DATE: September 21, 2016
TO: Procurement Directors/Contracting Officers
Contract and Financial Assistance Policy Division
Office of Policy
Office of Acquisition Management
SUBJECT: Acquisition Guide Chapters 31.205-33 and 70.31.205-33: Contractor
Legal Management Requirements, Approving Settlements, and Determining the
Allowability of Settlement Costs
SUMMARY: The subject guide chapters, which contain identical language, replace their predecessors (Chapter 31.3 of September 2010 and Chapter 70-31C of September 2010 “Contractor Legal Management Requirements”) and significantly expand upon their guidance. The predecessor chapters only briefly discussed two aspects of managing contractor legal costs: contractors’ hiring outside counsel; and contractors’ exercise of prudent business judgment. These guide chapters provide great detail concerning the requirements of the current version of the Contractor Legal Management Requirements at 10 CFR part 719 (reflecting its May 2013 update), address considerations for approving settlements, and cover several key facets of determining the allowability of settlement costs.
Questions concerning this policy flash should be directed to Michael Righi of the Contract and Financial Assistance Policy Division, at Michael.Righi@hq.doe.gov or (202) 287-1337.