Defense acquisition rule requiring contractors to report counterfeit parts set to be included in the FAR

June 30, 2014 by

In May, the Department of Defense amended the Defense Federal Acquisition Regulation Supplement (DFARS) to require certain contractors to detect and report counterfeit electronic parts.  (See DFARS rule on “Detection and Avoidance of Counterfeit Electronic Parts” by clicking here.)

Now, the Federal Acquisition Regulation (FAR) Council has published a proposed rule to greatly expand counterfeit reporting obligations.  The newly proposed rule sets forth sweeping requirements for contractors and subcontractors to report nonconforming items.

Unlike the DFARS rule, which limits application to particular electronic parts and a certain category of contractors, the proposed FAR rule extends beyond electronic parts and specific contractors.  In fact, the proposed rule is designed to effect all contracts for acquisition of supplies or services that include supplies.

Under the proposed rule, contractors and subcontractors at all tiers must screen the Government-Industry Exchange Program (GIDEP) as part of their quality control processes.  Further, the proposed rule requires reporting in GIDEP of any “common” items purchased that are counterfeit, suspected to be counterfeit, or contain “major nonconformance” or “critical nonconformance.”   In addition, contractors must notify Contracting Officers, in writing, when they become aware that “any end item, component, subassembly, part or material contracted in supplies purchased by the government” is counterfeit or suspected to be counterfeit.

Written comments on the proposed rule are due by August 11, 2014.   Comments are to be submitted via the Federal eRulemaking portal by searching for ‘‘FAR Case 2013–002’’.    Select the link ‘‘Comment Now’’ that corresponds with ‘‘FAR Case 2013–002.’’ Follow the instructions provided at the ‘‘Comment Now’’ screen. Please include your name, company name (if any), and ‘‘FAR Case 2013-002’’ on your attached document.  Comments may be faxed to 202–501–4067 or mailed to: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405.

Contractor pay cap will apply to all employees under new rule

June 16, 2014 by

A new rule would limit the amount contractors could charge the government for any of their employees’ salaries under cost-reimbursement contracts.

Currently contractors can charge back $487,000 for employee salaries, but the ceiling only applies to top senior executives. With the new Federal Acquisition Regulation rule, that limit would be expanded to all employees including scientists and engineers.

The final rule, issued May 30, would only affect the Defense Department, NASA and the Coast Guard, and applies retroactively to compensation costs on government contracts signed after Dec. 31, 2011.

Keep reading this article at: http://www.fiercegovernment.com/story/contractor-pay-cap-will-apply-all-employees-under-new-rule/2014-06-03

Limitations on subcontracting: 1099 contractor’s work didn’t count

June 11, 2014 by

Under the FAR’s limitations on subcontracting clause, the work to be performed by a 1099 independent contractor did not count toward the prime contractor’s performance.

In a recent bid protest decision, the GAO held that a procuring agency properly rejected an offeror’s proposal because the offeror was relying, in part, on an independent contractor to meet its obligations under the limitations on subcontracting clause.

The GAO’s decision in MindPoint Group, LLC, B-409562 (May 8, 2014) involved a Department of Justice solicitation for information technology infrastructure support.  The proposal was issued as a set-aside for Economically Disadvantaged Woman Owned Small Businesses (EDWOSBs), and incorporated FAR 52.219-14, the standard limitation on subcontracting clause.  For a services contract, FAR 52.219-14 requires the EDWOSB to perform at least 50 percent of the cost of contract performance incurred for personnel with its own employees.

MindPoint Group, LLC submitted a proposal.  MindPoint’s proposal stated that MindPoint would self-perform 53.3 percent of the contract effort using seven individuals, including an individual designated as the “Systems Administrator MS.”  However, MindPoint’s proposal included a letter of commitment stating that the Systems Administrator MS would be an “independent consultant,” and MindPoint’s price proposal referred to the individual as a “1099 Consultant.”

