Navy plans preferred contractor program: Favorable terms and conditions in exchange for exemplary work
May 14, 2010 by cs
The Navy plans to reward contractors that show good performance, according to a news report.
In a May 5 speech, Navy Secretary Ray Mabus said he plans to set up a preferred provider program, and he urged companies to get better at their work so they would qualify for the program, according to a May 10 news report from the Navy Department. Mabus said the Navy would release a notice about the program in the Federal Register this month.
Mabus was speaking at the Navy League Sea Air Space Expo in Washington
In the program, the Navy would reward contractors with favorable contract terms, conditions and payment schedules “in return for consistent and exemplary contract performance,” he said. In addition, Mabus mentioned the program’s entry criteria would include energy-efficient products and manufacturing capabilities.
Mabus also said he was forming an industrial base council intended to let Navy and Marine Corps officials hear from private-sector representatives about their concerns. The council would be made up of companies in the fields that the department works closely with.
Similarly, last month, the House overwhelmingly passed a Defense Department acquisition improvement bill, which would also require DOD officials to set up a council of companies in the defense industrial base. The Senate hasn’t considered the bill.
Mabus said the Navy would live by several other time-tested imperatives that lead to successful acquisitions as it tries to make every dollar count, according to the department.
The Navy’s programs will go through a rigorous test that analyzes their requirements. The requirements must be clearly defined long before the contract is awarded. He said all contract spending will go through this analysis. The Navy would turn to fixed-price contracts and set aside contracts that include incentives and award fees for special high-risk circumstances, the report states. The Obama administration has pushed departments to avoid cost-reimbursement contracts because they are too risky.
In addition, Mabus plans to raise the bar on performance, as he keeps a closer eye on Navy contractors and the service’s own internal acquisition teams, and he has urged acquisition officials to increase their outreach to increase the workforce, he said.
Defense Secretary Robert Gates made similar remarks about acquisition reforms in a speech on May 5. Because of procurement problems, he said the military is paying more for airplanes and ships while getting fewer of them.
Gates said DOD needs to do “a better job of negotiating contracts, doing a better job of capping requirements and doing a better job of executing the program, and then [it is] industry’s responsibility to do this for the price they say they’ll do it.”
May 12, 2010 – About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week.
DOT’s DBE rule would heighten accountability, raise net worth limit, require reciprocity
May 10, 2010 by cs
Small businesses would benefit from a proposed rule that would help more economically and socially disadvantaged businesses participate in federal highway, transit and airport construction projects, while making the states and agencies that run the Disadvantaged Business Enterprise (DBE) Program more accountable, according to U.S. Transportation Secretary Ray LaHood in a statement on May 7th. “When we help small businesses, we’re helping get the economy going,” said Secretary LaHood. “This is an important rule that can help small businesses owned and controlled by women and minorities.”
The proposed rule would:
- Require greater accountability from state and local transportation agencies. Those that fail to meet established goals to include disadvantaged business enterprises in their spending plans must analyze the reasons for the short-fall and offer corrective actions.
- Prevent DBEs from being removed from the program prematurely. It would raise the personal net worth limit for DBE owners from the present $750,000, to an inflation-adjusted $1.3 million. This personal net worth limit was set in 1989 and has not been adjusted since.
- Add safeguards to make sure that prime contractors fulfill commitments to use DBE subcontractors. State and local agencies would have to conduct post-award monitoring of each contract for this purpose, and prime contractors could not dismiss DBE subcontractors without good cause.
- Reduce burdens on small businesses seeking DBE certification in more than one state. Any state would have to accept another’s existing certification, unless it found good reason not to. Currently DBEs must seek certification in each state in which they wish to do business.
The U.S. Department of Transportation’s DBE Program helps for-profit small businesses in which socially and economically disadvantaged individuals own at least a 51 percent interest and control management and daily business operations to compete for government contracts. It does this by requiring state and local transportation agencies to establish goals for DBE participation.
The U.S. Department of Transportation’s proposed rule to improve the DBE Program appears in the 5/10/2010 Federal Register. Public comment can be submitted through July 11, 2010.
Lockheed Still Tops Misconduct Charts, But No Misconduct Pattern for Over a Third of Top Gov’t Contractors
April 27, 2010 by cs
The Project On Government Oversight (POGO) is releasing its updated Federal Contractor Misconduct Database (FCMD), with a new top 100 ranking based on the fiscal year 2009 data of USAspending.gov. POGO’s release is concurrent with the operational date for the federal government’s contractor responsibility database — the Federal Awardee Performance and Integrity Information System (FAPIIS) — which will not be publicly accessible.
