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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


June 2019
Vol. XX, No. 6
[pdf version]

CONTENTS


FAC 2019-02 Addresses Special Emergency Procurement Authority, Interagency Contracts
DOD Keeps Up Frenzied Pace of DFARS Changes
FSS Provisions, Clauses Updated
SBA Proposes WOSB Certification Procedures
HUDAR Gets Cleaned Up



FAC 2019-02 Addresses Special Emergency
Procurement Authority, Interagency Contracts

Federal Acquisition Circular (FAC) 2019-02 amends the Federal Acquisition Regulation (FAR) with two rules implementing sections in two National Defense Authorization Acts (NDAAs): one rule expands special emergency procurement authorities; the other rule removes the requirement to make a best procurement approach determination to use an interagency acquisition.



DOD Keeps Up Frenzied Pace of DFARS Changes

The Department of Defense (DOD) maintained its torrid rate of DOD FAR Supplement (DFARS) changes during May with the issuance of five final rules, two proposed rules, and a deviation.



FSS Provisions, Clauses Updated

The General Services Administration (GSA) is finalizing, with many changes, the rule that proposed to clarify, update, and incorporate existing Federal Supply Schedule (FSS) contract administration policies and procedures. In addition, substantial corrections had to be issued to the final rule.

Thirty new FSS-specific clauses and provisions that were previously implemented through internal GSA policy and were included in FSS solicitations and contracts are incorporated into GSA Acquisition Regulation (GSAR) part 538, Federal Supply Schedule Contracting, and GSAR part 552, Solicitation Provisions and Contract Clauses. Bringing these clauses and provisions into the GSAR allows for greater transparency, and consolidates all regulations into one area, while updating administrative information to ensure currency and consistency within the FSS program. The new clauses and provisions are:

Four FSS-specific clauses and provisions were removed from the GSAR as part of the ongoing GSAR rewrite and retained as internal GSA policy. It has been decided that these four clauses and provisions should be reinstated and given new clause numbers. These clauses and provisions are:

Ten existing FSS-specific clauses and provisions are updated to reflect current references and practices. These clauses and provisions are:

In addition, GSAR 538.273, FSS Solicitation Provisions and Contract Clauses, is restructured to be more consistent with the formation of FSS solicitations and contracts. The previous structure of GSAR 538.273 was based on whether the FSS was single-award or multiple-award. A more practical structure outlines where each provision or clause is to be located in FSS solicitations and contracts (for example, as an addendum to FAR 52.212-1, Instructions for Offerors – Commercial Items, or FAR 52.212-4, Contract Terms and Conditions – Commercial Items).

Three respondents submitted numerous comments on the proposed rule, and many of the suggested changes have been adopted. However, the final rule had many errors in it, so an extensive correction had to be issued. For more on the proposed rule, see the October 2014 Federal Contracts Perspective article “GSA to Update GSAR FSS Provisions/Clauses.”



SBA Proposes WOSB Certification Procedures

P>The Small Business Administration (SBA) is proposing to amend its regulations to implement a statutory requirement in the NDAA for FY 2015 (Public Law 113-291), Section 825, Sole Source Contracts for Small Business Concerns Owned and Controlled by Women, to certify women-owned small businesses (WOSB) and economically disadvantaged women-owned small businesses (EDWOSB) participating in the Women-Owned Small Business Contract Program.

Section 825 amended Title 15 of the U.S. Code, Section 637 (15 USC 637), Additional Powers (of the SBA), paragraph (m), Procurement Program for Women-Owned Business Concerns, to: (1) grant contracting officers the authority to award sole source awards to WOSBs and EDWOSBs; and (2) to require that a concern be certified as a WOSB or EDWOSB by a federal agency, a state government, the SBA, or a national certifying entity approved by the SBA, in order to be awarded a set aside or sole source contract under the authority of 15 USC 637(m). (EDITOR’S NOTE: For more on Section 825, see the January 2015 Federal Contracts Perspective article “Authority to Use Simplified Procedures for Commercial Items Up to $6,500,000 Made Permanent.”)