Keep reading this article at: http://smallgovcon.com/gaobidprotests/limitations-on-subcontracting-1099-contractors-work-didnt-count/

Learn how the government conducts cost and price analysis, starting June 16

June 6, 2014 by

The Contracting Education Academy at Georgia Tech is offering a course focusing on the Fundamentals of Cost & Price Analysis in government contracting.  The course begins June 16, 2014, and will be held at the Global Learning Center located on the midtown Atlanta campus of the Georgia Institute of Technology.

To see details or to register, click here.

Academy identifier - gold & black w-white bkgrndThe Academy’s comprehensive, two-week course begins with an in-depth review of the market research process, and provides instruction to help students understand and analyze contractor pricing strategies.

Attendees will learn to accomplish cost-volume-profit analysis, calculate contribution margin estimates, and develop cost estimating relationships in order to accomplish an effective price analysis pursuant to FAR Subpart 15.4.

After learning the basic elements of price and cost analysis, students will build and defend a pre-negotiation objective, including a minimum and maximum pricing objective with a weighted guidelines assessment.

This course is ideal for new hires in the contracting career field.   In addition, for government contractors, this course provides invaluable insights into the government contracting decision-making process.

Student performance will be assessed by graded exams on math fundamentals and applied course material as well as an exercise for student participation and completion of negotiations.

DAU logoCON 170 – Fundamentals of Cost & Price Analysis is Defense Acquisition University-equivalent training that satisfies the FAC-C and DAWIA certification programs.  Students successfully completing the course earn 7.35 continuing education units.

For more information or to register, please visit: http://www.pe.gatech.edu/courses/con-170-fundamentals-cost-and-price-analysis

How one small word change could mean many more contracting dollars for small businesses

June 3, 2014 by

Sometimes, it’s the most subtle nuances in a phrase that matter most — and for small government contractors, that appears to be the case in the federal procurement rulebook.

The Federal Acquisition Regulation, a long list of government-wide contracting rules established by the heads of several federal agencies, requires all large companies bidding on prime contracts to specify what percentage of the money awarded would flow through to small-business subcontractors.

The rule is meant to ensure that small firms “have the maximum practicable opportunity to participate in performing contracts,” according to the FAR, and to help the government meet its annual goal of awarding 35.9 percent of all subcontracting dollars to small companies. Collectively, federal agencies have missed that mark each of the last five years.

Bob Justis says one odd word on page 1,343 in the rulebook isn’t helping.

“Out of all your planned subcontracting dollars, you’re required to set aside some percentage of that for small businesses,” Justis, head of Justis Consulting, a contracting proposal development firm based in Washington, said in a recent interview. “However, it’s required to be stated as a percentage of your total subcontract dollars — not as a percentage of the total contract dollars.”

It’s a subtle but important distinction, Justis explained, because a large prime contractor can, based on that rule, pledge to commit 40 percent of its subcontracting dollars to small businesses. If the company then handles all the work itself, resulting in a total subcontracting spend of zero, it still met its small-business subcontracting goal.

After all, 40 percent of nothing is nothing.

Keep reading this article at: http://m.washingtonpost.com/business/on-small-business/how-one-small-word-change-could-mean-many-more-contracting-dollars-for-small-businesses/2014/05/22/30b4c0d8-e106-11e3-9743-bb9b59cde7b9_story.html

Learn how to use the FAR beginning June 3rd

May 22, 2014 by

Learning the Federal Acquisition Regulation — the FAR — is a daunting, but necessary, undertaking for both contracting personnel and contractors alike.

The 2,000-page FAR is the rule book federal agencies use to plan, award, and administer virtually all government contracts.  Contracting officers must master the FAR in order to construct contracts correctly.  Likewise, contractors must learn the FAR in order to compete more effectively and execute contract work in accordance with the rules.

On June 3, 2014, Georgia Tech’s Contracting Education Academy is kicking-off an intensive four-day course that helps participants learn how to identify the basic principles of government contracting, access online resources, and locate, cite, and interpret information in the FAR and agency supplements to the FAR such as the Defense Federal Acquisition Regulation Supplement (DFARS).

For more information or to register, click here.

CON 090-1: Contracting Overview of the FAR is actually the first of four modules in the CON 090 – Federal Acquisition Regulation (FAR) Fundamentals series.  Each module involves limited lecture, and features an exercise-based curriculum that takes a look at the federal acquisition environment from a macro-level.

