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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


December 2003
Vol. IV, No. 12

CONTENTS

Services Acquisition Reform Act Signed Into Law
Wage Determination On-Line Program Inaugurated
FAR Would Address Commercial Items in Construction
Small Arms Ammo Nonmanufacturer Waiver Terminated
DFARS Agency Activity Numbers, CCR Coverage Removed
NASA FAR Supplement Reissuance Proposed
OMB Releases First Set of 2003 FAIR Act Inventories
Navy Establishes Approval Levels for Services Buys



Services Acquisition Reform Act Signed Into Law,
Establishes Training Fund, Chief Acquisition Officer

On November 24, 2003, President Bush signed Public Law 108-136, the National Defense Authorization Act for Fiscal Year 2004, which contains several acquisition-related provisions, including the Services Acquisition Reform Act of 2003 (SARA). SARA applies to all agencies, and is a further attempt by Congress to bring commercial acquisition practices to the government.

The following are some of the significant provisions of SARA, which apply to all departments and agencies, not just the Department of Defense (DOD):

The following are other acquisition-related provisions in the Defense Authorization Act that apply to DOD only (unless otherwise indicated):



Wage Determination On-Line Program Inaugurated

On November 12, 2003, the Department of Labor's (DOL) Wage and Hour Division announced the official launch of the new Wage Determination On-Line (WDOL) program at http://www.wdol.gov, where current and archived Davis-Bacon Act (DBA) and Service Contract Act (SCA) wage determinations are available.

The DBA requires that construction contractors with contracts over $2,000 pay their construction workers no less than the locally prevailing wage rate. The SCA requires service contractors with contracts over $2,500 to pay service employees no less than the wage rates and fringe benefits found prevailing in the locality. DOL establishes these minimum wages through what are called "wage determinations." Previously, agencies had to request that DOL provide wage determinations for the various types of labor used on the contract. Now, with the launching of WDOL.gov, these wage determinations are readily available to the federal contracting community and the general public.

WDOL.gov offers users several unique features, including (1) guidance to contracting officers on selecting the appropriate wage determinations for each contract action; (2) access to the most current DBA and SCA wage determinations, as well as an alert service for notification of future revisions to particular wage determinations; (3) access to databases containing archived DBA and SCA wage determinations; and (4) access to other websites that many in the contracting community may not have known existed.



FAR Would Address Commercial Items in Construction

The FAR Council has published a proposed FAR rule that would require that FAR 52.244-6, Subcontracts for Commercial Items and Commercial Components, be required in solicitations and contracts other than those for commercial items.

FAR Subpart 44.4, Subcontracts for Commercial Items and Commercial Components, prescribes the policies limiting the contract clauses a prime contractor my be required to apply to any subcontractors that are furnishing commercial items or commercial components. FAR 44.403, Contract Clause, requires that FAR 52.244-6 be included "in solicitations and contracts for supplies or services other than commercial items." It is not clear whether this includes solicitations and contracts for construction. Therefore, this proposed rule would amend FAR 44.403 to revise the prescription to read "in solicitations and contracts other than those for commercial items." This change would clearly include construction contracts.

Also, the definition of "commercial item" in paragraph (a) of FAR 52.244-6, which currently reads "'Commercial item' has the meaning contained in the clause at [FAR] 52.202-1, Definitions," would be revised to read "'Commercial item' has the meaning contained in the clause at [FAR] 52.202-1, Definitions, and includes commercial construction materials but does not include construction itself." This would clarify that a commercial item would include commercial construction materials but would not include construction itself.

Comments on the proposed rule should be submitted on or before December 26, 2003, to General Services Administration, FAR Secretariat (MVA), 1800 F Street, NW, Room 4035, Attn: Laurie Duarte, Washington, DC 20405; or by e-mail to: farcase.2002-021@gsa.gov.



Small Arms Ammo Nonmanufacturer Waiver Terminated

The Small Business Administration (SBA) announced that it is terminating its waiver of the nonmanufacturer rule for small arms ammunition manufacturing under North American Industry Classification System (NAICS) code 332992. This decision is based on SBA's discovery of small business manufacturers for these products. (EDITOR'S NOTE: Paragraph (f) of FAR 19.102, Size Standards, requires recipients of federal contracts set-aside for small businesses or awarded through the SBA's 8(a) program to provide the product of a small business manufacturer or processor if the recipient is not the actual manufacturer or processor. This is called the "nonmanufacturer rule" However, the law permits SBA to waive this requirement for any "class of products" if there are no small business manufacturers or processors in the federal market.)

