FEDERAL CONTRACTS PERSPECTIVE
Federal Acquisition Developments, Guidance, and Opinions
Vol. XI, No. 12
SBA Suspends Two Small Businesses Alleged to be GTSI Fronts
Another Deluge of DFARS Changes
Fourteen More Items Proposed for Biobased Designation
DEAR Updated, Conformed to FAR
Nonmanufacturer Rule Waived for Gloves
SBA Suspends Two Small Businesses
Alleged to be GTSI Fronts
In October, GTSI Corporation was suspended by the Small Business Administration (SBA) for using small business “fronts” to obtain government contracts reserved for small businesses (see the November 2010 Federal Contracts Perspective article “GTSI Suspended, Reinstated”). Though SBA subsequently reinstated GTSI after it agreed to dismiss its chief executive officer and general counsel, and suspend three other employees, the question was: “Why weren’t the small businesses that allowed themselves to be used as fronts for GTSI likewise suspended?” On November 19, the other shoe dropped when MultimaxArray Firstsource (MAF) and EG Solutions, LLC (EGS) were suspended for “a lack of business integrity or business honesty.”
Both small businesses are FirstSource contractors. FirstSource is a Department of Homeland Security (DHS) program consisting of indefinite-delivery/indefinite-quantity (IDIQ) contracts for information technology (IT) hardware, software, and associated services that are reserved for small businesses. One of the clauses in the contract, Federal Acquisition Regulation (FAR) 52.219-14, Limitations on Subcontracting, states, “By submission of an offer and execution of a contract, the offeror/contractor agrees that in performance of the contract in the case of a contract for: (1) Services (except construction). At least 50 percent of the cost of contract performance incurred for personnel shall be expended for employees of the concern; [and] (2) Supplies (other than procurement from a nonmanufacturer of such supplies). The concern shall perform work for at least 50 percent of the cost of manufacturing the supplies, not including the cost of materials.”
GTSI was a subcontractor for both MAF and EGS. SBA suspended GTSI because “the evidence shows that GTSI was an active participant in a scheme that resulted in contracts set-aside for small businesses being awarded to ineligible contractors, and with contracts not being performed in accordance with applicable law, regulations, and contract terms.”
On November 19, both MAF and EGS were sent letters by Michael Chodos, SBA suspension and debarment official. In the letter to MAF, Mr. Chodos wrote:
| ||“DHS and SBA have looked into the conduct of MAF as a prime contractor on this contact and have found evidence which shows that MAF entered in a relationship with a subcontractor [GTSI] in order to defraud the government. By the terms of its agreement with its subcontractor, including payment terms, the subcontractor agreed to do most if not all the work necessary to perform the contracts and the work necessary to receive and respond to any contract opportunities. Further evidence shows that the subcontractor in fact performed most if not all of the work required to be performed in connection with the subject contract opportunities. There is also evidence that MAF and its subcontractor attempted to conceal the nature of this relationship from the government and their competitors, after concerns were raised about MAF and its subcontractor’s conduct…|
| ||“I have found that there is adequate evidence that establishes that MAF misrepresented its status in order to obtain or attempt to obtain contracts set-aside for small businesses and that MAF failed to perform those contracts in accordance with all applicable laws and regulations. I also find that there is adequate evidence that MAF committed fraud or a criminal offense in obtaining and attempting to obtain contracts, and in its performance of those contracts; and that there is adequate evidence of a lack of business integrity or business honesty that seriously or directly affects the present responsibility of MAF.”|
An identical letter was sent to EGS.
As a result of the indefinite suspension, MAF and EGS will suffer the following “consequences”:
- Both companies’ names will be published in the Excluded Parties List System (EPLS) (http://epls.gov), where it will be noted that they have been suspended from receiving new federal contracts or orders.
- The companies are excluded from receiving contracts, and agencies shall not solicit offers from, award contracts to, or consent to subcontracts with the companies, unless the agency head determines that there is a compelling reason for such action.
- The companies are excluded from conducting business with the government as agent or representative of other contractors.
However, agencies may continue contracts with MAF and EGS that were in existence at the time they were suspended unless the agency head directs otherwise. See FAR Subpart 9.4, Debarment, Suspension, and Ineligibility, for more on the restrictions placed on MAF and EGS.
