Hot Topics

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• Executive Compensation Caps• Department of Labor Initiatives• Safeguarding Information• Supply Chain Risk• Counterfeit Electronic Items• Fair and Reasonable Pricing for

Schedule Purchases• Recent Publications• Other Rules of Interest

Senior Executive Benchmark Extension2012 NDAA

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• Authority: Section 803, NDAA for FY 2012• Expands application of compensation cap from the five most

highly compensated employees in management positions to all contractor employees

• Applies to compensation costs incurred after 1/1/2012, under DoD, NASA, and Coast Guard contracts entered into before, on, or after the date of the enactment of this law

• FAR Case 2012-017 – Prospective implementation for contracts awarded on or after 12/31/2011• Interim FAR rule published 6/26/2013• Final FAR rule published 5/30/2014

• FAR Case 2012-025 – Retroactive implementation for contracts awarded prior to 12/31/2011• Proposed FAR rule published 6/26/2013• Issues relating to retroactivity• Final FAR rule is in development

Limitation on Allowable GovernmentContractor Compensation Costs

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(2014-012)

• Authority: Section 702, Bipartisan Budget Act (BBA) of2013 (Pub. L. 113-67)• BBA establishes a compensation cap for contractors

• Outcome:• Interim rule sets the initial limitation on

allowable contractor and subcontractor employee compensation costs at $487K/year

• Applies to contracts awarded on or after 6/24/2014

• Stage of Rulemaking:• Interim FAR rule published 6/24/2014• Next steps: adjudicating public

comments and developing final FAR rule for publication

Department of Labor Initiatives(2015-003)

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• Executive Order 13658, Establishing a MinimumWage for Contractors, dated 2/12/2014• Minimum wage of $10.10 effective as of 1/1/2015 for

certain Federal Contractor Employees• DoD Sponsor: DPAP/CPIC• Implementation:

• OMB: Memo of 6/12/2014 requires agencies to take all reasonable and legally permissible steps for immediate implementation

• DOL: Proposed rule published 6/17/2014• Stage of Rulemaking:

• Interim FAR rule published 12/15/2014; public commentperiod ends 2/13/2015

• Next steps: adjudicate public comments and develop final FAR rule

Department of Labor Initiatives Cont’d(2014-025)

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• Executive Order 13673, Fair Pay and SafeWorkplaces, dated 7/31/2014• Seeks to increase efficiency and cost savings in

work performed by Federal contractors by ensuring they understand and comply with labor laws designed to promote safe, healthy, fair, and effective workplaces

• DoD Sponsor: DPAP/CPIC

• Implementation: Proposed FAR rule is indevelopment

Safeguarding Unclassified ControlledTechnical Information

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(2011-D039)

• Objective: Provide standards and structures for safeguarding unclassified controlled technical information and reporting the compromise of unclassified controlled technical information

• DoD Sponsors: CIO; OUSD(SE); DPAP/PDI• Outcome: Implement security measures to safeguard unclassified

DoD information within contractor information systems from unauthorized access and disclosure

• Stage of Rulemaking: Final DFARS rule published 11/18/2013• Future FAR rule: Implement NARA CUI rule after it is published• Follow-on Related Rule: Implements section 941 of the FY13 NDAA &

section1632 of the FY15 NDAA• Interim DFARS rule 2013-D018, Network Penetration Reporting

and Contracting for Cloud Services, in development• Class Deviation 2015-O0011:

• DoD Class Deviation 2015-O0011, Contracting for Cloud Services, issued 2/9/2015 to provide guidance and a clause for use in contracts, task orders, and delivery orders that require cloud computing services. Effective while interim rule 2013-D018 is in development.http://www.acq.osd.mil/dpap/policy/policyvault/USA001321-15-DPAP.pdf

Basic Safeguarding of ContractorInformation Systems

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(2011-020)

• Authorities:• Federal Information Security Management Act (FISMA) of

2002• 44 USC 3544, Federal Agency Responsibilities (paragraph (a)(1)

(ii) – information systems used by an agency or contractor)

• DoD Sponsor: DPAP/PDI

• Outcome: FAR subpart and clause to address basic safeguarding of information systems that contain or process information provided by or generated for the Government (other than public information)

