Panoptic Enterprises'


Federal Acquisition Developments, Guidance, and Opinions

November 2005
Vol. VI, No. 11


FAC 2005-06 Addresses IT Security, Cancels SDB Price Evaluation Adjustment for Civilian Agencies
CCR Registrant's Taxpayer ID to be Validated
Procedures for Billing and Payment Improved in DFARS
Former OFPP Chief Indicted for Obstruction, False Statements
SBA Waives Four Nonmanufacturer Rules
Katrina's $250,000 Micro-Purchase Authority Restricted
OFCCP Establishes Internet Application Data Rule

FAC 2005-06 Addresses IT Security, Cancels SDB Price Evaluation
Adjustment for Civilian Agencies

On the last day of Fiscal Year 2005, Federal Acquisition Circular (FAC) 2005-06 was issued to make 11 miscellaneous changes to the Federal Acquisition Regulation (FAR). Among the most significant of the rule changes are the addition of guidance on the importance of information technology (IT) system and data security, and the cancellation of the authority for civilian agencies (other than the National Aeronautics and Space Administration (NASA) and the U.S. Coast Guard) to apply a price evaluation adjustment to certain small disadvantaged businesses in competitive acquisitions.

CCR Registrant's Taxpayer ID to be Validated

A proposed rule has been published to amend the FAR to include the process of validating a Central Contractor Registration (CCR) registrant's taxpayer identification number (TIN) with the Internal Revenue Service (IRS). Vendor registration in the CCR has been a pre-requisite for being awarded a contract by the Department of Defense since 1998, and by civilian agencies since 2003 (see the November 2003 Federal Contracts Perspective article "CCR Registration, Unique Contract Numbers Required"). Since CCR's inception, it was anticipated that the validation of registrants' TINs with the IRS would eventually be conducted to improve data accuracy throughout the federal procurement system.

To implement the TIN validation requirement, the proposed rule would: (1) amend the definition of "registered in the CCR database" in FAR 2.101, Definitions, to add that the validation requirement includes TIN matching; and (2) amend FAR 52.204-7, Central Contractor Registration, to identify validation of the TIN as part of the "registered in the CCR database" definition, and to indicate that consent is part of that process.

In addition, FAR Subpart 4.11, Central Contractor Registration, contains language that was included when this subpart was implemented in the FAR in 2003. This outdated language required modifications of contracts by December 31, 2003, to add CCR registration requirements. Because this date is past, the following would be amended to remove the language requiring action by December 31, 2003: paragraphs (a)(3)(i) and (a)(3)(ii) of FAR 4.1103, Procedures; the last sentence of FAR 4.1104, Solicitation Provision and Contract Clauses; and Alternate I to FAR 52.204-7, Central Contractor Registration.

Comments on these proposed rule must be submitted by December 19, 2005, to: (a) http://www.regulations.gov; (b) http://www.acqnet.gov/far/ProposedRules/proposed.htm; (c) fax: 202-501-4067; (d) e-mail: farcase.2005-007@gsa.gov; or (e) mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405.

Procedures for Billing and Payment Improved in DFARS

The Department of Defense (DOD) never sleeps -- during October, it issued a final rule that amended the Defense FAR Supplement (DFARS) to improve payment and billing instructions in DOD contracts, five other final rules, an interim rule, and extended a FAR deviation.

Former OFPP Chief Indicted for Obstruction, False Statements

On October 5, a federal grand jury indicted David Safavian, former Office of Federal Procurement Policy (OFPP) administrator and chief of staff for the General Services Administration (GSA), on charges of obstructing a GSA proceeding, obstructing a U.S. Senate proceeding, and making false statements.

Safavian resigned as OFPP administrator on September 16, and was arrested September 19 (see the October 2005 Federal Contracts Perspective article "OFPP Chief Arrested for Making False Statements").

The five-count indictment alleges that, between May 2002 and January 2004, Safavian made false statements and obstructed investigations into his relationship with Jack Abramoff, a lobbyist and former partner of Safavian. The investigations focused on whether Safavian aided Abramoff in his attempts to acquire GSA-controlled property. In August 2002, Abramoff allegedly took Safavian and others on a golf trip to Scotland. Safavian is charged with making false statements to a GSA ethics officer regarding the trip and his relationship with Abramoff, and with making the same statements to a GSA Office of Inspector General special agent.

