2 2007 FAR Update Presentation Alan Chvotkin, PSC Richard Hopf, ASI Julia Wise, OFPP
3 Federal Acquisition Regulation •FAR provides uniform policies and procedures for acquisitions by executive agencies of the Federal Government. It is issued and maintained by GSA, DoD, and NASA. FAR located on www.acquisition.gov www.acquisition.gov •Regulations.gov - U.S. Government Web site encourages public participation in the Federal decision-making process by allowing you to view and submit comments and documents concerning Federal regulations, adjudications, and other actions. •Federal Register is the official daily publication for rules, proposed rules, and notices of Federal agencies and organizations, as well as executive orders and other presidential documents. All rules and changes discussed are available at http://www.gpoaccess.gov
4 Sources of FAR Changes Legislation IG & GAO Recommendations Court Decisions OFPP Policy Letters Executive Orders Agency Recommendations Individual Recommendations Industry Recommendations Policy Changes FAR
5 FAR Change Process • Director, DAR Council • NASA, DAR Council Rep. • Chairman, CAAC FAR Team DAR Council/CAAC OFPP/OIRA FAR Secretariat/Federal Register Proposed Rule Interim Rule (FAC) Public Comments FAR Principals Final Rule (FAC)
6 2007 - FAR FACs •FAC 2005-14 – FAC 2005-20 – 7 issued •25 rules interim and final rules issued during this period. •Property Management Rule – impacts 24 parts •Emergency Acquisition Rule – impacts the least parts of the FAR – 1 part. •Rule that received the most comments – Property Management with 287 comments •Rule that received the least comments – 0 comments received on the Contracts with Religious Entities rule
7 FAR CHANGE: Emergency Procurement Authority •What is the change and who is impacted? –This final rule (FAR Case 2005-038) adds a single FAR Part 18 for acquisition flexibilities that may be used by the acquisition community to facilitate and expedite acquisitions of supplies and services during emergency situations that already existed in the FAR. •How/When are these changes implemented? –The COs and others in the acquisition community will use this quick reference tool when buying under these conditions. •Where is it implemented? FAR Part 18
8 FAR CHANGE: C ontracts with Religious Entities •What is the change/who is impacted? –FAR rule 2006-019 implements E.O. 11246, as amended, Equal Employment Opportunity, to incorporate the exemption for religious entities prescribed in E.O. 13279 to exempt religious corporations, associations, educational institutions and societies from certain nondiscrimination requirements. E.O. 11246, as amended, permits religious entities to consider employment of individuals of a particular religion to perform work connected with carrying on the entity's activities. •Who/When/Where is it implemented? - Acquisition community is affected by this change. This rule was published in FAC 2006-16 on March 22, 2007 and affects FAR Parts 22 and 52
9 FAR CHANGES: Free Trade Agreement (FTA) additions •What is the change? The FAR was amended to implement –the Dominican Republic—Central America—United States FTA with respect to the Dominican Republic and adds Bulgaria and Romania to the list of WTO; –the Dominican Republic—Central America—United States FTA with respect to El Salvador, Honduras, Nicaragua, –the Dominican Republic—Central America—United States FTA with respect to Guatemala and the US –Bahrain Free Trade Agreement, and –the FTA with respect to Morocco This FTA waives the applicability of the Buy American Act for some foreign supplies and construction materials from these countries, and specifies procurement procedures designed to ensure fairness, applicable to the acquisition of supplies and services. (See FAR individual FAR changes for additional application of each change) •When/Where is it implemented: These changes allow COs to purchase the products from these countries under certain conditions. Various FAC were issued that included these changes in 2007. FAR Parts 25 and 52 were affected (See FAR Rules, 2006-001,2006-006, 2006-017, and 2006-028 for details on these rules).
