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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: May 16, 2001

SUBJECT: Federal Acquisition Circular (FAC) 97-26, Miscellaneous Amendments

SOURCE: Federal Register, May 16, 2001, Vol. 66, No. 95, page 27405

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Interim Rules

SYNOPSIS: FAC 97-26 is being issued to amend the Federal Acquisition Regulation (FAR) to (1) establish Federal Business Opportunities ("FedBizOpps" -- http://www.FedBizOpps.gov) as the universal electronic public access to governmentwide procurement opportunities (the "governmentwide point of entry" or "GPE"); (2) to implement Executive Order (EO) 13202, Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally Funded Construction Projects; and (3) to implement EO 13204, Revocation of Executive Order on Nondisplacement of Qualified Workers Under Certain Contracts.

EDITOR'S NOTE: For more on the proposed rule to designate FedBizOpps as the GPE, see the August 21, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Regulation (FAR); Electronic Commerce in Federal Procurement."

For more on EO 13202, see the February 22, 2001, FEDERAL CONTRACTS DISPATCH "Executive Order 13202, Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally-Funded Construction Projects." For more on an amendment of EO 13202, see the April 11, 2001, FEDERAL CONTRACTS DISPATCH "Executive Order 13208, Amendment to Executive Order 13202, Preservation of Open Competition and Government Neutrality Towards Government Contractors' Labor Relations on Federal and Federally-Funded Construction Projects."

For more on EO 13204, see the February 22, 2001, FEDERAL CONTRACTS DISPATCH "Executive Order 13204, Revocation of Executive Order on Nondisplacement of Qualified Workers Under Certain Contracts."

DATES: The effective date for these interim rules is May 16, 2001. Interested parties should submit comments on these interim rules on or before July 16, 2001 to be considered in the formulation of a final rule.

ADDRESSES: Submit comments to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405. Submit electronic comments on Item 1 to farcase.1997-304@gsa.gov; on Item 2 to farcase.2001-016@gsa.gov; and on Item 3 to farcase.2001-017@gsa.gov. Cite FAC 97-26, FAR case 1997-304 in all correspondence related to Item 1; cite FAC 97-26, FAR case 2001-016 in all correspondence related to Item 2; and cite FAC 97-26, FAR case 2001-017 in all correspondence related to Item 3.

FOR FURTHER INFORMATION CONTACT: The following analysts:

     Item (1): Victoria Moss, 202-501-4764.

     Item (2): Linda Nelson, 202-501-1900.

     Item (3): Linda Klein, 202-501-3775.

For general information, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, 202-501-4755.

SUPPLEMENTAL INFORMATION: (1) Electronic Commerce in Federal Procurement: The Fiscal Year 1998 National Defense Authorization Act (Public Law 105-85), Section 850, Use of Electronic Commerce in Federal Procurement, eliminated the preference for electronic commerce to be conducted through the Federal Acquisition Computer Network (FACNET). This was implemented in FAC 97-09 on October 30, 1998.

The Fiscal Year 2001 National Defense Authorization Act (Public Law 106-398), Section 810, Procurement Notice of Contracting Opportunities Through Electronic Means, requires that "any notice of agency requirements or agency solicitation for contract opportunities" be provided in a form that allows "convenient and universal user access through a single, government-wide point of entry." A proposed rule to implement this provision by designating FedBizOpps as the GPE was published on August 21, 2000, and 22 comments were received. As a result of the comments, the FedBizOpps is adopted as the GPE as proposed with changes.

EDITOR'S NOTE: The preamble to the interim rule states, "the estimated purchase cost of a personal computer, modem, software, telephone lines, and Internet access is $1,600. The benefit of increased access to federal contracting opportunities should far outweigh these additional costs." Besides, after January 1, 2002, there will be little need for the CBD, which costs $316 a year.


(2) EO 13202: EO 13202 prohibits the government and federally-funded construction projects from including requirements for or against affiliation with a labor organization as a condition for award of any contract or subcontract for construction or construction management services. In other words, this EO prohibits the use of so-called "project labor agreements" on these construction projects.

On October 23, 1992, President George H. W. Bush issued EO 12818 prohibiting the government and federally-funded construction projects from using any contract provisions that required bidders to enter into "project labor agreements" with labor unions. On November 23, 1992, Federal Acquisition Circular (FAC) 90-15 implemented EO 12818 by adding Federal Acquisition Regulation (FAR) Subpart 22.5, Open Bidding on Federal Construction Contracts, and a clause at FAR 52.222-5.

On February 1, 1993, President Clinton issued EO 12836 revoking EO 12818 because he thought "project labor agreements" benefited the government and contractors. On March 2, 1993, FAC 90-17 removed FAR Subpart 22.5 and FAR 52.222-5.

On February 17, 2001, EO 13202 revoked the part of EO 12836 that revoked EO 12818. EO 13202 also revoked President Clinton's June 5, 1997, memorandum which encouraged federal agencies to consider using project labor agreements on construction contracts greater than $5,000,000.

Basically, this interim rule reinstates FAR Subpart 22.15 as new paragraph (d) of FAR 36.202, Specifications. There was one key difference -- EO 12836 forbade the government or federally-funded construction projects from including clauses requiring project labor agreements, but EO 13202 forbids the government or federally-funded construction projects from including clauses requiring or prohibiting project labor agreements. FAR 36.202(d)(2) states that "nothing in this paragraph [(d)] prohibits offerors, contractors, or subcontractors from voluntarily entering into project labor agreements."

Because some interpreted EO 13202 as negating current project labor agreements (such as the project labor agreement on the $14 billion Boston Central Artery/Tunnel project), President Bush issued EO 13208 on April 11, 2001, to permit agency heads to exempt a particular project from any or all of the provisions of EO 13202 if he or she finds that a project labor agreement was in effect on February 17 (the date of EO 13202), and one or more construction contracts subject to the project labor agreement had been issued by February 17. This exemption is reflected in FAR 36.202(d)(3).

FAR 36.202(d)(4) contains the only other exemption: "The head of the agency may exempt a particular project, contract, or subcontract from this policy upon a finding that special circumstances require an exemption in order to avert an imminent threat to public health or safety, or to serve the national security. A finding of 'special circumstances' may not be based on the possibility or presence of a labor dispute concerning the use of contractors or subcontractors who are nonsignatories to, or otherwise do not adhere to, agreements with one or more labor organizations, or concerning employees on the project who are not members of or affiliated with a labor organization."


(3) EO 13204: On October 20, 1994, President Clinton issued EO 12933, directing federal agencies to include in public building maintenance contracts a clause that requires successor contractors to give their predecessors' employees the right of first refusal to employment openings under the new contract. On August 21, 1997, FAC 97-01 added FAR Subpart 22.12, Nondisplacement of Qualified Workers Under Certain Contracts, and FAR clause 52.222-50, Nondisplacement of Qualified Workers. FAR Subpart 22.12 and FAR 52.222-50 applied to contracts over $100,000 for building services such as janitorial, window washing, food services, laundry, protective services, lawn and grounds care, and repair of heating and air conditioning systems.

On February 17, 2001, EO 13204 directed the FAR Council and federal agencies to "promptly move to rescind any orders, rules, regulations, guidelines, or policies implementing or enforcing Executive Order 12933..." To comply with this direction, FAR Subpart 22.12 and FAR 52.222-50 are removed.


FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2001 by Panoptic Enterprises. All Rights Reserved.

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