In September 2015, the SBA issued a final rule implementing the sole source authority for WOSBs and EDWOSBs (see the October 2015 Federal Contracts Perspective article “Women-Owned Business Sole Source Regulations Finalized”), and FAC 2005-91 amended FAR subpart 19.15, Women-Owned Small Business Program, to implement the SBA final rule (see the October 2016 Federal Contracts Perspective article “FAC 2005-91 Finalizes Rule on Women-Owned Small Business Sole Source Contracts”). However, SBA’s final rule did not address the certification portion of Section 825 “because its implementation is more complicated, could not be accomplished by merely incorporating the statutory language into the regulations, and would have delayed the implementation of the sole source authority unnecessarily. SBA notified the public that because it did not want to delay the implementation of the WOSB sole source authority by combining it with the new certification requirement, SBA decided to implement the certification requirement through a separate rulemaking.” This proposed rule is that “separate rulemaking.”

As part of the process to draft the regulations governing the WOSB/EDWOSB certification program, SBA issued an Advance Notice of Proposed Rulemaking (ANPR) in December 2015 that solicited comments to assist SBA in drafting a proposed rule to implement a WOSB/EDWOSB certification program. SBA received 122 comments in response to the ANPR, and SBA reviewed all the comments while drafting this proposed rule.

This rule proposes to revamp the SBA’s regulations in Title 13 of the Code of Federal Regulations (CFR), Part 127, Women-Owned Small Business Federal Contracting Program (13 CFR part 127), Subpart C, Certification of EDWOSB and WOSB Status, and Subpart D, Eligibility Examinations (proposed to be renamed “Maintaining WOSB and EDWOSB Status and Eligibility Examinations”). The following are the significant changes being proposed:

Finally, this proposed rule would revise paragraph (c) of Section 124.104, Who is economically disadvantaged?, to make the economic disadvantage requirements for the 8(a) program consistent with the economic disadvantage requirements for women-owned firms seeking EDWOSB status.

To be considered economically disadvantaged for EDWOSB status, Section 127.203, What are the rules governing the requirement that economically disadvantaged women must own EDWOSBs?, requires that: (1) a woman's personal net worth must be less than $750,000, excluding her ownership interest in the concern and her equity interest in her primary personal residence (paragraph (b); (2) a woman’s personal income cannot exceed $350,000 averaged over the preceding three years (paragraph (c)(3)(i)); and (3) the fair market value of all her assets (including her primary residence and the value of the business concern) may not exceed $6,000,000 (paragraph (c)(4)). These economic disadvantage criteria are the same criteria that an 8(a) participant, once accepted into the 8(a) program, needs to meet to continue in the 8(a) program (Section 124.104(c)(2), (c)(3), and (c)(4), respectively).

However, there is much stricter criteria for those seeking to enter the 8(a) program: (1) the net worth of an individual claiming disadvantage must be less than $250,000 (paragraph (c)(2)); (2) an individual’s personal income cannot exceed $250,000 averaged over the preceding three years (paragraph (c)(3)); and (3) the fair market value of all the individual’s assets (including his or her primary residence and the value of the business concern) may not exceed $4,000,000 (paragraph (c)(4)).

This has produced an anomaly. A concern applying for EDWOSB and 8(a) status at the same time can be found economically disadvantaged for EDWOSB purposes, but denied eligibility for the 8(a) program based on not being economically disadvantaged. “SBA does not believe that it makes sense to allow a woman to qualify as economically disadvantaged for EDWOSB purposes, but to then be declined from 8(a) participation for not being economically disadvantaged.”

Comments on this proposed rule must be submitted no later than July 15, 2019, identified as “RIN: 3245-AG75,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) mail, paper, disk, or CD/ROM submissions: Brenda Fernandez, U.S. Small Business Administration, Office of Policy, Planning and Liaison, 409 Third Street SW, 8th Floor, Washington, DC 20416; or (3) hand delivery or courier: Brenda Fernandez, U.S. Small Business Administration, Office of Policy, Planning and Liaison, 409 Third Street SW, 8th Floor, Washington, DC 20416.



HUDAR Gets Cleaned Up

The Department of Housing and Urban Development (HUD) has made miscellaneous changes to the HUD Acquisition Regulation (HUDAR). The most obvious change is the replacement of the unique-HUD term “government technical representative” (GTR) with contracting officer representative” (COR) throughout the HUDAR, and the removal of the term “government technical monitor” from the HUDAR.

The following are some of the more significant changes made to the HUDAR by this rule:

No comments were submitted in response to the proposed rule, so the proposed rule is finalized without changes. For more on the proposed rule, see the May 2018 Federal Contracts Perspective article “HUDAR Revisions Proposed.”





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