The Professor s Forum: Making Sense of Complex Government Contracting Issues
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1 The Professor s Forum: Making Sense of Complex Government Contracting Issues An Update on Evolving FAPIIS Elements and Responsibilities January 29, 2015
2 Welcome our special guest! Jeffery Chiow is a senior Associate in the Washington, DC office of Rogers Joseph O Donnell PC where he focuses his practice on government contracts and government investigations. He counsels government contractors on business and compliance issues and in the litigation of claims and bid protests. Mr. Chiow has served clients holding contracts with the Departments of Defense and Homeland Security, every branch of the military, NASA and intelligence agencies as well as GSA, VA and many other civilian agencies. He has also conducted internal investigations and guided contractors through very significant government and congressional investigations arising primarily, though not exclusively, from the performance of government contracts. Recently, Mr. Chiow has been called upon to assist clients with difficult questions surrounding the government s growing demands for information assurance/cybersecurity, cloud computing and the transition of legacy IT systems. He speaks and writes on emerging issues facing government contractors and is an active member of the American Bar Association s Section of Public Contract Law serving on that body s Counterfeit Parts Task Force. EDUCATION J.D., The George Washington University Law School, 2008 B.S., United States Naval Academy, 1997 EXPERIENCE Mr. Chiow is a USMC Combat Veteran of the wars in Iraq and Afghanistan where he flew combat missions in an F/A-18D. He was awarded eight air medals, one with Combat V. jchiow@rjo.com (202)
3 Big Picture Agenda Federal Awardee Performance and Integrity Information System (FAPIIS) References: Legislation and Regulation Implementation Resources for Acquisition Professionals Discussion with Q&A Recent Development(s) Wrap-Up
4 Ground to Cover 1. What changes are in the new Proposed FAR Rule? 2. What data must be included in the FAPIIS system? 3. Who must report this data, and when? 4. How should FAPIIS be used in source selections? 5. What material may be published, and how may contractors contest data published in FAPIIS? 6. What is likely to be the next change to FAPIIS?
5 Legislation Section 872 of 2009 NDAA, required the General Services Administration to develop and maintain a database containing specific performance and integrity information on potential awardees to support award decisions for actions >$500K. Section 3010 of the Supplemental Appropriations Act of 2010 requires that the information in FAPIIS, excluding past performance reviews, be made publicly available. Section 852 of 2013 NDAA requires that FAPIIS include, to the extent practicable, information on any parent, subsidiary, or successor entities to a corporation in a manner designed to give more acquisition officials using the database a comprehensive understanding of the performance and integrity of the corporation in carrying out federal contracts and grants.
6 FAR Cases/Changes FAR Case , Contractor Performance Information, opened to mandate the use of PPIRSs, require agencies to establish internal controls and identify officials responsible for completing evaluations, consider the achievement of small business goals in performance evaluations when the contract includes a small business subcontracting plan proposed rule published on September 2, 2009 and the final was published on July 1, 2009 FAR Case , FAPIIS, opened to implement section 872 proposed rule published on September 3, 2009 and the final was published on March 23, 2010 FAR Case , Termination for Default Reporting, required T4D, T4Cause, and Defective Pricing to be reported into FAPIIS proposed rule was published on September 2, 2009 and the final was published on September 29, 2010 FAR Case , Documenting Contractor Performance, to provide Governmentwide standardized past performance evaluation factors and performance rating categories and require past performance information be entered into CPARS First proposed published June 28, 2011; second proposed rule published September 6, 2012; final rule published August 1, 2013
7 FAR Cases/Changes (Cont.) FAR Case , Public access to FAPIIS, opened to implement section 3010 interim rule published on January 24, 2011 and the final rule published on January 3, 2012 FAR Case , Information on Corporate Contractor Performance and Integrity, data on immediate owner and direct subsidiaries of an entity will be available through FAPIIS as reported by CAGE code certifications Proposed rule published on December 4, 2014 with comments to close on February 2, 2015
