FEDERAL CONTRACTS PERSPECTIVE
Federal Acquisition Developments, Guidance, and Opinions
Vol. IX, No. 10
FAC 2005-27 Requires "Enhanced Competition” for Task and Delivery Orders
SBA Ceases Certifying SDBs
DFARS Implements 2008 Defense Authorization Act
Removal of GSAR Part 505 Proposed
State and Local Governments Can Buy Off Schedule 84
Comments Sought on Harmonization of CAS 412 and 413
FEHBAR Would Clarify Rate Setting Process
NASA to Update Its Mentor-Protégé Program
FAC 2005-27 Requires "Enhanced Competition”
for Task and Delivery Orders
Federal Acquisition Circular (FAC) 2005-27 contains 14 different rules revising the Federal Acquisition Regulation (FAR) on such topics as competition for task and delivery orders, extension of the authority to acquire commercial items up to $5.5 million using simplified procedures, cost accounting standards administration, accepting and dispensing $1 coins by vending machines, and subcontractor requests for bonds.
- Enhanced Competition for Task and Delivery Order Contracts: This interim rule amends FAR Subpart 16.5, Indefinite-Delivery Contracts, to implement Section 843 of the Fiscal Year 2008 National Defense Authorization Act (Public Law 110-181), “Enhanced Competition for Task and Delivery Order Contracts.” The provisions of Section 843 include (1) a limitation on single award task and delivery order contracts greater than $100 million; (2) enhanced competition for task and delivery orders in excess of $5 million; and (3) protest on orders on the grounds that the order increases the scope, period, maximum value of the contract under which the order is issued; or valued in excess of $10 million.
FAR Subpart 16.5 is amended as follows:
- Subparagraph (c)(1)(ii)(D) of FAR 16.504, Indefinite-Quantity Contracts, is amended to state that no task or delivery order contract in an amount estimated to exceed $100 million (including all options) may be awarded to a single source unless the head of the agency determines in writing that: (a) the task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work; (b) the contract provides only for firm-fixed price task or delivery orders for products for which unit prices are established in the contract, or services for which prices are established in the contract for the specific tasks to be performed; (c) only one source is qualified and capable of performing the work at a reasonable price to the government; or (d) it is necessary in the public interest to award the contract to a single source due to exceptional circumstances. The agency head must notify Congress within 30 days after making the determination in the public interest.
- Subparagraph (a)(9) of FAR 16.505, Ordering, is revised to permit protests of orders greater than $10 million (including options) (the only other ground for protests of task or delivery orders is that the order increases the scope, period, or maximum value of the contract under which the order is issued). Protests of orders in excess of $10 million must be filed with the Government Accountability Office (GAO). This authority expires May 27, 2011.
- FAR 16.505(b)(1)(iii) is revised to require the contracting officer to provide all multiple award contract awardees a fair opportunity to be considered for each task or delivery order in excess of $5 million. The contracting officer must provide, at a minimum, a notice of the order that includes a clear statement of requirements; a reasonable response period; disclosure of the significant evaluation factors and subfactors; and, when award is made on a best value basis, a statement documenting the basis for award and the relative importance of quality and price or cost factors.
- FAR 16.505(b)(4) is added to require the contracting officer to notify unsuccessful awardees when the total price of a task or delivery order exceeds $5 million, and provide an opportunity for the unsuccessful multiple award contractor to request a debriefing.
The revisions to FAR 16.504 apply to contracts awarded on or after May 27, 2008. The revisions to FAR 16.505 apply to task or delivery orders awarded on or after May 27, 2008, against existing contracts as well as new contracts.
Comments on the interim rule must be submitted no later than November 17, 2008, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail to: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann Duarte, Washington, DC 20405. Identify comments as “FAC 2005-27, FAR Case 2008-006.”
EDITOR’S NOTE: For more on the acquisition-related provisions of Public Law 110-181, see the February 2008 Federal Contracts Perspective article “Defense Authorization Act Restricts A-76 Competitions, Extends FAR Subpart 13.5.”
