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. 11 November 2013 SBA ISSUES RULES FOR SETTING ASIDE TASK ORDER CONTRACTS, CONTRACT CONSOLIDATION, AND BUNDLING The Small Business Administration (SBA) has issued rules that amend its regulations to address two important aspects of the Small Business Jobs Act of 2010 (Public Law ), which was enacted to increase consideration of small businesses and boost their opportunities in the federal marketplace: (1) the application of the SBA s small business programs to multiple award contracts; and (2) limitations on contract consolidation and bundling. Prior to enactment of Public Law , a contracting officer was required to provide each awardee a fair opportunity to be considered for each order exceeding $3,000 before placing an order under a multiple award contract (MAC) CONTENTS SBA Issues Rules for Setting Aside Task Orders... 1 Nonmanufacturing Waiver for Bearings Rescinded.. 4 DOD Keeps Issuing Changes Despite Shutdown... 5 NASA Proposes Proposal Adequacy Checklist (unless one of several exceptions applied): Multiple Award Schedules contracts managed by the General Services Administration (GSA) (also called Federal Supply Schedules ); governmentwide acquisition contracts (GWACs); multi-agency contracts; and agency-specific indefinitedelivery indefinite-quantity (IDIQ) contracts. This requirement to give all awardees, large and small, a fair opportunity to compete prevented the use of set-asides for small businesses. Section 1331 of Public Law , Reservation of Prime Contract Awards for Small Businesses, amended Section 15 of the Small Business Act (Title 15 of the United States Code, Section 664 [15 USC 644]) to: (1) set aside part or parts of a multiple award contract for small business concerns ; (2) notwithstanding the fair opportunity requirements set aside orders placed against multiple award contracts for small business concerns ; and (3) reserve 1 or more contract awards for small business concerns under full and open multiple award procurements Section 1331 required the administrator of the Office of Federal Procurement Policy (OFPP) and the SBA administrator, in consultation with the GSA administrator, to amend the Federal Acquisition Regulation (FAR) to implement this change (for more on Public Law , see the October 2010 Federal Contracts Perspective article Parity Among Small Business Programs Mandated by Statute ). Federal Acquisition Circular (FAC) included an interim rule that made clear that set-asides may be used in the placement of orders under MACs regardless of the requirement to provide each contract holder a fair opportunity to be considered, and also made clear that set-

2 asides may be used in the placement of orders and blanket purchase agreements under Multiple Award Schedule contracts. (For more on FAC , see the December 2011 Federal Contracts Perspective article FAC Permits Small Business Set-Asides For Multiple- Award Contracts. ) Subsequently, the SBA issued a proposed rule to provide more specific guidance to ensure both that meaningful consideration of set-asides is given with regard to the award of MACs and task and delivery orders placed against them, and that these are used in a consistent manner across agencies (see the June 2012 Federal Contracts Perspective article SBA Proposes Changes on Use of MACs ). SBA received over 120 comments on the proposed rule. The following are the significant changes made by the final rule (along with changes to the proposed rule): Processes for using partial set-asides: Paragraph (n) of Title 13 of the Code of Federal Regulations (CFR), Business Credit and Assistance, Section 125.1, What definitions are important to SBA s Government Contracting Programs? (13 CFR 125.1), defines partial setaside for a multiple award contract as a contracting vehicle that can be used when: market research indicates that a total set-aside is not appropriate; the procurement can be broken up into smaller discrete portions or discrete categories such as by Contract Line Items, Special Item Numbers, Sectors or Functional Areas or other equivalent; and two or more small business concerns, 8(a) BD [business development] participants, HUBZone SBCs [small business concerns], SDVO [service-disabled veteran-owned] SBCs, WOSBs [women-owned small businesses] or EDWOSBs [economically disadvantaged WOSBs] are expected to submit an offer on the set-aside part or parts of the requirement at a fair market price. Paragraph (e)(3)(vi) of Section 125.2, What are SBA s and the procuring agency s responsibilities when providing contracting assistance to small businesses?, states, that the small business must submit one offer that addresses each part of the solicitation for which it wants to compete. A small business (or 8(a) Participant, HUBZone SBC, SDVO SBC or EDWOSB) is not required to submit an offer on the part of the solicitation that is not set-aside. However, a small business may choose to submit an offer on the part or parts of the solicitation that have been set-aside and/or on the parts that have