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2008 Procurement Review--Statutes, Regulations, Executive Orders




The National Defense Authorization Act for Fiscal Year 2008 finally became law on January 28.  Among other things, (beginning 120 days after January 28) it permits protests to the GAO of delivery orders over $10,000,000 issued under ID/IQ contracts.

Chapter 1 of Title VI of H.R. 2642 (the Supplemental Appropriations Act, 2008)  is entitled "Close the Contractor Fraud Loophole," and section 6102 of that chapter reads as follows: "The Federal Acquisition Regulation shall be amended within 180 days after the date of the enactment of this Act pursuant to FAR Case 2007-006 (as published at 72 Fed Reg. 64019, November 14, 2007) or any follow-on FAR case to include provisions that require timely notification by Federal contractors of violations of Federal criminal law or overpayments in connection with the award or performance of covered contracts or subcontracts, including those performed outside the United States and those for commercial items."

The Omnibus Appropriations Act, 2009, Public Law 111-8, was enacted March 11, 2009.


Executive Orders

Executive Order 13457 of January 29, 2008, addresses earmarking and provides in pertinent part:  "For appropriations laws and other legislation enacted after the date of this order, executive agencies should not commit, obligate, or expend funds on the basis of earmarks included in any non-statutory source, including requests in reports of committees of the Congress or other congressional documents, or communications from or on behalf of Members of Congress, or any other non-statutory source, except when required by law or when an agency has itself determined a project, program, activity, grant, or other transaction to have merit under statutory criteria or other merit-based decisionmaking."

President Bush amended Executive Order 12989 to read in part as follows: "Sec. 5. (a) Executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system designated by the Secretary of Homeland Security to verify the employment eligibility of: (i) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the Federal contract."

Executive Order 13467 concerns new procedures for access to classified information by contractor and subcontractor personnel.


Federal Acquisition Regulation (FAR)

Federal Acquisition Circular (FAC) 2005- 24  

Federal Acquisition Circular (FAC) 2005-24 was published February 28. It includes six items: (1) FAR Case 2005-011--(effective March 31) adding new subpart 25.3 to the FAR covering contractor personnel that are providing support to the mission of the United States Government in a designated operational area or supporting a diplomatic or consular mission outside the United States, but are not authorized to accompany the U.S. Armed Forces; (2) FAR Case 2006-16--amending the FAR to update and clarify policy for synopses of proposed contract actions and to delete all references to Numbered Notes ; (3) FAR Case 2007-16--(effective February 28), incorporating increased thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the United States Trade Representative; (4) FAR Case 2006-28--(effective February 28) adopting (without change) the interim rule published in the Federal Register at 72 FR 46357 (August 17, 2007) and amending the FAR to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to the Dominican Republic; (5) FAR Case 2005-27--(effective March 31) amending the FAR to implement revisions to the regulations related to the administration of the Cost Accounting Standards; and (6) FAR Case 2007-004--(effective March 31), amending the FAR to require agencies to include common security configurations in new information technology acquisitions, as appropriate, to reduce the risks associated with security threats and vulnerabilities and to enhance public confidence in the confidentiality, integrity, and availability of Government information. (This final rule requires contracting officers to consult with the requiring official to ensure the proper standards are incorporated in their requirements.)

FAC 2005-25

FAC 2005-25  includes six items, plus a technical amendment: (i) FAR Case 2004-038--an interim rule change to FAR Subpart 4.6 that revises the process for reporting contract actions to the Federal Procurement Data System (FPDS); (ii) FAR Case 2005-040--another interim rule, which requires that small business subcontract reports be submitted using the Electronic Subcontracting Reporting System (eSRS), rather than Standard Form 294 - Subcontract Report for Individual Contracts and Standard Form 295 -Summary Subcontract Report; (iii) FAR Case 2006-033--a rule which amends the FAR to reflect the President's delegation of the Defense Production Act's priorities and allocations authorities in Executive Order 12919, and the current provisions of the DPAS regulations of the Department of Commerce in 15 CFR Part 700; (iv) FAR Case 2005-039--effective May 22, a FAR amendment to clarify language on the use of products containing recovered materials, pursuant to the Resource Conservation and Recovery Act of 1976, and Executive Order 13101; (v) FAR Case 2006-011--also effective May 22, a FAR amendment to add conditions regarding violation of Federal criminal tax laws and delinquent Federal taxes to standards of contractor responsibility, causes for debarment and suspension, and the certifications regarding debarment, suspension, proposed debarment, and other responsibility matters; and (vi) FAR Case 2006-031--a final rule amending FAR 33.211(a)(4)(v) to create a higher dollar ceiling to enable small businesses to use the small claims procedure to appeal a contracting officer's final decision.

FAC 2005-26

An interim rule amended the FAR to implement section 6 of the Sudan Accountability and Divestment Act of 2007, which generally requires certification that the contractor does not conduct certain business operations in Sudan. The interim regulation also updates the list of countries from which most imports are prohibited, to reflect Burma as well as Sudan. FAC 2005-26; FAR Case 2009-004.