- Extension of Authority for Use of Simplified Acquisition Procedures for Certain Commercial Items: This final rule amends paragraph (d) of FAR 13.500, General, to extend the expiration date of the authority to use simplified procedures to purchase commercial items in amounts greater than the simplified acquisition threshold but not greater than $5.5 million ($11 million for acquisitions in support of a contingency operation or to facilitate the defense against or recovery from nuclear, biological, chemical, or radiological attack). The expiration date is extended from January 1, 2008, to January 1, 2010. This rule implements Section 822 of Public Law 110-181 (for more on the acquisition-related provisions of Public Law 110-181, see the February 2008 Federal Contracts Perspective article “Defense Authorization Act Restricts A-76 Competitions, Extends FAR Subpart 13.5”).
- Contract Debts: This final rule reorganizes and clarifies FAR Subpart 32.6, Contract Debts, by: (1) replacing “responsible official” with the specific individual or organization responsible for fulfilling a particular requirement (see FAR 32.602, Responsibilities); (2) specifies in FAR 32.601, General, what constitutes a contract debt rather than how a contract debt may arise; (3) consolidates all discussions of contract debt determinations in FAR 32.603, Debt Determination; (4) consolidates all discussions of payment demands in FAR 32.604, Demand for Payment; (5) consolidates all discussions of final decisions in FAR 32.605, Final Decisions; (6) consolidates all discussions of debt collection in FAR 32.606, Debt Collection; and (7) consolidates all discussions of interest in FAR 32.608, Interest.
Three respondents submitted comments on the proposed rule. Many of the comments were adopted in the final rule, primarily those concerning further reorganization, clarification, and elimination of duplicative and conflicting provisions. For more on the proposed rule, see the November 2006 Federal Contracts Perspective article “Changes to FAR Contract Debt Coverage Proposed.”
- Cost Accounting Standards (CAS) Administration and Associated FAR Clauses: This interim rule revises the FAR 52.230 series of clauses related to CAS administration to maintain consistency between the FAR and CAS, primarily to reflect the increase in the CAS applicability threshold from $500,000 to $650,000.
Comments on the interim rule must be submitted no later than November 17, 2008, by any of the means mentioned above, except that comments are to be identified as “FAC 2005-27, FAR Case 2007-002.”
- CAS Administration: This final rule revises FAR 30.201-4, Contract Clauses, to clarify that FAR 52.230-4, Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns, is not required to be included in contracts with foreign concerns that are exempt from CAS coverage.
The proposed rule was issued in response to the Cost Accounting Standards Board’s rule that revised the applicability of the CAS to United Kingdom contracts and subcontracts (see the July 2007 Federal Contracts Perspective article “Application of CAS to Foreign Concerns Addressed”). No comments were received on the proposed rule, so it is adopted as final with one minor change -- it broadens the FAR 52.230-4 exception to cover contracts with foreign concerns otherwise exempt from CAS coverage (not just United Kingdom contracts), and specifies that foreign concerns do not include foreign governments, or their agents or instrumentalities.
For more on the proposed rule, see the November 2006 Federal Contracts Perspective article “More FAR Changes Proposed for CAS Administration.”
- Accepting and Dispensing $1 Coins: This finalizes, with one change, the interim rule that added FAR 37.116-1, Presidential $1 Coin Act of 2005, to require any business, including vending machines, on any premises owned by the U.S. or under the control of any U.S. agency, to be capable of accepting and dispensing $1 coins.
Three respondents submitted comments in response to the interim rule. As a result of one of the comments, the final rule provides an exception for those vending machines that do not receive currency denominations greater than $1. For more on the interim rule, see the September 2007 Federal Contracts Perspective article “FAC 2005-19 Addresses Personal Identity Verification Products, Free Trade Agreements.”