not been set-aside. This approach replaces the more cumbersome process described in Federal Acquisition Regulation (FAR) , Partial Set-Asides, in which small businesses must submit responsive offers on the non-set-aside portion of the acquisition to be considered for the set-aside portion. This partial set-aside process has proven to be unnecessarily complicated, which has resulted in its underutilization over time. Processes for using contract reserves: Paragraph (e)(4) of Section establishes a process for agencies to reserve awards for small businesses under a MAC awarded through full and open competition if the requirement cannot be broken into discrete components to support a partial set-aside and market research shows that either: (1) at least two small businesses could perform on a part of the contract; or (2) at least one small business could perform all of 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 November 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 2

3 contract. The orders must be set-aside for small businesses under a reserved contract if the rule of two or any alternative set-aside requirements provided in SBA s small business programs have been met. (The final rule clarifies that the contracting officer may, but is not required to, establish targets in the contract showing the dollar value of awards to small businesses.) Processes for order set-asides: Paragraph (e)(6) of Section establishes processes permitting agencies, when awarding MACs through full and open competition without either partial set-asides or reserves, to make commitments to set aside orders, or preserve the right to consider set-asides, when the rule of two is met. The contracting officer may state in the solicitation and resulting contract what process would be used (for example, automatic application of order set-asides or preservation of right to consider order set-asides). These alternatives maximize agencies flexibility in exercising their discretion to determine when and how best to use set-asides under MACs. On Ramps/Off Ramps: Paragraph (e)(3) of Section adds new coverage addressing on ramps and off ramps mechanisms for allowing small businesses to enter and exit a contract during the performance period. Specifically, in MACs that had been totally or partially set-aside, if a small business awarded a total or partial set-aside MAC becomes other than small as a result of a merger or acquisition, it is up to the contracting officer to decide whether to terminate, or off-ramp the contractor. However, any awards issued to such a contractor will not count as an award to a small business. In addition, the paragraph recommends that agencies should consider including in MAC solicitations an on ramp provision that permits the agency to refresh these awards by adding more small business contractors to that portion of the MAC that was set-aside throughout the life of the contract. (The proposed rule would have required the contracting officer to off-ramp small businesses that become large.) Application of size standards to multiple award contracts: Under SBA s current rules, a predominant North American Industry Classification System (NAICS) code and size standard is required for all contracts and all orders. Paragraph (c) of Section , What size standards are applicable to Federal Government Contracting Programs?, provides several alternatives to ensure every contract and every order issued against a contract contains a NAICS code with a corresponding size standard, and that coding for orders more accurately reflects the size of the business for the work being performed. For example, a contracting officer could divide a MAC for various types of goods and services into discrete categories (which could be by contract line item numbers, special item numbers, functional areas, sectors, or any other means for identifying various parts of a requirement identified by the contracting officer), each of which is assigned a NAICS code with a corresponding size standard. Alternatively, the contracting officer could assign one NAICS code and corresponding size standard to the MAC if all of the orders issued against that contract can also be classified under that same NAICS code and corresponding size standard. Limitation on subcontracting: When an order is set-aside under a contract awarded through full and open competition or under a contract reserve, or is issued against a set-aside or partialset aside MAC, the contractor must comply with the limitation on subcontracting and the nonmanufacturer rule for that order (see paragraph (c) of Section , What percentage of work must a Participant perform on an 8(a) contract?; paragraph (d) of Section , What 3 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE November 2013

