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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions

February 2008
Vol. IX, No. 2

CONTENTS

Defense Authorization Act Restricts A-76
Competitions, Extends FAR Subpart 13.5

On January 28, President Bush signed Public Law 110-181, the $692 billion National Defense Authorization Act for Fiscal Year 2008. Most of the acquisition-related provisions, both those that apply governmentwide and to only the Department of Defense (DOD), are in the Section 800 series. However, there are a few other important provisions scattered about the statute, such as those addressing restrictions applicable to DOD on competitions under Office of Management and Budget (OMB) Circular A-76, Performance of Commercial Activities.

• Section 322, Modification to Public-Private Competition Requirements Before Conversion to Contractor Performance: This provision prohibits a contractor from receiving an advantage in an OMB Circular A-76 competition because it offers its workers a medical plan or retirement plan that costs less than what DOD contributes towards plans for its civilian employees.
  
  
• Section 323, Public-Private Competition at End of Period Specified in Performance Agreement Not Required: When DOD civilian employees win an A-76 competition, DOD does not have to conduct another competition at the end of the performance period.
  
  
• Section 324, Guidelines for Insourcing New and Contracted Out Functions: This requires DOD to establish guidelines and procedures for using DOD employees to perform: (1) new functions; and (2) functions that are being performed by a contractor that had been performed by DOD employees within the past 10 years, are closely associated with the performance of inherently governmental functions, has been performed though a non-competitive contract, or has been performed poorly within the previous five years.
  
  
• Section 326, Bid Protests by Federal Employees in Actions Under OMB Circular A-76: This provision applies governmentwide, and gives federal employees the right to protest A-76 competitions.
  
  
• Section 327, Public-Private Competition Required Before Conversion to Contractor Performance: This extends to the entire government the provision that previously had applied only to DOD. This requires that activities performed by 10 or more employees may not be contracted-out to contractors without a competition. This overrides OMB Circular A-76, which provides that activities performed by 65 or more employees may be contracted-out through a “streamlined competition,” one which permits the government to make the decision.
  
  
• Section 805, Procurement of Commercial Services: This provision requires DOD to modify the Defense Federal Acquisition Regulation Supplement (DFARS) to state that services of a type offered and sold competitively in substantial quantities in the commercial marketplace may be treated as commercial items if the offeror submits sufficient information to evaluate, through price analysis, the reasonableness of the price of such services. Also, this provision requires DOD to modify the DFARS to ensure that time-and-materials and labor-hour contracts for commercial items may be used only for services procured for support of a commercial item, emergency repair services, or any other commercial services only as approved by the head of the agency.
  
  
• Section 822, Extension of Authority for Use of Simplified Acquisition Procedures for Certain Commercial Items: The authority to use Federal Acquisition Regulation (FAR) Subpart 13.5, Test Program for Certain Commercial Items, which permits acquisitions of commercial items up to $5.5 million to use the provisions of FAR Part 13, Simplified Acquisition Procedures, are extended from January 1, 2008, to January 1, 2010.
  
  
• Section 843, Enhanced Competition Requirements for Task and Delivery Order Contracts: This prohibits DOD from awarding single source task or delivery order contracts exceeding $100 million unless the head of the agency determines the task or delivery orders are so integrally related that only a single source can reasonably perform the work. Also, for task or delivery orders exceeding $5 million, the requirement to provide all contractors a fair opportunity to be considered would not be met unless all such contracts are provided notice and given a reasonable time to provide a proposal. Finally, protests of task or delivery orders exceeding $10 million are authorized.
  
  
• Section 844, Public Disclosure of Justification and Approval Documents for Noncompetitive Contracts: This provision requires agencies governmentwide to make available, within 14 days after contract award, the justification and approval documents for noncompetitive contracts. The documents are to be made available of the agencies website and a website selected by the Office of Federal Procurement Policy (OFPP) administrator (probably FedBizOpps (http://www.fbo.gov)).
  