• Stage of Rulemaking• Proposed FAR rule published 8/24/2012• Next steps: Ad Hoc Team adjudicating proposed rule

comments and developing a final FAR rule for publication

Requirements Relating to Supply Chain Risk(2012-D050)

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• Authority: Section 806, NDAA of FY 2011

• DoD Sponsor: CIO

• Outcome: Enable agencies to exclude sources that are identified as having a supply chain risk on information technology purchases relating to national security systems

• Stage of Rulemaking• Interim DFARS rule published 11/18/2013• Next steps: Adjudicating interim rule comments and

preparing DFARS final rule for publication

Detection and Avoidance of CounterfeitElectronic Parts

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(2012-D055)

• Authorities:• Section 818, NDAA for FY 2012• Section 833, NDAA for FY 2013

• DoD Sponsor: DPAP/PDI; L&MR• Outcome: Reduce the incidence of counterfeit

electronic parts in DoD systems• Public Meeting: 6/28/2013

• Further Implementation public meetings:3/27/2014 and 6/16/2014

• Stage of Rulemaking• Final DFARS rule published 5/6/2014• Next step: Follow-on DFARS Case 2014-D005 opened to

consider further implementation - proposed rule is in development

Class Deviation 2014-O0011

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• Class Deviation: 2014-O0011, dated March 13, 2014

• Subject: Determination of Fair and Reasonable Prices When Using Federal Supply Schedule Contracts

• Outcome:• Ordering office contracting officers are responsible

for making a determination of fair and reasonable pricing for individual orders, BPAs, and orders under BPAs, using the proposal analysis techniques at FAR 15.404-1 when using ordering under Federal Supply Schedules.

• An excerpt from the class deviation is provided on the following slide.

• Effective: The class deviation is in effect until incorporated into the DFARS or otherwise rescinded.

SUBJECT: Class Deviation—Determination of Fair and Reasonable Prices When Using Federal Supply Schedule Contracts

Effective immediately, contracting officers shall comply with the following policy, in lieu of FAR 8.404(d), Pricing, when using Federal Supply Schedules. This class deviation clarifies that ordering activity contracting officers are responsible for making a determination of fair and reasonable pricing when using Federal Supply Schedules.

8.404(d) Pricing. (DEVIATION)

Supplies offered on the schedule are listed at fixed prices. Services offered on the schedule are priced either at hourly rates, or at a fixed price for performance of a specific task (e.g., installation, maintenance, and repair). GSA has determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, to be fair and reasonable for the purpose of establishing the schedule contract. GSA’s determination does not relieve the ordering activity contracting officer from the responsibility of making a determination of fair and reasonable pricing for individual orders, BPAs, and orders under BPAs, using the proposal analysis techniques at 15.404-1. The complexity and circumstances of each acquisition should determine the level of detail of the analysis required.

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Recent Publications

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• Contractor Comment Period PastPerformance Evaluations

• Commercial and Government Entity Code• Contracting with Women-Owned Small

Businesses• Contractor Personnel Supporting US

Armed Forces• Ending Trafficking in Persons• Uniform Procurement Identification• EPEAT Items

Contractor Comment Period PastPerformance Evaluations

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(2012-028)

• Authorities:• Section 853, NDAA for FY 2013• Section 806, NDAA for FY 2012

• DoD Sponsors: DPAP/PDI; DPAP/CPIC• Outcome: Revised past performance evaluation language

• Contractor comment period is 14 calendar days from date of notification of past performance evaluation in CPARS

• Evaluations and contractor comments are automatically transmitted to PPIRS no later than 14 days after contractor notification

• Government must update PPIRS with comments provided after 14 days and any subsequent agency review of comments

• Stage of Rulemaking• Final FAR rule published 5/30/2014

Commercial and Government Entity Code(2012-024)

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• Objective: Require the use of Commercial and Government Entity (CAGE) codes, including North Atlantic Treaty Organization CAGE codes for foreign entities, for awards valued at greater than the micro-purchase threshold

• DoD Sponsor: D,DPAP; DPAP/PDI• Outcome:

• Require offerors, if owned by another entity, to identifythat entity

• Increase transparency and accuracy of Federal procurement data

• Stage of Rulemaking• Final FAR rule published 5/30/2014; effective

11/1/2014

Contracting with Women-Owned SmallBusinesses

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(2013-010)