Another Deluge of DFARS Changes
Still more changes to the Defense FAR Supplement (DFARS) in November: four final rules, two interim rules, three proposed rules, one class deviation, and a follow-up memorandum from Under Secretary for Defense for Acquisition, Technology & Logistics (USD(AT&L)).
- Prohibition on Interrogation of Detainees by Contractor Personnel: This interim rule implements Section 1038 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84), which prohibits the interrogation of detainees by contractor personnel, by adding DFARS 237.173, Prohibition on Interrogation of Detainees by Contractor Personnel, and the identically titled clause DFARS 252.237-7010.
DFARS 237.173 prescribes policies that prohibit interrogation of detainees by contractor personnel (“detainees” are defined as “any person captured, detained, held, or otherwise under the effective control of DOD personnel (military or civilian) in connection with hostilities. This includes, but is not limited to, enemy prisoners of war, civilian internees, and retained personnel.”). It permits support roles for contractor personnel as linguists, interpreters, report writers, information technology technicians, and other employees filling ancillary positions, including as trainers of and advisors to interrogations, if they have proper training and security clearances, and meet the criteria provided by DOD Instruction 1100.22, Policy and Procedures for Determining Workforce Mix (http://www.dtic.mil/whs/directives/corres/pdf/110022p.pdf), DOD Directive 2310.01E, The Department of Defense Detainee Program (http://www.dtic.mil/whs/directives/corres/pdf/231001p.pdf), and DOD Directive 3115.09, DOD Intelligence Interrogations, Detainee Debriefings, and Tactical Questioning (http://www.dtic.mil/whs/directives/corres/pdf/311509p.pdf).
Comments on this interim rule must be submitted no later than January 3, 2011, identified as “DFARS Case 2010-D027,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) e-mail: firstname.lastname@example.org; (3) fax: 703-602-0350; or (4) mail: Defense Acquisition Regulations Council, Attn: Julian Thrash, OUSD (AT&L) DPAP (DARS), 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060.
- Award-Fee Reductions for Health and Safety Issues: This interim rule revises DFARS Subpart 216.4, Incentive Contracts, to implement Section 823 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84), which requires contracting officers to consider reduction or denial of award fee if contractor or subcontractor actions jeopardize the health or safety of government personnel.
DFARS 216.405-270, Award Fee Reduction or Denial for Jeopardizing the Health or Safety of Government Personnel, is added, and it applies to contracts containing award fee provisions. If a covered 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. New clause DFARS 252.216-7004, Award Fee Reduction or Denial for Jeopardizing the Health or Safety of Government Personnel, details those dispositions where a reduction or denial of award fee is applicable, and permits the government to recovery 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.
Comments on this interim rule must be submitted no later than January 11, 2011, identified as “DFARS Case 2009-D039,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) e-mail: email@example.com; (3) fax: 703-602-0350; or (4) mail: Defense Acquisition Regulations Council, Attn: Amy Williams, OUSD (AT&L) DPAP (DARS), 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060.
- Cost and Software Data Reporting System: This finalizes, with changes, the proposal to add DFARS Subpart 234.71, Cost and Software Data Reporting, to establish DOD Cost and Software Data Reporting (CSDR) system requirements for major defense acquisition programs and major automated information system programs that exceed $50 million.
The proposed rule would require that each offeror:
- Describe in its proposal responding to solicitations for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) programs the standard CSDR process it intends to use to satisfy the requirements of the DOD 5000.04-M-1, CSDR Manual; its DD Form 2794, Cost and Software Data Reporting Plan; and the related Resource Distribution Table (RDT) (proposed DFARS 252.234-70XX, Notice of Cost and Software Data Reporting System); and
- Submit with its pricing proposal the DD Form 1921, Cost Data Summary Report; DD Form 1921-1, Functional Cost-Hour Report, and; DD Form 1921-2, Progress Curve Report.