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10 Relevant FAR Provisions FAR Contracting Officers must review FAPIIS, consider it, collect necessary additional information and document the review FAR PPIRS/FAPIIS Information Shall Be Used to Support Responsibility Determinations/ Documentation is required in FAPIIS FAR Past Performance Shall Be Evaluated in All Source Selections for Negotiated Competitive Acquisitions (Includes Construction) FAR Past Performance Shall Be Included as an Evaluation Factor for Two-Phase Design-Build Source Selections FAR Agency Must Consider Offeror Past Performance in Selection of Firms for Architect-Engineer Contracts
11 Relevant FAR Provisions FAR Certification Regarding Ownership or Control of Offeror FAR Commercial and Government Entity Code Maintenance FAR Certification Regarding Responsibility Matters (SAT) FAR Information Regarding Responsibility Matters ($500K) FAR Updates of Publicly Available Information Regarding Responsibility Matters ($500K or checked Has in ) FAR Policy - Past Performance Sets forth requirements establishing when past performance must be reported, establishing thresholds (subject to DFARS deviation), and giving guidance regarding orders under single or multiple agency IDIQ contracts Procedures Past Performance Establishes uniform procedures and standards for reporting Past Performance Information
12 What changes are in the new Proposed FAR Rule? The data on immediate owner and direct subsidiaries of an entity will be available through FAPIIS [T]he Councils have determined that it is not practicable to establish interrelationships beyond the immediate owner and the direct subsidiary. Based on data obtained from offerors in response to FAR Contractor CAGE Code Immediate Owner CAGE Code Highest-level Owner* CAGE Code
13 What data must be included in FAPIIS? Government data Termination for Default/Cause/Material Failure to Comply (grants) Defective Pricing (contracts) Non-responsibility/nonqualification determination SDO Report Admin Agreements (in lieu of suspension/debarment) CPARS (past performance) Vendor required data Criminal/civil/administrativ e proceedings for which there has been a finding of fault Comments on Government-posted items Update the information in FAPIIS on a semi-annual basis throughout the life of the contract Include CAGE codes of predecessor, immediate and highest-level owners
14 Who must report FAPIIS data, and when? Government Databases including Past Performance Information Retrieval System ( PPIRS ) and Excluded Parties List System ( EPLS ) SDO information about suspension and debarment, including administrative agreements CO terminations for default or cause, determinations of non-responsibility, and defective pricing determinations The Offeror criminal, civil and administrative proceedings and settlements, where applicable
15 Contractor-provided information Contractor self-reporting of criminal convictions, civil liability, and adverse administrative actions Scope : whether the offeror, and/or any of its principals, has or has not, within the last five years, in connection with the award to or performance by the offeror of a Federal contract or grant, been the subject of a proceeding, at the Federal or State level that has resulted in any of the following dispositions... FAR Three Categories of Proceedings : Criminal Proceedings Civil Proceedings Administrative Proceedings Settlements with acknowledgment of fault
16 Criminal Reporting Specifics Criminal Proceedings Involving either the offeror or principal In connection with the award to or performance by the offeror of a Federal contract or grant Federal or State-level proceeding Resulted in conviction.
17 Civil Proceeding Specifics Civil Proceedings Involving either the offeror or principal In connection with the award to or performance by the offeror of a Federal contract or grant Federal or State-level proceeding Finding of fault and liability that results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more
18 Administrative Proceeding Specifics Administrative proceeding means non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability Includes: SEC proceeding, Civilian Board of Contract Appeals proceeding, and Armed Services Board of Contract Appeals proceeding Excludes: agency actions such as contract audits, site visits, corrective plans, or inspection of deliverables Finding of fault and liability that results in the payment of monetary fine or penalty of $5,000 or more OR the payment of any reimbursement, restitution, or damages in excess of $100,000.
