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. XV, No. 8 August 2014 FAC ADDRESSES SMALL BUSINESS SIZE/STATUS PROTESTS; EQUAL OPPORTUNITY FOR VETS, DISABLED Federal Acquisition Circular (FAC) consists of three rules that amend the Federal Acquisition Regulation (FAR) to: (1) implement final rules issued by the Office of Federal Contract Compliance Programs (OFCCP) in the Department of Labor (DOL) relating to equal opportunity and affirmative action for veterans and individuals with disabilities: (2) provide revised coverage for small business size and small business status protest and appeal procedures and to ensure that the FAR contains consistent and coherent protest and appeal procedures that are congruent with Small Business Administration (SBA) regulations; and (3) address the allowability of legal costs incurred by a contractor or subcontractor in response to a whistleblower protection proceeding. CONTENTS FAC Addresses Small Business Size Protests... 1 DOD Conducts DFARS Clean-Up... 5 Sexual Orientation and Gender Identity Order Issued... 9 Proposed FAR Rule on Pass-Through Contracts... 9 EDAR Update Proposed EPA Addresses IDIQ Ordering, Work Assignments NASA Implements Whistleblower Protections Prompt Payment Interest Rate Set at 2% Small Business Protests and Appeals: This finalizes the proposed rule that would update the small business size and small business status protest and appeal procedures to be consistent with the Small Business Administration s (SBA s) revisions to its regulations (see the March 2011 Federal Contracts Perspective article SBA Revises Small Business Status Protest Regulations ). The most significant of the proposed changes were the following: FAR , Size Standards, would be amended to clarify the requirements for a small business concern to be considered a nonmanufacturer. FAR , Protesting a Small Business Representation or Rerepresentation, would be amended to update and clarify the protest and appeals guidance. FAR , Determining North American Industry Classification System (NAICS) Codes and Size Standards, would be revised to clarify the selection of the appropriate NAICS code and appeal procedures. FAR , Protesting a Firm s Status as a HUBZone Small Business Concern; FAR , Protesting a Firm s Status as a Service-Disabled Veteran-Owned Small Business Concern; and FAR , Protesting a Firm s Status as an Economically

2 Disadvantaged Women-Owned Small Business Concern or Women-Owned Small Business Concern Eligible Under the WOSB Program, would be amended so they have consistent protest and appeal procedures. Two respondents submitted comments on the proposed rule, and it was determined that greater clarification regarding changes to the nonmanufacturer rule is warranted, so the revisions made to FAR pertaining to the nonmanufacturer rule have been removed. Also, additional language has been added to FAR to further clarify how a contracting officer is to select a NAICS code that best describes the principal purpose of the product or service being acquired ( Primary consideration is given to the industry descriptions in the U.S. NAICS Manual, the product or service description in the solicitation and any attachments to it, the relative value and importance of the components of the procurement making up the end item being procured, and the function of the goods or services being purchased. A procurement is usually classified according to the component which accounts for the greatest percentage of contract value. ). Finally, FAR , FAR , and FAR have been revised to provide additional guidance regarding protests of small business program status. This guidance further clarifies that the contracting officer is required to prepare a written determination documenting the decision to: (1) proceed with a contract award when the apparent successful offeror s program eligibility has been protested; and (2) not terminate a contract when award has been made to the protested contractor and SBA subsequently issues a negative program eligibility decision, or SBA s decision of negative program eligibility is upheld on appeal. For more on the proposed rule, see the April 2013 Federal Contracts Perspective article Small Business Protest Procedures Proposed. Equal Employment and Affirmative Action for Veterans and Individuals With Disabilities: This interim rule revises FAR subpart 22.13, Equal Opportunity for Veterans, and FAR subpart 22.14, Employment of Workers with Disabilities, to implement rules issued by the Office of Federal Contract Compliance Programs (OFCCP) at the Department of Labor (DOL) relating to equal opportunity and affirmative action for veterans and individuals with disabilities. The OFCCP rules updated requirements under the Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA) and Section 503 of the Rehabilitation Act of 1973 (Section 503). The VEVRAA rule required contractors and subcontractors to adopt an annual benchmark either based on the national percentage of veterans in the workforce (currently 8%) or their own benchmark based on the best available data. The Section 503 rule introduced a hiring goal for contractors and subcontractors that 7% of each job group in their workforce be qualified individuals with disabilities. Also, the Section 503 rule detailed specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination, which are similar to those that have been required to promote workplace equality for women and minorities. The following are the significant changes made by this interim rule: Vivina McVay, Editor-in Chief 2014 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 August 2014 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 2

