Government Contracts Update January 2009

January 2009

From the editors of CCH's government contracts products, here are summaries of the important recent developments in this practice area for the past month. Complete coverage of these issues, and many more, appear in the Government Contracts Reporter and related products.

If you have comments or suggestions concerning the information provided or the format used, please feel free to contact me directly at william.vanhuis@wolterskluwer.com.

Hot Topic

FAR Councils Issue Nine Rules in FAC 2005-30
The Civilian Agency Acquisition and Defense Acquisition Regulations Councils have published Federal Acquisition Circular 2005-30. The Circular contains one interim and eight final rules amending the Federal Acquisition Regulation. In order of appearance, the rules address: Item I —Federal Procurement Data System (FAR Case 2004-038); Item II —Commercially Available Off-the-Shelf Items (FAR Case 2000-305); Item III —Exemption of Certain Service Contracts from the Service Contract Act (FAR Case 2001-004); Item IV —Public Disclosure of Justification and Approval Documents for Noncompetitive Contracts (FAR Case 2008-003, Interim); Item V —SAFETY Act: Implementation of DHS Regulations (FAR Case 2006-023); Item VI —Electronic Products Environmental Assessment Tool (FAR Case 2006-030); Item VII —Combating Trafficking in Persons (FAR Case 2005-012); Item VIII —Trade Agreements-New Thresholds (FAR Case 2007-016); and Item IX, Technical Amendments. All rules carry a February 17, 2009, effective date, unless otherwise noted. The full text of FAC 2005-30 appears at ¶70,002.105.

FAR Case 2004-038, finalizes, with a minor change, an interim rule issued with FAC 2005-25, which amended the FAR to revise the process for reporting contract actions to the Federal Procurement Data System. The interim rule established the FPDS as the single authoritative source of all procurement data for a number of applications and reports, such as the Central Contractor Registration, the Electronic Subcontracting Reporting System, the Small Business Goaling Report, and Resource Conservation and Recovery Act data. The rule amended FAR Subpart 4.6 to revise the process for reporting contract actions to the FPDS, which will allow agencies to obtain federal procurement reports as well as several workload reports designed specifically for first-line supervisors. The use of the federal reports will alleviate the need for individual agencies to collect, verify, and distribute statistics for many requirements. In addition to revising FAR Subpart 4.6 (FAR 4.600 through FAR 4.607), the rule amended FAR 1.106, FAR 2.101, FAR 4.805, FAR 12.301, and the contract clauses at FAR 52.204-5 through FAR 52.204-7, and FAR 52.212-1. The final rule clarifies the definition of “indefinite delivery vehicle” at FAR 4.601 to include other types of agreements beyond indefinite delivery contracts.

The final rule associated with FAR Case 2000-305 amends the FAR to implement Section 4203 of the Clinger-Cohen Act of 1996 (41 USC 431) with respect to the inapplicability of certain laws to contracts and subcontracts for the acquisition of commercially available off-the-shelf items (see ¶70,006.159 for the proposed rule). FAR 2.101 is amended to define COTS as any item of supply (including construction material) that is a commercial item (as defined in paragraph (1) of FAR 2.101) sold in substantial quantities in the commercial marketplace, and is offered to the government under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace. The rule adds a new section at FAR 12.103, which outlines the treatment of COTS items, as well as a new provision at FAR 12.505, which lists the laws that do not apply to contracts for the acquisition of COTS items. The rule also amends FAR 25.003 to revise the definitions of “domestic construction material” and “domestic end product” to include COTS items. Corresponding changes are also made at FAR 3.503-2, FAR 12.301, FAR 12.500, FAR 12.502, FAR 23.406, FAR 25.100, FAR 25.101, FAR 25.200, and the contract clauses at FAR 52.212-3, FAR 52.212-5, FAR 52.213-4, FAR 52.225-1 through FAR 52.225-4, and FAR 52.225-9 through FAR 52.225-12.

