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FAC 2005-34 Implements Presidential Memo and Statutes

The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-34, which contains one interim and two final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address the following subjects: Contractor Performance Information (FAR Case 2006-022), Prohibition on Contracting with Inverted Domestic Corporations (FAR Case 2008-009; Interim), and Role of Interagency Committee on Debarment and Suspension (FAR Case 2008-028). This FAC also contains a Small Entity Compliance Guide. For the text of FAC 2005-34, see 70,002.111.
Performance Information

The FAR Case 2006-022 final rule amends the FAR to revise the contractor performance information process. The amendments emphasize the use of the Past Performance Information Retrieval System, which is located at http://www.ppirs.gov. These changes align the FAR with the President's March 4, 2009, Memorandum on Government Contracting (70,105.05), with particular focus on managing the government's risk associated with procuring goods and services, and ensuring projects are completed effectively and efficiently. The rule, which adopts a proposed rule (70,006.221) with changes, makes the following amendments to the proposed rule: the definition of "past performance" in FAR 2.101 is revised to clarify the term "completed contract" is one that is physically completed in accordance with FAR 4.804-4; language is added to FAR 8.406-7 to advise ordering activities that past performance evaluations required in FAR 42.1502(c) apply to orders; FAR 13.106-2 is revised to encourage contracting officers to utilize more than one tool in identifying offerors' past performance information; language is added to the provisions at FAR 42.1502 (c) and (d) to clarify the consideration of small business goals in past performance evaluations for governmentwide acquisition contracts, multi-agency contracts, and single-agency task order and delivery order contracts; FAR 42.1503(a) is revised to specify that agency procedures must identify those responsible for preparing interim and final evaluations; FAR 42.1503(c) is revised to clarify that agencies are responsible for establishing procedures for reporting past performance information to PPIRS; and FAR 42.1503(e) is revised to delete the phrase "[f]or source selection purposes," to state that this language deals with retention of past performance information, rather than required procedures to be utilized in a source selection. The final rule makes corresponding changes to: FAR 9.105-1 on obtaining information from the PPIRS; FAR 17.207 on the exercise of options; FAR 36.201, FAR 36.602-3, FAR 36.603, FAR 36.604, FAR 36.701, and FAR 36.702 on the evaluation of past performance for construction and architect-engineer contractors; and the forms at FAR 53.236-1 and FAR 53.236-2. The rule also removes the standard forms at FAR 53.301-1420 and FAR 53.301-1421. This final rule has a July 1, 2009, effective date.
Inverted Corporations

The interim rule associated with FAR Case 2008-009 amends the FAR to implement Section 743 of Division D of the Omnibus Appropriations Act, 2009 (PL 111-8), which prohibits the award of contracts using appropriated funds to any foreign incorporated entity that is treated as an inverted domestic corporation or to any subsidiary of one. An inverted domestic corporation is one that was formerly incorporated in the United States, or was a U.S. partnership, but now is incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country (see FAR 9.108-1). According to the Councils, the reason a corporation would incorporate overseas is to avoid U.S. taxes on business income generated in foreign countries. The amendments to the FAR are included along with the requirements for Responsible Prospective Contractors, at FAR Subpart 9.1. New FAR 9.108 adds a definition for "inverted domestic corporation" (FAR 9.108-1) and a prohibition on contracting with one (FAR 9.108-3). It also includes the limited Secretarial waiver authority granted by the Appropriations Act (FAR 9.108-4) and a prescription for a new solicitation provision (FAR 9.108-5), which requires a contractor to represent it is not an inverted domestic corporation or a subsidiary of one. The new clause (FAR 52.209-2) applies to solicitations issued after July 1, 2009, and when funds appropriated in fiscal years 2006 through 2009 are used. Corresponding technical changes are made to FAR 4.1202, FAR 9.104-1, and FAR 52.212-3 . Comments on this interim rule, identified by its FAR case number, are due August 31, 2009. The rule carries a July 1, 2009, effective date.
Debarment and Suspension

The FAR Case 2008-028 final rule amends the FAR to implement Section 873(a)(1) and (2) of the National Defense Authorization Act for Fiscal Year 2009, which clarifies the role of the Interagency Committee on Debarment and Suspension when more than one agency has an interest in the debarment or suspension of a contractor. Among other responsibilities, the committee is authorized to resolve issues regarding the agency that will have lead responsibility in initiating a suspension or debarment proceeding. The committee will also coordinate actions among interested agencies before the initiation of proceedings. The rule amends the policy provision at FAR 9.402. This final rule goes into effect on July 31, 2009.


(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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