3 FAR subpart 22.13: FAR , Definitions, is revised to add definitions for active duty wartime or campaign badge veteran, and changes the definition of other protected veteran to protected veteran (only the definition title is changed). Paragraph (a) of FAR , Policy, is revised to address appropriate outreach and recruitment, and hiring benchmarks. FAR subpart 22.14: FAR , Policy, is revised to address appropriate outreach and recruitment, and utilization goals, as prescribed in the OFCCP s Section 503 regulations. FAR , Waivers, is revised to amends the waiver authority to be the OFCCP director, and revises the policy concerning national security waivers. The OFCCP regulations contain two revised Equal Opportunity clauses: 41 CFR , Equal Opportunity for VEVRAA Protected Veterans, which provides clarification of mandatory listing of employment openings and posting of notices, and 41 CFR , Equal Opportunity for Workers with Disabilities, which adds requirements with regard to posting in electronic format and making notices accessible to persons with disabilities. Both clauses add requirements with regard to contractor solicitations or advertisements for employees, requiring inclusion of statements that all qualified applicants will receive consideration for employment without regard to their protected veteran status or basis of disability. Paragraph (d) of both 41 CFR and 41 CFR state that it is not necessary to include the equal opportunity clause verbatim in the contract, but that the respective clause shall be made a part of the contract by reference followed by the appropriate sentence: This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractor and subcontractors to employ and advance in employment qualified protected veterans ; or This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities. Therefore, FAR , Equal Opportunity for Veterans, and FAR , Equal Opportunity for Workers with Disabilities, do not repeat the entire equal opportunity clauses in the OFCCP regulations, but rather provides a citation to the applicable OFCCP clause and includes the applicable statement. The FAR clauses must be incorporated in the contract in full text, as required by the OFCCP regulations. Comments on the interim rule must be submitted no later than September 23, 2014, identified as FAC , 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: Ms. Flowers, 1800 F Street NW, 2nd Floor, Washington, DC For more on the OFCCP s rules, see the October 2013 Federal Contracts Perspective article Affirmative Action Goals Set for Disabled, Veteran Contractor Employees. 3 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE August 2014

4 Allowability of Legal Costs for Whistleblower Proceedings: This finalizes, with changes, the interim rule that amended FAR , Costs Related to Legal and Other Proceedings, to address the allowability of legal costs incurred by a contractor or subcontractor related to a whistleblower proceeding commenced by a contractor or subcontractor employee s allegation of reprisal. The interim rule amended FAR (b) to provide that reasonable costs incurred by a contractor or subcontractor employee submitting a whistleblower complaint of reprisal in accordance with 41 USC 4712 [Contractor Employees: Protection from Reprisal for Disclosure of Certain Information] or 10 USC 2409 [Pilot Program for Enhancement of Contractor (employee) Protection from Reprisal for Disclosure of Certain Information] are unallowable if the result is in a civil or administrative proceeding...imposition of a monetary penalty, or an order issued by the agency head to the contractor or subcontractor to take corrective action under 41 USC 4712 or 10 USC One respondent submitted comments on the interim rule. The respondent noted that the interim rule, as written, effectively prohibited settlement of whistleblower claims by making related legal costs entirely unallowable if the proceeding could have led to an agency order for corrective action, with no apparent exceptions. The respondent requested that language be added to FAR (c), which addresses when the matter is resolved through consent or compromise, to provide the same treatment for whistleblower complaints as is provided in paragraph (c) for settlement of any proceeding brought by a third party under the False Claims Act in which the United States did not intervene. In response, the following is added as subparagraph (c)(2)(ii): In the event of disposition by consent or compromise of a proceeding brought by a whistleblower for alleged reprisal in accordance with 41 USC 4712 or 10 USC 2409, reasonable costs incurred by a contractor or subcontractor in connection with such a proceeding that are not otherwise unallowable by regulation or by agreement with the United States may be allowed if the contracting officer, in consultation with his or her legal advisor, determined