Independent Research & Development (IR&D)

In a January 4, 2017 Memorandum, the Under Secretary of Defense for Acquisition, Technology and Logistics (“Under Secretary”), discussed implementation of a problematic DFARS rule issued on November 4, 2016, requiring “major contractors” to engage in a “technical interchange” with a DoD employee before IR&D costs are generated as a prerequisite for the allowability of such costs (“IR&D Rule”). The Memorandum effectively recognizes that issues with the IR&D Rule are more significant than DoD previously acknowledged. However, although the Memorandum addresses certain issues arising out of the IR&D Rule, it remains to be seen whether contractors will encounter different types of problems as the Rule is implemented.

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