Source: http://www.fedgovcontracts.com/newsltr/fcp3-2.htm
Timestamp: 2019-04-25 12:53:25
Document Index: 575626943

Matched Legal Cases: ['art 13', 'art 13', 'art 13', 'art 8', 'art 219', 'art 208', 'art 13', 'art 13', 'art 23', 'art 23', 'art 350', 'art 23']

February 2002 Federal Contracts Perspective
2002 Defense Authorization Act Signed Into Law
New DFARS Rules on Caribbean, Italy, Switzerland
Automobile Reimbursement Increased to 36.5 Cents/Mile
SBA Increases Small Business Size Standards for Services
FAR Policy on Material Safety Data Sheets to be Revised
OMB Releases Third Set of FAIR Act Inventories
DOE Publishes List of Low Standby Power Devices
List of FedBizOpps Print Providers Published
2002 Defense Authorization Act Signed Into Law,
Extends FAR Subpart 13.5 Until January 1, 2003
On December 28, 2001, President Bush signed the $318 billion National Defense Authorization Act for Fiscal Year 2002 (Public Law 107-107). Though several past defense authorization acts have included significant changes to acquisition procedures, the FY 2002 defense authorization act is relatively calm and quiet. It does contain several acquisition-related provisions in Title VIII, Acquisition Policy, Acquisition Management, and Related Matters, one of which applies governmentwide.
Governmentwide:
Section 823, One-Year Extension of Program Applying Simplified Procedures to Certain Commercial Items: This extends the authority in Federal Acquisition Regulation (FAR) Subpart 13.5, Test Program for Certain Commercial Items, for contracting officers to use FAR Part 13 simplified acquisition procedures when acquiring commercial items up to $5,000,000, from January 1, 2002, to January 1, 2003.
Applicable to Department of Defense (DOD) Only:
Section 802, Savings Goals for Procurements of Services: The following goals for reductions in the amount DOD expends on services (based on Fiscal Year 2000 expenditures on services) through performance-based services contracting, competition for task orders under services contracts (see Section 803 below), and improved management of services contracts: 3% by FY 2002; 4% by FY 2003; 5% by FY 2004; and 10% by FY 2011.
Section 803, Competition Requirement for Purchase of Services Pursuant to Multiple Award Contracts: Each purchase of services over $100,000 that is made under a multiple award contract must be made on a competitive basis unless a contracting officer waives the requirement under certain specific circumstances. To qualify as being made "on a competitive basis," a "fair notice" must be provided to all contractors offering such services under the multiple award contract. However, a notice may be provided to "fewer than all contractors" if notice is provided to "as many contractors as practicable" and "offers [are] received from at least three qualified contractors..."
Section 811, Applicability of Competition Requirements to Purchases from a Required Source: Before purchasing a product in the Federal Prison Industries (FPI) catalog, DOD contracting officers must conduct market research to determine whether the FPI product is comparable in price, quality, and time of delivery to products available from the private sector. If so, competitive procedures shall be used to procure the product. (For more on acquisitions from FPI, see Federal Acquisition Regulation (FAR) Subpart 8.6, Acquisitions from Federal Prison Industries, Inc.)
Section 812, Extension of Mentor-Protege Program: The DOD Mentor-Protege Program expiration date is extended from September 30, 2002, to September 30, 2005. (For more on the DOD Mentor-Protege Program, see the Defense FAR Supplement (DFARS) Subpart 219.71, Pilot Mentor-Protege Program, and DFARS Appendix I, Policy and Procedures for the DOD Pilot Mentor-Protege Program.)
Section 824, Acquisition Workforce Qualifications: This clarifies that the following DOD employees or members of the military are exempt from the requirement that contracting officers and others in GS-1102 series (contracting) positions and similar military positions have a bachelor's degree and at least 24 semester hours of business-related studies: (1) those who served as a contracting officer with authority to award or administer contracts in excess of $100,000 on or before September 30, 2000; (2) those in the GS-1102 series or members of the armed services in a similar occupational specialty on or before September 30, 2000; (3) those in the contingency contracting force ("members of the armed forces whose mission is to deploy in support of contingency operations and other operations of the Department of Defense"); and (4) those appointed by the Secretary of Defense to developmental positions.