FAR Case 2001-004, finalizes, with changes, an interim rule issued with FAC 2005-21, which amended the FAR to implement the Department of Labor's final rule issued January 18, 2001 (66 FR 5327), amending the regulations at 29 CFR Part 4 to exempt certain contracts for services meeting specific criteria from coverage under the Service Contract Act. The interim rule imposed the DoL criteria, but did not utilize the term “commercial services,” because the specified criteria are not exactly the same as the FAR definition of “commercial item.” The rule incorporated slight revisions to the exemption for consistency with the current DoL regulations and clarified appropriate courses of action for the contracting officer. To implement the DoL regulations, the interim rule established a new category of exemptions for certain service contracts, including contracts for the following: automobile and vehicle maintenance services; financial services; hotel/motel services; equipment maintenance, calibration, repair, and installation services; common carrier transportation services; real estate services; and relocation services. To implement these new requirements, the interim rule added three contract clauses at FAR 52.222-51 through FAR 52.222-53 to address the SCA exemption for specified services, and contracts for the maintenance, calibration, or repair of certain equipment. The final rule adds to the Annual Representations and Certifications clause at FAR 52.204-8, the conditions under which each listed provision applies, or for the more complex cases, a check-off for the contracting officer to indicate whether the provision is applicable to the solicitation. The other changes in the final rule clarify and make technical corrections at FAR 4.1201, FAR 4.1202, FAR 15.102, FAR 22.1003-4 through FAR 22.1003-6, FAR 22.1006, FAR 52.212-3, FAR 52.212-5, FAR 52.222-48, and FAR 52.222-53. In addition, the interim rule amended the following provisions: FAR 17.109, FAR 22.1004, FAR 22.1008-2, FAR 22.1018 through FAR 22.1020, FAR 22.1022, FAR 22.1023, FAR 22.1026, FAR 52.212-1, FAR 52.213-4, and FAR 52.222-41.

An interim rule, FAR Case 2008-003, amends the FAR to implement Section 844 of the National Defense Authorization Act for Fiscal Year 2008, “Public Disclosure of Justification and Approval Documents for Noncompetitive Contracts,” which stipulates the requirements regarding the public availability of justification and approval documents after the award of federal contracts, except for information exempt from public disclosure. This rule revises FAR 6.305 to require agencies to make available for public inspection within 14 days after contract award the justification required by FAR 6.303-1 on the agency’s website and at the Governmentwide Point of Entry (www.fedbizopps.gov ). In the case of a contract award permitted under FAR 6.302-2, the rule requires that the justification be posted within 30 days after contract award. The rule also requires contracting officers to screen carefully all justifications for contractor proprietary data and remove all such data, and any references and citations as are necessary to protect the proprietary data, before making the justifications available for public inspection. This interim rule also adds a new section at FAR 5.406 that cross-references the requirements at FAR 6.305. The rule also amends FAR 5.301 and FAR 24.203. Comments on this interim rule are due March 16, 2009.

A rule, FAR Case 2006-023, finalizes, with changes, an interim rule issued with FAC 2005-21, which amended the FAR to implement the Department of Homeland Security regulations on the SAFETY Act. The SAFETY Act (6 USC 441 and following) provides incentives for the development and deployment of anti-terrorism technologies by creating a system for “risk management” and “litigation management.” The purpose of the Act is to ensure the threat of liability does not deter potential manufacturers or sellers of antiterrorism technologies from developing, deploying, and commercializing technologies that could save lives. DHS published a final rule (71 FR 33147) at 6 CFR Part 25 that limited the liability of sellers who maintain a “SAFETY Act designation” or “SAFETY Act certification.” The DHS SAFETY Act certification of a technology as an “approved product” confers a rebuttable presumption that sellers are entitled to the “government contractor defense” (6 USC 442(d)), which means that any seller of an “approved product” cannot be held liable for design defects. The interim rule renumbered existing FAR Part 50, Extraordinary Contractual Actions, as FAR Subpart 50.1, and added a new FAR Subpart 50.2, Support Anti-terrorism by Fostering Effective Technologies Act of 2002, to address the SAFETY Act. The rule also added associated contract clauses at FAR 52.250-2 through FAR 52.250-5. The final rule makes changes to FAR Subpart 50.2 and associated contract clauses to improve clarity and implementation of the Safety Act. For example, the final rule modifies the definitions of “pre-qualification notice,” “block designation,” “SAFETY Act designation,” and “SAFETY Act certification” at FAR 50.201 and in the associated contract clauses. Corresponding technical changes made by the interim rule at FAR 1.602-3, FAR 7.105, FAR 18.121, FAR 18.126, FAR 28.308, FAR 32.401, FAR 32.402, FAR 32.405, FAR 33.205, FAR 43.000, and FAR 52.250-1 were finalized without change.

