There's an interesting issue which has come up at my contracting office that I thought I would throw out for discussion. Is it necessary for an RDT&E (FAR 35) contract to be 100% RDT&E and funded 100% with RDT&E? In a SUPPLY contract, some "incidental" services can legitimately be included. Same for Services contracts - incidental "materials" can be provided under a contract labeled "Service" type. So while accepting that RDT&E needs to be PRIMARILY RDT&E, can it include some non RDT&E "incidentals?" (An example might be integration support between a prototype and an established system when the primary work is the prototype test.)  Further, does RDT&E HAVE to always have RDT&E funding? For example, if one is testing a new missile design, sometimes weapons money is provided. Clearly, if the new design works, it will be put on the aircraft, so it is appropriate to use weapons $ - but one could obviously use RDT&E $ as well. Is it REQUIRED to use only RDT&E?  My opinion is that the FAR is intended to be reasonably flexible while recognizing that the contract scope and the funding provided should be appropriate and accurate.

By Peggy Richter on Thursday, February 08, 2001 - 10:46 am:

I suppose this is a bit esoteric compared with arguing if a IBM computer with specialized software is or isn't "commercial" or if a 747 modified to do test launching of a shuttle is or isn't commercial, but it is a major issue here and I was really hoping for some input from you all.

By Anonymous on Thursday, February 08, 2001 - 10:57 am:

Peggy,

I agree with your thought about flexibility. If the principle purpose is RDT&E, but incidental portions to satisfy the overall need are something else, they probably can be combined. I'm assuming the only thing that needs to be clear and separate are the funding sources, but that's an adminstrative function that can be handled through individual funding strips, etc.

By Eric Ottinger on Thursday, February 08, 2001 - 11:33 am:

Peggy,

I think this is more a question of Congressional intent, and probably a good question for GC and smart financial types.  In view of recent criticism of DoD regarding allegedly loose accounting, I can understand why there is a reluctance to stick one's head up and comment on this sensitive issue.

Eric

By Kennedy How on Thursday, February 08, 2001 - 12:17 pm:

I think it depends on what the incidentals are in relation to satisfying the SOW. If a contractor is required to buy 100 One GigH Pentiums and a handful of Mid-tier servers to do this, then I think it could be under the RDT&E. It's a direct cost to the contract. I certainly wouldn't fund this sort of thing using hardware money, especially in light of the discussions regarding multiple funding lines, cites, ACRNs, etc. over in the Acq Reform thread!

Kennedy

By Eric Ottinger on Thursday, February 08, 2001 - 12:52 pm:

Peggy and All,

I put "RDT&E" into the Ask A Professor and search and got 124 hits.

If you really want to get into this topic, that might be a good place to start.

This bit should confirm the sensitive character of this issue.

"Appropriations shall be applied only to the object for which the appropriations were made except as otherwise provided by law."  This question pertains to the legality of using appropriated funds for a specific purpose and should be raised within command channels of the involved Military Department (through the resource managers' fiscal law channels) before funds are actually obligated for the suggested purpose. While an academically oriented answer is provided, it should not be considered legal advice and should not be used as sole justification to obligate funds.  Expanded, more complicated answer goes to the specifics of the statement "...for the purposes for which Congress intended...", as might be amended by any Congressionally approved reprogramming actions. First situation: Look in the appropriation act itself and in its legislative history for such authorization. If Congress included in the authorization language and if funds were designated in the appropriations act language indicated funds were made available for cost reduction initiatives, there would be no doubt but that the PM could use appropriated funds for that purpose."

Eric

By John Ford on Thursday, February 08, 2001 - 02:45 pm:

As Eric stated, the key is for what purpose did Congress appropriate funds? The starting point in looking for that answer is the appropriation act itself. For DoD RDT&E, check the general provisions of the appropriation act. I recall from my years working in an R&D activity that there is usually a provision stating that R&D funds can be obligated for any other purpose described in the act. Again, as mentioned earlier, the specifics should be checked with knowledgeable fiscal experts. This is an esoteric area that is frequently beyond the expertise of contracting officers and their procurement advisors.

By Peggy Richter on Monday, February 12, 2001 - 11:50 am:

let me use an example, if i can. Let's say there's a multimillion dollar research effort for the cloning of sheep. This will have long term benefits to medical (cloned animals can be used to produce hormones for human use in consistent fashion), the livestock industry (standardized wool & meat) and pure science. A sheep "Dolly" is selected as the subject and a 5 year contract for attempts to clone said sheep is issued. So far, we are pure RDT&E. But what if it's an IDIQ LOE contract? after all, we have no idea if a clone will even work, so we can't demand that as an end product (completion contract). Further, let's say that on one of the Task Orders, part of the job is to take blood draws from the clone "prototype". Blood draws can of course be done by any vet and are not "new". The wool grower's association wants a test to see if the gene for wool growing is affected by cloning so they are willing to pay for some of the money, and the local vet school has some training money and would be willing to pay for the blood draw because they get copies of the reports and can use them for their students.

The contract SOW does include tests (with blood draws) for validation purposes of the cloning effort.  Is it RDT&E? can one use the different colors of money and still consider the effort part of RDT&E overall? Is the blood draw just too "standardized" to include as part of an RDT&E effort?  I'm trying to use an analogy most of us can understand here, because I can't use the actual circumstances of the real contracts which gave rise to the question.

By John Ford on Tuesday, February 13, 2001 - 10:43 am:

Peggy, I don't see any significance to the contract being IDIQ LOE. The questions to be decided are what is the nature of the work and how can it be funded based on the language of the appropriation act (assuming you have an appropriation that has multiple accounts instead of a unitary appropriation).  Looking at your analogy, it seems to me that everything you have described could well fall within the RDT&E classification. All the objectives of the work deal with expanding scientific knowledge through the conduct of research. Although there are some mundane processes in the project, that does not change the fundamental nature of the objective of the contract. RDT&E funds can be used for things other than just working in a lab. For example, I don't think anyone would question that contractor travel under an R&D contract is chargable to R&D funds. If the purpose of the trip is to further the research objective of the contract, it is proper.  Turning your question around a little, if the work you have described is not RDT&E, what is it?