10 FAR Change: Reporting of Purchases from Sources outside the US •What is the change/who is impacted? –FAR Rule 2005-034 amends to implement Section 837 of Division A of the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006 (Pub. L. 109-115) and similar sections in subsequent appropriations acts. Section 837 requires the head of each Federal agency to submit a report to Congress relating to acquisitions of articles, materials, or supplies that are manufactured outside the United States. •Who/When: This rule amends the FAR to request from offerors necessary data regarding place of manufacture. •When/Where is it implemented? This amendment FAR 25 and 52 is mandatory for solicitations issued and contracts awarded on or after 10/1/06. To meet the congressionally mandated reporting requirement, agencies may incorporate the new FAR provision 52.225-XX or corresponding requirement at 52.212-3 in solicitations issued or contracts awarded prior to 10/1/06. -
11 FAR Change: Removal of Sanctions against EU Countries •What: FAR Rule 2005-045 implemented the removal of sanctions against certain European Union (EU) countries not covered by WTO Government Procurement Agreement. •Who is impacted: COs can now consider offers of end products, services, and construction that were previously prohibited by the sanctions. •When/Where is impacted: Published in FAC 2005-014 on November 22, 2006 and changes were made to FAR Parts 25 and 52
12 FAR Change: Use of $1 Coins on Federal Facilities •What: FAR Rule 2006-027 amends the FAR to implement Section 104 of the Presidential $1 Coin Act of 2005. Section 104 requires that entities that operate any business on any premises owned or controlled by the United States be capable of accepting and dispensing $1 coins on and after January 1, 2008. •How/When: - This rule applies to all service contracts that involve business operations conducted in U.S. coins and currency, including vending machines, on any premises owned by the U.S. or under the control of any agency or instrumentality of the U.S. - Federal agencies are required to place the contract clause in such solicitations and contracts issued on and after the effective date of this rule to ensure compliance with this Act. Those applicable contracts in existence before January 1, 2008, shall be modified to include the clause. •Where: FAR Parts 37 and 52
13 FAR Change: Property Management What is the change: FAR Rule 2004-025 amends the FAR to simplify procedures, clarify language, and eliminate obsolete requirements related to the management and disposition of Government property in the possession of contractors. Who: COs, property administrators and contractors responsible for the management of Government property. It also simplifies requirements for contractors by reducing the number of FAR Clauses from 19 to 3 overarching clauses. Why: changes were made to adopt commercial property management practices to improve the management of Government property while fostering efficiency, flexibility, innovation, and creativity in How/When/Where: Effective in 2007 and changes were made in FAR Parts 1, 2, 4, 7, 14, 15, 16, 17, 18, 19, 22, 31, 32, 35, 37, 41, 42, 43, 44, 45, 46, 49, 51, 52
14 FAR CHANGE: CHANGES TO LOBBYING RESTRICTIONS •What is the change? –Final rule –Includes a new definition of “lobbying contact” –Includes OMB guidance on the definition of “appropriated funds” –Formalizes in the regulations changes already made to the OMB Standard Form LLL, Disclosure of Lobbying Activities –Removes 31 U.S.C. 1352 (Limitation on payments to influence certain transactions) from the list of laws inapplicable to the acquisition of commercial items
15 FAR CHANGE: CHANGES TO LOBBYING RESTRICTIONS •Who is impacted? –Recipients of contracts over $100,000 or grants, loans or cooperative agreements seeking to “influence or attempting to influence” officials in connection with a covered federal action. Includes subcontractors •How are they impacted? –Prohibits lobbying contacts; recipients must fill out Form LLL •When is it implemented? –Effective September 17, 2007; published August 17, 2007 (72 F.R.46327; FAC 2005-19) •Where is it implemented? –FAR Parts 3.8, 12 and 52
