Georgia Tech Procurement Assistance Center

Complying with the government’s restrictions on foreign telecommunications equipment

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Government contractors are facing a significant compliance burden thanks to three new FAR provisions that impose restrictions on contractors who supply or use Chinese telecommunications equipment services.

Generally speaking, the new FAR provisions, 52.204-24, 52.204-25, and 52.204-26, are designed to ensure that contractors do not supply any covered equipment or services to the government (the “supply restriction”) or use any covered equipment or services in their business (the “use restriction”).  Covered equipment or services include any telecommunications equipment or services from companies linked to the Chinese government, such as Huawei (the world’s largest telecom manufacturing company) and ZTE, as well as any subsidiaries or affiliates of such companies.

Continue reading at:  JD Supra

Buy American Act in 2021: key changes and future outlook

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On January 19, 2021, the domestic content restrictions of the Buy American Act (BAA) were significantly changed via a final rule (Final Rule) issued by the Federal Acquisition Regulation (FAR) Council.  The Final Rule stemmed from a July 2019 Executive Order issued by President Trump, titled “Maximizing Use of American-Made Goods, Products, and Materials,” which sought to overhaul domestic content restrictions associated with federal procurement subject to the BAA.

It is more important than ever for government contractors subject to the BAA to understand the Final Rule’s updated requirements, especially as the Biden Administration turns its attention to further tightening the BAA’s restrictions.  Soon after the publication of the Final Rule, President Biden issued another BAA-focused Executive Order that may result in even further significant revisions to the contours of the BAA.  This alert will first outline the three key changes to the BAA that went into effect in January 2021, and will follow with an analysis of the potential impact of President Biden’s 2021 BAA mandates for the FAR Council.

Continue reading at:  Baker Donelson

FAR definition of “recruitment fees”: No means no

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On December 20, 2018, the Federal Acquisition Regulation (FAR) was amended to clarify the FAR’s prohibition on assessing employees with recruitment fees in connection with federal contracts.  The rule provides a final definition of “recruitment fees” and clarifies the FAR’s broad prohibition on federal contractors or subcontractors assessing employees or potential employees with any such fees.

The final rule brings long-awaited clarity to the scope of the prohibition on recruitment fees, as the term has not previously been defined in anti-trafficking regulations.  Upon publication of a proposed rule change in January 2015, the FAR Council invited the public to comment on a draft definition of the term “recruitment fees” in a notice-and-comment process.  The final rule, which took effect on January 22, 2019, incorporates a definition that has been revised pursuant to comments received during that rulemaking process. Government contractors will need to take these new rules into account in their compliance efforts in connection with their supply chains.

Background

On January 29, 2015, DoD, GSA, and NASA issued a final rule amending the FAR to strengthen and enhance the human trafficking-related prohibitions applicable to all federal contracts. The final rule implemented Executive Order (E.O.) 13627, “Strengthening Protections Against Trafficking in Persons in Federal Contracts,” and Title XVII of the National Defense Authorization Act for Fiscal Year 2013, entitled “Ending Trafficking in Government Contracting.”  The amended FAR, which applied to all future contracts and orders under existing indefinite-delivery/indefinite quantity contracts, imposed significant responsibilities on federal contractors and subcontractors to prevent human trafficking and forced labor.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=768098

DoD makes immediate change to limitations on subcontracting rule; FAR Council issues proposed rule

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The Department of Defense (DoD) has issued a class deviation that resolves the inconsistency between the Small Business Administration (SBA) regulations and the clause at Federal Acquisition Regulation (FAR) 52.219-14 related to the Limitations on Subcontracting Rule (LOSR).

The FAR Council has also issued a proposed rule to amend FAR 52.219-14 to fully resolve this issue for all small businesses. Government contractors should be aware of these new changes and proposed changes.

Generally, the LOSR prevents small business prime contractors from subcontracting the majority of the work under a prime contract to large businesses. The LOSR is intended to ensure that small businesses get the benefit of the set-aside prime contract. The government does not want a small business to get an award, perform only a small portion of the work, and then subcontract out everything else to large businesses.

Since 2016, SBA small businesses have struggled to comply with the LOSR because the regulations at 13 C.F.R. § 125.6 are inconsistent with the contract clause at FAR 52.219-14.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=777544

See DoD’s Jan. 8, 2019 Class Deviation 2019-O0003 on this subject at: https://www.acq.osd.mil/dpap/policy/policyvault/USA000039-19-DPC_Class_Deviation_2019-O0003.pdf

See the proposed rule here: https://www.govinfo.gov/content/pkg/FR-2018-12-04/pdf/2018-25506.pdf

While FAR Council proposes change to subcontracting limitation rules, DoD issues immediate class deviation

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More than five years after Congress directed the Executive Branch to change the way small business contract performance requirements are calculated, the U.S. Department of Defense (DoD) and the Federal Acquisition Regulation (FAR) Council announced significant steps yesterday to adopt these new requirements.

