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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


July 2017
Vol. XVIII, No. 7
[pdf version]

CONTENTS


Office of Management and Budget Eliminating, Modifying Procurement-Related Guidance
DOD Seeks Recommendations on Clauses to Repeal
CAAC Deviation Removes Fair Pay and Safe Workplaces Rule



Office of Management and Budget Eliminating,
Modifying Procurement-Related Guidance

Mike Mulvaney, Director of the Office of Management and Budget (OMB), issued a memorandum to the heads of departments and agencies announcing that “OMB is taking action to identify low-value, duplicative, and obsolete activities that can be ended...From administration to administration, agencies have been asked to respond to hundreds of guidance documents related to management areas such as information technology (IT), human capital, acquisition, financial management, and real property. Too often, burdensome tasks have piled up without consideration of whether the requirements collectively make sense. In many cases, agencies are asked to spend more time and resources complying with low-value activities versus allocating taxpayer dollars to meet their core agency mission...Through this memorandum, OMB begins providing relief to agencies by rolling back these requirements and allowing those who know their agencies best – agency managers – manage operations, adopt best practices, and find the best way possible to reduce costs and minimize staff hours responding to duplicative and burdensome reporting requirements.”

The memorandum categorizes the 60 OMB policy and guidance documents by type of action (that is, the document will be eliminated, modified, or “paused”) and area of focus: information technology, financial management, procurement, performance management, customer service, program management. For example, seven of the OMB documents set out requirements and implementation guidance for agencies on planning for potential information technology (IT) disruption related to the Year 2000. Since these policies are obsolete and outdated, all of them are being eliminated.

The following are the procurement-related documents that are being eliminated, modified, or paused:

Eliminated:

Modified:

Paused:

In addition, five financial management OMB memoranda are of interest to the acquisition community: the five memoranda that required quarterly reporting of accelerate payments to small businesses and prime contractors with small business subcontractors are eliminated. However, agencies are encouraged to continue to accelerate payments to eligible contractors. (EDITOR’S NOTE: For more on accelerated payments to small businesses and prime contractors with small business subcontractors, see the September 2012 Federal Contracts Perspective article “OMB Orders Prompt Payment to Small Subcontractors.”)

This is the first phase of an “extensive review process,” in which OMB will continue working with agencies to identify additional areas of low-value, duplicative, and obsolete requirements, including those that are statutory in nature, and work with the appropriate parties, including Congress, to provide relief for agencies wherever possible.



DOD Seeks Recommendations on Clauses to Repeal

Jennifer Hawes, the editor of the Defense Acquisition Regulations System (which includes the Department of Defense [DOD] Federal Acquisition Regulation Supplement [DFARS]), is seeking comments on DFARS solicitation provisions and contract clauses that may be appropriate for repeal, replacement, or modification. (The DFARS solicitation provisions and contract clauses are in DFARS part 252, Solicitation Provisions and Contract Clauses.)

This request for comments is in response to President Trump’s Executive Order (EO) 13777, Enforcing the Regulatory Reform Agenda, which requires each agency to establish a “Regulatory Reform Task Force,” the function of which is to attempt to identify regulations that:

“(i) eliminate jobs, or inhibit job creation;

“(ii) are outdated, unnecessary, or ineffective;

“(iii) impose costs that exceed benefits;

“(iv) create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies;

“(v) are inconsistent with the requirements of...those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard for reproducibility; or

“(vi) derive from or implement Executive Orders or other presidential directives that have been subsequently rescinded or substantially modified.”

Section 3(e) of EO 13777 requires the Regulatory Reform Task Force of each agency to “seek input and other assistance, as permitted by law, from entities significantly affected by federal regulations, including state, local, and tribal governments, small businesses, consumers, non-governmental organizations, and trade associations.” This request for comments complies with the direction provided in https://www.whitehouse.gov/the-press-office/2017/02/24/presidential-executive-order-enforcing-regulatory-reform-agendaSection 3(e). (For more on https://www.whitehouse.gov/the-press-office/2017/02/24/presidential-executive-order-enforcing-regulatory-reform-agendaEO 13777, see the March 2017 Federal Contracts Perspective article “Trump’s Executive Order Fleshes Out Regulatory Freeze Procedures.”)

Comments must be submitted no later than August 21, 2017, identified as “DFARS-RRTF-2017-01,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) fax: 571-372-6099; or (3) mail: Defense Acquisition Regulations System, Attn: DFARS Subgroup RRTF, OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060.

For a similar effort being undertaken by the General Services Administration (GSA), see the June 2017 Federal Contracts Perspective article “GSA Evaluating Regulations to Identify Those Suitable for Repeal, Replacement, or Modification.”



