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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


August 2014
Vol. XV, No. 8
[pdf version]

CONTENTS


FAC 2005-76 Addresses Small Business Size/Status Protests; Equal Opportunity for Vets, Disabled
DOD Conducts DFARS Clean-Up
Sexual Orientation and Gender Identity Order Issued
Proposed FAR Rule on Pass-Through Contracts
Education Acquisition Regulations Update Proposed
EPA Addresses IDIQ Ordering, Work Assignments
NASA Implements Whistleblower Protections
Prompt Payment Interest Rate Set at 2%



FAC 2005-76 Addresses Small Business Size/Status Protests;
Equal Opportunity for Vets, Disabled

Federal Acquisition Circular (FAC) 2005-76 consists of three rules that amend the Federal Acquisition Regulation (FAR) to: (1) implement final rules issued by the Office of Federal Contract Compliance Programs (OFCCP) in the Department of Labor (DOL) relating to equal opportunity and affirmative action for veterans and individuals with disabilities: (2) provide revised coverage for small business size and small business status protest and appeal procedures and to ensure that the FAR contains consistent and coherent protest and appeal procedures that are congruent with Small Business Administration (SBA) regulations; and (3) address the allowability of legal costs incurred by a contractor or subcontractor in response to a whistleblower protection proceeding.



DOD Conducts DFARS Clean-Up

The Department of Defense (DOD) was busy during July, issuing four regulations revising the Defense FAR Supplement (DFARS), one class deviation, and two memoranda directing specific actions and providing information. In addition, DOD issued a proposed rule.



Sexual Orientation and Gender Identity Order Issued

President Obama has issued Executive Order 13672, Equal Employment Opportunity Amendments Regarding Sexual Orientation and Gender Identity, which prohibits federal contractors from discriminating against lesbian, gay, bisexual, and transgender (LGBT) employees, and prohibits discrimination based on gender identity in federal employment.

The president decided to take this action because Congress failed to pass the Employment Non-Discrimination Act and 32 states do not have laws explicitly protecting LGBT workers from being fired because of their sexual orientation or gender identity.

The executive order amends two earlier executive orders:

There is no exemption provided for federal contractors with religious affiliations, as had been urged by religious leaders.

The executive order directs the Secretary of Labor to prepare regulations implementing the requirements of the executive order within 90 days (that is, by October 20, 2014). “This order shall become effective immediately, and...shall apply to contracts entered into on or after the effective date of the rules promulgated by the Department of Labor...”



Proposed FAR Rule on Pass-Through Contracts

To implement Section 802 of the National Defense Authorization Act of Fiscal Year 2013 (Public Law 112-239), which provides additional requirements relative to the review and justification of pass-through contracts, the FAR Council is proposing to amend FAR 15.404-1, Proposal Analysis Techniques, to add these requirements.

When an offeror for a contract, task order, or delivery order informs the agency, in accordance with FAR 52.215-22, Limitations on Pass-Through Charges – Identification of Subcontract Effort, of its intention to award subcontracts for more than 70% of the total cost of work to be performed under the contract, task order, or delivery order, Section 802 requires contracting officer to “(1) consider the availability of alternative contract vehicles and the feasibility of contracting directly with a subcontractor or subcontractors that will perform the bulk of the work; (2) make a written determination that the contracting approach selected is in the best interest of the government; and (3) document the basis for such determination.” Therefore, paragraph (h) would be added to FAR 15.404-1 to implement these statutory requirements.

However, Section 1615 of the National Defense Authorization Act of Fiscal Year 2014 (Public Law 113-66), states, “In the case of a contract to which the provisions of Section 46 of the Small Business Act (15 U.S.C. 657s) apply, the requirements under Section 802 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239; 126 Stat. 1824; 10 U.S.C. 2304 note) do not apply.” Therefore, proposed subparagraph (h)(3) would exempt set-aside acquisitions conducted under the procedures in FAR part 19, Small Business Programs.

