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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


May 2008
Vol. IX, No. 5

CONTENTS


FAC 2005-25 Requires Tax Delinquency Reporting, Electronic Subcontract Reporting
Doan Resigns as GSA Administrator
DOD Seeks More “Nontraditional Contractors”
EVMS Policy Added to DFARS
FAR Proposals For Progress Payments, Performance
Three Nonmanufacturer Rule Waivers Proposed
Federal Acquisition System Requirements Proposed



FAC 2005-25 Requires Tax Delinquency Reporting,
Mandates Use of Electronic Subcontract Reporting

Federal Acquisition Circular (FAC) 2005-25 has amended the Federal Acquisition Regulation to require that offerors disclose to contracting officers whether they have been notified of delinquent federal taxes exceeding $3,000 within the past three years. Other items addressed in FAC 2005-25 include the requirement to use the Electronic Subcontracting Reporting System (eSRS), rather than the Standard Form (SF) 294, Subcontract Report for Individual Contracts, and Standard Form 295, Summary Subcontract Report; Federal Procurement Data System (FPDS) reporting; revisions to the Defense Priorities and Allocations System (DPAS); use of products containing recovered materials in service and construction contracts; and an increase in the threshold for small businesses to use small claims procedures under the Contract Disputes Act.



Doan Resigns as GSA Administrator

On April 29, Lurita Doan was asked to resign as the administrator of the General Services Administration (GSA), and she did so, ending her 23 month tenure.

Doan’s administration was marked by investigations by the House Committee on Oversight and Government Reform, the GSA Inspector General (IG), and the U.S. Office of Special Counsel. Most of her troubles involved her relations with the GSA IG, starting with her attempt to trim the IG’s budget, then followed by IG investigations into allegations that she attempted to steer a $20,000 contract to a friend, that she violated the Hatch Act by asking political appointees to think of ways to “help our candidates,” and improperly intervened in debarment procedures.

For more on the Doan term, see the February 2007 Federal Contracts Perspective article “House Government Reform Committee to Investigate GSA Administrator’s Alleged Contract-Steering,” and the April 2007 Federal Contracts Perspective article “GSA Administrator Points Finger at IG as Primary Source of Controversy and Woes.”



DOD Seeks More “Nontraditional Contractors”

The Department of Defense (DOD) is seeking public input on expanding pathways for “nontraditional contractor” participation in defense procurements. Currently, the definition in Defense FAR Supplement (DFARS) 212.70, Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority, is: “A business unit that: (1) has entered into an other transaction agreement with DOD; and (2) has not, for a period of at least 1 year prior to the date of the other transaction agreement, entered into or performed on (i) any contract that is subject to full coverage under the cost accounting standards described in FAR Part 30; or (ii) any other contract exceeding $500,000 to carry out prototype projects or to perform basic, applied, or advanced research projects for a federal agency that is subject to the FAR.” However, the application of this definition is limited to follow-on efforts to Other Transactions (OT) for prototype awards. As such, this definition tends to narrow the scope to research and development (R&D) projects that involve experimentation, test, demonstration, and developments related to weapons systems. This definition may not be entirely appropriate with respect to the various types of defense procurements that are possible under existing regulations. Therefore, DOD is seeking industry input with regard to the standards that should be utilized in defining a nontraditional defense contractor and in developing an appropriate definition, particularly the following:

Comments should be submitted on or before June 20, 2008, to Office of the Director, Defense Procurement and Acquisition Policy, ATTN: OUSD (AT&L) DPAP (CPIC), 3060 Defense Pentagon, Washington, DC 20301-3060; or by e-mail to Anthony.Cicala@osd.mil.

In a related note, the expiration date for authority to conduct the pilot program in DFARS Subpart 212.70 has been extended from September 30, 2008, to September 30, 2013. This final rule implements Section 823 of the National Defense Authorization Act for Fiscal Year 2008 (Public Law 110-181).



