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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

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.

• Section 341, Public-Private Competition Required Prior to Conversion of Certain Department of Defense (DOD) Functions: This prohibits DOD from converting activities performed by 10 or more DOD employees to contractor performance unless a "standard" A-76 competition is conducted. A-76 had permitted "streamlined" competitions for activities performed by 65 or fewer employees. However, streamlined competitions were thought by some to afford less protection to federal employees, so Congress decided to require DOD to conduct the longer, more complex standard competitions for much smaller activities. (NOTE: Section 842 of the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act of Fiscal Year 2006 (Public Law 109-115) contains a similar requirement applicable to civilian agencies.)
  
  For more on OMB Circular A-76, see the July 2003 Federal Contracts Perspective article "Revised OMB Circular A-76 Released, Establishes 12 Month Period for Competitions."
  
  
• Section 342, Contracting for Procurement of Certain Supplies and Services: This requires private sector offerors under an A-76 competition to provide health care benefits comparable to those provided to federal employees.
  
  
• Section 816, Guidance on Use of Tiered Evaluation of Offers for Contracts and Task Orders Under Contracts: This prohibits the use of "tiered evaluations of offers" unless the contracting officer conducts market research and determines there are "not a sufficient number of qualified small businesses available to justify limiting competition for the award of such contract or task or delivery order under applicable law and regulation..." (NOTE: This procedure is sometimes called "cascading set-asides," in which the contracting officer solicits and receives offers from all types of businesses at the same time, but considers each category of offers in a designated order of precedence, or "tiers." Whenever there is adequate competition at a tier, the contracting officer stops at that tier and mades award. If there is insufficient competition at a tier, any acceptable offer "cascades" to the next lower tier. For example, the solicitation might specify that 8(a) offers will be considered first; if there is insufficient competition among 8(a) firms, HUBZone offers will be considered next; if there is insufficient competition among HUBZone firms, service-disabled veteran-owned small business offers will be considered next, etc. There is much concern that this procedure induces small businesses to incur costs in preparing proposals that might not even be considered for award.)
  
  
• Section 822, Increase in Cost Accounting Standard Threshold: This increases the threshold for compliance with the Cost Accounting Standards (CAS) from $500,000 to the threshold for cost or pricing data -- $550,000. (EDITOR'S NOTE: A proposal to increase the cost or pricing threshold from $550,000 to $600,000 to adjust for inflation was published in December 2005. Also in December, a proposal was published to increase the CAS threshold from $500,000 to $550,000, but Section 822 makes this proposal superfluous. See the January 2006 Federal Contracts Perspective article "Inflation Adjustment Proposed for FAR, CAS Thresholds.")
  
  
• Section 842, Extension of Contract Goal for Small Disadvantaged Businesses and Certain Institutions of Higher Education: The expiration date for the 5% goal for contract and subcontract awards to small disadvantaged businesses, historically Black colleges and universities, and minority institutions is extended from September 30, 2006, to September 30, 2009. The 5% goal applies to DOD, the Coast Guard, and the National Aeronautics and Space Administration (NASA).
  
  
• Section 847, Civilian Board of Contract Appeals: This establishes within the General Services Administration the "Civilian Board of Contract Appeals" to hear disputes and claims involving civilian agencies' contracts. The Civilian Board will assume the responsibilities of all the boards of contract appeals (except the Armed Services Board of Contract Appeals, the Tennessee Valley Authority Board of Contract Appeals, and the newly-established Postal Service Board of Contract Appeals) on January 6, 2007. All employees, assets, and liabilities of the old boards will be transferred to the Civilian Board.

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.

• Performance-Based Acquisition: First of all, this final rule changes the terms "performance-based contracting" and "performance-based service contracting" to "performance-based acquisition" (PBA) throughout the FAR.
  
  To FAR 2.101, Definitions, is added definitions for "performance work statement" (PWS) ("a statement of work for performance-based acquisitions that describes the required results in clear, specific and objective terms with measurable outcomes") and "statement of objectives" (SOO) ("a government-prepared document incorporated into the solicitation that states the overall performance objectives. It is used in solicitations when the government intends to provide the maximum flexibility to each offeror to propose an innovative approach.").
  
