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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: January 21, 2000

FROM: Barry McVay, CPCM

SUBJECT: Housing and Urban Development Acquisition Regulation (HUDAR); Miscellaneous Revisions

SOURCE: Federal Register, January 21, 2000, Vol. 65, No. 14, pages 3571 and 3575

AGENCIES: Department of Housing and Urban Development (HUD)

ACTION: Final Rule

SYNOPSIS: HUD is finalizing, with changes, the August 23, 1999, interim rule that revised the HUDAR to implement changes made to the Federal Acquisition Regulation (FAR) since the HUDAR's last issuance in 1996, and to implement requirements of the Clinger-Cohen Act of 1996 (Public Law 104-106). Also, HUD is adopting as final, without changes, the proposed rule dated August 23, 1999, to make miscellaneous revisions to the HUDAR.

EDITOR'S NOTE: The HUDAR is Chapter 24 of Title 48 of the Code of Federal Regulations.

EFFECTIVE DATE: February 22, 2000, except for the addition of a part heading and authority citation for HUDAR Part 2439, which is effective September 22, 1999.

FOR FURTHER INFORMATION CONTACT: Frederick Graves, Policy and Field Operations Division, Office of Procurement and Contracts (Seattle Outstation), U.S. Department of Housing and Urban Development, Seattle Federal Office Building, 909 1st Avenue, Seattle, WA 98104-1000; 206-220-5122, extension 3450, fax: 206-220-5406.

SUPPLEMENTAL INFORMATION: On August 23, 1999, HUD published an interim rule which amended the HUDAR to bring it up-to-date and to conform with the many changes made to the FAR (the previous version of the HUDAR was published on May 1, 1996), and a proposed rule to make other miscellaneous changes to the HUDAR. No comments were received on either the interim rule or the proposed rule. Therefore, the interim rule is adopted as final except for several technical corrections, and the proposed rule is adopted as final without change.

The following are the changes between the interim rule and the final rule:

• Paragraph (d)(3) of HUDAR 2415.304, Evaluation Factors, is deleted since it is a duplicate of paragraph (a)(3) of HUDAR 2415.303, Responsibilities.
  
  
• HUDAR 2415.613-72, Selection and Final Negotiation, is removed because HUDAR 2415.613-70 and HUDAR 2415.613-71, which dealt with HUD's alternative selection process, were removed in the interim rule, and HUDAR 2415.613-72 should have been removed as well.
  
  
• HUDAR Subpart 2415.10, Preaward, Award, and Postaward Notifications, Protests, and Mistakes, is redesignated as Subpart 2415.5. The redesignation was erroneously omitted from the interim rule.
  
  
• HUDAR Section 2426.703, Solicitation Provision, is redesignated as HUDAR 2426.7003. HUDAR 2426.701 and HUDAR 2426.702 were redesignated as HUDAR 2426.7001 and HUDAR 2426.7002 in the interim rule, and HUDAR 2426.703 should have been redesignated, too.
  
  
• The following are added to designate HUD officials to act on behalf of the agency head for the purposes of various sections of the FAR. These designations implement the relevant sections of the FAR cited in the new sections and were erroneously omitted from the interim rule: HUDAR Subpart 2432.1, Non-Commercial Item Purchase Financing (consisting of HUDAR 2432.114, Unusual Contract Financing); HUDAR Subpart 2432.2, Commercial Item Purchase Financing (consisting of HUDAR 2432.201, Statutory Authority); HUDAR 2432.407, Interest; HUDAR Subpart 2432.7, Contract Funding (consisting of HUDAR 2432.703-3, Contracts Crossing Fiscal Years); and HUDAR 2432.903, Policy.
  
  
• HUDAR Subpart 2451.3 was redesignated as HUDAR Subpart 2451.70 in the interim rule. The title should have been revised. The new title, Contractor Use of Government Discount Travel Rates, is included in this final rule.
  
  
• In HUDAR 2452.215-70, Proposal Content, the reference to HUDAR 2415.407(a) is corrected to read HUDAR 2415.209(a) because HUDAR 2415.407 was redesignated as HUDAR 2415.209 in the interim rule. Also, the date of the basic provision is changed to "OCT 1999."
  
  
• The instructions in the final rule state "2452.226-70 [Certification of Status as a Minority Business Enterprise] is revised to correct the HUDAR citation in the first sentence from 2426.222-703 to 2426.222-7003. This correction was erroneously omitted from the interim rule." However, there is no HUDAR 2426.222-703, so this correction is itself erroneous. Undoubtedly, HUD means HUDAR 2426.703, which is redesignated by this final rule as HUDAR 2426.7003 (see above).

The following are the other significant changes being made to the HUDAR by the finalizing of the proposed rule:

• HUDAR 2442.1106, Reporting Requirements, is revised to allow contractors with contracts for professional or technical services of a developmental or advisory nature exceeding $500,000 to use "systematic project planning and progress reporting" instead of HUD Form 441.1, Project Management System Baseline Plan, and HUD Form 661.1, Project Management System Progress Report (HUDAR 2453.242-70 and HUDAR 2453.242-71, which address these two forms, are removed). This change is implemented by revising HUDAR 2452.242-71, Project Management System. New paragraph (c) of HUDAR 2452.242-71 states that the contracting officer is to specify "the formats, forms and/or software to be used for the project management system under this contract" by inserting the following language, as appropriate: "as prescribed in the schedule"; "a format, forms and/or software designated by the GTR [government technical representative]"; or, "the contractor's own format, forms and/or software, subject to the approval of the GTR."
  
  
• HUDAR 2452.203-71, Certification Regarding Federal Employment, is removed.
  
  
• HUDAR 2452.209-70, Organizational Conflicts of Interest Notification, is replaced with a new version titled "Potential Conflicts of Interest," which reflects the guidance in FAR Subpart 9.5, Organizational and Consultant Conflicts of Interest, in that the burden for identifying and describing organizational conflicts of interest is placed on the contracting officer, not the offeror.
  
  
• HUDAR 2452.209-71, Organizational Conflicts of Interest Certification, is replaced by a new clause titled "Limitation on Future Contracts," which requires the contracting officer to identify the organizational conflicts of interest and the restrictions imposed on the contractor to remedy the conflict, and prohibits the contractor from performing as a prime contractor or first-tier subcontractor any future contracts that use specifications or statements of work developed by the contractor under the contract.
  
  
• HUDAR 2452.239-71, Information Technology Virus Security, is added for inclusion in solicitations and contracts under which the contractor will provide information technology hardware, software or data products. The clause requires the contractor to provide a statement with its deliveries that it has scanned the products for known viruses, and it gives the contracting officer the right to "assess monetary damages against the contractor sufficient to compensate HUD for actual or estimated costs resulting from computer virus damage or malicious destruction of computer information arising from the contractor's failure to take adequate precautions to preclude delivery of virus-containing products in the delivery of hardware, software, or data on diskettes under this contract."

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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