During contract performance, the proposed rule would require the contractor to:
- Utilize a documented standard CSDR process that satisfies the guidelines in DOD 5000.04-M-1;
- Use management procedures that provide for generation of timely and reliable information for the Contractor Cost Data Reports, and Software Resources Data Reports;
- Use the government-approved contract CSDR plan, DD Form 2794, Cost and Software Data Reporting Plan with the related RDT, and DD Form 1921-3, Contractor Business Data Report, as the basis for reporting; and
- Require subcontractors, or subcontracted effort if subcontractors have not been selected, to comply with the CSDR requirements (DFARS 252.234-70YY, Cost and Software Data Reporting (CSDR)).
Two respondents submitted comments on the proposed rule, and the final rule differs from the proposed rule in the following respects:
- Paragraph (a) of DFARS 234.7100, Policy, clarifies that the two principal components of the CSDR system are the contractor cost data reporting (CCDR) and the software resources data reporting (SRDR).
- DFARS 234.7101, Solicitation Provision and Contract Clause, is revised to clarify the prescriptions for DFARS 252.234-7003, Notice of Cost and Software Data Reporting System, and DFARS 252.234-7004, Cost and Software Data Reporting.
- DFARS 234.7101(b)(2) is revised to specify the approval authority for applying the CSDR requirements between $20 million and $50 million (the Office of the Secretary of Defense Deputy Director, Cost Assessment).
- Removing from DFARS 252.234-7003(b)(6) the requirement to submit DD Form 1921-2, Progress Curve Report, with the offeror's pricing proposal.
- Removing from paragraph (b) of DFARS 242.503-2, Postaward Conference Procedure, and DFARS 252.234-7004 the reference to DD Form 1921-3, Contractor Business Data Report.
- Restructuring DFARS 252.234-7003 to clarify proposal submission requirements.
- Providing an Alternate I to DFARS 252.234-7003 and DFARS 252.234-7004 to accommodate CSDR requirements between $20 million and $50 million.
For more on the proposed rule, see the June 2010 Federal Contracts Perspective article “DOD Publishes Five Proposed Rules, Two Deviations.”
- Contract Authority for Advanced Component Development or Prototype Units: This finalizes, with a minor change, the interim rule that added DFARS 234.005-1, Competition, to implement Section 819 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84), which places limitations on certain types of line items and contract options to prevent a contract for new technology that is initially awarded as a result of competition from becoming a noncompetitive effort for the development of advanced components or the procurement of prototype units.
One respondent submitted comments on the interim rule and, as a result, a cross-reference to DFARS 234.005-1 is added to DFARS Part 235, Research and Development Contracting (DFARS 235.006-71, Competition).
For more on the interim rule, see the June 2010 Federal Contracts Perspective article "A Plethora of Changes to DFARS in June."
- Services of Senior Mentors: This final rule implements DOD policy that senior mentors (“a retired flag, general, or other military officer or retired senior civilian official who provides expert experience-based mentoring, teaching, training, advice, and recommendations to senior military officers, staff, and students as they participate in war games, warfighting courses, operational planning, operational exercises, and decision-making exercises”) will be employed as “highly qualified experts,” a type of civil service position that subjects them to applicable federal personnel and ethics laws and regulations. DOD will no longer enter into personal services contracts with senior mentors or otherwise contract for the services of senior mentors. Therefore, this final rule adds DFARS 237.102-73, Prohibition on Contracts for Services of Senior Mentors, which states, “DOD is prohibited from entering into contracts for the services of senior mentors. See PGI [Policy, Guidance, and Information] 237.102-73 for references to DOD policy and implementation guidance.”
- Contractor Insurance/Pension Review: This final rule removes and relocates the requirements for conducting a contractor insurance/pension review (CIPR) from PGI 242.7302, Requirements [for CIPRs] to DFARS 242.7302, Requirements.
In 2006, the CIPR requirements were removed from DFARS 242.7302 and relocated to PGI 242.7302 (see the March 2006 Federal Contracts Perspective article “DOD Suspends SDB Evaluation Adjustment Another Year”). However, because the threshold and requirements for conducting a CIPR are DOD-wide policy, and the conduct of a CIPR impacts industry (since contractors are required to provide documentation to support the reviews), DOD proposed to move the requirements for CIPR back to the DFARS (see the July 2010 Federal Contracts Perspective article "A Plethora of Changes to DFARS in June"). No comments were received on the proposal, so the CIPR requirements are moved back to DFARS 242.7302.
