DoD Requires Data Reporting for Certain Service Contracts Exceeding $3 Million

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[co-author: Whitney N. Alston, Law Clerk]

The Department of Defense (DoD) issued a final rule on July 9, 2021, requiring contractors to report annually their total labor hours and invoiced amounts for certain service contracts.

TAKEAWAYS

  • Requirement applies to contracts for logistics management services, equipment-related services, knowledge-based services, and electronics and communications services.
  • Contractors are required to report the total amount invoiced for these services and the number of direct labor hours, including first-tier subcontractor hours.
  • Contractors are required to input the contract data for the preceding fiscal year into the System for Award Management (SAM) no later than October 31 of each fiscal year.

The Department of Defense has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to require contractors to report specified service contract data in the System for Award Management (SAM). This rule implements 10 U.S.C. 2330(a), as modified by section 812 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017.

This reporting requirement is limited to service contracts estimated to exceed $3 million in the areas of logistics management services, equipment-related services, knowledge-based services, or electronics and communications services. While this rule applies to the acquisition of commercial items, it does not apply to contracts or subcontracts at or below the simplified acquisition threshold (SAT) or for commercially available off-the-shelf (COTS) items.

For the covered contracts, contractors are required to report the total amount invoiced for these services and the number of direct labor hours, including first-tier subcontractor hours. In reporting labor hours, the rule does not require contractors to separate or distinguish between contractor and subcontractor labor hours. There also is no requirement to report hours by labor category. The rule leaves the process of collecting the subcontractor data to the discretion of each contractor.

The rule allows DoD to gather necessary data to manage its overall workforce, especially to inform strategic workforce planning decisions and develop budget justification materials.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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