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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


August 2004
Vol. V, No. 8

CONTENTS


SBA Withdraws Proposed Size Standards Revision
GSA, DOD Announce "Get It Right" Program
FAR Rules on Commercial-Type Contracts Proposed
EPA Issues Four "Green" Purchasing Guides
NASA Reissues NFS Parts 1842 Through 1851
Prompt Payment Interest Rate Set at 4 1/2%
GAO Changes Name



SBA Withdraws Proposed Size Standards Revision,
"Needs a Little More Work"

Upon receiving over 3,700 comments on its proposed rule to restructure the small business size standards, the Small Business Administration (SBA) decided to withdraw the rule because the small business community told the SBA "good intention, good idea, but needs a little more work."

The proposed rule would have simplified the size standards by establishing "number of employees" as the basis for determining size, and deleting "average annual receipts" as the basis for determining size, primarily in service industries. In making this change, SBA would have reduced the number of individual size standard levels from 37 to 10, ranging between 50 employees and 1,500 employees depending on the industry or SBA program. The new size standards would have affected 514 industries (out of 1,151 total). (EDITOR'S NOTE: For more on the proposed rule that was withdrawn, see the April 2004 Federal Contracts Perspective article "SBA Proposes to Restructure Size Standards, Would Reduce Number of Categories from 37 to 10.")

While many of the 3,700 comments supported aspects of the proposal, many others raised concerns about SBA's methodology for developing the proposed size standards, the effect the proposed size standards would have on existing small businesses, the determination of the employee size of a business, and SBA's proposed overall approach to simplifying the size standards.

Out of approximately 4.4 million businesses in the industries that would have had revised size standards, 35,200 businesses would have gained small business eligibility and 34,100 businesses would have lost small business eligibility, for a net increase of 1,110 small businesses. However, many of the 34,100 small businesses that would have lost their small business eligibility were among those that submitted comments.

"We are here to serve those small business owners, and we take their concerns very seriously," said SBA Associate Deputy Administrator for Government Contracting Allegra McCullough. "That is why we are going to step back and study this rule further. There is no doubt that our current system of size standards is in need of simplification, but we want to make absolutely sure that we do it in the right way. This issue is important to our mission, and it's important to America's small business owners."

SBA believes that "further review of these issues may result in substantive changes from the proposal." Once SBA completes its review of the comments, SBA intends to issue an Advance Notice of Proposed Rulemaking (ANPRM) to collect additional information on the issues raised by the comments on the proposed rule, then decide what, if any, further actions are necessary. If SBA decides to take further actions, it will issue another proposed rule.



GSA, DOD Announce "Get It Right" Program

On July 13, the General Services Administration (GSA) unveiled "Get It Right," a comprehensive program designed to ensure improved contracting operations and proper use of GSA's contracting vehicles, such as the Federal Supply Schedules. The "Get It Right" program was announced at a meeting with personnel from GSA and the Department of Defense (DOD), GSA's largest customer. GSA Administrator Stephen Perry and DOD Director of Procurement and Acquisition Policy Deidre Lee shared the stage.

The program is the result of recent improper use of GSA's contracts and noncompliance with various acquisition regulations. Recently, the GSA Inspector General found that GSA's Federal Technology Service had used contracts intended for information technology to fund construction projects, and DOD used a GSA technology schedule contract to acquire interrogation services for the Iraqi prison Abu Ghraib.

"This is a strong action on the part of the Bush Administration, the GSA management team and its acquistiion officials and a change in direction for the entire federal acquisition workforce," stated Perry. "We are implementing the 'Get It Right' plan because acquisition is the core of what we do as an agency and because we take seriously the trust placed in GSA by our federal agency customers, the Congress, the Office of Management and Budget, and most importantly, the taxpayers. I am confident that as the federal acquisition community works to implement this fully integrated approach and we gather feedback, that we will identify and close any gaps that exist and take specific actions to achieve improvements, ultimately resulting in a reinvigoration of commitment to excellence in acquisition."

The "Get It Right" program will provide an integrated approach to assessing compliance to the acquisition regulations, policies, and procedures. The major objectives of the program are to:

Hundreds of contracting and program personnel attended the meeting at GSA. The meeting was also broadcast by webcast to GSA personnel nationwide.



FAR Rules on Commercial-Type Contracts Proposed

The Federal Acquisition Regulation (FAR) Council published two proposed rules during July that would address and clarify the use of commercial-type contracts by federal agencies: performance-based service acquisition and share-in-savings contracts. In addition, the FAR Council published a proposed rule that would clarify the basis for determining the rental charges for the use of government property, and address the issue of title to special tooling.



