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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


November 2004
Vol. V, No. 11

CONTENTS


FY 2005 Defense Authorization Act Directs Review of GSA Procedures
DOD Extends 8(a) Partnership Agreement
Agencies Directed to Increase Service-Disabled Contracts
FAC 2001-25 Authorizes Telecommuting for Contractors
One Nonmanufacturer Rule Waived, Two Proposed
NASA Removes NFS Subpart 1852.1, Parts 1853 and 1872
EPA Withdraws Proposed Background Check Rule



FY 2005 Defense Authorization Act Directs Review of GSA Procedures,
Permits A-76 Protests by Feds

On October 28, 2004, President Bush signed Public Law 108-375, Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, which authorizes $446 billion for defense and national security programs. Public Law 108-375 contains several acquisition-related provisions that apply to the Department of Defense (DOD), and several other provisions that apply government-wide.



DOD Extends 8(a) Partnership Agreement

The Department of Defense (DOD) is amending Defense FAR Supplement (DFARS) 219.800, General, to extend the expiration date of the partnership agreement between DOD and the Small Business Administration (SBA) to September 30, 2005. The partnership agreement permits DOD to award contracts to 8(a) program participants on behalf of the SBA.

On February 1, 2002, DOD and SBA entered into a partnership agreement in which SBA delegated to DOD its authority to enter into contracts under Section 8(a) of the Small Business Act. The expiration date of the partnership agreement was September 30, 2004, but DOD and SBA have agreed to extend the agreement to September 30, 2005. This final rule amends the last sentence of DFARS 219.800(a) to reflect this extension.



In a proposed change to the DFARS, FAR 52.227-12, Patent Rights -- Retention by the Contractor (Long Form), would be added to the DFARS because there is a proposed rule that would remove the clause from the FAR (see the June 2003 Federal Contracts Perspective article "FAR Rewrite Proposed on Patents and Copyrights"). FAR 52.227-12 is proposed for removal because DOD is the only agency that uses the clause. DOD includes the clause in contracts awarded to large businesses for experimental, developmental, or research work.

This proposed rule would add DFARS 252.227-70XX, Patent Rights -- Ownership by the Contractor (Large Business), which is substantially the same as FAR 52.227-12 except for some changes to reflect current statutory provisions (such as changing "domestic university" to "university" because the word "domestic" does not appear in the statutory definition) and minor changes in the proposed FAR Part 27 rewrite (such as changing the term "convey" to "assign" with regard to transfer of title to a subject invention).

Comments on the proposed rule must be submitted on or before November1, 2004, to: (1) http://www.regulations.gov; (2) e-mail: dfars@acq.osd.mil; (3) fax: 703-602-7887; or (4) mail: Defense Acquisition Regulations Council, Attn: Amy Williams, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.



Agencies Directed to Increase Service-Disabled Contracts

On October 20, 2004, President Bush issued Executive Order 13360, Providing Opportunities for Service-Disabled Veteran Businesses To Increase Their Federal Contracting and Subcontracting, to "strengthen opportunities in federal contracting for service-disabled veteran businesses."

Section 308 of Public Law 108-183, the Veterans Benefits Zct of 2003, amended the Small Business Act to establish a service-disabled veteran-owned small business (SDVOSB) set-aside program (see the January 2004 Federal Contracts Perspective article "Disabled Veteran Set-Asides Established"). On May 5, 2004, the SDVOSB program was implemented with the addition of FAR Subpart 19.14 and additions to SBA's regulations in Title 13 of the Code of Federal Regulations (CFR), Part 125, Government Contracting Programs (see the June 2004 Federal Contracts Perspective article "FAC 2001-23, SBA Institute Service-Disabled Veteran-Owned Small Business Program").

In EO 13360, President Bush directs agencies to "more effectively implement...the Small Business Act...which provides that the President must establish a goal of not less than 3 percent for participation by service-disabled veteran businesses in federal contracting, and...which gives agency contracting officers the authority to reserve certain procurements for service-disabled veteran businesses." According to the EO:



FAC 2001-25 Authorizes Telecommuting for Contractors

Federal Acquisition Circular (FAC) 2001-25 amends the FAR to prohibit agencies from including a requirement in a solicitation that precludes an offeror from permitting its employees to telecommute. In addition, agencies are prohibited from reducing the scoring of an offer because the offeror proposes to permit its employees to telecommute. However, a contracting officer is permitted to prohibit the telecommuting of contractor employees if it would adversely affect agency requirements, such as security. This rule implements Section 1428 of the Services Acquisition Reform Act of 2003 (Title XIV of Public Law 108-136) (for more on the acquisition-related provisions of Public Law 108-136, see the December 2003 Federal Contracts Perspective article "Services Acquisition Reform Act Signed Into Law, Establishes Training Fund, Chief Acquisition Officer").

This interim rule adds FAR 7.108, Additional Requirements for Telecommuting, which lists the provisions of Section 1428. Also, FAR 7.108 is referenced in FAR 11.002, Policy [on describing agency needs], FAR 13.106-2, Evaluation of Quotations or Offers, and FAR 15.304, Evaluation Factors and Significant Subfactors.

