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

New FAR rule continues shake-up of LPTA procurements

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Federal civilian agencies will now face new restrictions on when and how they can use Lowest Price Technically Acceptable source selection procedures.  A new rule in the Federal Acquisition Regulation is the latest in a series of measures aimed at regulating the use of LPTA source selection procedures.  The new rule implements an October 2019 proposed rule and takes effect on February 16, 2021.

As previously discussed on this blog, the Department of Defense issued a final rule in late 2019 amending the Defense Acquisition Regulation Supplement to establish restrictions on when and how DOD may use LPTA source selection procedures.  Pursuant to the John S. McCain National Defense Authorization Act for Fiscal Year 2019, the new FAR rule places similar — though not identical — restrictions on civilian agencies.

The new FAR rule imposes three primary limits on the use of LPTA procedures.

Continue reading at:  Covington

Final rule implements changes to the Buy American Act regulations

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On January 19, 2021, the Federal Acquisition Regulatory Council published the final rule amending the Federal Acquisition Regulation (“FAR”) in accordance with President Trump’s Executive Order 13881, “Maximizing Use of American-Made Goods, Products, and Materials.”  As we discussed in our prior blog articles here (discussing the September 2020 proposed rule) and here (discussing the July 15, 2019 order), the Executive Order required significant changes to the regulations implementing the Buy American Act, 41 U.S.C. §§ 8301-8305 (“BAA”).  The final rule varies very little from the September 14, 2020 proposed rule (discussed in greater detail here).  Accordingly, the final rule amends applicable FAR clauses with three key impacts:

  1. Increasing the domestic content requirement – to 55% for most products, and to 95% for products consisting “wholly or predominantly” of iron or steel, or a combination of both (and including new definitions to clarify further what types of products are covered by the heightened requirements);
  2. Removing the commercially available-off-the-shelf (“COTS”) exception for products consisting “wholly or predominantly” of iron or steel, or a combination of both (but leaving a partial exception in place for COTS fasteners made wholly or predominantly of iron or steel); and
  3. Increasing price preferences for domestic products – from 6% to 20% for large businesses, and from 12% to 30% for small businesses.

The final rule and the new FAR clauses are effective on January 21, 2021 – although it is not required in new solicitations until February 22, 2021.

Continue reading at:  Government Contracts and Investigations blog

GAO: SAM registration is a matter of contractor responsibility, not bid responsiveness

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Government contractors must be registered in the System for Award Management (SAM) and complete required representations and certifications annually.  FAR 52.204-7 also requires bidders, with some limited exceptions, to be registered in SAM at the time of bid and to continue to be registered until time of award, during performance, and through final payment.  Recently, the Government Accountability Office (GAO) addressed the issue of whether a bidder’s failure to have an active registration in SAM at time of bid renders the bid “nonresponsive” and ineligible for award in Master Pavement Line Corp., B-419111 (Dec. 16, 2020).

In Master Pavement Line Corp., GAO concluded that the failure to be registered in SAM and to complete the annual representations and certifications was a matter of contractor responsibility and not bid responsiveness and that such a defect did not impact the responsiveness of the bid.  As a result, FAR 14.405 required the procuring agency to give the bidder the opportunity to cure the defect.  While GAO concluded that the failure to be registered in SAM does not render a bid nonresponsive, this does not mean that a bidder should wait to register in SAM.  GAO also indicated that SAM registration and the completion of the representations and certifications was still a matter of contractor “responsibility.”  In addition to examining bid responsiveness, under FAR 9.104-1, the federal government is required to determine if a contractor is responsible prior to award.  Therefore, an agency could still theoretically find a contractor nonresponsible for failing to properly register in SAM and deem the contractor ineligible for award.

