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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


October 2013
Vol. XIV, No. 10
[pdf version]

CONTENTS


Affirmative Action Goals Set for Disabled, Veteran Contractor Employees
FAC 2005-70 Addresses Contractor Whistleblower Issues
Protections Against Trafficking in Persons Proposed
Lots More Changes to DOD Acquisition Regulations and Policies
VA Revises SDVOSB/VOSB Protest Adjudication



Affirmative Action Goals Set for Disabled,
Veteran Contractor Employees

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued two rules intended to improve hiring and employment of veterans and people with disabilities. The rules update requirements under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) and Section 503 of the Rehabilitation Act of 1973 (Section 503). These laws have required federal contractors and subcontractors to affirmatively recruit, hire, train and promote qualified veterans and people with disabilities.

The VEVRAA rule requires contractors and subcontractors to adopt an annual benchmark either based on the national percentage of veterans in the workforce (currently 8%) or their own benchmark based on the best available data. The rule strengthens accountability and record-keeping requirements, enabling contractors and subcontractors to assess the effectiveness of their recruitment efforts. It also clarifies job listing and subcontract requirements to facilitate compliance.

The Section 503 rule introduces a hiring goal for contractors and subcontractors that 7% of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination – similar to those that have been required to promote workplace equality for women and minorities.

The rules become effective on March 24, 2014.

The following are highlights of the rules:

EDITOR’S NOTE: These rules will have a substantial cost to the contractor community:

Therefore, OFCCP itself estimates the first year’s cost of implementing these two rules could be up to $1.1 billion, and each subsequent year’s cost could be up to $743 million (up to $828 million every fifth year)! However, the chief executive of the Associated General Contractors of America, Stephen Sandherr, claims the cost will be much higher: “...these rules will force federal contractors to spend an estimated $6 billion a year to produce reams of new paperwork proving they are doing what the federal government already knows they are doing.” While the goal of increasing job opportunities for veterans and individuals with disabilities is laudable, these two rules could result in costs to the government that are much higher than imagined, especially considering the tight federal budget and the lagging economy.



FAC 2005-70 Addresses Contractor Whistleblower Issues

Federal Acquisition Circular (FAC) 2005-70 consists of two rules involving contractor whistleblowers. One amends Federal Acquisition Regulation (FAR) subpart 3.9, Whistleblower Protections for Contractor Employees, to implement a four-year pilot program that enhances the existing whistleblower protections for contractor employees, and the other amends FAR 31.205-47, Costs Related to Legal and Other Proceedings, to address the allowability of legal costs incurred by a contractor or subcontractor related to a whistleblower proceeding.



Protections Against Trafficking in Persons Proposed

A proposed FAR rule has been published that would amend FAR subpart 22.17, Combating Trafficking in Persons, to strengthen protections against trafficking in persons in federal contracts by implementing Executive Order 13627, Strengthening Protections Against Trafficking in Persons in Federal Contracts, and Title XVII of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239), Ending Trafficking in Government Contracting.

FAR subpart 22.17 implements the Trafficking Victims Protection Act of 2000 (22 USC Chapter 78), which expresses the government’s zero-tolerance policy regarding government employees and contractor personnel engaging in prohibited trafficking activities. The subpart provides for the use of FAR 52.222-50, Combating Trafficking in Persons, which requires contractors and subcontractors to notify government employees of trafficking violations and puts parties on notice that the government may impose remedies, including contract termination, for failure to comply with the requirements. However, recent studies of trafficking in persons have pointed out a need for additional steps to eliminate trafficking in persons from government contracts. Therefore, President Obama issued Executive Order 13627, and Congress enacted Title XVII of Public Law 112-239, to create a stronger framework for agency compliance by providing additional requirements for awareness, compliance, and enforcement.

The following are changes being proposed to FAR subpart 22.17 to implement new policies applicable to all contracts:

The following are changes being proposed to FAR subpart 22.17 to implement new policies applicable to contracts where the portion to be performed outside the U.S. exceeds $500,000 (except contracts and subcontracts for commercially available off-the-shelf items):

Finally, FAR 52.222-50 would be revised to implement these changes. While FAR 52.222-50 is required to be included in all solicitations and contracts, new paragraph (h) would address compliance plans, which apply only to the portion of the contract that is for supplies acquired, other than commercially available off-the-shelf items, or services performed, outside the U.S, and has an estimated value that exceeds $500,000.

