FAC 2005-46 Issued with Seven Rules

The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-46, which contains four interim and three final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address the following subjects: Item I, Equal Opportunity for Veterans (FAR Case 2009-007); Item II, Certification Requirement and Davis Procurement Prohibition Relating to Iran Sanctions (FAR Case 2010-012); Item III, Termination for Default Reporting (FAR Case 2008-016); Item IV, Award-Fee Language Revision (FAR Case 2008-008); Item V, Offering a Construction Requirement --8(a) Program (FAR Case 2009-020); Item VI, Encouraging Contractor Policies to Ban Text Messaging While Driving (FAR Case 2009-028); and Item VII, Buy American Exemption for Commercial Information Technology --Construction Material (FAR Case 2009-039). For the text of FAC 2005-46, see ś70,002.126.

Effective Dates

The four interim rules are effective on the date of publication, September 29, 2010. Comments on the interim rules, identified by FAR Case number, are due November 29, 2010. The three final rules go into effect October 29, 2010. A full listing of FAR sections impacted by these rules, as well as the effective date for each rule, appears in the table below. This FAC also contains a Small Entity Compliance Guide.

Veterans' Opportunities

An interim rule, FAR Case 2009-007, amends the FAR to implement Department of Labor regulations on equal opportunity provisions for various categories of military veterans. The DoL Office of Federal Contract Compliance Programs published a final rule (72 FR 44393) amending Parts 30 through 300 of Title 41 in the Code of Federal Regulations. The DoL rule implemented amendments to the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act of 1972, as amended by the Jobs for Veterans Act (PL 107-288). The DoL rule changed the categories of veterans protected by these laws for covered government contracts entered into or modified on or after December 1, 2003. These changes specifically modified the government contracts equal opportunity clause and revised the categories of veterans to include Disabled Veterans, Recently Separated Veterans, Other Protected Veterans, and Armed Forces Service Medal Veterans. The JVA eliminated the separate coverage category of Vietnam-era veterans. However, DoL in its rule explained that many people in this category may be covered under the other categories. The JVA expanded the coverage of veterans with disabilities to all veterans who were discharged or released from active duty because of a service-connected disability. This interim FAR rule re-titles FAR Subpart 22.13 from "Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans" to "Equal Opportunity for Veterans." Accordingly, the clause at FAR 52.222-35 is also renamed "Equal Opportunity for Veterans," and it incorporates the new categories and definitions of protected veterans as established by DoL. Similarly, the clause at FAR 52.222-37, "Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans," is renamed "Employment Reports on Veterans," and the amendment incorporates the new DoL requirements for using the VETS-100A report. In addition, FAR 52.222-38, Compliance with Veterans' Employment Reporting Requirements, is revised to incorporate new title references for FAR 52.222-37 and the new report form VETS-100A. The interim rule also makes conforming changes to the lists of FAR clauses in FAR 52.212-5, FAR 52.213-4, and FAR 52.244-6.

Iran Sanctions

The interim rule associated with FAR Case 2010-012 amends the FAR to implement Section 102 and partially implement Section 106 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (PL 111-195). Section 102 requires certification that each offeror, and any person owned or controlled by the offeror, does not engage in any activity for which sanctions may be imposed under Section 5 of the Iran Sanctions Act of 1996, as amended. Section 106 imposes a procurement prohibition relating to contracts with persons that export certain sensitive technology to Iran. The FAR Councils will further implement Section 106 in FAR Case 2010-018. This interim rule adds a new section at FAR 25.703, Prohibition on contracting with entities that engage in certain activities relating to Iran, and three new subsections. FAR 25.703-1 provides a definition of "person" as it applies to the requirements in newly added FAR 25.703-2 and FAR 25.703-3. FAR 25.703-2 explains the certification requirement and provides a summary of the activities for which sanctions may be imposed, which are described in more detail in Section 5 of the Iran Sanctions Act. It also sets forth the remedies if the head of an executive agency determines that a person has submitted a false certification, including contract termination, contractor suspension or debarrment. FAR 25.703-3 partially implements Section 106 of PL 111-195 by prohibiting agencies from entering into or extending a contract for the procurement of goods or services with a person that exports certain sensitive technology to Iran, as determined by the President and listed on the Excluded Parties List System. The interim rule establishes a waiver of the requirements if the President, on a case-by-case basis, determines and certifies in writing to the appropriate congressional committees that it is in the national interest to do so. The statutory certification requirement is communicated to offerors through a new clause at FAR 52.225-25, Prohibition on Engaging in Sanctioned Activities Relating to Iran --Certification. Offerors will be able to make an annual certification through the Online Representations and Certifications Application, if the offeror is registered in the Central Contractor Registration. The interim rule makes conforming changes to FAR 4.1202 and the clause at FAR 52.204-8, Annual Representations and Certifications.