  
• Section 855, Federal Acquisition Workforce Improvements: This requires the OFPP administrator to designate an associate administrator for acquisition workforce programs located in the Federal Acquisition Institute (FAI). All agency heads must consult with the associate administrator and establish acquisition and contracting training programs.
  
  
• Section 888, Green Procurement Policy: It is the sense of Congress that DOD should establish a system to document and track environmentally preferable products and services.

Lots of DFARS Rules Saved for the New Year

For the past several months, DOD has essentially left the DFARS alone. That changed in January, when it roused itself from its Thanksgiving/Christmas/New Year respite and issued nine final rules, four interim rules, and one proposed rule.

• DOD Representations and Certifications in the Online Representations and Certifications Application (OCRA): This final rule adds DFARS Subpart 204.12, Annual Representations and Certifications, to address DOD-unique requirements relating to the ORCA (https://orca.bpn.gov/). FAR Subpart 4.12 requires prospective contractors to complete electronic annual representations and certifications in ORCA – this is done in conjunction with the required registration in the Central Contractor Registration (CCR) database (http://www.ccr.gov). ORCA used to include only representations and certifications required by the FAR, but it has been revised to include those required by the DFARS.
  
  DFARS Subpart 204.12 consists of DFARS 204.1202, Solicitation Provision and Contract Clause, which prohibits the inclusion of 12 representations and certifications in solicitations because they are now included in ORCA. Also, DFARS 252.204-7007, Alternate A, Annual Representations and Certifications, is added. It consists of a substitute for paragraph (c) of FAR 52.204-8, Annual Representations and Certifications. This substitute paragraph (c) allows offerors to include information regarding changes to the offeror's annual FAR and DFARS representations and certifications that apply to a particular solicitation.
  
  One respondent submitted comments on the proposed rule, but the proposed rule was finalized without changes. For more on the proposed rule, see the March 2007 Federal Contracts Report article “DOD Undertakes a Little Spring Cleaning.”
  
  
• Functions Exempt From Private Sector Performance: This final rule amends DFARS 207.503, Policy, to address procedures for preparation of the written determination required by FAR 7.503(e) that none of the functions to be performed by contract are inherently governmental. New paragraph (e) of DFARS 207.503 requires DOD personnel to prepare the determination using DOD Instruction 1100.22, Guidance for Determining Workforce Mix, and to also include a determination that none of the functions to be performed are exempt from private sector performance, as addressed in DOD Instruction 1100.22.
  
  In addition, DFARS 237.102, Policy [for Service Contracting], is added, and it cross-references the prohibitions in DFARS 207.503(e).
  
  
• Lead System Integrators: This interim rule adds DFARS Subpart 209.5, Organizational and Consultant Conflicts of Interest, to implement Section 807 of the National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364), which places limitations on contractors acting as lead system integrators in the acquisition of major DOD systems. Such contractors may have no direct financial interest in the development or construction of any individual system or element of any system of systems unless the secretary of defense certifies to Congressional committees that appropriate steps were taken to prevent any organizational conflict of interest, or the entity was selected by a subcontractor to serve as a lower-tier subcontractor.
  
  Also, provision DFARS 252.209-7006, Limitations on Contractors Acting as Lead System Integrators, and clause DFARS 252.209-7007, Prohibited Financial Interests for Lead System Integrators, are added. DFARS 252.209-7006 requires the contractor to represent whether or not it intends to perform the contract as a lead system integrator and, if so, whether or not it has any direct financial interest in the system(s), subsystem(s), system of systems, or services supporting the system(s). DFARS 252.209-7007 specifies the limitations and contains an agreement in which the contractor agrees it will not acquire any “direct financial interest in the development or construction of any individual system or element of any system of systems while performing lead system integrator functions in the acquisition of a major system...or, if it does acquire or plan to acquire such interest, it will immediately notify the contracting officer.”
  
