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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


April 2018
Vol. XIX, No. 4
[pdf version]

CONTENTS


GSA Detects Fraudulent Activities in the System for Award Management
Fourth Revision to VAAR Proposed
DOD Amends Mentor-Protégé Program
NASA Revises Invoice Submission Process
OFPP Proposes Reducing Value Engineering Reporting
CBCA Proposes Preference for Electronic Filing



GSA Detects Fraudulent Activities in the
System for Award Management

The General Services Administration (GSA) has announced that it has discovered instances of fraud within the System for Award Management (SAM – https://www.SAM.gov), and it is supporting an active investigation by the GSA Office of the Inspector General (OIG) into the alleged third party fraudulent activity. “At this time, only a limited number of entities registered in SAM are suspected of being impacted by this fraudulent activity,” says GSA in its press release.

SAM is the federal database where vendors register to do business with the government. It consolidates several federal databases into one: the Federal Agency Registration (FedReg); the Online Representations and Certifications Application (ORCA); and the Excluded Parties List System (EPLS); and there are plans to consolidate even more federal databases, such as the Wage Determinations On-Line (WDOL), the Federal Procurement Data System (FPDS), and several others. The purpose of the SAM is to: (1) allow users to employ a single login to access all the capabilities found in the old systems; (2) eliminate data overlap by sharing the data among the systems; and (3) provide a standardized format across all webpages to make it easier to navigate and find information.

The fraudulent activities detected involve individuals using public information to impersonate legitimate entities and fraudulently registering those entities in SAM. By impersonating legitimate entities, these individuals have redirected payments from the government to the fraudulent entities registered in SAM. In addition, some of these illegitimate entities have won government contracts and provided non-authentic or counterfeit items.

GSA has taken steps to address this issue and has notified affected entities. These steps include requiring an original, signed notarized letter identifying the authorized Entity Administrator for the entity associated with the DUNS number before a new SAM.gov entity registration will be activated. In addition, GSA is in the process of making system modifications to prevent this and similar improper activity.

GSA has deactivated any entity registrations that appeared to have been affected – that is, those entities whose financial information has changed within the last year. These entities are being advised to validate their registration information in SAM, particularly their financial information and points of contact. This means awards or any modifications to existing awards will not be able to be made to affected entities until the re-verification is completed.

Entities registered in SAM are advised to log into SAM and review their registration information, particularly their financial information. If an entity suspects a payment due them from a federal agency was paid to a bank account other than their own, the entity should contact the Federal Service Desk at http://www.fsd.gov, or by telephone at 866-606-8220 (toll free) or 334-206-7828 (internationally), Monday through Friday from 8:00 am to 8:00 pm (EDT), for free assistance.

EDITOR’S NOTE: Paragraph (b) of Federal Acquisition Regulation (FAR) 52.232-33, Payment by Electronic Funds Transfer – System for Award Management, states: “The government shall make payment to the contractor using the EFT [electronic funds transfer] information contained in the System for Award Management (SAM) database. In the event that the EFT information changes, the contractor shall be responsible for providing the updated information to the SAM database.” GSA maintains that “entities are responsible for ensuring that their information is current and correct in SAM in accordance with paragraph (b) of FAR clause 52.232-33, and should routinely review such information for accuracy.”



Fourth Revision to VAAR Proposed

The Department of Veterans Affairs (VA) is proposing the fourth increment of its effort to amend and update its VA Acquisition Regulation (VAAR) to revise or remove any policy superseded by changes in the FAR, to move procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency specific regulations or policies. These changes are intended to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements. VA will rewrite the VAAR in a series of proposed rules, with each increment revising VAAR parts that address related topics.

This is the fourth proposed rule VA has published, and it would amend VAAR part 811, Describing Agency Needs, VAAR part 832, Contract Financing, VAAR part 870, Special Procurement Controls, and the corresponding clauses and provisions in VAAR part 852, Solicitation Provisions and Contract Clauses, to reflect current FAR titles of parts, subparts, and sections; reflect current FAR format, numbering, and arrangement; reflect current FAR requirements and definitions; correct inconsistencies with the FAR; remove redundancies and duplicate material already covered by the FAR; and delete outdated material and information.

For more on the first proposed rule, see the April 2017 Federal Contracts Perspective article “Revision of VAAR to Adhere to FAR Proposed,” and for more on the finalized version of this first proposed rule, see the March 2018 Federal Contracts Perspective article “Phase I of VAAR Update Finalized”; for more on the second proposed rule, see the June 2017 Federal Contracts Perspective article “Phase Two of VAAR Revision Proposed”; and for more on the third proposed rule, see the February 2018 Federal Contracts Perspective article “VAAR to be Revised to Align with the FAR.”