• Authority: Section 1697, NDAA of FY 2013• DoD Sponsors: SBP; DPAP/CPIC• Purpose: Leveled playing field among small business socio-

economic programs; eliminated mandatory dollar limit caps for set-asides under the Women-Owned Small Business Program:• $6.5 million for manufactured requirements• $4 million for all other requirements

• Outcome: Contracting officers may set aside requirements under the Women-Owned Small Business Program at any dollar threshold above the micro-purchase threshold, provided all other eligibility criteria are met

• Implements: SBA final rule published 5/7/2013• Stage of Rulemaking

• Final FAR rule published and effective 6/24/2014

Contractor Personnel Supporting US Armed

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Forces Deployed Outside the US(2013-D015)

• Authority: DoDI 3020.41, Operational ContractSupport

• DoD Sponsors: DPAP/CC; PS

• Objective: Implement DoDI 3020.41 and apply DFARS clause 252.225-7040 to non-CAAF as well as CAAF (Contractors Authorized to Accompany the Force)

• Stage of Rulemaking• Final DFARS rule published 5/28/2014

Ending Trafficking in Persons(2013-001)

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• Authorities:• Executive Order 13627• Title XVII of the NDAA for FY 2013

• DoD Sponsors: DPAP/CPIC; USD(P&R) CTIP• Objective: Strengthen protections against trafficking

in persons• Public Meeting: 3/2/2013• Stage of Rulemaking• Final rule published 1/29/2015; effective 3/2/2015• Associated DFARS Final Rule: 2013-D007, Further

Implementation of Trafficking in Persons Policy, final rule published and effective on 1/29/2015

Uniform Procurement Identification(2012-023)

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• DoD Sponsors: D,DPAP; DPAP/PDI• Objective: Implement a uniform Procurement

Instrument Identification (PIID) number system, which will require the use of Activity Address Codes (AACs) as the unique identifier for contracting offices and other offices

• Outcome: Provide for standardization across theFederal Government• Will facilitate tracking of Federal spending data

• Stage of Rulemaking• Proposed FAR rule published 6/6/2013• Final FAR rule published 10/14/2014;

effective 11/13/2014

EPEAT® Items(2013-016)

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• Authorities: Executive Order 13424 and Executive Order 13514

• DoD Sponsors: DPAP/CC; GSA• Proponent: EPA• Objectives:

• Revise the EPEAT® standard for personal computer products• Add new EPEAT® standards for imaging equipment

and televisions• Outcome: Expand the use of EPEAT® Standards to

fully implement EO’s• Initial Implementation: Final FAR rule 2006-030, effective

2/17/2009, initially implemented EO 13424 and established EPEAT® requirements for personal computer products

• Stage of Rulemaking• Interim FAR rule published and effective 6/24/2014• Next steps: adjudicating public comments and

developing final FAR rule for publication

Other Rules of Interest

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• OCI/ Unequal Access to Information• Service Contract Reporting (eCMRA)• Uniform Use of Line Items• Expanded Reporting of Nonconforming Items

(GIDEP)• Enhancements to Past Performance

Evaluation Systems• Contracts Under the SBA 8(a) Program• Small Business Subcontracting Improvements• Set-Asides Under Multiple Award IDIQ

Contracts

Organizational Conflicts of Interest andUnequal Access to Information

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(2011-001)

• Authority: Section 841, NDAA for FY 2009• DoD Sponsor: DPAP/CPIC• Objectives:

• Provide an approach that focuses on risk of harm to the business interests of the Government or to the integrity of the competitive process

• Differentiate unequal access to information from organizational conflicts of interest

• Stage of Rulemaking• Proposed FAR rule published 4/26/2011• Also considered public comments of DFARS 2009-D015

proposed rule (based on incorporation of GAO case law), published 4/22/2010

• Next steps: adjudicating public comments and preparing finalFAR rule for publication

Service Contract Reporting(2012-D051)

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• Authority: Section 807, NDAA for FY 2008, which amended10 USC 2330a

• DoD Sponsor: DPAP/CPIC• Outcome: Require contractors to annually report service

contract data, to include direct labor hours and cost data, into an online DoD database