that there was very little likelihood that the claimant would have been successful on the merits. For more on the interim rule, see the October 2013 Federal Contracts Perspective article FAC Addresses Contractor Whistleblower Issues. (EDITOR S NOTE: See the article below on National Aeronautics and Space Administration s (NASA) implementation of contractor whistleblower protection rules [ NASA Implements Whistleblower Protections ].) DOD CONDUCTS DFARS CLEAN-UP The Department of Defense (DOD) was busy during July, issuing four regulations revising the Defense FAR Supplement (DFARS), one class deviation, and two memoranda directing specific actions and providing information. In addition, DOD issued a proposed rule. Rules of the Armed Services Board of Contract Appeals (ASBCA): This finalizes, with changes, the proposed rule that would revise and reorder the ASBCA s Rules (which are DFARS Appendix A) for clarity and consistency, to reflect changes in technology, to remove contradictions and resolve ambiguities, to provide updated contact information that would allow for some electronic communication by litigants appearing before the board, and to add two August 2014 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 4

5 addenda that had not been contained in the board s rules: Equal Access to Justice Act Procedures, and Alternative Methods of Dispute Resolution. Two respondents submitted comments on the proposed rule, and in response non-substantive editorial changes consisting of minor wording and paragraph numbering changes have been made for clarity. For more on the proposed rule, see the March 2014 Federal Contracts Perspective article DOD Cranks Up DFARS Changes. Application of Certain Clauses to Acquisitions of Commercial Items: This finalizes, with an editorial change, the proposed rule that would clarify the applicability of DFARS , Use of Government-Assigned Serial Numbers, and DFARS , Wide Area WorkFlow Payment Instructions, to acquisitions of commercial items. The rule proposed adding these two clauses to the list at paragraph (f) of DFARS , Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items, and revising their clause prescriptions at DFARS , Contract Clauses, and DFARS , Contract Clauses, to require their inclusion in solicitations and contracts for acquisitions using the procedures in FAR part 12, Acquisition of Commercial Items. One respondent submitted a comment on the proposed rule but no changes were made in response to the comment. However, the numbering of the subparagraphs identifying the two clauses in DFARS (f) were revised to reflect the current DFARS. For more on the proposed rule, see the January 2014 Federal Contracts Perspective article Lots of Revisions (and Proposed Revisions) to the DFARS. Removal of Defense-Unique Domestically Nonavailable Articles List: This finalizes, without changes, the proposed rule that would remove DFARS , Nonavailable Articles, because domestic aluminum-clad steel wire is available in the United States, and DOD does not use sperm oil. Two respondents expressed support for the proposed rule, so the proposed rule is finalized without changes. For more on the proposed rule, see the January 2014 Federal Contracts Perspective article Lots of Revisions (and Proposed Revisions) to the DFARS. Use of Military Construction Funds in Countries Bordering the Arabian Sea: This interim rule amends DFARS part 236, Construction and Architect-Engineer Contracts, to implement Sections 111 and 112 of the Military Construction and Veterans Affairs, and Related Agencies Appropriations Act, 2014 (Public Law ), which revise the applicability of the preference for award to U.S. firms of military construction and architect-engineer contracts from countries bordering the Arabian Gulf to countries bordering the Arabian Sea. Since 1997, Sections 111 and 112 of the annual military construction appropriations acts have restricted use of military construction funds for acquisitions of architect-engineer services and military construction contracts to be performed in certain foreign countries that exceed certain dollar thresholds. With some exceptions, these restrictions require award to a U.S. firm or provide a preference for award to a U.S. firm. This interim rule revises DFARS , Construction in Foreign Countries, and DFARS , Restriction on Award of Overseas Architect-Engineer Contracts to Foreign Firms, to implement Sections 112 and 111, respectively, which change the restriction from countries 5 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE August 2014

