Last week, DoD issued a proposed rule to implement section 807 of the National Defense Authorization Act (NDAA) of FY2008. This rule will require contractors to annually report service contract data at the end of the Government’s fiscal year or the end of contract performance, whichever comes first. The rule will apply to all contracts above the simplified acquisition threshold, including those under FAR Part 12.
Notably, Section 807 of the FY2008 NDAA does not explicitly require contractor action. Rather, it requires DoD to annually provide Congress with an inventory of activities performed under DoD service contracts. This requirement went into effect in 2008 and DoD has been providing these inventories to Congress every year. The past inventories can be found here. Presumably, DoD is implementing this new proposed rule in order to ease its burden by requiring contractors to report the information.
The proposed rule will require contractors to report service contract direct labor and corresponding dollar value data for prime and subcontractors using the Enterprise-wide Contractor Manpower Reporting Applicable (ECMRA) online database. It applies to all solicitations, contracts, and task and delivery orders, including those using FAR part 12 procedures for acquisition of commercial items if the acquisition is for (1) services with a total estimated value exceeding the simplified acquisition threshold or (2) supplies that contain separate line items for services with a total estimated value exceeding the simplified acquisition threshold. Exceptions are provided for construction of structures and facilities, lease/rental of equipment or facilities, utilities, freight and shipping, and classified services.
This is not the first requirement of its kind for federal contractors. In December 2013, the FAR was amended to include a similar requirement for non-DoD contractors. That final rule requires non-DoD contractors to report annually through SAM (1) the contract number, (2) the total value invoiced for services, (3) the number of contractor direct labor hours expended on services, and (4) similar data from first-tier subcontractors. However, unlike the proposed DFARS rule, the FAR rule is only applicable to certain types of contracts over certain dollar thresholds, as provided in FAR 4.1703(a). The non-DOD rule elicited numerous comments ranging from the cost burden on contractors to the impact on small businesses to the specific types of information required. Presumably, the proposed DFARS rule will elicit similar comments, but perhaps with even more concern given that it is applicable to all service contracts over the simplified acquisition threshold.
Comments are due August 4, 2014. Information about submitting comments can be found here.
Katie Calogero is the attorney responsible for the content of this article
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