The rule associated with FAR Case 2006-030 finalizes, without change, an interim rule issued with FAC 2005-23, which amended the FAR to require use of the Electronic Products Environmental Assessment Tool when acquiring personal computer products such as desktops, notebooks or laptops, and monitors pursuant to the Energy Policy Act of 2005 and Executive Order 13423, “Strengthening Federal Environmental, Energy, and Transportation Management.” EPEAT is a system that helps purchasers in the public and private sectors evaluate, compare, and select computers and computer components based on the environmental attributes of the equipment. EPEAT also provides a clear and consistent set of performance criteria for the design of products, and an opportunity for manufacturers to secure market recognition for efforts to reduce the environmental impact of their products. The interim rule revised FAR Subpart 23.7, which implements the requirements for acquiring environmentally preferable products and services, and prescribed a new clause, FAR 52.223-16 (also included in FAR 52.212-5 for acquisition of commercial items), for all solicitations and contracts for the acquisition of personal computer products, services that require furnishing of personal computer products for use by the government, and services for contractor operation of government-owned facilities. The rule also added a new provision at FAR 23.701 that defines a “personal computer product” to include notebook computers, desktop computers, or computer monitors, and all peripherals that are integral to the operation of these items, consistent with the IEEE 1680 standard. In accordance with Section 7 of E.O. 13423 , the EPEAT requirement applies only to contracts performed in the United States, unless otherwise authorized in agency procedures. This rule also impacts FAR 11.101, FAR 23.702, FAR 23.705, FAR 23.706, FAR 39.101, and FAR 52.223-10.

A rule, FAR Case 2005-012, finalizes, with changes, an interim rule issued with FAC 2005-19, which amended the FAR to implement 22 USC 7104(g). The statute mandates that contracts include a provision authorizing the government to terminate the contract if the contractor or any subcontractor engages in trafficking in persons. That interim rule had adopted, with changes, a prior interim rule, published with FAC 2005-09, that implemented this statute by adding FAR Subpart 22.17 with an associated clause at FAR 52.222-50 to address combating trafficking in persons. In revising the first interim rule, the FAR Councils noted the statutory language at 22 USC 7104(g) contained no exceptions or limitations with regard to its application to federal contracts. Therefore, while the first rule applied only to contracts for services (other than commercial), the second interim rule applied to all contracts, including contracts for supplies, and all contracts for commercial items as defined at FAR 2.101. To reflect the statutory language accurately, the second interim rule provided for contract termination for engaging in severe forms of trafficking in persons or procurement of a commercial sex act during the period of performance of the contract, or for use of forced labor in the performance of the contract. The requirements for the contractor to establish policies and procedures and develop an awareness program were replaced with the requirement to notify employees of the government policy and actions that will be taken against them for violations. Additionally, the second interim rule deleted the requirement to obtain written agreement from employees. Accordingly, the second interim rule revised FAR 12.503, FAR 22.1700- FAR 22.1705, FAR 52.212-5, FAR 52.213-4, and FAR 52.222-50. The final rule amends FAR 22.1702 to add the definition of “forced labor.” The term is also added to the contract clause at FAR 52.222-50 as a method of coercion prohibited by the clause. In addition, the final rule amends the policy provision at FAR 22.1703 to specify that additional information about trafficking in persons can be found at the website for the Department of State's Office to Monitor and Combat Trafficking in Persons' at http://www.state.gov/g/tip . The amendment to FAR 22.1704 specifies that contracting officers may take into consideration whether the contractor had a Trafficking in Persons awareness program at the time of the violation as a mitigating factor when determining the appropriate remedies. Corresponding technical changes are made to FAR 52.212-5, FAR 52.213-4, and FAR 52.244-6.

