Effective September 29, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (“FAR Councils”) issued an interim rule amending the FAR to implement sections of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”), signed into law on July 1, 2010. 75 Fed. Reg. 60254 (Sept. 29, 2010).
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New Employee Notification Requirements For Federal Contractors And Subcontractors
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By Sheldon M. Kline, Karin Hunter Johnson, and Ashley T. Hirano
Executive Order 13496 requires federal contractors and subcontractors to inform employees of their rights under federal labor laws. The Executive Order was signed at the end of 2009 and the Department of Labor (“DOL”) issued a final regulation implementing the Executive Order on May 20, 2010. The DOL regulation went into effect on June 21, 2010.
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FAPIIS: The New Integrity Database For Government Contractors
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Effective April 22, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (“FAR Councils”) amended the Federal Acquisition Regulation (“FAR”) to implement the Federal Awardee Performance and Integrity Information System (“FAPIIS”). 75 Fed. Reg. 14059 (March 23, 2010).
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Proposed FAR Rule Places Greater Responsibility on Contractors to Eliminate Personal Conflicts of Interest
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Posted in FAR
Under the terms of a proposed FAR rule issued November 13, contractors that perform systems engineering and technical assistance ("SETA") type work for Government agencies soon will face enhanced obligations to prevent personal conflicts of interest on the part of their employees. The proposed rule applies to all contractors with covered employees who perform acquisition functions "closely associated with inherently Government functions" such as planning acquisitions, evaluating contract proposals, and awarding Government contracts.
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New FAR Rule Seeks to Curtail Reach of “Unusual and Compelling Urgency” Justification
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Posted in FAR
The Competition in Contracting Act (CICA) requires that agencies maximize the competition for goods and services and thus requires the use of full and open competition when soliciting offers and awarding government contracts. 10 U.S.C. § 2304; FAR 6.101. An agency satisfies this requirement through the use of "competitive procedures," which include procedures such as sealed bids, competitive proposals, and multiple award schedules. An agency may employ a competitive procedure (or combination thereof) that is best suited for the procurement and allows the agency to fulfill efficiently its requirements.
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FAR Councils Issue Interim Rule Limiting Excessive Pass-Through Charges
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Based on their view that contractors who subcontract the majority of the work to subcontractors add little or no value, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (FAR Councils) issued an interim rule on October 14, 2009 that limits excessive pass-through charges by contractors and subcontractors. See 74 Fed. Reg. 52,853 (October 14, 2009). The rule not only makes excessive pass-through costs unallowable, but also provides for recoupment of pass-through charges later determined to be excessive.
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FAR Councils Issue Interim Rule Taking Aim at the Use of Award-Fee Contracts
By Sheppard Mullin on
On October 14, 2009, the Civilian Acquisition Council and the Defense Acquisition Regulation Council issued an interim rule that limits the use of award-fee contracts, modifies how a contractor earns an award fee, and prohibits the rollover of unearned award fees. The interim rule implements § 814 of the John Warner National Defense Authorization Act (NDAA) for Fiscal Year 2007, § 867 of the Duncan Hunter NDAA for Fiscal Year 2009, and the Office of Federal Procurement Policy Guidance Memorandum dated December 4, 2007 entitled "Appropriate Use of Incentive Contracts." The interim rule significantly revises Federal Acquisition Regulation (FAR) Part 16, adds FAR Part 16.401(e), and makes other general housekeeping changes.
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What Exactly Is DCAA Thinking?
Recently, contractors have begun receiving formal requests for information from the Defense Contract Audit Agency (“DCAA”). The purported purpose of these requests is to “[o]btain an understanding of the management control environment” of major government contractors. In pursuit of this goal, DCAA has crafted a letter that demands, among other things, the following:
- A list of all ethics training, copies of agendas, and attendee lists
- Copies of the company’s written Codes of Conduct, copies of the policies dealing with communications of the Code, and a list of employees who have acknowledged receiving the Code over the past 12 months
- A list of all violations of the Code over the past 12 months
- All “noncompliances” reported through the contractor’s internal control system (such as a hotline) within the past 12 months
- A “company-wide list of any current open investigations”
Trimming the Fat in Government Subcontracts — Recognizing What Really Needs to Be Flowed Down by the Prime
By Sheppard Mullin on
Even experienced contractors can find themselves in unfamiliar waters when delving for the first time in the world of government contracts. In many cases, the first step for a commercial company may be acting as a subcontractor (the "Subcontractor") for another company (the "Prime") that is contracting directly with the Government. Even though the Subcontractor’s contract is with the Prime and not the Government, certain federal regulations and policies may still apply and place obligations on the Subcontractor. For various reasons, including promoting federal policy and protecting itself contractually, the Government may require that certain clauses included in its contract with the Prime also be included in the subcontract between the Prime and Subcontractor. Similarly, the Prime, for reasons of consistency, to ensure that the Subcontractor’s performance will allow the Prime to meet its own contractual requirements, or to protect itself, may include provisions from the prime contract in the subcontract. Such clauses are colloquially known as "flowdown" clauses.
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