Proposed rule clarifies contractor requirements for counterfeit electronic part detection and avoidance

On September 21, 2015, the Department of Defense (DOD) published a proposed rule in the Federal Register that would amend the Department of Defense FAR Supplement (DFARS) to DFARSfurther implement Section 818 of the National Defense Authorization Act for Fiscal Year 2012 regarding counterfeit electronic parts (Proposed Rule).   (See Detection and Avoidance of Counterfeit Electronic Parts–Further Implementation, 80 Fed. Reg. 56,939.)

The Proposed Rule adds clarity on key issues under the current counterfeit electronic parts rule, DFARS 252.246-7007, Contractor Counterfeit Electronic Part Detection and Avoidance System, which was implemented in May 2014.

Comments on the Proposed Rule are due on or before November 20, 2015.

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Georgia Tech teaching federal contract fundamentals in October

The Contracting Education Academy at Georgia Tech (The Academy) kicks-off a course on Tuesday, October 20, 2015 that covers the fundamentals of federal contracting.

The FARThe four-day course, known as Module 1 of CON 090: Federal Acquisition Regulation (FAR) Fundamentals, includes the identification of all the basic principles of contracting by the federal government.  The course identifies and provides access to on-line resources, and provides instruction on the location, citation, and interpretation of all 53 Parts of the FAR.  Also covered are the Defense Federal Acquisition Regulation Supplement (DFARS) and other FAR supplements to the FAR issued by federal agencies.

The course is being conducted at Georgia Tech’s world-class professional education facilities in the Global Learning Center located on campus in midtown Atlanta.  Click here for course registration details.

This course was originally designed exclusively for federal contracting officers, but The Academy has expanded its scope so that it is relevant to multiple audiences, including contractors seeking to learn more about the federal contracting process as well as federal officials who need to satisfy job-related continuous education requirements.

In all, there are four Modules that make-up the CON 090 course series.  Information about the entire series can be found at:

The Academy’s complete list of government acquisition courses, and course scheduling, is at:

DAU logoThe Contracting Education Academy at Georgia Tech is an official equivalency training provider of the Defense Acquisition University (DAU).  The Academy also offers new coursework from the Federal Acquisition Institute.

Students attending CON 090 courses at Georgia Tech receive a printed Student Guide, helpful handouts, a deck of FAR Cards, and access to exclusive on-line resources.  Georgia Tech’s Global Learning Center provides students with a complementary breakfast each morning and snacks throughout the day.

Federal government can revoke acceptance years later and demand replacement of work

Many contractors mistakenly think that once the government accepts work and pays for it, that the work is, well, “accepted.”

The FARSome also believe that the one-year warranty provided in the Federal Acquisition Regulation (FAR) means that the contractor is in the clear after, well, one year.

Those contractors would be wrong.

In JJK Group Inc. v. VW International Inc., a federal court in Maryland recently ruled that the government could revoke its prior acceptance years later and require the contractor to replace an entire system because the system contained “latent defects.”   The court cited the FAR clauses which provide that the one-year warranty only applies to work that has been “accepted” and that acceptance may be revoked if the government later finds “latent defects.”

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New rule allows sole source awards to women-owned small businesses

The Small Business Administration (SBA) published a rule today (Sept. 14, 2015) allowing sole source awards to Women-Owned Small Businesses (WOSBs) or Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) in appropriate circumstances.

SBA logo smallThe new rule changes existing SBA regulations in order to conform to section 825 of the FY15 National Defense Authorization Act (NDAA).

The rule is effective October 14, 2015.  The Federal Acquisition Regulations (FAR) will need to be amended to include the sole source authority so that there is no conflict between the SBA’s rules and the FAR.

