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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: December 4, 2003

SUBJECT: Department of Homeland Security Acquisition Regulation (HSAR) Issued

SOURCE: Federal Register, December 4, 2003, Vol. 68, No. 233 page 67867

AGENCIES: Department of Homeland Security (DHS)

ACTION: Interim Rule

SYNOPSIS: The DHS is issuing the HSAR to establish a uniform departmentwide acquisition policy and regulation that supplements the Federal Acquisition Regulation (FAR).

EDITOR'S NOTE: The HSAR is Chapter 30 of Title 48 of the Code of Federal Regulations. It is available on the Internet at http://www.dhs.gov/dhspublic/.

DATES: The HSAR is effective December 4, 2003. Comments on the HSAR must be submitted on or before January 5, 2004.

ADDRESSES: Submit comments by one of the following means: (1) electronically to acquisition@dhs.gov; or (2) by mail to the Department of Homeland Security, Office of the Chief Procurement Officer, Acquisition Policy and Oversight, ATTN: Kathy Strouss, 245 Murray Drive, Bldg. 410 (RDS), Washington, DC 20528.

FOR FURTHER INFORMATION CONTACT: Kathy Strouss, Department of Homeland Security, Office of the Chief Procurement Officer, Acquisition Policy, 202-205-0141.

SUPPLEMENTAL INFORMATION: DHS consists of agencies and other operating elements that pre-existed the formation of DHS. Prior to DHS's formation, those agencies and elements used supplemental acquisition regulations as a foundation for the conduct of their procurement and acquisition functions. For example, the Coast Guard utilized the Department of Transportation (DOT) Acquisition Regulations (DTAR). The Coast Guard can no longer rely on the DTAR since it is no longer are a part of DOT. Similarly, organizations that used the Department of Treasury's or Department of Justice's acquisition supplements can no longer rely on those regulations. Therefore, DHS is issuing the HSAR to provide uniform procedures that will ensure seamless continued acquisition and contracting operations of the previous agencies and organizations that now comprise DHS. (EDITOR'S NOTE: The Transportation Security Administration (TSA) is exempt from the HSAR by Section 101 of the Aviation and Transportation Security Act of 2001 (Public Law 107-71).)

The HSAR will be amended by Homeland Security Acquisition Circulars (HSAC). HSAR Notices will be issued when interim guidance is necessary (1) to promulgate, as rapidly as possible, selected material in a general or narrative manner, in advance of a HSAC issuance; (2) to disseminate other acquisition related information; or (3) to issue guidance that is expected to be effective for a period of one year or less. Each HSAR Notice will have a specific expiration date.

Internal agency guidance and procedures are contained in the Department of Homeland Security Acquisition Manual (HSAM) (http://www.dhs.gov/interweb/assetlibrary/DHS_HSAM_12-19-03.pdf).

While most of the HSAR consists of standard provisions common to most agencies' FAR supplements, the following are some of the noteworthy features of the HSAR:

• HSAR Subpart 3005.90, Publicizing Contract Actions for Personal Services Contracting, contains a United States Coast Guard (USCG) statutory exemption from publicizing contract actions for personal medical services contracting.
  
  
• HSAR Subpart Subpart 3006.90, Competition Requirements for Personal Services Contracting, exempts the USCG from competition requirements for personal medical services contracting.
  
  
• HSAR Part 3009, Contractor Qualifications, contains HSAR 3009.104-71, General, which prohibits the DHS from entering into "any contract with a foreign incorporated entity, which is treated as an inverted domestic corporation" (that is, a domestic firm that moves off-shore to become a foreign concern merely to avoid taxes). However, the DHS Secretary may waive this prohibition if "in the interest of homeland security, or to prevent the loss of any jobs in the United States or prevent the government from incurring any additional costs that otherwise would not occur."
  
  
• HSAR Subpart 3011.6, Priorities and Allocations, authorizes the USCG (in support of certified national defense related programs) and the Federal Emergency Management Agency (FEMA) (in support of emergency preparedness activities) to assign priority ratings on contracts and orders placed with contractors to acquire products, materials, and services under the Defense Priorities and Allocations System (DPAS) regulations. (EDITOR'S NOTE: The DPAS are at http://www.bxa.doc.gov/DefenseIndustrialBasePrograms/OSIES/DPAS/pdfdocs/dpasreg.pdf.)
  
