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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


February 2006
Vol. VII, No. 2

CONTENTS


2006 Defense Authorization Addresses A-76, Consolidates Civilian Boards of Contract Appeals
Abramoff Pleads Guilty to Fraud, Tax Evasion
Performance-Based Acquisition Procedures Revised
Rewrite of the VAAR Proposed
FAC 2005-08 Increases Trade Agreements Thresholds
CAS Exemption for T&M, Labor-Hour Contracts Proposed
DOD Finalizes Many Proposed, Interim DFARS Rules
HUDAR Revised to Conform to the FAR
Nonmanufacturer Waiver Proposed for Water Treatment Chemicals
OMB Establishes Civilian Contracting Certification



2006 Defense Authorization Addresses A-76,
Consolidates Civilian Boards of Contract Appeals

The $441.5 billion National Defense Authorization Act for Fiscal Year 2006 (Public Law 109-163), signed by President Bush January 6, places restrictions on competitions conducted under Office of Management and Budget (OMB) Circular A-76, Performance of Commercial Activities. In addition, the act establishes the "Civilian Board of Contract Appeals" to handle disputes and claims involving contracts issued by civilian agencies.



Abramoff Pleads Guilty to Fraud, Tax Evasion

On January 3, former lobbyist Jack Abramoff pleaded guilty to charges of conspiracy, mail fraud, and tax evasion in U.S. District Court in the District of Columbia. Under the terms of the plea agreement, Abramoff faces up to 30 years in prison, a fine of more than $750,000, and restitution of approximately $26.7 million. Abramoff has agreed to cooperate with law enforcement officials in other criminal investigations.

David Safavian, former Office of Federal Procurement Policy (OFPP) administrator and General Services Administration (GSA) chief of staff, was arrested and indicted for allegedly lying about his relationship with Abramoff and obstructing investigations. For more on Abramoff and Safavian, see the October 2005 Federal Contracts Perspective article "OFPP Chief Arrested for Making False Statements," and the November 2005 Federal Contracts Perspective article "Former OFPP Chief Indicted for Obstruction."



Performance-Based Acquisition Procedures Revised

Federal Acquisition Circular (FAC) 2005-07 amends the Federal Acquisition Regulation (FAR) to revise and clarify the criteria and procedures for performance-based acquisitions, delete coverage of the Very Small Business Pilot program, reflect the latest changes to the Federal Management Regulation (FMR), address contractor personal identification requirements, and make several other miscellaneous changes.



Rewrite of the VAAR Proposed

The Department of Veterans Affairs (VA) proposes to rewrite the VA Acquisition Regulation (VAAR) to conform to plain language principles; change the format, arrangement, and numbering to conform to that in the FAR; remove provisions that duplicate those in the FAR; remove provisions that conflict with current statutes; and remove non-regulatory material.

In addition, the rewrite proposes to establish or revise procedures for establishing qualified products lists, suspending or debarring a contractor, expediting payments to small businesses, and for reducing or suspending payments upon a finding of contract fraud. Furthermore, the rewrite would remove requirements for audits of 8(a) price proposals, and remove a requirement for offerors to provide data on veteran-owned small businesses. Also, the proposed rewrite would provide guidance to contracting officers on the types of data that should be requested from a contractor when evaluating the contractor's financial condition, and provide guidance on the criteria for revising the payment due dates for invoices.

Comments on the proposed rewrite must be submitted by March 14, 2006, identified as "RIN 290-AK78, by any of the following methods: (1) mail or hand-delivery: Director, Regulations Management (00REG1), Department of Veterans Affairs, 810 Vermont Ave., NW, Room 1068, Washington, DC 20420; (2) fax: 202-273-9026; (3) e-mail: VARegulations@va.gov; or (4) http://www.regulations.gov.



FAC 2005-08 Increases Trade Agreements Thresholds

FAC 2005-08 consists of an interim rule that increases the thresholds for the World Trade Organization Government Procurement Agreement (WTO GPA) and the various Free Trade Agreements (FTAs) in FAR Part 25, Foreign Acquisition. This implements the direction of the U.S. Trade Representative.

The increased thresholds are as follows:

TRADE AGREEMENT      SUPPLY      SERVICE      CONSTRUCTION
WTO GPA$193,000$193,000$7,407,000     
FTAs
      North American FTA (NAFTA)
            Canada$25,000$64,786$8,422,165     
            Mexico$64,786$64,786$8,422,165     
      Chile FTA$64,786$64,786$7,407,000     
      Singapore FTA$64,786$64,786$7,407,000     
      Australia FTA$64,786$64,786$7,407,000     

This interim rule is effective January 5, 2006. Comments on the interim rule must be submitted no later than March 6, 2006, identified as "FAC 2005-07, FAR case 2005-030," by any of the following methods: (1) eRulemaking Portal: http://www.regulations.gov; (2) http://www.acqnet.gov/far/ProposedRules/proposed.htm; (3) e-mail: farcase.2005-060@gsa.gov; (4) fax: 202-501-4067; or (5) mail to: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405.



