FEDERAL CONTRACTS PERSPECTIVE Federal Acquisition Developments, Guidance, and Opinions

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1 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE Federal Acquisition Developments, Guidance, and Opinions Vol. XIV, No. 5 May 2013 DOD IMPLEMENTS CONTRACT CLAUSE LOGIC SERVICE, CONTRACT BUSINESS ANALYSIS REPOSITORY The Department of Defense (DOD) was busy taking care of odds and ends in April by unveiling a program to make sure the correct provisions and clauses are included in solicitations and contracts, requiring additional information be added to a business analysis program, cancelling a proposed rule, and issuing three class deviations. Implementation of Defense-Wide Contract Clause Logic Service (CLS): The CLS is a new mandatory service for procurement professionals and contract writing systems. It is an authoritative, rules driven engine that determines the appropriate Federal Acquisition Regulation (FAR) and Defense FAR Supplement (DFARS) clauses for solicitations and contracts. The CLS is a web-based database designed to aid in the CONTENTS DOD Implements Contract Clause Logic Service... 1 Proposed Rule Would Mandate CAGE Code Use... 4 NASA Commences NFS Updating Process... 5 DOE Seeks Comments on Improving ESPCs... 6 EPA Revises Printing Clause... 8 Nonmanufacturing Waiver Rescission Proposed... 8 procurement process within the Department of Defense (DOD) and other federal agencies. The primary function of the CLS is to allow for consistent inclusion of provisions and clauses into procurement documents. The CLS will be implemented in phases. The initial Implementation Wave 1 will target the following systems: ocontrax (Air Force), EProcurement (Defense Logistics Agency), and Integrated Defense Enterprise Acquisition System (Defense Information Systems Agency). The Standard Procurement System (SPS) will be evaluated for a Fiscal Year (FY) 2014 implementation schedule by the SPS Joint Program Management Office. The CLS website is Contract Business Analysis Repository (CBAR) Implementation: The Defense Contract Management Agency (DCMA) released the CBAR application for use by the DOD procurement community on February 29, 2012, to facilitate the sharing of information among DOD contracting officers and to assist them during their preparation for negotiations with contractors. The CBAR provided the following information: Direct and indirect cost information (forward pricing rates) Status of contractor business systems Status of compliance with Cost Accounting Standards (including Cost Accounting Standards disclosure statement) Information about costs and financial condition of the parent entity of major corporations

2 DOD contracting officers will be required to add business clearance information to the CBAR database for all negotiated contract pricing actions exceeding $25,000,000. In addition, contracting officers are to upload the same business clearance information to the CBAR database for all FY 2013 actions that were over $100,000,000 and occurred prior to June 24, Due to the sensitive and proprietary nature of the data in CBAR, users are granted access to records on a need-to-know basis (that is, to view only the data needed to perform their duties). Access to CBAR is limited to active-duty military and civilian government employees only at no time will CBAR access be granted to contract employees, even when employed by the government. Withdrawal of Proposed Encouragement of Science, Technology, Engineering, and Mathematics (STEM) Programs Rule: DOD is cancelling the proposed rule that would encourage contractors to develop science, technology, engineering, and mathematics (STEM) programs. The proposed rule would have added DFARS subpart , Encouragement of Science, Technology, Engineering, and Mathematics (STEM) Programs, and a related clause to implement Section 862 of the National Defense Authorization Act for FY 2012 (Public Law ), which requires DOD to encourage contractors to develop STEM programs. At this time, DOD is in the process of reassessing the most effective and efficient methods by which it can encourage contractors to develop science, technology, engineering, and mathematics (STEM) programs. For more on the proposed rule, see the March 2013 Federal Contracts Perspective article DOD Issues Rules on Acquiring Tents, Alleged Crimes. Prohibiting Use of FY 2013 Funds to Contract with Corporations with Unpaid Delinquent Taxes: DOD has issued a DFARS class deviation that prohibits contracting with corporations with an unpaid delinquent tax liability or a felony conviction under a federal law. This prohibition applies to contracts funded by the Consolidated and Further Continuing Appropriations Act of 2013 (Public Law 113-6). The class deviation provides a provision, DFARS , Representation by Corporations Regarding an Unpaid Delinquent Tax Liability or a Felony Conviction Under Any Federal Law Fiscal Year 2013 Appropriations (DEVIATION 2013-O0010), and requires the contracting officer to include it in all solicitations that will use funds made available by Public Law 113-6, including solicitations for the acquisition of commercial items under FAR part 12. DFARS requires each contractor to represent whether it: (1) has any unpaid federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability ; or (2) was convicted of a felony criminal violation under a federal law within the preceding 24 months. If the contractor answers yes, the contracting officer shall not award a contract to the contractor. However, contracting officers may make an award despite these restrictions if the Vivina McVay, Editor-in Chief 2013 by Panoptic Enterprises. All rights reserved. Reproduction, photocopying, storage, or transmission by any means is prohibited by law without the express written permission of Panoptic Enterprises. Under no circumstances should the information contained in Federal Contracts Perspective be construed as legal or accounting advice. If a reader feels expert assistance is required, the services of a professional counselor should be retained. The Federal Contracts Perspective is published monthly by Panoptic Enterprises, P.O. Box 11220, Burke, VA May 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 2