Default Reporting

A final rule, FAR Case 2008-016, amends the FAR to establish procedures for contracting officers to provide contractor information, such as terminations for cause or default and defective cost or pricing data, in the Past Performance Information System and Federal Awardee Performance and Integrity Information System module within PPIRS. This information is intended to assist COs in making informed source selection and award decisions. Instructions on access to the FAPIIS module and how to input data into the FAPIIS module are available at http://www.ppirs.gov/fapiis.html. As stated in the proposed rule (ś70,006.234), evaluation of past performance information, especially terminations, manages risks associated with timely, effective, and cost efficient completion of contracts, a key objective of President Obama's March 4, 2009, Memorandum on Government Contracting (ś70,105.05). Accordingly, this final rule amends the termination provisions at FAR 8.406-4 and FAR 12.403, language on defective cost and pricing data at FAR 15.407-1, and policy and procedure provisions at FAR 42.1502 and FAR 42.1503. In addition, the rule adds a new section at FAR 49.402-8 detailing the reporting requirements.

Award Fees

The FAR Case 2008-008 rule finalizes, with a clarification, an interim rule issued with FAC 2005-37, which addressed award and incentive fee contract types. The rule amended and integrated, where appropriate, FAR Part 7, Acquisition Planning, and FAR Part 16, Contract Types, to improve agency use and decision making when using incentive contracts. It also added new definitions at FAR 16.001, and amended FAR 16.305, FAR 16.401, FAR 16.402-1, FAR 16.404 and FAR 16.405-2, to provide further guidance relative to: linking award fees to acquisition objectives in the areas of cost, schedule, and technical performance; the percentage of award fee available for prescribed narrative ratings; award fees not being earned if the contractor's overall performance is judged to be below satisfactory; the analysis required in determining whether to use an award or incentive fee type contract; award fee plan content; the prohibition on the use of the award fee rollover concept; the requirements relative to award and incentive fee data collection and performance measures to evaluate this data, and a reference to FAR 7.105 for consideration of this information in acquisition planning; and the publishing of best practices. The rule implemented the provisions of Section 814 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (PL 109-364), Section 867 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (PL 110-417), and the Office of Federal Procurement Policy guidance memorandum dated December 4, 2007, entitled "Appropriate Use of Incentive Contracts." The final rule adds the phrase "in the aggregate" to FAR 16.401(e)(2), Table 16-1, and FAR 16.401(e)(3)(v), to clarify that the objective is to consider the contractor's cost, schedule, and technical performance in the aggregate when performing award fee assessments.

SBA Regulations

The final rule associated with FAR Case 2009-020 amends the FAR to revise FAR Subpart 19.8, Contracting with the Small Business Administration (The 8(a) Program), to conform to SBA regulations. SBA 124.502(b)(2) requires the offering letter for an open construction requirement to be submitted to the SBA District Office for the geographical area where the work is to be performed, while SBA 124.502(b)(3) requires that the offering letter for a construction requirement offered on behalf of a specific participant be submitted to the SBA District Office servicing that concern. This rule revises FAR 19.804-2 to reflect these requirements.

Texting and Driving

An interim rule, FAR Case 2009-028, amends the FAR to implement Executive Order 13513, issued on October 1, 2009, entitled "Federal Leadership on Reducing Text Messaging While Driving." This executive order was issued to demonstrate federal leadership in improving safety on the nation's roads and highways, and to enhance the efficiency of federal contracting. The purpose of this policy is to prevent the unsafe practice of text messaging by federal contractors while driving in connection with government business. This policy also seeks to prohibit the disruption of government business and federal procurement resulting from unsafe text messaging practices. Accordingly, this interim rule creates a new FAR Subpart 23.11 and an associated clause at FAR 52.223-18, Contractor Policy to Ban Text Messaging While Driving, to encourage contractors and subcontractors to adopt and enforce policies that ban text messaging while driving company-owned or -rented vehicles or government-owned vehicles, and privately-owned vehicles when on official government business or when performing any work for the government. The new provisions also encourage contractors, in connection with a government contract, to conduct initiatives, commensurate with the size of the business, such as establishment of new rules and programs to prohibit text messaging while driving, and education, awareness, and other outreach programs to inform employees about the safety risks associated with texting while driving. The rule makes a conforming change to the scope provision at FAR 23.000 to include safe operation of vehicles.

Buy American Exemption

The interim rule associated with FAR Case 2009-039 amends the FAR to implement Section 615 of Division C, Title VI, of the Consolidated Appropriations Act, 2010 (PL 111-117). Section 615 authorizes exemption from the Buy American Act for acquisition of information technology that is a commercial item. The rule amends FAR 25.202, and the clauses at FAR 52.225-9 and FAR 52.225-11, to implement the exemption.

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