FAC 2005-27

Federal Acquisition Circular (FAC) 2005-27  includes the following items: (i) FAR Case 2007-020, entitled "Correcting Statutory References Related to the Higher Education Act of 1965," a final rule to reflect citation changes necessitated by the Higher Education Amendments of 1998; (ii) FAR Case 2008-001, entitled "Changing the Name of the Office of Small and Disadvantaged Business Utilization for DoD," a final rule which substitutes the new name of Office of Small Business Programs; (iii) FAR Case 2007-015, entitled "Changes to the FPI Blanket Waiver and the JWOD Program Name," a final rule to increase the blanket waiver threshold for small dollar-value purchases from Federal Prison Industries (FPI) by Federal agencies from $2500 to $3000 and to change the name of the JWOD Program to the AbilityOne Program; (iv) FAR Case 2006-014, entitled "Local Community Recovery Act of 2006," a final rule implementing amendments to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5150) concerning set-asides for major disaster or emergency assistance acquisitions to businesses that reside or primarily do business in the geographic area affected by the disaster or emergency; (v) FAR Case 2007-007, entitled "Additional Requirements for Competition Advocate Annual Reports, a final rule requiring that annual reviews by executive agency competition advocates be provided in writing to both the agency senior procurement executive and the agency chief acquisition officer, if designated, and that the reports specifically address the quality of planning, executing, and managing of task and delivery orders over $1 million; (vi) FAR Case 2005-018, entitled "Contract Debts," a significant final rule that revises the FAR's policies and procedures concerning contract debts; (vii) FAR Case 2007-022, entitled "Subcontractor Requests for Bonds," a final rule to to clarify that the ‘‘Prospective Subcontractor Requests for Bonds’’ clause does not apply to commercial items; (viii) FAR Case 2008-002, entitled "Extension of Authority for Use of Simplified Acquisition Procedure for Certain Commercial Items," which extends until January 1, 2010, the timeframe in which an agency may use simplified procedures to purchase commercial items in amounts greater than the simplified acquisition threshold, but not exceeding $5,500,000 ($11 million for acquisitions as described in 13.500(e)); (ix) FAR Case 2008–006, entitled "Enhanced Competition for Task and Delivery Order Contracts—Section 843 of the Fiscal Year 2008 National Defense Authorization Act," an interim rule which (a) prohibits issuing a task or delivery order exceeding $100 million without special authorization, (b) provides additional competition requirements for orders in excess of $5 million, and (c) establishes the right to protest to the GAO for orders in excess of $10 million; (x) FAR Case 2006-025, entitled "Online Representations and Certifications Application Review," a final rule revising the prescription for use of clauses for the use of Environmental Protection Agency-designated products and toxic chemical release reporting; (xi) FAR Case 2007-002, entitled Cost Accounting Standards (CAS) Administration and Associated Federal Acquisition Regulation Clauses," an interim rule to revise the FAR CAS administration clauses to maintain consistency between the FAR and CAS and to reflect various amendments made by the CAS Board on June 14, 2007; (xii) FAR Case 2006-004, Entitled CAS Administration, a final rule related to CAS administration in contracts with foreign firms; and (xiii) FAR Case 2006-027, entitled "Accepting and Dispensing of $1 Coin," a final rule to implement Section 104 of the Presidential $1 Coin Act of 2005, which requires that entities that operate any business on any premises owned or controlled by the United States be capable of accepting and dispensing $1 coins on January 1, 2008.

FAC 2005-28

FAC 2005-28 (FAR Case 2007-006), Contractor Business Ethics Compliance Program and  Disclosure Requirement, amends the FAR and implements Public Law 110-252, Title VI, Chapter I (the "Close the Contractor Fraud Loophole" Act) to amplify the requirements for a contractor code of business ethics and conduct, an internal control system, and disclosure to the Government of certain violations of criminal law, violations of the civil False Claims Act, or significant overpayments.

FAC 2005-29

FAC 2005-29 includes FAR Case 2007-013, Employment Eligibility Verification, which requires certain contractors and subcontractors to utilize the  E-Verify system administered by the Department of Homeland Security as a means of verifying that certain of their workers are eligible to work in the United States.

Other FAR Revisions

As a pilot program (scheduled to terminate January 1, 2009) , awardees of contracts whose values equal or exceed $500 million, which are awarded, and to be performed in, the United States, must report all first tier subcontract awards exceeding $1 million to the Federal Funding Accountability and Transparency Act of 2006 ("FFATA") database at

FAR Case 2005-032: Comments were due by June 9 on proposed FAR rule changes to improve the regulations at FAR 32.001, 32.5, and 52.232–16 related to requests for progress payments and Standard Form (SF) 1443, Contractor’s Request for Progress Payments. 

FAR Case 2006-022: Comments were due by June 2 on a proposed rule that would make several changes to the FAR concerning contractor performance information, including, inter alia, (i) adding a definition of past performance that would include both active and completed contracts, (ii) clarifying the use of the Past Performance Information Retrieval System, (iii) requiring contracting officers to evaluate past performance for orders that exceed the simplified acquisition threshold placed against Federal Supply Schedule contracts, or under a task order contract or a delivery order contract awarded by another agency (i.e. a government-wide acquisition contract or multi-agency contract) and recommending past performance evaluations for orders under single agency contracts, and (iv) requiring the agency to identify the individual responsible for each past performance evaluation.     