16 FAR CHANGE: TERMINATION OR CANCELLATION OF PURCHASE ORDERS •What is the change? –Final rule corrects an inadvertent omission made in FAC 97-3 (12/9/97) by reinstating coverage for termination for cause of commercial purchase orders under FAR 13 •Who is impacted? –Contractors with commercial purchase orders awarded under FAR Part 13 procedures •How are they impacted? –Reestablishes authority of the contracting officer to terminate a purchase order for cause in addition to the authority to terminate for convenience
17 FAR CHANGE: TERMINATION OR CANCELLATION OF PURCHASE ORDERS •When is it implemented? –Effective March 22, 2007; published March 22, 2007 (72 F.R. 13586; FAC 2006-20) •Where is it implemented? –FAR Part 13
18 FAR CHANGE: TERMS AND CONDITIONS TO IMPLEMENT STATUTES AND EXECUTIVE ORDERS •When is it implemented? –Effective March 22, 2007; published March 22, 2007 (72 F.R. 13588; FAC 2006-20) •Where is it implemented? –FAR 52.212-5
19 FAR CHANGE: TERMS AND CONDITIONS TO IMPLEMENT STATUTES AND EXECUTIVE ORDERS •What is the change? –Final rule updates the list of required contract clauses that implement provisions of laws or Executive orders that may be applied to acquisitions of commercial items by adding the clause on liquidated damages under a small business subcontracting plan •Who is impacted? –All offerors (other than small business) for commercial items acquired pursuant to FAR Part 12 •How are they impacted? –Offerors could be subjected to the liquidated damages clause for small business subcontracting plans provided under FAR 52.219-16
20 FAR CHANGE: FAR PART 19 CHANGES –SMALL BUSINESS SIZE REPRESENTATION •What is the change? –Interim rule amending the FAR to implement SBA’s final rule (11/15/06) to improve the accuracy of small business size status reporting, at the prime contract level, over the life of certain contracts •Who is impacted? –All small businesses awarded long-term contracts and any firm engaged in a merger or acquisition of a small business concern
21 FAR CHANGE: FAR PART 19 CHANGES –SMALL BUSINESS SIZE REPRESENTATION •How are they impacted? –Contractors are required to re-represent their size status (1) on contracts prior to the end of the fifth year of a contract that is more than five years in duration (long-term contract); (2) prior to exercising any option thereafter; (3) following execution of a novation agreement; or (4) following a merger or acquisition of the contractor regardless of whether there is a novation agreement •When is it implemented? –Effective June 30, 2007; published July 5, 2007 (72 F.R. 36852; FAC 2005-18); contracting officers must also modify existing long-term contracts to add the clause •Where is it implemented? –FAR Parts 19 and 52
22 FAR CHANGE: FAR PART 19 CHANGES –SMALL BUSINESS CREDIT FOR ALASKA NATIVE CORPORATIONS •What is the change? –Final rule authorizing contractors to count subcontracts awarded to Alaskan Native Corporations (ANCs) and Indian tribes towards satisfaction of goals for subcontracting with small business and small disadvantaged business, regardless of size; implements Section 702 of P.L. 107-117 •Who is impacted? –Firms (other than small business) required to submit small business subcontracting plans •How are they impacted? –Permits firms utilizing ANCs and Indian tribes to take credit toward small business subcontracting plans; increases opportunities for using ANCs and Indian tribes as subcontractors
23 FAR CHANGE: FAR PART 19 CHANGES –SMALL BUSINESS CREDIT FOR ALASKA NATIVE CORPORATIONS •When is it implemented? –Effective September 17, 2007; published August 17, 2007 (72 F.R. 46345; FAC 2005- 19) •Where is it implemented? –FAR Parts 19 and 52 and new Forms 294 and 295
24 FAR CHANGE: ADDITIONAL COMMERCIAL CONTRACT TYPES •What is the change? –Establishes procedures for award and payment for commercial time and materials/labor hour (T&M) contracts –Requires CO to execute D&F that no other contract type is suitable –Must be awarded using competitive procedures (FAR 6.102 or 13) or set-aside procedures (FAR 19.5); no “sole source” awards –“Time is time” regardless of where performed; material includes “direct material”, subcontracts for supplies, and incidental services that do not have a labor category –Time is paid at hourly rates in the contract that meets the labor qualifications specified in the contract –Commercial material paid at contractor’s established catalog or market price; non-commercial material paid at actual cost without profit
