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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


December 2014
Vol. XV, No. 12
[pdf version]

CONTENTS


FAC 2005-78 Standardizes Incorporation of Representations and Certifications in Contracts
Five-Year Acquisition Threshold Adjustments Proposed
Number of Protests Increased by 5% in FY 2014
DOD Updates Four Types of Contract Clauses



FAC 2005-78 Standardizes Incorporation of
Representations and Certifications in Contracts

Federal Acquisition Circular (FAC) 2005-78 addresses a nagging problem that has bedeviled federal acquisitions for years: the inconsistent incorporation in contract awards of Section K, Representations, Certifications, and Other Statements of Bidders/Offerors or Respondents. In addition, FAC 2005-78 amends the Federal Acquisition Regulation (FAR) to reflect the transfer of authority to process claims for the payment of workers who were not paid appropriate wages; to clarify when to use higher-level quality standards in solicitations and contracts; and to remove the last vestiges of “year 2000 compliance” (“Y2K”).



Five-Year Acquisition Threshold Adjustments Proposed

Every five years, statutory-based acquisition-related thresholds are required to be adjusted for inflation except for the Construction Wage Rate Requirements statute (the Davis-Bacon Act), the Service Contract Labor Standards statute (the Service Contract Act), and trade agreements thresholds. This requirement is in Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year (FY) 2005 (Public Law 108-375), and it requires an adjustment every five years (“on October 1 of each year that is evenly divisible by five”) using the Consumer Price Index for all urban consumers. This proposed rule would make the required adjustments to the statutory-based acquisition thresholds on October 1, 2015. In addition, this proposed rule would use the same methodology to adjust nonstatutory acquisition-related thresholds – that is, those thresholds in the FAR that have their origin in executive orders or regulations. However, this proposed rule does not address those thresholds that are not considered “acquisition-related,” such as those related to claims, penalties, withholding, payments, required levels of insurance, small business size standards, liquidated damages, etc. Finally, changes to cost accounting standards (CAS) thresholds will be dealt with separately.

The following are the adjustments that would be made to the most used thresholds by this rule:

Comparable changes would be made to corresponding provisions and clauses in FAR part 52, Solicitation Provisions and Contract Clauses.

The $150,000 simplified acquisition threshold in FAR 2.101 would be unchanged because it was escalated in 2010 and the inflation since then is insufficient to trigger another adjustment. Also, the threshold for FedBizOpps (https://www.fbo.gov/) preaward and post-award notices in FAR part 5, Publicizing Contract Actions, will remain at $25,000 because of the trade agreements.

Comments on the proposed rule must be submitted no later than January 26, 2015, identified as “FAR case 2014-022,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Ms. Flowers, 1800 F Street NW, 2nd Floor, Washington, DC 20405.

For more on the previous adjustments to FAR thresholds, see the September 2010 Federal Contracts Perspective article “Federal Acquisition-Related Thresholds Adjusted for Inflation.”


In addition, the Department of Defense (DOD) has proposed five-year inflation adjustments to acquisition-related thresholds in the Defense FAR Supplement (DFARS). Besides making changes to conform to the FAR threshold adjustments (see above), DOD is proposing changes to thresholds that apply only to DOD. Among the most significant DOD-unique threshold changes would be the following:

Comparable changes would be made to corresponding provisions and clauses in DFARS part 252, Solicitation Provisions and Contract Clauses.

Comments on the proposed rule must be submitted no later than January 5, 2015, identified as “DFARS 2014-D025,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: osd.dfars@mail.mil; (3) fax: 571-372-6094; or (4) mail: Defense Acquisition Regulations System, Attn: Amy Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060.

For more on the previous adjustments to DFARS thresholds, see the September 2010 Federal Contracts Perspective article “Defense Acquisition-Related Thresholds Adjusted, Too.”



Number of Protests Increased by 5% in FY 2014

The Government Accountability Office (GAO) issued its annual letter on bid protests to various Congressional committees, in which it reported that 2,561 protests, cost claims, and requests for reconsideration were filed in Fiscal Year (FY) 2014, a 5% increase from the 2,429 filed in FY 2013. This is the largest number of protests filed since FY 1995.

The FY 2014 protest sustain rate (number of GAO decisions in favor of the protestor versus the number of all protests) was 13%, compared to the 17% sustain rate for FY 2013 and 18.6% sustain rate for FY 2012. The 43% 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 rate for FY 2013 and slightly higher than the 42% effectiveness rates for FY 2012 and FY 2011.

GAO’s review of its decisions shows the most prevalent reasons for sustaining protests during FY 2014 were: (1) failure to follow the solicitation evaluation criteria; (2) flawed selection decision; (3) unreasonable technical evaluation; and (4) unequal treatment of offerors.



DOD Updates Four Types of Contract Clauses

Besides the proposed revision of acquisition thresholds in the DFARS (see above), DOD continued its revision of DFARS provisions and clauses that have alternates by finalizing the proposed rules on clauses and their alternates in contracts involving special contracting methods, major systems, services, and foreign acquisitions. In addition, DOD is proposing to require the use of a new clause that would clarify that entering into a contract may cause a small business to exceed the applicable small business size standard.



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