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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


September 2019
Vol. XX, No. 9
[pdf version]

CONTENTS


FAC 2019-05 Prohibits Acquisition of Chinese Telecommunications and Surveillance Equipment
FAC 2019-04 Provides Info on Task Order Ombudsmen
Two More FAR Changes Proposed
DOD Resumes DFARS Clean-Up
OFCCP Clarifies Religious Exemption
FY 2020 Per Diem Rates Released
VA Continues Updating the VAAR
Wooten Confirmed as OFPP Administrator



FAC 2019-05 Prohibits Acquisition of Chinese
Telecommunications and Surveillance Equipment

In response to Congressional concern about making federal databases vulnerable to access by the Chinese government through Chinese-produced video surveillance and telecommunications equipment, Federal Acquisition Circular (FAC) 2019-05 implements the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Public Law 115-232), Section 889, Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment, with the addition of Federal Acquisition Regulation (FAR) subpart 4.21, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment.

Section 889 prohibits agencies from procuring or obtaining, or extending or renewing a contract to procure or obtain, any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as a critical technology as part of any system, on or after August 13, 2019 (one year after the enactment of the NDAA for FY 2019).

Section 889 defines “covered telecommunications equipment or services” as any of the following: “(A) telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities); (B) for the purpose of public safety, security of government facilities, physical security surveillance of critical infrastructure, and other national security purposes, video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities); (C) telecommunications or video surveillance services provided by such entities or using such equipment; [and] (D) telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country.” In addition, Section 889 defines “covered foreign country” as “the People’s Republic of China.”

To implement Section 889, this interim rule revises the title of FAR part 4 from “Administrative Matters” to “Administrative and Information Matters,” and adds FAR subpart 4.21, which consists of:

Comments on this interim rule must be submitted no later than October 15, 2019, identified as “FAR Case 2018-017,” by either of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; or (2) mail: General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW, 2nd Floor, Washington, DC 20405.



In response to FAC 2019-05, the Department of Defense (DOD) issued a memorandum outlining the DOD-specific procedures for DOD contracting officers to comply with FAR subpart 4.21. These implementation procedures apply to contracts, task orders, and delivery orders, including basic ordering agreements (BOAs), orders against BOAs, blanket purchase agreements (BPAs), and calls against BPAs.

Also, the General Service Administration (GSA) has issued a FAR and GSA Acquisition Regulation (GSAR) deviation to limit the representation requirements in the new FAR 52.204-24 to the contract level for low and medium risk IDIQ contract vehicles instead of at the IDIQ contract level and order-level. In addition, the deviation adds GSAR 552.204-70, Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment, which requires that the representation in FAR 52.204-24 be provided as part of the proposal and resubmitted on an annual basis from the date of award.



FAC 2019-04 Provides Info on Task Order Ombudsmen

FAC 2019-04 finalizes, with editorial changes, the rule that proposed to add FAR 52.216-32, Task-Order and Delivery-Order Ombudsman, to standardize the identification of the task-order and delivery-order ombudsman as required by paragraph (a)(4)(v) of FAR 16.504, Indefinite-Quantity Contracts.

Paragraph (f) of Title 10 of the U.S. Code, Section 2304c (10 USC 2304c), Task and Delivery Order Contracts: Orders, and paragraph (g) of 41 USC 4106, Orders, require agencies to appoint or designate a task- and delivery-order ombudsman who is responsible for reviewing complaints from offerors and contractors, and ensure that all offerors are afforded a fair opportunity to be considered for the award of an order. However, neither paragraph explains how agencies are to make offerors aware of how to contact this official.

To implement the statutory requirement in 10 USC 2304c and 41 USC 4106, FAR 16.504(a)(4)(v) specifies that “a solicitation and contract for an indefinite-quantity must...include the name, address, telephone number, facsimile number, and e-mail address of the agency task and delivery order ombudsman…if multiple awards may be made...”

In response to the requirement in FAR 16.504(a)(4)(v), several agencies created agency-level contract clauses that provide this information to contractors. Others did not, leaving it to their contracting officers to provide this information as they saw fit.

To rectify this situation, a standardized clause was proposed: FAR 52.216-32 which would explain the purpose of the ombudsman, the ombudsman’s duties, and a blank line for the “contracting officer to insert name, address, telephone number, and email address for the agency ombudsman or provide the URL address where this information may be found.”

Three respondents submitted comments on the proposed rule, but none of the suggested changes were adopted. However, several edits were made to the final rule for accuracy and clarification.

For more on the proposed rule, see the December 2018 Federal Contracts Perspective article “Task/Delivery Order Ombudsman Identification Proposed.”



