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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


October 2018
Vol. XIX, No. 10
[pdf version]

CONTENTS


FAC 2005-101 Updates Instructions for System for Award Management Registration
DOD Continues Cleaning Up the DFARS
USDA Proposes 30 New Biobased Products
Federal Minimum Wage Increased to $10.60/Hour for 2019
VA Resumes Cleaning Up the VAAR



FAC 2005-101 Updates Instructions for
System for Award Management Registration

Federal Acquisition Circular (FAC) 2005-101 consists of two relatively minor final rules. One clarifies the procedures for registering in the System for Award Management (SAM) database, in which all federal contractors must be registered to be eligible for a contract award; and removal of the requirement that business operations performed on government premises accept and dispense $1 coins.



DOD Continues Cleaning Up the DFARS

The Department of Defense (DOD) is continuing its scrubbing of the Defense FAR Supplement (DFARS), which it has been conducting the last several months to remove obsolete, duplicative, or unnecessary clauses and provisions. In addition, DOD issued a couple of class deviations and several policy memoranda providing guidance and information on various aspects of defense acquisition.



USDA Proposes 30 New Biobased Products

The United States Department of Agriculture (USDA) is proposing to add thirty (30) more sections to Title 7 of the Code of Federal Regulations (CFR), Part 3201, Guidelines for Designating Biobased Products for Federal Procurement (7 CFR Part 3201), to designate product categories that would be given preference in federal procurements as provided under Section 9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA) (Public Law 107-171), and to specify the minimum level of biobased content to be contained in the procured products.

The following are the proposed new designated product categories and their Title 7 section numbers:

3201.120, Adhesives
3201.121, Animal Habitat Care Products
3201.122, Cleaning Tools
3201.123, Concrete Curing Agents
3201.124, Concrete Repair Materials
3201.125, Durable Cutlery
3201.126, Durable Tableware
3201.127, Epoxy Systems
3201.128, Exterior Paints And Coatings
3201.129, Facial Care Products
3201.130, Feminine Care Products
3201.131, Fire Logs and Fire Starters
3201.132, Folders and Filing Products
3201.133, Foliar Sprays
3201.134, Gardening Supplies and Accessories
3201.135, Heating Fuels and Wick Lamps
3201.136, Kitchenware and Accessories
3201.137, Other Lubricants
3201.138, Phase Change Materials
3201.139, Playground and Athletic Surface Materials
3201.140, Powder Coatings
3201.141, Product Packaging
3201.142, Rugs and Floor Mats
3201.143, Shopping and Trash Bags
3201.144, Soil Amendments
3201.145, Surface Guards, Molding, And Trim
3201.146, Toys and Sporting Gear
3201.147, Traffic and Zone Marking Paints
3201.148, Transmission Fluids
3201.149, Wall Coverings

In addition, USDA is proposing to amend the existing designated product categories of general purpose de-icers (3201.37, De-Icers); firearm lubricants (3201.38, Firearm Cleaners, Lubricants, and Protectants); laundry products (3201.40, Laundry Products); and water clarifying agents (3201.99, Water and Wastewater Treatment Chemicals). Since USDA finalized the designation of each of these product categories (2012 for water and wastewater treatment chemicals, 2008 for the others), USDA has obtained additional information on products within these four categories. Therefore, USDA is now proposing amendments to these four categories to more closely align the existing categories with the data gathered since the categories were originally designated.

As a general rule, procuring agencies must purchase biobased products within these designated items where the purchase price of the procurement item exceeds $10,000 or where the quantity of such items or functionally equivalent items purchased over the preceding fiscal year equaled $10,000 or more, unless products within a designated item: (1) are not reasonably available within a reasonable period of time; (2) fail to meet the reasonable performance standards of the procuring agencies; or (3) are available only at an unreasonable price. The $10,000 threshold applies to federal agencies as a whole and not to agency subgroups such as regional offices or subagencies of the larger federal department or agency. In addition, federal contractors are subject to the procurement preference provisions of Section 9002 of FSRIA.

Comments on this proposal must be submitted no later than November 13, 2018, identified with the Regulatory Information Number (RIN) 0599-AA26, by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) email: biopreferred_support@amecfw.com; or (3) mail or commercial/hand delivery to: Karen Zhang, USDA, Office of Procurement and Property Management, Room 1640, USDA South Building, 1400 Independence Avenue SW, Washington, DC 20250.

For more information on the biobased program and the products in the program, go to https://www.biopreferred.gov/.



Federal Minimum Wage Increased to $10.60/Hour for 2019

The Department of Labor (DOL) has announced that the applicable minimum wage rate to be paid to workers performing work on or in connection with federal contracts covered by Executive Order 13658, Establishing a Minimum Wage for Contractors, beginning January 1, 2019, is increased from $10.35 to $10.60 per hour.

