Panoptic Enterprises’


Federal Acquisition Developments, Guidance, and Opinions

June 2012
Vol. XIII, No. 6


FAC 2005-59 Extends Rules on Inverted Domestic Corporations, Revises CAS Threshold
FAR Rule Would Address Nondisplacement of Workers
SBA Proposes Changes on Use of MACs
Jordan Confirmed as New OFPP Administrator
OFPP Continues Acquisition “Myth-Busting”

FAC 2005-59 Extends Rules on Inverted Domestic Corporations,
Revises CAS Threshold

Federal Acquisition Circular (FAC) 2005-59 contains three rules that amend the Federal Acquisition Regulation (FAR) to revise the threshold for the application of cost accounting standards, apply the rules that prohibit contracting with inverted domestic corporations to Fiscal Year (FY) 2012 funds, and implement the United States-Colombia Trade Promotion Agreement.

FAR Rule Would Address Nondisplacement of Workers

A proposed rule has been issued that would amend the FAR to implement Executive Order (EO) 13495, Nondisplacement of Qualified Workers Under Service Contracts, and the Department of Labor’s (DOL's) implementing regulations that require service contractors and their subcontractors under successor contracts to offer employees of the predecessor contractor and its subcontractors a right of first refusal of employment for positions for which they are qualified (see the March 2009 Federal Contracts Perspective article “Obama Issues Four Labor-Related Executive Orders” and the September 2011 Federal Contracts Perspective article “Displaced Service Workers Get Right of First Refusal”).

This proposed rule would add FAR Subpart 22.12, Nondisplacement of Qualified Workers Under Service Contracts, and new clause FAR 52.222-XX, Nondisplacement of Qualified Workers, to express the policy in EO 13495 that service contractors and their subcontractors under successor contracts must offer employees of the predecessor contractor and its subcontractors a right of first refusal of employment for positions for which they are qualified. The text of FAR 52.222-XX is included in Section 5 of EO 13495, and it is to be included “in solicitations for and service contracts that succeed contracts for performance of the same or similar work at the same location.”

Section 3 of the EO and proposed FAR 22.1203-2, Exemptions, exclude the following service contracts and subcontracts from coverage:

In addition, Section 4 of the EO and proposed FAR 22.1203-3, Waiver, provide the head of a contracting department or agency with the authority to waive the application of the EO to a contract, subcontract, or purchase order upon a determination that its application would impair the ability of the government to procure services on an economical and efficient basis or would not serve the purposes of the EO. When waiving any or all of the provisions of the EO, the agency shall notify the DOL of its waiver decision and provide the DOL a copy of its written analysis no later than five business days after the solicitation issuance date.

Comments on this proposed rule must be submitted no later than July 2, 2012, identified as “FAR Case 2011-028,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-501-4067; or (3) mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE, 7th Floor, Washington, DC 20417.

SBA Proposes Changes on Use of MACs

The Small Business Administration (SBA) is proposing to amend its regulations in Title 13 of the Code of Federal Regulations (CFR), Part 125, Government Contracting Programs (13 CFR Part 125), to increase consideration of small businesses in the establishment and use of multiple award contracts (MACs). These changes would implement Section 1331, Reservation of Prime Contract Awards for Small Businesses, of the Small Business Jobs Act of 2010 (Public Law 111-240) (for more on the provisions of Public Law 111-240, see the October 2010 Federal Contracts Perspective article “Parity Among Small Business Programs Mandated by Statute”). In addition, SBA is proposing to amend 13 CFR Part 121, Small Business Size Regulations, to explain how small business size standards are assigned to MACs and orders issued against them.

Federal agencies increasingly use MACs, including Federal Supply Schedule (FSS) contracts (see FAR Subpart 8.4, Federal Supply Schedules) and indefinite-delivery indefinite-quantity (IDIQ) contracts (see FAR Subpart 16.5, Indefinite-Delivery Contracts), to acquire a wide range of products and services. Section 1331 of Public Law 111-240 directed OFPP, SBA, and the General Services Administration (GSA) to issue regulations permitting federal agencies to “(1) set aside part or parts of a multiple award contract for small business concerns...; (2) notwithstanding the fair opportunity requirements...set aside orders placed against multiple award contracts for small business concerns...; and (3) reserve one or more contract awards for small business concerns under full and open multiple award procurements...” OFPP, SBA, and GSA requested that the FAR be amended to provide federal agencies with guidance they can use while SBA completes the drafting and coordination of a proposed rule that will provide more specific guidance, and FAC 2005-54 was issued (see the December 2011 Federal Contracts Perspective article “FAC 2005-54 Permits Small Business Set-Asides For Multiple-Award Contracts”). This proposed rule would provide that more specific guidance.