3 agency debarring and suspending official has considered suspension or debarment of the corporation and has made a written determination that this further action is not necessary to protect the interests of the government. Class Deviation 2013-O0006 remains in effect for funds appropriated by the Continuing Appropriations Resolution of 2012 (Public Law ), which made appropriations for FY 2013 through March 27, 2013 (see the February 2013 Federal Contracts Perspective article Those with Tax Liability Barred from DOD Contracts ). Class Deviation Authorizing Contractors to Use Government Sources of Supply in Support of Operation Enduring Freedom: This class deviation encourages contracting officers to authorize contractors (including contractors with fixed-price contracts) to use appropriate government sources of supply in performance of contracts in support of Operation Enduring Freedom (that is, Afghanistan). Appropriate government sources of supply include: The General Services Administration (GSA) Central Asian and South Caucasus Supply Catalog under the GSA Global Supply Program ( ); or The Defense Logistics Agency (DLA) (for construction materials) This policy constitutes a deviation from the policy in FAR , Policy [on contractor use of government supply sources], which restricts the use of government supply sources in other than cost-reimbursement contracts. Contracting officers may modify existing contracts to include FAR , Government Supply Sources, and DFARS , Ordering From Government Supply Sources, to permit use of government supply sources. Contracting officers shall comply with the requirements of FAR , Authorization to Use Government Supply Sources, and DFARS , Authorization to Use Government Supply Sources, when providing this authorization to contractors. Class Deviation Requiring Payment in Local Currency for Contracts Performed in Afghanistan: This deviation requires the inclusion of DFARS , Notification of Payment in Local Currency (Afghanistan) (DEVIATION 2013-O0011), in all solicitations for contracts that will be performed in Afghanistan. DFARS states that this contract will be awarded in Afghani (local currency) if awarded to a host nation vendor. The contractor will receive payment in local currency via Electronic Funds Transfer (EFT) to a local (Afghan) banking institution. Contracts/purchase orders shall not be awarded to host nation vendors (Afghans) who do not bank locally. If awarded to other than a host nation vendor, the contract will be awarded in U.S. dollars The contractor shall submit their offer/proposal in U.S. dollars. If the contract/purchase order is awarded to an Afghan vendor, the offer/proposal will be converted to Afghani using a Government budget rate of [insert current budget rate] Afghani per U.S. dollar. Visit 3 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE May 2013

