ARRA Implementation

IMPLEMENTATION OF THE AMERICAN IMPLEMENTATION OF THE AMERICAN RECOVERY AND REINVESTMENT ACT RECOVERY AND REINVESTMENT ACT

OF 2009OF 2009Presented to Presented to

ABA Section of Public Contract LawABA Section of Public Contract LawCouncil MeetingCouncil MeetingMAY 16, 2009MAY 16, 2009

Donald G. FeatherstunDonald G. Featherstun David F. InnisDavid F. Innis

Seyfarth Shaw LLPSeyfarth Shaw LLP Rogers Joseph Rogers Joseph O’DonnellO’Donnell

560 Mission Street, Ste 3100560 Mission Street, Ste 3100 311 California 311 California Street, 10Street, 10thth Fl Fl

San Francisco, CA 94105San Francisco, CA 94105 San Francisco, CA 94104San Francisco, CA 94104

May 16, 2009May 16, 2009 ABA Section of Public Contract Law Council MeetingABA Section of Public Contract Law Council Meeting 22

I. IntroductionI. Introduction

A.A. The American Recovery and Reinvestment Act The American Recovery and Reinvestment Act (the Recovery Act), signed on February 17, (the Recovery Act), signed on February 17, creates significant opportunities to contractors, creates significant opportunities to contractors, grantees, States, and local governments, but grantees, States, and local governments, but those opportunities are accompanied by those opportunities are accompanied by additional obligations beyond what is normally additional obligations beyond what is normally required to do business with the federal required to do business with the federal government. government.



1.1. The Recovery Act will fund massive spending on The Recovery Act will fund massive spending on contracts and grants:contracts and grants:

a.a. $60 billion in contract dollars$60 billion in contract dollars

b.b. $300 billion in grants$300 billion in grants

2.2. At the same time, all contracts and grants funded by At the same time, all contracts and grants funded by the Recovery Act come with higher levels of the Recovery Act come with higher levels of

a.a. Transparency: complete and rapid public disclosure ofTransparency: complete and rapid public disclosure of1)1) Contract performanceContract performance

2)2) Job creation and retentionJob creation and retention

b.b. OversightOversight1)1) Whistleblower rightsWhistleblower rights

2)2) GAO and IG audit accessGAO and IG audit access

c.c. Buy American requirements for construction materialsBuy American requirements for construction materials



B.B. OMB has published Interim Guidance for OMB has published Interim Guidance for implementation of the Recovery Act implementation of the Recovery Act

1.1. OMB issued Initial Implementing Guidance on February OMB issued Initial Implementing Guidance on February 18.18.

2.2. Updated Implementing Guidance issued on April 3Updated Implementing Guidance issued on April 3

3.3. Additional memo clarifying the guidance is expected in Additional memo clarifying the guidance is expected in May.May.


I. IntroductionI. IntroductionC.C. New regulations also have been issued to New regulations also have been issued to

implement the Act: implement the Act: 1.1. Contracts: Five sets of interim FAR provisions with Contracts: Five sets of interim FAR provisions with

comments due June 1 comments due June 1 a.a. Buy American Requirements for Construction MaterialsBuy American Requirements for Construction Materialsb.b. Whistleblower ProtectionsWhistleblower Protectionsc.c. Publicizing Contract ActionsPublicizing Contract Actionsd.d. Reporting RequirementsReporting Requirementse.e. GAO/IG AccessGAO/IG Access

2.2. Grants, Cooperative Agreements, and Loans: New 2 Grants, Cooperative Agreements, and Loans: New 2 CFR Part 176, containing four sets of new award terms CFR Part 176, containing four sets of new award terms with comments due on June 22 with comments due on June 22

a.a. Reporting and Registration RequirementsReporting and Registration Requirementsb.b. Buy American RequirementBuy American Requirementc.c. Wage Rate RequirementsWage Rate Requirementsd.d. Single Audit Information for Recipients of Recovery Act Single Audit Information for Recipients of Recovery Act

FundsFunds



D.D. This presentation This presentation 1.1. Addresses the impact of the OMB Interim Guidance on Addresses the impact of the OMB Interim Guidance on

contractors, grantees, States and local governmentscontractors, grantees, States and local governments

2.2. Describes each of the new regulationsDescribes each of the new regulations


II. II. OMB Recovery ActOMB Recovery Act Guidance Guidance

A.A. Drafted as guidance to federal agencies that Drafted as guidance to federal agencies that are implementing the Recovery Act, but are implementing the Recovery Act, but contains information useful to state and local contains information useful to state and local governments and to contractors. governments and to contractors.