  The majority of the changes are to FAR Subpart 37.6, now titled "Performance-Based Acquisition." Previously, FAR 37.601, General, required performance-based acquisitions to "specify procedures for reductions of fee or for reductions to the price of a fixed-price contract when services are not performed or do not meet contract requirements" and "include performance incentives where appropriate." Now, FAR 37.601 has been revised to delete the requirements for fee or price reductions when services do not meet contract requirements.
  
  A proposed rule was published July 21, 2004, and 15 commenters submitted responses, most of which recommended that PBA be made "more flexible," which the final rule did (for more on the proposed rule, see the August 2004 Federal Contracts Perspective article "FAR Rules on Commercial-Type Contracts Proposed"). (EDITOR'S NOTE: Now that fee and price reductions have been deleted, and performance incentives remain optional, it is unclear what a PBA actually accomplishes. The government can measure performance against the contract's performance standards all it wants, but if the government won't reward a contractor for performance above the standards, and can't punish the contractor for performance below the standards, the PBA is nothing but a regular contract.)
  
  
• Deletion of the Very Small Business Pilot Program: This final rule deletes FAR Subpart 19.9, Very Small Business Pilot Program, because the legislative authority for the program terminated on September 30, 2003. Under the pilot program, contracting officers were required to set-aside for very small businesses (those with 15 or fewer employees, average annual revenues of less than $1,000,000, and located in certain designated areas) acquisitions with an anticipated dollar value between $2,500 and $50,000. This follows the Small Business Administration's (SBA) removal of the Very Small Business Pilot Program from its regulations on September 29, 2005.
  
  
• Standard Transportation Industry Practices: This final rule (1) implements changes to the FMR that require use of commercial bills of lading for domestic shipments, and (2) implements changes to the Interstate Commerce Act that abolished tariff-filing requirements for motor carriers of freight and the Interstate Commerce Commission (ICC).
  
  The following are the significant changes being made by this rule:
  
  
  • FAR Subpart 42.14, Traffic and Transportation Management, is deleted, and its texts is relocated throughout FAR Part 47, Transportation.
    
    
  • To FAR 47.001, Definitions, are added definitions for "bill of lading," "commercial bill of lading," "government bill of lading," "government rate tenders," "household goods," "noncontiguous domestic trade," and "released or declared value."
    
    
  • FAR 47.101, Policies, is amended to require the use of commerical bills of lading for domestic shipments, and to permit use of government bills of lading for international or noncontiguous domestic trade shipments.
    
    
  • FAR 52.242-10, F.O.B. Origin -- Government Bills of Lading or Prepaid Postage, and FAR 52.242-11, F.O.B. Origin -- Government Bills of Lading or Indicia Mail, are deleted.
    
    
  • FAR 52.242-12, Report of Reshipment (REPSHIP) is redesignated as FAR 52.247-68.
  
  A proposed rule was published January 24, 2004, and five respondents submitted comments, which resulted in minor editorial changes in the final rule. For more on the proposed rule, see the February 2004 Federal Contracts Perspective article "Proposed FAR Changes on Electronic Reps and Certs, COTS."
  
  
• Common Identification Standard for Contractors: This interim rule adds FAR Subpart 4.13, Personal Identity Verification of Contractor Personnel, and the corresponding clause at FAR 52.204-9, to address the contractor personal identification requirements in Homeland Security Presidential Directive (HSPD-12), "Policy for a Common Identification Standard for Federal Employees and Contractors," and Federal Information Processing Standards Publication (FIPS PUB) Number 201, "Personal Identity Verification (PIV) of Federal Employees and Contractors." These apply to "all affected contractor and subcontractor personnel when contract performance requires contractors to have physical access to a federally-controlled facility or access to a federal information system."
  
  HSPD-12 is available at http://www.whitehouse.gov/news/releases/2004/08/20040827-8.html; FIPS PUB 201 is available at http://www.csrc.nist.gov/publications/fips/fips201/FIPS-201-022505.pdf; and associated OMB guidance M-05-24 is available at http://www.whitehouse.gov/omb/memoranda/fy2005/m05-24.pdf.
  
  This interim rule is effective January 3, 2006. Comments on the interim rule must be submitted no later than March 6, 2006, identified as "FAC 2005-07, FAR case 2005-015," 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.2005-015@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.
  
  
• Free Trade Agreements -- Australia and Morocco: This finalizes the interim rule in FAC 2001-27 that implemented the Australian Free Trade Agreement and the Moroccan Free Trade Agreement, by removing coverage of the Moroccan Free Trade Agreement from FAR Subpart 25.4, Trade Agreements, and the corresponding clauses.
  
