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FEDERAL CONTRACTS PERSPECTIVE

Federal Acquisition Developments, Guidance, and Opinions


June 2020
Vol. XXI, No. 6
[pdf version]

CONTENTS


FAC 2020-06 Applies Acquisition-Related Threshold Inflation Adjustments to Existing Contracts
Running Out of Actions to Take Against COVID-19
List of Domestically Nonavailable Items to Be Updated
DOD Issues Deviations Banning Chinese, Russian Products
Two Socio-Economic Programs' Regulations Amended



FAC 2020-06 Applies Acquisition-Related Threshold
Inflation Adjustments to Existing Contracts

Federal Acquisition Circular (FAC) 2020-06 is essentially a mop-up action, finalizing rules that had been in the works for a while: one makes inflation adjustments of acquisition-related thresholds applicable to existing contracts on the date of the adjustment; another removes the portions of the Federal Acquisition Regulation (FAR) that required service contractors and their subcontractors to offer employees of the predecessor contractor and its subcontractors a right of first refusal of employment; and the last one establishes regulations for the imposition of a tax on payments made by the U.S. government to foreign persons.



Running Out of Actions to Take Against COVID-19

After the plethora of actions taken by the acquisition community to quell the COVID-19 pandemic (see the April 2020 Federal Contracts Perspective article “Coronavirus Overruns United States, Emergency Acquisition Authorities Invoked,” and the May 2020 Federal Contracts Perspective article “Acquisition Community Fighting COVID-19 On a Multitude of Fronts”), there was not much left to do in May. However, that doesn’t mean there were no actions taken to aid the federal government against COVID-19.



List of Domestically Nonavailable Items to Be Updated

The FAR Council is considering amending FAR 25.104, Nonavailable Items, to update the list of domestically nonavailable articles under the Buy American Act. The Council is seeking information that will assist in identifying domestic capabilities and for evaluating whether some articles on the list of domestically nonavailable articles are now mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.

The Buy American Act (41 USC Chapter 83, Buy American) restricts the purchase of supplies that are not domestic end products. However, there are several exceptions listed in FAR 25.103, Exceptions. One of the exceptions is in paragraph (b), Nonavailability: “The Buy American statute does not apply with respect to articles, materials, or supplies if articles, materials, or supplies of the class or kind to be acquired, either as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality.”

FAR 25.104 lists the items for which a nonavailability determination has been made. The list is a comprehensive and wide-ranging mix of natural resources, compounds, materials, and other items of supply. Some articles on the list have no known domestic production sources (e.g., quartz crystals or vanilla beans); many of the articles are known to have some domestic production sources, but those sources have been determined in the past to be inadequate to meet U.S. demand – examples range from goat and kidskins (negligible domestic production), to crude iodine (5% of U.S. government and nongovernment demand), to bismuth (not in excess of 50% of U.S. government and nongovernment demand).

Besides these examples, the list includes items such as anise, bananas, unroasted Brazil nuts, English chalk, goat hair canvas, hog bristles for brushes, lavender oil, olive oil, quartz crystals, shellac, tea in bulk, and cobra venom.

The FAR Council is https://www.govinfo.gov/content/pkg/FR-2020-05-13/html/2020-09208.htmseeking information to determine whether some articles should be removed from the list because they are now mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality. “Specific information with regard to domestic production capacity in relation to U.S. government and nongovernment demand and the quality of domestically produced items would be most helpful in determining whether articles should remain on or be removed from the list.”

Comments regarding items on the nonavailability list must be submitted no later than July 13, 2020, identified as “FAR Case 2020-009,” through the Federal eRulemaking Portal at http://www.regulations.gov.

EDITOR’S NOTE: FAR 25.104(b) requires that the list be reviewed every five years – the last time the list was published for review was in 2015 (see the April 2015 Federal Contracts Perspective article “Comments Sought on Domestically Nonavailable Articles”). No changes were made to the list at that time.



DOD Issues Deviations Banning Chinese, Russian Products

Besides the two COVID-19-related actions taken by DOD (see above article), DOD issued two deviations: one prohibiting the procurement of Chinese unmanned aircraft systems, the other prohibits the acquisition of energy produced inside the Russia Federation for U.S. operating bases in Europe. In addition, DOD issued two memoranda addressing acquisition data systems.



Two Socio-Economic Programs' Regulations Amended

The Small Business Administration (SBA) has issued two final rules on socio-economic programs it administers: one requires that participants in the Women-Owned Small Business Program be certified as eligible; and the other removes 16 sections of the small disadvantaged business regulations because they are obsolete.





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