The FAR Case 2007-016 rule finalizes, without change, an interim rule issued with FAC 2005-24 (and a subsequent correction, see ¶70,002.98). The interim rule implemented the increased thresholds for the World Trade Organization Government Procurement Agreement and Free Trade Agreements. Trade agreement thresholds are increased every two years according to a predetermined formula set forth in the agreements. The changes made to the FAR resulted from new thresholds published by the United States Trade Representative in the Federal Register (72 FR 71166 and 72 FR 73904). A table showing the new dollar thresholds appears at revised FAR 25.402. The other provisions affected by the rule are: FAR 22.1503, FAR 25.202, FAR 25.1101, and FAR 25.1102, and the contract clauses at FAR 52.212-5, FAR 52.213-4, and FAR 52.222-19. This rule has a January 15, 2009, effective date.

Item IX of FAC 2005-30 implements a technical amendments final rule to the FAR. The rule makes an editorial change at FAR 15.101-2. This technical change has a January 15, 2009, effective date. Also, FAC 2005-30 includes a Small Entity Compliance Guide, which was prepared in accordance with Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. The Guide identifies two rules —FAR Case 2001-004 and FAR Case 2006-030 —as having a corresponding regulatory flexibility analysis.

Legal News

Selection Decision Was Flawed, Award Enjoined
A selection decision awarding a protection services contract was improper, according to the Court of Federal Claims, because the source selection authority erroneously concluded the protester's and awardee's proposals were “basically equal” and the SSA failed to discuss technical/price trade-off factors. The protester challenged the award of a five-year, $1.186 billion contract to provide security guard, fire fighting, and emergency medical response services at 14 NASA locations. The solicitation for the best-value procurement required proposals to be evaluated under three factors: mission suitability, past performance, and price. Mission suitability was more important than past performance, and the two factors combined were significantly more important than price. A source evaluation board was to evaluate the proposals and report its findings to the SSA, who was responsible for the final source selection decision. The protester challenged the SSA's decision, issued the same day the SSA received the SEB's final evaluation. The protester contended the SSA's conclusion the protester's and awardee's proposals were “basically equal” as to the two nonprice factors was flawed, and the selection decision should have discussed the protester's significant strengths and the technical-price trade-off between the protester's significant strengths and higher price.

With regard to the past performance factor, the court found the administrative record supported the SSA's conclusions and the SSA did not err in relying on the SEB's final findings. However, the evaluation under the mission suitability factor and the best-value determination were flawed. The SEB violated the Administrative Procedure Act by failing to create a record that justified the awardee's score increase for two mission suitability subfactors. The SSA in turn misunderstood the protester's improvement process, which caused its conclusion regarding the comparability of the two offerors' proposals under the mission suitability factor to be ipso facto arbitrary and capricious. In addition, the SSA determined a technical/price trade-off analysis was required, but the selection decision contained no discussion of the relevant factors. The circumstances also suggested the SSA may have influenced the SEB to increase the awardee's ratings, so that the SEB's final findings already reflected the SSA's best value decision. The court concluded limited injunctive relief was warranted. It ordered the government to appoint both a reconstructed SEB to evaluate three mission suitability subfactors and issue reconsidered final findings, and a new SSA to issue a reconsidered and independent final decision with a detailed explanation of the best value determination. (Wackenhut Services, Inc. v. U.S., et al., FedCl, 53 CCF ¶79,041)

CFC Exercises Jurisdiction over Performance Evaluation Dispute
The Court of Federal Claims asserted jurisdiction over a dispute involving a negative performance evaluation because the government's jurisdictional challenge was unsupported and the exercise of jurisdiction was consistent with the Tucker Act and the Contract Disputes Act. The air traffic management contractor sought a declaration that its performance evaluation was "false and highly prejudicial" and an injunction requiring the government to revise or rescind the Contractor Performance Assessment Report and the entry in its past performance database. In its motion to dismiss for lack of jurisdiction, the government cited a statement in a decision of the Court of Appeals for the Federal Circuit that "Congress intended to ensure "jurisdictional parity" between the boards of contract appeals and the Court of Federal Claims" in the 1992 amendments to the Tucker Act (Alliant Techsystems, Inc., et al. v. U.S., 43 CCF ¶77,478). According to the government, since the boards consistently ruled they did not possess jurisdiction to review performance evaluations, "jurisdictional parity" precluded the CFC from exercising jurisdiction over performance evaluations.