  Comments on this interim rule must be submitted no later than March 10, 2008, by any of the following means: (1) eRulemaking Portal: http://www.regulations.gov/far; (2) e-mail: dfars@osd.mil; (3) fax: 202-501-4067; (4) mail: Defense Acquisition Regulations System, ATTN: Michael Benavides, 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 such comments as “DFARS Case 2006-D051.”
  
  
• New Designated Countries: This finalizes, without changes, the interim rule that added the Dominican Republic to the definitions of “designated country” and “Free Trade Agreement country” in DFARS 252.225-7021, Trade Agreements, DFARS 252.225-7036, Buy American Act–Free Trade Agreements–Balance of Payments Program, and DFARS 252.225-7045, Balance of Payments Program–Construction Material Under Trade Agreements, to implement the Central America-United States Free Trade Agreement with respect to the Dominican Republic. Also, the Dominican Republic was removed from the definition of “Caribbean Basin country” in these clauses because when a country becomes a “Free Trade Agreement country” it ceases to be a “Caribbean Basin country.”
  
  In addition, Bulgaria and Romania were added to the definition of “World Trade Organization Government Procurement Agreement countries” in DFARS 252.225-7021 and DFARS 252.225-7045 because of direction from the United States Trade Representative.
  
  No comments were received on the interim rule, so it is finalized without changes. For more on the interim rule, see the April 2007 Federal Contracts Perspective article “DOD Undertakes a Little More Spring Cleaning.”
  
  
• Trade Agreements Thresholds: This interim rule amends DFARS Part 225, Foreign Acquisitions, to incorporate increased dollar thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the United States Trade Representative (see the January 2008 Federal Contracts Perspective article “Trade Agreements Thresholds Adjusted”).
  
  This interim rule makes the following changes:
  
  
  Paragraph (10)(1) of DFARS 225.1101, Acquisition of Supplies, is amended by replacing “$193,000” with “$194,000” as the limit on the use of DFARS 252.225-7036, Buy American Act–Free Trade Agreements–Israeli Trade Act; paragraph (10)(1)(A) is amended by replacing “$64,786” with “$67,826” as the threshold for using the basic clause; and paragraph (10)(1)(B) is amended by replacing “$64,786” with “$67,826” as the limit for using Alternate I.
  
  
  • Paragraph (a) of DFARS 225.7503, Contract Clauses, is amended by replacing “$7,407,000” with “$7,443,000” as the limit for using DFARS 252.225-7044, Balance of Payments Program–Construction Material; and paragraph (b) is amended by (1) replacing “$7,407,000” with “$7,443,000” as the limit for using DFARS 252.225-7045, Balance of Payments Program–Construction Material Under Trade Agreements; (2) replacing “$7,407,000” with “$7,443,000” as the threshold for using Alternate I; and (3) replacing “$8,422,165” with “$8,817,449” as the limit for using Alternate I.
  
  Comments on this interim rule must be submitted no later than March 24, 2008, by any of the means mentioned above, except identify the comments as “DFARS Case 2007-D023,” and address mail to the attention of Amy Williams.
  
  
• Receiving Reports for Shipments: This final rule amends DFARS 252.246-7000, Material Inspection and Receiving Report, to clarify that, when Wide Area WorkFlow-Receipt and Acceptance (WAWF-RA) is used, two copies of either the DD Form 250, Material Inspection and Receiving Report, or the WAWF-RA report must be distributed with the shipment in accordance with DFARS Appendix F, Material Inspection and Receiving Report. Such clarification is needed to ensure proper identification of all shipments. In addition, DFARS F-401, Distribution, is amended to state that use of the WAWF-RA electronic form satisfies the distribution requirements of DFARS Appendix F.
  
  Three respondents submitted comments on the proposed rule and, as a result, the rule is amended to allow the contractor to use the DD Form 250 as an alternative to the printed WAWF-RA. For more on the proposed rule, see the December 2006 Federal Contracts Perspective article “DFARS Changes Proposed for MIRRs, Fixed-Price Exception.”
  
