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ARTICLE · 06 DECEMBER 2018

DOD Quietly Kills Another Controversial IR&D Rule

While both rules are now withdrawn, the DOD concerns expressed with respect to IR&D as part of Better Buying Power 3.0 likely remain unresolved.

United StatesGovernment, Public Sector

On November 4, 2016, the Department of Defense ("DOD") published a proposed change to the Department of Defense Federal Acquisition Regulation Supplement ("DFARS") that would have significantly altered DOD's regulatory landscape regarding independent research and development ("IR&D") costs.  On the same day, DOD also issued a final rule that required certain contractors to participate in a technical interchange before incurring IR&D costs.  Both the proposed rule and the final rule met the same fate--each rule was withdrawn and abandoned.  This is an appropriate outcome.  Both the proposed rule and the final rule were counter-productive, vague and ambiguous, and carried significant risk of disincentivizing contractor investment in innovation.  

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