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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


November 2009
Vol. X, No. 11

CONTENTS


SBA Proposes Extensive Changes to 8(a) Program and Related Small Business Size Standards
FY10 Defense Authorization Restricts A-76 Competitions
President Sets Sustainability Goals for Government
FAC 2005-37 Provides Guidance on Use of Award Fees
DOD Memos and DFARS Changes Abound
OMB/OFPP Memos Abound, Too
SBA Proposes Small Business Size Standard Increases
GSAR Parts 503 and 532 Rewritten
USDA Adds Nine More Biobased Items



SBA Proposes Extensive Changes to 8(a) Program
and Related Small Business Size Standards

The Small Business Administration (SBA) is proposing to make extensive changes to its regulations governing the 8(a) Business Development (8(a) BD) and Small Disadvantaged Business (SDB) programs, and the related small business size regulations, to reflect current practice and experience, to implement statutory changes, to clarify various aspects that have been prone to misinterpretation, and to stress the primary purpose of the 8(a) program – business development.

The following are the proposed changes:

Title 13 of the Code of Federal Regulations, Part 121 (13 CFR Part 121), Small Business Size Regulations

13 CFR Part 124, 8(a) Business Development/Small Disadvantaged Business Status Determinations

Comments on the proposed rule must be submitted no later than December 28, 2009, by any of the following methods: (1) Federal eRulemaking portal: http://www.regulations.gov; follow the instructions for submitting comments; (2) mail for paper, disk, or CD/ROM submissions: Joseph Loddo, Associate Administrator, Office of Business Development, 409 Third Street, SW, Mail Code, Washington, DC 20416; or (3) hand delivery/courier: Joseph Loddo, Associate Administrator, Office of Business Development, 409 Third Street, SW, Washington, DC 20416. Cite “RIN: 3245-AF53” in all correspondence.



FY10 Defense Authorization Restricts A-76 Competitions

On October 28, President Obama signed into law the $680.2 billion National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84). The act makes many changes to Department of Defense (DOD) acquisition procedures, and several changes that apply governmentwide, particularly restrictions on competitions conducted under the Office of Management and Budget (OMB) Circular A-76, Performance of Commercial Activities, and the extension of the authority in Federal Acquisition Regulation (FAR) Subpart 13.5 to apply simplified acquisition procedures to acquisitions of commercial items between $100,000 and $5,500,000.



President Sets Sustainability Goals for Government

On October 5, President Obama issued Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance, which sets sustainability goals for federal agencies and focuses on making improvements in their environmental, energy and economic performance. The executive order requires agencies to set a 2020 greenhouse gas emissions reduction target within 90 days; increase energy efficiency; reduce fleet petroleum consumption; conserve water; reduce waste; support sustainable communities; and leverage federal purchasing power to promote environmentally-responsible products and technologies.

“This executive order builds on the momentum of the Recovery Act to help create a clean energy economy,” said the president. The executive order builds on and expands the energy reduction and environmental requirements of Executive Order 13423, Strengthening Federal Environmental, Energy, and Transportation Management, by making reductions of greenhouse gas emissions a priority of the federal government, and by requiring agencies to develop sustainability plans focused on cost-effective projects and programs. (For more on the Recovery Act, see the March 2009 Federal Contracts Perspective article “$787 Billion Stimulus Package Passed, Spending To Be ‘Transparent and Accountable.’” For more on Executive Order 13423, see the February 2007 Federal Contracts Perspective article “President Orders Federal Energy Conservation.”)

The new executive order requires agencies to measure, manage, and reduce greenhouse gas emissions toward agency-defined targets by 2020. Also, the executive order requires agencies to meet a number of energy, water, and waste reduction targets, including:

Implementation of the executive order will focus on integrating achievement of sustainability goals with agency mission and strategic planning to optimize performance and minimize implementation costs. Each agency will prioritize its actions toward the goals of the executive order based on lifecycle return on investments.



FAC 2005-37 Provides Guidance on Use of Award Fees

Federal Acquisition Circular (FAC) 2005-37 consists of seven different rules, several of which are of significance to the acquisition community. FAC 2005-37 includes rules that place restrictions on the use of award fees, minimize “pass-through” charges that add little or no value, limit the length of contracts awarded noncompetitively under unusual and compelling urgency circumstances, and permit the Government Accountability Office (GAO) to interview current contractor employees when conducting audits on contracts that do not involve Recovery Act funds.