4 requirements must an SDVO SBC meet to submit an offer on a contract?; and paragraph (g) of Section , What additional requirements must a qualified HUBZone SBC meet to bid on a contract?). (The final rule modifies the proposed rule s handling of orders made under total or partial set-aside contracts. In these cases, the contractor must meet the limitations on subcontracting and the nonmanufacturer rule in each performance period of the contract [for example, the base term and each option period as defined in the contract's period of performance]. However, the final rule gives contracting officers the discretion, on a contract-bycontract basis, to require compliance at the order level.) Agreements: Paragraph (a)(2) of Section , When is the size status of a business concern determined?, addresses agreements, which includes Blanket Purchase Agreements (BPAs) (except for BPAs issued against a GSA Schedule contract), Basic Agreements, Basic Ordering Agreements, or any other agreement for which a contracting officer sets aside or reserves awards to any type of small business. It requires that a concern qualify as small at the time of its initial offer for the agreement. In addition, because an agreement is not a contract, the concern is required to qualify as small for each order issued under the agreement to be considered small for the order and for an agency to receive small business goaling credit for the order. Consolidation and bundling of contract requirements: Paragraph (d) of Section states that an agency may not conduct an acquisition that is a consolidation of contract requirements unless the senior procurement executive or chief acquisition officer justifies the consolidation by showing that the benefits of the consolidated acquisition substantially exceed the benefits of each possible alternative approach that would involve a lesser degree of consolidation, and identifies the negative impact on small businesses. In addition, the SBA s Procurement Center Representative is required to work with the agency s small business specialist and Office of Small Disadvantaged Business Utilization or Office of Small Business Programs to identify bundled or consolidated requirements and promote set-asides and reserves. NONMANUFACTURER WAIVER FOR BEARINGS PARTLY RESCINDED The SBA is partially rescinding the class waiver of the nonmanufacturer rule for aerospace ball and roller bearings under North American Industry Classification System (NAICS) code , Ball and Roller Bearing Manufacturing, Product Service Code (PSC) 3110, Bearings, Antifriction, Unmounted, and replacing it with a class waiver for 305 aerospace ball and roller bearings. A list of the specific 305 aerospace ball and roller bearings can be accessed at This partial rescission is based on public comments and an analysis of data submitted to SBA by several small business manufacturers of aerospace ball and roller bearings that have done business with the federal government within the previous two years. In 2001, SBA granted a class waiver for aerospace ball and roller bearings, consisting of, but not limited to, 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, identified within NAICS code under PSC 3110 (see the May 2001 Federal Contracts Perspective article SBA Waives Nonmanufacturer Rule for November 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 4

5 Bearings ). Subsequently, a small business manufacturer of roller bearings notified SBA that it had lost several aerospace ball and roller bearing contracts based on the existence of the class waiver and brought to SBA s attention that several small business manufacturers of roller bearing had submitted proposals for bearings contracts or received bearings contracts from the federal government within the previous 24 months. In April 2013, SBA published a notice stating that it was considering a complete rescission of the class waiver of the aerospace ball and roller bearings nonmanufacturer rule (see the May 2013 Federal Contracts Perspective article SBA Proposes Rescinding Nonmanufacturer Rule Waiver ). Fourteen comments were received from ten respondents. Some supported total rescission of the nonmanufacturer rule waiver, others opposed it. The Defense Logistics Agency (DLA) recommended a partial rescission of the class waiver based on the possible damage to the small business dealer base that might result from a complete rescission of the class waiver. DLA provided a list of bearings for which there was no known small business manufacturers in existence. SBA considered the comments and data presented by all of the commenters, including DLA. After conducting independent market analysis, and analyzing the data submitted by DLA and small bearing manufacturers, SBA decided to partially rescind the aerospace ball and roller bearing class waiver and replace it with a waiver for 305 specifically identified aerospace ball and roller bearings. 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 DOD KEEPS ISSUING CHANGES DESPITE SHUTDOWN Despite the federal government shutdown, most employees of the Department of Defense (DOD) were deemed essential and came to work. Apparently, among those DOD employees who were essential were the Defense Federal Acquisition Regulation Supplement (DFARS) administrators because they issued four final DFARS rules, one interim rule, one proposed rule, three DFARS class deviations, and a memorandum on an acquisition matter. 5 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE November 2013