FAR Case 2006-034: Comments were due by May 9 on a proposed rule that is intended to ensure that the FAR clearly reflects the SBA's interpretation of the Small Business Act and the SBA's own regulations concerning the order of precedence that applies when deciding whether to satisfy a requirement through an award to a small business, a HUBZone small business concern, an SDVOSB concern or an 8(a) company. Specifically the proposed rule is intended to make the following four things clear: (1) although there is no order of precedence among the 8(a), HUBZone, or SDVOSB programs, if a requirement has been accepted by SBA under the 8(a) program, it must remain there unless SBA agrees to its release in accordance with 13 CFR 124, 125 and 126;. (2) for acquisitions exceeding $100,000, the contracting officer must consider making award under the 8(a), HUBZone or SDVOSB programs (either set-aside or sole source) before the contracting officer proceeds with a small business set-aside, and, after such consideration, the contracting officer may set aside an acquisition for small businesses, unless the criteria for setting it aside for HUBZone small businesses are met; (3) FAR 19.502-2(a) sets forth the requirement to exclusively reserve acquisitions between $3,000 and $100,000 for small businesses unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more small businesses that are competitive in terms of market prices, quality, and delivery, and the proposed rule clarifies that these small business set-asides do not preclude award of a contract to a qualified HUBZone small business, an 8(a) concern, or an SDVOSB concern because the SBA’s regulations give the contracting officer discretionary authority to use the HUBZone, 8(a), or SDVOSB programs at these dollar levels (and the rule shows that, unlike procurements that are expected to exceed $100,000, it is not mandatory that the contracting officer set aside an acquisition for HUBZone small business concerns before setting aside the requirement for small businesses); and (4) the SBA believes that progress in fulfilling the various small business goals, as well as other factors such as the results of market research and the acquisition history, should be considered in making a decision as to which program to use for the acquisition. Comments were due by May 9.

FAR Case 2007-006: a second version of proposed rules concerning contractor compliance program and integrity reporting has been published. Comments are due by July 15. 

FAR Case 2007-016: a corrected table of contract thresholds has been issued for various trade agreements. 

FAR Case 2007-017: Service Contractor Employee Personal Conflicts of Interest--The public comment period has been extended to  July 17 concerning whether there is a need for a set of regulatory and contract FAR provisions specifically covering personal conflicts of interest by employees of service contractors. Because the federal government is increasingly using service contractors to perform work formerly performed by federal employees, there is a concern that these private employees are not subject to the same ethical standards and obligations as their federal counterparts.

FAR Case 2007-018: Organization Conflicts of Interest--for the same reason as above, comments are also being solicited concerning whether there is a need for increased regulatory coverage of the the subject of organizational conflicts of interest. The comment period was subsequently extended for 30 days (until July 18).    

      Comments are due by August 11 on proposed amendments to the FAR that will require contractors to utilize the U.S. Citizenship and Immigration Services' (USCIS) E-Verify system to verify that certain of their employees are eligible to work in the United States. See also first entry at June 9 below.

Department of Defense FAR Supplement (DFARS)

January 10: Several DFARS amendments were published: (i) DFARS Case 2006-D032: revisions to harmonize DFARS online representations and and certifications requirements (ORCA) with those in the FAR; (ii) DFARS Case 2006-D051: an interim rule to implement the Defense Authorization Act for Fiscal 2007, which prohibits contractors acting as lead system integrators on major systems acquisitions from having any financial interest in the development or construction of any system element unless an exception applies; (iii) DFARS Case 2007-D019: a final rule to address procedures for preparation of the written determination required by the FAR that none of the functions to be performed by contract are inherently governmental; (iv) DFARS Case 2007-D016: an interim rule implementing another section of the National Defense Authorization Act for Fiscal 2007 to establish a quality control policy for the procurement, modification, repair, and overhaul of ship critical safety items; (v) DFARS Case 2006-D023: a final rule implementing the Federal Information Security Management Act of 2002 (44 U.S.C. 3541 et seq.) to address training requirements that apply to contractor personnel who perform information assurance functions for DoD; (vI) DFARS Case 2006-D062: an interim rule implementing the Dominican Republic-Central America-United States Free Trade Agreement with respect to the Dominican Republic, and adding Bulgaria and Romania to the list of countries covered by the World Trade Organization Government Procurement Agreement; and (vii) DFARS Case 2006-D024: a final rule to address requirements for the distribution of material inspection and receiving reports under DoD contracts.

January 24: Several more DFARS amendments were published: (i) DFARS Case 2006-D045--text regarding contract close-out procedures has been removed from the DFARS and relocated to the DoD Procedures, Guidance, and Information (PGI) resource; (ii) DFARS Case 2004-D017--text regarding combating trafficking in persons has been removed from the DFARS (sections 222.17 and 252.222-7006) because it is now covered in the FAR; (iii) DFARS Case 2007-D005--a new DFARS subpart 212.1 requires that, when using FAR Part 12 procedures for acquisitions exceeding $1 million in value, the contracting officer must determine in writing that the acquisition meets the "commercial item" definition in FAR 2.101, and the contracting officer must include the written determination to this effect in the contract file; (iv) DFARS Case 2007-D010 deletes text regarding withholding payments on T&M and labor-hour contracts from DFARS 232.111 and 252.232-7006, because the subject is covered in FAR 32.111 and 52.232-7; (v) DFARS Case 2006-D053--an interim rule amending the DFARS (sections 232.004 and 235.006) to implement Section 818 of the National Defense Authorization Act for Fiscal Year 2007, which requires DoD to modify its regulations regarding the determination of contract type for major development programs to address the assessment of program risk, and (vi) DFARS Case 2007-D023--an interim rule amends DFARS 225.1101 and 225.7503 to reflect increased dollar thresholds for implementation of various trade agreements.

