FedGovContracts.com

Panoptic Enterprises'

FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


February 2009
Vol. X, No. 2

CONTENTS


Publication of Justifications Required For Noncompetitive Contracts
E-Verify Put on Hold Until May 21
Fifteen DFARS Rules for the New Year
Labor Clauses Proposed for Inclusion in T&M Contracts
GSA Proposes Rewriting Federal Supply Schedule Rules
Two Rewritten GSAR Parts Finalized
Mileage Reimbursement Set at 55¢/Mile for Private Autos



Publication of Justifications Required
For Noncompetitive Contracts

To implement Section 844 of the National Defense Authorization Act of Fiscal Year 2008 (Public Law 110-181), Federal Acquisition Circular (FAC) 2005-30 amends the Federal Acquisition Regulation (FAR) to require agencies to post on FedBizOpps all justifications for contracts awarded through other than full and open competition. In addition, FAC 2005-30 contains rules addressing commercially available off-the-shelf items, the Support Anti-Terrorism by Fostering Effective Technologies (SAFETY) Act, trafficking in persons, and several other topics.



E-Verify Put on Hold Until May 21

The effective date of FAC 2005-29, which requires most contractors to use the free website E-Verify (http://www.dhs.gov/e-verify) to determine whether their employees are authorized to work in the United States, has been postponed twice in one month: from January 15, 2009, to February 20, 2009, in response to pending litigation; then from February 20, 2009, to May 21, 2009, at the request of President Obama to give his new administration time to review it.

As of May 21, 2009, FAR 52.222-54, Employment Eligibility Verification, must be included in contracts exceeding $100,000 that are 120 days or longer in duration. The clause requires the contractor to use E-Verify for all its employees working on the contract in the United States, and all of its newly-hired employees regardless of whether they are working on the contract or not. There are some exceptions to this: (1) contracts for “commercial off-the-shelf” (COTS) items and services, or items that would be COTS except for minor modifications (see FAR 22.1801, Definitions, for the definition of COTS – contracts for commercial items that do not meet the COTS definition are subject to E-Verify); and (2) contracts that will be performed outside the United States.

Contracting officers are not to use FAR 52.222-54 in any solicitation or contract prior to May 21, 2009.

However, on or after May 21, 2009, the rule states that contracting officers “should modify, on a bilateral basis, existing indefinite-delivery/indefinite-quantity contracts...to include the clause for future orders if the remaining period of performance extends beyond November 21, 2009, and the amount of work or number of orders expected under the remaining performance period is substantial.”

For more on E-Verify and FAC 2005-29, see the December 2008 Federal Contracts Perspective article “FAC 2005-29 Requires Contractors to Verify Workers’ Eligibility for Employment.”



Fifteen DFARS Rules for the New Year

The Department of Defense (DOD), in an apparent move to clear the decks of pending regulations while the Bush administration was still in office, issued 15 rules amending the Defense FAR Supplement (DFARS) five days before leaving office.



Labor Clauses Proposed for Inclusion in T&M Contracts

To achieve consistency throughout government and resolve potential inequities, a proposed rule has been published that would specifically require the inclusion of FAR 52.222-43, Fair Labor Standards Act and Service Contract Act – Price Adjustment (Multiple Year and Option Contracts), and FAR 52.222-44, Fair Labor Standards Act and Service Contract Act – Price Adjustment, in time-and-materials and labor-hour service contracts that are subject to the Service Contract Act.

FAR 52.222-41, Service Contract Act of 1965, requires that service employees be paid minimum monetary wages and fringe benefits, and those wages and fringe benefits may be subject to adjustment, under wage determinations issued by the Department of Labor. FAR 52.222-43 and FAR 52.222-44 establish a consistent manner for making those adjustments. By not including either FAR 52.222-43 or FAR 52.222-44 in time-and-materials and labor-hour service contracts, contracting officers have to resort to other methods of making the adjustments, such as allowing for wage and benefit escalation, equitable adjustment, or economic price adjustment. However, using these methods usually permit the contractors to include profit, overhead, and general and administrative expenses in addition to the wage or fringe benefit increases.

Many contracting officers throughout the government already use either FAR 52.222-43 or FAR 52.222-44 in their time-and-materials and labor-hour contracts. The proposed revision of paragraphs (c)(1) and (c)(2) of FAR 22.1006, Solicitation Provisions and Contract Clauses, would replace the requirement that the clauses be included in “fixed-price service contracts” with the requirement that the clauses be included in “fixed-price, time-and-materials, or labor-hour service contracts.” This change would achieve consistency throughout the government acquisition community and resolve potential inequities where the clauses have not been applied.

In addition, FAR 52.222-43 and FAR 52.222-44 would be amended to provide for changes to “fixed hourly labor rates (if this is a time-and-materials or labor-hour contract)” in addition to changes to the contract price or contract unit price labor rates already provided by the clauses.

Comments on this proposed rule must be submitted no later than March 10, 2009, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail to: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Hada Flowers, Washington, DC 20405. Identify comments as “FAR Case 2007-021.”



GSA Proposes Rewriting Federal Supply Schedule Rules

As part of its General Services Administration (GSA) Acquisition Regulation (GSAR) rewrite project, GSA is proposing to rewrite GSAR Part 538, Federal Supply Schedule [FSS] Contracting, by abandoning the FAR format and employing subparts that correspond to individual FAR parts. Currently, GSAR Part 538 consists of three subparts: Subpart 538.2, Establishing and Administering Federal Supply Schedules; Subpart 538.70, Cooperative Purchasing; and GSAR Subpart 538.71, Recovery Purchasing. The proposed rule would retain GSAR Subparts 538.70 and 538.71, but would remove GSAR Subpart 538.2. However, most of the text in GSAR Subpart 538.2 would be retained in the following new subparts:

Comment on this proposed rule must be submitted no later than March 27, 2009, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail to: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Hada Flowers, Washington, DC 20405. Identify comments as “GSAR Case 2007-G507.”



Two Rewritten GSAR Parts Finalized

Besides proposing to revise GSAR Part 538, GSA has finalized two GSAR parts as part of its GSAR rewrite effort: Part 542, Contract Administration and Audit Services, and Part 543, Contract Modifications.

For more on these two proposed rules, see the July 2008 Federal Contracts Perspective article “GSAR Undergoing Rewrite.”



Mileage Reimbursement Set at 55¢/Mile for Private Autos

The Federal Travel Regulation (FTR) is amended to decrease the mileage reimbursement rate for use of a privately owned automobile on official travel from 58.5¢ per mile to 55¢ per mile, and the rate for use of a motorcycle on official travel from 58.5¢ per mile to 52¢ per mile. Also, GSA is reducing the reimbursement rate for use of a privately owned aircraft from $1.26 per mile to $1.24 per mile. These revised rates are effective for travel performed on or after January 1, 2009. Travel performed before January 1, 2009, will be reimbursed at the earlier rates.

By law, the automobile reimbursement rate cannot exceed the single standard mileage rate established by the Internal Revenue Service (IRS). The IRS announced a new mileage rate for automobiles of 55¢ per mile effective January 1, 2009, so GSA took action to decrease the automobile reimbursement rate as of January 1, 2009. The change reflects the drop in gasoline price from $4 a gallon in the summer to below $2 a gallon this winter.



Copyright 2009 by Panoptic Enterprises. All Rights Reserved.

Return to the Newsletters Library.

Return to the Main Page.