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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


January 2015
Vol. XVI, No. 1
[pdf version]

CONTENTS


Authority to Use Simplified Procedures for Commercial Items Up to $6,500,000 Made Permanent
FAR Amended to Mandate $10.10/Hour Minimum Wage
DOD Conducts Regulation-Dump
Two FAR Changes Proposed in December
No Sexual Orientation or Gender Identity Discrimination
Prompt Payment Interest Rate Set at 2 1/8%
Mileage Reimbursement Set at 57.5˘/Mile for Autos



Authority to Use Simplified Procedures for
Commercial Items Up to $6,500,000 Made Permanent

Just before Congress left town for the holidays, it passed, and President Obama signed, the “Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015” (Public Law 113-291). Title VIII, Acquisition Policy, Acquisition Management, and Related Matters, contains the sections that are significant to the defense and civilian acquisition communities, but this year Title VIII has few sections that have widespread effect on the acquisition community. The following are among those few sections:



FAR Amended to Mandate $10.10/Hour Minimum Wage

Federal Acquisition Circular (FAC) 2005-79 consists of two interim rules: (1) the establishment of $10.10/hour as the minimum wage for federal contractor employees; and (2) clarification of the ongoing, continuing nature of the statutory prohibition on contracting with inverted domestic corporations and their subsidiaries (an “inverted domestic corporation” is one that used to be incorporated in the United States but now is incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country).



DOD Conducts Regulation-Dump

In addition to the two deviations the Department of Defense (DOD) issued in response to provisions in the National Defense Authorization Act for Fiscal Year 2015 (Public Law 113-291) (see article above), DOD cleaned out its regulatory closet and issued eight final rules to the Defense FAR Supplement (DFARS) (and a correcting amendment to one of these final rules), one proposed rule, four additional class deviations, and one memorandum!



Two FAR Changes Proposed in December

During December, two FAR changes were proposed: one to require each offeror to identify all its predecessors that held a federal contract or grant within the previous three years; and one to clarify the requirement that a noncompetitive contract awarded on the basis of unusual and compelling urgency that exceeds one year must be supported by a determination of exceptional circumstances.



No Sexual Orientation or Gender Identity Discrimination

The Office of Federal Contract Compliance Programs (OFCCP) is revising its regulations at Title 41 of the Code of Federal Regulations (CFR), Chapter 60, Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor (41 CFR Chapter 60) to implement 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 (see the August 2014 Federal Contracts Perspective article “Sexual Orientation and Gender Identity Order Issued”).

Executive Order 11246, Equal Employment Opportunity, was issued on September 24, 1965, and it prohibited federal contractors from discriminating “against any employee or applicant for employment because of race, creed, color, or national origin.” Executive Order 11375, Amending Executive Order No. 11246, Relating to Equal Employment Opportunity, was issued October 13, 1967, and it added “sex” as a covered category. Executive Order 13672 further amends Executive Order 11246 to add “sexual orientation, gender identity” to the covered categories, so it now reads “race, creed, color, sex, sexual orientation, gender identity, or national origin”.

To implement Executive Order 13672, OFCCP is making changes throughout its regulations to add “sexual orientation, gender identity” to the list of categories covered by the equal opportunity executive orders: 41 CFR part 60-1, Obligations of Contractors and Subcontractors; 41 CFR part 60-2, Affirmative Action Programs; 41 CFR part 60-4, Construction Contracts – Affirmative Action Requirements; and 41 CFR part 60-50, Guidelines on Discrimination Because of Religion or National Origin.

These regulations go into effective on April 8, 2015, and they will apply to federal contractors who hold contracts entered into or modified on or after that date.



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, 2015, and June 30, 2015, 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, 2014, through December 31, 2014) was 2%. The interest rate for January 1, 2014, through June 30, 2014, was 2 1/8% (2.125%).

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.



Mileage Reimbursement Set at 57.5˘/Mile for Autos

The General Services Administration (GSA) is increasing the mileage reimbursement rate for use of a privately owned automobile on official travel from 56˘ per mile to 57.5˘ per mile, and the rate for use of a motorcycle on official travel from 53˘ per mile to 54.5˘ per mile. The rate for use of a privately owned aircraft is reduced from $1.31 per mile to $1.29 per mile. These revised rates are effective for travel performed on or after January 1, 2015, through December 31, 2015.

The privately owned vehicle mileage reimbursement rates are published at http://www.gsa.gov/mileage.



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