FEDERAL CONTRACTS PERSPECTIVE
Federal Acquisition Developments, Guidance, and Opinions
Vol. XV, No. 2
DOD Limits Use of Cost-Type Contracts for Major Defense Acquisition Programs
DPAS Revisions and Clarifications Proposed
GSA Seeking Comments on FSS Order-Level Materials
Number of Protests Decreased by 2% in FY 2013
Prompt Payment Interest Rate Set at 2 1/8%
DOD Limits Use of Cost-Type Contracts for
Major Defense Acquisition Programs
Department of Defense (DOD) started 2014 slowly, issuing an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a provision of the National Defense Authorization Act for Fiscal Year (FY) 2013 (Public Law 112-239) that prohibits DOD from entering into cost-type contracts for production of major defense acquisition programs (MDAP). In addition, DOD revised the Proposal Adequacy Checklist to remove a redundancy, and proposed two rules: one would address payment in local Afghan currency; the other would address storage, treatment, and disposal of toxic or hazardous materials. Finally, DOD issued a class deviation addressing contractor personnel performing in Djibouti.
- Limitation on Use of Cost-Reimbursement Line Items for Major Defense Acquisition Programs: This interim rule implements Section 811 of the National Defense Authorization Act (NDAA) for FY 2013, which requires the DOD to prohibit entering into cost-type contracts for the production of MDAPs for contracts entered into on or after October 1, 2014, unless the Under Secretary of Defense for Acquisition, Technology, and Logistics submits to the congressional defense committees: (1) a written certification that the particular cost-type contract is needed to provide a required capability in a timely, cost-effective manner; and (2) an explanation of the steps taken to ensure that the use of cost-type pricing is limited to only those line items or portions of the contact where such pricing is needed to achieve the purpose of the exception.
This interim rule makes the following changes to the DFARS:
- The definition of “major defense acquisition program” is moved from DFARS 209.571-1, Definitions, to DFARS 202.101, Definitions.
- To paragraph (b)(1)(S-74) of DFARS 207.106, Additional Requirements for Major Systems, is added a cross-reference to DFARS 234.004, Acquisition Strategy, when selecting contract type.
- The following policy statement is added to DFARS 216.102, Policies [for selecting contract type]: “In accordance with Section 811 of the National Defense Authorization Act for Fiscal Year 2013 (Pub. L. 112-239), use of any cost-reimbursement line item for the acquisition of production of major defense acquisition programs is prohibited unless the exception at [DFARS] 234.004(2)(ii) applies.”
- The following definition of “production of major defense acquisition program” is added to DFARS 234.001, Definitions [applicable to major system acquisitions]: “the production and deployment of a major system that is intended to achieve an operational capability that satisfies mission needs, or an activity otherwise defined as Milestone C [that is, seek approval to enter production] under Department of Defense Instruction 5000.02 [Operation of the Defense Acquisition System] or related authorities.”
- Paragraph (2) of DFARS 234.004, Acquisition Strategy [for major system acquisitions], is revised and reformatted to reflect the Section 811 requirements.
Comments on this interim rule must be submitted no later than March 21, 2014, identified as “DFARS Case 2013-D016,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: firstname.lastname@example.org; (3) fax: 571-372-6094; or (4) mail: Defense Acquisition Regulations System, Attn: Susan Williams, OUSD/AT&L/DPAP/ DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.
- Proposal Adequacy Checklist Revision: This final rule amends DFARS 252.215-7009, Proposal Adequacy Checklist, to remove Item 19 from the checklist because it is redundant. Item 19 required price analysis for all commercial items offered that are not available to the general public (“Does the proposal include a price analysis for all commercial items offered that are not available to the general public?”). DOD has determined that Item 19 duplicates Item 14 (“Does the proposal include a consolidated summary of individual material and services, frequently referred to as a Consolidated Bill of Material (CBOM), to include the basis for pricing? The offeror’s consolidated summary shall include raw materials, parts, components, assemblies, subcontracts and services to be produced or performed by others, identifying as a minimum the item, source, quantity, and price”) and Item 17 (“Is there a price/cost analysis establishing the reasonableness of each of the proposed subcontracts included with the proposal? If the offeror’s price/cost analyses are not provided with the proposal, does the proposal include a matrix identifying dates for receipt of subcontractor proposal, completion of fact finding for purposes of price/cost analysis, and submission of the price/cost analysis?”).