25 FAR CHANGE: ADDITIONAL COMMERCIAL CONTRACT TYPES •Who is impacted? –All agencies using T&M/LH contracts for commercial items; all contractors selling T&M/LH as a commercial item •How are they impacted? –Agencies must make new affirmative determinations before using T&M contracts; contractors must carefully differentiate between commercial and non-commercial items and between “time” and materials” used in the performance of appropriate solicitations and contracts •When is it implemented? –Effective February 12, 2007; published December 12, 2006 (71 F.R. 74667; FAC 2005-15) •Where is it implemented? –FAR Part 16
26 FAR CHANGE: PAYMENTS UNDER TIME AND MATERIALS/LABOR HOURS CONTRACTS •What is the change? –Final rule –Applies to payments for non-commercial item contracts –Allowable cost and payment clauses must be included in T&M contracts applicable to reimbursement of materials –Defines the term “materials” –Three new solicitation provisions that directs how proposals address subcontract labor: (1) non-commercial items based on adequate competition; (2) non-commercial items based on other than adequate price competition; and (3) acquisition of commercial items
27 FAR CHANGE: PAYMENTS UNDER TIME AND MATERIALS/LABOR HOURS CONTRACTS •Who is impacted? –Agencies and contractors for payments under non-commercial item contracts •How are they impacted? –New rules and new clauses relating to the treatment of proposals and subcontracts under non-commercial item contracts •When is it implemented? –Effective February 12, 2007; published December 12, 2006 (71 F.R. 74656; FAC 2005-15) •Where is it implemented? –FAR Parts 16 and 52
28 Online Representations and Certifications Application Archiving Capability •Amends FAR so that contracting officers no longer need to file a paper copy of a contractor’s representations and certifications in the contract file, but may incorporate archived Online Representations and Certifications Application (ORCA) records by reference in the contract file to satisfy documentation requirements. FAR 4.12 currently requires prospective contractors to submit annual representations and certifications via ORCA to eliminate the administrative burden for contractors of submitting the same information to various contracting offices. •Primarily affects federal contracting officers •Harmonizes record retention policy requiring paper inclusion in contract file and policy requiring electronic submission and archiving or reps and certs; Eliminates confusion and reduces administrative burden; Paper record must be included where offeror identifies changes to electronic submission. •Effective August 17, 2007; Interim rule published September 28, 2006. •Implemented at FAR parts 4, 12, 14, and 15.
29 Wage Determinations Online •Implements the Wage Determinations Online (WDOL) website as the source for federal contracting agencies to obtain wage determinations issued by the Department of Labor for service contracts subject to McNamara – O’Hara Service Contract Act and for construction contracts subject to Davis – Bacon Act. Rule also incorporates new geographic jurisdictions for DOL’s wage and hour regional offices and eliminates GPO references. •Contracting officers primarily affected. •FAR now directs them to obtain wage determination electronically from DOL’s website. WDOL and e98 replaces paper standard forms 98 and 98a. Forms 98, 98a, and 99 deleted from FAR part 53. •Effective March 22, 2007; Interim rule published June 28, 2006. •Implemented at FAR parts 4, 22, 47, 52, and 53.
30 Federal Funding Accountability and Transparency Act – Reporting Subcontractor Award Data •Establishes a pilot program to test the collection and accession of subcontract award data. Implements, in part, the FFATA requirement for a single searchable website that provides the public access to information on federal expenditures. However, information reporting during pilot will not be disclosed to the public. •Primarily affects contractors. •Applies to awarded contracts valued at or above $500 M and performed in the U.S. Awardees required to report quarterly all first tier subcontract awards exceeding $ 1 M to the FFATA electronic database at www.esrs.gov – Classified and commercial item contracts excepted.www.esrs.gov •Effective date is September 6, 2007. Pilot runs through 2008. •Implemented in FAR parts 4, 12, and 52.