DFARS Case 2002-D002: The DoD adopted as final (with certain changes) an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 832 of the National Defense Authorization Act for Fiscal Year 2002. Section 832 codified (and made modifications to) the Berry Amendment, which requires the acquisition of certain items from domestic sources. The latest changes affect the following sections in the DFARS: 225.7002-2; 252.212-7001; and 252.225-7012.

DFARS Case 2006-D049: The DoD issued a final rule amending the DFARS to require use of the Wide Area WorkFlow electronic system for submitting and processing payment requests and receiving reports under DoD contracts, in order to facilitate timely and accurate payments to DoD contractors.

DFARS Case 2006-D057: DoD issued an interim rule amending the DFARS in accordance with Section 852 of the National Defense Authorization Act for Fiscal Year 2007 to ensure that pass-through charges on contracts or subcontracts are not excessive in relation to the cost of work performed by the contractor or subcontractor. The interim regulation includes two, new standard contract clauses (252.215-7003 and -7004). According to the clauses, an "excessive pass-through charge, with respect to a contractor or subcontractor that adds no or negligible value to a contract or subcontract, means a charge to the Government by the contractor or subcontractor that is for indirect costs or profit on work performed by a subcontractor (other than charges for the costs of managing subcontracts and applicable indirect costs and profit based on such costs)." The clauses generally operate when the contractor is subcontracting more than 70% of the work.

DFARS Case 2004-D010: effective July 21, the DoD is issuing an interim rule amending the DFARS to specify requirements for complying with export control laws and regulations when performing DoD contracts. The rule recognizes contractor responsibilities to comply with existing  Commerce and State Department regulations and adds two new clauses to be used when export-controlled items, including information or technology, may be involved in the performance of a contract. The new clauses are: 252.204-7008--Requirements for contracts involving export-controlled items; and 252.204-7009--Requirements regarding potential access to export-controlled items.

DFARS Case 2008-D003: DoD is proposing to amend the DFARS to address statutory restrictions on the acquisition of specialty metals not melted or produced in the United States. The proposed rule implements Section 842 of the National Defense Authorization Act for Fiscal Year 2007 and Sections 804 and 884 of the National Defense Authorization Act for Fiscal Year 2008. Comments are due by September 19.

DFARS Case 2005-D015: the DoD  adopted as final, without change, the interim rule amending the DFARS to update requirements for reporting of government property in the possession of DoD contractors. The final rule replaces DD Form 1662 reporting requirements with requirements for DoD contractors to electronically submit, to the Item Unique Identification (IUID) Registry the IUID data applicable to the government property in the contractor's possession.

DFARS Case 2007-D021: the DoD issued a final rule amending the DFARS to address review and documentation requirements pertaining to the use of time-and-materials contracts for the acquisition of noncommercial services. The rule provides for the same level of review for both commercial and non-commercial DoD time-and-materials contracts.

DFARS Case 2008-D019: the DoD issued a final rule revising the list of "least developed" countries that are designated as eligible countries under the Trade Agreements Act (adding Liberia and removing Cape Verde) in accordance with direction from the United States Trade Representative.

Because the DoD exceeded its 5% goal for awards to small disadvantaged businesses in fiscal 2007, it suspended the price evaluation adjustment for such businesses for one year beginning March 10. Moreover, the Defense Department has reinstituted small business set-asides for a number of Designated Industry Groups under the Small Business Competitiveness Demonstration Program because it has failed to meet its 40% goal for these Designated Industry Groups.

Effective March 31, the DoD adopted a final DFARS rule (unchanged from the interim rule)  to implement policy regarding contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States.

The DoD issued a final rule making changes related to earned value management policy (DFARS Case 2005-D006), a final rule implementing Section 823 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181), which provides a 5-year extension of the authority for DoD to carry out a pilot program for follow-on contracting for the production of items or processes begun as prototype projects under other transaction agreements (DFARS Case 2008-D008), and a final rule removing an obsolete restriction on the acquisition of propellers from foreign sources (DFARS Case 2007-D027).

Effective May 1, the the Per Diem, Travel and Transportation Allowance Committee published Civilian Personnel Per Diem Bulletin Number 258, which  lists revisions in the per diem rates prescribed for U.S. Government employees for official travel in Alaska, Hawaii, Puerto Rico, the Northern Mariana Islands and United States possessions.