For 27 of the top 100 recipients of federal contract dollars, POGO did not find any instances of misconduct. “The fact that over a quarter of the top 100 contractors have no known instances of misconduct is further evidence that we should not accept contractor misconduct as a cost of doing business,” said POGO Investigator Neil Gordon.
An additional 11 contractors in the top 100 have only one known instance, showing that more than one-third of the companies in the database do not show a pattern of misconduct.
However, 63 contractors did have multiple instances of misconduct, and once again Lockheed Martin tops the ranking with 50 instances of civil, criminal, or administrative misconduct since 1995. In FY 2009, Lockheed Martin received almost $40 billion in federal contract awards.
The top 100 contractors received over $296 billion in contracts in FY 2009, accounting for 56 percent of the $524 billion in contracts the government awarded that year. As of today, these 100 contractors have accumulated 642 misconduct instances and over $18.7 billion in monetary penalties since 1995. Counting previous years, the FCMD now includes information on 151 federal contractors and 1,049 resolved and pending misconduct instances.
The updated top 100 ranking includes 26 new contractors from a wide variety of industry sectors and home countries. Italian defense and aeronautics giant Finmeccanica, S.p.A. made the cut, as did the Bahrain National Oil Company (BANOCO), Dutch foodservice logistics provider Supreme Group Holding SARL, German construction and engineering firm Hochtief AG and Swiss pharmaceutical manufacturer Novartis AG.
Novartis and two other pharmaceutical companies new to the ranking, Schering-Plough Corporation (which merged with former top 100 contractor Merck & Co, Inc. in 2009) and Pfizer, Inc., received $3.7 billion in contracts in FY 2009 and have a combined total of $4.7 billion in penalties, or about 25 percent of the misconduct penalty total.
POGO’s analysis is not exhaustive because it cannot capture undisclosed settlements and financial settlement terms that may not be publicly available. “POGO is happy to offer its own contractor misconduct database as an open resource, but hopes that the information in the government’s own database, FAPIIS, will soon be accessible to the public,” Gordon said.
For detailed listings on each of the top contractors, please visit POGO’s Federal Contractor Misconduct Database.
Founded in 1981, the Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open, and ethical federal government.
- Released April 23, 2010 by the Project On Government Oversight (POGO).
Contractors Must Begin to Update Integrity Database
April 20, 2010 by cs
Since 2007, government contractors have seen a series of new provisions added to the Federal Acquisition Regulation to promote business ethics and contractor compliance.
The National Defense Authorization Act of 2009 added yet another feature, which now requires the government to develop and maintain an information system containing specific information on the integrity and performance of federal contractors and grantees.
This database system will be known as the Federal Awardee Performance and Integrity Information System (FAPIIS). The proposed rule for FAPIIS (74 Fed. Reg. 45,579) discusses additional obligations for contractors and government contracting officers. Many contractors this year must prepare information for the database, and certify compliance with FAPIIS requirements for bids and proposals. Contracting officers will review FAPIIS when making the key “responsibility determination” for all contract awards, including delivery or task orders.
The proposed rule provides that FAPIIS will cover essentially all significant government contracts, including those for commercial and commercially available off-the-shelf items.
The FAPIIS database will incorporate information from existing government sources, such as the Excluded Parties List System of suspended or debarred contractors. The Past Performance Information Retrieval System and Contractor Performance Assessment Reporting System, both contain past performance reports from federal agencies, and will provide information for the database. Contracting officers will be asked to report non-responsibility determinations and default terminations to FAPIIS. Suspension/debarment officials will be sending information on any administrative agreements with contractors that resolve compliance issues. Finally, the proposed rule requires larger contractors to report their own information to FAPIIS relating to criminal, civil and administrative proceedings.
To protect against misuse of the information, the rule proposes that only government personnel will view FAPIIS data. However, a contractor can see its own information. Data is accessible for a period of five years and thereafter will be archived for another year to allow an audit trail. Significantly, a contractor can post comments regarding its FAPIIS listings and these explanations will remain part of the database unless the contractor revises them. The intent also is to provide an automatic notification to a contractor when new information is posted to the contractor’s record.
