I.  Background

Section 823 of the National Defense Authorization Act for Fiscal Year 2010 (Pub. L. 111-84), requires DoD to revise guidance issued pursuant to section 814 of the National Defense Authorization Act for Fiscal Year 2007 (Pub. L. 109-364). Section 823 is entitled "Authority for Secretary of Defense to Reduce or Deny Award Fees to Companies Found to Jeopardize Health or Safety of Government Personnel." For covered contracts that include award fees, if a contractor or its subcontractor acts with gross negligence or reckless disregard for health or safety, causing serious bodily injury or death of Government personnel, then the contracting officer must consider reduction or denial of award fee for the period in which that action occurred. This interim rule provides a clause to detail those dispositions where a reduction or denial of award fee is applicable. The clause also allows for the recovery of all or part of any award fees paid for any previous award fee evaluation period during which contractor actions caused serious bodily injury or death of Government personnel.