6 bordering the Arabian Gulf to countries bordering the Arabian Sea (i.e., India, Iran, Oman, Pakistan, Somalia, and Yemen). These restrictions apply to military construction contracts that have an estimated value greater than $1,000,000, and architect-engineer contracts that have an estimated value greater than $500,000. These thresholds are unchanged. Comments on the interim rule must be submitted no later than September 29, 2014, identified as DFARS 2014-D016, by any of the following methods: (1) the Federal erulemaking Portal: (2) (3) fax: ; or (4) mail: Defense Acquisition Regulations System, Attn: Amy Williams, OUSD(AT&L)DPAP/ DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC Business Systems Compliance: This proposed rule would amend the DFARS to ensure appropriate contractor accountability for adequate contractor business systems. The introduction to the proposed rule states, Contractor business systems and internal controls are the first line of defense against waste, fraud, and abuse. Weak control systems increase the risk of unallowable and unreasonable costs on government contracts. To improve the efficiency and effectiveness of auditing contractor business systems, DOD is proposing to amend the DFARS to entrust contractors with the capability to demonstrate compliance with DFARS system criteria for contractors accounting systems, estimating systems, and material management and accounting systems (MMAS), based on contractors selfevaluations and audits by independent certified public accountants (CPAs) of their choosing. Government auditors would perform overviews of the results of contractor self-evaluations and CPA audits. These CPA audits would take place within six months following the expiration of the contractor s fiscal year and every three years thereafter. For reporting on estimating systems and MMAS, the rule would apply to solicitations and contracts with large businesses with contracts totaling more than $50,000,000. For reporting on accounting systems, the rule would apply to contractors subject to the Cost Accounting Standards (CAS) except for educational institutions, Federally Funded Research and Development Centers operated by educational institutions, and University Associated Research Centers. (EDITOR S NOTE: The CAS are in Title 48 of the Code of Federal Regulations, Chapter 99, Part 9904 [48 CFR part 9904]. They apply primarily to large contractors performing large non-commercial contracts.) The proposed rule would make the following significant changes to the DFARS: DFARS , Disclosure, Maintenance, and Review Requirements [of estimating systems], would be amended to state DOD policy is for all contractors to have acceptable estimating systems that consistently produce well-supported proposals that are acceptable as a basis for negotiation of fair and reasonable prices. It would go on to provide that the contractor is subject to the estimating system disclosure, maintenance, review, annual reporting, triennial CPA audit, and documentation requirements in the clause at [DFARS] , Cost Estimating System Requirements. In addition, the requirements and procedures for the triennial CPA audit would be added. In DFARS subpart , Contractor Business Systems, DFARS , Contractor Business System Deficiencies, would be split into two sections: paragraph (a) would become DFARS , Definitions, and the rest would become DFARS , August 2014 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 6

7 Contractor Business System Deficiencies. Both DFARS and DFARS reference DFARS , Contractor Business Systems. In DFARS subpart , Contractor Material Management and Accounting System, DFARS , Policy, would be revised to include the criteria for conducting MMAS audits. To DFARS , Procedures, would be added the requirements and procedures for conducting the triennial CPA audit. In DFARS subpart , Contractor Accounting Systems and Related Controls, a new DFARS , Procedures, would be added, which would address the requirements and procedures for the triennial CPA audit and the contracting officer s responsibilities. To DFARS , Cost Estimating System Requirements, would be added the following reporting requirements: (1) the contractor shall provide to the contracting officer and government auditor within the 6-month period following the expiration of the contractor s fiscal year, and annually thereafter, a report regarding compliance with the system criteria specified in the clause; and (2) in the first year in which the contractor is required to provide the annual report as required [above] and every three years thereafter, or more frequently if directed by the contracting officer the contractor s annual report shall include an audit report on the contractor s CPA s examination of the contractor s compliance with the system criteria specified in the clause. To DFARS , Material Management and Accounting System, would be added requirements for the CPA selection, the CPA audit plan, and the triennial CPA audit. To DFARS , Contractor Business Systems, would be added a paragraph (g), Compliance with applicable reporting and audit requirements. It would direct the contracting officer to discontinue the withholding of progress payments and performance-based payments [5% of the amounts due], and direct the contractor, in writing, to discontinue the payment withholding from billings on interim cost vouchers under this contract associated with the contracting officer s final determination, and authorize the contractor to bill for any monies previously withheld that are not also being withheld due to significant deficiencies or other noncompliance with applicable reporting and audit requirements. To DFARS , Accounting System Administration, would be added requirements for the CPA selection, the CPA audit plan, and the triennial CPA audit. Comments on the proposed rule must be submitted no later than September 15, 2014, identified as DFARS 2012-D042, by any of the following methods: (1) the Federal erulemaking Portal: (2) osd.dfars@mail.mil; (3) fax: ; or (4) mail: Defense Acquisition Regulations System, Attn: Mark Gomersall, OUSD(AT&L)DPAP/ DARS, Room 3B855, 3060 Defense Pentagon, Washington, DC Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE August 2014