Section 832, Codification and Modification of Provision of Law Known as the "Berry Amendment": This codifies the "Berry Amendment" as Title 10 of the United States Code (U.S.C.), Chapter 148, Section 2533a, Requirement to Buy Certain Articles from American Sources; Exceptions. The "Berry Amendment" is implemented by DFARS 225.7002, Restrictions on Food, Clothing, Fabrics, Specialty Metals, and Hand or Measuring Tools, and it requires that procurements of covered items in excess of $100,000 must be of products grown, reprocessed, reuse, or produced in the U.S. or its possessions unless the service secretary determines that satisfactory quality and sufficient quantity cannot be procured when needed at U.S. market prices. Also, new 10 U.S.C. 2533a(g) clarifies that the Berry Amendment "does not apply to items purchased for resale purposes in commissaries, exchanges, or nonappropriated fund instrumentalities operated by the Department of Defense."
Section 836, Temporary Emergency Procurement Authority to Facilitate the Defense Against Terrorism or Biological or Chemical Attack: For any procurement to facilitate the defense against terrorism or biological or chemical attack against the U.S., the term "micro-purchase" is defined as $15,000 (instead of $2,500 as defined in FAR 2.101, Definitions); and the term "simplified acquisition threshold" is defined as $250,000 when the purchase is made inside the U.S. in support of a contingency operation, and as $500,000 when the purchase is made outside the U.S. in support of a contingency operation (instead of $100,000, or $200,000 for purchases outside the U.S. in support of contingency operations, as defined in FAR 2.101). This temporary authority will expire September 30, 2003.
While it was sorting out the FY 2002 Defense Authorization Act, DOD took the time to issue five final rules and one proposed rule, as well as one FAR class deviation.
Caribbean Basin Country End Products: DOD is adopting as final, without change, the September 11, 2001, interim rule which amended Defense FAR Supplement (DFARS) 252.225-7007, Buy America Act -- Trade Agreements -- Balance of Payments Program, and DFARS 252.225-7021, Trade Agreements, to remove Panama from the definition of "Caribbean Basin country" and to clarify which Caribbean Basin country products are subject to duty-free treatment. (For more on the interim rule, see the October 2001 Federal Contracts Perspective article "Deluge of DFARS Changes Made and Proposed, Involve Foreign Acquisitions, Small Business, Profit.")
Tax Exemptions for Contracts Performed in Italy: DOD is adopting as final, without changes, the September 21, 2001, proposed rule which updates the requirements in DFARS 252.229-7003, Tax Exemptions (Italy), pertaining to tax exemptions for DOD contracts performed in Italy. (For more on the proposed rule, see the October 2001 Federal Contracts Perspective article "Deluge of DFARS Changes Made and Proposed, Involve Foreign Acquisitions, Small Business, Profit.")
Memorandum of Understanding with Switzerland: To reflect a determination of Deputy Secretary of Defense Wolfowitz on December 10, 2001, that it is inconsistent with the public interest to apply the restrictions of the Buy American Act to the acquisition of defense equipment produced or manufactured in Switzerland, this final rule amends DFARS 225.872-1, General, to add Switzerland to the list of countries in paragraph (a) for which DOD has made such public interest determinations, and to remove Switzerland from the list of countries in paragraph (b) for which exemption from the Buy American Act is permitted only on a purchase-by-purchase basis.
Veterans Employment Emphasis: This final rule removes from the DFARS text pertaining to the requirement for contractors to submit annually the Form VETS-100, Federal Contractor Veterans' Employment Report, because the reporting requirements have been added to the FAR by Federal Acquisition Circular (FAC) 2001-01 (see the November 2001 Federal Contracts Perspective article "2001 FAR Published; FAC 2001-01 Addresses Veterans, Davis-Bacon, Commercial Items, Very Small Businesses"). The final rule removes several FAR sections, most notably DFARS 222.1304, Department of Labor Notices and Reports, and DFARS 252.209-7003, Compliance with Veterans' Employment Reporting Requirements.
Technical Amendments: Various portions of the DFARS are amended to update activity names and addresses, and to reflect the extension, from December 31, 2001, to March 31, 2002, of a memorandum of understanding between the Small Business Administration (SBA) and DOD authorizing DOD to enter into 8(a) contracts on behalf of SBA (paragraph (a) of DFARS 219.800, General). In addition, paragraphs (1) and (2) of DFARS 246.407, Nonconforming Supplies or Services, are deleted because the language is duplicated in FAR 46.101, Definitions; FAR 46.103, Contracting Office Responsibilities; and FAR 46.407, Nonconforming Supplies or Services.
Enterprise Software Agreements: This proposed rule would add a new DFARS Subpart 208.74, Enterprise Software Agreements, to address the use of "enterprise software agreements" in accordance with the DOD Enterprise Software Initiative.
