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  • Question

    Is this DFARS clause required, required when applicable, or optional for cost reimbursment services contracts exceeding the simplified acquisition threshold that are not for the acquisition of commercial items and do not apply to small businesses, educational institutions or nonprofit organizations?


    Answer

    The DFARS is usually explicit about when a clause is applicable or not. In the case of the clause at DFARS 252.242-7004, DFARS 242.7204 does not specifically exclude contracts for services. Confirmation for this can be seen at DFARS 242.7200, where again, services contracts are not excluded from the applicability of this DFARS subpart. The assumption is that the Government may be billed for at least some material costs incurred during contract performance, even if the contract is primarily for services.

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