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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


December 2012
Vol. XIII, No. 12

CONTENTS


FAC 2005-62 Updates Policy on Reporting to FPDS, Limits Use of Generic DUNS Numbers
Twelve More Biobased Products Designated
DOD Issues Preliminary “Better Buying Power 2.0”
VA Requires Electronic Payment Requests
Revision to CAS Exemption for Commercial Items Proposed
Number of Protests Increased by 5% in FY 2012
GSA Introduces GWACs Dashboard



FAC 2005-62 Updates Policy on Reporting to FPDS,
Limits Use of Generic DUNS Numbers

Federal Acquisition Circular (FAC) 2005-62 amends the Federal Acquisition Regulation (FAR) to: (1) limit the use of generic Data Universal Numbering System (DUNS) numbers; (2) update policies on reporting into the Federal Procurement Data System (FPDS); (3) revise clauses for Central Contractor Registration (CCR) and DUNS Number reporting; (4) require compliance by nondefense agencies with Department of Defense (DOD) procurement requirements when entering into interagency agreements; and (5) implement the United States-Panama Trade Promotion Agreement Implementation Act.



Twelve More Biobased Products Designated

The United States Department of Agriculture (USDA) is adding twelve sections to Title 7 of the Code of Federal Regulations (CFR), Part 3201, Guidelines for Designating Biobased Products for Federal Procurement (7 CFR Part 3201), to add twelve 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:

     3201.88, Agricultural spray adjuvants
     3201.89, Animal cleaning products
     3201.90, Deodorants
     3201.91, Dethatcher products
     3201.92, Fuel conditioners
     3201.93, Leather, vinyl, and rubber care products
     3201.94, Lotions and moisturizers
     3201.95, Shaving products
     3201.96, Specialty precision cleaners and solvents
     3201.97, Sun care products
     3201.98, Wastewater systems coatings
     3201.99, Water clarifying agents

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 all the products in the program, go to http://www.biopreferred.gov/.

In a related development, the USDA has launched a website to handle contractor biobased reporting required by Section 9001 of the Food, Conservation, and Energy Act of 2008 (Public Law 110-246), which amended Section 9002 of the Farm Security and Rural Investment Act of 2002 (Public Law 107-171) to require contractors to report the biobased products purchased under service and construction contracts. President Obama issued a memorandum to agency heads (“Driving Innovation and Creating Jobs in Rural America through Biobased and Sustainable Product Procurement”) directing them to take necessary actions to comply with Section 9001. Section 5 of the memorandum directed the FAR Council to amend the FAR to require reporting of biobased product purchases and develop a template to facilitate this reporting requirement. FAC 2005-58 contained the FAR amendment requiring this contractor biobased reporting (see the May 2012 Federal Contracts Perspective article “FAC 2005-58 Addresses Biobased Procurements, Exports to Iran, Sole Source 8(a) Contracts”).

The website is at http://www.biopreferred.gov/FARReporting/FARReporting.xhtml. The website states that the due date for contractors to report on their biobased products has been extended from October 31, 2012, to December 31, 2012 (see paragraph (c)(2) of FAR 52.223-2, Affirmative Procurement of Biobased Products Under Service and Construction Contracts). However, the website goes on to explain that “this website will serve as a temporary reporting solution. A longer term solution is under development for follow-on annual reporting. Note: Contractors should only report biobased products that were purchased under contracts that were awarded between May 18, 2012, and September 30, 2012, and reported to the Federal Procurement Data System – Next Generation (FPDS-NG). Other contracts will not pass the system validation test.”



DOD Issues Preliminary “Better Buying Power 2.0”

Two years after Dr. Ashton Carter, then Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) and now the Deputy Secretary of Defense, issued the memorandum “Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending,” the current Under Secretary of Defense for AT&L, Frank Kendall, has issued a preliminary version of “Better Buying Power (BBP) 2.0,” which represents a “management philosophy of continuous improvement in our acquisition practices.”

After two months of review and comments by those in industry and government, a more detailed memorandum will be issued “that will outline the specific goals and requirements for each initiative included in the final BBP 2.0.”

BBP 2.0 encompasses the following 36 initiatives that are organized into seven focus areas. While many are duplicates or refinements of the original BBP initiatives, the majority are new or significant elaborations:

“Improving the productivity of all our contracted work, both products and services, is not an easy task that can be accomplished with a simple set of policy changes. It will require the professionalism and dedication I know I can expect from everyone in the workforce,” wrote Mr. Kendall. “We are entering an era where resources for the Defense Department are likely to be limited. We must wring every possible cent of value for the warfighters we support from the dollars with which we are entrusted by the American taxpayers.”