19 Reportable Settlements Settlements with acknowledgment of fault Disposition of the matter by consent or compromise with acknowledgment of fault by the Contractor if the proceeding could have led to any of the outcomes specified (either in criminal, civil or administrative context
20 When must offerors report? FAR Information Regarding Responsibility Matters the contractor must represent/certify that by submission of this offer, that the information it has entered into [FAPIIS] is current, accurate, and complete as of the date of submission of this offer... Information should be submitted with regard to each occurrence FAR Update of Publicly Available Information Regarding Responsibility Matters the contractor shall update the information in FAPIIS on a semiannual basis.
21 When must Government report FAPIIS information? FAR (h) Other contract performance information. (1) Agencies shall ensure information is accurately reported in the Federal Awardee Performance and Integrity Information System (FAPIIS) module of CPARS within 3 calendar days after a contracting officer (i) Issues a final determination that a contractor has submitted defective cost or pricing data; (ii) Makes a subsequent change to the final determination concerning defective cost or pricing data pursuant to (d); (iii) Issues a final termination for cause or default notice; or (iv) Makes a subsequent withdrawal or a conversion of a termination for default to a termination for convenience
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23 When must Government report FAPIIS information? (Cont.)
24 FAR FAPIIS (a) (b) (c) (d) How should FAPIIS be used in source selections? Before awarding a contract in excess of the simplified acquisition threshold, the contracting officer shall review the Federal Awardee Performance and Integrity Information System (FAPIIS) The contracting officer shall consider all the information in FAPIIS and other past performance information when making a responsibility determination Contracting officers shall use sound judgment in determining the weight and relevance of the information contained in FAPIIS and how it relates to the present acquisition. If the contracting officer obtains relevant information from FAPIIS the contracting officer shall, unless the contractor has already been debarred or suspended (1) Promptly request such additional information from the offeror as the offeror deems necessary and (2) (2) Notify, prior to proceeding with award the agency official responsible for initiating debarment or suspension action, if the information appears appropriate for the official s consideration. The contracting officer shall document the contract file for each contract in excess of the simplified acquisition threshold to indicate how the information in FAPIIS was considered in any responsibility determination, as well as the action that was taken as a result of the information. FAR (d)
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26 FAPIIS User Guide
27 What material may be published, and how may contractors contest data in FAPIIS? Contracting Officers are not to publish data that is subject to a FOIA exemption. FAR (b)(2)(iv); (c)(1). Contractors may challenge any data they believe should be withheld as exempt under FOIA. FAR (b)(2); (c). Contractors will be notified when new information about them is posted to FAPIIS. New information will be posted to the non-public section of FAPIIS. Within 7 days, contractors must identify any information to be withheld from publication based upon a FOIA concern. If a contractor does not lodge a timely challenge, the information will move to the public section of FAPIIS 14 days after it was first posted in the non-public section Past Performance information is expressly not to be made publicly available Responding to adverse past performance information FAR allows for rebuttal but gives CO the last word Challenging past performance information under the Contract Disputes Act
28 Some Questions 1. Do current data collection policies and practices provide useful information? Why or why not? 2. How does a Contracting Officer respond to adverse information? 3. What are the potential implications of reporting ownership and control? 4. Where are Government consumers and interested contractors having trouble living with FAPIIS? 5. What is the potential impact of making all of this information available? Protests?
29 What is likely to be the next change to FAPIIS? Reporting state-level contracts Industry or event-specific reports Security contractors Cyber breach Labor non-compliances
30 Recent Developments in Government Procurement Proposed Rule to enact provisions of the 2013 NDAA relating to small business subcontracting Limitation on Subcontracting Similarly situated entities DoD Final Rule on Safeguarding Personally Identifiable Information (PII) and Breach Reporting Push for Cybersecurity and Breach Notification
31 Wrap-up Upcoming Professor s Forum Events February 26: Understanding Mandatory Flowdowns and Tailoring Subcontracts March 26: Small Business Contracting Rules April 30: Applicability of OCIs and PCIs May 28: The Difference Between REAs and Claims Questions? Prof. Nash rcnash@olg.com Jeff Chiow jchiow@rjo.com (202)
Rogers Joseph O Donnell. Jeffery M. Chiow th Street, N.W., Ste. 725 Washington, D.C
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