- Payment in Local Afghan Currency: This proposed rule would add DFARS subpart 232.72, Payment in Local Currency (Afghanistan), and solictation provision DFARS 252.232-7XXX, Notification of Payment in Local Currency (Afghanistan), to provide notification that the payment currency to be used for contracts for performance in Afghanistan is dependent on the nationality of the vendor.
DFARS subpart 232.72, Payment in Local Currency (Afghanistan), would be added. DFARS 232.7201, Policy and Procedures, would state the following: “Payment currency used for contracts performed in Afghanistan shall be dependent on the nationality of the vendor pursuant to the authority of USCENTCOM Fragmentary Orders (FRAGOs) 09-1567 and 10-143. If the contract is awarded to a host nation vendor (Afghan), the contractor will be paid in Afghani (local currency) via electronic funds transfer to a local (Afghan) banking institution. Contracts shall not be awarded to host nation vendors who do not bank locally. If awarded to other than a host nation vendor, the contract will be awarded in U.S. dollars.”
DFARS 232.7202, Solicitation Provision, would require the inclusion of DFARS 252.232-7XXX, Notification of Payment in Local Currency (Afghanistan), “in all solicitations, including solicitations using [Federal Acquisition Regulation] FAR part 12 procedures for the acquisition of commercial items, for performance in Afghanistan.”
DFARS 252.232-7XXX, would provide that if the contract is awarded to a host nation vendor (Afghan), the contractor would receive payment in Afghani (local currency) via electronic funds transfer to a local (Afghan) banking institution. In addition, it would prohibit the award of contracts to host nation vendors (Afghans) who do not bank locally. Finally, it would provide that the contract would be awarded in U.S. dollars if it is awarded to other than a host nation vendor.
Comments on this proposed rule must be submitted no later than March 21, 2014, identified as “DFARS Case 2013-D029,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: email@example.com; (3) fax: 571-372-6094; or (4) mail: Defense Acquisition Regulations System, Attn: Mark Gomersall, OUSD/AT&L/DPAP/ DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.
- Storage, Treatment, and Disposal of Toxic or Hazardous Materials: This proposed rule would revise DFARS subpart 223.71, Storage and Disposal of Toxic and Hazardous Materials, and the corresponding clause DFARS 252.223-7006, Prohibition on Storage and Disposal of Toxic and Hazardous Materials, to: (1) reflect current language and restrictions contained in Title 10 of the U.S. Code, Section 2692 (10 USC 2692), Storage, Treatment, and Disposal of Nondefense Toxic and Hazardous Materials; (2) reorganizing and rewriting sections in DFARS subpart 223.71 to provide greater clarity to contracting officers; (3) amend the prescriptions for DFARS 252.223-7006 and its alternate; and (4) revise DFARS 252.223-7006 and its alternate to require flowdown of the clause to the subcontractors.
First of all, the title of DFARS subpart 223.71 would be revised by adding “Treatment” and changing “Toxic and Hazardous” to “Toxic or Hazardous.” The new title would be “Storage, Treatment, and Disposal of Toxic or Hazardous Materials.” Similarly, the title of DFARS 252.223-7006 would be revised to “Prohibition on Storage, Treatment, and Disposal of Toxic or Hazardous Materials.”
The following would be other changes to DFARS subpart 223.71 and DFARS 252.223-7006:
- New DFARS 223.7101, Definitions, would be added. It would provide a cross reference to DFARS 252.223-7006, where the terms “storage” and “toxic or hazardous materials” are defined in paragraph (a). (The remaining sections in DFARS subpart 223.71 would be renumbered as a result of adding the new DFARS 223.7101.)
- To paragraph (a) of redesignated DFARS 223.7102, Policy (currently DFARS 223.7100), would be added the term “treatment” to the 10 USC 2692 list of prohibited actions, and would add a statement that the prohibition to the storage, treatment, or disposal on DOD installations of toxic or hazardous materials “that are not owned either by DOD or by a member of the armed forces (or a dependent of the member) assigned to or provided military housing on the installation, unless an exception in [DFARS] 223.7104 applies.” Also, a new paragraph (b) would be added, which would state “When storage of toxic or hazardous materials is authorized based on an imminent danger, the storage provided shall be temporary and shall cease once the imminent danger no longer exists. In all other cases of storage or disposal, the storage or disposal shall be terminated as determined by the Secretary of Defense.”