4 PROPOSED RULE WOULD MANDATE CAGE CODE USE Commercial and Government Entity (CAGE) codes, including North Atlantic Treaty Organization (NATO) CAGE (NCAGE) codes for foreign entities, would be required to be provided by offerors to contracting officers for awards valued at greater than the micro-purchase threshold ($3,000) if a proposed FAR rule is adopted. In addition, the proposed rule would require offerors, if owned or controlled by another business entity, to identify that entity during System for Award Management (SAM) registration ( (NOTE: The proposed rule refers to SAM rather than CCR [Central Contractor Registry] and ORCA [Online Representations and Certifications Application] because both CCR and ORCA have been transitioned to SAM [see the August 2012 Federal Contracts Perspective article Phase I of SAM Implemented for more information on this transition]. There is a pending rule that will make a global update throughout the FAR to change all CCR and ORCA references to SAM. ) The proposed rule would add FAR subpart 4.17, Commercial and Government Entity Code, two provisions, and a clause: FAR subpart 4.17 would include the scope, policy, and definitions for the subpart. The definitions in FAR , Definitions, would include Commercial and Government Entity (CAGE), highest-level owner, immediate owner, and owner. FAR , Policy, would require an offeror to provide its CAGE code for the offeror s location to the contracting officer prior to the award of a contract action above the micro-purchase threshold, except when: (i) a generic DUNS number is authorized (see paragraph (c)(2) of FAR 4.605, Procedures [for contract reporting]; and (ii) the acquisition is funded by an agency other than DOD or the National Aeronautics and Space Administration (NASA). Provision FAR XX, Commercial and Government Entity Code Reporting, would require offerors to provide their CAGE codes and contains information on obtaining CAGE codes. Provision FAR YY, Ownership or Control of Offeror, calls for offerors to identify if they are owned or controlled by another entity and to provide the legal name and CAGE code of such entity. Clause FAR ZZ, Commercial and Government Entity Code Maintenance, provides instructions to contractors to maintain accurate CAGE information in the CAGE file and to inform their contracting officer if their CAGE code changes. In addition, conforming changes would be made to FAR , Annual Representations and Certifications, and FAR , Offeror Representations and Certifications Commercial Items. Comments on this proposed rule must be submitted no later than June 17, 2013, identified as FAR Case , by any of the following methods: (1) the Federal erulemaking Portal: (2) fax: ; or (3) mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street NE, 7th Floor, Washington, DC May 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 4

5 NASA COMMENCES NFS UPDATING PROCESS NASA is proposing to update the NASA FAR Supplement (NFS) to eliminate unnecessary regulations, streamline overly burdensome regulations, clarify language, and simplify processes where possible. This proposed rule is the first in a series of three. This proposed rule would revise NFS parts 1834, Major System Acquisition; 1841, Acquisition of Utility Services; 1846, Quality Assurance; 1851, Use of Government Sources by Contractors; and 1852, Solicitation Provisions and Contract Clauses. In addition, this proposed rule provides notice that no regulatory changes will be made to NFS parts 1814, Sealed Bidding; 1815, Contracting by Negotiation (except for NFS subpart , Contract Pricing); 1822, Application of Labor Laws to Government Acquisitions; 1824, Protection of Privacy and Freedom of Information; and 1843, Contract Modifications. The following is a summary of the proposed changes (changes to clauses are described in the corresponding NFS part): NFS part 1834: Administrative changes would be made to policy on Earned Value Management System (EVMS) correcting nomenclature and web site references. In NFS , Notice of Earned Value Management System, a requirement would be added for offerors to provide a matrix that correlates each guideline in ANSI/EIA Standard 748, Earned Value Management Systems (current version at time of solicitation), to the corresponding process in the offeror s written management procedures. Also, the rule would update web site references in the provision. In NFS , Earned Value Management System, administrative changes would be made to correct nomenclature and add a web site reference. NFS part 1841: Subpart , Solicitation Provision and Contract Clauses, would be deleted in its entirety. NFS , Renewal of Contract, would be removed because FAR , Option to Extend the Term of the Contract, is sufficient to provide for a contract extension or renewal. Therefore, the clause s prescription in NFS , NASA Contract Clause, the sole contents of NFS subpart , would be unnecessary. NFS part 1846: Subpart , Material Inspection and Receiving Reports, would be revised to align it with DFARS Appendix F, Material Inspection and Receiving Report, to facilitate comparison of NASA and DOD practices and procedures with regard to the DD Form 250, Material Inspection and Receiving Report (MIRR), especially for contractors doing business with both agencies. Administrative changes would also be made to clarify DD Form 250 preparation instructions. NFS , Material Inspection and Receiving Report, would be revised to clarify distribution requirements. NFS part 1851: NFS , Contractor Acquisition of Filing Cabinets, would be deleted because it is no longer relevant or necessary. 5 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE May 2013