Executive Order 13658 was signed by President Obama on February 12, 2014 (see the March 2014 Federal Contracts Perspective article “President Issues Executive Order Mandating $10.10/Hour Minimum Wage”), which raised the hourly minimum wage paid by contractors to workers performing work on covered federal contracts to $10.10 per hour, beginning January 1, 2015. Further, the executive order stated that the Department of Labor (DOL) would adjust the minimum wage annually (beginning January 1, 2016) to reflect inflation during the year as reflected in the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers.

In 2015, the DOL determined that the CPI increased by 0.345% in 2015, so the minimum wage became $10.15 per hour beginning January 1, 2016 (see the October 2015 Federal Contracts Perspective article “Federal Minimum Wage Increased to $10.15/Hour for 2016”).

In 2016, the DOL determined that the CPI increased by 0.278% in 2016, so the minimum wage became $10.20 per hour beginning January 1, 2017 (see the October 2016 Federal Contracts Perspective article “Federal Minimum Wage Increased to $10.20/Hour for 2017”).

In 2017, the DOL determined that the CPI index increased by 1.691% in 2017, so the minimum wage became $10.35 per hour beginning January 1, 2018 (see the October 2017 Federal Contracts Perspective article “Federal Minimum Wage Increased to $10.35/Hour For 2018”).

Now, the DOL has determined that the CPI index increased by 2.337% in 2018, and this produces a minimum wage of $10.60 per hour effective January 1, 2019.

In addition, the required minimum cash wage that must be paid to tipped employees performing work on or in connection with covered contracts is increased from $7.25 to $7.40 per hour ($4.90 per hour was the original minimum cash wage for tipped employees established in the executive order).

In a related rule change, the DOL is amending its regulations at Title 29 of the Code of Federal Regulations (CFR), Part 10, Establishing a Minimum Wage for Contractors, Section 10.4, Exclusions (29 CFR 10.4), to implement Executive Order 13838, Exemption from Executive Order 13658 for Recreational Services on Federal Lands, which exempts from the federal minimum wage requirements of Executive Order 13658 contracts for seasonal recreational services and seasonal recreational equipment rental when such services and equipment are offered to the general public on federal lands.

This final rule adds a paragraph (g) to 29 CFR 10.4, which contains language identical to that which Section 2 of Executive Order 13838 inserted to amend Executive Order 13658. New paragraph (g) is as follows: “(g) Contracts in connection with seasonal recreational services and seasonal recreational equipment rental offered for public use on federal lands. This part shall not apply to contracts or contract-like instruments entered into with the federal government in connection with seasonal recreational services or seasonal recreational equipment rental for the general public on federal lands, but this exemption shall not apply to lodging and food services associated with seasonal recreational services. Seasonal recreational services include river running, hunting, fishing, horseback riding, camping, mountaineering activities, recreational ski services, and youth camps.”

Section 1 of Executive Order 13838 provided the following explanation for exempting these service contracts from Executive Order 13658: “Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors), established a minimum wage to be paid by parties who contract with the federal government and applies to outfitters and guides operating on federal lands. These individuals often conduct multiday recreational tours through federal lands, and may be required to work substantial overtime hours. The implementation of Executive Order 13658 threatens to raise significantly the cost of guided hikes and tours on federal lands, preventing many visitors from enjoying the great beauty of America’s outdoors. Seasonal recreational workers have irregular work schedules, a high incidence of overtime pay, and an unusually high turnover rate, among other distinguishing characteristics. As a consequence, a minimum wage increase would generally entail large negative effects on hours worked by recreational service workers. Thus, applying Executive Order 13658 to these service contracts does not promote economy and efficiency in making these services available to those who seek to enjoy our federal lands.”



VA Resumes Cleaning Up the VAAR

The Department of Veterans Affairs (VA) has issued the third, fourth, and fifth final rules that conduct housekeeping on the VA Acquisition Regulation (VAAR) to revise or remove any policy that has been superseded by changes in the Federal Acquisition Regulation (FAR); remove any procedural guidance that is internal to the VA; incorporate new regulations and policies; correct inconsistencies within the VAAR; remove redundant and duplicate material already covered by the FAR; delete outdated material or information; and renumber VAAR text, clauses, and provisions to conform to the FAR format, numbering, and arrangement.

The following are summaries of the three final rules amending the VAAR:

For more on all three of the proposed rules that resulted in these final rules, see the May 2018 Federal Contracts Perspective article “Phase II of VAAR Update Finalized.”





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