This class deviation rescinds and supersedes Class Deviation 2012-O0008. The deviation implements the attached Deputy Secretary of Defense memorandum "Guidance for Limitation on Aggregate Annual Amount Available for Contracted Services" dated June 03, 2012, and paragraphs (c)(1) and (c)(2) of section 808 of the National Defense Authorization Act for Fiscal Year 2012. Section 808 limits the amount of funds the Department may obligate for contract services in Fiscal Years 2012 and 2013. The Deputy Secretary memorandum indicates that each DoD component must take action to ensure compliance with the limitation on the aggregate obligation amount for contract services.
Effective immediately contracting officers shall implement section 808 by complying with the following requirements:
(1) When establishing negotiation objectives for labor and overhead rates for any contract or task or delivery order that includes contract services, where the contract services have an estimated value in excess of $10,000,000 in fiscal year 2012 or 2013, in addition to the requirements of DFARS 215.406-1, unless the rates are otherwise established by law, and unless approval of negotiation objectives has already been granted-
(a) Negotiation objectives for labor and overhead rates shall not exceed labor and overhead rates paid to that contractor for the same or similar contract services in Fiscal Year 2010. Contracting officers shall coordinate with the Defense Contract Audit Agency and the Defense Contract Management Agency (DCMA), for those contractors with contracts over which DCMA has cognizance, to determine the applicable 2010 rates; and
(b) In circumstances such as contractor reorganizations and accounting changes, where the applicable 2010 labor and overhead rates cannot reasonably be compared to the proposed rates, contracting officers shall document the circumstances and develop estimated labor and overhead rates, with supporting rationale, for inclusion in their negotiation objectives, not to exceed the total labor and overhead rates per hour paid to that contractor for the same or similar contract services in Fiscal Year 2010; and
(2) Prior to award or issuance of any contract or task or delivery order that includes contract services, where the contract services have an estimated value in excess of $10,000,000, in fiscal year 2012 or 2013, including commercial contract services and competitively awarded contract services, that provides for continuing contract services at an annual cost to the Government that exceeds the annual cost paid by the DoD component concerned for the same or similar contract services in fiscal year 2010, contracting officers shall obtain approval in writing by the Secretary of the Military Department or Head of the DoD component. The requirement of this paragraph also applies where the contract services were previously provided by a different contractor.
For the purposes of this deviation, the term "contract services” means services procured from contractors, excluding those services relating to research, development, test and evaluation; military construction; overseas contingency operations, and object class codes 25.3 and 25.6 (see Attachment 1 of the Deputy Secretary of Defense memorandum).
This class deviation remains in effect until it is incorporated in the DFARS, or is otherwise rescinded.