The sole source authority can only be used where a contracting officer (CO) conducts market research in an industry where a WOSB or EDWOSB set-aside is authorized, and the CO cannot identify two or more WOSBs or EDWOSBs that can perform at a fair and reasonable price, but identifies one WOSB or EDWOSB that can perform. In addition, the sole source authority for WOSBs and EDWOSBs is limited to contracts valued at $6.5 million or less for manufacturing contracts and $4 million or less for all other contracts.

The rule is published in the Federal Register at:

GAO report is a good reminder to bidders: Agencies don’t always follow the rules!

The United States government has awarded more than $280 billion in contracts so far this fiscal year — FY2015 ends September 30.  Last year, that number was just over $445 billion on September 30.  (Data available online at  While this year’s total contracts awarded will be less than last year, the disparity reveals that the rest of August and September is likely to set a blistering pace of federal contract awards.

GAO-GovernmentAccountabilityOffice-SealIn late July, the Government Accountability Office (GAO) — tasked with investigating how the federal government spends taxpayer dollars — released what many are calling a scathing report.  The report explains that many federal agencies fail to follow the procurement regulations found in the Federal Acquisition Regulations (FAR).  The report is a good reminder for contractors who bid on federal procurements to be watchful of procurements that appear to deviate from the rules.  Data suggest not only that these agencies are breaking the rules, but also that protestors who call them on it are increasingly getting some relief.

The percentage of protesters obtaining relief—either through a protest being sustained or voluntary action taken by an agency—is called the effectiveness rate. From FY2001 to FY2014, the effectiveness rate of GAO protests grew from 33% to 43% (see Figure 2). Over the last five fiscal years the effectiveness rate has remained relatively stable, averaging 42%.
The percentage of protesters obtaining relief — either through a protest being sustained or voluntary action taken by an agency — is called the effectiveness rate. From FY2001 to FY2014, the effectiveness rate of GAO protests grew from 33% to 43% (see above). Over the last five fiscal years the effectiveness rate has remained relatively stable, averaging 42%.  Source: Congressional Research Service at


Congress typically funds federal agencies through annual appropriations.  An elementary principle of federal fiscal law is that if an agency’s appropriations are not obligated by the end of the fiscal year in which the appropriation was made, those funds expire and generally become unavailable to the agency.  Often, agencies spend their appropriated funds late in the year in an effort to save some “dry powder” early on in case an unforeseen need arises.

With Congress always looking for ways to cut spending, agencies do not want to end a fiscal year with unobligated funds.  In Washington it is hard for an agency to justify to lawmakers the need for more money if the money Congress appropriated last year — money the members of Congress had to explain to their constituents was needed then — was not used.  Accordingly, at the end of each fiscal year agencies resolve this dilemma by finding ways to close the gap between the portion of their appropriation obligated and the portion faced with becoming expired on September 30.  Too often that solution is a less than ideal procurement.

With only a little over $280 billion in federal contract awards to date, federal agencies look posed to make another year-end dash to spend our cash.

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Reminder: Requests for equitable adjustment are not claims

A request for equitable adjustment (REA) is not a “claim” under the Federal Acquisition Regulation (FAR).  Although a REA and a claim can look very similar, there are important legal distinctions.

And as one contractor recently learned, the distinction between a REA and a claim can make all the difference when it comes to a potential appeal.

First things first: what exactly is the difference between a REA and a claim?

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The Dispute Continuum

New regulations will change business for Government contractors

The Administration has been active in promulgating Executive Orders (E.O.) that affect the stakeholders in the Government contracting process.  On July 31, 2014, the President signed Executive Order 13673, “Fair Pay and Safe Workplaces.”  The E.O.states that it “improve[s] the federal contracting process.” But it will create a burden for prime contractors, subcontractors, and their agency customers. It will place increased importance on avoiding any type of adverse ruling involving an employment-related or safety-related claim.

