Panoptic Enterprises'


Federal Acquisition Developments, Guidance, and Opinions

November 2002
Vol. III, No. 11


DFARS Revised on Multiple Award Competitions, Enterprise Software Agreements
FAR Changes on Efficient Devices, Relocation Costs
2002 FAIR Act Inventories Available to Public
SBA Proposes Change to Tour Operators Size Standard
GAO Proposes Revisions to Bid Protest Regulations
SBA Denies Hand Tools Nonmanufacturer Waiver

DFARS Revised on Multiple Award Competitions,
Enterprise Software Agreements, Honduras

The Department of Defense (DOD) has been busy this autumn, issuing new rules as fast as squirrels gather acorns. Probably the most significant, and controversial, is the rule requiring the contracting officer obtain at least three competitive offers for services acquired under multiple award contracts. In addition, DOD issued rules on enterprise software agreements; contracting officer qualifications; performance-based contracting using the procedures in Federal Acquisition Regulation (FAR) Part 12, Acquisition of Commercial Items; and Honduras. Also, DOD proposed rules on foreign acquisition and transportation of commercial items by sea.

Final Rules:

Proposed Rules:

FAR Changes on Efficient Devices, Relocation Costs

Unlike the DFARS, there was not much action involving the FAR the past month, just one proposed rule and a request for comments:

2002 FAIR Act Inventories Available to Public

On October 17, the OMB published a notice that the first release of the 2002 "Agency Inventories of Activities that are not Inherently Governmental" required by Section 2 of Public Law 105-270, the Federal Activities Inventory Reform Act of 1998 ("FAIR Act"), is available to the public from the Departments of Health and Human Services, Housing and Urban Development, and Treasury, Energy, State, and Veterans Affairs; National Aeronautics and Space Administration (NASA); and several small agencies and activities. These inventories consist of "activities performed by federal government sources for the executive agency that, in the judgment of the head of the executive agency, are not inherently governmental functions." Interested parties have 30 days from the publication of the (that is, until November 16, 2002) to challenge the omission or inclusion of an activity on and inventory.

Approximately 250,000 jobs are included in this release, and about one-third of those jobs are categorized as eligible to be performed by the private sector.

Also, the Office of Federal Procurement Policy (OFPP) has prepared a summary "FAIR Act User's Guide" and it is available at http://www.whitehouse.gov/OMB/procurement/index.html. This User's Guide will help interested parties review 2002 FAIR Act inventories, and include the website addresses for individual agency inventories.

SBA Proposes Change to Tour Operators Size Standard

The Small Business Administration (SBA) is proposing to modify the way average annual receipts are calculated for firms in North American Industry Classification System (NAICS) 561520, Tour Operators. The proposed method would exclude funds received in trust for unaffiliated third parties from the calculation of a tour operator's receipts. SBA would retain the size standard of $6.0 million.

SBA's regulations in Title 13 of the Code of Federal Regulations, Section 121.104, How does SBA calculate annual receipts?, provides that the receipts of a firm are based on a firm's federal tax returns. Generally, receipts reported to the Internal Revenue Service (IRS) include a firm's gross receipts from the sale of goods and services. However, tour operators believe that receipts collected for payment to the actual transportation and lodging providers that are reimbursed by a tour operator should not be included in the calculation of average annual receipts for purposes of determining the size of a tour operator. They request that SBA exclude monies passed through to suppliers of travel components (that is, meals, transportation, lodging, and sightseeing and entertainment) from the calculation of a tour operator's average annual receipts. These monies typically account for 80% to 95% of a tour operator's receipts.

SBA agrees that certain types of receipts should be excluded from the calculation of size for firms in this industry. Therefore, SBA is proposing a revision to the size standard for the tour operators industry by excluding funds received in trust for unaffiliated third parties while retaining the size standard of $6.0 million in average annual receipts.

Currently, 2,722 out of 3,222 tour operators are considered small. If this change is adopted, 238 additional firms, generating 21% of sales in the industry, will obtain small business status and become eligible for small business assistance programs.

SBA is seeking public comments on this proposed change to the NAICS 561520 size standard. Comments must be received on or before November 1, 2002, by Gary M. Jackson, Assistant Administrator for Size Standards, 409 3rd Street, SW, Mail Code 6530, Washington, DC 20416; or e-mail to SIZESTANDARDS@sba.gov. Comments on alternatives should present the reasons that would make them preferable to the current size standard.

GAO Proposes Revisions to Bid Protest Regulations

The General Accounting Office (GAO) is proposing to revise its bid protest regulations, which has not been revised since 1996, to conform to current practice and to improve their overall efficiency and effectiveness. On February 25, 2002, GAO published an advance notice of proposed rulemaking (ANPR) requesting comments on alternative dispute resolution, electronic filing, review of affirmative responsibility determinations, and suggestions for changes to other areas of the regulations (see the March 2002 Federal Contracts Perspectives article "GAO Protest Procedures Being Reviewed"). Based on the comments and suggestions received, GAO has proposed revisions to its regulations, the two most significant changes being:

Comments must be submitted on or before November 12, 2002, to John M. Melody, Assistant General Counsel, General Accounting Office, or by e-mail: BidProtestRegs@gao.gov.

EDITOR'S NOTE: GAO's protest regulations are available at http://www.gao.gov/special.pubs/og96024.htm. FAR 33.104, Protests to the GAO, provides an overview of the protest process and procedures.

SBA Denies Hand Tools Nonmanufacturer Waiver

On July 22, 2002, SBA published a notice that it was considering granting a waiver of the nonmanufacturer rule for hand and edge tool manufacturing under NAICS code 332212 because no small business manufacturers were supplying those products to the federal government (see the August 2002 Federal Contracts Perspective article "SBA Proposes Small Business Size Standard Changes"). Comments received from large and small business manufacturers have made the SBA aware of the existence of small business manufacturers of hand and edge tools, so SBA is denying the waiver of the nonmanufacturing rule for NAICS 332212.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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