August 12: Several DFARS amendments were published: (i) in compliance with section 904 of the National Defense Authorization Act for fiscal 2006, the Office of Small and Disadvantaged Business Utilization has been re-designated the Office of Small Business Programs (DFARS Case 2008-D001); (ii) the DFARS has been updated to make its language consistent with the FAR concerning contractor standards of conduct and the handling of extraordinary contractual actions (DFARS Case 2008-D004); (iii) in compliance with Section 827 of the National Defense Authorization Act for Fiscal Year 2008, an interim rule requires the use of competitive procedures in the acquisition of items for which Federal Prison Industries has a significant market share (DFARS Case 2008-D015); (iv) in compliance with  Section 130 of the National Defense Authorization Act for Fiscal Year 2007, a final rule establishes a quality control policy for the procurement, modification, repair, and overhaul of ship critical safety items (DFARS Case 2007-D016); (v) a final rule increases  dollar thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the United States Trade Representative (DFARS Case 2007-D023); and (vi) a final rule updates and clarifies the requirements for unique identification and valuation of items delivered under DoD contracts and revises the applicable contract clause to reflect the current requirements (DFARS Case 2007-D007).

September 15: Several DFARS were published. DFARS Case 2008-D002 (entitled Acquisitions in Support of Operations in Iraq or Afghanistan) is an interim rule amending the DFARS to implement Sections 886 and 892 of the National Defense Authorization Act for Fiscal Year 2008. Section 886 provides authority for DoD to limit competition when acquiring products or services in support of operations in Iraq or Afghanistan. Section 892 addresses competition requirements for the procurement of small arms for assistance to Iraq or Afghanistan. DFARS Case 2008-D013, entitled Limitation on Service Contracts for Military Flight Simulators, is a final rule implementing Section 883(b) of the National Defense Authorization Act for Fiscal Year 2008, which changed the conditions under which DoD may waive the prohibition on entering into a service contract to acquire a military flight simulator. Specifically, it adds a provision that allows a waiver of the general prohibition if the Secretary of Defense determines it to be in the national interest. DFARS Case 2006-D050, Security Guard Functions, is an interim rule extending through September 30, 2012, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001.

The DoD amended section 215.370 of the DFARS to implement Section 819 of the National Defense Authorization Act for Fiscal Year 2006, which authorizes the DoD to use an evaluation factor reflecting whether an offeror intends to perform a contract using employees or individual subcontractors who are members of the Selected Reserve.

The DoD proposed to amend the DFARS (i) to revise the criteria under which the contract administration office may permit a contractor to release supplies for shipment without government authorization of the shipping documents and (ii) to address review and documentation requirements with regard to the use of time-and-materials contracts for the acquisition of non-commercial services in order to provide for the same level of review for both commercial and non-commercial DoD time-and materials contracts.

The DoD sought comments concerning how to define the term "nontraditional defense contractor."

The DoD proposed a rule designed to ensure the accuracy of the information in the Central Contractor Registration (CCR) database.

Other Agencies    

Agriculture Department

The Department of Agriculture's Office of Energy Policies and New Uses issued three sets of regulations (to be published at 7 C.F.R. Part 2902) designating biobased items for federal procurement. The new regulations include many categories of designated items and are issued in three parts: Part III; Part IV; and Part V.

The same office proposed to amend the Guidelines for Designating Biobased Products for Federal Procurement, by adding nine sections to designate the following nine items within which biobased products would be afforded federal procurement preference: chain and cable lubricants; corrosion preventatives; food cleaners; forming lubricants; gear lubricants; general purpose household cleaners; industrial cleaners; multipurpose cleaners; and parts wash solutions. USDA also is proposing minimum biobased content for each of these items. The authority for the proposed changes is section 9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA), as amended by the Food, Conservation, and Energy Act of 2008 (FCEA), 7 U.S.C. 8102.

Architect of the Capitol

The Architect of the Capitol proposed to implement a small-business set-aside program for small purchases.

Commerce Department

The Bureau of Industry and Security (BIS) issued a slew of revisions to the Export Administration Regulations (EAR) in January, most of which are technical corrections. However, there are some substantive revisions, including removing certain non-Country Group D countries from Country Group D, removing a reference to Libya under embargoed destinations, clarifying the requirements for obtaining an Import Certificate or an End-User Statement, changing Validated End-User report requirements, and removing references to certain entries on the Commerce Control List (CCL).

The BIS amended the EAR to reflect changes to the Missile Technology Control Regime (MTCR) Annex that were agreed to by MTCR member countries at the November 2007 Plenary in Athens, Greece.

The BIS  published various technical corrections and clarifications to the EAR. The BIS also proposed making conforming changes in certain end-user/end-use controls and to clarify that a party cannot proceed with an export, reexport, or transfer (in-country) that is in transit at the time the party is informed by BIS that a license is required (in accordance with certain end-user/end-use controls in the EAR), unless that party first obtains a license from BIS authorizing the completion of the transaction.

The BIS also published a final rule revising the EAR to clarify that a party cannot proceed with an export, reexport, or transfer (in-country) that is in transit at the time the party is informed by BIS that a license is required (in accordance with certain end-user/end-use controls in the EAR), unless that party first obtains a license from BIS authorizing the completion of the transaction. These changes are intended to enhance the ability of BIS to stop items subject to the EAR, including items not on the CCL, from being exported, re-exported or transferred (in-country) when there is an unacceptable risk that such items will be used in, or diverted to, any of the proliferation activities specified in certain sections of the EAR. The new rule also amends the EAR by revising the definition of the term "transfer"  and certain related terms, to provide greater clarity regarding these provisions.