A FAPIIS provision will appear in solicitations where the contract value is expected to exceed $500,000. The proposed rule also would require any contractor with federal contracts and grants totaling over $10 million to add information. This includes whether the contractor and its principals have within the past five years, been involved in criminal, civil or administrative proceedings in connection with the award or performance of a federal or state contract or grant, which resulted in a conviction, or payment of a fine or penalty of $5,000 or more, or reimbursement, restitution or damages in excess of $100,000.
Even absent a contractor payment, settlements with acknowledged fault would be reportable to FAPIIS. Knowing that a wide range of matters might end up in FAPIIS, contractors will need to take this into account when resolving any criminal, civil or administrative matters. Also, what constitutes an “administrative proceeding” subject to reporting may not always be clear, particularly where all federal and state proceedings potentially are covered.
Since FAPIIS will contain information covering a five-year period, some of that information may no longer be relevant. One example is a prior administrative action such as debarment or suspension that has expired or otherwise been resolved. One recommendation is that a statement be posted on the FAPIIS screen that might read: “Certain past performance in FAPIIS may no longer be relevant.” A contracting officer also should consider the magnitude and seriousness of any reported matters in FAPIIS, as well as the contractor’s corrective actions and comments. Moreover, contracting officers obtaining relevant adverse FAPIIS information are required to request additional information from a contractor demonstrating its responsibility, and document each contract file at to how the FAPIIS information was considered.
Although contracting officers must consider the FAPIIS information when making the responsibility determination for a contract award, the proposed rule is not clear on using FAPIIS for past performance as a competitive evaluation factor, or for periodic past performance evaluations as contract work is completed.
The proposed rule creates a new contract clause requiring larger contractors to update their FAPIIS information semi-annually throughout the life of contracts that are expected to exceed $500,000. As noted, contractors with over $10 million in contracts and grants must self-report, but the rule does not specify what information goes into the database for smaller businesses. The proposed rule does not prescribe penalties for contractors that fail to comply with FAPIIS reporting, although as a contract term and indicator of responsibility, it is difficult to ignore. But at a minimum those contractors with legal troubles that end up in FAPIIS will have a harder time winning contracts. Contractors can attempt to manage the FAPIIS database entries to provide context and a fair report. The proposed rule does not address a government contractor’s private sector work.
FAPIIS is requiring the government to collect information from multiple databases, as well as information that never before has been collected and centralized. There are many questions left unanswered with the proposed FAPIIS system, but because this is a statutory requirement, it will be implemented in one form or another.
by Dorn C. McGrath – National Defense magazine – May 2010 – Dorn C. McGrath is a shareholder in the Greenberg Traurig, LLP government contracts practice group. The views expressed are solely those of the author.
FAR Councils Issue Final Rule Unveiling A New Measure Designed To Ensure Only Responsible Contractors Obtain Contract Awards
April 16, 2010 by cs
The Federal Awardee Performance and Integrity Information System, (“FAPIIS”), takes effect on April 22, 2010. Responding to heightened Congressional concerns regarding the performance and integrity of companies receiving federal contracts, FAPIIS is intended to enhance the government’s ability to prevent non-responsible contractors from receiving contract awards. FAPIIS will serve as a “one-stop” repository containing all data reflecting on a contractor’s responsibility.
Contracting officers, in fulfilling their obligation to make a responsibility determination prior to contract award, will be required to review the FAPIIS data pertaining to the contractor. That information will include: contracting officers’ non-responsibility determinations; default terminations; defective pricing determinations; administrative agreements with suspension and debarment officials; contractor criminal convictions, civil liability, and adverse administrative actions involving a finding of fault and liability in connection with the award or performance of a government contract; and certain settlements in criminal, civil, or administrative proceedings.
The Civilian Agency Acquisition Council and Defense Acquisition Regulations Council believe that arming contracting officers with this information will “significantly enhance the Government’s ability to evaluate the business ethics and quality of prospective contractors competing for Federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources.” (See FR 14059, March 23, 2010, available at: http://edocket.access.gpo.gov/2010/2010-6329.htm).
Responsibility for providing and updating the data in FAPIIS will rest, at least in part, on contractors, who may be required to certify their compliance with the new rule.
Responsibility Determinations Under Current Law
Currently, before the award of any federal government contract, contracting officers are required to make an “affirmative determination of responsibility.” (FAR 9.103(b)). To make this determination, contracting officers are required to “possess or obtain information sufficient to be satisfied that a prospective contractor currently meets the applicable standards . . . .” (FAR 9.105-1). In practice, contracting officers typically review the Excluded Parties List System (“EPLS”), www.epls.gov, the Past Performance Information Retrieval System (“PPIRS”), www.ppirs.gov, and any other information they receive pertaining to the contractor’s responsibility, including information obtained through pre-award surveys. FAPIIS will significantly expand the nature and volume of data to be considered by contracting officers and will store that information in a single repository.
