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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


May 2002
Vol. III, No. 5

CONTENTS

New DFARS Rules Address Profit, Berry Amendment, NAFTA
DOD FAIR Inventory Available
Proposed FAR Changes on Personal Costs, Trademarks
OFPP Issues Two Memos on Source Selections
Safety and Health Clauses Amended in NFS
SBA Proposes Increasing Testing Labs' Size Standards
Nonmanufacturer Rule Waiver Proposed for Bearings



New DFARS Rules Address Profit, Berry Amendment,
Federal Prisons, NAFTA, Balance of Payments

Spring cleaning continues apace at the Department of Defense (DOD). During the month of April, DOD amended the Defense Federal Acquisition Regulation Supplement (DFARS) by issuing four final rules and two interim rules. In addition, DOD published two proposed rules, withdrew two other proposed rules, requested comments on a proposal, and issued a Federal Acquisition Regulation (FAR) class deviation.

Final Rules:


Interim Rules:

Both these interim rules are effective April 26, 2001. Comments on either (or both) must be submitted by June 25, 2002, on the website at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm; by e-mail to dfars@acq.osd.mil; by fax to 703-602-0350; or to Defense Acquisition Regulations Council, Attn: Susan Schneider (for FPI rule) or Amy Williams (for Berry Amendment rule), OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

For more on the acquisition-related provisions of Public Law 107-107, see the February 2002 Federal Contracts Perspective article "2002 Defense Authorization Act Signed Into Law, Extends FAR Subpart 13.5 Until January 1, 2003."


Proposed Rules:

Comments on the proposed multiple award contracts rule must be submitted by May 6, 2002, and comments on the proposed FMS rule must be submitted by June 25, 2002, on the website at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm; by e-mail to dfars@acq.osd.mil; by fax to 703-602-0350; or to Defense Acquisition Regulations Council, Attn: Susan Schneider (for multiple award contracts rule) or Amy Williams (for FMS rule), OUSD (AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.


Request for Comments:


Withdrawals:


FAR Deviation:



DOD FAIR Inventory Available

On April 15, the Office of Management and Budget (OMB) announced that the fourth, and final, release of Commercial Activities Inventories required to be compiled by Public Law 105-270, Federal Activities Inventory Reform Act of 1998 (FAIR Act), is now available to the public from the Department of Defense (DOD). The inventory is available by contacting DOD's FAIR Act Hotline at 703-824-2692, or through the website at http://web.lmi.org/fairnet/. The inventory consists of "activities performed by federal government sources for the executive agency that, in the judgment of the head of the executive agency, are not inherently governmental functions." Interested parties have 30 days from the publication of the notice (that is, until May 15) to challenge the omission or inclusion of an activity on and inventory.

For more on the other three releases of inventories, see the following Federal Contracts Perspective articles: October 2001, "FAIR Act Inventories Available to Public"; December 2001, "Second FAIR Act Inventories Released"; and February 2002, "OMB Releases Third Set of FAIR Act Inventories."



Proposed FAR Changes on Personal Costs, Trademarks

Though it was a relatively quiet month for the FAR, that doesn't mean there was no action -- a proposed rule on personal costs was published, and a meeting was announced to discuss the August 9, 2001, proposed rule to provide guidance on the use of trademarks for government products.



OFPP Issues Two Memos on Source Selections

Angela B. Styles, Administrator of the Office of Federal Procurement Policy (OFPP), issued two memoranda to federal departments and agencies involving the source selection process.



Safety and Health Clauses Amended in NFS

On December 13, 2001, the National Aeronautics and Space Administration (NASA) published a proposed rule to remove the requirement that NASA FAR Supplement (NFS) 1852.223-70, NASA Safety and Health, and NFS 1852.223-73, Safety and Health Plan, be included in contracts that are greater than $1 million, involve construction, or have hazardous deliverable end items or operations (see the January 2002 Federal Contracts Perspective article "Changes Proposed for NFS Safety and Health Clauses"). This proposed change was intended to make sure contractors are held to the same standards for mishap prevention as the government. Since only one comment was received, and it did not recommended any changes, NASA is finalizing the proposed rule without changes.



SBA Proposes Increasing Testing Labs' Size Standard

SBA is proposing to modify the small business size standard for testing laboratories (North American Industry Classification System (NAICS) code 541380) from $6,000,000 to $10,000,000 in average annual receipts to better define the size of businesses that should be eligible as small for federal procurement programs. SBA is proposing this change because of the high level capacities and skills that federal agencies have recently required among their vendors that specialize in environmental and radiochemical testing, and the costs of doing business in this industry may have increased to the point that the pool of eligible small businesses has seriously declined.

SBA believes $10,000,000 is a reasonable size standard for the testing laboratories industry and will help small testing laboratories compete for federal contracts without including laboratories that are so large that they could harm the ability of small laboratories to compete successfully for federal contracts.

SBA estimates that the number of small businesses would increase by 120, from 3,762 firms to 3,882, out of 4,126 businesses in the industry if this increase is adopted.

EDITOR'S NOTE: Effective February 22, 2002, the testing laboratories size standard was increased from $5,000,000 to $6,000,000 as part of a 15.8% inflation adjustment to SBA's monetary size standards. For more on the adjustment, see the February 2002 Federal Contracts Perspective article "SBA Increases Small Business Size Standards for Services."



Nonmanufacturer Rule Waiver Proposed for Bearings

The SBA is considering a waiver of the "nonmanufacturer rule" for bearings, plain, unmounted and bearings, mounted. The basis for the proposed waiver is that no small business manufacturers are currently supplying these products to the government, and a search of the Procurement Marketing and Access Network (PRO-Net (http://pro-net.sba.gov)) failed to identify any small business manufacturers of these items.

The nonmanufacturer rule requires recipients of federal contracts that are set-aside for small businesses or are awarded through the 8(a) program to provide the product of a small business manufacturer or processor if the recipient is not the actual manufacturer or processor (see paragraph (f) of FAR 19.102, Size Standards). However, SBA may waive this requirement if there are no small business manufacturers or processors.

Comments and sources must be submitted to Edith Butler, Program Analyst, U.S. Small Business Administration, 409 3rd Street, SW, Washington, DC 20416; 202-619-0422.



Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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