The Contracting Education Academy at Georgia Tech (The Academy) is an approved equivalency training provider to the Defense Acquisition University (DAU) and provides continuing education training to Acquisition and Government Contracting professionals as well as to business professionals working for government contractors or pursuing opportunities in federal contracting.

Customs and Border Protection agency offers more information to losing bidders

May 19, 2014 by

Customs and Border Protection’s IT technology acquisition operation is developing ways to help explain to unsuccessful contract bidders why they lost out to competitors, according to the agency’s top IT acquisition official.

In remarks at a presentation on acquisition and programming at FOSE in Washington, D.C., Guy Torres, CBP director of IT contracting, said he and his legal team had developed an “explanation plus” document to provide more information to vendors bidding under Federal Acquisition Regulation. The FAR can restrict providing explicit information on some bids to vendors. Torres said he wanted to provide some information to help vendors understand why they may have lost, instead of providing only a short statement that they didn’t get a contract.

Keep reading this article at: http://fcw.com/articles/2014/05/13/cbp-informs-losing-vendors.aspx

Why the government can’t buy more like a business

April 11, 2014 by

Commonly heard issues with federal government contracting (such as, “it takes too long,” “it’s too expensive,” “it’s overly bureaucratic,” or “it’s too burdensome”) often conclude with a determination that the government should adopt commercial acquisition practices.

Government contracting does have considerable regulation associated with it. The government version of “commercial contracting,” found in the Federal Acquisition Regulation Part 12, was an attempt to address this idea and has been somewhat successful. However, additional government-unique requirements have been added over time.

In many cases, a primary hurdle is that a customer can have unique requirements, making that customer the only customer.

Keep reading this article at: http://www.federaltimes.com/article/20140327/BLG06/303270007/Why-government-can-t-buy-more-like-business

Agencies extended noncompetitive contracts past time limits, GAO says

April 3, 2014 by

Agencies are letting noncompetitive contracts awarded on the basis of “unusual and compelling urgency” run past the one year limit they’re not meant to exceed.

The Federal Acquisition Regulation (FAR) limits the total period of contracts awarded using the urgency exception to one year, unless a determination from the head of the agency is made that exceptional circumstances apply.

Awarding a noncompetitive contract on the basis of urgency is necessary in select circumstances, such as combat operations or preventing unanticipated gaps in program support, says the Government Accountability Offices in a March 26 report,

But those contracts should be limited in duration to minimize the amount of time that the government is exposed to the risks of contracts that are awarded quickly without the benefits of competition, the watchdog says.

Keep reading this article at: http://www.fiercegovernment.com/story/agencies-extended-noncompetitive-contracts-past-time-limits-gao-says/2014-03-27 

 

Appeal board reminds contractors not to look the other way when an RFP is missing documents or information

March 25, 2014 by

When an RFP is missing an attachment or information, contractors simply should not look the other way.  This is the lesson of CAE USA, Inc., ASBCA No. 58006, where the Armed Services Board of Contract Appeals (ASBCA) denied a contractor’s appeal due to its failure to inquire about missing information in an RFP before preparing and submitting its bid.

Pursuant to FAR 22.1008-2 and in compliance with Service Contract Act of 1965, 41 U.S.C. § 6707 (c)(1), the contracting officer (the “CO”) provided all bidders with a copy of a collective bargaining agreement (the “CBA”) that would apply to the contract.  The CBA indicated that the contractor’s employees would participate in a corporate benefit program, but did not provide specific details.  The CBA was missing certain relevant attachments but, rather than asking for that information, CAE USA, Inc. (“CAE”) made certain general assumptions about fringe benefits when calculating its proposed rates.  After award, the CO informed CAE that the missing attachments in the CBA required the payment of additional benefits, which CAE had to pay.  CAE submitted a claim for the cost of these additional benefits, which the CO denied, and CAE appealed to the ASBCA.

Keep reading this article at: http://www.governmentcontractsadvisor.com/2014/03/18/asbca-reminds-contractors-not-to-look-the-other-way-when-an-rfp-is-missing-documents-or-information