The Commerce Department revised the provisions of the EAR relating to foreign-made items that incorporate controlled U.S.-origin items, the so-called ‘‘de minimis’’ rules. The new rules (i) change the de minimis calculation for foreign produced hardware that is bundled with U.S.-origin software; (ii) clarify the definition of ‘incorporate’ as it applies to the de minimis rules and to the medical statement of understanding; (iii) remove the requirement to submit a one-time report to the Bureau of Industry and Security for foreign-made software that incorporates U.S.-origin software, and (iv) revise the ‘‘Steps for Using the EAR’’ and General Prohibition Two with regard to the de minimis rules.

The BIS proposed to amend the Export Administration Regulations (EAR) to establish a new license exception entitled ‘‘Intra-Company Transfer (ICT),’’ which (with prior authorization from BIS) would allow an approved parent company and its approved wholly-owned or controlled in fact entities to export, reexport, or transfer (in-country) many items on the CCL among themselves for internal company use.

The BIS published a significant number of changes to the Export Administration Regulations (EAR) based on a a systematic review of the CCL.

Environmental Protection Agency

The EPA amended its acquisition regulation (48 C.F.R. Chapter 15) to add a section 1515.401-70 (along with associated contract clauses), which establishes award term incentives as a means of enabling a contractor to become eligible for additional periods of performance under a current contract by achieving prescribed performance measures under that contract.

The EPA proposed to amend its acquisition regulation (the EPAAR) to revise the prescription for using the "Technical Direction" clause and the clause, itself. The clause describes the circumstances in which technical direction may be provided to contractors, the types of direction that may be provided, and the role of the Contracting Officer's technical representative in issuing such direction.       

Energy Department

The Department of Energy made various changes to its regulations, including its acquisition regulations (the DEAR) to conform them to a 1991 amendment of the Defense Production Act with regard to the Defense Priorities and and Allocations System (DPAS).      

The Department of Energy is proposing to amend its acquisition regulation (the DEAR) to revise the security clause used in all contracts and subcontracts involving access authorizations to specifically require background checks and tests for the absence of any illegal drug of uncleared personnel (employment applicants and current employees) who will require access authorizations.

General Services Administration (GSA     

Effective March 17, the GSA revised the FTR's maximum per diem rates for certain areas of Alabama, California, Illinois, Missouri, and Texas. Effective March 19, the FTR's mileage allowance for privately owned vehicles increased from .485 to .505 per mile. Then, effective  July 28, the FTR was revised again to increase the cost of operating a privately owned airplane from $1.07 to $1.26 per mile, a privately owned automobile from $0.505 to $0.585 cents per mile, and a privately owned motorcycle from $0.305 to $0.585 cents per mile.

The GSA published the final rules of procedure for the Civilian Board of Contract Appeals.

The GSA proposed to amend the Federal Travel Regulation (FTR) provisions relating to the use of U. S. Flag air carriers under the provisions of the Fly America Act and to make the regulations consistent with the Open Skies Air Transport Agreement between the U.S. and the European Union.

The GSA's Office of Governmentwide Policy invited comments on a proposed document entitled "Federal Acquisition System Requirements," which gives functional, process, technical and data standards requirements for software developers of Government acquisition and contract writing systems.

Effective August 8, the GSA implemented a final rule rewriting GSAR Part 522, Application of Labor Laws to Government Acquisitions. Effective January 8, 2009, the GSA is amending (rewriting) GSAR Part 533 (Protests, Disputes, and Appeals)--GSAR Case 2007-G501.

The GSA proposed rewrites of the following parts of the General Services Acquisition Regulation (GSAR): (i) Part 501; (ii) Part 503, improper business practices and personal conflicts of interest (GSAR Case 2008-G503), (iii) Part 504, administrative matters (GSAR Case 2006-G510); (iv) Part 505, publicizing contract actions (GSAR Case 2008-G503), (v) Part 509, contractor qualifications (GSAR Case 2006-G512); (vi) Part 511, describing agency needs (GSAR Case 2007-G507); (vii) Part 512, acquisition of commercial Items (GSAR Case 2008-G504); (viii) Part 513, simplified acquisition procedures (GSAR Case 2007-G502); (ix) Part 515, contracting by negotiation (GSAR Case 2008-G506); (x) Part 516, types of contracts  (GSAR Case 2006-G504); (xi) Part 517, special contracting methods (GSAR Case 2007-G500); (xii) Part 525, foreign acquisition (GSAR Case 2006-G520); (xiii) GSAR Part 528, bonds and insurance (GSAR Case 2006-G517); (xiv) Part 532, contract financing (GSAR Case 2006-G515); (xv) Part 533, protests, disputes, and appeals (GSAR Case 2007-G501); (xvi) Part 536, construction and architect-engineer contracts; (xvii) Part 537, service contracting (GSAR Case 2008-G510);  (xviii) Part 542, contract administration and audit services (GSAR Case 2008-G512); (xix) Part 543, contract modifications (GSAR Case 2008-G513); (xx) GSAR Part 546, quality assurance  (GSAR Case 2008-G514); (xxi) Part 547, transportation (GSAR Case 2006-G518), and (xxii) GSAR Part 549, Termination of Contracts  (GSAR Case 2008-G515).