1.1. Divided into 7 sections:Divided into 7 sections:a.a. General InformationGeneral Informationb.b. Agency Plans and Public ReportingAgency Plans and Public Reportingc.c. Governance, Risk Management, and Program IntegrityGovernance, Risk Management, and Program Integrityd.d. Budget ExecutionBudget Executione.e. Grants and Cooperative AgreementsGrants and Cooperative Agreementsf.f. ContractsContractsg.g. Loans and Loan Guarantees Loans and Loan Guarantees


II. II. OMB Recovery ActOMB Recovery Act GuidanceGuidance

B.B. ““Unprecedented” TransparencyUnprecedented” Transparency1.1. OMB's guidance emphasizes that the Recovery Act OMB's guidance emphasizes that the Recovery Act

requires timely and accurate reporting to achieve high requires timely and accurate reporting to achieve high level of transparency and accountability. level of transparency and accountability.

a.a. The OMB expects to “provide unprecedented The OMB expects to “provide unprecedented transparency into how and where Federal funds are transparency into how and where Federal funds are spent.” spent.”

b.b. Recovery Act reporting will be separate from all other Recovery Act reporting will be separate from all other reporting of resultsreporting of results

c.c. All Federal agency guidance must be immediately posted All Federal agency guidance must be immediately posted on the agency’s Recovery Act web page.on the agency’s Recovery Act web page.

d.d. Agencies will be providing weekly funding reports to the Agencies will be providing weekly funding reports to the OMB.OMB.

e.e. States are supposed to be given flexibility in collecting States are supposed to be given flexibility in collecting and transmitting required information and transmitting required information



2. www.recovery.gov a.a. Recipients are responsible for reporting on funds used by Recipients are responsible for reporting on funds used by

themselves and by any sub-awardees.themselves and by any sub-awardees.

b.b. Information to be posted on Recovery.gov Information to be posted on Recovery.gov 1)1) ContractsContracts

a)a) Contracts awardedContracts awarded

b)b) How prime contractor is using fundsHow prime contractor is using funds

c)c) Subcontracts awarded by prime Subcontracts awarded by prime

2)2) GrantsGrantsa)a) Grants madeGrants made

b)b) How the prime recipient is using fundsHow the prime recipient is using funds

c)c) Sub-awardsSub-awards

c.c. Initial statutory reporting deadline: October 10, 2009Initial statutory reporting deadline: October 10, 20091)1) 10 days after the end of each calendar quarter thereafter10 days after the end of each calendar quarter thereafter

http://www.recovery.gov/


II. II. OMB Recovery ActOMB Recovery Act GuidanceGuidance3.3. Job creation reportingJob creation reporting

a.a. Recipients of Recovery Act funds must report jobs Recipients of Recovery Act funds must report jobs created and retained for each project or activity created and retained for each project or activity

b.b. Must provideMust provide1)1) Description of the types of jobs created or retained in the Description of the types of jobs created or retained in the

United StatesUnited States2)2) Estimate of number of jobs created and retained Estimate of number of jobs created and retained

c.c. Agencies could ask for additional information for Agencies could ask for additional information for oversight oversight

4.4. National Environmental Policy Act reporting also National Environmental Policy Act reporting also required required

a.a. Agencies must plan how to comply with energy efficiency Agencies must plan how to comply with energy efficiency and green building requirements and green building requirements

5.5. All reports will be made available to the public almost All reports will be made available to the public almost immediately on Recovery.gov or agency recovery immediately on Recovery.gov or agency recovery websites. websites.



C.C. Focused Federal oversight of Recovery Act Focused Federal oversight of Recovery Act projects projects

1.1. Act created the Recovery Act Accountability and Act created the Recovery Act Accountability and Transparency Board Transparency Board

a.a. Coordinates and conducts oversight of Federal spending Coordinates and conducts oversight of Federal spending under the Act to prevent waste, fraud, and abuse under the Act to prevent waste, fraud, and abuse 1)1) Not yet in place as of April interim guidance, functions being Not yet in place as of April interim guidance, functions being

carried out by OMB carried out by OMB

b.b. Goals of the BoardGoals of the Board1)1) Timely spending of money in a fair and reasonable manner Timely spending of money in a fair and reasonable manner

a)a) Emphasizing fixed-price, competitive contractsEmphasizing fixed-price, competitive contracts

2)2) TransparencyTransparency

3)3) Avoiding fraud, waste, and abuseAvoiding fraud, waste, and abuse

4)4) Avoiding delays and cost overrunsAvoiding delays and cost overruns

5)5) Meaningful and measurable outcomes Meaningful and measurable outcomes



2.2. Recovery Act funds will be accounted for separately, Recovery Act funds will be accounted for separately, and cannot be co-mingled with other fundsand cannot be co-mingled with other funds

3.3. New regulations provide additional tools to the federal New regulations provide additional tools to the federal government that apply only to Recovery Act funded government that apply only to Recovery Act funded projects projects

a.a. Whistleblower ProtectionsWhistleblower Protections

b.b. GAO/IG AccessGAO/IG Access

c.c. Special Single Audit rights for grants, cooperative Special Single Audit rights for grants, cooperative agreements and loans agreements and loans