- Correcting Statutory References Related to the Higher Education Act of 1965: This final rule corrects references to sections of the Higher Education Act of 1965 in the “minority institutions” definition in FAR 2.101, Definitions; FAR 52.219-23, Notice of Price Evaluation Adjustment for Small Disadvantaged Business Concerns; and FAR 52.226-2, Historically Black College or University and Minority Institution Representation. The sections of the Higher Education Act contain the definitions of “minority institution” and “Hispanic-serving institution.” The citations for these sections changed when the Higher Education Act of 1965 was amended by the Higher Education Amendments of 1998. This final rule updates the FAR accordingly.
- Changing the Name of the Office of Small and Disadvantaged Business Utilization for the Department of Defense (DOD): This final rule changes the name of the “Office of Small and Disadvantaged Business Utilization: to “Office of Small Business Programs” for DOD only. This change is required by Section 904 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181). The name changes are made in FAR 2.101, Definitions; paragraphs (d) and (d)(1) of FAR 19.201, General Policy; and paragraph (d) of FAR 19.702, Statutory Requirements.
- Administrative Changes to the Federal Prison Industries, Inc. (FPI) Blanket Waiver and the Javits-Wagner-O’Day (JWOD) Program Name: This final rule increases the blanket waiver threshold for FPI from $2,500 to $3,000, and changes the name of the JWOD program to the AbilityOne program.
The increase in the blanket waiver threshold is in paragraph (e) of FAR 8.605, Exceptions, and it means no waiver is required to buy from a source other than FPI when the purchase is below $3,000.
The change in the name of the JWOD program to the AbilityOne program is made throughout the FAR. Of particular note are the changes in FAR 8.703, Procurement List: replace “http://www.jwod.gov/procurementlist” with “http://www.abilityone.gov/jwod/PL.html,” and replace the e-mail address “email@example.com” with “firstname.lastname@example.org.” For more on the name change, see the December 2006 Federal Contracts Perspective article “‘JWOD Program’ Renamed ‘AbilityOne Program’.”
- Local Community Recovery Act of 2006: This finalizes two interim rules that implemented the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
The first interim rule added FAR Subpart 6.6, Stafford Act Preference for Local Area Contractor, and amended FAR Subpart 26.2, Disaster or Emergency Assistance Activities, to implement the Local Community Recovery Act of 2006, which amended the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The Local Community Recovery Act authorizes set-asides for major disaster or emergency assistance acquisitions to businesses that reside or primarily do business in the geographic area affected by the disaster or emergency.
After the first interim rule was published, Congress further amended the Stafford Act in the Department of Homeland Security Appropriations Act of 2007 (Public Law 109-295). The amended statute contains requirements for transitioning work to local firms in the geographic area affected by the disaster or emergency and for justifications for expenditures to entities outside the major disaster or emergency area. The second interim rule amended FAR Subpart 26.2 to make these changes. Also, the second interim rule addressed the comments submitted by four respondents on the first rule, particularly to delete FAR Subpart 6.6 as unnecessary.
No comments were received on the second interim rule, so both interim rules are adopted as final with one change: the words “or procedures” are added to FAR 26.202-2, Evaluation Preference, so that it reads “The contracting officer may use an evaluation preference, when authorized in agency regulations or procedures.”
For more on the first interim rule, see the September 2006 Federal Contracts Perspective article “New Set-Aside Authorized for Major Disaster or Emergency Assistance Acquisitions.” For more on the second interim rule, see the December 2007 Federal Contracts Perspective article “FAC 2005-21 Rewrites FAR Part 27 in Plain English.”
- Additional Requirements for Competition Advocate Annual Reports: This final rule amends FAR 6.502, Duties and Responsibilities [of Competition Advocates], to require that annual reviews by competition advocates be provided in writing to both the agency senior procurement executive and the agency chief acquisition officer, and that the reports specifically address the quality of planning, executing, and managing of task and delivery orders over $1 million issued under multiple award contracts.
This rule implements an initiative in a May 31, 2007, OFPP memorandum to chief acquisition officers and senior procurement executives entitled “Enhancing Competition in Federal Acquisition” (go to http://www.whitehouse.gov/omb/procurement/memo/competition_memo_053107.pdf).