Proposed DFARS 208.7401, Definitions, would define an "enterprise software agreement" (ESA) as "a blanket purchase agreement or a contract that is used to acquire designated commercial software or related services such as software maintenance." In addition, DFARS 208.7401 would define the "DOD Enterprise Software Initiative" (ESI) as "an initiative led by the DOD Chief Information Officer to develop processes for DOD-wide software asset management." The initiative's intent is to promote the use of ESAs with contractors that allow DOD to obtain favorable terms and pricing for commercial software and related services.
DFARS 208.7403, Acquisition Procedures, would require that commercial software rights or maintenance be obtained "from available existing DOD inventories...before proceeding with an acquisition. DOD inventories and other ESI information are listed on the ESI website at http://www.don-imit.navy.mil/esi." It goes on to state, "If the required commercial software or related service is not in the DOD inventory, or not on an ESA, the contracting officer or requiring official may fulfill the requirement by other means...If the commercial software or related service is on an ESA, the contracting officer or requiring official must review the terms and conditions and prices. If an ESA's terms and conditions and prices represent the best value to the government, the contracting officer or the requiring official must fulfill the requirement for supplies or services through the ESA. If existing ESAs do not represent the best value to the government, the software product manager (SPM) must be given an opportunity to provide the same or a better value to the government under the ESAs before the contracting officer or requiring official may continue with alternate acquisition methods."
Comments on the proposed rule must be submitted by April 1, 2002, to the Defense Acquisition Regulations Council, Attn: Susan Schneider, OUSD(AT&L)DP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; by fax to 703-602-0350; on the web site at http://emissary.acq.osd.mil/dar/dfars.nsf/pubcomm; or by e-mail to: dfars@acq.osd.mil.
Class Deviation -- Extension of Authority to Use FAR Subpart 13.5: In response to Section 823 of the FY 2002 Defense Authorization Act (see preceding article), Director of Defense Procurement Deidre Lee issued a memorandum on January 11, 2002, authorizing DOD contracting officers to issue solicitations in accordance with the authority provided in FAR Subpart 13.5 to acquire commercial items under $5,000,000 until January 1, 2003, or until paragraph (d) of FAR 13.500, General, is revised, whichever occurs first.
The General Services Administration (GSA) is amending Federal Travel Regulation (FTR) 301-10.303, What am I reimbursed when use of a POV [privately owned vehicle] is determined by my agency to be advantageous to the Government?, to increase the mileage reimbursement rate for use of a privately owned automobile on official travel from 34.5 cents per mile to 36.5 cents per mile; for use of a privately owned motorcycle from 27.5 cents per mile to 28.0 cents per mile; and for use of a privately owned airplane from 96.5 cents per mile to 97.5 cents per mile. This increase reflects the current costs of operation as determined in GSA's cost studies.
The same statute that directs GSA to establish the POV mileage reimbursement rates also limits the automobile reimbursement rate to the mileage rate established by the Internal Revenue Service (IRS). The IRS announced a new standard mileage rate for automobiles of 36.5 cents effective January 1, 2002, so the new 36.5 cents FTR rate conforms with the IRS rate.
To maintain the value of small business size standards established in 1994, the SBA is increasing its monetary-based size standards by 15.8% to compensate for inflation between 1994 and the third quarter of 2001. "This change will restore eligibility to firms that may have lost small business status solely due to the effect of inflation," says SBA in its rule. SBA estimates that approximately 8,600 businesses will regain their small business status as a result of this change. Being considered a "small" business is helpful not only in obtaining small business set-aside contracts, but also for access to SBA loans, guarantees, and assistance.
Monetary-based small business size standards are based on receipts, net income, or other monetary measures, and they apply primarily to service industries (small business size standards for manufacturing industries are primarily based on the number of employees, so those size standards are not affected by inflation). Most of the monetary-based size standards have been increased by 15.8%, then rounded to the nearest $500,000. For example, the size standard for North American Industrial Classification System (NAICS) 446130, Optical Goods Stores, had been $5 million. Multiplying $5 million by 115.8% equals $5.8 million, and rounding it to the nearest $500,000 produces a new small business size standard of $6 million. Some other examples are NAICS 812331, Linen Supply, from $10.5 million to $12 million; NAICS 541512, Computer Systems Design, from $18 million to $21 million; and NAICS 445110, Supermarkets, from $20 million to $23 million.
The new standards (which are in Title 13 of the Code of Federal Regulations (CFR), Section 121.201, What size standards has SBA identified by North American Industry Classification System codes?) become effective on February 22, 2002. However, for small businesses located in the September 11 presidentially-declared disaster areas of metropolitan New York City and Northern Virginia, the new regulations will apply retroactively to September 11, 2001. This means SBA will go back and review applications for disaster recovery loans in those areas to determine whether those rejected because they did not qualify as small businesses are now eligible for assistance.