Dept. of LaborAs all Government contractors are aware, a contract may be awarded only after a federal agency determines that the prospective contractor is “responsible” in accordance with Part 9 of the Federal Acquisition Regulation (FAR). Under this E.O., a company’s compliance with 14 federal labor statutes, as well as unnamed state labor statutes, will now be a factor that agencies and prime contractors must consider prior to awarding a contract or subcontract over $500,000.

The FAR Council issued a proposed rule (FAR Case 2014-025) on May 28, 2015, amending the FAR to implement E.O. 13673.  80 Fed. Reg. 30548. On that same day, the Department of Labor (DOL) issued extensive “guidance” on the E.O.  80 Fed. Reg. 30573.  Comments on the proposed regulations were originally requested by July 27, 2015, but that deadline has been extended twice and is now August 26, 2015. Your company, or an association representing your industry, may have already filed comments on the proposed regulation; regardless, it is very important that your company focus on the requirement and take immediate steps to prepare for its implementation.

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Proposed contract bundling changes aim to increase small business contracting

As required by the Small Business Jobs Act of 2010, on June 3, 2015, the FAR Council introduced a proposed change to the FAR contract bundling requirements. 80 Fed. Reg. 31,561-01. The proposed rule aims to improve small business participation in federal contracting by clarifying existing FAR regulations that discourage agency utilization of contracting bundling. The proposed rule would require increased reporting, parses the definitions of “bundling” and “consolidating” of contracts, and requires agencies to publicly justify their decisions to bundle requirements or consolidate contract vehicles. This definitional distinction between bundling of requirements and consolidation of contracts is intended to discourage agencies from combining unrelated requirements or contracts into a single award.

Under the proposed rule, agencies that bundle contracts or requirements in excess of $2 million will face greater notification and reporting requirements. If an agency wants to bundle two existing contracts, it must first notify small businesses at least 30 days beforehand of its intent to bundle its contracts. Agencies will also be required to provide public notice of the agency’s bundling policy and a list of and rationale for any bundled requirements for which the agency solicited offers or issued an award. If adopted, the proposal’s enhanced notification requirements may afford small business contractors an opportunity to protest an agency’s improperly bundled contracts.

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Actions foreshadow uniform cybersecurity regulations for federal contractors

Two recent Executive Agency actions lay the groundwork for a FAR cybersecurity clause in 2016.

  • Government contractors should expect an amendment to the Federal Acquisition Regulation in 2016 that mandates cybersecurity clauses and standards.
  • Companies can prepare now by comparing new government standards to their existing system protections.
  • As part of this process, companies should not just be reviewing the capabilities of their information systems, but also their written information assurance policies, training materials, and employment and third-party agreements.

cyber securityFederal government contractors handling Controlled Unclassified Information (CUI) should take notice of two recent executive agency actions. Combined, they lay the groundwork for a new cybersecurity clause to be added to the Federal Acquisition Regulation (FAR) in 2016.

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For more information on this topic, see:

New proposal would alter FAR subcontracting plan requirements

The Federal Acquisition Regulation (FAR) requires most large business contractors to have a plan approved by the government to subcontract a certain amount of their work to the various types of small business contractors (i.e., SDB, WOSB, SDVOSB, etc.). In the last few years, we have seen a noticeable increase in activity related to these subcontracting plans.

The FARSBA changed its subcontracting rules in July 2013 and since then has stepped up its audits to determine how well contractors are complying with their subcontracting plans. The FAR, which has lagged behind the updated SBA regulations, is now poised to catch up in several respects based on proposed changes released on June 10, 2015.

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Interested parties may submit written comments on this proposed rule.  Comments must be received on or before August 10, 2015 by mail to the General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F. Street NW., 2nd Floor, Washington, DC 20405.  Cite FAR case 2014-003.  

Comments also may be sent via the Federal eRulemaking portal by searching “FAR Case 2014-003.”  Select the link “Comment Now” that corresponds with “FAR Case 2014-003.” Follow the instructions provided on the screen. Please include your name, company name (if any), and “FAR Case 2014-003” on your attached document.