Continue reading at:  Peckar & Abramson Blog

NDAA requires Contracting Officers to provide information to unsuccessful offerors for task and delivery orders valued under $5.5 million

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The annual National Defense Authorization Act (NDAA) has long been used to impose government-wide procurement reforms.  The recently enacted NDAA, signed by President Trump on December 20, 2019, continues this practice, by requiring agencies to provide unsuccessful offerors on smaller dollar task or delivery orders above the Simplified Acquisition Threshold an explanation as to why their proposal was unsuccessful as well as the rationale for the award.

Currently, agencies are not required to provide debriefings to unsuccessful offerors on FAR Part 16 task or delivery orders smaller than $5.5 million, leaving many contractors with no explanation as to why their offers were not successful.  Section 874 of the FY 2020 NDAA requires that Federal Acquisition Regulation (FAR) 16.505(b)(6) be amended to provide that, upon request by an unsuccessful offeror, the Contracting Officer on a contract above the Simplified Acquisition Threshold and less than $5.5 million shall “provide a brief explanation as to why such offeror was unsuccessful that includes a summary of the rationale for the award and an evaluation of the significant weak or deficient factors in the offeror’s offer.”

Continue reading at:  Pillsbury

Understanding the FAR’s government control exceptions to late proposals

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[A] number of [government contractors] encounter the same problem: They timely emailed a proposal to a government agency, but, for reasons unknown, the proposal was delivered late or was never received by the Contracting Officer (“CO”).  There, the CO normally enforces the Federal Acquisition Regulation’s (“FAR”) strict “Late is Late” policy and rejects the proposal.  Fortunately, in certain circumstances, it is possible to employ the Government Control Exception to salvage allegedly late proposals; however, the Government Accountability Office (“GAO”) and the Court of Federal Claims (“COFC”) interpret that exception differently.  Any government contractor whose timely emailed proposal is rejected due to the “Late is Late” policy, is encouraged to work with an experienced government contracts attorney who can help them overcome the rejection.

The Government Control Exception, found both at 48 C.F.R. § 52.212-1(f) and 48 C.F.R. § 52.215-1(c)(3)(ii)(A)(1)-(3), contain identical language, but one applies to offerors of commercial items and the other applies to offerors in competitive acquisitions, respectively.  Essentially, they hold that a late proposal may be considered “if it is received before award is made,” and “the Contracting Officer determines that accepting the late offer would not unduly delay the acquisition; and—

(1) If it was transmitted through an electronic commerce method authorized by the solicitation, it was received at the initial point of entry to the Government infrastructure not later than 5:00 p.m. one working day prior to the date specified for receipt of offers; or

(2) There is acceptable evidence to establish that it was received at the Government installation designated for receipt of offers and was under the Government’s control prior to the time set for receipt of offers . . .”

48 C.F.R. § 52.215–1(c)(3)(ii)(A)(1)-(2); 48 C.F.R. § 52.212-1(f)(2)(i)(A)-(B).  Put simply, the Government Control Exception applies if the “late” proposal: (1) is received before award is made; (2) will not unduly delay the acquisition; (3) was received by the government’s servers; and (4) was under the government’s control prior to the deadline.

Continue reading at:  Piliero Mazza

Government contracts regulatory and legislative update

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Our monthly edition of the “Government Contracts Regulatory and Legislative Update” offers a summary and insight into the relevant industry developments that occurred during the previous month.

Regulations

DoD Issues Proposed Rule Establishing Preference for Fixed-Price Contracts

On April 1, 2019, the U.S. Department of Defense (DoD) issued a proposed rule to revise the Defense Federal Acquisition Regulation Supplement (DFARS) to establish a preference for fixed-price contracts when determining contract type, and to require use of firm fixed-price contracts for foreign military sales, subject to exceptions.  Approval is required for cost-reimbursement contracts in excess of $50 million if awarded between October 1, 2018 and October 1, 2019, and for cost-reimbursement contracts in excess of $25 million if awarded on or after October 1, 2019.  These revisions will implement Sections 829 and 830 of NDAA FY 2017.