Two More FAR Changes Proposed

Besides FAC 2019-04 and FAC 2019-05 (see the two previous articles), two additional changes to the FAR have been proposed:



DOD Resumes DFARS Clean-Up

After a couple of months of relative quiet, the Department of Defense (DOD) has resumed its scrubbing of the Defense FAR Supplement (DFARS) to comply with provisions of various National Defense Authorization Acts (NDAA), and to bring to the attention of the acquisition workforce miscellaneous changes and clarifications. DOD has done this with the issuance of four final rules, two proposed rules, and two class deviations.



OFCCP Clarifies Religious Exemption

The Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) is proposing to amend its regulations to clarify the scope and application of the religious exemption in Executive Order 11246, Equal Employment Opportunity, as amended.

On July 2, 1964, President Lyndon B. Johnson signed the Civil Rights Act of 1964 (Public Law 88-352). Title VII of the statute, “Equal Employment Opportunity,” makes it an unlawful employment practice for an employer to discriminate because of an individual’s “religion, sex, or national origin” (see Section 703 of the statute). Title VII also provides an accommodation for religious employers and religious educational institutions: “This title shall not apply...to a religious corporation, association, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, or society of its religious activities...” (see Section 702); “Notwithstanding any other provision of this title...it shall not be an unlawful employment practice for a school, college, university, or other educational institution or institution of learning to hire and employ employees of a particular religion if such school, college, university, or other educational institution or institution of learning is, in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society, or if the curriculum of such school, college, university, or other educational institution or institution of learning is directed toward the propagation of a particular religion” (see Section 703(e)(2)).

In 1965, President Johnson signed Executive Order 11246, Equal Employment Opportunity, which requires equal employment opportunity in federal government contracting. The order mandates that all government contracts include a provision stating that “the contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin” (see Section 202). In 1967, President Johnson issued Executive Order 11375, Amending Executive Order No. 11246, Relating to Equal Employment Opportunity, which expands Executive Order 11246 to prohibit discrimination on the bases of sex and religion (see paragraph (2)). Finally, in 2002, President George W. Bush issued Executive Order 13279, Equal Protection of the Laws for Faith-Based and Community Organizations, which amended Executive Order 11246 by expressly importing Title VII’s exemption for religious organizations (“Section 202 of this order [Executive Order 11246, as amended by Executive Order 11375] shall not apply to a government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities”). This statement is in paragraph (c)(1) of FAR 52.222-26, Equal Opportunity, which is required to be included in all solicitations and contracts (with limited exceptions). Executive Order 11246, as amended, is implemented by FAR subpart 22.8, Equal Employment Opportunity.

In 1972, Congress enacted the Equal Employment Opportunity Act of 1972 (Public Law 92-261), which expanded the religious exemption in Title VII’s Section 702 by adding educational institutions to the list of those eligible for exemption. In addition, Congress broadened the scope of the Section 702 exemption to cover not just religious activities, but all activities of a religious organization: “This title shall not apply...to a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities” (emphasis added) (see Section 3). This expansion of the religious exemption to all activities of religious organizations was upheld unanimously by the Supreme Court against an Establishment Clause challenge in Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos (1987). (EDITOR’S NOTE: The “Establishment Clause” is in the first amendment in the Bill of Rights: “Congress shall make no law respecting an establishment of religion, or abridging the free practice thereof...”)

Because there has been some variation among federal circuit courts in interpreting the scope and application of the Title VII religious exemption, the OFCCP has decided it is time to propose amending its regulations in Title 41 of the Code of Federal Regulations (CFR), Chapter 60, Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor, Part 60-1, Obligations of Contractors and Subcontractors (41 CFR 60-1), “to provide clarity regarding the scope and application of the religious exemption...Among other changes, this proposal is intended to make clear that the Executive Order 11246 religious exemption covers not just churches but employers that are organized for a religious purpose, hold themselves out to the public as carrying out a religious purpose, and engage in exercise of religion consistent with, and in furtherance of, a religious purpose. It is also intended to make clear that religious employers can condition employment on acceptance of or adherence to religious tenets without sanction by the federal government, provided that they do not discriminate based on other protected bases. In addition, consistent with the administration policy to enforce federal law’s robust protections for religious freedom, the proposed rule states that it should be construed to provide the broadest protection of religious exercise permitted by the Constitution and other laws. While only a subset of contractors and would-be contractors may wish to seek this exemption, the Supreme Court, Congress, and the President have each affirmed the importance of protecting religious liberty for those organizations who wish to exercise it” (from the preamble of the proposed rule).

Therefore, OFCCP proposes to add the following five definitions to 41 CFR 60-1.3, Definitions:

Exercise of religion” means any exercise of religion, whether or not compelled by, or central to, a system of religious belief. An exercise of religion need only be sincere.