CAAC Deviation Removes Fair Pay and Safe Workplaces Rule

The Civilian Agency Acquisition Council (CAAC) has issued a Federal Acquisition Regulation (FAR) class deviation removing the Fair Pay and Safe Workplaces final rule from the FAR. The final rule required each offeror, prior to award of a contract or subcontract exceeding $500,000, to represent “whether there has been any administrative merits determination, arbitral award or decision, or civil judgment...rendered against the offeror within the preceding three-year period for violations” of any of 14 labor laws and executive orders and “equivalent state laws,” even if the offeror was not performing or bidding on a covered contract at the time of the determination, decision, or judgment. Among the laws covered were the Occupational Safety and Health Act (OSHA), Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act. (EDITOR’S NOTE: For more on Executive Order 13673, see the September 2014 Federal Contracts Perspective article Obama Issues Order Requiring That Contractors Provide ‘Fair Pay and Safe Workplaces’.”)

The Fair Pay and Safe Workplaces final rule implemented President Obama’s Executive Order (EO) 13673, Fair Pay and Safe Workplaces. The final rule was the sole rule in Federal Acquisition Circular (FAC) 2005-90, which added FAR subpart 22.20, Fair Pay and Safe Workplaces. Concurrently with the issuance of FAC 2005-90 was the issuance by the Department of Labor (DOL) of 52 pages of guidance intended to assist contractors with complying with the EO. (EDITOR’S NOTE: For more on Executive Order 13673, see the September 2014 Federal Contracts Perspective article “Obama Issues Order Requiring That Contractors Provide ‘Fair Pay and Safe Workplaces’.” For more on the FAR rule and the DOL guidance, see the September 2016 Federal Contracts Perspective article “FAC 2005-90 Establishes ‘Fair Pay and Safe Workplaces’ Representation.”)

However, on October 24, 2016, the day before the FAC and the DOL guidance were to take effect, the District Court for the Eastern District of Texas granted an injunction suspending implementation of the parts of EO 13673, FAC 2005-90, and the DOL guidance that imposed new reporting requirements regarding labor law violations until a final decision on the merits was issued (the court did not issue an injunction against the “paycheck transparency” portion of EO 13673, FAC 2005-90, and the DOL guidance, which required contractors to provide wage statements and notice of any independent contractor relationship to their covered workers, because it was not scheduled to take effect until 2017). To ensure compliance with the court order, the Office of Federal Procurement Policy (OFPP) and the FAR Council issued a joint memorandum to all agency chief acquisition officers directing them to “take all steps necessary to ensure the enjoined sections, provisions, and clauses of the final rule are not implemented until further notice.” (EDITOR’S NOTE: For more on the court injunction, see the November 2016 Federal Contracts Perspective article “Executive Order 13673, Fair Pay and Safe Workplaces, Put on Hold by Court.”)

On March 27, 2017, President Trump signed Public Law 115-11, which states “that Congress disapproves the rule submitted by the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration relating to the Federal Acquisition Regulation (published at 81 Fed. Reg. 58562 (August 25, 2016)), and such rule shall have no force or effect.” The disapproved rule is FAC 2005-90. Public Law 115-11 was passed in accordance with the Section 251 of the Contract with America Advancement Act of 1996 (Public Law 104-121), which permits Congress to disapprove of regulations issued by federal agencies by passing a joint resolution. Public Law 115-11 is that joint resolution (House Joint Resolution 37).

Concurrently with the signing of Public Law 115-11, President Trump issued EO 13782 revoking EO13673 (as well as Section 3 of EO 13683, and EO 13738, both of which amended EO 13673). By revoking EO 13673 in its entirety, President Trump had revoked both the reporting requirements and the payment transparency requirements that the District Court left in force. (EDITOR’S NOTE: For more on Public Law 115-11 and EO 13782, see the April 2017 Federal Contracts Perspective article “Trump Revokes Obama's Fair Pay and Safe Workplaces Executive Order.”)

While a rule is being prepared that would amend the FAR to formally remove FAC 2005-90, the CAAC issued this FAR class deviation to permit civilian agencies (except the National Aeronautics and Space Administration and the Coast Guard) to exclude the following provisions and clauses from solicitations and contracts: FAR 52.222-57, Representation Regarding Compliance with Labor Laws (Executive Order 13673); FAR 52.222-58, Subcontractor Responsibility Matters Regarding Compliance with Labor Laws (Executive Order 13673); FAR 52.222-59, Compliance with Labor Laws (Executive Order 13673); FAR 52.222-60, Paycheck Transparency (Executive Order 13673); FAR 52.222-61, Arbitration of Contractor Employee Claims (Executive Order 13673); and paragraph (s) of FAR 52.212-3, Instruction to Offerors – Commercial Items. (EDITOR’S NOTE: The Department of Defense, the National Aeronautics and Space Administration, and the Coast Guard are governed by the Defense Acquisition Regulation Council [DARC] and must either wait for a DARC class deviation to be issued before taking similar action or issue a class deviation on their own.)





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