- Annual Representations and Certifications: This proposed rule would add amend DFARS 252.204-7007, Alternate A, Annual Representations and Certifications, to conform the DFARS to changes in the FAR relating to annual representations and certifications.
FAC 2005-30 added paragraph (c) to FAR 52.204-8, Annual Representations and Certifications, to indicate the applicable representations and certifications in the Online Representations and Certifications Application (ORCA) (https://orca.bpn.gov/). The ORCA representations and certifications in paragraph (c) are those listed in FAR 4.1202, Solicitation Provision and Contract Clause (see the February 2009 Federal Contracts Perspective article “Publication of Justifications Required For Noncompetitive Contracts”).
DFARS 252.204-7007 would add a new paragraph (d) to FAR 52.204-8 consisting of the ORCA representations and certifications listed in DFARS 204.1202, Solicitation Provision and Contract Clause (current FAR 52.204-8(d) would become FAR 52.204-8(e)). In addition, DFARS 252.204-7007(d) would address the applicability of the representations and certifications in ORCA.
Comments on this proposed rule must be submitted no later than January 24, 2011, identified as “DFARS Case 2009-D011,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) e-mail: firstname.lastname@example.org; (3) fax: 703-602-0350; or (4) mail: Defense Acquisition Regulations Council, Attn: Julian Thrash, OUSD (AT&L) DPAP (DARS), 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060.
- Discussions Prior to Contract Award: This proposed rule would revise DFARS Part 215, Contracting by Negotiation, to strongly encourage discussions prior to award for source selections of procurements estimated at $100 million or more.
The DOD Source Selection Joint Analysis Team (JAT), chartered by the Deputy Under Secretary of Defense (Acquisition, Technology, and Logistics) to revise the DOD source selection procedures, determined there is a significant positive correlation between high-dollar value source selections conducted without discussions and protests sustained. Therefore, to improve the quality of high-dollar value, more complex source selections and reduce turbulence and inefficiency resulting from sustained protests, the JAT recommended that discussions prior to award be strongly encouraged for source selections with a dollar value of $100 million or more. Therefore, this proposed rule would add the following:
- DFARS 215.203-71, Requests for Proposals – Procurements of $100 Million or More, which would state the following: “For source selections when the procurement is $100 million or more, contracting officers should conduct discussions with offerors in the competitive range.”
- DFARS 215.209, Solicitation Provisions and Contract Clauses, which would encourage contracting officers to use Alternate I of FAR 52.215-1, Instructions to Offerors – Competitive Acquisition, for source selections when the procurement is $100 million or more (“should use”). FAR 52.215-1(f)(4) states, “The government intends to evaluate proposals and award a contract without discussions with offerors…” Alternate I would replace paragraph (f)(4) with the following language: “The government intends to evaluate proposals and award a contract after conducting discussions with offerors whose proposals have been determined to be within the competitive range.”
Comments on this proposed rule must be submitted no later than January 31, 2011, identified as “DFARS Case 2010-D023,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) e-mail: email@example.com; (3) fax: 703-602-0350; or (4) mail: Defense Acquisition Regulations Council, Attn: Meredith Murphy, OUSD (AT&L) DPAP (DARS), 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060.
- Definition of Sexual Assault: This proposed rule would amend DFARS 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, to ensure contractor employees are aware of the DOD definition of “sexual assault” in DOD Directive 6495.01, Sexual Assault Prevention and Response (SAPR) Program (http://www.dtic.mil/whs/directives/corres/pdf/649501p.pdf), and would advise them that such offenses are covered under the Uniform Code of Military Justice, Title 10, Chapter 47 (http://www.constitution.org/mil/ucmj19970615.htm).
Comments on this proposed rule must be submitted no later than January 24, 2011, identified as “DFARS Case 2010-D013,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) e-mail: firstname.lastname@example.org; (3) fax: 703-602-0350; or (4) mail: Defense Acquisition Regulations Council, Attn: Julian Thrash, OUSD (AT&L) DPAP (DARS), 3060 Defense Pentagon, Room 3B855, Washington, DC 20301-3060.