However, the government misinterpreted Alliant Techsystems, board rulings are not binding on the CFC, and the board decisions cited by the government were unpersuasive. Allowing challenges to performance evaluations in the CFC "is in complete harmony with the overall jurisdictional scheme fashioned by Congress in enacting and amending the Tucker Act." As originally enacted in 1887, the Tucker Act granted the claims court jurisdiction over "all claims founded ... upon any contract, expressed or implied, with the [g]overnment," and this basic jurisdictional grant has remained intact. Today, the CFC possesses jurisdiction over both protests and contract disputes, which "allows it to render decisions with an eye towards the overall government contracting process." Moreover, "performance evaluations are best made within the confines of the CDA, thus allowing the contractor and the government to avoid unnecessary and disruptive bid protests" that could arise if a contractor was required to "wait and lodge a protest when the performance evaluation played a role in an unsuccessful bid on a future contract." (BLR Group of America, Inc. v. U.S., FedCl, 53 CCF ¶79,035)

Alleged Oral Contract Was Not Governed by CDA Requirements
The government's motion to dismiss a breach of contract claim for lack of jurisdiction was denied by the Court of Federal Claims because the alleged oral contract was not a "procurement" and the claim therefore was not subject to the Contract Disputes Act's requirement to exhaust administrative remedies. The claimant, a real estate broker, was a subcontractor to a prime engaged by the Department of Housing and Urban Development to manage, market, and oversee the sale of HUD-owned single family homes. During the contract term, the government asked the claimant to participate in a confidential quality management review program designed to measure the effectiveness of the prime contractor's performance in implementing HUD's Property Disposition Program. Before agreeing to participate, the claimant received specific oral assurances from the government's agents that all feedback would be kept strictly confidential. Apparently, the feedback was not all positive and within hours after the feedback session ended, the prime notified the claimant by e-mail that its subcontract was being unilaterally terminated. The claimant filed a complaint against the government, asserting the breach of an implied-in-fact contract.

The government moved to dismiss, arguing the court lacked jurisdiction because the claimant failed to submit its claim to the HUD contracting officer before filing its complaint, as required by the CDA. However, the alleged contract was not a procurement within the meaning of the CDA (41 USC 602(a)) and therefore did not trigger the CDA's jurisdictional prerequisite that a claim be filed with the CO. It was clear the government had no obligation to pay --with or without appropriated funds --for the "services" provided by the claimant. Case law supported this conclusion as "courts have refused to stretch the language of the CDA to cover contracts that do not arise from a typical 'acquisitive' relationship and the expenditure of appropriated funds or some other exchange of recognized value." Moreover, the government protested the claimant's failure to file a claim with the CO, but HUD never appointed a CO to the matter. As stated by the court, it most likely "never occurred to the agency that it needed to conduct a "procurement of services" in order to approach one of its subcontractors for a few hours of feedback." The court, therefore, could invoke its Tucker Act jurisdiction. (Lublin Corp. t/a Century 21, Advantage Gold v. U.S., FedCl, 53 CCF ¶79,037)

Lost Profits Awarded for Government's Breach
Lost profits were awarded by the Armed Services Board of Contract Appeals for the government's breach of a telecommunications contract because the contractor satisfied the requisite elements of proof. The contractor sought lost profits for the unperformed years of the contract to install and operate transient lodging telecommunications systems. In a prior decision (04-2 BCA ¶32,714), the board found the government's removal of restrictions preventing access to long-distance carriers outside the contractor's network amounted to a material breach of the contract. The government argued the contractor's lost profits claim was wholly speculative because it was "almost certain" the government would have terminated the contract for convenience.

However, the facts did not support the government's argument --the government had rejected the contractor's convenience termination settlement proposal and instead breached the contract. The contractor met the elements of proof of lost profits by establishing they were foreseeable, there would have been a profit but for the breach, and the measure of damages could be clearly established. The board calculated the net lost profit the contractor would have accrued over the 71 months remaining in the contract term, adjusting the contractor's historical revenues to reflect its successful claims and disallowing revenues for planned new facilities because the government had indicated it had no intention of ordering the contractor's services for the new facilities. (SUFI Network Services, Inc., ASBCA, ¶92,452)

Government Failed to Meaningfully Consider Conflict of Interest
The government unreasonably determined that a contract requiring the awardee to review its own work would not create an organizational conflict of interest, because it failed to meaningfully consider the potential OCI and the awardee's mitigation plan was insufficient. Pursuant to an amended request for proposals for information technology operation and maintenance services, which contemplated award of a cost-plus-award-fee contract, the awardee was expected to review and offer input regarding systems engineering solutions proposed by itself under a different contract with the same agency. The protester argued it was not in the awardee's best interests to review its own work negatively, asserting a “substantial and inadequately mitigated OCI.” The government contended the review work involving the other contract was minimal at most and subject to oversight by government personnel.