If a compliance plan is required, it would have to be maintained during the performance of the contract and “appropriate to the size and complexity of the contract and to the nature and scope of the activities to be performed for the government, including the number of non-United States citizens expected to be employed and the risk that the contract or subcontract will involve services or supplies susceptible to trafficking” (paragraph (h)(2)).

Paragraph (h)(3) would require contractors to include the following elements in their compliance plans:

FAR 52.222-50(h)(4)(i) would require the contractor to post the relevant contents of the compliance plan at the workplace no later than the initiation of contract performance and on the contractor’s website (if one is maintained).

FAR 52.222-50(h)(4)(ii) would require the contractor to prove the compliance plan to the contracting officer upon request (the compliance plan would not be required to be submitted automatically to the government).

Comments on this proposed rule must be submitted no later than November 25, 2013, identified as “FAR Case 2013-001,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail: U.S. General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Hada Flowers, 1800 F Street NW, 2nd Floor, Washington, DC 20405.

DOD has determined that it is necessary to amend the DFARS coverage on trafficking to supplement the proposed new FAR coverage. Therefore, DOD has proposed the following changes to the DFARS subpart 222.17, Combating Trafficking in Persons, and the associated provisions and clauses:

Comments on this proposed rule must be submitted no later than November 25, 2013, identified as “DFARS Case 2013-D007,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: dfars@osd.mil; (3) fax: 571-372-6094; or (4) mail: Defense Acquisition Regulations System, Attn: Meredith Murphy, OUSD (AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.

For more on Executive Order 13627, see the October 2012 Federal Contracts Perspective article “Order Strengthens Trafficking Protections.” For more on Title XVII of Public Law 112-239, see the February 2013 Federal Contracts Perspective article “FY 2013 National Defense Authorization Act Extends FAR Subpart 13.5 Procedures Through 2014.”



Lots More Changes to DOD Acquisition Regulations and Policies

Besides the final and proposed rules discussed in the previous articles, DOD published several other rules, deviations, and policy changes.



VA Revises SDVOSB/VOSB Protest Adjudication

The Department of Veterans Affairs (VA) is amending VA Acquisition Regulation (VAAR) 819.307, SDVOSB/VOSB Small Business Status Protests, to provide that VA’s Director, Center for Veterans Enterprise (CVE), will initially adjudicate Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB) status protests, and to provide that protested businesses, if denied status, may appeal to VA’s Executive Director, Office of Small and Disadvantaged Business Utilization (OSDBU).

In December 2009, VA published a final rule that amended VAAR part 819, Small Business Programs, to establish special methods for contracting with SDVOSBs and VOSBs – set-asides and sole source awards under certain circumstances. With regard to SDVOSB and VOSB status protests, VA had intended to utilize SBA to decide the protests. That required VA and SBA to execute an interagency agreement, but negotiations of the interagency agreement was not complete when the final rule was published. Therefore, VA amended VAAR 819.307 to provide that VA’s Executive Director, OSDBU, would consider and decide SDVOSB and VOSB status protests until the interagency agreement was executed.

Since the publication of the final rule, VA has reconsidered reaching an interagency agreement with SBA and has subsequently decided that SDVOSB and VOSB status protest adjudication shall remain within VA. Therefore, VA is issuing this interim final rule to remove from VAAR 819.307(a) references to an interagency agreement between VA and SBA.

In addition, VAAR 819.307 has been reorganized for ease of readability and clarity.

Comments on this interim final rule must be submitted no later than November 29, 2013, identified as “RIN 2900-AM92-VA Acquisition Regulation: Service-Disabled Veteran-Owned and Veteran-Owned Small Business Status Protests,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) mail or hand-delivery to: Director, Regulation Policy and Management (02REG), Department of Veterans Affairs, 810 Vermont Avenue NW, Room 1068, Washington, DC 20420; or (3) fax: 202-273-9026.

For more on the December 2009 final rule, see January 2010 Federal Contracts Perspective article “Sole Source Contracts for Veteran-Owned Businesses.”



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