ISM-FASMG member Charles Rumbaugh's Regulatory Update provides general insight into timely issues facing the purchasing professional and stimulates further discussion. These updates are not intended as legal advice and you should consult your own attorney before applying any item below to a specific situation or real transaction.

CHARLES E. RUMBAUGH
Private Dispute Resolution
Arbitrator/Private Judge/Mediator
(310) 373-1981 / FAX (310) 373-4182
(888) ADROffice (toll free)
ADROffice@ieee.org (e-mail)

P.O. Box 2636
Rolling Hills, California 90274

Special Regulatory Related Matters that may be of interest since the last Update includes-

• DoD FINALIZES INCREASE IN PROGRESS PAYMENT RATE. In the October 1, 2001, Federal Register DoD noticed it is amending the DFARS, wherein the summary provides, “to increase the customary uniform progress payment rate for large business concerns from 75 percent to 80 percent. The progress payment rate change is applicable only to contract awards made on or after October 1, 2001. Contracts awarded before October 1, 2001, will not be modified to include the 80 percent rate.” The specific change is to DFARS 232.501-1(a) and states, “the customary progress payment rates for DoD contracts, including contracts that contain foreign military sales (FMS) requirements, are 80 percent for large business concerns.”
  

COMMENT: Because of the timing on this regulatory change, this rate change may impact negotiated/proposed “offers” currently outstanding and raise the issue as to the basis for the pricing of same, i.e. old rate verses new rate. Also, the impact upon certain contract actions that may be of potential concern include newly issued delivery/task orders and incrementally funded contracts/subcontracts, etc.
Consult with legal counsel.

• DoD CANCELS military standard that prescribed a format for preparation of engineering change proposals. Also on October 1, 2001, the Federal Register noticed the DFARS changes necessary due to MIL-STD-973 being “canceled without replacement on September 20, 2000. Therefore, this final rule removes the clauses that were based on the requirements of MIL-STD-973. General policy regarding engineering change proposals is removed from DFARS 243.205-70 to a more appropriate location at 243.204-71.”
  

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