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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


FEBRUARY 2001
Vol. II, No. 2

CONTENTS

FAC 97-22 Cleans House, FAC 97-23 Prohibits Products by Child Labor
HHSAR Rewritten
SBA Implements HUBZone Program Improvements
FAR Changes Proposed on Helium, IT Accessibility
President Bush Freezes New Regulations
DOE Rewrites DEAR Part 970, Mandates Legal Management
DOL Revises Davis-Bacon, Service Contract Act Regs



FAC 97-22 Addresses Definitions and Cleans House,
FAC 97-23 Prohibits Products by Forced Child Labor

During the last few days before George W. Bush took office as president, the Federal Acquisition Regulation (FAR) Council published two Federal Acquisition Circulars (FACs) to clean up the FAR and tie up loose ends. FAC 97-22 addresses FAR definitions, the threshold for cost accounting standards, advance payments for non-commercial items, assignment of claims for commercial items, and commercial items clause flowdown. FAC 97-23 prohibits the acquisition of products produced by forced or indentured child labor.

The following are the key provisions in FAC 97-22:

FAC 97-23 implements Executive Order 13126, Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor, which directs agencies to "take appropriate actions to enforce the laws prohibition the manufacture or importation of goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part by forced or indentured child labor." New FAR Subpart 22.15, Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor, applies to acquisitions in excess of the $2,500 micro-purchase threshold, except contracts for products mined, produced, or manufactured in (1) a country that is a party to the Agreement on Government Procurement if the contract exceeds the $177,000; (2) Canada if the contract exceeds $25,000; (3) Mexico if the contract exceeds $54,372; or (4) Israel if the contract exceeds $50,000 (see FAR Subpart 25.4, Trade Agreements). But even non-exempt contracts are only subject to FAR Subpart 22.15 if the offered product is on the new "List of Products Requiring Contractor Certification as to Forced or Indentured Child Labor" which has been compiled by the Department of Labor. The List identifies specific products from specific countries which may have been mined, produced, or manufactured by forced or indentured child labor. The products and countries on the List are: bamboo (Burma); beans (including yellow, soya, and green beans) (Burma); hand-made bricks (Burma and Pakistan); chilies (Burma); corn (Burma); pineapples (Burma); rice (Burma); rubber (Burma); shrimp (aquaculture) (Burma); sugarcane (Burma); and teak (Burma). (EDITOR'S NOTE: The List is available at http://www.dol.gov/dol/ilab.)

New FAR 52.222-18, Certification Regarding Knowledge of Child Labor for Listed End Products, is to be included in all solicitations for the acquisition of products on the List (regardless of country of origin). It requires offerors of products on the list to certify either (1) that the product will not be from a country on the list, or (2) the offeror has made a good faith effort to determine whether forced or indentured child labor was used to mine, produce, or manufacture the end product, and on the basis of those efforts, the offeror certifies that it is not aware of any use of child labor. The same certification is included in FAR 52.212-3, Offeror Representations and Certifications -- Commercial Items.

New FAR 52.222-19, Child Labor -- Cooperation with Authorities and Remedies, is to be included in all solicitations and contracts for supplies that are expected to exceed $2,500. It requires the contractor to "cooperate fully with authorized officials of the contracting agency, the Department of the Treasury, or the Department of Justice by providing reasonable access to records, documents, persons, or premises upon reasonable request by the authorized officials" if authorized officials need to conduct an investigation to determine whether forced or indentured child labor was used to mine, produce, or manufacture any product furnished under the contract. If the contractor: (1) submitted a false certification, or (2) refuses to cooperate with an investigation, or (3) uses forced or indentured child labor, or (4) furnishes products that are mined, produced, or manufactured by forced or indentured child labor, then (1) the contracting officer may terminate the contract, or (2) the contractor may be suspended, or (3) the contractor may be debarred.

EDITOR'S NOTE: How much corn does the U.S. government buy from Burma? Or pineapples? Harvested by either children or adults? Not much, if any! But it makes a nice political statement.



HHSAR Rewritten

The Department of Health and Human Services (HHS) has completely revised and republished the HHS Acquisition Regulation (HHSAR). The new HHSAR is streamlined and simplified by the elimination of procedural guidance that is too encumbering for a simplified system, and it empowers the appropriate levels of management and contracting personnel so they can accomplish their mission with the least amount of resistance and oversight. The introductory material to the revised HHSAR says "the amendments being made to the HHSAR concern internal procedural matters which are administrative in nature, and will not have a major effect on the general public, or to contractors or offerors of the Department [of HHS]." It was published in the January 17, 2001, Federal Register, beginning on page 4219.

The HHSAR is Chapter 3 of Title 48 of the Code of Federal Regulations (CFR), and it implements and supplements the FAR.



SBA Implements HUBZone Program Improvements

On October 3, 2000, the Small Business Administration (SBA) published proposed "improvements" to the Historically Underutilized Business Zone (HUBZone) program, which SBA implements in Title 13 of the CFR, Part 126, HUBZone program (see the November 2000 Federal Contracts Perspective article "SBA Proposes Improvements to HUBZone Program"). The proposed rule was intended to clarify the regulations, streamline the operation of the HUBZone program, and ease eligibility requirements that are burdensome to businesses. Based on 22 comments submitted, SBA has decided to finalize the proposed rule with minor revisions.

The HUBZone Program was initiated in 1998 to provide federal contract assistance to qualified small businesses in distressed communities. To participate in the HUBZone program, a small business' principal office must be located in a HUBZone. More than 7,000 urban census tracts and 900 rural counties currently qualify as HUBZones, as well as all federally-recognized Native American reservations. SBA's HUBZone website is at http://www.sba.gov/hubzone.

The following are the major changes made to the HUBZone regulations by this final rule:



FAR Changes Proposed on Helium, IT Accessibility

What would life be like without some proposed FAR changes?



President Bush Freezes New Regulations

Wary of what President Clinton included in the flurry of regulations issued in the last few days of his administration, one of President Bush's first acts after taking office on January 20 was to order all agencies to "send no proposed or final regulation to the Office of the Federal Register (the 'OFR') unless and until a department or agency head appointed by the President after noon on January 20, 2001, reviews and approves the regulatory action." In addition, President Bush ordered that agencies withdraw all regulations that have been sent to the OFR but not yet published in the Federal Register, and to temporarily postpone for 60 days the effective date of regulations that have been published in the Federal Register but have not yet taken effect (the temporary postponement will affect all of FAC 97-22 except for the finalization of the interim rule changing the cost accounting standards threshold, and FAC 97-23).

The only exceptions are for emergency or other urgent situations relating to health and safety, and any regulations promulgated pursuant to statutory or judicial deadlines.



DOE Rewrites DEAR Part 970, Mandates Legal Management

The Department of Energy (DOE) has made several significant changes to its regulations:



Labor Revises Davis-Bacon, Service Contract Act Regs

Along with everyone else, the Department of Labor (DOL) was busy tying up loose ends involving two laws it administers.



Copyright 2001 by Panoptic Enterprises. All Rights Reserved.

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