While Section 802 only applies to contracts with the Department of Defense, the Department of State, and the United States Agency for International Development, the FAR Council has decided to apply the Section 802 requirements to all of agencies.

Comments on the proposed rule must be submitted no later than September 9, 2014, identified as “FAR Case 2013-012,” 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.



Education Acquisition Regulations Update Proposed

The Department of Education is proposing to update the Education Department Acquisition Regulation (EDAR) to update it so to it accurately reflects the current FAR and departmental policies. The last revision of the EDAR was made in 2011 (see the April 2011 Federal Contracts Perspective article “EDAR Reissued”).

Comments on the proposed rule must be submitted no later than September 15, 2014, identified as “FAR Case 2013-012,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail, commercial delivery, or hand delivery: Roscoe Price, U.S. Department of Education, 400 Maryland Avenue SW, Room 7172, PCP, Washington, DC 20202-4200. The Department of Education does not accept comments submitted by fax or by email or those submitted after the comment period.



EPA Addresses IDIQ Ordering, Work Assignments

The Environmental Protection Agency (EPA) has issued a final rule amending EPA Acquisition Regulation (EPAAR) 1552.216-72, Ordering – By Designated Ordering Officers, to update policy and procedures. In addition, the EPA has proposed to amend EPAAR 1552.211-74, Work Assignments, to update its policy and procedures.



NASA Implements Whistleblower Protections

The National Aeronautics and Space Administration (NASA) is amending the NASA FAR Supplement (NFS) to add NFS subpart 1803.9, Contractor Employee Whistleblower Protections, which covers NASA-unique policy, procedures for filing and investigating complaints, and remedies pertaining to whistleblower protections for contractor and subcontractor employees. In addition, this interim rule adds NFS 1852.216-90, Allowability of Legal Costs Incurred in Connection with a Whistleblower Proceeding, to address the treatment of contractor costs incurred in connection with whistleblower proceedings.

Among the NASA-unique policies and procedures included in NFS subpart 1803.9 are: NFS 1803.904, Procedures for Filing Complaints; NFS 1803.905, Procedures for Investigating Complaints; and NFS 1803.906, Remedies. In addition, NFS 1852.203-71, Requirement to Inform Employees of Whistleblower Rights, is added. It is to be included in all solicitations and contracts.

In addition, this interim rule adds NFS 1852.216-90, Allowability of Legal Costs Incurred in Connection with a Whistleblower Proceeding, to implement paragraph (g) of Section 827 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law 112-239), which addresses costs incurred in connection with whistleblower proceedings. Because Section 827 encouraged agencies to modify contracts that were awarded before the effective date of implementing FAR regulations, NASA decided it is necessary to create a revised cost principle applicable to any task orders issued against contracts awarded prior to the effective date of FAC 2005-70, which originally implemented Section 827. Otherwise, FAR 52.216-7, Allowable Cost and Payment, governs.

Comments on the interim rule must be submitted no later than September 29, 2014, identified as “RIN number 2700-AE08,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) email: leigh.pomponio@NASA.gov.

EDITOR’S NOTE: See the article above for the FAR rule finalizing the interim rule in FAC 2005-70 [“FAC 2005-76 Addresses Small Business Size/Status Protests; Equal Opportunity For Vets, Disabled”]. For more on the interim rules in FAC 2005-70, see the October 2013 Federal Contracts Perspective article “FAC 2005-70 Addresses Contractor Whistleblower Issues.”



Prompt Payment Interest Rate Set at 2%

The Treasury Department has established 2% (2.0%) as the interest rate for the computation of payments made between July 1, 2014, and December 31, 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 (January 1, 2014, through July 31, 2014) was 2 1/8% (2.125%). The interest rate for July 1, 2013, through December 31, 2013, was 1 3/4% (1.75%).

All prompt payment interest rates since 1980 (in six-month increments) are available at http://www.fms.treas.gov/prompt/rates.html.

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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