- A new paragraph (a)(1) would be added to DFARS 223.7103, Procedures (currently DFARS 223.7101), which would clearly identify and cross-reference the prohibition exceptions in DFARS 223.7104.
- The following changes would be made to DFARS 223.7104, Exceptions (currently DFARS 223.7102):
- Subparagraphs (a)(1) through (a)(9) would be redesignated as subparagraphs (a)(2) through (a)(10).
- New subparagraph (a)(1) would be added, which would add the following as an exemption to the 10 USC 2692 prohibitions: “The storage, treatment, or disposal of materials that will be or have been used in connection with an activity of DOD or in connection with a service to be performed on a DOD installation for the benefit of DOD."
- Redesignated subparagraph (a)(3) (currently subparagraph (a)(2)) would be revised to expand the exception for storage or disposal of explosives “in order to protect the public or to assist agencies responsible for federal law enforcement” to include state and local law enforcement.
- Redesignated subparagraph (a)(9) (currently subparagraph (a)(8)) would be revised to remove “a private person” and “by that person” from “the material is required or generated by a private person in connection with the authorized and compatible use by that person of an industrial-type DOD facility…”, and would add “including the use of such a facility for testing material or training personnel.” Paragraph (a)(9) would read: “The storage of any material that is not owned by DOD, if the Secretary of the military department concerned determines that the material is required or generated in connection with the authorized and compatible use of a facility of DOD, including the use of such a facility for testing material or training personnel.”
- Redesignated subparagraph (a)(10) (currently subparagraph (a)(9)) would be revised to: (1) remove the term “non-DOD owned material” and replace it with “toxic or hazardous materials not owned by DOD”; (2) remove the term “by a private person”; (3) remove the language concerning commercial use of an industrial facility and replace it with language reflecting use of a facility when the Secretary of the military department enters into a contract or agreement with the prospective user; and (4) replace “that person’s” with “the prospective user’s.”
- Subparagraph (a)(11) would be added to add the following exception: “The storage of any material that is not owned by DOD if the Secretary of the military department concerned determines that the material is required or generated in connection with the use of a space launch facility located on a DOD installation or on other land controlled by the United States.”
- Paragraph (b) would be revised to provide the Secretary of Defense with the authority to grant an exception to 10 USC 2672 “when essential to protect the health and safety of the public from imminent danger if the Secretary otherwise determines the exception is essential and if the storage or disposal authorized does not compete with private enterprise.”
- DFARS 223.7105, Reimbursement, would be added. It would permit the Secretary of Defense to “assess a charge for any storage or disposal provided under this subpart. If a charge is to be assessed, then such assessment shall be identified in the contract with payment to the government on a reimbursable cost basis.”
- DFARS 223.7103, Contract Clause, would be redesignated as DFARS 223.7106, Contract Clause. To facilitate the use of automated contract writing systems, the clause prescriptions and clause titles would be revised to clearly differentiate between the basic clause and its alternate. In DFARS 223.7106, paragraph (a) would provide the prescription for the retitled “Prohibition on Storage, Treatment, and Disposal of Toxic or Hazardous Materials – Basic,” and paragraph (b) would provide the prescription for the retitled “Prohibition on Storage, Treatment, and Disposal of Toxic or Hazardous Materials – Alternate” (currently identified merely as “Alternate I”). (EDITOR’S NOTE: DOD is proposing to use these “overarching prescriptions” throughout the DFARS. For more on “overarching prescriptions,” see the September 2013 Federal Contracts Perspective article “DOD Proposes “Overarching Prescriptions” for Clauses with Alternatives.”