Not all monetary-based small business size standards were increased by 15.8%. For example, size standards for agricultural industries are set by law (see the July 2001 Federal Contracts Perspective article "SBA Revises Agricultural Size Standards"). The health care size standards were increased in December 2000 (see the December 2000 Federal Contracts Perspective article "SBA Increases Some Health Care Size Standards"); the freight forwarders size standards were increased in September 2000 (see the September 2000 Federal Contracts Perspective article "Freight and Cargo Transportation Size Standards Revised"); and the help supply services, construction, and refuse collection size standards were increased in July 2000 (see the July 2000 Federal Contracts Perspective article "Size Standards Increased for Construction, Temps"). The size standards for all these industries (except those set by law and a few other special circumstances) were adjusted to account for inflation from the last time they were adjusted until the third quarter of 2001 -- for example, NAICS 562111, Solid Waste Collection, has been increased by 4.3% from $10 million to $10.5 million to adjust for inflation between the end of 1999 through the third quarter of 2001.
In addition, SBA is adding a paragraph (c) to 13 CFR 121.102, How does SBA establish size standards?, to state that SBA will examine the small business size standards at least once every five years to assess the affect of inflation. "If SBA finds that inflation has significantly eroded the value of the monetary-based size standards, it will issue a proposed rule to increase size standards," paragraph (c) states. Prior adjustments occurred in 1994, 1984, and 1975, and SBA believes that adjustments should be made more frequently than once every ten years.
The FAR Council proposes to amend FAR Subpart 23.3, Hazardous Material Identification and Material Safety Data, and FAR 52.223-3, Hazardous Material Identification and Material Safety Data, to revise the language that provides policies and procedures for contractor submission of Material Safety Data Sheets (MSDSs).
The Occupational Safety and Health Act of 1970 (OSHA) and the Federal Hazard Communication Standard (29 CFR 1910.1200) require the manufacturer or importer of chemicals to label its products and provide a copy of the detailed MSDS with initial shipments of the product and whenever revisions to the product require revising the MSDS. OSHA excludes public sector employees from the protection provided by the Federal Hazard Communication Standard. Federal Standard 313, Material Safety Data, Transportation Data and Disposal Data for Hazardous Materials Furnished to Government Activities (FED-STD-313) was originally developed to extend to federal employees the protection provided by OSHA laws and regulations to private sector employees.
FAR Subpart 23.3 and FAR 52.223-3 implement FED-STD-313 requirements in federal contracts that require the delivery of hazardous materials by making sure the government has notice of hazardous materials and receives MSDSs necessary for employee safety and health programs, and for the safe handling, storage, use, transportation and environmentally acceptable disposal of hazardous materials. However, industry has several concerns with the FAR's implementation of FED-STD-313, so this proposed rule would make numerous changes:
FAR 23.301, Definition, and FAR 52.223-3(a) currently define "hazardous material" as "any material defined as hazardous under the latest version of Federal Standard 313 (including revisions adopted during the term of the contract)." Since it is difficult for contractors to anticipate future changes to FED-STD-313 and their cost impact, the definition would be changed to require the contractor to comply with the version of FED-STD-313 "in effect at the time of award of the contract."
FAR 52.223-3(h) gives the government the right "to use, duplicate, and disclose any [MSDS] data...and have others use, duplicate, and disclose the data...[this right takes] precedence over any other clause of this contract providing for rights in data." Industry argues that this gives the government unlimited rights in the MSDS information and data without any protection for trade secrets or other proprietary data. This language would be removed from FAR 52.223-3, and the following would be added to the new FAR 23.301, General: "OSHA Standards (29 CFR 1910.1200) or Environmental Protection Agency regulations (40 CFR Part 350), as applicable, provide policy when the MSDS indicates that the specific chemical identity of the hazardous material is being withheld as a trade secret."
To FAR 23.300, Scope of Subpart, would be added a clarification that FAR Subpart 23.3 applies if hazardous materials are (1) expected to be delivered under the contract, or (2) incorporated into end items to be delivered under the contract if the materials' incorporation does not eliminate their hazardous nature throughout the life cycle of the end items. The same clarification would be added to FAR 52.223-3.
Comments on the proposed rule must be submitted by March 5, 2002, to General Services Administration, FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, ATTN: Laurie Duarte, Washington, DC 20405; or e-mail to farcase.1998-020@gsa.gov.