6 Further Implementation of One Offer Policy: This finalizes, with editorial changes, the proposed rule that would amend DFARS , Only One Offer, to further implement DOD policy relating to competitive acquisitions in which only one offer is received, and to provide additional exceptions to this policy. Also, this rule further addresses requests for data other than certified cost or pricing data from the Canadian Commercial Corporation (CCC). This rule elaborates on two 2012 DFARS final rules: Only One Offer (see the July 2012 Federal Contracts Perspective article DFARS Addresses Receipt of Only One Offer ); and Contracting with the Canadian Commercial Corporation. The Only One Offer rule implemented the initiative on promoting real competition that was in the Under Secretary of Defense for Acquisition, Technology & Logistics November 3, 2010, memorandum Implementation Directive for Better Buying Power Obtaining Greater Efficiency and Productivity in Defense Spending (see the December 2010 Federal Contracts Perspective article Another Deluge of DFARS Changes ). The Contracting with the CCC rule clarified the requirements for the CCC to submit data other than certified cost or pricing data. Because these two rules were developed in parallel, DOD proposed to revise the DFARS to further implement both rules, in particular as they relate to each other (see the June 2013 Federal Contracts Perspective article Defense Regulation-Making Picks Up Pace ). No public comments were received, but minor editorial changes were made to the final rule. The final rule makes the following changes: Paragraph (f) of DFARS , Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items, is revised to clarify that DFARS , Requirements for Data Other Than Certified Cost or Pricing Data Canadian Commercial Corporation, and DFARS , Requirement for Data Other Than Certified Cost or Pricing Data Modifications Canadian Commercial Corporation, must be used as prescribed in DFARS , Solicitation Provisions and Contract Clauses. Two additional exceptions to the policy on only one offer delineated DFARS , Promote Competition, are added to DFARS , Exceptions: architect-engineer services (see FAR subpart 36.6, Architect-Engineer Services, and DFARS subpart 236.6); and set-asides offered to and accepted by the Small Business Administration (SBA) into the 8(a) Program (see FAR subpart 19.8, Contracting with the Small Business Administration (The 8(a) Program), and DFARS subpart 219.8). The prescription at DFARS , Solicitation Provision, is revised to include a statement that DFARS , Notice of Intent to Resolicit, should be included in solicitations for the acquisition of commercial items using the procedures in FAR part 12, Acquisition of Commercial Items. This provision is included in the list at DFARS (f) as being applicable to solicitations for commercial items, but the proposed prescription at DFARS inadvertently omitted that the provision is applicable to FAR part 12 solicitations. The prescriptions at DFARS , Solicitation Provisions and Contract Clause, for DFARS and DFARS should be included in solicitations for the acquisition of commercial items using the procedures in FAR part 12. These November 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 6

7 provisions are included in the list at DFARS (f) as being applicable to solicitations for commercial items, but the proposed prescription at DFARS inadvertently omitted that the provision is applicable to FAR part 12 solicitations. Paragraph (c)(2) of DFARS , Contracting Procedures [with the CCC], is revised to add when approval is required to request data from the CCC (paragraph (c)(2)(ii)). Also, paragraph (c)(2)(i) is revised to state that no further approval is required to request data other than cost or pricing data in competitive solicitations if: (1) the CCC submits a proposal for a sole source acquisition that exceeds $700,000 for costreimbursement acquisitions, or $500,000,000 for fixed-price acquisitions; (2) the CCC submits the only offer in response to a competitive solicitation that exceeds $700,000 for cost-reimbursement acquisitions, or $500,000,000 for fixed-price acquisitions; (3) a $150,000 or greater modification to a CCC contract that exceeds $700,000 for costreimbursement acquisitions, or $500,000,000 for fixed-price acquisitions; or (4) data other than certified cost or pricing data are required from all offerors in a competitive solicitation. DFARS , Only One Offer, is revised to remove the requirement to submit data requested by the contracting officer after receipt of only one offer in accordance with FAR , Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data. Instead, DFARS is revised to incorporate the appropriate requirements of FAR if the offeror is other than the CCC (paragraph (b)), and separately addresses the requirements for submission of data if the