For more on the original “Better Buying Power” guidance, see the July 2010 Federal Contracts Perspective article “A Plethora of Changes to DFARS in June,” and the October 2010 Federal Contracts Perspective article “USD(AT&L) Directs DOD to ‘Do More Without More’.”



VA Requires Electronic Payment Requests

The Department of Veterans Affairs (VA) is amending the VA Acquisition Regulation (VAAR) to add VAAR Subpart 832.70, Electronic Invoicing Requirements, to require contractors to submit payment requests in electronic form. This will enhance customer service, departmental productivity, and facilitate adoption of innovative information technology, including the appropriate use of commercial best practices.

Paragraph (a) of FAR 32.905, Payment Documentation and Process, states that “payment will be based on receipt of a proper invoice and satisfactory contract performance.” The phrase “receipt of a proper invoice” has generally been interpreted to mean a paper invoice.

To improve the timeliness of payments and lower overall administrative costs, VA issued a class deviation to FAR 32.905 which added interim electronic invoicing clause VAAR 852.273-76, Electronic Invoice Submission (see the August 2009 Federal Contracts Perspective article “VA to Encourage Electronic Submission of Invoices”). The clause strongly encouraged contractors to submit invoices using its electronic invoicing system.

This final rule adds VAAR subpart 832.70, Electronic Invoicing Requirements, and VAAR 852.232-72, Electronic Submission of Payment Requests, to mandate electronic invoicing to improve the commercial vendor payment process. VAAR 832.7002-1, Data Transmission, and VAAR 852.232-72(c) require contractors to “submit electronic payment requests through: (a) VA’s Electronic Invoice Presentment and Payment System (see website at http://www.fsc.va.gov/einvoice.asp); or, (b) a system that conforms to the X12 electronic data interchange (EDI) formats established by the Accredited Standards Center (ASC) chartered by the American National Standards Institute (ANSI).”

There are five exceptions to this requirement in which the contracting officer is permitted to require contractors to submit payment requests by mail through the United States Postal Service:

No comments were submitted in response to the proposed rule, so the rule is finalized without any changes except to the numbering of the subpart and its sections, and the clause. The proposed rule proposed adding VAAR subpart 832.10, VAAR sections 832.1001, 832.1002, 832.1003, 832.1003-1, and 832.1003-2, and VAAR 852.273-76. However, FAR subpart 32.10, Performance-Based Payments, already exists, so VAAR subpart 832.10 is renumbered as VAAR subpart 832.70, and the VAAR sections are renumbered as 832.7000, 832.7001, 832.7002, 832.7002-1, and 832.7002-2 because this VAAR subpart has no corresponding subpart in the FAR (see paragraph (a) of FAR 1.303, Publication and Codification: “Supplementary material for which there is no counterpart in the FAR shall be codified using chapter, part, subpart, section, or subsection numbers of 70 and up”). Proposed VAAR 852.273-76 is renumbered as VAAR 852.232-72 to align it with FAR part 32, Contract Financing (see FAR 1.303(a): “Coverage in an agency acquisition regulation that implements a specific part, subpart, section, or subsection of the FAR shall be numbered and titled to correspond to the appropriate FAR number and title”, and paragraph (b)(1) of FAR 52.101, Using Part 52).

For more on the proposed rule, see the May 2012 Federal Contracts Perspective article “VA Proposes Electronic Payment Requests.”



Revision to CAS Exemption for Commercial Items Proposed

The Cost Accounting Standards (CAS) Board is soliciting comments concerning a proposed rule that would clarify the exemption from CAS requirements for contracts or subcontracts for commercial items so that the regulatory text is more consistent with the statutory text.

Paragraph (b)(6) of Title 48 of the Code of Federal Regulations (CFR), 9903.201-1, CAS Applicability, provides the following exemption from all CAS requirements of the following categories of contracts and subcontracts: “firm fixed-priced, fixed-priced with economic price adjustment (provided that price adjustment is not based on actual costs incurred), time-and-materials, and labor-hour contracts and subcontracts for the acquisition of commercial items.” In 1996, the enactment of the Federal Acquisition Reform Act (FARA) of 1996 (Public Law 104-106), provided a CAS exemption for “contracts or subcontracts for the acquisition of commercial items.” The FARA exemption has evolved into the current language as subsequent statutes and rules have “clarified” the commercial item exemption.

The CAS Board now believes the current language in (b)(6), as it has evolved, is inconsistent with applicable statutes and regulations. Therefore, to correct this inconsistency, the CAS Board is proposing to return to the “contracts or subcontracts for the acquisition of commercial items” language in the FARA.

