Independent Research & Development (IR&D) is a key source of innovation for the department. In 2010, under the Better Buying Power 1.0 initiative, DoD staff engaged with industry and government to learn about what we could to improve IR&D effectiveness. The key challenge identified was communication—industry wanted information about Department investment priorities to better help them plan their IR&D investment projects and DoD planning was hampered by limited insight into industry IR&D projects.
The Defense Innovation Marketplace website was created to be a consolidated resource for both DoD and industry to help enable this communication.
About Independent Research & Development (IR&D)
For nearly 80 years, firms have been allowed to recover some of its independently funded research and development (R&D) costs as part of the general and administrative expenses charged to existing contracts. Firms have the independence to decide which technologies to pursue with these funds, as long as these efforts are of potential interest to the Department.
On January 30th, the Federal Register published an update to the new Defense Federal Acquisition Regulation Supplement (DFARS) Rule revising requirements for reporting IR&D project data. Firms that receive reimbursements totaling more than $11 million in IR&D/Bid and Proposal costs to covered contracts are required to submit annual IR&D updates. The rule also encourages firms that fall below the $11 million threshold to voluntarily submit IR&D project data so that department acquisition and science and technology (S&T) program managers can gain visibility and potentially leverage their projects.
"Independent Research and Development" is R&D initiated and conducted by defense contractors independent of DoD control and without direct DoD funding. IR&D includes: (1) basic research, (2) applied research, (3) development, and (4) systems and other concept formulation studies. IR&D does not include R&D performed under grants or contracts from the Government or third parties and does not include technical efforts in the support of bid or proposal activities. (IR&D defined)
What is B&P?
"Bid and Proposal" is the contractor effort to prepare, submit, and support bids and proposals on potential Government or non-Government contracts. B&P can involve highly technical efforts and can sometimes be an extension of prior IR&D efforts. Technical effort expended in developing and preparing technical data specifically to support bid or proposal activities is considered B&P, rather than IR&D. Administrative costs related to B&P activities are also covered under the B&P definition. B&P does not include the costs of efforts sponsored by a grant or cooperative agreement, or required in the performance of a contract. (B&P defined)
IR&D/B&P Regulations and Resources
The following regulations govern the treatment of IR&D and B&P costs under defense contracts:
- DoD Instruction 3204.01, August 20, 2014, DoD Policy for Oversight of Independent Research and Development (IR&D)
- Defense Federal Acquisition Regulation Supplement (DFARS) 242.771 Provides the contract administration functions relating to IR&D and B&P costs incurred by major defense contractors.
- Cost Accounting Standard (CAS) 420 Provides criteria for the accumulation and allocation of IR&D and B&P.
- Navy Instruction Navy IR&D Program activities are governed by SECNAVINST 3900.40C, Policy and Assignment of Responsibilities for the Independent Research and Development (IR&D) Program, 23 February 2000.
Industry IR&D Compliance
Industry uses a portal on this site to submit proprietary IR&D summary reports are restricted to Department of Defense (DoD) federal employees or military service members with a direct interest in technology development or S&T planning and that have a Common Access Card (CAC).
Submit your data through this portal: http://www.defenseinnovationmarketplace.mil/industry.html