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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


September 2018
Vol. XIX, No. 9
[pdf version]

CONTENTS


$717 Billion Defense Authorization Act Addresses DOD Micro-Purchase Threshold, Commercial Items
FAC 2005-100 Finalizes Paid Sick Leave Rule
DOD Returns from Summer Vacation with Lots of Rules
CBCA Revises Procedures to Prefer Electronic Filing
Threshold for FSS OLMs Clarified
Prompt Payment Interest Rate Set at 3 1/2%
GSA Releases FY2019 Per Diem Rates



$717 Billion Defense Authorization Act Addresses
DOD Micro-Purchase Threshold, Commercial Items

On August 13 President Trump signed into law the $717 billion John S. McCain National Defense Authorization Act for Fiscal Year 2019 (NDAA for FY 2019 – Public Law 115-232), named after the late senator from Arizona. While the primary concern of Public Law 115-232 is to authorize an increase in defense funding by 3% over that authorized by the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 (Public Law 115-91), there are some provisions that address issues involving acquisition. Most of those provisions are in Title VIII, Acquisition Policy, Acquisition Management, and Related Matters (Sections 800-890), though there are a few other acquisition-related provisions scattered elsewhere in the statute. The most significant of the acquisition-related provisions are the increase in the micro-purchase threshold for the Department of Defense (DOD) from $5,000 to $10,000, and the revision of the definition of “commercial item.”

First of all, Sections 800 through 809 direct that Title 10 of the U.S. Code, Armed Forces (10 USC), Subtitle A, General Military Law, be realigned to include a new Part V, Acquisition, to logically organize all acquisition-related statutes applicable to DOD in one part of the U.S. Code. This is an acknowledgement that the structure for acquisition-related statutes in Title 10 has become unwieldy and inadequate. In addition, this restructuring will enable additional growth and potential future reorganization of Title 10 statutes in other subject areas outside of the acquisition code.

Section 800 requires that the new Part V be established by February 1, 2019; Section 801 establishes the framework for Part V; Section 806 redesignates sections and chapters in Subtitle D, Air Force, to create numerical space for Part V at the end of Subtitle A; Section 807 redesignates sections and chapters in Subtitle C, Navy and Marine Corps, to create numerical space for Part V at the end of Subtitle A; Section 808 redesignates sections and chapters in Subtitle B, Army, to create numerical space for Part V at the end of Subtitle A; and Section 809 requires that each provision of Title 10 that contains a reference to a section or chapter that has been redesignated be amended so that the reference refers to the number of the section or chapter as redesignated.

The following are some of the other important acquisition-related provisions in Title VIII:

The following miscellaneous sections of Public Law 115-232 involving acquisition are outside of Title VIII:

DOD has announced that it is providing the public an opportunity to provide “early inputs” on implementation of the provisions in NDAA for FY19 that address acquisition. “The public is invited to submit early inputs on sections of the NDAA for FY 2019 via the DARS [Defense Acquisition Regulations System] website at http://www.acq.osd.mil/dpap/dars/index.html. The website will be updated when early inputs will no longer be accepted. Please note, this venue does not replace or circumvent the rulemaking process; DARS will engage in formal rulemaking...when it has been determined that rulemaking is required to implement a section of the NDAA for FY 2019 within the acquisition regulations.”



FAC 2005-100 Finalizes Paid Sick Leave Rule

Federal Acquisition Circular (FAC) 2005-100 finalizes two interim rules that were issued to amend the FAR to comply with two labor-related Executive Orders (EO) issued by President Obama and the Department of Labor (DOL) rules implementing those EOs. In addition, FAC 2005-100 contains technical amendments throughout the FAR that make editorial changes and update the addresses of links to websites.



DOD Returns from Summer Vacation with Lots of Rules

The Department of Defense (DOD) returned from its summer break full of vim and vigor, finalizing two interim rules, proposing six rules, issuing a class deviation, and issuing two memoranda.



CBCA Revises Procedures to Prefer Electronic Filing

The Civilian Board of Contract Appeals (CBCA), which hears disputes involving contract with civilian agencies, is finalizing, with minor changes, the rule that proposed to revise its procedures in Title 48 of the Code of Federal Regulations (CFR), Part 6101, Rules of Procedure of the Civilian Board of Contract Appeals, to simplify and modernize access to the CBCA by establishing a preference for electronic filing, increasing conformity between its rules and the Federal Rules of Civil Procedure, streamlining the wording of the its rules, and clarifying current rules and practices.

The CBCA rules of procedure for Contract Disputes Act cases were adopted in May 2008 (see the June 2008 Federal Contracts Perspective article “CBCA Revises Rules of Procedure”) and last amended in August 2011 to permit “filings submitted by electronic mail (e-mail).” Paragraph (b)(1) of revised section 6101.4, Appeal File [Rule 4], now states, “Unless otherwise ordered, parties shall file the appeal file and supplements thereto in an electronic storage medium (e.g., hard disk or solid state drive, compact disc (CD), or digital versatile disc (DVD)), labeled with the docket number, case name, and range of exhibit numbers.”

Two respondents submitted comments on the proposed rule, but no changes were made in response to their comments. However, several administrative changes to correct spelling, grammatical, and similar errors have been made to the final rule.

For more on the proposed rule, see the April 2018 Federal Contracts Perspective article “CBCA Proposes Preference for Electronic Filing.”



Threshold for FSS OLMs Clarified

The General Services Administration (GSA) has amended paragraph (d)(4) of GSA Acquisition Regulation (GSAR) 552.238-82, Special Ordering Procedures for the Acquisition of Order-Level Materials, to clarify the application of the threshold for order-level materials (OLMs) when placing an order against a Federal Supply Schedule (FSS) contract or FSS blanket purchase agreement (FSS BPA).

GSAR 552.238-82(d) prescribes procedures for including OLMs when placing an individual task or delivery order against an FSS contract or FSS BPA. The procedures in paragraph (d)(4) required that “the cumulative value of order-level materials in an individual task or delivery order awarded under a FSS contract or FSS BPA shall not exceed 33.33 percent of the total value of the individual task or delivery order.”

GSA is amending GSAR 552.238-82(d)(4) to clarify the applicability of the 33.33 percent threshold as follows: “The value of order-level materials in a task or delivery order, or the cumulative value of order-level materials in orders against an FSS BPA awarded under a FSS contract shall not exceed 33.33 percent.”

For more on the addition of GSAR 552.238-82 to the GSAR, see the February 2018 Federal Contracts Perspective article “GSA Authorizes Order-Level Materials on Federal Supply Schedule Orders.”



Prompt Payment Interest Rate Set at 3 1/2%

The Treasury Department has established 3 1/2% (3.5%) as the interest rate for the computation of payments made between July 1, 2018, and December 31, 2018, 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, 2018, through June 30, 2018) was 2 5/8% (2.625%). The interest rate for July 1, 2017, through December 31, 2017, was 2 3/8% (2.375%).

All prompt payment interest rates since 1980 (in six-month increments) are available at https://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPayment/rates.htm.

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.



GSA Releases FY2019 Per Diem Rates

The General Services Administration (GSA) has released the FY 2019 maximum travel per diem rates for the Continental United States (CONUS), which will take effect on October 1, 2018. GSA sets these rates annually based on local market costs of mid-priced hotels. Per diem rates provide maximum amounts that can be reimbursed to federal employees for lodging and meals while on official travel.

The FY 2019 travel per diem rates are available at https://www.gsa.gov/travel/plan-book/per-diem-rates.





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