sole offeror is the CCC (paragraph (c)). New Free Trade Agreement with Panama: This final rule implements the United States Panama Trade Promotion Agreement (which is a free trade agreement [FTA]). This rule adds Panama to the definition of Free Trade Agreement country in the following provisions and clauses: DFARS , Photovoltaic Devices; DFARS , Photovoltaic Devices Certificate; DFARS , Trade Agreements; DFARS , Buy American Free Trade Agreements Balance of Payments Program Certificate; DFARS , Buy American Free Trade Agreements Balance of Payments Program; and DFARS , Balance of Payments Program Construction Material Under Trade Agreements. The Panama FTA applies to acquisitions of supplies and services equal to or exceeding $202,000, and construction equal to or exceeding $7,777,000. New Designated Country Croatia: This final rule adds Croatia as a new designated country under the World Trade Organization Government Procurement Agreement (WTO GPA). Croatia joined the European Union, which is a party to the WTO GPA, on July 1, Therefore, this rule adds Croatia to the definition of designated country in the following provision and clauses: DFARS , Photovoltaic Devices; DFARS , Trade Agreements; and DFARS , Balance of Payments Program Construction Material Under Trade Agreements. 7 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE November 2013

8 Approval of Rental Waiver Requests: This final rule amends DFARS , Contracts with Foreign Governments or International Organizations, to remove the director of the Defense Security Cooperation Agency (DSCA) from the approval process for waiver or reduction of charges for the use of government property on work for foreign governments or international organizations. Over the past year, the director of the DSCA has seen a significant increase in the number of requests for waiver or reduction of charges with extremely low dollar values over the rental period. This final rule allows the contracting officer to process the request for waiver or reduction of charges for the use of government property on work for foreign governments or international organizations without a separate review by the DSCA. Removing DSCA from the approval process will expedite contractors requests, while still protecting the interests of the government. Private Sector Notification Requirements of In-Sourcing Actions: This interim rule amends DFARS , Private Sector Notification Requirements in Support of In-Sourcing Actions, to implement Section 938 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law ) regarding private sector notification of in-sourcing actions. Section 938 of Public Law requires the secretary of defense to establish procedures for the timely notification of any contractor who performs a function that the secretary plans to convert (in-source) to performance by DOD civilian employees. DFARS is revised to provide that a written notification will be provided to affected incumbent contractors within 20 business days of the contracting officer s receipt of a decision by the component in-sourcing program official. The notification will summarize why the services are being in-sourced and must be coordinated with the component s in-sourcing program official. Comments on this interim rule must be submitted no later than December 30, 2013, identified as DFARS Case 2012-D036, by any of the following methods: (1) the Federal erulemaking Portal: (2) dfars@osd.mil; (3) fax: ; or (4) mail: Defense Acquisition Regulations System, Attn: Annette Gray, OUSD (AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC Contractor Personnel Supporting U.S. Armed Forces Deployed Outside the United States: This proposed rule would revise and update DFARS , currently titled Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, to align it with the changes in applicability, terminology, and other revisions made by DOD Instruction (DODI) , Operational Contract Support (OCS). DODI establishes policy, assigns responsibilities, and provides procedures for OCS, including OCS program management, contract support integration, and integration of defense contractor personnel into contingency operations outside the United States. Additions to, and clarifications of, terminology aid in determining which groups qualify for different types of government support and are based on improvements in practices and lessons learned in recent contingency operations. To implement these changes, the following revisions to DFARS would be made: The clause title would be changed to Contractor Personnel Supporting U.S. Armed Forces Deployed Outside the United States. November 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 8

