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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


August 2011
Vol. XII, No. 8

CONTENTS


FAC 2005-53 Extends Protests of Task/Delivery Orders, Standardizes Unique PIIDs
CAS Applicability Threshold Changed to Reflect TINA
One Nonmanufacturer Rule Retracted, One Denied
Prompt Payment Interest Rate Set at 2 1/2%



FAC 2005-53 Extends Protests of Task/Delivery Orders,
Standardizes Unique PIIDs

Federal Acquisition Circular 2005-53 contains six rules that amend the Federal Acquisition Regulation (FAR), among them a rule extending the deadline for protests against task and delivery orders issued by the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), and a rule standardizing the use of unique Procurement Instrument Identifiers (PIIDs) throughout the government.



CAS Applicability Threshold Changed to Reflect TINA

The Cost Accounting Standards Board (CASB) is revising the threshold for the applicability of Cost Accounting Standards (CAS) from “$650,000” to “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation.” The change is being made because the CAS applicability threshold is statutorily tied to the TINA threshold, which was recently changed to $700,000 as required by Section 807 of the National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375) (“on October 1 of each year that is evenly divisible by five, the Federal Acquisition Regulatory Council shall adjust each acquisition-related dollar threshold provided by law...to the baseline constant dollar value of that threshold”) (for more on the most recent five-year threshold adjustment, see the September 2010 Federal Contracts Perspective article “Federal Acquisition-Related Thresholds Adjusted for Inflation”).

This change obviates the need to revise the CAS regulations to reflect the new TINA threshold every time it is adjusted.

The change from “$650,000” to “the Truth in Negotiations Act (TINA) threshold, as adjusted for inflation” is being made to the following CAS regulations (which are Chapter 99 of Title 48 of the Code of Federal Regulations):

Comments on this interim rule must be submitted no later than August 11, 2011, identified as “CAS-TINA Threshold,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) e-mail: casb2@omb.eop.gov; (3) fax: 202-395-5105; or (4) mail: Office of Federal Procurement Policy, ATTN: Raymond J. M. Wong, 725 17th Street, NW, Room 9013, Washington, DC 20503.



One Nonmanufacturer Rule Retracted, One Denied

The Small Business Administration (SBA) is retracting the waiver of the nonmanufacturer rule for petroleum base liquid propellants (NAICS) because of the discovery of small business manufacturers, and denying a request for a waiver of the nonmanufacturer rule for optical eyeglass frames because SBA has discovered a manufacturer.

NOTE: 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/sites/default/files/05262011_class_waivers.pdf.



Prompt Payment Interest Rate Set at 2 1/2%

The Treasury Department has established 2 1/2% (2.500%) as the interest rate for the computation of payments made between July 1, 2011, and December 31, 2011, under the Prompt Payment Act and the Contracts Disputes Act. This rate is also used in facilities capital cost of money calculations. The interest rate for the prior six-month period (January 1, 2011, through June 30, 2011) was 2 5/8% (2.625%). The interest rate for July 1, 2010, through December 31, 2010), was 3 1/8% (3.125%).

All prompt payment interest rates since 1980 (in six-month increments) are available at http://www.treasurydirect.gov/govt/rates/tcir/tcir_opdprmt2.htm.

FAR Subpart 32.9, Prompt Payment; FAR Subpart 33.2, Disputes and Appeals; FAR 31.205-10, Cost of Money; and Cost Accounting Standard (CAS) 9904.414, Cost of Money as an Element of the Cost of Facilities Capital, are affected by this interest rate.



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