Comments on the interim rule must be submitted on or before December 6, 2004, to: (1) http://www.regulations.gov; (2) http://www.acqnet.gov/far/ProposedRules/proposed.htm; (3) e-mail: farcase.2003-025@gsa.gov; (4) fax: 202-501-4067; or (5) mail: General Services Administration, Regulatory Secretariat (MVA), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405.

The following are other changes made to the FAR by FAC 2001-25:



One Nonmanufacturer Rule Waived, Two Proposed

The SBA decided to waive the nonmaufacturer rule for miscellaneous electrical equipment and component manufacturing under North American Industry Classification System (NAICS) code 335999 because no small business manufacturers are currently supplying this class of products to the federal government. This waiver allows otherwise qualified nonmanufacturers to supply the products of any domestic manufacturer on a federal contract set aside for small business or awarded through the SBA's 8(a) program. (EDITOR'S NOTE: For more on the proposed waiver, see the September 2004 Federal Contracts Perspective article "SBA Proposes Six Nonmanufacturer Rule Waivers.")

In addition, SBA is proposing to waive the nonmanufacturer rule for general aviation turboprop aircraft with six or more passenger seats under NAICS code 336411, and for small arms ammunition manufacturing under NAICS code 332992. SBA is inviting the public to comment on these two proposed waivers, or provide information on potential small business sources for these products, to Edith Butler, Program Analyst, U.S. Small Business Administration, 409 3rd Street, SW, Washington, DC 20416; 202-619-0422. (EDITOR'S NOTE: SBA originally waived the nonmanufacturer rule for small arms ammunition manufacturing in September 2002 (see the October 2002 Federal Contracts Perspective article "SBA Waives One Nonmanufacturer Rule, Rethinks Another"). However, SBA terminated its waiver of the nonmanufacturer rule in October 2003 because it discovered a small business manufacturer (see the December 2003 Federal Contracts Perspective article "Small Arms Ammo Nonmanufacturer Waiver Terminated"). Apparently, that small business manufacturer is no longer capable of providing small arms ammunition to the government).

Finally, SBA is terminating consideration of a proposed waiver of the nonmanufacturer rule for paint and paint manufacturing under NAICS code 325510 because of its recent discovery of a small business manufacturer for this class of products. (EDITOR'S NOTE: For more on the proposed waiver, see the September 2004 Federal Contracts Perspective article "SBA Proposes Six Nonmanufacturer Rule Waivers.")

EDITOR'S NOTE: Public Law 100-656, enacted November 15, 1988, requires those with federal contracts that are set-aside for small businesses or 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). This is called the "nonmanufacturer rule." However, SBA may waive this requirement if there are no small business manufacturers or processors.

The SBA regulation on the nonmanufacturer rule is in Title 13 of the Code of Federal Regulations (CFR), Business and Credit Administration, Part 121, Small Business Size Standards, under paragraph (b) of 121.406, How Does a Small Business Concern Qualify to Provide Manufactured Products Under Small Business Set-Aside or MED [Minority Enterprise Development] Procurements? The SBA regulation on the waiver of the nonmanufacturer rule is 13 CFR 121.1202, When Will a Waiver of the Nonmanufacturer Rule Be Granted for a Class of Products? A complete list of products for which the nonmanufacturer rule has been waived is available at http://www.sba.gov/GC/approved.html.



NASA Removes NFS Subpart 1852.1, Parts 1853 and 1872

The National Aeronautics and Space Administration (NASA) is adopting, without change, the proposed removal of NASA FAR Supplement (NFS) Subpart 1852.1, Instructions for Using Provisions and Clauses, NFS Part 1853, Forms, and NFS Part 1872, Acquisitions of Investigations (see the June 2004 Federal Contracts Perspective article "Proposed NFS Reissuance Continues with Parts 1852-1872" for more on the proposed revisions).

This final rule completes the revision of the Code of Federal Regulations (CFR) version of the NFS. All that remains 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) continues to provide the regulations and internal agency guidance and procedures.



EPA Withdraws Proposed Background Check Rule

The Environmental Protection Agency (EPA) is withdrawing its proposed rule that would have added EPA Acquisition Regulation (EPAAR) 1552.211-81, Background Checks for EPA Contractors Performing Services On-Site, to require contractors and subcontractors to perform background checks and make suitability determinations for their employees who are performing services on or within federally-owned or leased space and facilities, commercial space primarily occupied by federal employees, and Superfund, Oil Pollution Act, and Stafford Act sites.

This proposed rule was in response to the events of September 11, 2001. Proposed EPAAR 1552.211-81 would have required contractors and subcontractors to perform background checks and make suitability determinations for contractor and subcontractor employees performing services on or within federally- owned or leased space or facilities. However, the public comments objected not only to the proposed clause's broad application, but also to its key provisions. Therefore, EPA has decided to withdraw the proposed EPAAR 1552.211-81, and instead plans to incorporate a narrowly tailored background check requirement in its emergency response contracts' statements of work. Currently, this category of contracts consists of Superfund Technical Assistance and Removal Team (START), Emergency and Rapid Response Services (ERRS), and Response Engineering and Analytical Contract (REAC). In the future, EPA may include this requirement in other types of contracts.

For more on the proposed rule, see the February 2003 Federal Contracts Perspective article "EPA Proposes Background Checks for On-Site Employees."



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