DOD Memos and DFARS Changes Abound

DOD continues to be busy issuing directives to its acquisition workforce and making changes to the DOD FAR Supplement (DFARS), particularly direction to appoint ombudsmen for procurement integrity, preparation of a warranty guide, and publication of service contract inventories.



OMB/OFPP Memos Abound, Too

DOD isn’t the only agency issuing directives to the acquisition workforce – the Office of Management and Budget (OMB) and its Office of Federal Procurement Policy (OFPP) are busy issuing memoranda, too.



SBA Proposes Small Business Size Standard Increases

As part of its ongoing initiative to review all small business size standards, the Small Business Administration (SBA) is proposing increases in the following industry groups, based on its “Size Standards Methodology” (available at http://www.sba.gov/contractingopportunities/officials/size/ssm/index.html), which it uses for developing and modifying size standards:

Comments on these proposed changes must be submitted no later than December 21, 2009, by either of the following methods: (1) Federal eRulemaking portal: http://www.regulations.gov; follow the instructions for submitting comments; or (2) mail/hand delivery/courier to: Khem R. Sharma, Chief, Size Standards Division, 409 Third Street, SW, Mail Code 6530, Washington, DC 20416. Cite “RIN 3245-AF69” in all correspondence pertaining to the proposed Sectors 44-45 size changes, “RIN 3245-AF71” in all correspondence pertaining to the proposed Sector 72 size changes, and “RIN 3245-AF70” in all correspondence pertaining to the proposed Sector 81 size changes. Comments on the “Size Standards Methodology” may be submitted at any time by either of the methods mentioned above – cite “Docket number SBA-2009-0008” in all correspondence pertaining to the methodology.



GSAR Parts 503 and 532 Rewritten

The General Services Administration (GSA) has finalized GSA Acquisition Regulation (GSAR) Part 503, Improper Business Practices and Personal Conflicts of Interest, and GSAR Part 532, Contract Financing, as part of its GSAR rewrite project.



USDA Adds Nine More Biobased Items

The United States Department of Agriculture (USDA) is adding nine sections to Title 7 of the Code of Federal Regulations (CFR), Part 2902, Guidelines for Designating Biobased Products for Federal Procurement (7 CFR Part 2902), to add nine more biobased products to be given preference in federal procurements as provided under Section 9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA), and to specify the minimum level of biobased content to be contained in the procured products.

The following are the new designated items and their Title 7 section numbers:

2902.43, Chain and cable lubricants
2902.44, Corrosion preventatives
2902.45, Food cleaners
2902.46, Forming lubricants
2902.47, Gear lubricants
2902.48, General purpose household cleaners
2902.49, Industrial cleaners
2902.50, Multipurpose cleaners
2902.51, Parts wash solutions

As a general rule, procuring agencies must purchase biobased products within these designated items where the purchase price of the procurement item exceeds $10,000 or where the quantity of such items or functionally equivalent items purchased over the preceding fiscal year equaled $10,000 or more, unless products within a designated item: (1) are not reasonably available within a reasonable period of time; (2) fail to meet the reasonable performance standards of the procuring agencies; or (3) are available only at an unreasonable price. The $10,000 threshold applies to federal agencies as a whole and not to agency subgroups such as regional offices or subagencies of the larger federal department or agency.

For more information on the biobased program and its products, go to http://www.biopreferred.gov/. For more on the proposal to add these nine items to the biobased program, see the November 2008 Federal Contracts Perspective article "Nine More Biobased Items Proposed." Also see the February 2005 Federal Contracts Perspective article “USDA Publishes Biobased Products Guidelines,” the April 2006 Federal Contracts Perspective article “USDA Designates Six Biobased Products for Procurement,” the September 2006 Federal Contracts Perspective article “USDA Proposes 20 More Biobased Products,” the November 2006 Federal Contracts Perspective article “10 More Biobased Items Proposed,” and the June 2008 Federal Contracts Perspective article “USDA Adds 27 Items to Biobased Products List, Exempts DOD and NASA from Requirements.”

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