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Publish Date : 03-Nov-2015

The Department of Defense (DoD) has issued a Final Rule that amends the Defense Federal Acquisition Regulation Supplement ("DFARS") and clarifies the scope of the department's ability to assess and exclude contractors that represent "supply chain risks" in solicitations and contracts involving the development or delivery of IT products and services associated with National Security Systems ("NSS").

The Final Rule clarifies that the DoD’s exclusion authority is restricted to NSS' procurement, explains that decisions apply on a procurement-by-procurement basis, and eliminates the flow down requirement that was there in the Interim Rule.

The Final Rule also urges contracting officers to consider enforcing a Government consent requirement for all subcontracts.

When the DoD issued its Interim Rule, these changes are important as they allow the department to implement a Section 806 Action to exclude IT contractors from contract participation or withhold consent to subcontract if the DoD decides that a contractor or subcontractor presents a supply chain risk.

Notably, the DoD may adopt this tool without giving pre- or post-exclusion notice to or engaging in dialogue with contractors.

Moreover the Final Rule says that Section 806 Actions cannot be reviewed in a bid protest before the Government Accountability Office or in any Federal court.

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