APPROVAL OF REQUEST TO EXTEND CLASS DEVIATION TO
FAR 42.703-1(b), FAR 42.703-1(c)(2), AND 42.708(a)(2)

Use of Quick-Closeout Procedure for Cost-Reimbursement, Fixed-Price Incentive, Fixed-Price Redeterminable and Time-and-Materials Contracts.

In accordance with DFARS 201.404 and under the authority granted to me by the Director of the Defense Contract Management Agency memo dated July 22, 2002, I hereby approve this class deviation to FAR 42.703-1(b) and FAR 42.703-1(c)(2) and FAR 42.708(a)(2). This revises and extends the previous deviation that was issued September 29, 2003 and will expire September 30, 2005.

This deviation authorizes Administrative Contracting Officers (ACOs) to close specific contracts prior to the establishment of final indirect cost rates regardless of dollar value or the percent of unsettled indirect costs allocable.  This deviation may be used provided the contractor has submitted a final certified indirect cost rate proposal that has been audited by the Defense Contract Audit Agency (DCAA).  This deviation is subject to the following conditions:

• It applies to cost-reimbursement, fixed-price incentive, fixed-price redeterminable, and time-and-materials contracts.
• ACOs must use either DCAA-recommended rates or other rates mutually agreed to by the ACO and the contractor in determining the final indirect expenses.
• In selected instances, the audit requirement may be waived when compelling reasons exist. The decision to waive the audit must be made by the cognizant ACO in consultation with DCAA.
• ACOs must ensure contract closeout under this deviation does not impact the Government’s negotiation flexibility on the remaining unsettled contracts.  Indirect cost rates used under this deviation must not be considered as setting precedent when establishing the final indirect cost rates for other contracts.
• This deviation shall not be used if there are significant open cost issues such as Cost Accounting Standards noncompliances or issues in litigation.
• This deviation covers the period commencing with the date of this deviation and terminating on September 30, 2007.

                                                                                                      /s/
    Sep 23, 2005                                                               SALLIE H. FLAVIN
     Date                                                                             Senior Procurement Executive
                                                                                           Defense Contract Management Agency