FAPIIS Applies to All Contracts that Exceed the Simplified Acquisition Threshold, Including Commercial Item Contracts and Contracts With Small Businesses
FAR 9.104-6 will require contracting officers to review the FAPIIS database, located at http://www.ppirs.gov/fapiis.html, prior to any contract award that exceeds the simplified acquisition threshold. The rule is applicable to commercial item and commercial-off-the-shelf (COTS) procurements, and to contracts awarded to small business concerns. The FAPIIS database will provide the contracting officer access to the data maintained in the EPLS, the PPIRS, and the additional information now required by the new rule. Contracting officers will be required to document the contract file to explain how the information was considered in any responsibility determination, as well as the action that was taken as a result of the information.
Additionally, prior to proceeding with award, contracting officers must notify the agency official responsible for initiating debarment or suspension, if information is identified in FAPIIS that appears appropriate for that official’s consideration.
Contractor Reporting Requirements
The rule will impose new reporting requirements on contractors in connection with all federal contract solicitations exceeding $500,000. Under FAR 52.209-7, offerors will be required to report information pertaining to legal proceedings in connection with the award or performance of a federal government contract.
Specifically, offerors will be required to report whether within the last five years they or a principal were involved in any proceedings that resulted in: (1) a criminal conviction; (2) a finding of fault and liability in a civil proceeding that results in a payment of greater than $5,000; (3) a finding of fault and liability in an administrative proceeding that results in a fine of greater than $5,000, or reimbursement, restitution, or damages greater than $100,000; and (4) a settlement in a criminal, civil, or administrative proceeding where fault is admitted and a decision on the merits could have led to any of the results above.
FAR 52.209-7 also will require offerors to indicate whether they have active federal contracts and grants with a total value greater than $10 million. If so, by submission of their offer, the contractor is deemed to certify that the data they have submitted under FAPIIS is current, complete and accurate as of the date of submission of the offer. In addition, contracts exceeding $500,000 awarded to contractors with active federal contracts and grants with a total value greater than $10 million will contain FAR 52.209-8, “Updates of Information Regarding Responsibility Matters.” That clause will require the contractor to update the data it is required to submit to FAPIIS on a semi-annual basis through the life of the contract.
The Rule Offers Some Protection to Contractors
The rule does provide some limited protections to contractors. If the FAPIIS database contains adverse information, contracting officers will be required to give offerors the opportunity to provide additional information to demonstrate their responsibility before making a non-responsibility determination, unless the contractor already has been suspended or debarred. Consistent with the current protections provided to small business concerns, where the contracting officer determines that such a concern is not responsible, the contracting officer is required to refer the concern to the Small Business Administration, which will decide whether to issue a Certificate of Competency.
In addition, FAPIIS will notify contractors whenever the government posts new information to the contractor’s record, and the contractor will have an opportunity to post comments and respond.
The Rule Presents Challenges to the Government and Contractors Alike
Contracting officers are now charged with reviewing and analyzing a potentially large database of conclusory and often negative information in order to determine whether the contractor is responsible. While the new rule serves the legitimate purpose of preventing taxpayer dollars from going to non-responsible contractors with whom the funds may not achieve their intended purpose, the rule appears to be fraught with potential issues for the government and contractors alike including:
- Misuse of Information: FAPIIS collects a significant amount of information, some relevant, that contracting officers are required to evaluate. Yet, the rule provides no guidance to contracting officers as to how to utilize this information other than to say use “sound judgment.” Many contracting officers may lack the experience and/or training necessary to assess the weight to afford to the various types of information contained in FAPIIS.
- Disclosure of Contractor Information: While FAPIIS is restricted to the government and to contractors, who may access their own data, the information housed in FAPIIS likely is to be the target of Freedom of Information Act (“FOIA”) requests by private citizens and watchdog groups leading to the potential disclosure of contractor-sensitive data.
- Delay to the Acquisition Process: As a result of the amount of information contracting officers may need to review as a result of FAPIIS, and their efforts to collect additional information from contractors so as to document the file with an explanation for their award decision, including to support awards to contractors with apparent adverse matters in their database, the acquisition process is likely to be further protracted by this new rule.
