Panoptic Enterprises'


Federal Acquisition Developments, Guidance, and Opinions

Vol. III, No. 2


2002 Defense Authorization Act Signed Into Law
New DFARS Rules on Caribbean, Italy, Switzerland
Automobile Reimbursement Increased to 36.5 Cents/Mile
SBA Increases Small Business Size Standards for Services
FAR Policy on Material Safety Data Sheets to be Revised
OMB Releases Third Set of FAIR Act Inventories
DOE Publishes List of Low Standby Power Devices
List of FedBizOpps Print Providers Published

2002 Defense Authorization Act Signed Into Law,
Extends FAR Subpart 13.5 Until January 1, 2003

On December 28, 2001, President Bush signed the $318 billion National Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107). Though several past defense authorization acts have included significant changes to acquisition procedures, the FY 2002 defense authorization act is relatively calm and quiet. It does contain several acquisition-related provisions in Title VIII, Acquisition Policy, Acquisition Management, and Related Matters, one of which applies governmentwide.


Applicable to Department of Defense (DOD) Only:

New DFARS Rules on Caribbean, Italy, Switzerland

While it was sorting out the FY 2002 Defense Authorization Act, DOD took the time to issue five final rules and one proposed rule, as well as one FAR class deviation.

Automobile Reimbursement Increased to 36.5 Cents/Mile

The General Services Administration (GSA) is amending Federal Travel Regulation (FTR) 301-10.303, What am I reimbursed when use of a POV [privately owned vehicle] is determined by my agency to be advantageous to the Government?, to increase the mileage reimbursement rate for use of a privately owned automobile on official travel from 34.5 cents per mile to 36.5 cents per mile; for use of a privately owned motorcycle from 27.5 cents per mile to 28.0 cents per mile; and for use of a privately owned airplane from 96.5 cents per mile to 97.5 cents per mile. This increase reflects the current costs of operation as determined in GSA's cost studies.

The same statute that directs GSA to establish the POV mileage reimbursement rates also limits the automobile reimbursement rate to the mileage rate established by the Internal Revenue Service (IRS). The IRS announced a new standard mileage rate for automobiles of 36.5 cents effective January 1, 2002, so the new 36.5 cents FTR rate conforms with the IRS rate.

SBA Increases Small Business Size Standards for Services

To maintain the value of small business size standards established in 1994, the SBA is increasing its monetary-based size standards by 15.8% to compensate for inflation between 1994 and the third quarter of 2001. "This change will restore eligibility to firms that may have lost small business status solely due to the effect of inflation," says SBA in its rule. SBA estimates that approximately 8,600 businesses will regain their small business status as a result of this change. Being considered a "small" business is helpful not only in obtaining small business set-aside contracts, but also for access to SBA loans, guarantees, and assistance.

Monetary-based small business size standards are based on receipts, net income, or other monetary measures, and they apply primarily to service industries (small business size standards for manufacturing industries are primarily based on the number of employees, so those size standards are not affected by inflation). Most of the monetary-based size standards have been increased by 15.8%, then rounded to the nearest $500,000. For example, the size standard for North American Industrial Classification System (NAICS) 446130, Optical Goods Stores, had been $5 million. Multiplying $5 million by 115.8% equals $5.8 million, and rounding it to the nearest $500,000 produces a new small business size standard of $6 million. Some other examples are NAICS 812331, Linen Supply, from $10.5 million to $12 million; NAICS 541512, Computer Systems Design, from $18 million to $21 million; and NAICS 445110, Supermarkets, from $20 million to $23 million.

The new standards (which are in Title 13 of the Code of Federal Regulations (CFR), Section 121.201, What size standards has SBA identified by North American Industry Classification System codes?) become effective on February 22, 2002. However, for small businesses located in the September 11 presidentially-declared disaster areas of metropolitan New York City and Northern Virginia, the new regulations will apply retroactively to September 11, 2001. This means SBA will go back and review applications for disaster recovery loans in those areas to determine whether those rejected because they did not qualify as small businesses are now eligible for assistance.