DOD Amends Mentor-Protégé Program

The Department of Defense (DOD) is amending its mentor-protégé program to implement Section 861 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Public Law 114-92), which extended the program to September 30, 2021; added new eligibility criteria; added limitations on a protégé firm’s participation in the program; and added new elements to mentor-protégé agreements. In addition, DOD issued technical amendments to the Defense Federal Acquisition Regulation Supplement (DFARS); a class deviation on enhanced postaward debriefing rights; a list of supplies that are to be competed when purchasing from Federal Prison Industries; and an update to contract payment instructions. Finally, DOD announced that it is providing an opportunity for the public to provide inputs on implementation of those sections of the NDAA for FY 2018 that address acquisition matters.



NASA Revises Invoice Submission Process

The National Aeronautics and Space Administration (NASA) is finalizing, without changes, its proposal to make revisions to its voucher and invoice submittal and payment process to comply with the Office of Management and Budget (OMB) memorandum that directed federal agencies to transition to electronic invoicing for appropriate federal procurements by the end of Fiscal Year (FY) 2018 (for more on the OMB memorandum, see the August 2015 Federal Contracts Perspective article “Agencies to Convert to All-Electronic Invoicing”).

In September 2016, NASA revised its voucher submission and payment process to electronically process cost-type vouchers under cost-reimbursement type contracts. To have invoices for fixed-price contracts submitted electronically, NASA proposed to revise two NASA FAR Supplement (NFS) clauses: NFS 1852.216-80, Task Ordering Procedure, to add an Alternate II for use with fixed-price contracts; and NFS 1852.232-80, Submission of Vouchers/Invoices for Payment, by revising paragraph (c) to add the information required for fixed-price invoices (paragraph (c) already addressed the information required for cost-reimbursement contracts).

No comments were submitted in response to the proposed rule, so it is finalized without changes. For more on the proposed rule, see the October 2017 Federal Contracts Perspective article “NASA Proposes Revised Invoice Submission Process.”



OFPP Proposes Reducing Value Engineering Reporting

The Office of Federal Procurement Policy (OFPP), a part of the Office of Management and Budget (OMB), is proposing to modify OMB Circular A-131, Value Engineering, to reduce the reporting burden on federal agencies.

Value engineering (VE) is a management technique that is used to analyze activities and identify alternative processes for completing the activities at a lower cost. Contractors that submit VE change proposals that are accepted by the government share in the savings the government realizes from the reduced costs of acquisition, operation, maintenance, and logistic support. Industry first developed VE during World War II as a means of continuing production despite shortages of critical materials, and the federal government subsequently adopted VE by issuing OMB Circular A-131.

Overall usage of VE by federal agencies has been limited. OFPP believes agency workforce awareness and consideration of VE can be improved by redirecting agency resources away from compliance reporting and towards information sharing with other agencies on use of VE through the Acquisition Gateway. Therefore, OFPP proposes to replace OMB Circular A-131’s Section B, Reports to OMB, with the following:

"Section 8: Information Sharing. Agencies are encouraged to share best practices, case studies and other information about their experience using VE on the Acquisition Gateway (https://hallways.cap.gsa.gov/login-information). The Gateway connects federal buyers with resources and tools to improve acquisition throughout the government. The Acquisition Innovation Hub within the Gateway facilitates information sharing between acquisition professionals and other stakeholders. Sharing information on the Hub can help build greater awareness of VE and accelerate the pace of innovation and other benefits that can come from the use of this management tool."

In addition, OFPP proposes to delete: (1) paragraph f from Section 7, Agency Responsibilities, which refers to reporting; and (2) the attachment to OMB Circular A-131, which provides a format for reporting to OMB.

Although public comment is not required in the development of these changes, OMB welcomes input on the proposed amendments to OMB Circular A-131 and will consider feedback prior to finalizing changes to it. Those interested in submitting comments should do so by April 5, 2018, through http://www.regulations.gov.

CBCA Proposes Preference for Electronic Filing

The Civilian Board of Contract Appeals (CBCA), which hears disputes involving contract with civilian agencies, is proposing to simplify and modernize access to the CBCA by establishing a preference for electronic filing. In addition, the CBCA is proposing to increase conformity between its rules and the Federal Rules of Civil Procedure, streamline the wording of the its rules, and clarify current rules and practices.

Comments on this proposal should be submitted no later than May 29, 2018, identified as “CBCA Amendment 2018-01, BCA Case 2018-61-1,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail to: Civilian Board of Contract Appeals, Office of the Chief Counsel (GA), 1800 M Street NW, Sixth Floor, Washington, DC 20036.





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