- Increase in Suspension and Debarment Inquiries/Actions: The rule is likely to generate a significant increase in referrals to suspension and debarment officers from contracting officers whose only guidance is to refer “information . . . that appears appropriate for that official’s consideration.” Such an increase in referrals, in turn, is likely to result in additional inquiries from agency suspension and debarment officials to contractors in the form of requests for information and show cause letters. Contractors will be required to incur the cost and disruption of preparing present responsibility submissions, in many cases likely stemming from dated and insignificant matters.
- Increase in Bid Protests: Bid protests alleging erroneous and unreasonable agency decisions as to responsibility determinations are likely to increase. Not only will contract performance under these protested contracts be delayed, but the government and contractors will be required to spend considerable sums of money to resolve them.
- Decreased Contractor Incentive to Enter Into Administrative Agreements: The rule may act to discourage contractors from entering into administrative agreements concerning suspension and debarment because such agreements or the substance thereof will be published in FAPIIS and ostensibly could be used by a contracting officer to find a contractor non-responsible for a procurement, despite the additional undertakings to which the contractor agreed, including remedial measures, enhancements to their compliance program, and new internal controls.
- De Facto Debarment: The compilation of apparent negative data in FAPIIS may result in agencies repeatedly denying a contractor awards based on responsibility concerns without following the debarment procedures set forth in FAR Subpart 9.4, in violation of law and the contractor’s due process rights.
Time will reveal whether these concerns regarding FAPIIS are more theoretical than actual, and whether the rule serves to enhance the ability of the government to do business only with responsible contractors. It may be that the rule will require revision, both as to the nature of the information contained in the database as well as to the instructions provided to contracting officers in using that data.
In the interim, contractors should revise their procedures and compliance practices to include the collection and reporting of FAPIIS information. Additionally, contractors need to be alerted to new information posted by the government to their FAPIIS database and to the use of that information by contracting officers. Contractors should be prepared quickly to address new postings and to respond to contracting officer inquiries with additional information that is relevant and may provide proper context for any adverse information contained in FAPIIS. Failure to take such steps could result in a variety of negative consequences, ranging from non-responsibility determinations and the loss of contract awards to the submission of inaccurate data and improper certifications.
© 2010 McKenna Long & Aldridge LLP
Federal Acquisition Regulation change issued on “retainage”
April 6, 2010 by cs
The Federal Acquisition Regulation Council (FAR Council) has published a final rule revising a clause applied to federal contracts for architecture and engineering (A&E) services that mandated that 10 percent of fees be withheld or retained from a firm, regardless of the quality of the firm’s performance.
In publishing the final rule, the regulations body said, “FAR Case 2008-015 amends the clause at FAR 52.232-10 “Payments Under Fixed-Price Architect-Engineer Contracts”, to revise and clarify the retainage requirements. The contracting officer can (but is not mandated to) withhold up to 10 percent of the payment due in any billing period when the contracting officer determines that such a withholding is necessary to protect the Government’s interest and ensure satisfactory completion of the contract. However, withholding the entire 10 percent is not required, and no withholding is required if the contractor’s performance has been satisfactory. The changes clarify that retainage is optional and any amounts retained should not be held over beyond the satisfactory completion of the instant contract.”
“This rule was an unbearable burden for the A&E community,” according to Patrick Olson, P.E., L.S., (AERO-METRIC, Inc., Sheboygan, WI), president of The Council on Federal Procurement of Architectural and Engineering Services (COFPAES). “The 10 percent retainage meant A&E firms were bankers to the government, providing interest free loans that often exceed a firm’s profit margin on a contract. We had reports from member firms of millions of dollars in retainage, held for several years, on contracts where the firm receive the highest possible performance ratings. We are delighted this regulation has been changed.”
COFPAES Administrator John Palatiello noted, “Given that architect-engineer contracts, including surveying and mapping contracts, are awarded on a qualifications based selection process, and a firm’s experience and past performance are paramount factors in winning a contract, the retainage provision has little value to the government. Moreover, it was a severe cash flow burden on our member firms, particularly small businesses.”
The retainage rule was identified by the Small Business Administration’s Office of Chief Counsel for Advocacy as one of the most burdensome for small business in the office’s 2008 Regulatory Review and Reform (R3) initiative (http://www.sba.gov/advo/r3/r3_services08.html). The revision to the FAR on A&E retainage is the first regulation to have gone through the entire R3 process, from nomination, through Advocacy endorsement, and to final regulatory revision.
