Source: http://farsite.hill.af.mil/reghtml/changes/fac/fac2005-20.htm
Timestamp: 2019-03-20 01:37:44
Document Index: 731811461

Matched Legal Cases: ['arts 4', 'arts 4', 'art 12', 'art 12', 'arts 4', 'art 4']

FAC2005-20
48 CFR Chapter 1; Parts 4, 12, and 52
SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rule agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council in this Federal Acquisition Circular (FAC) 2005-20 as a pilot program. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at http://www.regulations.gov/
DATES: For effective dates and comment dates, see the document following this notice.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact the analyst whose name appears in the table below in relation to the FAR case. Please cite FAC 2005-20, FAR Case 2006-029. Interested parties may also visit our website at http://www.regulations.gov. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755.
Federal Funding Accountability and Transparency Act (FFATA) - Reporting Requirement of Subcontractor Award Data
SUPPLEMENTARY INFORMATION: A summary of the FAR rule follows. For the actual revisions and/or amendments to this FAR case, refer to FAR Case 2006-029.
This final rule amends the Federal Acquisition Regulation (FAR) to require that contractors report specific subcontract awards to a public database. The Federal Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109-282) requires the existence and operation of
a searchable website that provides public access to information about Federal expenditures. This final rule establishes a pilot program to test the collection and accession of subcontract award data. As a result, subcontracts awarded and funded with Federal appropriated funds will eventually be disclosed to the public in a single searchable website. However, information reported under the pilot program will not be disclosed to the public.
Dated: August 29, 2007.Al Matera, Director, Office of Acquisition Policy.
Federal Acquisition Circular (FAC) 2005-20 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.
Unless otherwise specified, all Federal Acquisition Regulation (FAR) and other directive material contained in FAC 2005-20 is effective September 6, 2007.
Dated: August 27, 2007.Shay D. Assad, Director, Defense Procurement and Acquisition Policy.
Dated: August 29, 2007.Al Matera, Acting Senior Procurement Executive, General Services Administration.
Dated: August 28, 2007.Sheryl Goddard, Acting Assistant Administrator for Procurement, National Aeronautics and Space Administration.
48 CFR Parts 4, 12, and 52
SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to require that contractors report specific subcontract awards to a public database as a pilot program. The Federal Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109-282) requires the existence and operation of a searchable website that provides public access to information about Federal expenditures.
FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement Analyst, at (202) 501-3775, for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. Please cite FAC 2005-20, FAR case 2006-029.
A. Background This final rule amends the FAR to establish a pilot program to test the collection and accession of subcontract award data. As a result, subcontracts awarded and funded with Federal appropriated funds will be disclosed to the public in a single searchable website. However, information reported under the pilot program will not be disclosed to the public.
This rule applies to contracts with values equal to or greater than $500 million awarded and performed in the United States, and requires the awardees to report all first tier subcontract awards exceeding $1 million to the FFATA database at http://www.esrs.gov. The Councils chose these thresholds to ensure that a sufficient number of subcontract award reports will be entered in the database to permit assessment of its effectiveness without imposing a significant burden on contractors during the pilot program. The Government does not guarantee the reliability of the data reported. The Government has no mechanism to verify the data submitted. Before completion of the pilot program, the Councils will initiate a separate rulemaking process to establish the requirements for the final subcontract reporting database pursuant to the statute. This rule does not apply to classified contracts or commercial item contracts issued under FAR Part 12.
Response: The FFATA of 2006 mandates the existence and operation of a single searchable website, accessible by the public to require full disclosure of all transactions of $25,000 or more involving Federal funds. The Councils must comply with the statute when the final reporting requirements are established. The definition of ``subcontract'' in FAR clause 52.204-10 refers to the definition of ``contract'' which would include all types of commitments that obligate the Government to an expenditure of appropriated funds, including task orders. According to the FFATA data definitions, available at the FFATA reporting website, ``award amount'' is defined as the amount of support provided in the award, based on obligations. The contractor should report a subcontract when the money is obligated. If obligation happens at the time the IDIQ is awarded then the contractor would report the amount of the award in the FFATA database at the time of the IDIQ award. If money is obligated at the time each task/delivery order is issued, then the contractor would report the amount of the award in the FFATA database at the time of award of the order. In addition, the clause provides a definition of ``subcontract,'' which is based on the FAR definition at 2.1, and includes bilateral contract modifications. If additional money is obligated by a bilateral subcontract modification, then that amount must also be reported in the FFATA database as a separate record. The pilot program will not allow the modification of an existing record, but the respondents recommendation will be considered when establishing the final requirements. The comments regarding small business are addressed in paragraph B, Regulatory Flexibility Act, of this notice.
3. Verification and Validation of Data in the FFATA Database. Three respondents question the usefulness of a system that the Government cannot validate. Four comments were received suggesting that the Government needs to establish a means of ensuring compliance and accuracy of the data available in the FFATA database. Response: While the Government does not have a mechanism to verify or validate subcontract data input by a contractor, the Government will use routine contract administration oversight to ensure contractor compliance with the FAR clause at 52.204-10, Reporting Subcontract Awards. The final rule therefore remains unchanged.
Clarification was requested as to whether the reference to the term ``contract number'' in the FAR clause at 52.204-10 applied to the prime contract number or subcontract number/purchase order number, and whether ``subcontractor location including address'' applied to the billing address of the subcontractor. It was also requested that clarification be provided regarding the assumption that a contract was classified when it contained a Department of Defense, Contract Security Classification Specification (DD Form 254).