  The United States-Morocco Free Trade Agreement (Public Law 108-302) was enacted on August 17, 2004, and was to go into effect on January 1, 2005, provided the president determined that Morocco had taken measures necessary to bring it into compliance with certain provisions of the agreement. While there were no comments on the interim rule, the U.S. Trade Representative informed the FAR Council that the president had not made the determination, so the Moroccan Free Trade Agreement is removed from the final rule.
  
  For more on the interim rule, see the February 2005 Federal Contracts Perspective article "FAC 2001-27 Implements Australian and Moroccan Free Trade Acts, Creates Table of Excluded Services." Also, see the following article on inflation adjustments to the various trade agreements thresholds.
  
  
• Requirement for Market Research Prior to Purchases from Federal Prison Industries (FPI): This finalizes the interim rule in FAC 2005-03 that amended FAR Subpart 8.6, Acquisition from Federal Prison Industries, Inc., to prohibit the purchase of products from FPI unless the agency making the purchase determines that the product or service offered by FPI provides the best value.
  
  Five respondents submitted comments on the interim rule, and the final rule amends FAR 8.602, Policy, to clarify that the market research requirements do not apply to items for which FPI has eliminated its mandatory source status (see paragraphs (b) through (g) of FAR 8.605, Exceptions). This clarifies that the market research requirement does not apply to purchases less than the micro-purchase threshold (FAR 8.605(e)). For more on the interim rule, see the May 2005 Federal Contracts Perspective article "FAC 2005-03 Permits Purchases from Federal Prisons Only If They Are Best Value."
  
  
• Exception from Buy American Act (BAA) for Commercial Information Technology: This interim rule amends FAR 25.103, Exceptions [to the BAA], and FAR 25.1101, [Solicitation Provisions and Contract Clauses for] Acquisition of Supplies, to implement Section 517 of the Consolidated Appropriations Act for 2005 (Public Law 108-447), which exempt acquisitions of information technology that are commercial items from the BAA. Though Public Law 108-447 only applies when Fiscal Year (FY) 2005 funds are used, the same exception was included in the Consolidated Appropriations Act for 2004 (Public Law 108-199) and is expected to be included in future appropriations acts. If the exception does not appear in a future appropriations act, the FAR will be quickly changed to limit the applicability of the exemption to the FYs to which it applies. (EDITOR'S NOTE: Section 717 of the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act for Fiscal Year 2006 (Public Law 109-115) extends this exception through FY 2006, and DOD has already issued a FAR class deviation excepting its acquisitions of commercial information technology from the provisions of the Buy American Act. For more on the DOD's FAR class deviation, see the January 2006 Federal Contracts Perspective article "DFARS Amendments Address Task Order Contracts.")
  
  The effect of this exception is that the following clauses no longer apply to acquisitions of commercial information technology: FAR 52.225-1, Buy American Act -- Supplies; FAR 52.225-2, Buy American Act Certificate; FAR 52.225-3, Buy American Act -- Free Trade Agreements -- Israeli Trade Act; and FAR 52.225-4, Buy American Act -- Free Trade Agreements -- Israeli Trade Act Certificate.
  
  This interim rule is effective January 3, 2006. Comments on the rule must be submitted no later than March 6, 2006, identified as "FAC 2005-07, FAR case 2005-022," by any of the following methods mentioned above (except send e-mail to: farcase.2005-022@gsa.gov.)
  
  
• Removal of Sanctions Against Libya: This final rule amends FAR Subpart 25.7, Prohibited Sources, and the corresponding clause FAR 52.225-13, Restrictions on Certain Foreign Purchases, to remove Libya from the list of countries sanctioned by the Department of the Treasury's Office of Foreign Assets Control (OFAC). This is in response to the president's issuance of Executive Order 13357 on September 20, 2004, which terminated the national emergency declared with respect to the policies and actions of Libya.
  
  
• Elimination of Certain Subcontract Notification Requirements: This finalizes, with changes, the interim rule in FAC 2005-01 that revised FAR 44.201-2, Advance Notification Requirements, and Alternate I of FAR 52.244-2, Subcontracts, to implement Section 842 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136). Section 842 removed the requirement for contractors with approved purchasing systems under cost-reimbursement contracts with DOD, NASA, and the Coast Guard to notify the agency before the award of any cost-plus-fixed-fee subcontract or any fixed-price subcontract that exceeds the simplified acquisition threshold or 5% of the total estimated cost of the contract, whichever is greater.
  