By way of background, in June 2016, the U.S. Small Business Administration (SBA) issued a final rule changing its regulations regarding the limitations on subcontracting applicable to small business set-aside contracts. SBA’s amended regulations were promulgated in response to a directive in the 2013 National Defense Authorization Act (2013 NDAA) which required changes to how limitations on subcontracting requirements are quantified and which required inclusion of “Similarly Situated Entities” (SSEs) in the prime contractor’s portion of the work under set-aside contracts.

The contracting community has been anxiously awaiting an amendment to the FAR, which has been asserted to be necessary for these Congressionally-mandated changes to become effective.  On Dec. 5th, the DoD issued a Class Deviation which adopts SBA’s current approach to Limitations on Subcontracting. The Class Deviation is effective immediately and applies to all DoD solicitations and contract awards from that date forward.

DoD’s Class Deviation was issued in conjunction with a notice of proposed rule-making issued by the FAR Council, which proposes to amend the FAR’s Limitations on Subcontracting clause (52.219-14) to conform with the statutory requirement and SBA’s previously announced final rule.

Keep reading this article at: https://www.jdsupra.com/legalnews/dod-issues-a-limitations-on-58789/

See commentary about the limitations on subcontracting rule at: http://smallgovcon.com/statutes-and-regulations/limitations-on-subcontracting-far-council-finally-proposes-rule-change/

Limitations on subcontracting: FAR change in the works

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It’s been more than a year since the SBA issued a final rule overhauling the limitations on subcontracting for small business contracts.  The SBA’s rule, now codified at 13 C.F.R. 125.6, changes the formulas for calculating compliance with the limitations on subcontracting, and allows small businesses to take credit for work performed by similarly situated subcontractors.

But the FAR’s corresponding clauses have yet to be changed, and this has led to a lot of confusion about which rule applies – especially since many contracting officers abide by the legally-dubious proposition that “if it ain’t in the FAR, it doesn’t count.”  Now, finally, there is some good news: the FAR Council is moving forward with a proposed rule to align the FAR with the SBA’s regulations.

By way of quick background, way back in January 2013, former President Obama signed the 2013 National Defense Authorization Act (NDAA) into law.  The 2013 NDAA made major changes to the limitations on subcontracting.  The law changed the way that compliance with the limitations on subcontracting is calculated for service and supply contracts – from formulas based on “cost of personnel” and “cost of manufacturing,” to formulas based on the amount paid by the government.  And, importantly, the 2013 NDAA allowed small primes to claim performance credit for “similarly situated entities.”

Keep reading this article at: http://smallgovcon.com/uncategorized/limitations-on-subcontracting-far-change-in-the-works/

Update on government contracts ramifications of the Trump administration

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In December 2016, Jones Day issued “ Government Contracts Ramifications of the Trump Election,” a Commentary in which we discussed several likely impacts of the Trump Administration in the government contracts arena. Specifically, we discussed that the new Administration would:

  • Seek repeal of numerous Executive Orders affecting government contractors.
  • Reject some Obama Administration procurement policies, such as: the preference for fixed-price type contracts; the preference for lowest-price technically acceptable (“LPTA”) evaluation schemes; and the preference against outsourcing government jobs to private companies.
  • Embrace Commercial Item contracting.
  • Increase government spending for defense, cybersecurity, infrastructure, and immigration-related activities.
  • Decrease spending by many agencies, including the Department of Education, Environmental Protection Agency, and Internal Revenue Service.
  • Focus on compliance issues such as rooting out fraud, waste, and abuse, and ensuring compliance with the Buy American Act and Trade Agreements Act.
  • Withdraw from, or renegotiate America’s participation in, certain trade relationships, which could affect companies’ supply chains.
  • Decrease the federal workforce, which could result in understaffing and undertraining within the acquisition workforce.
  • Appoint the members of the FAR Council, including the Office of Federal Procurement Policy (“OFPP”) Administrator, Secretary of Defense, Administrator of National Aeronautics and Space Administration, and the Administrator of General Services Administration.