D.D. Special guidance for Recovery Act ContractsSpecial guidance for Recovery Act Contracts1.1. Fixed-price contracts awarded on the basis of Fixed-price contracts awarded on the basis of

competition will be the norm competition will be the norm a.a. Fixed-price contracts will be used "to the maximum Fixed-price contracts will be used "to the maximum

extent practicable" extent practicable" 1)1) For other than fixed-price contracts, agencies must assure For other than fixed-price contracts, agencies must assure

that all alternatives have been considered and qualified staff that all alternatives have been considered and qualified staff is available for monitoring is available for monitoring

b.b. Competition strongly encouraged Competition strongly encouraged 1)1) Agencies cannot engage in noncompetitive contracts unless Agencies cannot engage in noncompetitive contracts unless

fully justified and safeguards are in place fully justified and safeguards are in place



2.2. Procurements should be structured to achieve outcomes Procurements should be structured to achieve outcomes consistent with goal of economic stimulus consistent with goal of economic stimulus

a.a. Evaluation criteria should measure the likelihood of achieving Evaluation criteria should measure the likelihood of achieving meaningful and measurable outcomesmeaningful and measurable outcomes

b.b. Special attention should be given to Special attention should be given to 1)1) Responsibility determinations to mitigate riskResponsibility determinations to mitigate risk

2)2) Acquisition flexibilities to avoid delays in awarding contracts Acquisition flexibilities to avoid delays in awarding contracts

c.c. Contract financing and deliverables should be set up to promote Contract financing and deliverables should be set up to promote economic stimulus goals economic stimulus goals 1)1) OMB suggests structuring contract line items to allow invoicing and OMB suggests structuring contract line items to allow invoicing and

payments based upon interim and partial deliverables, milestones, payments based upon interim and partial deliverables, milestones, and percent-of-completion. and percent-of-completion.

d.d. Agencies are encouraged to actively monitor Recovery Act Agencies are encouraged to actively monitor Recovery Act contracts contracts

3.3. Existing ID/IQ contracts may be used, but orders under Existing ID/IQ contracts may be used, but orders under existing ID/IQ contracts must be reported as Recovery Act existing ID/IQ contracts must be reported as Recovery Act actions. actions.



4.4. Existing FAR policy goals must still be met Existing FAR policy goals must still be met a.a. Davis-Bacon Act and Service Contract Act, apply to Davis-Bacon Act and Service Contract Act, apply to

contracts using Recovery Act fundscontracts using Recovery Act funds

b.b. Provide maximum practicable opportunities for small Provide maximum practicable opportunities for small business participationbusiness participation

c.c. Purchases from procurement list maintained by Purchases from procurement list maintained by Committee for Purchase From People Who Are Blind or Committee for Purchase From People Who Are Blind or Severely Disabled.Severely Disabled.

d.d. FAR Part 23 requirements for FAR Part 23 requirements for 1)1) environment, energy and water efficiencyenvironment, energy and water efficiency

2)2) renewable energy technologiesrenewable energy technologies

3)3) occupational safety, and occupational safety, and

4)4) drug-free workplace drug-free workplace



5.5. Transparency requirementsTransparency requirementsa.a. Changes to the pre-solicitation and award notice process Changes to the pre-solicitation and award notice process

1)1) Provide rationale for using other than fixed-price or Provide rationale for using other than fixed-price or competitive approaches in fedbizopps.govcompetitive approaches in fedbizopps.gov

2)2) Fedbizopps.gov description of supplies and services that is Fedbizopps.gov description of supplies and services that is clear and unambiguousclear and unambiguous

3)3) Special posting requirements for modifications and orders Special posting requirements for modifications and orders under task and delivery order contracts under task and delivery order contracts

b.b. Agencies are directed to promote transparency to the Agencies are directed to promote transparency to the maximum extent practicable when consistent with maximum extent practicable when consistent with national security interests and restrictions on release of national security interests and restrictions on release of proprietary information or information covered under the proprietary information or information covered under the Privacy Act. Privacy Act.



E.E. Special guidance for Recovery Act Grants and Special guidance for Recovery Act Grants and Cooperative Agreements Cooperative Agreements

1.1. Competition will be promoted to the maximum extent Competition will be promoted to the maximum extent practicable. practicable.

a.a. But limited competitions among existing high-performing But limited competitions among existing high-performing projects encouraged.projects encouraged.

b.b. Timeliness of award is important Timeliness of award is important

2.2. Grant award criteria should measure likelihood of Grant award criteria should measure likelihood of creating and preserving jobs creating and preserving jobs

a.a. May favor applicants with demonstrated ability to deliver May favor applicants with demonstrated ability to deliver programmatic result and accountability objectives of the programmatic result and accountability objectives of the Act. Act.

3.3. Recovery Act funds may be used for continuation or Recovery Act funds may be used for continuation or renewal of existing grants renewal of existing grants

a.a. But supplementation of funding on existing grants But supplementation of funding on existing grants discouraged because of the separate reporting and tracking discouraged because of the separate reporting and tracking requirements requirements



4.4. Transparency: Single Audit reports will be made Transparency: Single Audit reports will be made publicly available on the internet.publicly available on the internet.