  One respondent submitted comments on the interim rule. As a result of the comments, Alternate I of FAR 52.244-2 is deleted in its entirety because its deletion would be a less confusing means of implementing Section 842 than amending Alternate I.
  
  For more on the interim rule, see the April 2005 Federal Contracts Perspective article "FAC 2005-01 Addresses Cost Accounting Standards Administration, Architect-Engineer Services."
  
  
• Annual Representations and Certifications on North American Industry Classification System (NAICS) Code and Size: This final rule amends FAR 52.204-8, Annual Representations and Certifications, to add a paragraph where the contracting officer inserts the appropriate NAICS code and small business size standard for the procurement.
  
  This provision was added by FAC 2001-26 to implement the On-Line Representations and Certifications Application (ORCA). FAR 52.204-8 deleted the requirement to include 25 representations and certifications in solicitations, but instead required offerors to complete the 25 representations and certifications in ORCA annually. One of the provisions deleted by FAR 52.204-8 and included in ORCA is FAR 52.219-1, Small Business Program Representations, which requires the contracting officer to identify the appropriate NAICS code and the corresponding small business size standard for the solicitation. The NAICS code and corresponding small business size standard is specific to the particular soliciation, and the exclusion of this information from FAR 52.204-8 was an oversight. This amendment to FAR 52.204-8 now provides a standard way for the NAICS code and small business size standard to be communicated to prospective bidders and offerors.
  
  
• Technical Amendments: These technical amendments replace "DOD Index of Spec-ifications and Standards (DODISS)" with "DOD Acquisition Streamlining and Standardization Information System (ASSIST)." The ASSIST website is http://assist.daps.dla.mil.

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:

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).

• Pilot Mentor-Protege Program: This finalizes, without change, theinterim rule that amended DFARS Subpart 219.71, Pilot Mentor-Protege Program, and DFARS Appendix I, Policy and Procedures of the DOD Mentor-Protege Act, to (1) extend the program for five additional years, through September 30, 2010; (2) extend through September 30, 2013, the period during which mentor firms may incur costs that are eligible for reimbursement or credit under the program; and (3) permit service-disabled veteran-owned small businesses and HUBZone small businesses to participate in the program as protege firms.
  
  For more on the interim rule, see the June 2005 Federal Contracts Perspective article "DFARS Addresses Task Orders Against Non-DOD Contracts."
  
  
• Contracting by Negotiation: This finalizes, without change, the proposed rule that would remove unnecessary text from DFARS Part 215, Contracting by Negotiation, and moving several sections addressing internal operating procedures to the Procedures, Guidance, and Information (PGI) (for more on the PGI, see the December 2004 Federal Contracts Perspective article "DFARS Transformation in Full Gear, 'Procedures, Guidance, and Information' Added").
  
  For more on the proposed rule, see the April 2005 Federal Contracts Perspective article "Acquisition Functions Addressed in DFARS Changes."
  
  
• Simplified Acquisition Procedures: This finalizes, without change, the proposed rule that would remove unnecessary text in DFARS 213.305-1, General, which addresses imprest funds and third party drafts; remove unnecessary cross-references to the 8(a) program at DFARS 213.7001, Policy, and DFARS 213.7003-2, Contract Clauses; move to the PGI guidance on the use of unilateral contract modifications in paragraph (2) of DFARS 213.302-3, Obtaining Contractor Acceptance and Modifying Purchase Orders; and move to the PGI procedures for use of forms at DFARS 213.307, Forms, DFARS 253.213, Simplilfied Acquistiion Procedures (SF's 18, 30, 44, 1165, 1449, and OF's 336, 347, and 348), and DFARS 253.213-70, Instructions for Completion of DD Form 1155.
  
  For more on the proposed rule, see the May 2005 Federal Contracts Perspective article "DFARS Transformation Momentum Builds."
  
  
• Specialized Service Contracting: This finalizes, without change, the proposed rule that would update the text in DFARS Subpart 237.70, Mortuary Services, and DFARS Subpart 237.71, Laundry and Dry Cleaning Services, to delete text and material that is adequately addressed elsewhere, and to relocate internal instructions and procedures to the PGI.
  
