[Federal Register Volume 72, Number 98 (Tuesday, May 22, 2007)]
[Proposed Rules]
[Page 28663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-9754]



Defense Acquisition Regulations System

48 CFR Part 215

Contract Profit/Fee Policies

AGENCY: Defense Acquisition Regulations System, Department of Defense 

ACTION: Request for public input.


SUMMARY: DoD is conducting a review of the Department's contract 
profit/fee policies. As part of this review, DoD would like to hear the 
views of interested parties regarding the effectiveness of the profit/
fee policies presently used for DoD contracts.

DATES: Submit written comments to the address shown below on or before 
July 23, 2007.

ADDRESSES: Submit comments to: Office of the Director, Defense 
Procurement and Acquisition Policy, ATTN: OUSD (AT&L) DPAP (CPF), IMD 
3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Comments also 
may be submitted by facsimile at (703) 602-7887, or by e-mail at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain, by telephone at (703) 
602-0293, or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: DoD contract profit/fee policies, to include 
policy for developing pre-negotiation profit or fee objectives, are 
described in the Defense Federal Acquisition Regulation Supplement 
(DFARS), in sections 215.404-4 and 215.404-70 through 215.404-76. One 
of the key aspects of DoD's profit policy is the Weighted Guidelines. 
While there have been some revisions to the Weighted Guidelines over 
the past few years, the basis for the existing policy was established 
in the mid-1980s. Since then, there have been a number of changes, 
including (1) the evolution of DoD's acquisition programs, (2) 
extensive industry consolidation, and (3) a significant increase in the 
number of DoD contracts for services. In light of these many changes, 
DoD is interested in receiving public input on the existing profit/fee 
policies, with regard to those that are working effectively and those 
that should be revised or eliminated, along with supporting rationale. 
Potential areas for consideration include, but are not limited to, the 
     The contractor risk factors used in DoD's structured 
approach for developing profit/fee objectives, particularly with regard 
     The pertinence of the existing factors;
     Whether the ranges and normal values used for the existing 
factors are still valid; and
     Whether there are other risk factors that are not 
reflected in the existing policies.
     Any changes needed to--
     The technology incentive at DFARS 215.404-71-2(c)(2) and 
     The contract type risk factor at DFARS 215.404-71-3;
     The facilities capital employed factor at DFARS 215.404-
     The cost efficiency factor at DFARS 215.404-71-5;
     The modified weighted guidelines at DFARS 215.404-72;
     The policies as they provide for consideration of the 
amount of investment a contractor has in a contract;
     The policies as they provide for consideration of the 
extent of contract financing payments;
     The policies as they apply to contracts for services; and
     The policies as they apply to contracts for research, 
development, test, and evaluation.
     Whether any of the existing structured approaches for 
profit analysis should play a role in establishing the base fee or pool 
on award-fee contracts.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.
[FR Doc. E7-9754 Filed 5-21-07; 8:45 am]