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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


April 2012
Vol. XIII, No. 4

CONTENTS


FAC 2005-56 Finalizes Rules on Women-Owned Business Set-Asides, Use of Cost-Reimbursement Contracts
HUDAR Update Proposed
NASA Updates Award Fee Clauses
President Issues National Preparedness Order



FAC 2005-56 Finalizes Rules on Women-Owned Business
Set-Asides, Use of Cost-Reimbursement Contracts

Federal Acquisition Circular (FAC) 2005-56 is amending the Federal Acquisition Regulation (FAR) to finalize rules implementing the women-owned small business set-aside program; providing guidance on the proper use and management of cost-reimbursement contracts; mandate competition for orders placed against multiple-award contracts (including those against Federal Supply Schedule contracts); clarifying current reporting, reutilization, and disposal of government property; and adjusting trade agreements thresholds (along with adding Korea and Armenia as covered countries).



HUDAR Update Proposed

The Department of Housing and Urban Development (HUD) is proposing to update the HUD Acquisition Regulation (HUDAR), which was last revised on January 13, 2006. This proposed revision would remove provisions that are obsolete, refine provisions to approve requests for deviation from the HUDAR, update provisions that address the organizational structure of HUD, and add provisions on contractor record retention.

The following are some of the more significant changes to the HUDAR that are being proposed:

Comments on this proposed rule must be submitted no later than May 15, 2012, identified as “Docket No FR-5571-P-01, Amendments to the HUD Acquisition Regulation (HUDAR)” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail: Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500. Comments submitted by facsimile (fax) are not acceptable.

NASA Updates Award Fee Clauses

The National Aeronautics and Space Administration (NASA) is amending the NASA FAR Supplement (NFS) to update NFS 1852.216-76, Award Fee for Service Contracts, to clarify that the amount of award fee held in reserve, if any, shall not exceed $100,000 for the contract. In addition, NFS 1852.216-77, Award Fee for End-Item Contracts, is being amended to add similar language so the contracting officer can withhold fee payments, at a not-to-exceed amount of $100,000 for the contract, in reserve to protect the government’s interests relative to an orderly and timely closeout of the contract.

Previously, NFS 1852.216-76 specified a not-to-exceed amount of 15% of the contract’s potential award fee. On large multi-million dollar procurements, this reserve could total millions of dollars, and that amount would greatly exceed the intended purpose of the reserve.



President Issues National Preparedness Order

President Obama has issued Executive Order 13603, National Defense Resources Preparedness, to “strengthen (the domestic industrial and technological base) and to ensure it is capable of responding to the national defense needs of the United States.”

The executive order expands on the authority granted the president (“commander in chief of the armed forces”) by the Defense Production Act of 1950 to establish priorities and allocations. This authority has been used to establish the Defense Priorities and Allocation System (DPAS), the Energy Priorities and Allocation System (EPAS), and the proposed Agriculture Priorities and Allocation System (APAS). These priorities and allocations systems require acceptance and priority performance of contracts or orders to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense.

With this executive order, the priorities and allocations authority is further delegated to the following:

Each of these secretaries is to “plan for and issue regulations to prioritize and allocate resources and establish standards and procedures by which the authority shall be used to promote the national defense, under both emergency and non-emergency conditions.”



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