  For more on the proposed rule, see the March 2005 Federal Contracts Perspective article "DFARS Transformation Continues by Addressing Taxes, Services, Utilities, Extraordinary Relief."
  
  
• Acquisition of Utility Services: This finalizes, without change, the proposed rule that would amend DFARS Part 241, Acquisition of Utility Services, to delete text on use of competitive procedures and delegated authority to acquire utility services because these issues are adequately addressed in the FAR; delete obsolete text on preaward contract reviews; and relocate procedures and corresponding definitions related to connection charges and award of separate contracts for utility services from DFARS to the PGI.
  
  For more on the proposed rule, see the March 2005 Federal Contracts Perspective article "DFARS Transformation Continues by Addressing Taxes, Services, Utilities, Extraordinary Relief."
  
  
• Utility Rates Established by Regulatory Bodies: This finalizes, without change, the proposed rule that would amend DFARS Part 241 to clarify that utility rates established by independent regulatory bodies may be relied upon as fair and reasonable, and to clarify requirements for use of contract clauses addressing changes in rates for regulated and unregulated utility services.
  
  For more on the proposed rule, see the March 2005 Federal Contracts Perspective article "DFARS Transformation Continues by Addressing Taxes, Services, Utilities, Extraordinary Relief."
  
  
• Inflation Adjustment of Acquisition-Related Thresholds: This proposed rule would adjust acquisition-related thresholds for inflation as required by Section 807 of the National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375), which requires adjustments in every year divisible by five (that is, 2005, 2010, etc.). (For more on the acquisition-related provisions of Public Law 108-375, see the November 2004 Federal Contracts Perspective article "FY 2005 Defense Authorization Act Directs Review of GSA Procedures, Permits A-76 Protests by Feds.")
  
  The following thresholds would be adjusted by this rule:
  
  
  • In DFARS 205.303, Announcement of Contract Awards, the threshold for DOD awards would be increased from $5,000,000 to $5,500,000.
    
    
  • In DFARS 217.170, General, and DFARS 217.171, Multiyear Contracts for Services, the threshold for Congressional authorization to use a multiyear contract for services would be increased from $500,000,000 to $565,500,000 (the threshold for supply contracts would remain $500,000,000).
    
    
  • In DFARS 219.502-2, Total Set-Asides, the threshold below which acquisitions for construction must be set-aside for small businesses is increased from $2,000,000 to $2,500,000.
    
    
  • In DFARS 228.102, Performance and Payment Bonds for Construction Contracts, the threshold for obtaining payment protections for fixed-price construction subcontracts would be increased from $25,000 to $30,000.
    
    
  • In DFARS 232.404, Exclusions, the threshold for application of FAR Subpart 32.4, Advance Payments for Non-Commercial Items, to advertisements in high school and college publications for military recruitment efforts would be increased from $2,500 to $3,000.
    
    
  • In DFARS 232.502-1, Use of Customary Progress Payments, the threshold from providing progress payments to small disadvantaged businesses would be increased from $50,000 to $55,000.
    
    
  • In DFARS 236.601, Policy, the threshold for notifying Congress before initial obligation of funds for architect-engineer services or construction design for military construction or military family housing would be increased from $500,000 to $550,000.
    
    
  • In DFARS 237.170-2, Approval Requirements, the threshold for obtaining approval for acquisitions of services that a contract or task order that is not performance based would be increased from $50,000,000 to $77,500,000.
    
    
  • The threshold for use of FAR 52.211-12, Liquidated Damages -- Construction, would be increased from $500,000 to $550,000.
    
    
  • The threshold for use of FAR 52.216-4, Economic Price Adjustment -- Labor and Material, would be increased from $50,000 to $55,000.
    
    
  • The threshold in DFARS 252.209-7004, Subcontracting with Firms That are Owned or Controlled by the Government of a Terrorist Country, prohibiting the contractor from entering into a subcontract with a firm owned by a terrorist country would be increased from $25,000 to $30,000.
    
    
  • The threshold for use of DFARS 252.225-7003, Report of Intended Performance Outside the United States and Canada -- Submission with Offer, and DFARS 252.225-7004, Report of Intended Performance Outside the United States and Canada -- Submission After Award, would be increased from $10,000,000 to $11,500,000.
    
