GOVERNMENT CONTRACTS
DoD, GSA, and NASA Issue Proposed Rule to Amend FAR Prohibition on Contracting With Inverted Domestic Corporations – Representations and Notifications
The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued a proposed rule to amend the Federal Acquisition Regulation (FAR) to require additional actions by contractors to assist contracting officers in ensuring compliance with the Government wide statutory prohibition on the use of appropriated (or otherwise made available) funds for contracts with any foreign incorporated entity that is an inverted domestic corporation or to any subsidiary of such entity, 79 Fed. Reg. 74558. Comments are due February 13, 2015.
DoD, GSA, and NASA Issue Federal Acquisition Circular 2005-79
The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued the Federal Acquisition Circular (FAC) 2005-79. This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council, 79 Fed. Reg. 240.
DoD, GSA, and NASA Issue Interim Rule to Amend FAR Establishing a Minimum Wage for Contractors
The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued an interim rule to amend the Federal Acquisition Regulation (FAR) to implement Executive Order 13658 (E.O.) and Department of Labor (DOL) final rule issued on October 7, 2014, both entitled, Establishing a Minimum Wage for Contractors, 79 Fed. Reg. 74544. The interim rule establishes a new minimum wage for covered service and construction contracts of $10.10 per hour, which will be adjusted annually, by the DOL. Contracting officers will include a clause in covered contracts and, if requested by the contractor and if appropriate, will adjust contract prices for the annual adjustments in the E.O. minimum wage. Contractors shall consider any subcontractor request, including requests by small business subcontractors, for a subcontract price adjustment due to the annual adjustment in the E.O. minimum wage. The interim rule will become February 13, 2015.
DoD, GSA, and NASA Issue the Small Entity Compliance Guide
The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) issued the Small Entity Compliance Guide. This Small Entity Compliance Guide has been prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of the rules appearing in Federal Acquisition Circular 2005-79, which amends the Federal Acquisition Regulation, 79 Fed. Reg. 74554.
NASA OIG Conducts Audit Regarding Costs Incurred on NASA’s Cost-Type Contract
The National Aeronautics and Space Administration (NASA) Office of Inspector General (OIG) has conducted an audit to examine whether NASA has established adequate procedures to ensure the costs contractors pass on to NASA in cost-type contracts are supportable, allowable, reasonable, and allocable. Specifically, the OIG reviewed NASA’s internal controls designed to prevent payment of excessive costs in these contracts. Through conducting the audit, the OIG has found that NASA is at an increased risk of paying unallowable, unreasonable, and unallocable incurred costs and of losing the opportunity to recoup improper costs because NASA’s contracting officers rely too heavily on the Defense Contract Audit Agency’s (DCAA) incurred cost audit process. Under the DCAA’s new, risk-based methodology, which went into effect in 2012, DCAA has significantly decreased the number of contractor proposals it audits in an effort to reduce its 6-year backlog of incurred cost proposals awaiting review. However, NASA’s contracting officers generally wait for a DCAA audit and do not perform additional oversight to ensure the appropriateness of contractor costs. Since the implementation of DCAA’s new methodology, NASA has not strengthened its internal controls to account for the significant reduction in DCAA oversight of NASA’s cost-type contracts. Additionally, NASA’s reliance on DCAA is inhibiting its efforts to timely close out awards, which further delays the identification of questionable costs and limits availability of excess funds for other uses. Costs Incurred On NASA's Cost-Type Contracts.
Linking Small Business Subcontractors to Prime Contracts Is Not Feasible Using Current Systems
The Government Accountability Office (GAO) has issued a report pursuant to the Joint Explanatory Statement for the National Defense Authorization Act for Fiscal Year 2014 mandate that GAO review the feasibility of linking small business subcontractors to particular prime contracts when there is a subcontracting plan that pertains to multiple contracts. The report assesses the probability of using contract reporting systems to link small business subcontractors to particular contracts and identifies actions executive agencies are taking that might help facilitate linking small business subcontractors to prime contracts. To address the GAO’s objectives, four government-wide contract reporting systems and extracted data using contract information from previously reviewed defense programs were reviewed. The contract reporting systems GAO reviewed contain relevant information on subcontracting plans, subcontracts, and subcontractors, but no single system was designed to link small business subcontractors to prime contracts. The report concluded that linking small business subcontractors to prime contracts when there is a subcontracting plan that pertains to multiple contracts is especially difficult because these plans do not specify the particular contracts to which they apply. There are multiple actions currently called for by legislation that may result in a single system that can link small business subcontractors to prime contracts. The General Services Administration (GSA) is currently involved in an effort to consolidate the functions and information of several existing contract reporting systems, and the Department of the Treasury (DOT) has recently been tasked with the responsibility to operate and maintain USASpending.gov. DOT plans to make changes to improve the search function of the website, which could help facilitate linking subcontractors to prime contracts. Additionally, the Digital Accountability and Transparency Act, enacted May 2014, requires agencies to disclose additional data relevant to subcontracting; improve the consistency and reporting of the data; and periodically review their completeness, timeliness, quality, and accuracy. Linking Small Business Subcontractors to Prime Contracts Is Not Feasible Using Current Systems.
CAPITOL HILL
Defense Bill Extends Disputed Small Business Program
The massive fiscal 2015 defense authorization bill that cleared Congress on December 12, 2014 renewed the obscure small business program known as, The Comprehensive Subcontracting Plan Test Program, for an additional three years. The program was set up in 1990 to determine if comprehensive subcontracting plans on a corporate, division, or plant-wide basis, rather than for individual contracts, would lead to increased opportunities for small businesses. The program is yet to publish a single report or data set from the major contractors and small business advocates have charged that its existence is actually costing them opportunities by allowing the major firms leeway to get around the Government wide goal of awarding 23% of contract dollars to small businesses. Due to the lack of reporting, some industry advocates and the Pentagon itself have argued that the program should be terminated. The final bill, which President Obama is expected to sign, will require contractors to report greater detail on subcontracting more frequently in an effort to address the deficiency in reporting by the Program. Defense Bill Extends Disputed Small Business Program.
Committee for Purchase From People Who Are Blind or Severely Disabled
The Following Notices Were Issued:
79 Fed. Reg. 73885, December 12, 2014, adds products (Laminating Pouch, Thermal) and services (Internal Mail and Messenger Service, U.S. Department of State, Harry S. Truman Building, 2201 C Street NW., Washington, DC) to the Procurement List. The additions will become effective January 12, 2015.
79 Fed. Reg. 73886, December 12, 2014, propose the deletion of a product (Cover, Telescope Mounting) and services (Grounds Maintenance Service, United States Postal Service: General Mail Facility, San Jose, CA; Janitorial/Custodial Service, U.S. Army Reserve Center: Rockford, 1130 Arthur Avenue, Rockford, IL) from the Procurement List. Comments on the proposed deletions are due January 12, 2015.