8 Class Deviation on Contractor Personnel Performing in U.S. Central Command Area of Responsibility: This class deviation requires the use of DFARS , Contractor Personnel Performing in the United States Central Command Area of Responsibility (DEVIATION 2014-O0018), instead of DFARS , Contractor Personnel Supporting U.S. Armed Forces Deployed Outside the United States, in solicitations and contracts that will require contractor personnel to perform in the United States Central Command (USCENTCOM) Area of Responsibility (AOR). (EDITOR S NOTE: The USCENTCOM AOR consists of the following countries: Afghanistan, Bahrain, Egypt, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Oman, Pakistan, Qatar, Saudi Arabia, Syria, Tajikistan, Turkmenistan, United Arab Emirates, Uzbekistan, and Yemen.) DFARS applies to contractors when performing in a designated operational area outside the United States to support U.S. Armed Forces deployed outside the United States in: (i) contingency operations; (ii) humanitarian assistance operations; (iii) peace operations, consistent with Joint Publication ; or (iv) other military operations or military exercises, when designated by the Combatant Commander or as directed by the Secretary of Defense. DFARS (DEVIATION) applies to contractors when performing in the United States Central Command (USCENTCOM) Area of Responsibility (AOR). Otherwise, the two clauses are essentially the same. Contracting and Contractor Related Guidance for Afghanistan: This memorandum forwards a list of Key Links for DOD Contractors in Afghanistan at the behest of contractors supporting DOD in Afghanistan. Among the topics covered/links provided are: U.S. Embassy Kabul webpage DOD Foreign Clearance Guide International Security Assistance Force (ISAF) webpage Joint Contracting and Contingency Services webpage USCENTCOM Operational Contract Support webpage Defense Procurement and Acquisition Policy (DPAP) Contingency Contracting webpage Afghan Tax Information Temporary Import/Export of Government-Issued Personal Protective Equipment (PPE) The information will also be posted on the DPAP Contingency Contracting webpage at Providing Accelerated Payments to Small Business Subcontractors: DOD is re-instating the temporary practice of providing accelerated payments to all prime contractors so that they can, in turn, expedite payments to their small business subcontractors. In 2012, the Office of Management and Budget (OMB) issued a memorandum implementing the Obama administration s initiative to accelerate federal payments to prime contractors so prime contractors could expedite payments to their small business subcontractors. DOD implemented this initiative in 2012, but discontinued the practice in OMB has further extended this initiative through December 31, 2016, so DOD has decided to re-instate this practice. DOD has directed its contracting officers to continue using FAR , Providing Accelerated Payments to Small Business Subcontractors. August 2014 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 8

9 For more on the FAR implementation of OMB s 2012 memorandum, see the December 2013 Federal Contracts Perspective article FAC Adds Clause Accelerating Payments to Small Business Subcontractors. SEXUAL ORIENTATION AND GENDER IDENTITY ORDER ISSUED President Obama has issued Executive Order 13672, Equal Employment Opportunity Amendments Regarding Sexual Orientation and Gender Identity, which prohibits federal contractors from discriminating against lesbian, gay, bisexual, and transgender (LGBT) employees, and prohibits discrimination based on gender identity in federal employment. The president decided to take this action because Congress failed to pass the Employment Non-Discrimination Act and 32 states do not have laws explicitly protecting LGBT workers from being fired because of their sexual orientation or gender identity. The executive order amends two earlier executive orders: Executive Order 11246, Equal Employment Opportunity, September 24, 1965, which prohibits federal contractors from discriminating against any employee or applicant for employment because of race, creed, color, or national origin. Executive Order adds sexual orientation and gender identify to the list of protected categories. (EDITOR S NOTE: Executive Order is implemented in FAR subpart 22.8, Equal Employment Opportunity, and the corresponding clause FAR , Equal Opportunity.) Executive Order 11478, Equal Employment Opportunity in the Federal Government, August 8, 1969, which bars discrimination against federal employees on the basis of race, color, religion, sex, national origin, handicap, and age. Executive Order 13087, Further Amendment to Executive Order 11478, May 28, 1998, added sexual orientation to the list of protected categories. Executive Order further amends Executive Order to add gender identify to the list. There is no exemption provided for federal contractors with religious affiliations, as had been urged by religious leaders. The executive order directs