The GSA (GSAR Case 2008-G517) amended the GSAR to implement Pub.L. 110–248, The Local Preparedness Acquisition Act, which authorizes the use by state or local governments of GSA Federal Supply Schedules (FSS) for alarm and signal systems, facility management systems, firefighting and rescue equipment, law enforcement and security equipment, marine craft and related equipment, special purpose clothing, and related services (as contained in Federal supply classification code group 84 or any amended or subsequent version of that classification group).

Government Accountability Office (GAO)

The GAO amended its bid protest regulations concerning the term "interested party" in A-76 procurements to comply with the requirements of the National Defense Authorization Act for Fiscal Year 2008 and to make several other clarifications to various sections of the rules. 

The GAO issued interim rules of procedure for the GAO Contract Appeals Board, which will be codified at 4 C.F.R. Part 22.

Homeland Security

Homeland Security has revised its acquisition regulation to delegate authority for  one-step turnkey design-build contracts to the Coast Guard (HSAR Case 2007-002).

Homeland Security has announced that the Transportation Security Administration's exemption from the FAR will expire for acquisitions initiated after June 22 and has amended the Homeland Security Acquisition Regulation (i) to remove provisions related to DHS' special streamlined acquisition authority and (ii) to change the name of the Bureau of Immigration and Customs Enforcement to U.S. Immigration and Customs Enforcement, and the name of the Bureau of Customs and Border Protection to U.S. Customs and Border Protection.

Labor Department

The Department of Labor issued a proposed rule that would reduce the amount of personal data concerning individual workers in reports required by the Davis-Bacon and Copeland Anti-Kickback Acts, in order to protect workers' privacy.


NASA proposed to amend the procedures in the NASA FAR Supplement relating to the mentor-protege program to streamline the program; align the mentoring to technical skills; expand the program to include Small Disadvantaged Businesses (SDB), women-owned small businesses, HUBZone small businesses, veteran-owned and service-disabled veteran-owned small businesses, Historically Black Colleges and Universities, minority institutions of higher education, and NASA Small Business Innovation Research (SBIR) Phase II small businesses; and include award fee incentives. Comments are due by November 18. 

Office of Federal Contract Compliance Programs (OFCCP)

Effective April 7, OFCCP issued a final rule that revises the regulations in 41 CFR part 60-250 to implement the nondiscrimination and affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended.

Office of Federal Procurement Policy (OFPP)

Effective April 25, the Cost Accounting Standards (CAS) Board adopted, without change, the proposed rule establishing a clause to be used in CAS-covered contracts and subcontracts with foreign entities. See 48 C.F.R. 9903.201-4.

Effective June 2, the CAS Board revised CAS 412, "Cost Accounting Standard for composition and measurement of pension cost," and CAS 415, "Accounting for the cost of deferred compensation" to address issues concerning the recognition of the costs of Employee Stock Ownership Plans (ESOPs) under government cost-based contracts and subcontracts. These amendments provide criteria for measuring the costs of ESOPs and their assignment to cost accounting periods and  specify that accounting for the costs of ESOPs will be covered by the provisions of CAS 415.

The CAS Board requested public comments on a staff discussion paper concerning whether to revise the longstanding CAS 403 thresholds (48 C.F.R. 9904.403-40(c)(2)) for determining whether home office residual expenses must be allocated to segments. The Board also announced its decision to retain the exemption from CAS coverage for contracts executed and performed outside the United States.     

Office of Government Ethics

The Office of Government Ethics published final rules regarding post-employment conflicts of interest restrictions  for governmental employees terminating governmental service on or after January 1, 1991, which are to be codified at 5 C.F.R. 2637 and 2641. The final rules include an extensive and lengthy introduction summarizing comments received concerning the proposed rule and the agency's reaction to these comments.

Office of Management and Budget

OMB established $612,196 as the maximum executive benchmark compensation allowable under government contracts in contractors' fiscal 2008.

Office of Personnel Management

The Office of Personnel Management proposed to amend its procurement regulations to recognize the CBCA as the replacement for the ASBCA for appeals under the Federal Employees Group Life Insurance Federal Acquisition Regulation (LIFAR).         

Small Business Administration (SBA)

Effective February 12, the SBA waived the nonmanufacturer rule for (i) All Other Miscellaneous Electrical Equipment and Component Manufacturing (Fluorescent Lamps, Incandescent Lamps, etc) and (ii) All Other Miscellaneous Electrical Equipment and Component Manufacturing (Electric Lamp Starters and Lamp Holders, etc.).

Effective February 13, the SBA waived the rule for "Irradiation Apparatus Manufacturing, Computerized axial tomography (CT/CAT) scanners manufacturing; CT/CAT (computerized axial tomography) scanners manufacturing; Fluoroscopes manufacturing; Fluoroscopic X-ray apparatus and tubes manufacturing; Generators, X-ray, manufacturing; Irradiation equipment manufacturing; X-ray generators manufacturing; and X-ray irradiation equipment manufacturing."

Effective April 7, the SBA waived the nonmanufacturer rule for "All Other Miscellaneous Electrical Equipment and Component Manufacturing (Indoor and Outdoor Electrical Lighting Fixtures)." Effective May 16, the SBA waived the  rule for (i) trash bags manufacturing, (ii) safety zone rubber gloves manufacturing, and (iii) paper products manufacturing.