The Comptroller General sustained the protest, finding the government did not adequately consider the impact of the awardee's dual roles. “The concern with impaired objectivity situations is that a firm’s ability to render impartial advice to the government will be undermined by its relationship to the product or service being evaluated.” Here, the review of work under the awardee's other contract was significant in amount, involved subjective judgment, and could have a potential impact on the awardee's relationship with the government. Further, the plan to have the awardee's input vetted by government personnel constituted an ad hoc mitigation activity that was an inadequate “substitute for the preaward deliberation contemplated under FAR 9.504.” In addition, the awardee's proposed use of a firewall between the employees working on the two different contracts was “virtually irrelevant to an OCI involving potentially impaired objectivity.” The employees on both sides of the firewall would be working for the same organization and have the same incentive to benefit the awardee. The Comptroller General recommended the government reconsider its OCI determination, reopen discussions, obtain revised proposals, and make a new selection decision. (Nortel Government Solutions, Inc., 24 CGEN ¶112,758)

Regulatory News

DoD Adds Ethics Provisions to DFARS
The Department of Defense is revising ethics provisions in the Defense Federal Acquisition Regulation Supplement. Two interim rules and one final rule address separation of senior roles in source selection (DFARS Case 2008-D037), senior DoD officials seeking employment with defense contractors (DFARS Case 2008-D007), and whistleblower protections for contractor employees (DFARS Case 2008-D012). All of the rules are effective January 15, 2009, and comments on the interim rules are due March 16, 2009.

The DFARS Case 2008-D037 final rule revises DFARS 203.170(a), which prohibits DoD senior leaders from performing multiple roles in major source selections. The rule reinforces this policy by requiring DoD departments and agencies to certify every two years that no senior leader has performed multiple roles in the acquisition of a major weapon system or major service. The companion DFARS resource, Procedures, Guidance, and Information, specifies the form of the certification at new PGI 203.170. For the text of the rule, see ¶70,016.502.

The interim rule in DFARS Case 2008-D007 implements Section 847 of the National Defense Authorization Act for Fiscal Year 2008, which requires DoD officials that have participated personally and substantially in a DoD acquisition exceeding $10 million or have held a key acquisition position, and who expect to receive compensation from a DoD contractor within two years after leaving DoD service, to obtain a written opinion from a DoD ethics counselor regarding the activities that may be undertaken on behalf of a DoD contractor. Section 847 also prohibits a DoD contractor from providing compensation to these former DoD officials without first determining whether a post-employment ethics opinion has been received or requested. The rule adds new provisions at DFARS 203.104-4, and DFARS 203.171 through DFARS 203.171-4, and a new clause at DFARS 252.203-7000. The rule also amends DFARS 209.406-2 and DFARS 252.212-7001, and removes DFARS 203.104-5. See ¶70,016.503 for the text of the interim rule.

The other interim rule, DFARS Case 2008-D012, adds a new DFARS Subpart 203.9 , which addresses protections for contractor employees who disclose information to government officials with regard to waste or mismanagement, danger to public health or safety, or a violation of law related to a DoD contract. The rule implements Section 846 of the NDAA for FY 2008 and Section 842 of the NDAA for FY 2009, which added whistleblower protections different from those in FAR Subpart 3.9. The additions at DFARS 203.900 through DFARS 203.970 expand the types of information to which whistleblower protections apply and the categories of government officials to whom information may be disclosed without reprisal, establish time periods within which the Inspector General and the agency head must take action with regard to a complaint filed by a contractor employee, and establish a de novo right of action in federal district court for contractor employees who have exhausted their administrative remedies under 10 USC 2409. A new contract clause requiring contractors to inform employees in writing of their whistleblower rights and protections is added at DFARS 252.203-7002. The text of this interim rule appears at ¶70,016.504.