5.5. Oversight: OMB requires adding a mandatory Oversight: OMB requires adding a mandatory disclosure clause to grants parallel to the new FAR disclosure clause to grants parallel to the new FAR requirement.requirement.



F.F. Special guidance for Loans and Loan Special guidance for Loans and Loan Guarantees Guarantees

1.1. For loans and guarantees, OMB also encouragesFor loans and guarantees, OMB also encouragesa.a. CompetitionCompetition

b.b. Performance measuringPerformance measuring

c.c. Accountability Accountability

2.2. Transparency: similar reporting requirementsTransparency: similar reporting requirements

3.3. Oversight: requires mandatory disclosure terms similar Oversight: requires mandatory disclosure terms similar to recently promulgated FAR provisions to recently promulgated FAR provisions


III. FAR ProvisionsIII. FAR ProvisionsA.A. Publicizing Contract ActionsPublicizing Contract Actions

1.1. Amends multiple FAR sections to implement Amends multiple FAR sections to implement requirements unique to the Recovery Act for requirements unique to the Recovery Act for

a.a. posting of presolicitation notices.posting of presolicitation notices.b.b. announcing contract awards.announcing contract awards.c.c. entering awards into the Federal Procurement Data entering awards into the Federal Procurement Data

System (FPDS).System (FPDS).d.d. publicizing actions that are not fixed-price or competitive. publicizing actions that are not fixed-price or competitive.

2.2. Requires pre-award publication of notice of orders Requires pre-award publication of notice of orders under task and delivery contracts worth more than under task and delivery contracts worth more than $25,000. FAR 5.704(a)(2).$25,000. FAR 5.704(a)(2).

3.3. Requires post-award publication for contracts, Requires post-award publication for contracts, modifications, or task or delivery orders over $500,000 modifications, or task or delivery orders over $500,000 describing "the products and services (including describing "the products and services (including construction) that is clear and unambiguous to the construction) that is clear and unambiguous to the general public." FAR 5.705(a).general public." FAR 5.705(a).

4.4. Requires post-award publication of all actions that are Requires post-award publication of all actions that are not fixed-price or competitive, along with rationale for not fixed-price or competitive, along with rationale for doing so. FAR 5.705(b). doing so. FAR 5.705(b).


III. FAR ProvisionsIII. FAR Provisions

B.B. Reporting RequirementsReporting Requirements1.1. Introduces new FAR subpart 4.15 and new contract Introduces new FAR subpart 4.15 and new contract

clause FAR 52.204-11.clause FAR 52.204-11.

2.2. Implements requirement for contractors who receive Implements requirement for contractors who receive awards or modifications funded in whole or in part by awards or modifications funded in whole or in part by the Recovery Act to report quarterly on the use of the the Recovery Act to report quarterly on the use of the funds. funds.

a.a. First report due on July 10, 2009, and then 10 days after First report due on July 10, 2009, and then 10 days after the end of the calendar year quarter. the end of the calendar year quarter.

3.3. Applies to all contracts funded by the Recovery Act, Applies to all contracts funded by the Recovery Act, including including

a.a. Commercial item contractsCommercial item contracts

b.b. Commercially Available Off-the-Shelf (COTS) item Commercially Available Off-the-Shelf (COTS) item contractscontracts

c.c. Contracts below the simplified acquisition threshold Contracts below the simplified acquisition threshold



4.4. Required contents of quarterly report (FAR 4.1500): Required contents of quarterly report (FAR 4.1500): a.a. The dollar amount of contractor invoicesThe dollar amount of contractor invoices

b.b. The supplies delivered and services performedThe supplies delivered and services performed

c.c. An assessment of the completion status of the workAn assessment of the completion status of the work

d.d. An estimate of the number of jobs created and the An estimate of the number of jobs created and the number of jobs retained as a result of the Recovery Act number of jobs retained as a result of the Recovery Act fundsfunds


III. FAR ProvisionsIII. FAR Provisionse.e. Names and total compensation of each of the five most Names and total compensation of each of the five most

highly compensated officers for the calendar year in which highly compensated officers for the calendar year in which the contract is awarded. But under FAR 52.204-11(d)(8), the contract is awarded. But under FAR 52.204-11(d)(8), this information is only required if in the contractor’s this information is only required if in the contractor’s preceding fiscal year, the Contractor received preceding fiscal year, the Contractor received 1)1) 80 percent or more of its annual gross revenues from Federal 80 percent or more of its annual gross revenues from Federal

contracts (and subcontracts), loans, grants (and subgrants) and contracts (and subcontracts), loans, grants (and subgrants) and cooperative agreements; andcooperative agreements; and

2)2) $25,000,000 or more in annual gross revenues from Federal $25,000,000 or more in annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants) and contracts (and subcontracts), loans, grants (and subgrants) and cooperative agreements; and cooperative agreements; and

3)3) the public does not have access to information about the the public does not have access to information about the compensation of the senior executives through periodic reports compensation of the senior executives through periodic reports filed under the Securities Exchange Act of 1934 or the Internal filed under the Securities Exchange Act of 1934 or the Internal Revenue Code. Revenue Code.

f.f. Specific information on first-tier subcontractors. Specific information on first-tier subcontractors. 1)1) The information required for subcontracts over $25,000 will be The information required for subcontracts over $25,000 will be

similar to what the prime contractor must report. FAR 52.204-similar to what the prime contractor must report. FAR 52.204-11(d)(10). 11(d)(10).