Not all monetary-based small business size standards were increased by 15.8%. For example, size standards for agricultural industries are set by law (see the July 2001 Federal Contracts Perspective article "SBA Revises Agricultural Size Standards"). The health care size standards were increased in December 2000 (see the December 2000 Federal Contracts Perspective article "SBA Increases Some Health Care Size Standards"); the freight forwarders size standards were increased in September 2000 (see the September 2000 Federal Contracts Perspective article "Freight and Cargo Transportation Size Standards Revised"); and the help supply services, construction, and refuse collection size standards were increased in July 2000 (see the July 2000 Federal Contracts Perspective article "Size Standards Increased for Construction, Temps"). The size standards for all these industries (except those set by law and a few other special circumstances) were adjusted to account for inflation from the last time they were adjusted until the third quarter of 2001 -- for example, NAICS 562111, Solid Waste Collection, has been increased by 4.3% from $10 million to $10.5 million to adjust for inflation between the end of 1999 through the third quarter of 2001.

In addition, SBA is adding a paragraph (c) to 13 CFR 121.102, How does SBA establish size standards?, to state that SBA will examine the small business size standards at least once every five years to assess the affect of inflation. "If SBA finds that inflation has significantly eroded the value of the monetary-based size standards, it will issue a proposed rule to increase size standards," paragraph (c) states. Prior adjustments occurred in 1994, 1984, and 1975, and SBA believes that adjustments should be made more frequently than once every ten years.

FAR Policy on Material Safety Data Sheets to be Revised

The FAR Council proposes to amend FAR Subpart 23.3, Hazardous Material Identification and Material Safety Data, and FAR 52.223-3, Hazardous Material Identification and Material Safety Data, to revise the language that provides policies and procedures for contractor submission of Material Safety Data Sheets (MSDSs).

The Occupational Safety and Health Act of 1970 (OSHA) and the Federal Hazard Communication Standard (29 CFR 1910.1200) require the manufacturer or importer of chemicals to label its products and provide a copy of the detailed MSDS with initial shipments of the product and whenever revisions to the product require revising the MSDS. OSHA excludes public sector employees from the protection provided by the Federal Hazard Communication Standard. Federal Standard 313, Material Safety Data, Transportation Data and Disposal Data for Hazardous Materials Furnished to Government Activities (FED-STD-313) was originally developed to extend to federal employees the protection provided by OSHA laws and regulations to private sector employees.

FAR Subpart 23.3 and FAR 52.223-3 implement FED-STD-313 requirements in federal contracts that require the delivery of hazardous materials by making sure the government has notice of hazardous materials and receives MSDSs necessary for employee safety and health programs, and for the safe handling, storage, use, transportation and environmentally acceptable disposal of hazardous materials. However, industry has several concerns with the FAR's implementation of FED-STD-313, so this proposed rule would make numerous changes:

Comments on the proposed rule must be submitted by March 5, 2002, to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405; or e-mail to farcase.1998-020@gsa.gov.

OMB Releases Third Set of FAIR Act Inventories

On January 3, the Office of Management and Budget (OMB) released the third set of Fiscal Year 2001 Commercial Activities Inventories of non-governmental functions being performed by government agencies. These inventories are required to be compiled and made available to the public by the Federal Activities Inventory Reform (FAIR) Act of 1998. This third set of inventories covers over 550,000 positions, of which approximately 125,000 are classified as "not inherently governmental functions" that are eligible to be performed by the private sector. Inventories are from the Departments of Agriculture, Housing and Urban Development, Justice, Labor, Transportation, and Treasury; Central Intelligence Agency; General Services Administration; Social Security Administration; and others. The agencies' lists are available at http://www.whitehouse.gov/OMB/procurement/index.html.