  
• Information Assurance Contractor Training and Certification: This final rule amends DFARS Subpart 239.71, Security and Privacy for Computer Systems, to implement requirements of the Federal Information Security Management Act of 2002; DOD Directive 8570.1, Information Assurance Training, Certification, and Workforce Management; and DOD Manual 8570.01-M, Information Assurance Workforce Improvement Program, regarding training requirements that apply to contractor personnel who perform information assurance functions.
  
  New DFARS 239.7102-3, Information Assurance Contractor Training and Certification, makes the requiring activity responsible for providing to the contracting officer “(1) a list of information assurance functional responsibilities for DOD information systems by category (e.g., technical or management) and level (e.g., computing environment, network environment, or enclave); and (2) the information assurance training, certification, certification maintenance, and continuing education or sustainment training required for the information assurance functional responsibilities.” In addition, the requiring activity is responsible for ensuring that the certifications of all contractor personnel are in compliance with DOD Manual 8570.01-M and are identified, documented, and tracked.
  
  Also, the rule adds DFARS 252.239-7001, Information Assurance Contractor Training and Certification, for use in contracts involving contractor performance of information assurance functions, and it requires the contractor to ensure that personnel accessing information systems are properly trained and certified according to the requirements of DOD 8570.01-M.
  
  Seven respondents submitted comments on the proposed rule. In response to one of the comments, a paragraph has been added to the DFARS Procedures, Guidance, and Information (PGI) 239.7102-3, to inform contracting officers of the phased implementation plan in DoD 8570.01-M, which addresses modification of existing contracts. For more on the proposed rule, see the February 2007 Federal Contracts Perspective article “DOD-Unique Emergency Flexibilities Added to DFARS.” For more on the PGI (http://www.acq.osd.mil/dpap/dars/dfarspgi/current/index.html), see the December 2004 Federal Contracts Perspective article “DFARS Transformation in Full Gear, ‘Procedures, Guidance, and Information’ Added”.
  
  
• Ship Critical Safety Items: This interim rule amends DFARS Subpart 209.2, Qualification Requirements, to implement Section 130 of the National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364, which requires DOD to establish a quality control policy for the procurement, modification, repair, and overhaul of ship critical safety items.
  
  Section 802 of the National Defense Authorization Act for Fiscal Year 2004 (Public Law 108-136) contained a similar requirement applicable to aviation critical safety items, which was implemented in DFARS 209.270, Aviation Critical Safety Items. This interim rule amends DFARS 209.270 and other related DFARS text to address ship critical safety items as well as aviation critical safety items (the title of DFARS 209.270 is changed to “Aviation and Ship Critical Safety Items”).
  
  DFARS 209.270 consists of DFARS 209.270-1 through DFARS 209.270-4. Besides changing “aviation critical safety items” to “aviation and ship critical safety items” throughout, the key changes are in DFARS 209.270-2, Definitions, in which the definition for “design control activity” is revised to add “With respect to a ship critical safety item, [design control activity] means the systems command of a military department that is specifically responsible for ensuring the seaworthiness of a ship or ship equipment in which a ship critical safety item is to be used.” Also, the following definition of “ship critical safety item” is added: “any ship part, assembly, or support equipment containing a characteristic the failure, malfunction, or absence of which could cause (1) a catastrophic or critical failure resulting in loss of or serious damage to the ship; or (2) an unacceptable risk of personal injury or loss of life.”
  
  In addition, DFARS 246.407, Nonconforming Supplies or Services, is revised to designate the head of the design control activity as “the approval authority for acceptance of any nonconforming aviation or ship critical safety items or nonconforming modification, repair, or overhaul of such items.” Also, DFARS 246.504, Certificate of Conformance, is revised to require the concurrence of the head of the design control activity before authorizing a certificate of conformance for aviation or ship critical safety items.
  