CAS Exemption for T&M, Labor-Hour Contracts Proposed

The Cost Accounting Standards Board (CASB) is proposing to revise the Cost Accounting Standards (CAS) by exempting time-and-materials (T&M) and labor-hour (LH) contracts for commercial items. This proposed rule is in response to Section 1432 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136), which authorizes the use of T&M and LH contracts for the acquisition of commercial services that are commonly sold to the general public through such contracts and are procured on a competitive basis. (NOTE: Section 1432 is in the portion of the law referred to as the Services Acquisition Reform Act (SARA). For more on the provisions of SARA, see the December 2003 Federal Contracts Perspective article "Services Acquisition Reform Act Signed Into Law, Establishes Training Fund, Chief Acquisition Officer.")

The FAR Council drafted a rule to amend the FAR to implement Section 1432, and, after examining the proposed FAR rule, the CASB has determined that an exemption from CAS is appropriate. Therefore, CAS 9903.201-1, CAS Applicability, would be amended to exempt such contracts from CAS (for more on the proposed FAR rule, see the October 2005 Federal Contracts Perspective article "Time-and-Materials Proposed for Commercial Services").

Comments on the proposed rule must be submitted by March 6, 2006, by e-mail to: casb2@omb.eop.gov, or by fax to 202-395-5105.



DOD Finalizes Many Proposed, Interim DFARS Rules

DOD was busy cleaning house in first month of the new year, finalizing without change a slew of proposed and interim rules that, for the most part, received no comments. In addition, DOD proposed adjusting several thresholds to account for inflation and to update requirements for earned value management systems (EVMS).



HUDAR Revised to Conform to the FAR

The Department of Housing and Urban Development (HUD) has published a final rule that revises the HUD Acquisition Regulation (HUDAR) to better conform to the current FAR; to correct or remove obsolete text, clauses, and provisions; and to make other revisions to reflect organizational changes within HUD.

In addition, a proposed rule that would revise the HUDAR also was published to implement additional miscellaneous changes. Among the changes being proposed are:

Comments on the proposed rule must be submitted by March 14, 2006, identified by "Docket No. FR-4705-P-01; HUD-2006-0002," to Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 Seventh Street, SW, Room 10276, Washington, DC 20410-0500; or electronically to http://www.regulations.gov.



Nonmanufacturer Waiver Proposed for Water Treatment Chemicals

SBA is proposing to waive the nonmanufacturer rule for water treatment chemicals under North American Industry Classification System (NAICS) codes 325188 and 325199.

Comments on the proposed waiver, or the identification of small businesses that provide these classes of products, must be submitted no later than February 3, 2006, to Edith Butler, Program Analyst, by telephone at 202-619-0422; by fax at 202- 481-1788; or by e-mail at edith.butler@sba.gov.



OMB Establishes Civilian Contracting Certification

In response to the Office of Federal Procurement Policy's (OFPP) Letter 05-01, which required the Federal Acquisition Institute to develop a certification program for contracting professionals in civilian agencies that reflects common standards, OMB issued the "Federal Acquisition Certification in Contracting Program." The purpose of the certification program is to standardize the education, training, and experience requirements for contracting professionals, which will improve workforce competencies and increase career opportunities by making transfers between agencies easier. The program mirrors, as closely as possible, the requirements that DOD established for its contracting workforce. (EDITOR'S NOTE: For more on OFPP Policy Letter 05-01, see the May 2005 Federal Contracts Perspective article "OFPP Makes Civilian Acquisition Training Similar to DOD's.")

The program is not mandatory for all those in the GS-1102 contract specialist job series. However, members of the workforce issued new contracting officer warrants on or after January 1, 2007, regardless of GS series, must be certified at an appropriate level to support their warrant obligations.

The education requirement remains unchanged: GS-1102s at grades 5 through 12 must have either a baccalaureate degree or 24 semester hours of business-related education; GS-1102s at grades 13 and above must have both a baccalaureate degree and 24 semester hours of business-related education.

In addition, an acquisition professional must take certain core courses appropriate to the person's grade, and must earn 80 continuous learning points of skills currency training every two years to maintain a certification. Points may be earned for courses taken, on-the-job experience, professional exams and certificates, teaching and lecturing, attending symposia and conferences, participating in workshops, and publishing articles. The 80 learning points requirement becomes effective October 1, 2007.



Copyright 2006 by Panoptic Enterprises. All Rights Reserved.

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