5.5. These reports will be made available to the public. FAR These reports will be made available to the public. FAR 52.204-11(b). 52.204-11(b).



C.C. Whistleblower ProtectionsWhistleblower Protections1.1. Introduces a new FAR 3.907 and new contract clause Introduces a new FAR 3.907 and new contract clause

at FAR 52.203-15at FAR 52.203-15

2.2. Implements Recovery Act prohibition against non-Implements Recovery Act prohibition against non-Federal employers discharging, demoting, or Federal employers discharging, demoting, or discriminating against an employee as a reprisal for discriminating against an employee as a reprisal for disclosing disclosing certain covered informationcertain covered information to to certain certain categories of Government officials or a person with categories of Government officials or a person with supervisory authority over the employeesupervisory authority over the employee. .


III. FAR ProvisionsIII. FAR Provisionsa.a. Covered information is defined extremely broadly under Covered information is defined extremely broadly under

FAR 3.907-1 as information that the employee reasonably FAR 3.907-1 as information that the employee reasonably believes is believes is 1)1) evidence of gross mismanagement of the contract or evidence of gross mismanagement of the contract or

subcontract related to covered fundssubcontract related to covered funds

2)2) gross waste of covered fundsgross waste of covered funds

3)3) a substantial and specific danger to public health or safety a substantial and specific danger to public health or safety related to the implementation or use of covered funds related to the implementation or use of covered funds

4)4) an abuse of authority related to the implementation or use of an abuse of authority related to the implementation or use of covered funds, or covered funds, or

5)5) a violation of law, rule, or regulation related to an agency a violation of law, rule, or regulation related to an agency contract (including the competition for or negotiation of a contract (including the competition for or negotiation of a contract) awarded or issued relating to covered funds. contract) awarded or issued relating to covered funds.


III. FAR ProvisionsIII. FAR Provisionsb.b. Covers disclosure to the following entities or their Covers disclosure to the following entities or their

representatives under FAR 3.907-2: representatives under FAR 3.907-2: 1)1) The Recovery Act Accountability and Transparency Board.The Recovery Act Accountability and Transparency Board.

2)2) An Inspector General.An Inspector General.

3)3) The Comptroller General.The Comptroller General.

4)4) A member of Congress.A member of Congress.

5)5) A State or Federal regulatory or law enforcement agency. A State or Federal regulatory or law enforcement agency.

6)6) A person with supervisory authority over the employee or A person with supervisory authority over the employee or such other person working for the employer who has the such other person working for the employer who has the authority to investigate, discover, or terminate misconduct. authority to investigate, discover, or terminate misconduct.

7)7) A court or grant jury.A court or grant jury.

8)8) The head of a Federal agency.The head of a Federal agency.



3.3. Procedures governing a whistleblower complaint: Procedures governing a whistleblower complaint: a.a. Employee may submit a detailed complaint to a Employee may submit a detailed complaint to a

contracting officer or the Inspector General of the agency contracting officer or the Inspector General of the agency that awarded the contract. FAR 3.907-3.that awarded the contract. FAR 3.907-3.

b.b. Investigation will be conducted by the IG. FAR 907-4. Investigation will be conducted by the IG. FAR 907-4. 1)1) IG has 180 days to complete investigation, but can also IG has 180 days to complete investigation, but can also

unilaterally grant a 180 day extension. ARRA § 1553(b)(2)unilaterally grant a 180 day extension. ARRA § 1553(b)(2)

2)2) Employee will be given access to the IG's investigation file. Employee will be given access to the IG's investigation file. FAR 907-5FAR 907-5

c.c. Burden of proof on reprisal issue favors the employee. Burden of proof on reprisal issue favors the employee. 1)1) To establish a reprisal, employee need only show that the To establish a reprisal, employee need only show that the

employee's disclosure of information was "a contributing employee's disclosure of information was "a contributing factor" in the reprisal, and this can be established by factor" in the reprisal, and this can be established by circumstantial evidence. FAR 907-6(a). circumstantial evidence. FAR 907-6(a).

2)2) In response, the non-federal employer must show by clear In response, the non-federal employer must show by clear and convincing evidence that it would have taken the reprisal and convincing evidence that it would have taken the reprisal action in the absence of the disclosure. action in the absence of the disclosure.



d.d. Agency response to investigation. FAR 907-6Agency response to investigation. FAR 907-61)1) Within 30 days after receiving report from IG, head of the Within 30 days after receiving report from IG, head of the

agency must determine whether there was a reprisal.agency must determine whether there was a reprisal.