  Comments on this interim rule must be submitted no later than March 10, 2008, by any of the means mentioned above, except identify the comments as “DFARS Case 2007-D016.”
  
  
• Closeout of Contract Files: This final rule removes DFARS 204.804, Closeout of Contract Files (including DFARS 204.804-1, Closeout by the Office Administering the Contract, and DFARS 204.804-2, Closeout of the Contracting Office Files If Another Office Administers the Contract), and relocates the text to the PGI. All that remains is a cross-reference to PGI 204.804.
  
  No comments were submitted on the proposed rule, so it is finalized without changes. For more on the proposed rule, see the April 2007 Federal Contracts Perspective article “DOD Undertakes a Little More Spring Cleaning.”
  
• Commercial Item Determinations: This final rule adds DFARS Subpart 212.1, Acquisition of Commercial Items–General, consisting of DFARS 212.102, Applicability, which requires the contracting officer to (1) determine in writing that an acquisition exceeding $1 million being conducted under the procedures of FAR Part 12, Acquisition of Commercial Items, meets the commercial item definition in FAR 2.101, Definitions, and (2) include the written determination in the contract file.
  
  
• Combating Trafficking in Persons: This final rule removes DFARS Subpart 222.17, Combating Trafficking in Persons and the corresponding contract clause at DFARS 252.222-7006, which addressed prohibitions on contractor activities involving trafficking in persons. The DFARS text is no longer necessary because policy on this subject has been added to the FAR (see the September 2007 Federal Contracts Perspective article “FAC 2005-19 Addresses Personal Identity Verification Products, Free Trade Agreements”). Therefore, this final rule removes the DFARS text except for cross-references to PGI 222.1703, Policy, regarding additional information on DOD policy for combating trafficking in persons outside the United States, and to PGI 222.1704, Violations and Remedies, regarding violation reporting procedures.
  
  For more on DFARS implementation of the combating trafficking in persons policy, see the November 2006 Federal Contracts Perspective article “DFARS Amended to Address Foreign Acquisitions.”
  
  
• Deletion of Duplicative Payment Withholding Text: This final rule removes DFARS 232.111, Contract Clauses for Non-Commercial Purchases, and DFARS 252.232-7006, Alternate A, because similar policy was added to FAR 32.111 and FAR 52.232-7, Payments Under Time-and-Materials and Labor Hour Contracts, by Federal Acquisition Circular (FAC) 2005-05 (see the August 2005 Federal Contracts Perspective article “FAC 2005-05 Clarifies Justifications for Limiting Schedule Orders, 5% Withholding on T&M Contracts”), so the DFARS text is no longer necessary.
  
  DFARS 232.111 and DFARS 252.232-7006 provided that, under time-and-materials and labor-contracts, there normally should be no need to withhold payment for a contractor with a record of timely submittal of a release discharging the government from all liabilities, obligations, and claims under the contract.
  
  
• Research and Development Contract Type Determination: This interim rule amends DFARS Part 234, Major Systems Acquisition, and DFARS Part 235, Research and Development Contracting, to implement Section 818 of the National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364), which requires DOD to modify regulations regarding the determination of contract type for major development programs to address assessment of program risk.
  
  This rule amends DFARS 234.004, Acquisition Strategy, to require the Milestone Decision Authority for a major defense acquisition program to select the contract type for a development program that is consistent with the level of program risk. The Milestone Decision Authority may select a fixed-price type contract, including a fixed-price incentive contract; or a cost-type contract provided certain written determination requirements are satisfied.
  
  In addition, DFARS 235.006, Contracting Methods and Contract Type, is amended to require that research and development for major defense programs are to follow the procedures in DFARS 234.004.
  
  Comments on this interim rule must be submitted no later than March 24, 2008, by any of the means mentioned above, except identify the comments as “DFARS Case 2006-D053,” and address mail to the attention of Mark Gomersall.
  