9 The following definitions would be added to paragraph (a): Contractors authorized to accompany the Force (CAAF), ( contractor personnel, including all tiers of subcontractor personnel, who are authorized to accompany U.S. Armed Forces in applicable operations and have been afforded CAAF status through a letter of authorization ); Non-CAAF ( personnel who are not designated as CAAF ); and Designated reception site ( the designated place responsible for the reception, staging, integration, and onward movement of contractors deploying during a contingency ). To paragraph (b) is added the statement that when armed for personal protection contractor personnel are only authorized to use force for personal protection. This would not be a new policy, but rather a clear, concise statement of the existing policy. Paragraph (c) addresses the types of support available for CAAF personnel and the requirement to have a letter of authorization signed by the contracting officer prior to deployment for each CAAF. In the past, the provision of non-emergency medical and dental care to CAAF personnel has generated considerable confusion. The proposed revision to paragraph (c) would make clear that only emergency medical and dental care will be provided and only when the CAAF individual is injured while supporting operations. In certain cases, non-emergency care may be provided by field hospital staff, but the contractor will be billed for that non-emergency care. Paragraph (e) would clarify the predeployment requirements for CAAF personnel. In the past, there was some ambiguity about which requirements could be fulfilled once the individual was in theater and which requirements had to be completed during predeployment screening ( the government will provide, at no cost to the contractor, any military-specific immunizations and/or medications not available to the general public. All other immunizations must be obtained prior to arrival at the deployment center ). Paragraph (g) contains the requirements for and use of personnel data. Contractors are required to use the Synchronized Predeployment and Operational Tracker (SPOT) system ( to enter and maintain data on their CAAF and non-caaf personnel supporting deployed U.S. Armed Forces outside the United States. The purpose of SPOT is to provide the Combatant Commander with accurate, real-time information on all personnel within specified geographic combatant command operations areas. In the past, some contractors did not maintain current information on their personnel in SPOT. The proposed revisions to paragraph (g) would make a contractor s on-going SPOT maintenance requirements clear and specific. Comments on this proposed rule must be submitted no later than December 30, 2013, identified as DFARS Case 2013-D015, by any of the following methods: (1) the Federal 9 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE November 2013

10 erulemaking Portal: (2) (3) fax: ; or (4) mail: Defense Acquisition Regulations System, Attn: Meredith Murphy, OUSD (AT&L)DPAP/DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC Class Deviation Prohibiting Contracting with the Enemy in the U.S. Central Command (USCENTCOM) Theater of Operations: This deviation implements Section 841 of the National Defense Authorization Act for Fiscal Year 2012 (Public Law ), which requires the commander of USCENTCOM to identify persons or entities actively supporting an insurgency or otherwise actively opposing U.S. or coalition forces in the USCENTCOM theater of operations. When the USCENTCOM commander determines any person or an entity is an enemy of the U.S., senior procurement executives are notified of such enemy determination via a memorandum Subject: FY2012 National Defense Authorization Act, 841. Therefore, this class deviation, which applies to solicitations and contracts with an estimated value in excess of $100,000 that are being, or will be, performed in the USCENTCOM theater of operations and are awarded on or before December 31, 2014, requires the following: Senior procurement executives shall develop a standard process for distributing the USCENTCOM commander s Section 841 notification memorandum to the heads of contracting activities (HCAs) and have their HCAs develop similar mechanisms for providing Section 841 notifications to prime contractors performing contracts in the USCENTCOM theater of operations. Contracting officers shall check the NDAA FY12 Section 841 Identified Entities information posted on the USCENTCOM website at contracts/site/assets/contracting.aspx prior to award of contracts that will be performed in the USCENTCOM theater of operations and will be awarded on or before December 31, Section 841 provides that authority to restrict awards may not be delegated below the HCA. Contracting officers shall check the USCENTCOM website periodically to ensure that none of the existing contracts being performed in the USCENTCOM theater of operations is associated with individuals or entities on the NDAA FY12 Section 841 Identified Entities list. Contracting officers shall require prime contractors performing in the USCENTCOM theater of operations to check the USCENTCOM website periodically and ensure that none of their subcontracts is associated with an individual or entity on the NDAA FY12 Section 841 Identified Entities list. This class deviation remains in effect until December 31, 2014, unless incorporated into the DFARS or is rescinded. Class Deviation Reducing the Threshold Prohibiting the Consolidation of Contract Requirements: This class deviation requires contracting officers to use $2,000,000 as the threshold above which contract requirements cannot be consolidated unless the acquisition strategy includes the results of market research, identification of any alternative approaches that would involve a lesser degree of contract consolidation, and a determination by the senior procurement executive that the contract consolidation is necessary and justified. The threshold in November 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 10