2)2) If the determination is that there was a reprisal, the agency If the determination is that there was a reprisal, the agency head shall order the employer to do one or more of the head shall order the employer to do one or more of the following: following: a)a) Abate the reprisalAbate the reprisal

b)b) Reinstate the employee with back pay and compensatory Reinstate the employee with back pay and compensatory damagesdamages

c)c) Pay the employee's costs and expenses, including attorneys' Pay the employee's costs and expenses, including attorneys' fees and expert witnesses' fees. fees and expert witnesses' fees.

3)3) Employer may appeal the order to the Court of AppealsEmployer may appeal the order to the Court of Appeals

e.e. Employee may bring an action in District Court before a Employee may bring an action in District Court before a jury if the agency head jury if the agency head 1)1) denies relief denies relief

2)2) has not made a determination within 210 days of submission has not made a determination within 210 days of submission of the complaint to the IGof the complaint to the IG

3)3) decides not to investigate or discontinues investigation decides not to investigate or discontinues investigation


III. FAR ProvisionsIII. FAR Provisions3.3. Applies to all contracts funded by the Recovery Act, Applies to all contracts funded by the Recovery Act,

including including a.a. Commercial item contractsCommercial item contracts


c.c. Contracts below the simplified acquisition thresholdContracts below the simplified acquisition threshold



D.D. GAO/IG AccessGAO/IG Access1.1. Amends FAR audit requirements and adds new Amends FAR audit requirements and adds new

alternate clauses to standard FAR audit provisions.alternate clauses to standard FAR audit provisions.2.2. Implements Recovery Act provisions expanding GAO Implements Recovery Act provisions expanding GAO

and IG audit rights and IG audit rights a.a. Agency IG is given the right to review concerns raised by Agency IG is given the right to review concerns raised by

the public regarding investments of funds under the the public regarding investments of funds under the Recovery Act. Recovery Act.

b.b. GAO and agency IG are given the right to review any GAO and agency IG are given the right to review any records of the contractor or subcontractor regarding records of the contractor or subcontractor regarding transactions using Recovery Act funds,transactions using Recovery Act funds,

c.c. GAO and agency IG are given the right to interview GAO and agency IG are given the right to interview contractor officers or employees concerning such contractor officers or employees concerning such transactions. transactions.

d.d. GAO (but not agency IG) is given the right to interview GAO (but not agency IG) is given the right to interview subcontractor employees. subcontractor employees.



3.3. New audit rights apply to all contracts funded by the New audit rights apply to all contracts funded by the Recovery Act, including Recovery Act, including

a.a. Commercial item contractsCommercial item contracts


c.c. Contracts below the simplified acquisition threshold Contracts below the simplified acquisition threshold


III. FAR ProvisionsIII. FAR ProvisionsE.E. Buy American Requirements for Construction Buy American Requirements for Construction

Materials Materials 1.1. Introduces new FAR Subpart 25.6 and specific contract Introduces new FAR Subpart 25.6 and specific contract

clauses in FAR Part 52.225-21 through -24clauses in FAR Part 52.225-21 through -24

2.2. The Recovery Act prohibits the use of Recovery Act The Recovery Act prohibits the use of Recovery Act funds for any project for the construction, alteration, funds for any project for the construction, alteration, maintenance, or repair of a maintenance, or repair of a public building or public public building or public workwork unless unless all of the iron, steel, and manufactured all of the iron, steel, and manufactured goods used in the project are produced in the United goods used in the project are produced in the United StatesStates. .


III. FAR ProvisionsIII. FAR Provisionsa.a. "Public building or public work" is defined to mean "Public building or public work" is defined to mean

"building or work, the construction, prosecution, "building or work, the construction, prosecution, completion, or repair of which * * * is carried on directly completion, or repair of which * * * is carried on directly by authority of, or with funds of, a Federal agency to by authority of, or with funds of, a Federal agency to serve the interest of the general public regardless of serve the interest of the general public regardless of whether title thereof is in a Federal agency." FAR 22.401. whether title thereof is in a Federal agency." FAR 22.401.


III. FAR ProvisionsIII. FAR Provisionsb.b. "all of the iron, steel, and manufactured goods used in "all of the iron, steel, and manufactured goods used in

the project are produced in the United States": the project are produced in the United States": 1)1) Iron and steel are produced in the United States if all Iron and steel are produced in the United States if all

manufacturing processes take place in the United States, manufacturing processes take place in the United States, except metallurgical processes involving refinement of steel except metallurgical processes involving refinement of steel additives. FAR 25.602(a)(2)(i). additives. FAR 25.602(a)(2)(i). a)a) There is no need to do the component level analysis normally There is no need to do the component level analysis normally

required by the Buy American Act for manufactured goods required by the Buy American Act for manufactured goods

2)2) For other manufactured goods, manufacture of the For other manufactured goods, manufacture of the construction material must occur in the United States. FAR construction material must occur in the United States. FAR 25.602(a)(2)(ii).25.602(a)(2)(ii).