- Subcontractor Request for Bonds: This final rule amends the lists of laws inapplicable to commercial items in paragraph (a) of FAR 12.503, Applicability of Certain Laws to Executive Agency Contracts, and paragraph (a) of FAR 12.504, Applicability of Certain Laws to Subcontracts for the Acquisition of Commercial Items, to clarify that FAR 52.228-12, Prospective Subcontractor Requests for Bonds, does not apply to commercial items.
- Online Representations and Certifications Application (ORCA) Review: This rule finalizes, without changes, the interim rule that revised the prescriptions for the use of FAR 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-Designated Items, and FAR 52.223-14, Toxic Chemical Release Reporting. The prescriptions are in paragraph (d) of FAR 23.406, Solicitations Provisions and Contract Clauses, and paragraph (b) of FAR 23.906, Solicitations Provisions and Contract Clauses.
No comments were received on the interim rule, so it is finalized without changes. For more on the interim rule, see the September 2007 Federal Contracts Perspective article “FAC 2005-19 Addresses Personal Identity Verification Products, Free Trade Agreements.”
- Technical Amendment: This changes the Internet address for the Contract Pricing Reference Guides in paragraph (a)(7) of FAR 15.404-1, Proposal Analysis Techniques, to http://www.acq.osd.mil/dpap/cpf/contract_pricing_reference_guides.html.
SBA Ceases Certifying SDBs
The Small Business Administration (SBA) has decided to remove itself from the small disadvantaged business (SDB) certification process because only two agencies, the National Aeronautics and Space Administration (NASA) and the Coast Guard, are eligible to use the 10% SDB price evaluation preference authorized by FAR Subpart 19.11, Price Evaluation Adjustment for Small Disadvantaged Business Concerns, and those two agencies hardly use it at all. Instead, SBA recommends that NASA and the Coast Guard develop their own procedures for certifying SDBs. However, for the SDB subcontracting programs described in FAR Subpart 19.12, Small Disadvantaged Business Participation Program (an evaluation factor for the participation of SDBs in performance of the contract, and an SDB incentive subcontracting program), businesses will be able to self-certify their SDB status, and agencies and prime contractors will be permitted to rely on those self-certifications.
The 9,545 firms currently participating in the 8(a) program are considered certified SDB firms during their tenure in the 8(a) program, and the 2,814 firms previously certified as SDB firms by the SBA will remain certified for the remainder of their three-year certification periods.
DFARS Implements 2008 Defense Authorization Act
The Department of Defense (DOD) issued three rules to implement various provisions of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181), and a proposed rule to update text addressing management of government property in the possession of contractors.
- Acquisitions in Support of Operations in Iraq or Afghanistan: This interim rule adds DFARS Subpart 225.77, Acquisitions in Support of Operations in Iraq or Afghanistan, and associated clauses, to implement Sections 886 and 892 of Public Law 110-181. Section 886 gives the Department of Defense (DOD) authority to limit competition when acquiring products or services in support of military operations or stability operations in Iraq or Afghanistan (including security, transition, reconstruction, and humanitarian relief activities), and Section 892 addresses competition requirements for the procurement of small arms for assistance to the Army of Iraq or Afghanistan, the Police Forces of Iraq or Afghanistan, and other security organizations of Iraq or Afghanistan.
The following are the significant provisions of DFARS Subpart 225.77 and the associated clauses:
- DFARS 225.7702, Acquisition of Small Arms, requires that full and open competition be obtained to the maximum extent practicable when acquiring small arms for assistance to Iraq or Afghanistan; that no responsible U.S. manufacturer be excluded from competing for such acquisitions; and that products manufactured in the United States not be excluded from the competition.
- DFARS 225.7703, Acquisition of Products or Services Other Than Small Arms, authorizes DOD to limit competition to products or services (including construction) in support of operations in Iraq or Afghanistan; restrict an acquisition to a particular source or sources from Iraq or Afghanistan; or provide a preference for products or services (including construction) from Iraq or Afghanistan (DFARS 225.7703-1, Acquisition Procedures).