On January 3, the Office of Management and Budget (OMB) released the third set of Fiscal Year 2001 Commercial Activities Inventories of non-governmental functions being performed by government agencies. These inventories are required to be compiled and made available to the public by the Federal Activities Inventory Reform (FAIR) Act of 1998. This third set of inventories covers over 550,000 positions, of which approximately 125,000 are classified as "not inherently governmental functions" that are eligible to be performed by the private sector. Inventories are from the Departments of Agriculture, Housing and Urban Development, Justice, Labor, Transportation, and Treasury; Central Intelligence Agency; General Services Administration; Social Security Administration; and others. The agencies' lists are available at http://www.whitehouse.gov/OMB/procurement/index.html.
Interested parties have 30 working days (that is, until February 15, 2002) to challenge the omission or inclusion of an activity on an agency's Commercial Activities Inventories list. Being on the list is significant -- OMB has directed agencies to compete 5% of the positions identified in their inventories as "not inherently governmental" in Fiscal Year 2002, and 15% in Fiscal Year 2003.
The three sets of inventories cover more than 1,000,000 positions, and approximately 400,000 of those have been identified as "non-governmental" and subject to competition.
The Department of Defense (DOD) still has not provided its inventory to OMB for review. The stated reason is that the DOD inventory is so large that it was unable to compile its inventory on time, so the DOD inventory will be published as a separate fourth release.
For more on the first release of inventories, see the October 2001 Federal Contracts Perspective article "FAIR Act Inventories Available to Public." For more on the second release of inventories, see the December 2001 Federal Contracts Perspective article "Second Fair Act Inventories Released."
On July 31, 2001, President Bush signed Executive Order 13221, Energy Efficient Standby Power Devices, directing government agencies to purchase "commercially available, off-the-shelf products that use external standby power devices, or that contain an internal standby power function" with minimal standby power -- at or below one watt where available. He further ordered the Department of Energy (DOE) to develop a list of products that comply with this requirement by December 31, 2001, and to update the list annually (see the September 2001 Federal Contracts Perspective article "Bush Puts Bite on 'Vampire Appliances'").
On December 31, 2001, DOE published a notice to interested parties that the list has been compiled and is available at http://www.eren.doe.gov/femp/procurement. The list includes computer, office, video, audio, telecommunications, and other products. The website also makes available the testing guidelines and instructions on submitting product data, and additional information on standby power, federal purchasing, and Executive Order 13221.
Manufacturers are requested to continue submitting self-certified data for the standby power levels of their products. The list will be updated regularly with these new voluntary manufacturer submittals.
On December 31, 2001, the Department of Commerce (DOC) issued a notice stating it would cease publication of the Commerce Business Daily (CBD) on January 4, 2002, and that Federal Business Opportunities ( http://www.FedBizOpps.gov) would replace the CBD as the vehicle by which federal agencies post synopses of upcoming solicitations (see the January 2002 Federal Contracts Perspective article "CBD Goes Out of Business January 4, 2002"). The move from the CBD to FedBizOpps was precipitated by the Fiscal Year 2001 National Defense Authorization Act (Public Law 106-398), which directed agencies to provide access to synopses of upcoming solicitations over $25,000 through a "governmentwide point of entry designated in the Federal Acquisition Regulation." FAC 97-26 designated FedBizOpps as the governmentwide point of entry effective October 1, 2001, and made the publication of synopses in the CBD optional after January 1, 2002 (see the June 2001 Federal Contracts Perspective article "FedBizOpps.gov to Replace CBD, Performance-Based Contracts Preferred for Services").
The December 31 notice also stated that DOC would maintain a list of publishers that provide printed versions of FedBizOpps, and invited such publishers to identify themselves. DOC has printed the list of the publishers on its Office of Acquisition Management website at http://oamweb.osec.doc.gov/cbdnet.htm:
Bid Data Line, Inc.
1-800-559-2808
http://www.BidDataLine.com/fed
Point of Contact: Robert Nielsen
303-908-4771
http://www.netcom.com/~bizdata
Point of Contact: Jerry VandenBosch
1-800-824-1195 or 301-287-2400
http://www.govsalesnet.com/GSN/cbd.html
Point of Contact: Deborah Hoffman
Government Data Publications, Inc.
1-800-275-4688
http://www.govdata.com
Point of Contact: Leah Bodek
FBO Daily, Loren Data Corp.
1-800-745-6736 or 202-342-1191
http://www.fbodaily.com
Point of Contact: Fred Butlor
Other publishers of printed versions of FedBizOpps that wish to be identified on the DOC website should contact Yancey Stern, DOC, at 202-482-5781, or by e-mail at ystern@doc.gov.