6 Comments on this proposed rule must be submitted no later than June 17, 2013, identified as RIN number 2700-AE01, by either of the following methods: (1) the Federal erulemaking Portal: or (2) DOE SEEKS COMMENTS ON IMPROVING ESPCs The Department of Energy (DOE) is seeking comments and information regarding improvements to Energy Savings Performance Contracts (ESPCs). ESPCs allow federal agencies to implement energy savings projects where the up-front capital cost is financed by an Energy Services Company (ESCO), which is then repaid from the agency s energy savings over a period of up to 25 years. The DOE Federal Energy Management Program (FEMP) is the lead agency program for providing implementing rules and policies regarding ESPCs. FEMP strives to continuously improve the ESPC processes it has implemented since DOE is publishing this request for information (RFI) to obtain ideas and input from ESPC stakeholders and other interested persons to facilitate further improvements to ESPCs. Under the ESPC statutes, DOE is required to develop methods and procedures for federal agencies to implement the use of ESPCs. DOE s implementing procedures and regulations for ESPCs are in Title 10 of the Code of Federal Regulations (CFR) part 436, subpart B. To facilitate and accelerate the use of ESPCs, DOE has issued indefinite-delivery, indefinitequantity (IDIQ) contracts designed to make ESPCs as practical and cost-effective as possible for use by federal agencies. DOE awarded these umbrella contracts to ESCOs based on their ability to meet the terms and conditions established in the IDIQ contracts, and consistent with the ESPC regulations. DOE IDIQ contracts can be used by federal agencies to achieve energy savings for any federally-owned facility worldwide, by awarding task orders for ESPC projects at their facilities. These IDIQ contracts have been used to award more than 280 ESPC projects throughout the federal government. More than $2.71 billion has been invested in federal energy efficiency and renewable energy improvements, and these improvements have resulted in more than trillion Btu life-cycle energy savings and more than $7.18 billion of cumulative energy cost savings for the federal government. More detailed background and specifics of the FEMP ESPC program can be found at More detailed information about the IDIQ contracts, FEMP s primary vehicle for implementation of ESPCs, including a generic version of the current contract, can be found at espcs_resources.html. More detailed information about the new FEMP streamlined ESPC ENABLE program for smaller facilities can be found at financing/espc_enable.html. FEMP is soliciting comments and information on further potential improvements to ESPCs, with emphasis on improvements to the IDIQ contracts. Specifically, FEMP is interested in obtaining ideas and information in the following areas: Speed to Award Decreasing the time from the point an agency decides to go forward (issues a Notice of Opportunity (NOO), Request for Proposals (RFP), etc.) to the time of award. Process improvements and simplifications, while maintaining technical and project management integrity. May 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 6

7 Addressing internal agency policies and processes to speed up key reviews, approvals, and decisions. ESPC IDIQ Contract Improvements Opportunities and benefits relating to greater standardization of contract processes, terms and conditions across the government. Comments on current IDIQ processes that allow contractor selection based on ESCO qualifications only, without the submission of a price proposal. Comments on structuring an ESPC IDIQ contract so new contractors may be added during the life of the contract based on meeting the same qualification criteria as specified in the original solicitation. Comments on a potential process where the technical criterion to receive an IDIQ ESPC contract from DOE are based partially or fully on meeting requirements of an impartial, national ESCO certification program. Comments on structuring an ESPC IDIQ contract so contractors can be removed during the life of the contract based on conditions specified in the IDIQ such as nonperformance or lack of participation. Improvement of deliverables content and format (Investment Grade Audit, Commissioning Plans and Reports, Measurement and Verification Plans and Reports, etc.). Increasing the Certainty of Energy Savings Persistence Improvements to measurement and verification methodologies to achieve and maintain the greatest assurance of energy savings at the least cost. Approaches To Encourage Innovative or Underutilized Energy Efficiency and Renewable Energy Technologies Approaches to increase confidence in investing in technologies with good potential but little implementation experience. Approaches to incentivize ESCOs to propose innovative or underutilized technologies. Potential Improvements to the FEMP streamlined ENABLE Program for Smaller Facilities Improvements to the technical tools and contract templates that support project development and execution. Feedback on the process that is required by General Services Administration (GSA) Schedule 84, Special Identification Number , Facility Management and Energy Solutions, and use of the schedule ordering process in general. Comments must be submitted by May 3, 2013, identified as ESPC Comments, by either of the following methods: (1) femp@go.doe.gov; or (2) mail: Randy Jones, U.S. Department of Energy, 1617 Cole Blvd., Golden, CO Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE May 2013