Certain respondents strongly suggested that final reporting requirements be limited to first tier subcontracts because no privity of contract relationship exists between subcontractors and the Government, while a single respondent believed that the requirement to report all subcontracts, regardless of tier, was reasonable and would ensure consistency in reporting and maximize visibility into Federal spending. In addition, two respondents indicated that the final reporting requirements should not apply to commercial contractors because it will be excessively burdensome for them to identify and report on Government contracts and items purchased as company inventory should not be reportable. Concerns that commercial subcontractors might have their subcontract prices and other sensitive information disclosed on a public website raises concerns regarding the Federal Acquisition Streamlining Act of 1994 (FASA). FASA generally exempts laws from applying to commercial item subcontracts unless the statute specifically refers to that section. The respondent further stated that the final reporting requirements should not apply to contracts awarded or performed outside the United States. Extending the reporting requirements to contracts awarded or performed outside the United States will stretch the resources of an already overtaxed acquisition workforce in foreign countries. In addition, certain foreign countries may prohibit release of financial information outside the country. One respondent suggested that a limited set of data should be reported for sensitive but unclassified contracts (e.g., do not include the place of performance location).
Response: Regarding clarifications of applicability, the reference to ``contract number'' in FAR 52.204-10 refers to the prime contract number or purchase order number assigned by the Government, consistent with the FAR convention of all references to ``contractor'' meaning the recipient of a Government contract. The subcontractor location including address refers to the principal business location of the subcontractor receiving the award. The Councils expect the FFATA database to include helpful information regarding field definitions. The DD Form 254 is the basic document for conveying to contractors the applicable classified areas of information involved in a classified effort. The classification may be related to various attachments or supplement documents or a facility and would be identified in the body of the DD Form 254. The rule does not apply to classified contracts. The FAR clause at 52.204-10 does not require reporting of subcontract awards below the first tier. In addition, the clause is not required in solicitations and contracts for commercial items issued under FAR Part 12. However, comments received regarding the applicability to commercial contractors and to contracts awarded or performed outside the United States will be considered in formation of the final requirements. Therefore, the final rule remains unchanged. 8. Unique Identifier for Subcontractors. Eight comments were received regarding whether the unique subcontractor identifier should be the ``data universal numbering system (DUNS'') number, the Taxpayer Identification Number (TIN), some other number, or a non-numerical unique identifier. One respondent requested clarification as to whether the unique identifier was the prime contract number. Six respondents favored the DUNS number because it is well-established as the unique identifier for tracking Federal prime contractors. Since many subcontractors are also prime contractors on other contracts, using the DUNS number would eliminate any confusion regarding what role they are playing, prime or subcontractor. Two respondents favored the use of the TIN as a unique identifier because subcontractors are not required to obtain a DUNS number. There are limited controls on the issuance of DUNS numbers and therefore they are considered to be less reliable than the TIN.
Response: Use of the DUNS number is expected to be the most cost-effective identifier for reporting awards in the FFATA database. It is the common identifier used in most Federal systems/databases to identify contractors. Any contractor or subcontractor needing to obtain a DUNS number may do so by visiting http://www.dnb.com/us. For the Pilot Program, the unique identifier for the subcontractor will be defined in the FFATA pilot database. Therefore, the final rule remains unchanged.
9. Definition of Subcontract. One comment was received stating that the proposed definition of ``subcontract'' (see FAR clause 52.204-10) would lead to confusion over which business entity is entering into the subcontract. The respondent suggested that the definition be revised to be more closely aligned to the definition found at FAR 44.101.
Response: The definition at FAR clause 52.204-10 was adapted from the FAR 44.101 definition of ``subcontract'' and means ``* * * any contract entered into by the Contractor to furnish supplies or services for performance of this contract * * *.'' The definition is clear and, therefore, remains unchanged in the final rule.
B. Regulatory Flexibility Act DoD, GSA, and NASA certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the contract dollar threshold for the application of the pilot program is $500 million. The number of small businesses receiving such large prime contract awards is estimated to be miniscule to none.
C. Paperwork Reduction Act The Paperwork Reduction Act (Pub. L. 104-13) applies because the final rule contains information collection requirements. Accordingly, the FAR Secretariat has forwarded a request for approval of a new information collection requirement concerning OMB Control Number 9000-00XX, FFATA Reporting Requirement of Subcontractor Award Data, to OMB under 44 U.S.C. 3501, et seq. Public comments concerning this request will be invited through a subsequent Federal Register notice.
Government procurement. Dated: August 29, 2007.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4, 12, and 52 as set
Subpart 4.14--Reporting Subcontract Awards
This subpart implements section 2(d) of the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. No. 109-282) by establishing a pilot program for a single searchable website, which will eventually be available to the public at no charge, that includes information on Federal subcontracts. This pilot program will expire not later than January 1, 2009. Information reported under the pilot program will not be disclosed to the public.
4.1401 Contract clause.
(c) Within thirty days after the end of March, June, September, and December of each year through 2008, the Contractor shall report the following information at http://www.esrs.gov for each subcontract award with a value greater than $1 million made during that quarter. (The Contractor shall follow the instructions at http://www.esrs.gov to report the data.)
END OF FAC 2005-20