In addition, the indictment charges Safavian with obstruction of a Senate proceeding and making false statements in connection with a Senate investigation conducted by the Committee on Indian Affairs. In February 2005, Safavian was contacted by the committee, which was investigating allegations of misconduct made by several Native American tribes against Abramoff and others. The committee requested that Safavian provide information about the August 2002 Scotland trip. The indictment alleges that Safavian attempted to mislead the committee by once again falsely claiming that, at the time of the Scotland trip, Abramoff has no business before GSA.

If convicted, Safavian faces maximum penalties on each of the five counts of five years in prison, a $250,000 fine, and three years of supervised release.

SBA Waives Four Nonmanufacturer Rules

The Small Business Administration (SBA) is waiving the nonmanufacturer rule for the following industries:

In addition, SBA is terminating the nonmanufacturer rule waiver for sporting and athletic goods manufacturing under NAICS code 339920. The nonmanufacturer rule was originally waived because SBA was unaware of any small businesses supplying that class of products to the federal government. However, SBA recently discovered the existence of a small business sporting and athletic goods manufacturer, so SBA is terminating the waiver.

EDITOR'S NOTE: For more on the proposed waivers and proposed waiver termination, see the September 2005 Federal Contracts Perspective article "SBA Proposes Waiving Five Nonmanufacturing Rules." A complete list of products for which the nonmanufacturer rule has been waived is available at http://www.sba.gov/GC/approved.html.

Katrina's $250,000 Micro-Purchase Authority Restricted

On October 3, the Office of Management and Budget (OMB) significantly restricted the authority of federal agencies to use the $250,000 micro-purchase threshold for Hurricane Katrina-related relief and recovery efforts that was recently enacted by Congress in Public Law 109-62, the Second Emergency Supplemental Appropriations Act.

Most purchases under the micro-purchase threshold are made by non-acquisition professionals with government purchase cards. Responding to a severe case of "buyer's remorse" on the part of many representatives and senators, who suddenly realized they had released an army of card-wielding bureaucrats authorized to make quarter-million dollar purchases with little oversight, OMB Deputy Director for Management Clay Johnson III issued a memorandum to agency heads requesting that agencies not utilize the increased authority "unless there are exceptional circumstances. If an agency believes that such exceptional circumstances exist, please contact me directly at 202-456-7070."

This memorandum effectively returned the purchase limit for government purchase card purchases to pre-hurricane levels -- $2,500 for normal purchases and $15,000 for contingency operations (except for the "exceptional circumstances" cited by Mr. Johnson).

"In the first days after the hurricane, several regulations were streamlined to remove barriers to the quick delivery of needed, lifesaving aid," Johnson said. "As the recovery has advanced, we do not envision that agencies will need to utilize the higher thresholds."

While OMB was restricting purchase card use, other agencies took Katrina-related actions:

OFCCP Establishes Internet Application Data Rules

To address the increasing use of the Internet as a job search mechanism, and the effect this has on federal contractors' required collection of gender, race, and ethnicity data of job applicants, the Office of Federal Contract Compliance Programs (OFCCP) is modifing its applicant recordkeeping requirements to balance contractors' data collection and recordkeeping requirements with the OFCCP's need for the data for equal opportunity compliance monitoring and enforcement.

OFCCP defines an "Internet applicant" as any individual who meets the following four criteria:

      "(i) The individual submits an expression of interest in employment through the Internet or related electronic data technologies;
      "(ii) The contractor considers the individual for employment in a particular position;
      "(iii) The individual's expression of interest indicates the individual possesses the basic qualifications for the position; and,
      "(iv) The individual at no point in the contractor's selection process prior to receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position." (41 CFR 60-1.3, Definitions)

Besides retaining the usual applications and resumes of traditional applicants, contractors are now required to keep "any and all expressions of interest through the Internet or related electronic data technologies as to which the contractor considered the individual for a particular position, such as on-line resumes or internal resume databases..." (41 CFR 60-1.12, Record Retention). Whenever a contractor maintains one of these electronic records, the contractor must be able to identify "where possible, the gender, race, and ethnicity of each...Internet Applicant..."

Because contractors will have to make significant changes in technology and personnel practices to implement the new recordkeeping requirements, OFCCP has established February 6, 2006, as the effective date for these changes.

EDITOR'S NOTE: OFCCP's regulations are in Title 41 of the Code of Federal Regulations (CFR), Public Contracts and Property Administration; Chapter 60, Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor. The regulations being amended are in 41 CFR Part 60-1, Obligations of Contractors and Subcontractors.

Copyright 2005 by Panoptic Enterprises. All Rights Reserved.

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