- Both the basic and alternate versions of DFARS 252.223-7006 would require the flow down of the clause’s substance to all subcontractors that may require access to a DOD installation. In addition, the full text of the alternate would be included. The inclusion of the full text of each clause alternate is expected to make the terms of a clause alternate clearer to offerors and to DOD contracting officers (the current convention for alternates is to show only the paragraphs that differ from the basic clause). Inapplicable paragraphs from the basic version of the clause that are superseded by the alternate would not be included in the solicitation or contract, thus preventing confusion.
Comments on this proposed rule must be submitted no later than March 31, 2014, identified as “DFARS Case 2013-D013,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: firstname.lastname@example.org; (3) fax: 571-372-6094; or (4) mail: Defense Acquisition Regulations System, Attn: Susan Williams, OUSD/AT&L/DPAP/ DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC 20301-3060.
- Class Deviation on Requirements for Contractor Personnel Performing in Djibouti: This class deviation requires the inclusion of DFARS 252.225-7989, Requirements for Contractor Personnel Performing in Djibouti, in all solicitations and contracts for performance in Djibouti. The clause states that: (1) the contractor is responsible for all logistical and security support required by its personnel; (2) the contractor and its personnel are familiar and comply with all applicable U.S., host country, and third country national laws; appropriate treaties and international agreements; and U.S. regulations, directives, instructions, and policies and procedures; (3) the contractor’s personnel are aware of their rights; (4) the contractor is responsible for conducting all required security, background, medical, and physical checks; and (5) all contractor personnel are to be registered in the Synchronized Predeployment and Operational Tracker (SPOT) system. Finally, the clause requires that its terms be flowed down to all subcontracts that require subcontractor personnel to perform in Djibouti.
DPAS Revisions and Clarifications Proposed
The Bureau of Industry and Security (BIS), a part of the Department of Commerce, is proposing to update and expand Title 15 of the Code of Federal Regulations, part 700 (15 CFR 700), Defense Priorities and Allocations [DPAS], to make the DPAS regulations consistent with the regulations issued by agencies those with priorities and allocations authority (that is, the Departments of Agriculture [USDA], Defense [DOD], Energy [DOE], Health and Human Services [HHS], Homeland Security [DHS], and Transportation [DOT]), and to make the regulations easier to understand. In addition, this proposed revision would expand the provisions pertaining to allocations to clarify the procedures to be followed for allocations actions.
The DPAS has two principal components – priorities and allocations. Under the priorities component, certain contracts between the government and private parties or between private parties for the production or delivery of industrial resources are required to be given priority over other contracts to facilitate expedited delivery in promotion of the U.S. national defense. Under the allocations component, materials, services, and facilities may be allocated to promote the national defense. For both components, the term “national defense” means programs for military and energy production or construction, homeland security, stockpiling, space, emergency preparedness, and critical infrastructure protection and restoration. The term also includes foreign military and critical infrastructure assistance. Approximately 400,000 “rated” contracts are placed annually to satisfy national defense requirements.
The following are the significant changes being proposed to the DPAS regulations:
Comments on this proposed rule must be submitted no later than April 1, 2014 by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov (the identification number is “BIS-2010-0021”); (2) email: email@example.com (include “RIN 0694-AE81” in the subject line); or (3) mail: Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW, Washington, DC 20230 (refer to “RIN 0694-AE81”).
- Section 700.2, Introduction: “Homeland security, and critical infrastructure protection and restoration activities” would be added to “national defense and energy programs (including emergency preparedness activities)” as programs covered by the DPAS regulations.
- Sections 700.4, Priorities and Allocations in a National Emergency; 700.5, Special Priorities Assistance; 700.6, Official Actions; and 700.7, Compliance, would be removed because the information they contain is duplicated elsewhere the DPAS.
- Section 700.8, Definitions: To this section would be added new definitions for “allocation,” “allocation order,” “allotment,” “critical infrastructure,” “emergency preparedness,” “hazard,” “homeland security,” “national defense,” “official action,” “person,” “priority rating,” “program identification symbols,” “set-aside,” and “working day.”
- Section 700.12, Elements of a Rated Order: In addition to the elements required for all rated orders, new paragraph (b), “Additional Element Required for Certain Emergency Preparedness Rated Orders,” would be added. It would state that if a rated order is placed for the purpose of emergency preparedness requirements, and if expedited action is necessary or appropriate to meet those requirements, the order must include a statement informing the recipient that the order is for the purpose of emergency preparedness and of the amount of time within which the recipient must accept or reject the order. The minimum amount of time that would be allowed for acceptance or rejection would be governed by proposed Section 700.13(d)(2).