Interim Rules Amend DFARS COTS Provisions
The Department of Defense has issued two interim rules revising the Defense Federal Acquisition Regulation Supplement: DFARS Case 2008-D030, Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority, and DFARS Case 2008-D009, Statutory Waiver for Commercially Available Off-the-Shelf Items. Both rules carry a January 15, 2009, effective date, with comments due March 16, 2009.

The interim rule in DFARS Case 2008-D030 amends the DoD pilot program addressed in DFARS Subpart 212.70, Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority. The program implemented Section 845(e) of the National Defense Authorization Act for Fiscal Year 1994, which provides that certain items that do not otherwise meet the definition of “commercial item” may be treated as commercial items in the award of contracts and subcontracts that follow another transaction agreement. Section 824 of the NDAA for FY 2009 established a new program expiration date of September 30, 2010, and added items developed under research projects in accordance with 10 USC 2371 to the types of items to which the program applies. The rule adds the changes made by the FY 2009 NDAA at DFARS 212.7002-1 and DFARS 212.7002-2. For the text of the interim rule, See ¶70,016.509.

The interim rule in DFARS Case 2008-D009 implements a determination of the Administrator for Federal Procurement Policy that the Buy American Act's “component test” is inapplicable to acquisitions of commercially available off-the-shelf items. The Administrator's February 14, 2008, determination, which was implemented in the FAR through FAC 2005-30, included a partial waiver of the Act (41 USC 10a and 10b), limited to the Act’s domestic component test. As a result of the waiver, a COTS item may be treated as a domestic end product if it is manufactured in the United States, without tracking the origin of the item’s components. This interim rule makes corresponding changes to provisions and clauses addressing the Buy American Act/Balance of Payments Program at DFARS 252.225-7000, DFARS 252.225-7001, DFARS 252.225-7035, DFARS 252.225-7036, DFARS 252.225-7044, and DFARS 252.225-7045. For the text of the rule, see ¶70,016.515.

Major Contract Awards

Seven Seas Shipchandlers - $1.825 Billion. Seven Seas Shipchandlers, Dubai, United Arab Emirate, is being awarded a $1,825,000,000 firm-fixed-price, total set-aside, prime vendor, indefinite-delivery and indefinite-quantity contract for maintenance, repair and operations of supplies and materials. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps and federal civilian agencies. The original proposal was Web-solicited with three responses. Contract funds will not expire at the end of the current fiscal year. This contract is exercising the third one-year option. The date of performance completion is January 2, 2010. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA, (SPM500-05-D-BP05). Government Contracts Reports 1991, January 14, 2009.

Theodore Wille Intertrade - $1.825 Billion. Theodore Wille Intertrade (TWI), Zug, Switzerland, is being awarded a $1,825,000,000 firm-fixed-price, total set-aside, prime vendor, indefinite-delivery and indefinite-quantity contract for maintenance, repair and operations of supplies and materials. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps and federal civilian agencies. The original proposal was Web-solicited with three responses. Contract funds will not expire at the end of the current fiscal year. This contract is exercising the third one-year option. The date of performance completion is January 2, 2010. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA, (SPM500-05-D-BP02). Government Contracts Reports 1991, January 14, 2009.

SupplyCore - $1.825 Billion. SupplyCore, Rockford, IL, is being awarded a maximum $1,825,000,000 firm-fixed-price, total set-aside, prime vendor, indefinite-delivery and indefinite-quantity contract for maintenance, repair and operations of supplies and materials. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps and federal civilian agencies. The original proposal was Web-solicited with three responses. Contract funds will not expire at the end of the current fiscal year. This contract is exercising the third one-year option. The date of performance completion is January 2, 2010. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA, (SPM500-05-D-BP04). Government Contracts Reports 1991, January 14, 2009.

Oshkosh - $1.12 Billion. Oshkosh Corp., Oshkosh, WI is being awarded a maximum $1,121,351,999 firm-fixed-price, indefinite-delivery, sole source contract for heavy and medium tactical trucks support. There are no other locations of performance. Using services are All DoD and civilian agencies. There were originally two proposals solicited with one response. Contract funds will expire at the end of the current fiscal year. The date of performance completion is December 31, 2009. The contracting activity is the Defense Supply Center Columbus (DSCC), Columbus, OH (SPM7LX-09-D-9008). Government Contracts Reports 1990, January 7, 2009.