The CAS Board has included the following in the preamble to the proposed rule: “Interested persons are invited to participate by submitting data, views, or arguments with respect to this proposed rule…[T]he CAS Board is proposing to clarify and simplify the (b)(6) commercial item exemption from CAS to read as ‘[c]ontracts and subcontracts for the acquisition of commercial items.’ Doing so would eliminate the current listing of permissible contract types for the (b)(6) commercial item exemption, as well as the exception to that exemption for the FPEPA [fixed-priced with economic price adjustment] contract type with price adjustments based on actual incurred costs. The proposed elimination of the exception to the (b)(6) commercial item exemption would mean that the FPEPA contract type with price adjustments based on actual incurred costs would be exempted from CAS under the proposed (b)(6) commercial item exemption. With regard to the proposal to exempt from CAS coverage FPEPA contracts with economic price adjustments based on actual incurred costs for labor and material, the CAS Board notes that this proposal is made based on the assumption that this particular FPEPA contract type is not used for acquiring commercial items. Contract information, however, was not readily available to validate this assumption. As part of the public comment process, the CAS Board specifically requests comments on this usage assumption and any information on the use of this particular FPEPA type contract for acquiring commercial items.”

Comments on this proposed rule must be submitted no later than January 18, 2013, identified as “(b)(6) commercial item exemption,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: 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 (“due to delays caused by the screening and processing of mail, respondents are strongly encouraged to submit responses electronically”).



Number of Protests Increased by 5% in FY 2012

The Government Accountability Office (GAO) issued its annual letter on bid protests to various Congressional committees, in which it reported that 2,475 protests, cost claims, and requests for reconsideration were filed in Fiscal Year (FY) 2012, a 5% increase over the 2,353 filed in FY 2011 and a 50% increase over the 1,652 filed in FY 2008. The FY 2012 number is the largest since FY 1995 when 2,529 protests, cost claims, and requests for reconsideration were filed.

The FY 2012 protest sustain rate (number of GAO decisions in favor of the protestor versus the number of all protests) was 18.6%, compared to the 16% sustain rate for FY 2011 and 19% sustain rate for FY 2010. The 42% effectiveness rate (the protestor obtained some form of relief from the agency either as a result of voluntary corrective action by the agency or a GAO decision sustaining the protest) was the same as the effectiveness rates for FY 2011 and FY 2010.

Because of the increasing number of protests being filed, the fact that the GAO’s budget was reduced by 4.6% in FY 2012, and the number of GAO employees is being reduced to its lowest level in 75 years, the GAO is requesting that Congress approve the imposition of a fee to file a protest, according to Bloomberg.com. The proposed flat fee would be $240 per protest. An alternate would be a lower fee plus a charge per page or document filed. The fee would apply to all protestors, whether large or small businesses.



GSA Introduces GWACs Dashboard

The General Services Administration (GSA) has released its Governmentwide Acquisition Contracts (GWAC) Dashboard – “a new easily accessible online tool designed to assist federal agencies with spending analysis, evaluation of past GWAC performance, and IT [information technology] planning.” The GWACs Dashboard is located at http://www.gsa.gov/portal/content/103435. (NOTE: A GWAC is a pre-competed, multiple-award, indefinite delivery, indefinite quantity (IDIQ) contract that agencies can use to buy total IT solutions.)

The interactive dashboard aggregates and consolidates all nonclassified data on federal IT purchasing from 2004 to present through GSA’s GWACs. The dashboard is updated daily with publicly available spending data displayed in easily understood lists, graphs, and charts. This allows GSA’s contractors, specifically small businesses, to make informed strategic business decisions on their activity in the federal marketplace.

The dashboard allows the user to limit the period of time covered, the agency, the GWAC (8(a) STARS, 8(a) STARS II, Alliant, Alliant Small Business, or Veterans Technology Service (VETS)), or the contractor (“industry partner”). In addition, the user can build customized reports (under “Data Feed”) and download them. Also, the dashboard helps federal agencies monitor their use of GSA GWACs, respond to data calls, and prepare for executive briefings.

“Over the past several years we’ve received feedback from our federal agency customers and our small business partners indicating that they need access to GSA’s GWAC task-order data. The launch of this new GWAC dashboard is a direct response to their needs,” said GSA Federal Acquisition Service Acting Commissioner Mary A. Davie. “This tool is especially valuable to small businesses as it provides access to business intelligence they can use to assess market opportunity, decide how best to allocate resources, and identify potential teaming partners for future projects.”



Copyright 2012 by Panoptic Enterprises. All Rights Reserved.

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