8 EPA REVISES PRINTING CLAUSE The Environmental Protection Agency (EPA) is amending EPA Acquisition Regulation (EPAAR) , Printing, to update outdated information in the clause. The following are the changes made to EPAAR by this final rule: In paragraph (d), Permitted Contractor Activities, language in subparagraphs (d)(2), (d)(3), and (d)(4) is changed from the contracting officer must obtain a waiver from the U.S. Congress Joint Committee on Printing to only the Joint Committee on Printing has the authority to grant waivers to the printing requirements. All Agency waiver requests must be coordinated with EPA s Headquarters Printing Management Team, Facilities and Services Division, and with the Office of General Counsel. In subparagraph (d)(4), examples of non-paper duplication is expanded from CDs/DVDs to electronic information storage device (e.g., CD-ROMs, DVDs, thumb drives), and the duplication limit for electronic information storage devices is increased from 100 to 500. SBA PROPOSES RESCINDING NONMANUFACTURER RULE WAIVER The Small Business Administration (SBA) is proposing to rescind the class waiver of the nonmanufacturer rule for aerospace ball and roller bearings, North American Industry Classification System (NAICS) code , Product Service Code (PSC) 3110, which consists of annular ball bearings, cylindrical ball bearings, linear ball bearings, linear roller bearings, needle roller bearings, ball or roller bearing races, roller bearings, tapered roller bearings, and thrust roller bearings. This proposed rescission is the product of information submitted by several small business manufacturers of aerospace ball and roller bearings that have done business with the federal government within the previous two years. Comments must be submitted no later than May 3, 2013, identified as SBA-2013-XXXX, by the following methods: (1) the Federal erulemaking Portal: or (2) mail/hand delivery/courier: Dean Koppel, Associate Director for Government Contracting, U.S. Small Business Administration, 409 3rd Street SW, 8th floor, Washington, DC EDITOR S NOTE: Public Law , enacted November 15, 1988, requires those with federal contracts that are set-aside for small businesses or awarded through the 8(a) program to provide the product of a small business manufacturer or processor if the recipient is not the actual manufacturer or processor (see paragraph (f) of FAR , Size Standards). This is called the nonmanufacturer rule. However, SBA may waive this requirement if there are no small business manufacturers or processors. The SBA regulation on the nonmanufacturer rule is in Title 13 of the Code of Federal Regulations (CFR), Business and Credit Administration; part 121, Small Business Size Standards; under paragraph (b) of , How does a small business concern qualify to provide manufactured products or other supply items under a small business set-aside, servicedisabled veteran-owned small business set-aside, WOSB [women-owned small business] or EDWOSB [economically disadvantaged women-owned small business] set-aside, or 8(a) contract? The SBA regulation on the waiver of the nonmanufacturer rule is 13 CFR , When Will a Waiver of the Nonmanufacturer Rule Be Granted for a Class of Products? A complete list of products for which the nonmanufacturer rule has been waived is available at May 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 8

9 426 pages, 2009, ISBN: , $49.95 from Panoptic Enterprises ( and from Amazon.com To see: Table of Contents, go to Index, go to Sample Chapters: Chapter 11, Set-Asides and Preference Programs, go to Chapter 13, Federal Supply Schedules, go to 9 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE May 2013