- Section 700.13, Acceptance and Rejection of Rated Orders: Paragraph (d), Customer Notification Requirements, would continue to require DO rated orders to be accepted or rejected within 15 working days after receipt (see Section 700.8 for proposed definition of “working days”), and DX rated orders to be accepted or rejected within 10 working days after receipt. However, paragraph (d) would be revised to address customer notification requirements for orders placed for emergency preparedness requirements where expedited action is necessary or appropriate to meet those requirements. Such orders would have to be accepted or rejected in the time frame noted in the order. That time frame could be as short as six hours if the order is issued by an authorized person in response to a hazard that has occurred, or 12 hours if the order is issued by an authorized person in response to an imminent hazard. Also, the time limit in which to provide written confirmation of a verbal notice would be changed from five working days to one working day.
- Section 700.15, Extension of Priority Ratings: A new paragraph (c) would be added, which would require the use of rated orders to obtain items needed to fill an emergency preparedness rated order. It would require persons who have received emergency preparedness rated orders that have shortened timeframes for acceptance or rejection to impose shortened time frames for transmission of acceptance or rejection on rated orders placed with suppliers.
- Section 700.16, Changes or Cancellations of Priority Ratings and Rated Orders: To the list in paragraph (d) of amendments to a rated order that do not constitute a new rated order, the phrase “prior to the start of production” would be added immediately following the phrase “a minor variation in size or design.” Once production of an item is commenced, changes in design that would be minor prior to production can become significant. Therefore, BIS believes the rule should allow only changes in size or design that are specified before production starts to be considered merely an amendment to an existing rated order rather than a new rated order.
- Section 700.17, Use of Rated Orders: Paragraph (f) states that a priority rating is not required on orders less than $50,000 or one-half of the FAR’s simplified acquisition threshold, whichever is larger, if delivery can be obtained in a timely fashion without the priority rating. Since the FAR'S simplified acquisition threshold is currently $150,000, the threshold would be increased from $50,000 to $75,000.
- Section 700.30, Policy: This section would state that allocation orders would be used only when priority authority is unable to provide a sufficient supply of a material, service, or facility to meet the national defense, or when the use of priority authority would cause a severe and prolonged disruption in the supply of materials, services, or facilities available to support normal U.S. economic activities.
- Section 700.32, Controlling the General Distribution of a Material in the Civilian Market: This new section would set forth the findings the Secretary of Commerce must make and the President must approve before the Department of Commerce may use allocations to control the distribution of a material in the civilian market: “(1) Such material is a scarce and critical material essential to the national defense, and (2) the requirements of the national defense for such material cannot otherwise be met without creating a significant dislocation of the normal distribution of such material in the civilian market to such a degree as to create appreciable hardship.”
- Section 700.33, Types of Allocation Orders: This new section would describe the three types of allocations orders the Department of Commerce might issue: a set-aside (“an official action that requires a person to reserve materials, services, or facilities capacity in anticipation of the receipt of rated orders”); a directive (“an official action that requires a person to take or refrain from taking certain actions in accordance with its provisions. For example, a directive can require a person to stop or reduce production of an item; prohibit the use of selected materials, services, or facilities; or divert the use of materials, services, or facilities from one purpose to another”); or an allotment (“an official action that specifies the maximum quantity of a material, service, or facility authorized for a specific use to promote the national defense”).
- Section 700.35, Mandatory Acceptance of an Allocation Order: Paragraph (a) would require a person to accept and comply with allocations orders. Paragraph (b) would state that a person may not discriminate against an allocation order in any manner, such as by charging higher prices or imposing terms and conditions on allocations orders that are different from what the person imposed on contracts or orders for the same resource prior to receiving the allocation order. Paragraph (c) would provide that a person who is unable to comply fully with the required actions specified in an allocation order must notify the Office of Strategic Industries and Economic Security immediately, explain the extent to which compliance is possible, and give reasons why full compliance is not possible. Such notice would not release the person from complying with the allocation order to the fullest extent possible until notified by the Department of Commerce that the order has been changed or cancelled. If the notice is given verbally, written or electronic confirmation must be provided within one working day.
