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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: June 27, 2001

SUBJECT: Army; Report On Use of Contractor Employees to Provide Services

SOURCE: Army Memorandum dated June 21, 2001

AGENCIES: Department of the Army

ACTION: Notice

SYNOPSIS: The Army is suspending the use of the clause "Reporting of Contract Manpower Data Element" required by Title 32 of the Code of Federal Regulations (CFR), Part 668, Contractor Manhour Reporting Requirement. 32 CFR Part 668 had been added to implement the Fiscal Year 2000 Department of Defense Authorization Act (Public Law 106-65), Section 343, Report on Use of Employees of Non-Federal Entities to Provide Services to Department of Defense. However, Section 343 merely called for contractor reporting of the number of direct labor and indirect labor work year equivalents during Fiscal Year 2000, which ended September 30, 2000.

EDITOR'S NOTE: For more on the addition of 32 CFR Part 668, see the December 26, 2000, FEDERAL CONTRACTS DISPATCH "Army; Report On Use of Contractor Employees to Provide Services."

EFFECTIVE DATE: June 21, 2001.

FOR FURTHER INFORMATION CONTACT: John R. Conklin, SAAL-ZP, 703-628-3947, e-mail: John.Conklin@sarda.army.mil.

SUPPLEMENTAL INFORMATION: Section 343 of Public Law 106-65 required the Secretary of Defense to report to Congress by March 1, 2001, "the use during the previous fiscal year of non-Federal entities to provide services to the Department of Defense." It required the Secretary of Defense to prepare the report "to the extent practicable using information available from existing data collection and reporting systems available to the Department of Defense and the non-Federal entities..." Section 343 required the report to "(1) specify the number of work year equivalents performed by individuals employed by non-federal entities in providing services to the Department, including both direct and indirect labor attributable to the provision of the services; (2) categorize the information by federal supply class or service code; and (3) indicate the appropriation from which the services were funded and the major organizational element of the Department procuring the services."

To implement Section 343, the Army decided that "the only way to collect the required information economically, in a timely way, accurately and credibly, with the least burden on the public and expense to the Government, is to request contemporaneous submission directly from affected contractors." So, on March 15, 2000, the Army published an interim rule establishing 32 CFR Part 668, which required the contractor to identify the number and value of direct, and associated indirect, labor work year equivalents for contracted services in support of the Army. 32 CFR Part 668 was extensively revised and finalized on December 26, 2000. Acquisitions under Federal Acquisition Regulation (FAR) Part 12, Acquisition of Commercial Items, had been exempt by the interim rule, but that exemption was removed by the final rule.

However, Director of Defense Procurement Deidre Lee objected to the continued collection of the data, noting that Section 343 of Public Law 106-65 required reporting for Fiscal Year 2000 only, and because the final rule differed significantly from the interim rule, but the Army did not provide adequate public notice as required under the Paperwork Reduction Act. Therefore, on June 21, 2001, an e-mail was sent to the military services and Defense agencies directing them to immediately suspend use of the clause "Reporting of Contract Manpower Data Element" in new solicitations and contracting actions. Furthermore, contracting officers were directed to either provide written notice to contractors that reporting is no required or to delete the clause from all contracts.

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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