- Paragraph (e) of DFARS 225.7703-5, Solicitation Provisions and Contract Clauses, directs contracting officers not use Buy American Act/Balance of Payments Program/Trade Agreements provisions or clauses that might otherwise apply if the acquisition were not conducted using the authority of Section 886.
- The following provisions and clauses are added to address the requirements of Section 886 and to remove the prohibition against acceptance of Iraqi end products that would otherwise apply to acquisitions subject to the Trade Agreements Act (revised paragraphs (5) and (6) of DFARS 225.1101, Acquisition of Supplies):
- Alternate I to DFARS 252.225-7021, Trade Agreements, for use in solicitations and clauses that include DFAR 252.225-7023.
- DFARS 252.225-7022, Trade Agreements Certificate -- Inclusion of Iraqi End Products, for use in solicitations that include DFARS 252.225-7021 with its Alternate I.
- DFARS 252.225-7023, Preference for Products or Services from Iraq or Afghanistan, for use in solicitations that provide a preference for products or services from Iraq or Afghanistan.
- DFARS 252.225-7024, Requirement for Products or Services from Iraq or Afghanistan, for use in solicitations that include DFARS 252.225-7023, and in the resulting contract.
- DFARS 252.225-7026, Acquisition Restricted to Products or Services from Iraq or Afghanistan, for use in solicitations and contracts that are restricted to the acquisition of products or services from Iraq or Afghanistan, or will be directed to a particular source or sources from Iraq or Afghanistan.
Comments on the interim rule must be submitted no later than November 14, 2008, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov; (2) e-mail: email@example.com; (3) fax: 703-602-7887; (4) mail: Defense Acquisition Regulations System, Attn: Amy Williams, OUSD (AT&L) DPAP (DARS), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062; or (5) hand-delivery/courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Identify comments as “DFARS Case 2008-D002.”
- Security-Guard Functions: This interim rule amends DFARS 237.102-70, Prohibition on Contracting for Firefighting or Security-Guard Functions, to implement Section 343 of Public Law 110-181, which extends, through September 30, 2012, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001.
Comments on the interim rule must be submitted no later than November 14, 2008, by any of the means mentioned above, except mailed comments should be to the attention of Michael Benavides, and the comments should be identified as “DFARS Case 2006-D050.”
- Limitation on Service Contracts for Military Flight Simulators: This final rule amends paragraph (b) of DFARS 237.102-71, Limitation on Service Contracts for Military Flight Simulators, to implement Section 883(b) of Public Law 110-181, which amended the conditions under which the Secretary of Defense may waive the prohibition on the award of a DOD service contract for the acquisition of a military flight simulator from “necessary for national security purposes” to “in the national interest”.
- Government Property: This proposed rule would update and reorganize four subparts of DFARS Part 245, Government Property, for consistency with changes made to the FAR by FAC 2005-17 that addressed management of government property in the possession of contractors (see the June 2007 Federal Contracts Perspective article “FAR Coverage on Government Property Simplified, Clarified, Trimmed”).
The changes being made to DFARS Subpart 245.1, General; Subpart 245.3, Providing Government Property to Contractors; Subpart 245.4, Use and Rental of Government Property; and Subpart 245.5, Management of Government Property in the Possession of Contractors, consist of deleting obsolete terms and sections, updating sections, and relocating sections to correspond to the FAR.
Comments on the proposed rule must be submitted no later than November 24, 2008, by any of the means mentioned above, except mailed comments should be to the attention of Mark Gomersall, and the comments should be identified as “DFARS Case 2007-D020.”
For more on other acquisition-related provisions of Public Law 110-181, see the February 2008 Federal Contracts Perspective article “Defense Authorization Act Restricts A-76 Competitions, Extends FAR Subpart 13.5.”
Removal of GSAR Part 505 Proposed
As part of the General Services Administration (GSA) Acquisition Regulation (GSAR) rewrite effort, GSA proposes to remove GSAR Part 505, Publicizing Contract Actions, because its contents consists of non-regulatory material addressing internal agency acquisition policy. GSA intends to revise GSAR Part 505 and move it to the non-regulatory GSA Acquisition Manual (GSAM).