  
• Law of War Program: This proposed rule would amend DFARS 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, to address requirements for DOD contractors to institute effective programs to prevent violations of law of war by contractor personnel authorized to accompany U.S. Armed Forces deployed outside the U.S.
  
  DFARS 252.225-7040 would be amended as follows:
  
  
  • The following definition of “law of war” would be added to paragraph (a): “That part of international law that regulates the conduct of armed hostilities. The law of war encompasses all international law for the conduct of hostilities binding on the United States or its individual citizens, including treaties and international agreements to which the United States is a party, and applicable customary international law.”
    
    
  • Paragraph (d) would be revised to require that deploying contractor personnel receive appropriate law of war training.
    
    
  • Subparagraph (h)(3) would be added to require that contractor personnel report any violations of the law of war to the appropriate authorities.
  
  Comments on this proposed rule must be submitted no later than March 10, 2008, by any of the means mentioned above, except identify the comments as “DFARS Case 2006-D035,” and address mail to the attention of Amy Williams.

Three Nonmanufacturer Rule Waivers Granted

The Small Business Administration (SBA) is waiving the nonmanufacturer rule for three product classes:

• All other miscellaneous electrical equipment and component manufacturing (fluorescent lamps, incandescent lamps, etc.) under North American Industry Classification System (NAICS) code 335999, product number 6240. SBA published a notice of intent to waive the nonmanufacturer rule for these products, but no comments were received in response to the notice, so SBA is granting the waiver. For more on the notice of intent to waive the nonmanufacturer rule, see the January 2008 Federal Contracts Perspective article “Nonmanufacturer Rule Waivers Granted, Proposed.”
  
  
• All other miscellaneous electrical equipment and component manufacturing (electric lamp starters and lamp holders, etc.) under NAICS code 335999, product number 6250. SBA published a notice of intent to waive the nonmanufacturer rule for these products, but no comments were received in response to the notice, so SBA is granting the waiver. For more on the notice of intent to waive the nonmanufacturer rule, see the January 2008 Federal Contracts Perspective article “Nonmanufacturer Rule Waivers Granted, Proposed.”
  
  
• Irradiation apparatus manufacturing, computerized axial tomography (CT/CAT) scanners manufacturing; fluoroscopes manufacturing; fluoroscopic X-ray apparatus and tubes manufacturing; generators, X-ray, manufacturing; irradiation equipment manufacturing; X-ray generators manufacturing; and X-ray irradiation equipment manufacturing under NAICS code 334517, product number 6525. SBA published a notice of intent to waive the nonmanufacturer rule for these products, and two comments were received in response. However, neither of the commentors were small businesses, so SBA is granting the waiver. For more on the notice of intent to waive the nonmanufacturer rule, see the see the January 2008 Federal Contracts Perspective article “Nonmanufacturer Rule Waivers Granted, Proposed.”

EDITOR'S NOTE: Public Law 100-656, enacted November 15, 1988, requires those with federal contracts that are set-aside for small businesses or awarded through the 8(a) program to provide the product of a small business manufacturer or processor if the recipient is not the actual manufacturer or processor (see paragraph (f) of FAR 19.102, Size Standards). This is called the "nonmanufacturer rule." However, SBA may waive this requirement if there are no small business manufacturers or processors.

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

EPAAR Amended to Address Award Term Policies

The Environmental Protection Agency (EPA) has amended the EPA Acquisition Regulation (EPAAR) Subpart 1516.4, Incentive Contracts, to add policy, procedures, and contract clauses for the use of award term incentives. The following are the significant changes made by this final rule:

• EPAAR 1516.401-70, Award Term Incentives, is added to provide an explanation on use of award term incentives (“award term incentives enable a contractor to become eligible for additional periods of performance under a current contract by achieving prescribed performance measures under that contract”). Because some contractors might believe that their achievement of prescribed performance measures conferred an absolute entitlement to an additional award term (or multiple award terms), notwithstanding the absence of need or funds for such award term, EPA makes clear that “the government has the unilateral right not to grant or to cancel award term incentive periods and the associated award term incentive plans,” and that any award terms are contingent upon a need for the services and the availability of funds.
  
