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SITUATION: I work for the Department of Defense (DOD), and my office executes a healthy number of time-and-materials/labor-hour (T&M/LH) determination and findings (D&Fs). My leadership has decided, at legal counsel's suggestion, that the requirements of DFARS 212.207(b)(iii) can apply to all commercial T&M/LH D&Fs, including those done under the authority of FAR 8.404(h)(3). The upshot is that nearly all such D&Fs require Head of Agency (HOA) signature, since nearly all are defined under paragraph (6) of the "commercial item" definition. As you can imagine, this has created an administrative inconvenience. (The idea of delegating this approval authority to the Head of Contracting Activity (HCA) has been raised and rejected.) QUESTION: My question can be phrased specifically or broadly: Specifically, should HOA signature on commercial T&M/LH D&Fs, in accordance with DFARS 212.207(b)(iii), be required when using FAR 8.4 procedures? Broadly, where FAR 12 specifically instructs the reader to defer to FAR 8.4 on a topic, can DFARS 212 "override" FAR 12? DISCUSSION: I suspect that the answer is "no" (acknowledging that my response is at least partially biased). Part of the challenge here is that for DOD employees, there are no less than 5 different regulatory parts that provide T&M/LH guidance. I will attempt to address each in a logical order in walking through my thinking on this: FAR 16.601(d) provides general guidance for a D&F, and directs the reader to FAR 12.207(b) for "further limitations" when purchasing commercial services. Diverting for a moment to FAR 12.102(c), this assigns precedence to FAR 12 over conflicting FAR parts when purchasing commercial items. FAR 12.207(b)(1) and (2) provide commercial item D&F guidance; however, 12.207(b)(4) states: "See 8.404(h) for the requirement for determination and findings when using Federal Supply Schedules." In my opinion, this language unambiguously intends for the reader to exclusively defer to 8.4 for T&M/LH D&F guidance when using 8.4 procedures. (Compare the language in (b)(4) to the "additional approval" language in (b)(3).) Based on #3, there is no conflict as described under #2. FAR 12 defers to FAR 8 on this specific topic. As promised, 8.404(h) creates its own set of D&F requirements. Significantly, the highest stated approval authority here is HCA. Strangely, DFARS 208 is silent on the topic of T&M/LH contracts. DFARS 212.207(b), however, creates additional limitations when using T&M/LH contract types for commercial items. Specifically, (b)(iii) requires HOA approval when paragraph (6) of the "commercial item" definition applies. DFARS 216.201(d) provides additional limitations and guidance for T&M/LH D&Fs. My opinion is that if DFARS intended to impact the FAR guidance to defer to FAR 8 in these situations, it should have unambiguously done so by addressing it under DFARS 208 (as it did under DFARS 212 and 216). The most compelling counter-argument I've heard is that this reading would nullify the intent of NDAA for FY 2008 (on which DFARS 212.207(b) is based), which views T&M/LH contracts with skepticism and attempts to limit their usage. I agree that it would have been odd for DOD to intend to allow for a FAR 8.4 T&M/LH loophole, but in effect I believe this is what it did by neglecting to address the topic under DFARS 208. What say you, Wifcon community? -
Is a Determination and Findings (D&F) report required to exercise an option for a task order under a GSA IDIQ contract under the simplified acquisition threshold ($150,000)?