The following are the primary changes being proposed by SBA:

Comments on this proposed rule must be submitted no later than July 16, 2012, identified as “RIN: 3245-AG20,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail or hand delivery/courier to Dean Koppel, Assistant Director, Office of Policy and Research, Office of Government Contracting, U.S. Small Business Administration, 409 Third Street SW, Washington, DC 20416.

Jordan Confirmed as New OFPP Administrator

Joseph Jordan has been confirmed as the next Office of Federal Procurement Policy (OFPP) administrator. The Senate confirmed Jordan on a voice vote on May 24. He replaces Daniel Gordon, who was OFPP administrator until he resigned to take a position at George Washington University Law School on January 1, 2012.

Jordan joined the Office of Management and Budget (OMB) as an advisor in December 2011 in anticipation of his nomination to the OFPP post. Prior to taking the OMB position, he was an associate administrator of government contracting and business development for the Small Business Administration (SBA). He held that position for three years.

OFPP Continues Acquisition “Myth-Busting”

Lesley Field, OFPP Acting Administrator, has issued a second “Myth-Busting” memorandum to all chief acquisition officers, senior procurement executives, and chief information officers. Last year, OFPP’s first “Myth-Busting” memorandum addressed misconceptions on the part of federal agencies regarding communications with industry during the acquisition process (see the March 2011 Federal Contracts Perspective article “OFPP Addresses Communications With Industry”). This second memorandum addresses misconceptions on the part of some in the vendor community. As in last year’s memorandum, OFPP highlights the misconceptions in the attachment to the memorandum (“Vendor Misconceptions about Communications with the Federal Government”) and, for each one, provides the facts about the federal procurement process, with the goal of improving the productivity of communications. Also, the attachment provides additional information and strategies for both agencies and vendors to promote more effective communication (within applicable ethics rules, procurement integrity requirements, and other applicable statutes and regulations).

OFPP “busts” the following eight additional “myths” in this memorandum:

  1. Misconception – “The best way to present my company’s capabilities is by marketing directly to Contracting Officers and/or signing them up for my mailing list.”

    Fact – Contracting officers and program managers are often inundated with general marketing material that doesn’t reach the right people at the right time. As an alternative, vendors can take advantage of the various outreach sessions that agencies hold for the purpose of connecting contracting officers and program managers with companies whose skills are needed.

  2. Misconception – “It is a good idea to bring only business development and marketing people to meetings with the agency’s technical staff.”

    Fact – In meetings with government technical personnel, it’s far more valuable for you to bring subject matter experts to the meeting rather than focusing on the sales pitch.

  3. Misconception – “Attending industry days and outreach events is not valuable because the agency doesn’t provide new information.”

    Fact – Industry days and outreach events can be a valuable source of information for potential vendors and are increasingly being used to leverage scarce staff resources.

  4. Misconception – “Agencies generally have already determined their requirements and acquisition approach so our impact during the pre-RFP phase is limited.”

    Fact – Early and specific industry input is valuable. Agencies generally spend a great deal of effort collecting and analyzing information about capabilities within the marketplace. The more specific you can be about what works, what doesn’t, and how it can be improved, the better.

  5. Misconception – “If I meet one-on-one with agency personnel, they may share my proprietary data with my competition.”

    Fact – Agency personnel have a responsibility to protect proprietary information from disclosure outside the Government and will not share it with other companies.

  6. Misconception – “Agencies have an obligation not to share information about their contracts, such as prices, with other agencies, similar to the obligation they have not to disclose proprietary information to the public.”

    Fact – There are no general limitations on the disclosure of information regarding existing contracts between agencies within the Government. In fact, agencies are encouraged to share pricing information to ensure that we are getting the best value for our taxpayers.

  7. Misconception – “To develop my new proposal, I don’t really need to tailor my solution to the specific solicitation since the government won’t read my proposal that closely anyway.”

    Fact – Offerors should tailor each proposal to the evaluation criteria, proposal instructions, and specific requirements of the solicitation to which they are responding. Contracting Officers and evaluation team members read proposals closely for compliance with the proposal instructions and must evaluate them against the evaluation factors and the statement of work in the solicitation.

  8. Misconception – “If I lose the competition, I shouldn’t bother to ask for a debriefing. The Contracting Officer won’t share any helpful information with me.”

    Fact – Unsuccessful offerors should ask for a debriefing to understand the award decision and to improve future proposals.

Copyright 2012 by Panoptic Enterprises. All Rights Reserved.

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