Comments on the proposed rule must be submitted no later than November 17, 2008, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann Duarte, Washington, DC 20405. Identify comments as “GSAR Case 2008-G503.”
State and Local Governments Can Buy Off Schedule 84
GSA is amending GSAR Part 538, Federal Supply Schedule Contracting, to permit state and local governments to purchase from Federal Supply Schedule (FSS) 84, Total Solutions for Law Enforcement, Security, Facility Management Systems, Fire, Rescue, Special Purpose Clothing, Marine Craft, and Emergency/Disaster Response. This change implements the Local Preparedness Acquisition Act (Public Law 110-248).
The primary changes are in GSAR Subpart 538.70, Cooperative Purchasing, which addresses the use of Federal Supply Schedule contracts by non-federal organizations. Until enactment of Public Law 110-248, state and local governments were authorized to acquire only products and services from Federal Supply Schedule 70, Information Technology. A similar type of purchasing is addressed in GSAR Subpart 538.71, Recovery Purchasing, which authorizes non-federal organizations to use Federal Supply Schedule contracts to purchase products and services for recovery from major disasters, terrorism, or nuclear, biological, chemical, or radiological attack. Additional information about cooperative purchasing and recovery purchasing is available in GSA's Schedules e-Library at http://www.gsaelibrary.gsa.gov.
GSAR Subpart 538.70 and GSAR 552.238-78, Scope of Contract (Eligible Ordering Activities, are revised to add Schedule 84 to the schedule for which cooperative purchasing are authorized (that is, Schedule 70).
The interim rule applies to contracts awarded after the effective date of this rule (that is, September 19, 2008) for Schedule 84. Existing Schedule 84 contracts are to be modified by mutual agreement of both parties.
Comments on the interim rule must be submitted no later than November 18, 2008, by any of the means mentioned in the previous article, except that comments are to be identified as “GSAR Case 2008-G517.”
Comments Sought on Harmonization of CAS 412 and 413
The Cost Accounting Standards Board (CASB) is inviting comments concerning an Advance Notice of Proposed Rulemaking (ANPR) on the harmonization of Cost Accounting Standards (CAS) 412, Cost Accounting Standard for Composition and Measurement of Pension Cost, and CAS 413, Adjustment and Allocation of Pension Cost, with the Pension Protection Act of 2006 (Public Law 109-280).
The Pension Protection Act (PPA) amended the minimum funding requirements and tax-deductibility of pension plans under the Employee Retirement Income Security Act of 1974 (ERISA). The PPA requires the CASB to revise CAS 412 and CAS 413 to harmonize with the amended ERISA minimum required contribution not later than January 1, 2010.
Basic conceptual differences exist between the CAS and the PPA. The PPA utilizes a settlement or liquidation approach to value pension plan assets and liabilities, including the use of accrued benefit obligations and interest rates based on current corporate bond rates. CAS 412 and CAS 413 utilize the going concern approach to plan asset and liability valuation -- they assume the company (or, in this case, the pension plan) will continue in business, and follow accrual accounting principles that incorporate assumptions about future years of employees’ service and salary increases that are absent from the settlement approach.
The CASB had published a Staff Discussion Paper to solicit public views (see the August 2007 Federal Contracts Perspective article “Harmonization of CAS with Pension Protection Act Sought”). The CASB received 18 public comments on the Staff Discussion Paper from contractors, industry associations, federal agencies, and from the actuarial and legal professions. After considering the comments, the CASB is proposing to change the amortization period for gains and losses to a 10-year amortization period from its current 15-year period. According to the CASB, this change will “provide more timely adjustment of plan experience while not introducing unmanageable volatility. This shorter amortization period also more closely follows the 7-year period required by ERISA to fully fund the plan’s settlement liability.” The text of the ANPR and the CASB’s analysis of the comments is available at http://www.whitehouse.gov/omb/procurement/casb/2008_anprm.pdf.