Particular religion” means the religion of a particular individual, corporation, association, educational institution, society, school, college, university, or institution of learning, including acceptance of or adherence to religious tenets as understood by the employer as a condition of employment, whether or not the particular religion of an individual employee or applicant is the same as the particular religion of his or her employer or prospective employer.

Religion” includes all aspects of religious observance and practice, as well as belief.

Religious corporation, association, educational institution, or society” means a corporation, association, educational institution, society, school, college, university, or institution of learning that is organized for a religious purpose; holds itself out to the public as carrying out a religious purpose; and engages in exercise of religion consistent with, and in furtherance of, a religious purpose. To qualify as religious a corporation, association, educational institution, society, school, college, university, or institution of learning may, or may not: have a mosque, church, synagogue, temple, or other house of worship; be nonprofit; or be supported by, be affiliated with, identify with, or be composed of individuals sharing, any single religion, sect, denomination, or other religious tradition.

Sincere” means sincere under the law applied by the courts of the United States when ascertaining the sincerity of a party’s religious exercise or belief.

In addition, 41 CFR 60-1.5, Exemptions, would be amended to add the following paragraph: “(e) Broad interpretation. This subpart shall be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the United States Constitution and law, including the Religious Freedom Restoration Act of 1993 [Public Law 103-141], as amended, 42 USC 2000bb et seq. [Religious Freedom Restoration].”

Comments on this notice of proposed rulemaking (NPRM) must be submitted no later than September 16, 2019, identified as “RIN 1250-AA09,” by any of the following methods: (1) the Federal eRulemaking Portal: http://www.regulations.gov; (2) fax: 202-693-1304; or (4) mail: Harvey D. Fort, Acting Director, Division of Policy and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue NW, Washington, DC 20210.



FY 2020 Per Diem Rates Released

The General Services Administration (GSA) has established the Fiscal Year (FY) 2020 per diem rates for the lower 48 Continental United States (CONUS), which are the maximum allowances that federal employees of civilian agencies are reimbursed for expenses incurred while on official travel (the Department of Defense employees are subject to per diem rates established under the Joint Travel Regulations). The rates are available at https://www.gsa.gov/travel/plan-book/per-diem-rates. (Note that the FY 2020 rates are not the default rates until October 1, 2019. One must select “2020” from the drop-down list under "Search By City, State, or ZIP” or “Search by State." Otherwise, the search will return FY 2019 rates.)

The CONUS per diem rate for an area is actually three allowances: the lodging allowance, the meals allowance, and the incidental expense allowance. Most of the CONUS (approximately 2600 counties) are covered by the standard CONUS per diem rate of $151 ($96 lodging, $55 meals and incidental expenses). In FY 2020, there are 322 Non-Standard Areas (NSAs) that have per diem rates higher than the standard CONUS rate.

The following locations have been designated as NSAs in FY 2020:

The following locations that were NSAs (or part of an established NSA) in FY 2019 will move into the standard CONUS rate category:

As a reminder, Federal Travel Regulation (FTR) Part 301-11, Per Diem Expenses, Subpart D, Actual Expense, allows for actual expense reimbursement when per diem rates are insufficient to meet necessary expenses.



VA Continues Updating the VAAR

The Department of Veterans Affairs (VA) is continuing its methodical amending of the VA Acquisition Regulation (VAAR) to revise or remove any policy that has been superseded by changes in the FAR; remove any procedural guidance that is internal to the VA; incorporate new regulations and policies; correct inconsistencies within the VAAR; remove redundant and duplicate material already covered by the FAR; delete outdated material or information; and renumber VAAR text, clauses, and provisions to conform to the FAR format, numbering, and arrangement.

This rule makes the following changes to the VAAR:



Wooten Confirmed as OFPP Administrator

On August 1 the Senate confirmed Michael Wooten as the 15th administrator of the Office of Federal Procurement Policy (OFPP).

Prior to his confirmation, Dr. Wooten was a senior advisor for acquisitions at the Department of Education’s Federal Student Aid office. He served in the Trump Administration as Department of Education’s acting Assistant Secretary and Deputy Assistant Secretary for Career, Technical, and Adult Education.

Before his service at the Department of Education, Dr. Wooten served as Deputy Chief Procurement Officer for the District of Columbia government.

Between 2005 and 2015, he served as a professor of contract management and in senior staff and acquisition workforce positions at Defense Acquisition University.

Dr. Wooten holds a doctorate in Higher Education Management from the University of Pennsylvania, an M.S. in contract management from the Naval Postgraduate School, master’s degrees from George Washington University and Norwich University, and a B.A. in psychology from Chapman University.

He is a retired Marine Corps major and previously served in Afghanistan.





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