- Class Deviation on Cessation of Use of Evaluation Factor and Subfactor for Small Disadvantaged Businesses: This class deviation directs DOD contracting officers not to use or apply the evaluation factor and subfactor in FAR Subpart 19.12 and DFARS Subpart 219.12, both titled “Small Disadvantaged Business Participation Program.” This class deviation will remain in effect until either the FAR or DFARS is amended. This deviation conforms to the final judgment entered in Rothe Development Corp. v. U. S. Department of Defense and the Department of the Air Force (U. S. Court of Appeals for the Federal Circuit 2008-1017). For more on the Rothe decision, see the January 2009 Federal Contracts Perspective article “Court Strikes Down DOD’s Small and Disadvantaged Business Contract Goal”; the March 2009 Federal Contracts Perspective article “DOD Suspends SDB Evaluation Adjustment One More Year”; and the April 2009 Federal Contracts Perspective article “DOD Ordered to Cease Giving Preference to SDBs.”
- Implementation Directive for Better Buying Power: This memorandum from Under Secretary for Defense for Acquisition, Technology & Logistics (USD(AT&L)) Ashton Carter to the secretaries of the military departments and directors of defense agencies provides specific guidance on, and deadlines for, the implementation of his September 14, 2010, memorandum “Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending” (see the October 2010 Federal Contracts Perspective article “USD(AT&L) Directs DOD to ‘Do More Without More’”).
The memorandum addresses the following five areas: (l) target affordability and control cost growth; (2) incentivize productivity and innovation in industry; (3) promote real competition; (4) improve tradecraft in services acquisition; and (5) reduce non-productive processes and bureaucracy.
While much of the memorandum addresses Acquisition Category I (ACAT I) programs (that is, Major Defense Acquisition Programs (MDAPs)), the following address all DOD acquisitions:
- “Effective immediately, you will give greater consideration to using Fixed-Price Incentive Firm Target (FPIF) contracts, particularly for efforts moving from development to production… I expect acquisition teams to pay particular attention to share lines and ceiling prices, and FPIF contracts with a 120% ceiling and a 50/50 share ratio should be the norm, or starting point. Effective immediately, you will implement this guidance for all programs under your immediate direction.”
- “You will ensure that by November 15, 2010, your contracting officers conduct negotiations with all single-bid offerors unless this requirement is specifically waived by the head of contracting activity (HCA) or yourself. The basis of these negotiations will be cost or price analysis, as the case may be, using either certified or non-certified cost or pricing data, as appropriate.”
- “Effective December 1,2010, all competitive and non-competitive procurement actions will seek to increase small business participation through weighting factors in past performance and in fee construct.”
- “By January 1, 2011, you will standardize the method by which you acquire services through the development and use of standard templates in developing Performance Work Statements to improve contract solicitations.”
- “By January 31, 2011, you will conduct a review of the length of time knowledge-based services contracts within your agency or component are scheduled to remain in effect before re-competition occurs and report the results to me. Single-award actions should normally be limited to three years (including options).”
- “In cases where ‘1-bid’ proposals are received, you will require pricing and cost data as appropriate. In addition, solicitations receiving only 1-bid, and which were open to industry for less than 30 days, are to be re-advertised for a minimum period of an additional 30 days unless a waiver is obtained from the head of contracting activity (HCA). This directive is to be implemented no later than December 1, 2010.”
- “…Starting immediately, you will ensure that services acquisitions under your control are predisposed toward cost-plus-fixed-fee (CPFF) or cost-plus-incentive fee (CPIF) arrangements when robust competition or recent competitive pricing history does not exist.”
- “Effective January 1, 2011, DoD components will seek opportunities to compete multiple award/IDIQ [indefinite-delivery/indefinite-quantity] contracts among small businesses.”
Fourteen More Items Proposed for Biobased Designation
The United States Department of Agriculture (USDA) is proposing to add fourteen (14) more 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 be given preference in federal procurements as provided under Section 9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA)(Public Law 107-171), and to specify the minimum level of biobased content to be contained in the procured products.