SBA published a notice on September 6, 2002, that it was granting a nonmanufacturer rule waiver for small arms ammunition manufacturing within NAICS 332992. SBA granted the waiver because it was unaware of any small business sources for these items and it received no comments when it published its intent to grant such a waiver (see the October 2002 Federal Contracts Perspective article "SBA Waives One Nonmanufacturer Rule, Rethinks Another").

It was brought to SBA's attention by SBA's Procurement Center Representatives that a small business manufacturer exists for items within this class of products. SBA published a notice of its intent to terminate the waiver granted for small arms ammunition manufacturing, and invited the public to comment on its intent to terminate the waiver (see the August 2003 Federal Contracts Perspective article "SBA Busy with Size Standards, Nonmanufacturer Rule"). Comments were received from small business manufacturers, so SBA is required to terminate the waiver of the nonmanufacturer for small arms ammunition manufacturing under NAICS 332992. Therefore, recipients of contracts set aside for small or 8(a) businesses will be required to provide the products of small business manufacturers or processors on such contracts.



DFARS Agency Activity Numbers, CCR Coverage Removed

DOD did some subtracting from the Defense FAR Supplement (DFARS) during November, and did some adding as well:



NASA FAR Supplement Reissuance Proposed

The National Aeronautics and Space Administration (NASA) is proposing to remove from the Code of Federal Regulations (CFR) version of the NASA FAR Supplement (NFS) those portions containing information that consists of internal administrative procedures and guidance that does not control the relationship between NASA and contractors or prospective contractors. All that would remain in the CFR version of the NFS is information requiring codification and subject to public comment. The Internet version of the NFS (http://www.hq.nasa.gov/office/procurement/regs/nfstoc.htm) will continue to contain both information requiring codification and internal agency guidance. Changes to the Internet version of the NFS would be incorporated through Procurement Notices (PNs).

The following NFS subparts would be removed: 1801.2, 1801.3, 1801.4, 1801.6, 1801.7, 1803.2, 1803.3, 1803.5, 1803.6, 1803.7, 1803.8, 1804.2, 1804.2, 1804.5, 1804.6, 1804.8, 1804.9, 1804.70, 1804.71, 1804.72, 1804.73, 1805.1, 1805.2, 1805.4, 1805.5, 1806.3, 1806.5, 1807.2, 1807.3, 1807.5, 1807.70, 1807.71, 1808.1, 1808.4, 1808.6, 1808.7, 1811.5, 1811.6, and 1812.1.

In addition, many NFS sections in NFS Part 1801 through 1812 would be removed.

Comments on the proposed rule should be submitted on or before January 16, 2004, to Celeste Dalton, NASA, Office of Procurement, Contract Management Division (Code HK), Washington DC 20546 or by e-mail to: Celeste.M.Dalton@nasa.gov.



OMB Releases First Set of 2003 FAIR Act Inventories

On November 21, the Office of Management and Budget (OMB) released the first set of Fiscal Year 2003 Commercial Activities Inventories of non-governmental functions being performed by government agencies. These inventories are required to be compiled and made available to the public by the Federal Activities Inventory Reform (FAIR) Act of 1998. Inventories in this first set are from the Departments of Housing and Urban Development, Interior, and Transportation; National Aeronautics and Space Administration; OMB; and several smaller agencies. The inventories are available at http://www.whitehouse.gov/omb/procurement/index.html.

Interested parties have 30 working days (that is, until January 7, 2004) to challenge the omission or inclusion of an activity on an agency's list.

The Office of Federal Procurement Policy (OFPP) has prepared a summary "FAIR Act User's Guide" and it is available at http://www.whitehouse.gov/omb/procurement/index.html. This User's Guide will help interested parties review 2003 FAIR Act inventories, and it includes the website addresses for individual agency inventories.



Navy Establishes Approval Levels for Services Buys

The Navy is revising the Navy Acquisition Procedures Supplement (NAPS) to define its approval levels for use of a contract or task order that is not performance-based. This is necessary to implement the requirements in the new DFARS 237.170, Approval of Contracts and Task Orders for Services (see the November 2003 Federal Contracts Perspective article "DFARS Changes on Task Orders, Unique Item IDs").

To implement this, NAPS 5237.170, Approval of Contracts and Task Orders for Services, is added. It consists of NAPS 5237.170-3, Approval Requirements. NAPS 5237.170-3(a) states that the following are the approving officials for the acquisition of services through a DOD contract or task order that is not performance-based:



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