Comments on the ANPR must be submitted no later than November 3, 2008, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov; (2) e-mail: firstname.lastname@example.org; or (3) fax: 202-395-5105. Identify comments as “CAS Pension Harmonization ANPR.”
FEHBAR Would Clarify Rate Setting Process
The Office of Personnel Management (OPM) is proposing to amend paragraph (b) of Federal Employees Health Benefits Program Acquisition Regulation (FEHBAR) 1652.216-70, Accounting and Price Adjustment, to clarify the rate setting process for community rated carriers with respect to Similarly Sized Subscriber Groups (SSSG), and remove the ban on adjustments based on rate reconciliation for the final year of Federal Employees Health Benefits Program (FEHBP) contracts. In prior years, carriers were not subjected to rate reconciliation in the final year of their contracts. Information technology and electronic transmission and storage of data now make it possible to efficiently perform rate reconciliation for the final contract year. Therefore, OPM will begin conducting such rate reconciliation on community rated contracts that terminate after January 1, 2009.
Comments on the proposed rule must be submitted no later than October 2, 2008, by either: (1) eRulemaking Portal: http://www.regulations.gov; or (2) mail: Edward M. DeHarde, Senior Policy Analyst, Insurance Policy Group, Office of Personnel Management, 1900 E Street, NW, Room 3415, Washington, DC 20415.
NASA to Update Its Mentor-Protégé Program
The National Aeronautics and Space Administration (NASA) proposes to revise the NASA FAR Supplement (NFS) Subpart 1819.72, NASA Mentor-Protégé Program, to update, revise, and expand the program.
The program, which currently is open to small disadvantaged businesses (SDBs), women-owned small businesses, Historically Black Colleges and Universities, and minority institutions of higher education, would be expanded to include veteran-owned small businesses, service-disabled veteran-owned small businesses, and NASA Small Business Innovative Research (SBIR) Phase II small businesses. In addition, the proposed rule would introduce mentor award fee incentives, and explain the calculated subcontracting credit in FAR 52.219-9, Small Business Subcontracting Plan.
NFS 1819.7208, Award Fee Pilot Program, would explain the mentor award fee incentives. The mentor-protégé program currently provides for mentors with award fee contracts to earn fee associated with their performance as a mentor. The new award fee would be a separate fee, but would apply only to developmental assistance to NASA SBIR Phase II protégés. However, any NASA contractors with an award fee contract would be eligible to earn award fee for overall developmental assistance in promoting the use of small businesses as subcontractors. The award fee evaluation criteria would include:
The award fee would be in addition to the credit agreement described in NFS 1819.7209, Credit Agreements. Basically, credit agreements permit the mentor to consider its developmental assistance costs as if they were incurred in a subcontract awarded to the protégé. “Credit is given for the sole purpose of determining the performance of the mentor in attaining an applicable subcontracting goal established under any contract containing a subcontracting plan pursuant to the clause at FAR 52.219-9, Small Business Subcontracting Plan.”
- Active participation in the program;
- The amount and quality of developmental assistance provided;
- Subcontracts awarded to small businesses and others;
- Success of the protégés in increasing their business as a result of receiving developmental assistance; and
- Accomplishment of any other activity as related to the mentor-protégé relationship.
NFS 1819.7209 goes on to provide that “other costs that have been reimbursed through inclusion in indirect expense pools may also be credited as subcontract awards for determining the performance of the mentor in attaining an applicable subcontracting goal established under any contract containing a subcontracting plan.”
The proposed rule would amend NFS 1852.219-77, NASA Mentor-Protégé Program, and NFS 1852.219-79, Mentor Requirements and Evaluation, to reflect the changes made by the rule.
Comments on the proposed rule must be submitted no later than November 18, 2008, by any of the following methods: (1) eRulemaking Portal: http://www.regulations.gov; (2) mail: Diane Thompson, NASA Headquarters, Office of Procurement, Contract Management Division, Washington, DC 20546; or (3) e-mail: Diane.Thompson@nasa.gov.
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