EPA Issues Four "Green" Purchasing Guides

The Environmental Protection Agency (EPA) has announced that its Environmentally Preferable Purchasing (EPP) program has posted four draft EPP guides for public review and comments: (1) "Greening Your Purchase of Carpet: A Guide For Federal Purchasers"; (2) "Greening Your Purchase of Cleaning Products: A Guide For Federal Purchasers"; (3) "Greening Your Purchase of Copiers: A Guide For Federal Purchasers"; and (4) "Greening Your Meetings and Conferences: A Guide For Federal Purchasers." The guides "can provide information to federal procurement officials in making EPP decisions that can help protect human health and the environment" (see FAR Subpart 23.7, Contracting for Environmentally Preferable and Energy-Efficient Products and Services").

The EPP program does not endorse products nor does it recommend for or against the purchase of specific products. The EPP program provides information on products with the overall best value, taking into account price competitiveness, regulatory requirements, performance standards, and environmental impact. Because purchasers typically have readily available sources of information on procurement and safety regulations and well-established methods for evaluating price and performance, EPA's EPP program has developed these purchasing guides to help government purchasers consider the environmental factors in the purchasing process.

EPA is inviting the public to provide comments on the various options that are proposed, new approaches that have not considered, the potential effects of the various options (including possible unintended consequences), and any other data or information that EPA should consider during the development of the final documents. In particular, EPA is seeking comments that address the following questions:

  1. Is the discussion on the potential environmental impacts of the product categories useful for federal purchasers?

  2. Is there any more recent information that is germane to or would enhance the discussion of these product categories?

  3. Can federal purchasers act easily upon the stated recommendations in the product guides?

  4. Is this an approach the commenter would like EPA to take in addressing EPP?

Commenters are requested to provide copies of any technical information and/or data that support their views.

Comments must be submitted by August 30, 2004. EPA's preferred method for receiving comments is its electronic public docket at http://www.epa.gov/edocket, and follow the online instructions. Also, comments may be sent by e-mail to oppt.ncic@epa.gov; by mail, computer disk, or CD-ROM to Document Control Office (7407M), Office of Pollution Prevention and Toxics (OPPT), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001 (disk or CD-ROM submissions must be in WordPerfect or ASCII file format); or by hand-delivery or courier to OPPT Document Control Office (DCO), EPA East Building, Rm. 6428, 1201 Constitution Avenue, NW., Washington, DC. ATTN: Docket ID number OPPT-2002-0039, between 8:00 a.m. to 4:00 p.m., Monday through Friday.



NASA Reissues NFS Parts 1842 Through 1851

The National Aeronautics and Space Administration (NASA) is adopting, without change, the proposed revisions of NASA FAR Supplement (NFS) Parts 1842 through 1851 (see the May 2004 Federal Contracts Perspective article "NASA Reissues NFS Parts 1801 Through 1825" for more on the proposed revisions).

The revisions remove from the Code of Federal Regulations (CFR) version of the NFS those portions of NFS Parts 1842 through 1851 that contain information consisting of internal administrative procedures and guidance that does not control the relationship between NASA and contractors or prospective contractors. All that remains in the CFR version of NFS Parts 1842 through 1851 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.



Prompt Payment Interest Rate Set at 4 1/2%

The Treasury Department has established 4 1/2% (4.5%) as the interest rate for the computation of payments made between July 1 and December 31, 2004, under the Prompt Payment Act and the Contracts Disputes Act. This rate is also used in facilities capital cost of money calculations. The interest rate for the prior six-month period (January 1 through June 30, 2004), was 4% (4.0%). The interest rate for July 1, 2003, through December 31, 2003, was 3 1/8% (3.125%).

FAR Subpart 32.9, Prompt Payment; FAR Subpart 33.2, Disputes and Appeals; FAR 31.205-10, Cost of Money; and Cost Accounting Standard (CAS) 9904.414, Cost of Money as an Element of the Cost of Facilities Capital, are affected by this interest rate.



GAO Changes Name

The GAO, formerly known as the "General Accounting Office," has changed its name to the "Government Accountability Office." This change implements a provision of the GAO Human Capital Reform Act, the main purpose of which was to authorize GAO to establish an employee pay system that is separate from the civil service regulations.

The name change to "Government Accountability Office" is intended to more accurately reflect the current duties and responsibilities of GAO. GAO, which started in 1921 with six auditors, now is predominantly involved in deciding bid protests and conducting investigations for Congress.



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