31 Common Identification Standard for Contractors •Requires contracting officers to incorporate the requirement for contractors to comply with agency verification procedures that implement Homeland Security Presidential Directive-12 (HSPD-12), Office of Management and Budget (OMB) guidance M-05-24, and Federal Information Processing Standards Publication (FIPS PUB) Number 201 when applicable to the work to be performed under the contract. •Primarily affects contractors. •Contractors must comply with agency personal identification requirements identified in HSDD-12, OMB guidance M-05-24, and FIPS PUB Number 201, for solicitations and contracts issued or awarded as of effective date. HSPD-12 requires the development and agency implementation of a government-wide standard for secure and reliable forms of identification for federal employees and contractors, including contractor employees. Contracting officers do not have to include the clause if contract performance does not require compliance with HSPD-12; however, the clause at 52.204-9 must be included, and applies to all large and small businesses, when contract performance requires contractors and subcontractors to have “routine” access to a federally controlled facility and/or federally controlled information system. Definitions of federally controlled facility and federally controlled information system have been revised to be consistent with the OMB memo M-05-24, dated August 5, 2005. Provides for subcontract flow down, as applicable. •Effective date is November 22, 2006. •Implemented in FAR parts 2, 4, 7, and 52.
32 Acquisition of Products and Services for Personal Identity Verification •Addresses the acquisition of products and services for personal identity verification so that they will comply with requirements in HSPD-12, and FIPS Pub Number 201, “Personal Identity Verification of Federal Employees and Contractors.” •Agency implementers of HSPD-12 and Federal contracting officers are primarily affected. •The rule requires agencies to acquire personal identity verification products and services that are approved to comply with the FIPS PUB 201 standard and that are interoperable among agencies. Agencies may satisfy this requirement by acquiring the approved products and services from GSA under Federal Supply Schedule 70, SIN 132-162, HSPD-12 product and service components. Agencies may also acquire such services directly, but must ensure compliance by certifying to that effect, ensuring interoperability and conformance for product life-cycle, and maintaining a plan for life-cycle conformance. •Effective date is September 17, 2007. •Implemented in FAR parts 4 and 52.
33 Combating Trafficking in Persons •Implements 22 U.S.C 7104(g) which requires that contracts must include a provision authorizing the government to terminate the contract if the contractor or any subcontractor engages in trafficking of persons. This revised interim rule contains FAR subpart 22.17 with an associated clause at 52.222-50 to be used in all contracts, including contracts for suppliers and all contracts for commercial items. Contractors are required to notify employees of the U.S policy and actions that will be taken against them for violations. •Affects all Government contractors. •This revised interim rule prohibits contractors, their employees, and subcontractors from trafficking in persons, procuring commercial sex acts, and using forced labor during the period of performance of the contract. Contractors and subs are required to notify employees of the prohibited activities and consequences for violations. The government’s policy is characterized as “zero tolerance.” Remedies for violation include contract/subcontract termination for default, suspension of payments, loss of fee, suspension or debarment, and loss of employment. This revised interim rule now applies to all contracts, including contracts for supplies and commercial items. •This revised interim rule is effective August 17, 2007. It replaces a prior interim rule issued April 19, 2006. •This interim rule is implemented in FAR parts 12, 22, and 52.
34 Contact Information ALAN CHVOTKIN SENIOR VICE PRESIDENT AND COUNSEL PROFESSIONAL SERVICES COUNCIL (703) 875-8059 CHVOTKIN@PSCOUNCIL.ORG WWW.PSCOUNCIL.ORG RICHARD HOPF ACCOUNT EXECUTIVE ACQUISITION SOLUTIONS, INC. RICHARD.HOFP@ACQSOLINC.COM JULIA WISE PROCUREMENT POLICY ANALYST OMB/OFPP JWISE@OMB.EOP.GOV