Barry McVay's


Federal Acquisition Developments, Guidance, and Opinions

MARCH 2000
Vol. I, No. 3


CAS Thresholds Increased, FFP Exempt
One FIPS Approved, 33 Withdrawn
DOD Extends Mentor-Protege Program
FMR Finalized as Successor to FPMR
NASA Issues Rules on Foreign Acquisition
DOE Flashes on Proposals, Small Businesses

Cost Accounting Standards Thresholds Increased, Competitive Firm-Fixed-Price Contracts Exempt

The Cost Accounting Standards Board (CASB) is revising its regulations governing the application of the Cost Accounting Standards (CAS) to negotiated government contracts awarded to large contractors. This is being done to implement the provisions of Section 802 of the National Defense Authorization Act of Fiscal Year 2000 (Public Law 106-65), which streamlined the applicability requirements for CAS coverage.

The 19 CAS are in Chapter 99 of Title 48 of the Code of Federal Regulations, and the most significant changes are to subsections of 48 CFR 9903.201, Contract Requirements.

The interim rule, which goes into effect April 2, 2000, makes the following changes:

Comments on the interim rule must be submitted by April 7, 2000, to Richard C. Loeb, Executive Secretary, Cost Accounting Standards Board, Office of Federal Procurement Policy, 725 17th Street, NW, Room 9013, Washington, DC 20503, Attn: CASB Docket 00-01. No e-mail comments will be accepted.

One FIPS Approved, 33 Withdrawn

The Secretary of Commerce has approved Federal Information Processing Standard (FIPS) 186-2, Digital Signature Standard (DSS), which enables federal agencies to use two additional standards for the generation and verification of digital signatures: ANSI X9.31, Digital Signature Using Reversible Public Key Cryptograph, and ANSI X9.62, Elliptic Curve Digital Signature Algorithm. FIPS 186-2 adds these two standards to the Digital Signature Algorithm, which had already been approved for use. (EDITOR'S NOTE: Specifications for FIPS 186-2 are available at http://csrc.nist.gov/encryption.)

In addition, the Secretary of Commerce approved the withdrawal of 33 FIPS that are obsolete or have not been updated to adopt current voluntary industry standards. Among the withdrawn FIPS are the following:

DOD Extends Mentor-Protege Program and FAR Deviations on Screening, Proposes Profit Policy Change

The Department of Defense (DOD) acquisition juggernaut continued in February, with the publication of three final rules, one interim rule, one proposed rule, and one notice of proposed rulemaking; the extension of two FAR deviations; the implementation of a Federal Prison Institute (FPI) pilot program on waiver processing; and additional exceptions to the mandatory use of the government travel card.

FMR Finalized as Successor to FPMR

On July 21, 1999, GSA issued an interim rule establishing the Federal Management Regulation (FMR) as Chapter 102 of Title 41 of the Code of Federal Regulations (CFR), and said that the various parts of the Federal Property Management Regulations (FPMR) (Chapter 101 of Title 41 of the CFR) would be updated, reorganized, and streamlined, and then transferred to the FMR as they are completed. To establish the framework for the FMR, the interim rule added Part 102-2, Federal Management Regulation System, and that was the entire contents of 41 CFR Chapter 102 at the time.

On February 25, GSA finalized the interim rule without changes. But that does not mean that GSA has been sitting idle since July 21, 1999. On November 2, 1999, FPMR 101-38, Motor Vehicle Management, was completely revised and redesignated as FMR 102-34, Motor Vehicle Management. And the following FPMR parts had been revised and proposed for transfer to the FMR: FPMR Part 101-43, Utilization of Personal Property, proposed on November 16, 1999 (and would be transferred to FMR Part 102-36, Transfer of Excess Personal Property); and FPMR Subpart 101-6.10, Federal Advisory Committee Management, proposed January 14, 2000 (and would be transferred to FMR Part 102-3, Federal Advisory Committee Management).

During February, GSA proposed revising two additional FPMR parts and transferring them to the FMR, both of which are transportation-related:

NASA Issues Final Rules on Foreign Acquisition

On February 25, the National Aeronautics and Space Administration (NASA) published a completely reorganized NASA FAR Supplement (NFS) Part 1825, Foreign Acquisition, which conforms to the rewritten FAR Part 25, Foreign Acquisition (see the January 2000 FEDERAL CONTRACTS PERSPECTIVE article "FAC 97-15 Addresses Foreign Acquisition, Contract Bundling, Award Fee Determinations"). The rewritten FAR Part 25 went into effect February 25, 2000, and the revised NFS Part 1825 went into effect simultaneously.

The new NFS Part 1825 subparts are:

Besides reorganizing NFS Part 1825, the final rule added the following:

and removed the following:

Part of this reorganization includes NFS 1825.1103-70, Export Control, which was added to the NFS on February 11, 2000, as NFS 1825.970, Export Control (it consisted of subsections NFS 1825.970-1, Background, and NFS 1825.970-2, Export Licenses). Paragraph (a) of NFS 1825.1103-70 is the former NFS 1825.970-1, and paragraph (b) is the former NFS 1825.970-2. NFS 1825.970 and the corresponding clause at NFS 1852.225-70, Export Licenses were added to notify NASA contractors and subcontractors that they "are subject to U.S. export control laws and regulations, including the International Traffic in Arms Regulations (ITAR), 22 CFR Parts 120 through 130, and the Export Administration Regulations (EAR), 15 CFR Parts 730 through 799. The contractor is responsible for obtaining the appropriate licenses or other approvals from the Department of State or the Department of Commerce when it exports hardware, technical data, or software, or provides technical assistance to a foreign destination or 'foreign person'...and there are no applicable or available exemptions/exceptions to the ITAR/EAR, respectively." In addition, NFS 1852.225-70 states that contractors are "responsible for obtaining export licenses, if required, before utilizing foreign persons in the performance of this contract...for all regulatory record keeping requirements associated with the use of licenses and license exemptions/exceptions...[and] for ensuring that the provisions of this clause apply to its subcontractors." (EDITOR'S NOTE: NFS 1852.225-70 was unaffected by the NFS Part 1825 reorganization, and it retained its NFS number.)

DOE Issues Policy Flashes on Unsolicited Proposals, Maximizing Small Business Utilization

The Department of Energy (DOE) issued two Policy Flashes during February: