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    Does DFARS clause 235.006 requiring AT&L approval, apply to our program or is that DFARS clause no longer applicable due to AT&L BBP Memo dated 3 Nov 2010? Who needs to approve our contract type?


    Answer

    You need to go to AT&L for approval on your FPIF EMD contract, per the requirements of DARC 235.0006.  Since the Nov 2010 BBP letter, we have heard several speeches by Dr. Kendall emphasizing the appropriate use of contract types.  He is consistently saying to do what makes sense for the situation and is recommends FPIF for LRIP contracts. The new BBP 2.0 helps to clarify AT&L's current philosophy on the use of FPIF contracts.   They are clearly stating that LRIP is a more appropriate time to move from Cost Reimbursement to Fixed Price type contracts.   Of course, you can get their approval for EMD using FPIF if you think the risk is appropriate for that contract type.

     

    From BBP 2.0:

     -" Employ appropriate contract types: The original BBP emphasized the use of Fixed Price Incentive (FPI) contracts. In BBP 2.0, we are refining our guidance to emphasize the use of the appropriate contract vehicle for the product or services being acquired. The DFAR and FAR provide for a range of contract types for a reason: one size does not fit all. This initiative will focus on improving the training of management and contracting personnel in the appropriate use of all contract types.

    - Increase use of Fixed Price Incentive contracts in Low Rate Initial Production: One phase of acquisition where FPI contracts are particularly appropriate is during the early stages of transition from development to production, low rate initial production (LRIP), particularly the earlier lots of LRIP. We will continue to emphasize the use of FPI during this phase."

      

    Lastly, please review PGI 2 16.104.70 which provides guidance on selecting appropriate contract types for R&D contracts.  Ultimately it refers you back to 235.006 which requires you to go to AT&L for approval.

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