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What's going on here?

I don't know for certain, but I suppose people are trying to support their organizational missions as best they can.  If they cannot put needed contract text in Section H (or similar approach for non-UCF contracts), they might put it in the SOW.  

46 minutes ago, ji20874 said:

I don't know for certain, but I suppose people are trying to support their organizational missions as best they can.  If they cannot put needed contract text in Section H (or similar approach for non-UCF contracts), they might put it in the SOW.  

Is that an explanation or a justification?

A supposition.

Let's suppose that you're right. What do you think is preventing people from putting needed contract text in Section H? Assume the needed contract text is a local clause that doesn't describe any particular work.

I'm not in DoD, so I can only operate based on what I hear.  I heard that all local clauses were deleted, but since many of them served valid and useful purposes, the text of those clauses seems to be ending up in SOWs, as you observed.  I also heard that the ban reached to Section H and SCRs.  But the reviewers only make sure that Section H is empty, but don't apply rigor to SOWs, so the needed text migrates to SOWs.

Perhaps the DoD ban is too burdensome?  

1 hour ago, ji20874 said:

Perhaps the DoD ban is too burdensome?

DoD didn't ban local clauses, they just created more red tape for the military departments and defense agencies. Also, DoD was just trying to implement 41 U.S.C. 1707.  

Well, for right or wrong, for good or bad, it seems the result is that those local clauses are migrating to SOWs, as you observed.  You asked "What's going on here?" In response, I gave my supposition as to what's going on, based on what I hear from colleagues in DoD.  I still have to wonder if the DoD red tape is too burdensome.  You said, "not a single local clause has been incorporated in the CFR since the new policy was implemented."