  
• EPAAR 1552.216-77, Award Term Incentive, describes the overall framework of the award term incentive contract, including the incentive period(s) of performance for which a contractor may become eligible by achieving prescribed performance measures (such as “acceptable quality levels” (AQL)). The clause states that the government’s failure to award a term extension “shall not be considered either a termination for convenience or termination for default, and shall not entitle the contractor to any termination settlement or any other compensation...”
  
  
• EPAAR 1552.216-78, Award Term Incentive Plan, prescribes the performance criteria and evaluation periods which will serve as the basis for the government’s decision on whether the contractor is eligible for an award term incentive. An alternate to this clause is provided for contracting officers who decide to use ratings entered into the National Institutes of Health (NIH) Contractor Performance System (CPS) for the contract as the basis for determining a contractor's eligibility for an award term incentive.
  
  
• EPAAR 1552.216-79, Award Term Availability of Funds, informs contractors that funds are not presently available for any award term, and that the government’s obligation under any award term is contingent upon the availability of appropriated funds from which payment can be made.

One comment was submitted on the proposed rule. The commentor pointed out that the proposed change to EPAAR 1533.203, Applicability, stated that EPA’s forum for contract appeals had been transferred from the Interior Board of Contract Appeals to the General Services Board of Contract Appeals (GSBCA), but that the GSBCA had been terminated in January 2007 and its cases transferred to the new Civilian Board of Contract Appeals (CBCA) (see the December 2006 Federal Contracts Perspective article “January Set for New Civilian Board of Contract Appeals”). Therefore, EPAAR 1533.203 is revised to reflect the CBCA as the new forum. For more on the proposed rule, see the November 2007 Federal Contracts Perspective article “EPA Proposes Award Term Policies and Procedures.”

VAAR Rewritten to Conform to Plain English Principles

The Department of Veterans Affairs (VA) has rewritten the VA Acquisition Regulation (VAAR) to conform to plain language principles, to update delegations of authority, and to remove non-regulatory material. Also, the rewritten VAAR has changes in format, arrangement, and numbering to make the VAAR parallel to the FAR, and provisions that simply restate FAR provisions have been removed.

The following are some of the more significant changes incorporated into the VAAR rewrite:

• The following procedures are added: (1) for providing notice and a hearing to resolve issues regarding possible violations of the Gratuities clause (VAAR 803.204, Treatment of Violations); (2) for establishing qualified products lists (VAAR 809.204, Responsibilities for Establishment of a Qualification Requirement); (3) for suspending or debarring a contractor (VAAR Subpart 809.4, Debarment, Suspension, and Ineligibility); (4) for expediting payments to small businesses (VAAR 819.202-1, Encouraging Small Business Participation in Acquisitions); and (5) for reducing or suspending payments upon a finding of contract fraud (VAAR 832.006, Reduction or Suspension of Contract Payments Upon Finding of Fraud).
  
  
• VAAR 852.209-70, Organizational Conflicts of Interest, has been expanded to cover a broader range of services that may be subject to organizational conflicts of interest.
  
  
• The following are deleted: (1) requirements for setting aside construction and architect-engineer solicitations for small businesses because they conflict with current statute; (2) a requirement to conduct an audit of Section 8(a) price proposals that is contrary to current FAR Requirements; and (3) a VAAR provision that requested data from offerors on veteran-owned small businesses that has been replaced by a FAR provision.

Eight respondents submitted comments on the proposed rule, and numerous changes were made to the final VAAR version as a result. For more on the proposed rule, see the February 2006 Federal Contracts Perspective article “Rewrite of the VAAR Proposed.”

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