Since the issuance of our earlier Commentary, President Trump has taken several actions that provide additional insight into the impact his Administration will have on government contractors.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/564798/Government+Contracts+Procurement+PPP/Update+On+Government+Contracts+Ramifications+Of+The+Trump+Administration

FAR now requires reporting reduced or untimely payments to small business subcontractors

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The FARThe Federal Acquisition Regulatory Council has issued a final rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Small Business Jobs Act of 2010.  The new rule, which goes into effect on January 19, 2017, will require certain prime contractors to “self-report” to their contracting officers all reduced or untimely payments to their small business subcontractors within 14 days of when the payment was due and the reason for the reduced or untimely payment.

Specifically, the contract will contain a new FAR clause, 52.242-5, which will state:

(a) Definitions. As used in this clause-

Reduced payment means a payment that is for less than the amount agreed upon in a subcontract in accordance with its terms and conditions, for supplies and services for which the Government has paid the prime contractor.

Untimely payment means a payment that is more than 90 days past due under the terms and conditions of a subcontract, for supplies and services for which the Government has paid the prime contractor.

(b) Notice. The Contractor shall notify the Contracting Officer, in writing, not later than 14 days after-

(1) A small business subcontractor was entitled to payment under the terms and conditions of the subcontract; and

(2) The Contractor-

(i) Made a reduced or untimely payment to the small business subcontractor; or

(ii) Failed to make a payment, which is now untimely.

(c) Content of Notice. The Contractor shall include the reason(s) for making the reduced or untimely payment in any Notice required under paragraph (b) of this clause.

Keep reading this article at: http://www.jdsupra.com/legalnews/new-federal-acquisition-regulation-rule-20809/

New FAR rule encourages ‘constructive exchanges’ between federal agencies and contractors

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The November 29, 2016 edition of the Federal Register contains a proposed amendment to the Federal Acquisition Regulation (FAR) aimed at encouraging pre-acquisition communications between industry professionals and federal agencies.  This amendment is part of a five-year long effort by the Obama Administration to clarify that communications between potential government contractors and federal agencies are not only allowed, but encouraged.

The proposed rule would amend FAR 1.102-2(a)(4), which currently states that “[t]he Government must not hesitate to communicate with the commercial sector as early as possible in the acquisition cycle to help the Government determine the capabilities available in the commercial marketplace. The Government will maximize its use of commercial products and services in meeting Government requirements.”  In the revised version, the following language would be added:

“Government acquisition personnel are permitted and encouraged to engage in responsible and constructive exchanges with industry as part of market research … so long as those exchanges are consistent with existing laws, regulations, and promote a fair competitive environment.” 

There are a number of laws and regulations that may be come into play during pre-acquisition exchanges with government officials, including the Procurement Integrity Act, 41 U.S.C. § 423, Anti-Kickback Act, 41 U.S.C. § 51 et seq., restrictions on lobbying activity, regulations on collusive bidding, prohibition on contingent fee arrangements, and various laws prohibiting gifts and gratuities to and bribery of federal officials.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/12/new-far-rule-encourages-constructive-exchanges-between-federal-agencies-and-contractors/

FAR Council clarifies 8(a) sole source justification requirements for high value contracts

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The Federal Acquisition Regulatory Council (FAR Council) has issued a proposed rule to clarify contracting officer and agency responsibilities when justifying sole source awards exceeding $22 million dollars made through the Small Business Administration’s 8(a) program.  The revisions directly address recommendations from a December 2012 Government Accountability Office (GAO) report titled, “Slow Start to Implementation of Justifications for 8(a) Sole-Source Contracts,” which, among other things, highlighted agency “confusion” about the existing justification requirements in the FAR.

The 8(a) sole source justification requirement for high value contracts is a statutory mandate, established by Section 811 of the FY 2010 National Defense Authorization Act, presumably to ensure that these high value awards are in the government’s best interest.  While the FAR Council published implementing regulations in April 2012, as noted in the 2012 GAO report, a number of agencies had difficulty complying with the new requirements, which differ from those governing other sole source justifications.

In subsequent GAO reports (published in September 2014 and in June 2016) reviewing the number of DoD issued 8(a) awards exceeding $20 million dollars, GAO identified a significant decline in high value sole source awards to 8(a) firms since implementation of the justification requirement in the Federal Acquisition Regulation (FAR).  Some agency officials at least partly attributed these declines to the new regulations.  GAO also noted a corresponding increase in the number of competitively awarded high value 8(a) contracts.

To see key aspects of the proposed rule and read more, so to: https://www.insidegovernmentcontracts.com/2016/11/far-council-clarifies-8a-sole-source-justification-requirements-high-value-contracts/

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