DOD Official Orders Restrictions on T&M Contracts Defense Department contracting activities have been ordered to draw up plans for reducing the use of time-and-materials contracts. Shay Assad, director of defense procurement, acquisition policy and strategic sourcing, said some contracting shops are using T&M contracts for as much as 60% of their services procurements. In a March 20 memo he reminded them that the Federal Acquisition Regulation allows the use of such contracts only “when it is not possible” to accurately estimate the cost, extent or duration of a project. The Government Accountability Office reported last year that DOD buyers were using T&M contracts because they can be awarded quickly and allow flexibility for changes. Auditors repeated criticism that T&M contracts expose the government to a higher risk of cost increases. “Contracting officers’ written determinations also never included a rationale as to why a less risky contract type could not be used, and little attempt was made to convert follow-on work to a less risky contract type,” the report said. (SAA, 7/13/07) Assad said GAO’s findings “are a major concern.” GAO found that DOD used T&M contracts extensively on task order contracts. Assad instructed contracting shops to establish procedures for justifying those orders. He said the procedures “should include the actions that will be taken to reduce the use of T&M contracts whenever possible.”