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DoD Acquisition Updates

The past month has seen a number of proposed acquisition changes. Remember that the FAR/DFARS is updated on a regular basis. As you read the updates, take note of “proposed” rules versus “final” rules, effective dates, and comment periods. When reviewing an RFP/Q or other document, note the effective date of the contract and the version of the regulations that apply.

FAR Consolidation and Bundling of Contract Requirements – A Proposed Rule by the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration.

Background: DoD, GSA, and NASA are proposing to revise the FAR to implement regulatory changes made by the Small Business Administration (SBA) in its final rule which was published in the Federal Register at 78 FR 61113 on October 2, 2013, concerning contract consolidation and bundling. SBA’s final rule implements the statutory requirements set forth at sections 1312 and 1313 of the Small Business Jobs Act of 2010 (Jobs Act) (Pub. L. 111-240). This proposed rule will encompass the acquisition of commercial items, including commercially available off-the-shelf (COTS) items.

FAR Definition of Multiple-Award Contract – A Proposed Rule by the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration.

Background: On October 2, 2013, the U.S. Small Business Administration (SBA) issued a final rule establishing new policies and procedures for multiple-award contracts and task and delivery orders in the Federal Register at 78 FR 61114. The final rule implemented several provisions of the Small Business Jobs Act of 2010, Public Law 111-240. Section 1311 of Public Law 111-240 (15 U.S.C. 632(v)) added a definition of “multiple award contract”. The SBA final rule included a definition of “multiple award contract” at 13 CFR 125.1(k).

Transporter Proof of Delivery – A Proposed Rule by the Defense Department.

Summary: This rule establishes a clause allowing the Government to require that contractors provide Transporter Proof of Delivery (TPD) when requested. As used in this rule, TPD means a commercial document that is generated by the contractor or the contractor’s transporter of supplies and is signed by the Government customer in order to document delivery of supplies under a contract or order.

FAR Fair Pay and Safe Workplaces – A Proposed Rule by the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration.

Summary: DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement the Executive Order “Fair Pay and Safe Workplaces”, which is designed to improve contractor compliance with labor laws and increase efficiency and cost savings in Federal contracting. The Executive Order (E.O.) requires that prospective and existing contractors disclose certain labor violations and that contracting officers, in consultation with labor compliance advisors, consider the disclosures, including any mitigating circumstances, as part of their decision to award or extend a contract. The E.O. directs agencies to include clauses in their contracts that require similar disclosures by certain subcontractors so their prime contractors can also consider labor violations when determining the responsibility of subcontractors. The E.O. further requires that processes be established to assist contractors and subcontractors to come into compliance with labor laws. To achieve paycheck transparency for workers, the E.O. requires contractors and subcontractors to provide individuals with information each pay period regarding how they are paid and to provide notice to those workers whom they treat as independent contractors. The E.O. also addresses arbitration of employee claims. This proposed rule, and proposed Guidance being issued simultaneously by the Department of Labor (DOL), are intended to implement the E.O.’s requirements.

FAR Contractors Performing Private Security Functions – A Proposed Rule by the Defense Department, the General Services Administration, and the National Aeronautics and Space Administration.

Summary: DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to remove the distinction between DoD and non-DoD agency areas of operation applicable for the use of FAR clause “Contractors Performing Private Security Functions Outside the United States” and provide a definition of “full cooperation” within the clause.

DoDIG DLADid Not Obtain Fair and Reasonable Prices From Meggitt Aircraft Braking Systems for Sole-Source Commercial Spare Parts (Redacted)

Finding: The DLA Aviation contracting officer did not obtain fair and reasonable prices for 51 of 54 statistically sampled sole-source commercial spare parts procured from the MABS companies. This occurred because the contracting officer did not conduct sufficient price analysis in accordance with federal and defense acquisition regulations. Specifically, the DLA Aviation contracting officer:

relied on previous over-inflated contract prices to determine the 2013 contract prices;
did not sufficiently analyze the “commercial of a type” parts1 to determine whether the sales of comparable parts supported the contract prices;
accepted excessive prices for new quantity ranges; and
did not compare commercial sales to Government sales to determine whether sales were sufficient to support commercial part prices.
In addition, the contracting officer did not obtain cost data or perform a cost analysis on parts with prices that were not supported by the commercial sales data. The contracting officer also included language in a contract clause that limited DLA Aviation’s ability to fully negotiate prices of parts added after the initial contract award.

As a result, DLA potentially overpaid MABS companies approximately $8.5 of $17 million paid for 32 sole-source commercial spare parts reviewed. In addition, DLA may overpay as much as $70.5 million on 47 of 51 parts over the remaining term of the contract. When projected across the contract for all 5 years, DLA will overpay approximately $106.8 of $294.9 million (see Appendix E).

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Robert Jones

Robert Jones

Robert E. Jones knows government contracts: How to qualify for them. How to manage them. And how to profit from them. With over 14 years of Department of Defense contract and accounting experience, he helps companies successfully navigate the complex legal and regulatory framework of federal contracting. Robert Jones' full biography