11 paragraph (a) of DFARS , Policy and Procedures [for consolidation of contract requirements], is $6,000,000. This class deviation remains in effect until incorporated into the FAR and/or DFARS or is rescinded. Class Deviation Prohibiting the Use of Fiscal Year 2014 Funds to Contract with Corporations That Have an Unpaid Delinquent Tax Liability or a Felony Conviction Under Federal Law: This class deviation implements the Continuing Appropriations Act of Fiscal Year 2014 (Public Law ) by prohibiting the entering into a contract with any corporation that: 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, where the awarding agency is aware of the unpaid tax liability, unless the agency has considered suspension or debarment of the corporation and made a determination that this further action is not necessary to protect the interests of the government; or Was convicted of a felony criminal violation under any federal law within the preceding 24 months, where the awarding agency is aware of the conviction, unless the agency has considered suspension or debarment of the corporation and made a determination that this further action is not necessary to protect the interests of the government. These prohibitions apply to all Fiscal Year 2014 DOD funds appropriated by Public Law , including the acquisition of commercial items under FAR part 12, Acquisition of Commercial Items, and military construction. 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 2014 Appropriations, that the contracting officer is required to include it in all solicitations that will use funds made available by Public Law , 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. Theater Business Clearance Update for the USCENTCOM Area of Responsibility: This memorandum increases the Theater Business Clearance threshold in Afghanistan in solicitations and contracts greater than $100,000 and/or with 30 days of performance. 11 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE November 2013

12 NASA PROPOSES PROPOSAL ADEQUACY CHECKLIST The National Aeronautics and Space Administration (NASA) is proposing to add NASA FAR Supplement (NFS) , Proposal Adequacy Checklist, which contracting officers would be required to include in solicitations that require the submission of certified cost or pricing data (see FAR , Obtaining Certified Cost or Pricing Data) to facilitate submission of a thorough, accurate, and complete proposal. This proposed rule supports the NASA Assistant Administrator for Procurement s Reducing Transaction Costs in NASA Procurements initiative by increasing uniformity across NASA and minimizing local variations in this area which will decrease proposal preparation costs. The Proposal Adequacy Checklist includes 34 pieces of information that the offeror must address. Each of the 34 provides a reference to the FAR provision that requires the information, a description of the information, and a place for the offeror to provide the page number in the proposal where that information is included or to provide an explanation of why the information is not included. For example, item 5 references FAR [Solicitation Provisions and Contract Clauses], Table 15-2 [Instructions for Submitting Cost/Price Proposals When Certified Cost or Pricing Data are Required], Section I [General Instructions] Paragraph B [ In submitting your proposal, you must include an index, appropriately referenced, of all the certified cost or pricing data and information accompanying or identified in the proposal ]; identifies the required information ( Is an Index of all certified cost or pricing data and information accompanying or identified in the proposal provided and appropriately referenced? ); and then provides space for the offeror to identify the proposal page where the index is or explain why there is no index. EDITOR S NOTE: The proposed NASA Proposal Adequacy Checklist is very similar to the Proposal Adequacy Checklist recently implemented by DOD. For more on the DOD s Proposal Adequacy Checklist, see the April 2013 Federal Contracts Perspective article DOD Implements Proposal Adequacy Checklist, Two Trade Agreements. Visit for more information on the rapidly-changing world of federal contracting! November 2013 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 12

13 426 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 13 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE November 2013