• Purpose:• Enable SECDEF to report to Congress an annual inventory of

service contracts above the SAT• The data also supports DoD’s total force management

and strategic workforce planning decisions (10 USC 129a)• Stage of Rulemaking

• Proposed DFARS rule published 6/5/2014• Next steps: adjudicating public comments and preparing

final DFARS rule for publication

Uniform Use of Line Items(2013-014)

final FAR rule for publication23

• Authority: Federal Funding Accountability andTransparency Act of 2006

• DoD Sponsors: D,DPAP; DPAP/PDI• Objective: Establish a uniform contract line

itemnumbering structure in Federal procurement

• Outcome: Improve the accuracy, traceability, and usability of procurement data• Will support tracing of funding from obligation

throughexpenditure on a Federal-wide basis

• Current funding traceability is limited to contract-level• Stage of Rulemaking

• Proposed FAR rule published 8/5/2014• Next steps: adjudicating public comments

and preparing

Expanded Reporting of Nonconforming Items(2013-002)

final FAR rule for publication24

• Authorities:• Section 818, NDAA for FY 2012• OFPP Letter 9-13, “Reporting Nonconforming Products”

• DoD Sponsor: DPAP/PDI• Outcome: FAR clause to require contractors to use GIDEP

to screen for and report items that are counterfeit, suspect counterfeit, or contain a major or critical nonconformance

• Public Meeting: 6/16/2014• Stage of Rulemaking

• Proposed FAR rule published 6/10/2014• Next steps: adjudicating public comments and preparing

Enhancements to Past PerformanceEvaluation Systems

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(2014-010)

• Objective: Update FAR subpart 42.15, ContractorPerformance Information

• DoD Sponsors: OFPP; DPAP/CPIC• Outcome:

• Incorporate two stand-alone past-performance reportingmodules into the CPARS database• Architect-Engineer Contract Administration Support

System (ACASS• Construction Contractor Appraisal Support System (CCASS)

• Provide reference to the CPARS Guide at www.CPARS.gov• Update the list of evaluation factors to consider when

assessing performance to better align with CPARS• Stage of Rulemaking

• Proposed FAR rule published 9/15/2014• Next steps: adjudicating public comments and preparing

final FAR rule for publication

Contracts Under the Small BusinessAdministration 8(a) Program

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(2012-022)

• Authority: SBA’s final rule amending the 8(a) program• DoD Sponsors: SBP; DPAP/CPIC• Purpose: Clarifies 8(a) procurement processes as follows:

• Separate offering and acceptance not required for orders under Multiple Award IDIQ contracts that were set-aside for 8(a)

• Agencies may take SB/SDB credit for awards to “post- graduate” 8(a) concerns, as long as firm foes not represent itself as other than small

• Obtain release of a requirement currently under the 8(a) program

• A firm recently graduated from the 8(a) program may still be awarded a competitive 8(a) contract, as long as it was eligible for the award on the initial date specified for receipt of offers

• Stage of Rulemaking• Proposed FAR rule published 2/3/2014• Next steps: adjudicating public comments and developing final

FAR rule for publication

Small Business SubcontractingImprovements

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(2014-003)

• Authority: Sections 1321 and 1322, Small Business Jobs Act of 2010

• DoD Sponsors: SBP; DPAP/CPIC• Purpose: Provide additional safeguards for small business

subcontractors:• Prime contractor must notify the contracting officer in writing

if it does not use the SB subcontractors set forth in its offer• Contracting officer is responsible to monitor and evaluate

the prime’s adherence to its subcontracting plan• Clarifies which subcontracts must be included in the prime’s

subcontracting data reporting• Funding agencies will be allowed to receive subcontracting

credit for FSS and GWAC orders• Implements: SBA final rule• Stage of Rulemaking

• Proposed FAR rule is in development

Set-asides Under Multiple Award IDIQ Contracts (2014-002)

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• Authority: Section 1331, Small Business Jobs Act of 2010• DoD Sponsors: SBP; DPAP/CPIC• Purpose: Provide uniform policy for conducting SB

set- asides under multiple award (MA), IDIQ solicitations/ contracts; provides three new MA/IDIQ authorities to:• Set-aside part or parts• Set-aside orders for SB awardees• Reserve one or more contract awards under full and open

solicitations• Implements: SBA final rule published 10/2/2013• Stage of Rulemaking

• Prior partial implementation: interim FAR rule 2011-024published 11/2/2011

• Proposed FAR rule is in development