Effective July 8, the SBA waived the rule for Other Aircraft Parts and Auxiliary Equipment Manufacturing (Drones and Aircraft Launching Equipment), Product Service Codes 1550 and 1720.

Effective July 23, the SBA waived the rule for televisions.

Effective December 22, the SBA waived the Nonmanufacturer Rule for Control Cable and Conductors, Trailers and Heavy Duty Truck Tractors, and Line Hardware (Insulator Strings) Manufacturing.

The SBA has increased its monetary size standards by 8.7% to account for inflation since December 2005.

Until such time as it may lift this suspension of activities, the SBA is no longer receiving applications for admission into the Small Disadvantaged Business Program. Since 1994, the SBA has processed these applications on behalf of all federal procuring agencies. In December 2004, however, the price evaluation preference for such businesses lapsed for most federal agencies, and the remaining agencies have become more reluctant to reimburse the SBA for the costs of its administration of the program. Hence, the suspension while the SBA reassesses the situation.

The SBA published a final rule, effective October 31, to set forth procedures that will govern the new Women-Owned Small Business (WOSB) Federal Contract Assistance Procedures as authorized in the Small Business Act. The rule does not identify the industries in which WOSBs are underrepresented or substantially underrepresented in Federal procurement because SBA is awaiting comments on a proposed rule in that area before concluding its eligibility determinations.

The SBA issued revised rules concerning its Small Disadvantaged Business (SDB) Program. Specifically, the rule allows firms to self-represent their SDB status without first receiving any SDB certification. It also recognizes that the benefits of being an SDB for federal prime contracts have  diminished and shifts the responsibility of identifying firms as SDBs for federal prime contracts to those limited agencies that have authority and choose to use price evaluation adjustments for SDBs.

State Department

Effective March 24, the State Department amended the ITAR to deny licenses and other approvals to export or otherwise transfer defense articles and defense services to Sri Lanka except, on a case-by-case basis, for technical data or equipment made available for the limited purposes of maritime and air surveillance and communications, in order to comply with the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2008.

The State Department proposed to amend the ITAR to clarify how the criteria of Section 17(c) of the Export Administration Act of 1979 are implemented in accordance with the Department's obligations under the Arms Export Control Act with regard to aircraft components.

Effective August 14, the State Department amended Part 121 of the International Traffic in Arms Regulations (ITAR) 121 to add language clarifying how the criteria of Section 17(c) of the Export Administration Act of 1979 ("EAA") are implemented in accordance with the Department of State's obligations under the Arms Export Control Act ("AECA")  and restating the Department’s policy and practice of implementing the criteria of this provision. The rule reinstates the Section 17(c) reference in the ITAR to assist exporters in understanding the application of the Section 17(c) criteria to parts and components for civil aircraft. It also clarifies that any part or component that (i) is standard equipment; (ii) is covered by an FAA civil aircraft type certificate (including amended type certificates and supplemental type certificates but expressly excluding military aircraft certified as restricted and any type certification of Military Commercial Derivative Aircraft, defined by FAA Order 8110.101 effective date September 7, 2007 as "civil aircraft procured or acquired by the military"); and (iii) is an integral part of such civil aircraft, is subject to the jurisdiction of the Export Administrative Regulations (EAR). Where such part or component is not Significant Military Equipment ("SME"), no Commodity Jurisdiction (CJ) determination is required to determine whether the item meets these criteria for exclusion under the United States Munitions List (USML), unless doubt exists as to whether these criteria have been met. However, where the part or component is SME, a CJ determination is always required, except where a SME part or component was integral to civil aircraft prior to the effective date of this rule. Additionally, the rule adds language in a new Note after Category VIII(h) to provide guidelines concerning the parts or components meeting these criteria. The change to Category VIII*(b) also identifies and designates certain sensitive military items, formerly controlled under Category VIII(h), as SME. Previous and current authorizations concerning the manufacturer of these items will not require notification in accordance with section 124.11 and will not require a "Nontransfer and Use Certificate" DSP-83, unless they are amended, modified, or renewed.

Effective September 19, the State Department amended the ITAR to clarify that certain anti-tumor drugs are not within the definition of "chemical agents."

The State Department removed Rwanda from the ITAR provisions on prohibited exports and sales to certain countries as a result of United Nations Security Council Resolution 1823, which terminated remaining arms sanctions against that country. The ITAR also has been amended to increase the registration fees, change the registration renewal period, and make other minor administrative changes.

The State Department added Eritrea to the ITAR on prohibited exports and sales to certain countries as a result of its designation as a country not cooperating fully with antiterrorism efforts.

Veterans Affairs

      Effective May 19, the VA issued an interim final rule, which implements portions of the Veterans Benefits, Health Care, and Information Technology Act of 2006. That Act requires the VA to verify ownership and control of veteran-owned small businesses, including service-disabled veteran-owned small businesses. According to the new rule, a VA contracting officer Veterans Affairs may restrict a competition for a requirement to an SDVOSB or a VOSB if that business is listed as "verified" in the Vendor Information Pages (VIP) database. The rule defines the eligibility requirements for businesses to obtain verified status, explains examination procedures, and establishes records retention and review processes.

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