    
  • The threshold for use of DFARS 252.225-7006, Quarterly Reporting of Actual Contract Performance Outside the United States, would be increased from $500,000 to $550,000.
    
    
  • The threshold in DFARS 252.232-7009, Mandatory Payment by Governmentwide Commercial Purchase Card, below which the contractor agrees to accept the governmentwide commercial card, would be increased from $2,500 to $3,000.
    
    
  • The threshold in DFARS 252.249-7002, Notification of Anticipated Contract Termination or Reduction, above which the contractor must provide notice of anticipated termination or reduction to each first-tier subcontractor would be increased from $500,000 to $550,000.
  
  Comments on the proposed rule must be submitted no later than March 24, 2006, identified as "DFARS Case 2004-D022," by any of the following methods: (1) eRulemaking Portal: http://www.regulations.gov; (2) e-mail: dfars@osd.mil; (3) fax: 703-602-0350; (4) mail to: Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; or (5) hand delivery or courier to: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.
  
  
• Earned Value Management Systems (EVMS): This proposed rule would revise DFARS Subpart 242.11, Production Surveillance and Reporting (particularly DFARS 242.1106, Reporting Requirements, and the corresponding clauses in DFARS 252.242), to update the requirements for contractors to establish and maintain EVMS. The proposed rule would:
  
  
  • Require compliance with American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems, for cost or incentive contracts and subcontracts valued at $20,000,000 or more (new provision DFARS 252.242-7005, Notice of Earned Value Management System -- Compliance Requirement, and new clause DFARS 252.242-7006, Earned Value Management System -- Compliance Requirement).
    
    
  • Require a formally validated and accepted EVMS for cost or incentive contracts and subcontracts valued at $50,000,000 or more (revised provision DFARS 252.242-7001, Notice of Earned Value Management System -- Validation Requirement, and revised clause DFARS 252.242-7002, Earned Value Management System -- Validation Requirement).
    
    
  • Discourage the application of earned value management to fixed-price contracts and subcontracts (DFARS 246.1106(a)(i)(D)).
    
    
  • Eliminate requirements for contractors to submit cost/schedule status reports (DFARS 252.242-7005, Cost/Schedule Status Report, and DFARS 252.242-7006, Cost/Schedule Status Report Plans).
  
  Comments on the proposed rule must be submitted no later than March 24, 2006, identified as "DFARS Case 2005-D006," by any of the methods mentioned above.
  
  
• Foreign Acquisition Procedures: This proposed rule would delete the following sections of DFARS Part 225, Foreign Acquisition, which consist of internal DOD procedures, and relocate them to the PGI:
  
  
  • DFARS 225.670-4, Waivers, which addresses the processing of requests for waiver of foreign source restrictions.
    
    
  • Paragraph (c) of DFARS 225.871-4, Statutory Waivers, which addresses processing of requests for waiver under North Atlantic Treaty Organization cooperative projects.
    
    
  • Paragraphs (b)(1), (b)(2), and (b)(3) of DFARS 225.7017-3, Exceptions, which address the preparation of determinations regarding award of a contract for ballistic missile defense research, development, test, and evaluation to a foreign source.
    
    
  • DFARS 225.7502, Procedures, which addresses the application of the Balance of Payments Program.
  
  Comments on the proposed rule must be submitted no later than March 24, 2006, identified as "DFARS Case 2005-D012," by any of the methods mentioned above.

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:

• Two new provisions, HUDAR 2452.208-70, Selection of Contractor for Task Orders Under GSA Schedules, and HUDAR 2452.215-70, Small Business Subcontracting Evaluation, would be added to solicitations exceeding $500,000 for task orders and contracts, respectively. These provisions would prescribe criteria related to to the offeror's proposed efforts in meeting HUD's small business subcontracting goals. HUD will revise these goals annually to reflect new governmentwide goals promulgated by the SBA and any additional changes to goal amounts that HUD determines to be warranted.
  
  
• Revision of HUDAR 2452.237-75, Access to HUD Facilities, and HUDAR 2452.239-70, Access to HUD Systems, to comply with Federal Information Processing Standards (FIPS) 201, Homeland Security Presidential Directive (HSPD-12), and OMB Memorandum M-05-24 with regard to granting contractor employees physical access to government facilities and systems, respectively.

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.

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