The proposed rule includes the following key amendments:

  • Adds “milestone decision authority” definition to DFARS 202.101.
  • Revises DFARS 216.102(1) and adds DFARS 216.102(3) to reference the Section 829 NDAA requirements.
  • Adds DFARS 225.7301-1 and -2 to implement the Section 830 NDAA requirements.

DoD Issues Proposed Rule Revising the Nonmanufacturer Rule for 8(a) Participants

On April 1, 2019, DoD issued a proposed rule to amend the DFARS to implement the Small Business Administration’s (SBA) final rule standardizing the nonmanufacturer rule (NMR).  The NMR imposes certain requirements upon small business concerns that offer end items they did not manufacture, process, or produce.

This rule will update DFARS clause 252.219-7010 (Notification of Competition Limited to Eligible 8(a) Participants) to remove the nonmanufacturer rule exemption for contracts valued at or below $25,000 and awarded under simplified acquisition procedures.  Instead, the NMR will apply to all 8(a) contracts regardless of dollar value, and will require 8(a) participants that are nonmanufacturers to offer end items manufactured, processed, or produced by small business concerns in the United States or its outlying areas.

Continue reading at:  Drinker Biddle

COFC issues decision on Cost Accounting Standards and ‘offsetting’

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The Boeing Company v. United States, Civil No. 17-1969C (May 29, 2019) reveals the Court of Federal Claims’ (COFC) interpretation of the Cost Accounting Standards (CAS) statute as primarily benefiting the government, and directs contractors challenging the Federal Acquisition Regulation (FAR) 30.606(a)(3)(ii) prohibition on offsetting the impact of simultaneous cost accounting practice changes to raise those challenges in a pre-award protest or risk waiver.  Importantly, the court’s decision could have broad implications, requiring contractors to protest the applicability and interpretation of any extra-contractual FAR provisions—not just those involving the CAS statute—that expound upon a FAR Part 52 contract clause.

Adopting a novel theory rooted in the US Constitution, The Boeing Company (Boeing) filed an action under the Contract Disputes Act (CDA) alleging that the FAR 30.606 offset prohibition is an “illegal exaction” in violation of the CAS statute, which specifically prohibits windfalls to the government resulting from changes to a contractor’s cost accounting practices.  Boeing also claimed that FAR 30.606 was “extra-contractual” and therefore, should not preclude Boeing from offsetting changes that increase costs to the government from those that decrease costs.  The COFC dismissed Boeing’s constitutional claim for lack of subject matter jurisdiction and concluded that Boeing had effectively waived its contract claims upon failing to raise them in a pre-award protest or during negotiations with the government.

Continue reading at:  Arnold & Porter

Small businesses: Why and how to set-up or enhance your ethics and compliance program

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It’s been ten years since the Federal Acquisition Regulation (FAR) was amended to require government contractors to have a business ethics and compliance program – that’s right, it’s a requirement in every government contract and in most subcontracts!  Aside from being a requirement in every contract and a core component of a small business’ “present responsibility” (i.e. eligibility to be a contractor at all), recent developments have made it essential for small business to address compliance now.

In particular, the Department of Justice has issued guidance as to what it expects from an organization’s ethics and compliance programs, and has reiterated that it will not tolerate companies that lack an effective program.  In other words: get caught without one, and that may be the end of your company.  See Holland & Knight’s post about the DOJ Guidance.  The good news is there has been a lull in new FAR and other regulatory requirements under this Administration, so this is a good time to play some catch up.

But let’s face it, many small businesses are not where they should be, and some others are not even close.  So why aren’t small businesses better prepared and how do small businesses move ethics and compliance programs from a perennial back burner issue to the forefront?

Continue reading at:  Holland & Knight’s Government Contracts Blog

 

U.S. Government issues definition of “recruitment fees” in FAR anti-trafficking regulations

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The Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) recently issued a final rule amending the Federal Acquisition Regulation (“FAR”) 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.

Keep reading this article at: Arnold & Porter website

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