Boeing - $1.12 Billion. The Air Force is awarding an undefinitized contract to Boeing Co., Long Beach, CA, for $1,118,679,176. This contact will provide proved Total System Support for the C-17 weapon system. At this time, $548,152,792 has been obligated. 730 ACSG/GFKAA, Robins Air Force Base, GA, is the contracting activity (FA8614-04-C-2004-P00507). Government Contracts Reports 1992, January 21, 2009.

Bell-Boeing Joint Project Office - $581 Million. Bell-Boeing Joint Project Office, Amarillo, TX, is being awarded a cost-plus-incentive fee, indefinite-delivery, requirements contract with an estimated value of $581,446,845 to provide Joint Performance Based Logistics (JPBL) support for the Marine Corps (MV-22), Air Force, and Special Forces Operations Command (CV-22) aircraft during the production and deployment phase of the V-22 Program. Work will be performed in Ft. Worth, TX (46.6 percent); Philadelphia, PA (41.4 percent); Ft. Walton Beach, FL (6.1 percent); Oklahoma City, OK (4.3 percent); and St. Louis, MO (1.6 percent), and is expected to be completed in November 2013. Contract funds in the amount of $84,807,065 will not expire at the end of the current fiscal year. This contract was not competitively procured. The Naval Air Systems Command, Patuxent River, MD, is the contracting activity (N00019-09-D-0008). Government Contracts Reports 1993, January 28, 2009.

Atlantic Diving Supply - $488 Million. Atlantic Diving Supply, Virginia Beach, VA, is being awarded a maximum $487,799,322 firm-fixed-price, indefinite-quantity delivery, total set-aside contract for items that support the Special Operational Equipment Tailored Logistics Support Program. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and other Federal civilian agencies. Proposals were originally Web-solicited with 14 responses. Contract funds will not expire at the end of the current fiscal year. This contract has a base period of two years with three, one-year option periods. The date of performance completion is January 8, 2011. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA (SPM8EJ-09-D-0003). Government Contracts Reports 1992, January 21, 2009.

Source One Distributors - $488 Million. Source One Distributors, Inc., Wellington, FL, is being awarded a maximum $487,799,322 firm-fixed-price, indefinite-quantity delivery, total set-aside contract for items that support the Special Operational Equipment Tailored Logistics Support Program. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and other Federal civilian agencies. Proposals were originally Web-solicited with 14 responses. Contract funds will not expire at the end of the current fiscal year. This contract has a base period of two years with three, one-year option periods. The date of performance completion is January 8, 2011. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA (SPM8EJ-09-D-0004). Government Contracts Reports 1992, January 21, 2009.

Tactical & Survival Specialties - $488 Million. Tactical & Survival Specialties, Inc., Harrisonburg, VA, is being awarded a maximum $487,799,322 firm-fixed-price, indefinite-quantity delivery, total set-aside contract for items that support the Special Operational Equipment Tailored Logistics Support Program. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and other Federal civilian agencies. Proposals were originally Web-solicited with 14 responses. Contract funds will not expire at the end of the current fiscal year. This contract has a base period of two years with three, one-year option periods. The date of performance completion is January 8, 2011. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA (SPM8EJ-09-D-0001). Government Contracts Reports 1992, January 21, 2009.

W.S. Darley & Co. - $488 Million. W.S. Darley & Co., Itasca, IL, is being awarded a maximum $487,799,322 firm-fixed price, indefinite-quantity delivery, total set-aside contract for items that support the Special Operational Equipment Tailored Logistics Support Program. There are no other locations of performance. Using services are Army, Navy, Air Force, Marine Corps, and other Federal civilian agencies. Proposals were originally Web-solicited with 14 responses. Contract funds will not expire at the end of the current fiscal year. This contract has a base period of two years with three, one-year option periods. The date of performance completion is January 8, 2011. The contracting activity is the Defense Supply Center Philadelphia, Philadelphia, PA (SPM8EJ-09-D-0002). Government Contracts Reports 1992, January 21, 2009.