To view the final rule, go to: http://edocket.access.gpo.gov/2010/2010-5991.htm
Officials mark rules for major contractor database
March 26, 2010 by cs
The broad database contains specific information on contractors’ and grantees’ reliability and history of work with the government
by Matthew Weigelt – Mar 23, 2010 – The Obama administration has settled on the details of a contractor database, as it intends to gather more information to keep a closer eye on government contractors.
Officials have finalized its regulation of the Federal Awardee Performance and Integrity Information System (FAPIIS), according to today’s Federal Register.
“We’ll be able to see, before any new contract is awarded, whether a company plays by the rules, how well they’ve performed in the past: Did they finish the job on time? Did the company provide good value? Did the company blow their budget? It’s your money, so you deserve to know how it’s spent and who these contracts are going to,” President Barack Obama said March 10.
Obama and other administration officials have started tougher oversight of the private sector because, they believe, it works too closely with the federal government.
The FAPIIS database contains specific information on the federal contractors and grantees’ reliability and history of work with the government. The database is available for use in award decisions at www.ppirs.gov.
FAPIIS is intended to significantly enhance the scope of information available to contracting officers as they evaluate prospective contractors competing for their contracts. Officials also hope to protect taxpayers by not having work done by contractors who are not responsible, according to the Federal Register notice.
Contracting officers now must consider all the information in FAPIIS and Past Performance Information Retrieval System (PPIRS) when making a “responsibility determination” about a company. The officers also must notify the agency official responsible for debarments or suspensions if the information appears appropriate for the official’s consideration, the rule states.
On the other side, contractors are required to confirm the information related to criminal, civil and administrative proceedings in which they were found at fault. They then must report the information to FAPIIS. They also have to update their profile every six months throughout the life of a contract. Contractors update the information in the Central Contractor Registration database.
In the fiscal 2009 National Defense Authorization Act, Congress required the administration to establish FAPIIS as a one-stop shop for contractor data. Lawmakers say information on companies was spread too widely in too many separate databases.
In the past, contracting officers historically had access to readily available government information only on suspensions and debarments as they determined a bidding company’s past work. That information was included in the Excluded Parties List Systems.
Since the summer of 2009, agencies have been required to submit electronic records of contractor performance into the PPIRS. The goal is to have a large amount of information from the agencies available to contracting officers across the government. To expand the amount of data in the FAPIIS, officials intend to collect state-level information on contractors in connection with the award or performance of a contract or grant with a state, according to the notice.
“This rulemaking and the associated launch of FAPIIS are part of an ongoing initiative by the administration to increase consideration of contractor integrity and the quality of a contractor’s performance in awarding federal contracts,” the notice states.
About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week.
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GSA solicits comments on contractor performance database
March 1, 2010 by llyons
By Emily Long – 03/01/10
The General Services Administration is looking for feedback on its federal contractor performance database, according to a notice published on Monday in the Federal Register.
GSA is soliciting comments on the necessity of the data gathered in the Federal Awardee Performance and Integrity Information Systems to the acquisition process. The agency also is looking for ideas to improve data quality and for ways to minimize the reporting burden through information technology.
The system, known as FAPIIS, will collect data on criminal, civil or administrative proceedings against contractors and grant recipients. All companies with contracts or grants exceeding $10 million will be required to submit information to the database, which was mandated by a provision in the 2009 Defense Authorization Act.
Federal contracting officers will be expected to check the database when making a responsibility determination or conducting a past performance evaluation for all new contracts worth more than $500,000.
Stan Soloway, president and chief executive officer of the Professional Services Council, said a potential problem with the system is the scope and diversity of the information required could make it difficult for someone not trained in law to determine the severity and patterns of abuse.
“How do we avoid penalizing those whose errors are administrative rather than defrauding? Companies will have to pay close attention to the information entered,” he said.
The database hasn’t yet been created, said Gary Therkildsen, federal fiscal policy analyst at the nonprofit OMBWatch. Monday’s notice asks for comments to fine-tune some of the system’s details, which indicates GSA is coming to the end of the process, he added.
GSA estimates that of the 12,000 to 14,000 contracts worth more than $500,000 annually, 5,000 recipients will be required to submit information to the database. Contractors will be required to update FAPIIS on a semiannual basis. Including time required for record-keeping, the agency has calculated a total reporting burden at 505,000 hours.
The request for comments ends March 31, 2010.
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