3)3) The new FAR provisions also apply the Buy American Act The new FAR provisions also apply the Buy American Act rules for unmanufactured construction material, even though rules for unmanufactured construction material, even though such material was not addressed by the Recovery Act. such material was not addressed by the Recovery Act. a)a) Unmanufactured construction material is defined in the same Unmanufactured construction material is defined in the same

way as the Buy American Act. FAR 25.602(b). way as the Buy American Act. FAR 25.602(b).


III. FAR ProvisionsIII. FAR Provisions3.3. Trade agreements requiring equal treatment for Trade agreements requiring equal treatment for

foreign materials do apply under the Recovery Act. foreign materials do apply under the Recovery Act. a.a. If the construction contract's estimated acquisition value If the construction contract's estimated acquisition value

is over $7.443 million, and trade agreements apply, is over $7.443 million, and trade agreements apply, eligible construction material from designated countries eligible construction material from designated countries will be treated the same as construction material will be treated the same as construction material produced in the United States. FAR 25.602(c). produced in the United States. FAR 25.602(c). 1)1) The Act's prohibition must be applied in a manner consistent The Act's prohibition must be applied in a manner consistent

with U.S. obligations under international agreements. with U.S. obligations under international agreements.

b.b. Applicability of trade agreements is based on FAR Applicability of trade agreements is based on FAR Subpart 25.4, "Trade Agreements" Subpart 25.4, "Trade Agreements" 1)1) Except that designated countries do not include Caribbean Except that designated countries do not include Caribbean

Basin Countries. Basin Countries.


III. FAR ProvisionsIII. FAR Provisions4.4. The Act provides for waiver under three circumstances: The Act provides for waiver under three circumstances:

a.a. Nonavailability: Iron, steel, or manufactured goods are not Nonavailability: Iron, steel, or manufactured goods are not produced in the United States in sufficient and reasonably produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. FAR available quantities and of a satisfactory quality. FAR 25.603(a)(1).25.603(a)(1).

b.b. Unreasonable cost: Inclusion of iron, steel, or manufactured Unreasonable cost: Inclusion of iron, steel, or manufactured goods produced in the United States will increase the cost goods produced in the United States will increase the cost of the contract by more than 25 percent. FAR 25.603(a)(2). of the contract by more than 25 percent. FAR 25.603(a)(2). 1)1) Cost adjustment: If the contracting officer determines that the Cost adjustment: If the contracting officer determines that the

unreasonable cost exception applies, the contracting officer unreasonable cost exception applies, the contracting officer must evaluate the offer by adding to the offered price— must evaluate the offer by adding to the offered price— a)a) 25 percent of the offered price for the entire project, if foreign iron, 25 percent of the offered price for the entire project, if foreign iron,

steel, or other manufactured goods. FAR 25.605(a)(1).steel, or other manufactured goods. FAR 25.605(a)(1).

b)b) 6 percent of the value of foreign unmanufactured construction 6 percent of the value of foreign unmanufactured construction material included in the offer. FAR 25.605(a)(2). material included in the offer. FAR 25.605(a)(2).

c.c. Inconsistent with public interest: Applying the domestic Inconsistent with public interest: Applying the domestic preference would be inconsistent with the public interest. preference would be inconsistent with the public interest. FAR 25.603(a)(3). FAR 25.603(a)(3).


III. FAR ProvisionsIII. FAR Provisions5.5. When exception claimed, the agency must publish a When exception claimed, the agency must publish a

detailed written justification in the Federal Register, a detailed written justification in the Federal Register, a new requirement not found in the Buy American Act. new requirement not found in the Buy American Act. FAR 25.602(b). FAR 25.602(b).

a.a. Normally, the determination that an exception applies is Normally, the determination that an exception applies is made before award. FAR 25.604. made before award. FAR 25.604. 1)1) Offeror may request such a determination. FAR 25.604(a). Offeror may request such a determination. FAR 25.604(a).

a)a) Request must include detailed justification and market survey. Request must include detailed justification and market survey. FAR 52.225-21(c). FAR 52.225-21(c).

b)b) May also submit alternate offers based on use of foreign and May also submit alternate offers based on use of foreign and domestic material, to avoid rejection of the foreign offer if the domestic material, to avoid rejection of the foreign offer if the CO determines that the exception does not apply. FAR CO determines that the exception does not apply. FAR 25.605(c). 25.605(c).

b.b. Postaward requests must explain why the need for the Postaward requests must explain why the need for the exception was not reasonable foreseeable before award. exception was not reasonable foreseeable before award. FAR 25.605. FAR 25.605. 1)1) If exception permitted after award based on unreasonable If exception permitted after award based on unreasonable

cost, the contract must be modified to add the 25% and 6% cost, the contract must be modified to add the 25% and 6% price penalties. price penalties.


