DCAA guidance on FAR Circular 2005-37

In case you weren’t watching, there were some significant changes to the Federal Acquisition Regulations (FAR) recently.  The Secretary of Defense issued a Federal Acquisition Circular Number 2005-37 on October 14, 2009.  Of the 7 changes implemented in this document, item V (Limitations on Pass-Through Charges (Interim)) has the most severe impact.  This change restricts what they call “excessive pass thru charges”  by contractors from subcontractors.  Basically if the contractor has a subcontractor with more than 70 percent of the total cost of work to be performed on the contract, the contractor cannot receive indirect costs or profits on this subcontract.  This restriction is effective October 14, 2009 (it is now in effect)!   Many contractors may not be aware of the change.   So the amount of work put on the contractor just grows.  It is becoming more difficult for the average small business owner to know how to safely fulfill requirements of government contracting.  It is clear small business needs help in the area of government contracting now more than ever.


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