the Secretary of Labor to prepare regulations implementing the requirements of the executive order within 90 days (that is, by October 20, 2014). This order shall become effective immediately, and shall apply to contracts entered into on or after the effective date of the rules promulgated by the Department of Labor PROPOSED FAR RULE ON PASS-THROUGH CONTRACTS To implement Section 802 of the National Defense Authorization Act of Fiscal Year 2013 (Public Law ), which provides additional requirements relative to the review and justification of pass-through contracts, the FAR Council is proposing to amend FAR , Proposal Analysis Techniques, to add these requirements. When an offeror for a contract, task order, or delivery order informs the agency, in accordance with FAR , Limitations on Pass-Through Charges Identification of 9 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE August 2014

10 Subcontract Effort, of its intention to award subcontracts for more than 70% of the total cost of work to be performed under the contract, task order, or delivery order, Section 802 requires contracting officer to (1) consider the availability of alternative contract vehicles and the feasibility of contracting directly with a subcontractor or subcontractors that will perform the bulk of the work; (2) make a written determination that the contracting approach selected is in the best interest of the government; and (3) document the basis for such determination. Therefore, paragraph (h) would be added to FAR to implement these statutory requirements. However, Section 1615 of the National Defense Authorization Act of Fiscal Year 2014 (Public Law , states, In the case of a contract to which the provisions of Section 46 of the Small Business Act (15 U.S.C. 657s) apply, the requirements under Section 802 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law ; 126 Stat. 1824; 10 U.S.C note) do not apply. Therefore, proposed subparagraph (h)(3) would exempt set-aside acquisitions conducted under the procedures in FAR part 19, Small Business Programs. While Section 802 only applies to contracts with the Department of Defense, the Department of State, and the United States Agency for International Development, the FAR Council has decided to apply the Section 802 requirements to all of agencies. Comments on the proposed rule must be submitted no later than September 9, 2014, 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: Ms. Flowers, 1800 F Street NW, 2nd Floor, Washington, DC EDUCATION ACQUISITION REGULATIONS UPDATE PROPOSED The Department of Education is proposing to update the Education Department Acquisition Regulation (EDAR) to update it so to it accurately reflects the current FAR and departmental policies. The last revision of the EDAR was made in 2011 (see the April 2011 Federal Contracts Perspective article EDAR Reissued ). Comments on the proposed rule must be submitted no later than September 15, 2014, identified as FAR Case , by either of the following methods: (1) the Federal erulemaking Portal: or (2) mail, commercial delivery, or hand delivery: Roscoe Price, U.S. Department of Education, 400 Maryland Avenue SW, Room 7172, PCP, Washington, DC The Department of Education does not accept comments submitted by fax or by or those submitted after the comment period. EPA ADDRESSES IDIQ ORDERING, WORK ASSIGNMENTS The Environmental Protection Agency (EPA) has issued a final rule amending EPA Acquisition Regulation (EPAAR) , Ordering By Designated Ordering Officers, to update policy and procedures. In addition, the EPA has proposed to amend EPAAR , Work Assignments, to update its policy and procedures. August 2014 Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE 10

11 Ordering by Designated Ordering Officers: This final rule amends EPAAR to add an alternate version. The clause, which has been in the EPAAR since 1984, has never had any alternates. The basic clause contemplated order issuance prior to negotiations ( the contractor shall acknowledge receipt of each order and shall prepare and forward to the ordering officer within ten (10) calendar days the proposed staffing plan for accomplishing the assigned task within the period specified ). In 1989, EPA issued a class deviation that prescribed an alternate to the clause that provides for negotiating the terms and conditions of a task/delivery order prior to order issuance. There are several benefits to conducting negotiations prior to the issuance of an order issuance: (1) the government is not charged directly for the time involved in the negotiations, rather the costs are considered bid and proposal costs and are spread across all government contracts as indirect charges; (2) the negotiations allow for more accurate pricing of the order; and (3) the negotiations enable the government to hold the contractor to negotiated requirements as soon as the order is issued. Therefore, EPAAR is being updated to add the 1989 class deviation. Because the class deviation provides several benefits that the basic clause does not, it will be designated as the basic form of the clause, and the previous basic form is being re-designated as Alternate I. In addition, the EPAAR prescription in paragraph (a) of EPAAR , Contract Clauses, is revised accordingly to reflect