- Section 700.55, Homeland Security, Emergency Preparedness, and Critical Infrastructure Protection and Restoration Assistance Programs Within the United States: This new section would direct persons seeking priority rating authority or assistance in obtaining rated items supporting homeland security, emergency preparedness, and critical infrastructure protection and restoration related activities, to direct their requests to the Federal Emergency Management Agency.
- Section 700.56, Military Assistance Programs with Canada: This new section would addresses situations in which a person in Canada, producing items for the Canadian government, seeks priorities assistance for items produced in the United States.
- Section 700.58, Critical Infrastructure Assistance Programs to Foreign Nations and International Organizations: This would direct persons in foreign nations and international organizations who are seeking assistance in obtaining items to be purchased in the United States for support of critical infrastructure protection or restoration to contact the Federal Emergency Management Agency.
- Schedule I to Part 700, Approved Programs and Delegate Agencies: The table in Schedule I would be revised to provide new program symbol “G4” for new topic heading “Critical Infrastructure Assistance to Other Nations.”
GSA Seeking Comments on FSS Order-Level Materials
The General Services Administration (GSA) is seeking comments on the development of processes and procedures for the inclusion of order-level materials under the Federal Supply Schedule (FSS) program. Though the acquisition of order-level materials is allowed under multiple-award indefinite-delivery/indefinite-quantity (IDIQ) contracts, GSA has yet to develop a clear mechanism for the procurement of these items under the FSS program, resulting in the inability to fully realize the effective use of the FSS program across the government. GSA is now taking steps to bring the FSS program into parity with other multiple-award IDIQ contract vehicles.
Respondents are encouraged to offer their views on the following questions:
- Is the current lack of a clear mechanism for the procurement of order-level materials a deterrent from using the FSS program? If so, how?
- What potential challenges exist where order-level materials and the FSS program are concerned? How can these be addressed?
- What kinds of processes and procedures are in place for the procurement of order-level materials under other multiple-award IDIQ contract vehicles? Can these be applied to the FSS program as is, or are there special considerations GSA needs to address? If possible, provide specific examples from multiple-award IDIQ contract vehicles that could serve as a good example of the kind of processes and procedures needed for the efficient and effective use of order-level materials.
- If GSA were to implement clear processes and procedures for the acquisition of order-level materials under the FSS program, is there the potential for administrative cost savings? If so, elaborate.
- If GSA were to implement clear processes and procedures for the acquisition of order-level materials under the FSS program, would it provide increased flexibility to contractors to provide total solutions to government requirements? Are there any additional benefits for small businesses in particular?
- What kind of risk management controls are needed to ensure efficient and effective use of order-level materials under the FSS program?
Written comments must be submitted no later than March 17, 2014 by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov (the identification number is “Notice – FAS-2013-02”); or (2) mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Ms. Flowers/Notice – FAS-2013-02, 1800 F Street NW, 2nd Floor, Washington, DC 20405-0001.
Number of Protests Decreased by 2% in FY 2013
The Government Accountability Office (GAO) issued its annual letter on bid protests to various Congressional committees, in which it reported that 2,429 protests, cost claims, and requests for reconsideration were filed in Fiscal Year (FY) 2013, a 2% decrease from the 2,475 filed in FY 2012 (which had the largest number of protests filed since FY 1995).
The FY 2013 protest sustain rate (number of GAO decisions in favor of the protestor versus the number of all protests) was 17%, compared to the 18.6% sustain rate for FY 2012 and 16% sustain rate for FY 2011. 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 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 the 2013 fiscal year were: (1) failure to follow the solicitation evaluation criteria; (2) inadequate documentation of the record, (3) unequal treatment of offerors; and (4) unreasonable price or cost evaluation.
Prompt Payment Interest Rate Set at 2 1/8%
The Treasury Department has established 2 1/8% (2.125%) as the interest rate for the computation of payments made between January 1, 2014, and June 30, 2014, 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 (July 1, 2013, through December 31, 2013) was 1 3/4% (1.75%). The interest rate for January 1, 2013, through June 30, 2013, was 1 3/8% (1.375%).
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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