Interested parties have 30 working days (that is, until February 15, 2002) to challenge the omission or inclusion of an activity on an agency's Commercial Activities Inventories list. Being on the list is significant -- OMB has directed agencies to compete 5% of the positions identified in their inventories as "not inherently governmental" in Fiscal Year 2002, and 15% in Fiscal Year 2003.

The three sets of inventories cover more than 1,000,000 positions, and approximately 400,000 of those have been identified as "non-governmental" and subject to competition.

The Department of Defense (DOD) still has not provided its inventory to OMB for review. The stated reason is that the DOD inventory is so large that it was unable to compile its inventory on time, so the DOD inventory will be published as a separate fourth release.

For more on the first release of inventories, see the October 2001 Federal Contracts Perspective article "FAIR Act Inventories Available to Public." For more on the second release of inventories, see the December 2001 Federal Contracts Perspective article "Second Fair Act Inventories Released."

DOE Publishes List of Low Standby Power Devices

On July 31, 2001, President Bush signed Executive Order 13221, Energy Efficient Standby Power Devices, directing government agencies to purchase "commercially available, off-the-shelf products that use external standby power devices, or that contain an internal standby power function" with minimal standby power -- at or below one watt where available. He further ordered the Department of Energy (DOE) to develop a list of products that comply with this requirement by December 31, 2001, and to update the list annually (see the September 2001 Federal Contracts Perspective article "Bush Puts Bite on 'Vampire Appliances'").

On December 31, 2001, DOE published a notice to interested parties that the list has been compiled and is available at http://www.eren.doe.gov/femp/procurement. The list includes computer, office, video, audio, telecommunications, and other products. The website also makes available the testing guidelines and instructions on submitting product data, and additional information on standby power, federal purchasing, and Executive Order 13221.

Manufacturers are requested to continue submitting self-certified data for the standby power levels of their products. The list will be updated regularly with these new voluntary manufacturer submittals.

List of FedBizOpps Print Providers Published

On December 31, 2001, the Department of Commerce (DOC) issued a notice stating it would cease publication of the Commerce Business Daily (CBD) on January 4, 2002, and that Federal Business Opportunities ( http://www.FedBizOpps.gov) would replace the CBD as the vehicle by which federal agencies post synopses of upcoming solicitations (see the January 2002 Federal Contracts Perspective article "CBD Goes Out of Business January 4, 2002"). The move from the CBD to FedBizOpps was precipitated by the Fiscal Year 2001 National Defense Authorization Act (Public Law 106-398), which directed agencies to provide access to synopses of upcoming solicitations over $25,000 through a "governmentwide point of entry designated in the Federal Acquisition Regulation." FAC 97-26 designated FedBizOpps as the governmentwide point of entry effective October 1, 2001, and made the publication of synopses in the CBD optional after January 1, 2002 (see the June 2001 Federal Contracts Perspective article "FedBizOpps.gov to Replace CBD, Performance-Based Contracts Preferred for Services").

The December 31 notice also stated that DOC would maintain a list of publishers that provide printed versions of FedBizOpps, and invited such publishers to identify themselves. DOC has printed the list of the publishers on its Office of Acquisition Management website at http://oamweb.osec.doc.gov/cbdnet.htm:

      Bid Data Line, Inc.
      Point of Contact: Robert Nielsen

      Business Data Services
      Point of Contact: Jerry VandenBosch

      Government Contracting Institute
      1-800-824-1195 or 301-287-2400
      Point of Contact: Deborah Hoffman

      Government Data Publications, Inc.
      Point of Contact: Leah Bodek

      FBO Daily, Loren Data Corp.
      1-800-745-6736 or 202-342-1191
      Point of Contact: Fred Butlor

Other publishers of printed versions of FedBizOpps that wish to be identified on the DOC website should contact Yancey Stern, DOC, at 202-482-5781, or by e-mail at ystern@doc.gov.

Copyright 2002 by Panoptic Enterprises. All Rights Reserved.

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