III. FAR ProvisionsIII. FAR Provisions6.6. Noncompliance: if CO determines that contractor Noncompliance: if CO determines that contractor

made unauthorized use of foreign construction made unauthorized use of foreign construction materials, CO may do one or more of the following: materials, CO may do one or more of the following:

a.a. Determine that an exception applies and modify the Determine that an exception applies and modify the contract to add the price penalty. FAR 25.607(c)(1).contract to add the price penalty. FAR 25.607(c)(1).

b.b. Require removal and replacement. FAR 25.607(c)(2).Require removal and replacement. FAR 25.607(c)(2).

c.c. Terminate the contract for default, seek suspension and Terminate the contract for default, seek suspension and debarment, or refer the matter for criminal investigation. debarment, or refer the matter for criminal investigation. FAR 25.607(c)(4). FAR 25.607(c)(4).


IV. 2 CFR 176: Assistance Agreements Award IV. 2 CFR 176: Assistance Agreements Award TermsTerms

A.A. Subpart A—Reporting and Registration Subpart A—Reporting and Registration Requirements Requirements

1.1. Equivalent to FAR interim rule on Reporting Equivalent to FAR interim rule on Reporting Requirements. Requirements.


IV. 2 CFR 176: Assistance Agreements Award IV. 2 CFR 176: Assistance Agreements Award Terms Terms

B.B. Subpart B—Buy American Requirement Subpart B—Buy American Requirement 1.1. Equivalent to FAR interim rule on Buy American Equivalent to FAR interim rule on Buy American

Requirements for Construction Materials. Requirements for Construction Materials. a.a. But does not include the 6% preference for domestic But does not include the 6% preference for domestic

unmanufactured materials, because the Buy American unmanufactured materials, because the Buy American Act does not apply to grants or cooperative agreements. Act does not apply to grants or cooperative agreements.

2.2. Trade agreements exception only applies to grant Trade agreements exception only applies to grant recipientsrecipients that are required to treat the goods and that are required to treat the goods and services of designated countries the same as domestic services of designated countries the same as domestic goods and services. 2 CFR § 176.90(a). goods and services. 2 CFR § 176.90(a).

a.a. 2 CFR Subpart B contains useful chart in Appendix that 2 CFR Subpart B contains useful chart in Appendix that lists U.S. States, Other Sub-Federal Entities, and Other lists U.S. States, Other Sub-Federal Entities, and Other Entities Subject to U.S. Obligations Under International Entities Subject to U.S. Obligations Under International Agreements. Agreements.


IV. 2 CFR 176: Assistance Agreements Award IV. 2 CFR 176: Assistance Agreements Award Terms Terms

C.C. Subpart C—Wage Rate Requirements Subpart C—Wage Rate Requirements 1.1. Applies Davis-Bacon wage requirements to all laborers Applies Davis-Bacon wage requirements to all laborers

and mechanics employed by contractors and and mechanics employed by contractors and subcontractors on contracts in excess of $2,000 for subcontractors on contracts in excess of $2,000 for construction, alteration, or repair. construction, alteration, or repair.



D.D. Subpart D—Single Audit Information for Subpart D—Single Audit Information for Recipients of Recovery Act Funds Recipients of Recovery Act Funds

1.1. Recipients required to maintain records that identify Recipients required to maintain records that identify adequately the source and application of Recovery Act adequately the source and application of Recovery Act funds.funds.

2.2. Recipients covered by the Single Audit Act Recipients covered by the Single Audit Act Amendments of 1996 and OMB Circular A-133, "Audits Amendments of 1996 and OMB Circular A-133, "Audits of States, Local Governments, and Non-Profit of States, Local Governments, and Non-Profit Organizations" agree to separately identify Organizations" agree to separately identify expenditures using Recovery Act funds.expenditures using Recovery Act funds.

3.3. Recipients also agree to identify each subrecipient of Recipients also agree to identify each subrecipient of Recovery Act funds and require them to separately Recovery Act funds and require them to separately identify their own Recovery Act expenditures. identify their own Recovery Act expenditures.



E.E. Omitted TermsOmitted Terms1.1. Whistleblower ProtectionsWhistleblower Protections

a.a. 2 CFR Part 176 does not create a term for Whistleblower 2 CFR Part 176 does not create a term for Whistleblower Protection to parallel the FAR clause, but the Recovery Protection to parallel the FAR clause, but the Recovery Act provision requiring such protections clearly applies to Act provision requiring such protections clearly applies to both contracts and grants. See ARRA § 1553(a). both contracts and grants. See ARRA § 1553(a).

2.2. IG AccessIG Accessa.a. 2 CFR Part 176 does not create a term for IG Access to 2 CFR Part 176 does not create a term for IG Access to

parallel the FAR clause on GAO/IG access, but the parallel the FAR clause on GAO/IG access, but the Recovery Act provisions requiring IG access clearly apply Recovery Act provisions requiring IG access clearly apply to both contracts and grants. See ARRA §§ 1514, 1515.to both contracts and grants. See ARRA §§ 1514, 1515.

b.b. In contrast, the Recovery Act provision creating GAO In contrast, the Recovery Act provision creating GAO access applies only to contracts. ARRA § 902. access applies only to contracts. ARRA § 902.

Business

ARRA Implementation