EVMS Policy Added to DFARS

DOD has added DFARS Subpart 234.2, Earned Value Management System [EVMS], and a related provision and clause, to update requirements for defense contractors to establish and maintain EVMS, and eliminate requirements for defense contractors to submit cost/schedule status reports. The rule supplements the final FAR rule published in FAC 2005-11 (see the August 2006 Federal Contracts Perspective article “New FAR Part Consolidates Emergency Authorities; Earned Value Management Coverage Added”).

This final rule makes the following changes to the DFARS:

Five respondents submitted comments on the proposed rule. In response to the comments, EVM policy is moved from DFARS Part 242, Contract Administration and Audit Services, to DFARS Part 234, Major System Acquisition, to conform to the FAR, and several other editorial changes were made. For more on the proposed rule, see the February 2006 Federal Contracts Perspective article "DOD Finalizes Many Proposed, Interim DFARS Rules."

Besides adding EVMS policy, the following additional changes were made to the DFARS this past month, as well as the following proposed DFARS changes:



FAR Proposals For Progress Payments, Performance

Two proposed FAR rules have been published to address issues during contract performance.



Three Nonmanufacturer Rule Waivers Proposed

The Small Business Administration (SBA) is proposing to waive the nonmanufacturer rule for the following industries: (1) safety zone rubber gloves manufacturing under North American Industry Classification System (NAICS) code 339113, product number 9999; (2) trash bags manufacturing under NAICS code 326111, product number 8105; and (3) paper products manufacturing under NAICS code 322121, product number 8540. SBA is inviting the public to comment on these proposed waivers, or to provide information on potential small business sources for these products by April 23, 2008, to Pamela M. McClam, Program Analyst, Small Business Administration, Office of Government Contracting, 409 3rd Street, SW, Suite 8800, Washington, DC 20416.



Federal Acquisition System Requirements Proposed

The Office of Governmentwide Policy has prepared, and is inviting comments on, a proposed “Federal Acquisition System Requirements,” which gives functional, process, technical, and data standards requirements for software developers of government acquisition and contract writing systems. The document is located at http://www.acquisition.gov.

The document specifies the functional and technical requirements that acquisition systems must satisfy for federal agency use. The document was developed at the request of the Chief Acquisition Officers Council (CAOC) and Chief Financial Officers Council (CFOC), demonstrating a commitment to starting the process of integrating the acquisition and finance functions more effectively. These requirements were drafted by the Acquisition Requirements Team (ART), consisting of representatives from both communities. The ART members recognize that agencies face major challenges in streamlining and automating procurement processes. Having access to better acquisition software is a first step toward this end. A key prerequisite to developing better software is to clearly define the requirements that the software product must meet.

Office of Management and Budget (OMB) Circular A-130, Management of Federal Information Resources, requires agencies to use commercially available off-the-shelf (COTS) software to reduce costs, improve the efficiency and effectiveness of system improvement projects, and reduce the risks inherent in developing and implementing a new system. To support this OMB mandate, vendors will be required to offer acquisition system products utilizing COTS software to the greatest extent practicable.

The document provides a framework for connecting program planning, financial, and asset management processes with agencies’ acquisition systems to deliver fully integrated acquisition support. Detailed acquisition system requirements are presented within the functional and technical requirements sections. They incorporate the latest changes in laws and regulations governing acquisition systems as well as required system interfaces such as the Federal Procurement Data System (FPDS) and Central Contractor Registration (CCR). When finalized, these requirements are expected to become the standard for qualifying COTS acquisition systems for federal agency acquisition.

The requirements in the document do not constitute a complete system specification. Requirements are deliberately stated in functional terms to give software developers maximum flexibility in engineering technical solutions. Individual agencies will also have, in many cases, additional mandatory requirements necessary to support their specific business processes.

Comments on the proposed document must be submitted no later than June 27, 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 (VIR), 1800 F Street, NW, Room 4035, ATTN: Diedra Wingate, Washington, DC 20405. Identify comments as “ME-2008-N01.”



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