Industry Fights Limits On T&M Contracts A coalition of industry groups is fighting new restrictions on time-and-material and labor hour contracts for commercial services. Section 823 of the Senate version of the 2008 Defense Authorization bill would permit the Defense Department’s to use those contract types only for emergency repairs and for services in support of a commercial item. A Senate-House conference committee is now writing the final language of the bill. The Acquisition Reform Working Group, a coalition of industry associations, says the restrictions “will inappropriately hamstring the Department of Defense.” The Office of Federal Procurement Policy published a rule in December requiring controls over the use of T&M contracts. The Senate Armed Services Committee believed the rule is too lenient. Senators said those contracts are prone to abuse because the government cannot control rising costs. The Acquisition Advisory Panel chartered by Congress recommended that T&M contracts be used only when the government could not determine the total amount of work required for a particular project. The panel said the contract type should be used only on a short-term basis. In its white paper, the Acquisition Reform Working Group said it would support “additional guidance for DOD” on how to use T&M contracts without additional risk to the government.