  
• HSAR Subpart 3013.70, Special Streamlined Acquisition Authority, authorizes the use of the "special streamlined acquisition authority set forth in Public Law 107-296 [Homeland Security Act], Section 833, with respect to any procurement made during the period beginning on November 25, 2002, and ending September 30, 2007, where if the secretary determines in writing the mission of the Department...would be seriously impaired without the use of such authorities."
  
  This "special streamlined acquisition authority" permits the secretary to deem any item or service to be a commercial item for the purpose of federal procurement laws." Under such authority, the micro-purchase threshold is $7,500; the simplified acquisition threshold is $200,000 for contracts that are to be awarded and performed, or purchases to be made, within the United States, and $300,000 for contracts that are to be awarded and performed, or purchases to be made, outside of the United States; and the limitation on the use of FAR Subpart 13.5, Test Program for Certain Commercial Items, is $7,500,000.
  
  
• HSAR Part 3017, Special Contracting Methods, includes USCG-specific guidance and clauses for fixed price contracts for vessel repair, alteration or conversion.
  
  
• HSAR Part 3019, Small Business Programs, prescribes two clauses for DHS' Mentor-Protege Program, which assists qualified small businesses in receiving developmental assistance from DHS prime contractors in order to increase the base of small businesses eligible to perform DHS contracts and subcontracts: HSAR 3052.219-71, Mentor-Protege Program, and HSAR 3052.219-72, Evaluation of Prime Contractor Participation in the Mentor-Protege Program.
  
  
• HSAR Part 3022, Application of Labor Laws to Government Acquisitions, contains HSAR 3022.101-70, Admittance of Union Representatives to DHS Installations, which specifies DHS' policy on the matter, and prescribes two clauses when applicable: HSAR 3052.222-70, Strikes or Picketing Affecting Timely Completion of the Contract Work, and HSAR 3052.222-71, Strikes or Picketing Affecting Access to a DHS Facility.
  
  In addition, HSAR Subpart 3022.90, Local Hire (USCG), specifies that HSAR 3052.222-90, Local Hire Provision, be included in all USCG contracts for construction or services. It requires that local residents possessing the required skills be employed when the construction or services are to be performed in whole or in part in a state that has an unemployment rate in excess of the national average rate of unemployment as determined by the Secretary of Labor.
  
  
• HSAR Part 3032, Contract Financing, provides guidance on contract financing for simplified acquisitions under the procedures in FAR Part 13, Simplified Acquisition Procedures (which would be used primarily in the acquisitions up to $7,500,000 made under FAR Subpart 13.5 -- see HSAR Subpart 3013.70 above).
  
  
• HSAR Subpart 3033.2, Disputes and Appeals, designates the Department of Transportation Board of Contract Appeals as DHS' board of contract appeals.
  
  
• HSAR 3037.104, Personal Services Contracts, states that Section 832 of the Homeland Security Act (Public Law 107-296) provides DHS with the authority "to acquire the personal services of experts and consultants...without regard to the pay limitation of 5 U.S.C. 3109 when the services are necessary due to an urgent homeland security need."
  
  HSAR 3037.104-90, Personal Services Contracts (USCG), states that the USCG may enter into medical personal services contracts, and HSAR 3037.104-91, Personal Services Contracts with Individuals Under the Authority of 10 U.S.C. 1091 (USCG), provides procedures for selecting individuals for these medical personal services contracts.
  
  
• HSAR Part 3052, Solicitation Provisions and Contract Clauses, provides the text of the provisions and clauses required by the HSAR, and it includes the text for the USCG specific provisions and clauses.
  
  
• HSAR Part 3053, Forms, includes five forms that require completion by contractors or contract employees: DHS Form 0070-01, Cumulative Claim and Reconciliation Statement; DHS Form 0070-02, Contractor's Assignment of Refunds, Rebates, Credits and Other Amounts; DHS Form 0070-03, Contractor Release; DHS Form 0070-04, Employee's Claim for Wage Restitution; and DHS Form 0070-05, Contractor's Report of Government Property. (EDITOR'S NOTE: DHS says, "The forms will be available and linked to the DHS website [http://www.dhs.gov/dhspublic/] after they are approved by OMB, and upon publication of the final rule."

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

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