The following are the proposed new designated items and their 7 CFR Part 2902 section numbers:
| ||2902.61, Animal repellents|
| ||2902.62, Bath products|
| ||2902.63, Bioremediation materials|
| ||2902.64, Compost activators and accelerators|
| ||2902.65, Concrete and asphalt cleaners|
| ||2902.66, Cuts, burns, and abrasions ointments|
| ||2902.67, Dishwashing products|
| ||2902.68, Erosion control materials|
| ||2902.69, Floor cleaners and protectors|
| ||2902.70, Hair care products|
| ||2902.71, Interior paints and coatings|
| ||2902.72, Oven and grill cleaners|
| ||2902.73, Slide way lubricants|
| ||2902.74, Thermal shipping containers|
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, all the products in the program, and those proposed for inclusion, go to http://www.biopreferred.gov/. Also see the February 2005 Federal Contracts Perspective article “USDA Publishes Biobased Products Guidelines”; the August 2005 Federal Contracts Perspective article "Agriculture Proposes Six Biobased Items"; 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”; the June 2008 Federal Contracts Perspective article “USDA Adds 27 Items to Biobased Products List, Exempts DOD and NASA from Requirements”; the November 2008 Federal Contracts Perspective article “Nine More Biobased Items Proposed”; the November 2009 Federal Contracts Perspective article “USDA Adds Nine More Biobased Items”; the March 2010 Federal Contracts Perspective article “USDA Proposes Another Nine Biobased Items”; and the November 2010 Federal Contracts Perspective article “Eight More Biobased Products Designated.”
DEAR Updated, Conformed to FAR
The Department of Energy (DOE) has issued amendments to the DOE Acquisition Regulation (DEAR) to make it conform to the FAR, to remove out-of-date coverage, and to update references.
The following DEAR parts are updated:
| ||Part 919, Small Business Programs|
| ||Part 922, Application of Labor Laws to Government Acquisition|
| ||Part 923, Environment, Conservation, Occupational Safety, and Drug-Free Workplace|
| ||Part 925, Foreign Acquisition|
| ||Part 926, Other Socioeconomic Programs|
| ||Part 952, Solicitation Provisions and Contract Clauses|
| ||Part 970, DOE Management and Operating Contracts|
In addition, a new DEAR Part 924, Protection of Individual Privacy, is added. This new part provides the cross reference to DOE’s regulations at 10 CFR Part 1008, Records Maintained on Individuals (Privacy Act), which implement the procedures prescribed at FAR 24.103, Procedures [for determine whether a contract will involve the design, development, or operation of a system of records on individuals to accomplish an agency function].
No comments were submitted on the two proposed rules, so they are finalized without changes. For more on the proposed rules, see the July 2010 Federal Contracts Perspective article “DOE Proposes to Update DEAR.”
Nonmanufacturer Rule Waived for Gloves
The Small Business Administration (SBA) is waiving the nonmanufacturer rule for woven and knit impregnated with flat dipped rubber/plastic gloves under North American Industry Classification System (NAICS) code 315992, Glove and Mitten Manufacturing, Product Service Code (PSC) 9999, Miscellaneous. SBA invited the public to comment on the proposed waiver or to provide information on potential small business sources for these products. One comment was received from a small business distributor, not a small business manufacturer of this type of product. Therefore, SBA has determined that there are no small business manufacturers of this classes of product, and is therefore granting the nonmanufacturing rule waiver. For more on the proposed nonmanufacturing rule waiver, see the September 2010 Federal Contracts Perspective article “Nonmanufacturer Rule Waiver Issued for Lab Equipment.”
The SBA regulation on the nonmanufacturer rule is in Title 13 of the Code of Federal Regulations (CFR), Business and Credit Administration; Part 121, Small Business Size Standards; under paragraph (b) of Section 121.406, How Does a Small Business Concern Qualify to Provide Manufactured Products Under Small Business Set-Aside or MED [Minority Enterprise Development] Procurements? The SBA regulation on the waiver of the nonmanufacturer rule is 13 CFR 121.1202, When Will a Waiver of the Nonmanufacturer Rule Be Granted for a Class of Products? A complete list of products for which the nonmanufacturer rule has been waived is available at http://www.sba.gov/idc/groups/public/documents/sba_program_office/class_waiver.pdf.
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