this change. Work Assignments: This proposed rule would update EPAAR , Work Assignments, which is included in cost-reimbursement contracts when work assignments are used. The 1984 version of the clause required EPA to include the estimate of required labor hours when issuing a work assignment. In 2009, EPA issued a class deviation that eliminated the requirement to include the estimate of required labor hours. So EPAAR would be revised to include approved workplan labor hours or an estimated initial level of effort provided in accordance with [EPAAR] EPAAR , Work Assignments, is the prescription for the use of EPAAR In addition, two additional alternates would be added to the two alternates to EPAAR that already exist. Current Alternates I and II are used in Superfund contracts and require the contractor to provide a conflict of interest (COI) certification (Alternate I is used for Superfund contractors that have at least three years of records that may be searched for certification purposes, and Alternate II is used for Superfund contractors that do not have at least three years of records that may be searched). New Alternates III and IV, which are substantially the same as Alternates I and II but are written for non-superfund contracts, would be added to EPAAR (Alternate III would be used for non-superfund contractors that have at least three years of records that may be searched for certification purposes, and Alternate IV would be used for non-superfund contractors that do not have at least three years of records that may be searched). A class deviation for Alternates III and IV was issued by EPA in Comments on the proposed rule must be submitted no later than August 18, 2014, identified as EPA-HQ-OARM , by any of the following methods: (1) the Federal erulemaking Portal: (2) valentino.thomas@epa.gov; (3) mail: EPA-HQ-OARM , OEI Docket, Environmental Protection Agency, 2822T, 1200 Pennsylvania Ave. NW, Washington, DC (include three copies); or (4) hand delivery: EPA Docket Center-Attention OEI Docket, EPA West, Room B102, 1301 Constitution Ave. NW, Washington, DC Panoptic Enterprises FEDERAL CONTRACTS PERSPECTIVE August 2014

12 NASA IMPLEMENTS WHISTLEBLOWER PROTECTIONS The National Aeronautics and Space Administration (NASA) is amending the NASA FAR Supplement (NFS) to add NFS subpart , Contractor Employee Whistleblower Protections, which covers NASA-unique policy, procedures for filing and investigating complaints, and remedies pertaining to whistleblower protections for contractor and subcontractor employees. In addition, this interim rule adds NFS , Allowability of Legal Costs Incurred in Connection with a Whistleblower Proceeding, to address the treatment of contractor costs incurred in connection with whistleblower proceedings. Among the NASA-unique policies and procedures included in NFS subpart are: NFS , Procedures for Filing Complaints; NFS , Procedures for Investigating Complaints; and NFS , Remedies. In addition, NFS , Requirement to Inform Employees of Whistleblower Rights, is added. It is to be included in all solicitations and contracts. In addition, this interim rule adds NFS , Allowability of Legal Costs Incurred in Connection with a Whistleblower Proceeding, to implement paragraph (g) of Section 827 of the National Defense Authorization Act for Fiscal Year 2013 (Public Law ), which addresses costs incurred in connection with whistleblower proceedings. Because Section 827 encouraged agencies to modify contracts that were awarded before the effective date of implementing FAR regulations, NASA decided it is necessary to create a revised cost principle applicable to any task orders issued against contracts awarded prior to the effective date of FAC , which originally implemented Section 827. Otherwise, FAR , Allowable Cost and Payment, governs. Comments on the interim rule must be submitted no later than September 29, 2014, identified as RIN number 2700-AE08, by either of the following methods: (1) the Federal erulemaking Portal: or (2) leigh.pomponio@nasa.gov. EDITOR S NOTE: See the article above for the FAR rule finalizing the interim rule in FAC [ FAC Addresses Small Business Size/Status Protests; Equal Opportunity For Vets, Disabled ]. For more on the interim rules in FAC , see the October 2013 Federal Contracts Perspective article FAC Addresses Contractor Whistleblower Issues. PROMPT PAYMENT INTEREST RATE SET AT 2% The Treasury Department has established 2% (2.0%) as the interest rate for the computation of payments made between July 1, 2014, and December 31, 2014, under the Prompt Payment Act and the Contracts Disputes Act. This rate is also used in facilities capital cost of money calculations. The interest rate for the prior six-month period (January 1, 2014, through July 31, 2014) was 2 1/8% (2.125%). The interest rate for July 1, 2013, through December 31, 2013, was 1 3/4% (1.75%). All prompt payment interest rates since 1980 (in six-month increments) are available at FAR Subpart 32.9, Prompt Payment; FAR Subpart 33.2, Disputes and Appeals; FAR , Cost of Money; and Cost Accounting Standard (CAS) , Cost of Money as an Element of the Cost of Facilities Capital, are affected by this interest rate. August 2014 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 August 2014