Small business gets own team on FAR council

As reported on FCW.com, the FAR Council has added a sixth team for small business. The Administrator of the Office of Management and Budget, Paul Denett, issued a memo creating this new team to:

focus on small business issues and to coordinate with the Small Business Administration (SBA) on concurrent SBA and FAR rulemaking

With the new legislative agendas, this may be a preemptive strike to ensure small business issues are included in executive department decision-making. The House Small Business Committee Chairwoman Rep. Nydia Velazquez (D-N.Y.) is busy working on her favorite pet peeve- the Small Business Adminstration. I'll have to cover that separately.

DFAR keeps up with T&M and Labor Hour changes

This Defense Federal Acquisition Regulation Supplement (DFARS) case is an update to payment options brought on by the the new FAR change (see below) to allow Time and Material (T&M) and Labor Hour contracts for commercial services.

There were three payment options specified in the FAR rule. The Defense Department narrows them to one. Here is how the DFAR case explained it:

DoD believes it is in the best interests of the Department to select, and make mandatory... requiring separate fixed hourly rates that include profit for each category of labor performed by the contractor and each subcontractor, and for each category of labor transferred between divisions, subsidiaries, or affiliates of the contractor under a common control.

That is the way DoD hopes to keep the final outcome of T&M and Labor Hour contracts to be as predictable and controllable (manageable???) as possible.

The DoD head of procurement has a good overview of this change on their DFARS site. There is even a chart comparing before and after use of T&M and labor hour contracts. Just scroll down the page a little to the heading, "Labor Reimbursement on DoD Non-Commercial Time-and-Materials and Labor-Hour Contracts (DFARS Case 2006-D030)."

Rules expand Time and Materials (T&M) plus Labor Hour contracts to commercial services

[This post includes an addition of information regarding T&M and Labor Hour contract D&Fs for contracts over 3 years]
Perhaps you noticed that the FAR got a revision (FAC 2005-15 dated Dec. 12, 2006) to allow T&M and Labor Hour contracts for commercial services. In their deliberations, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council worked to implement the Services Acquisition Report Act of 2003 (SARA). One of the provisions of SARA was to allow using T&M and Labor Hour contracts to purchase services that are commercial in nature.

This new change to the FAR keeps a decided preference for fixed price contacts for services.

Briefly, here is how to use these contract types to buy services (new FAR Part 12.207):

First, the contracting officer needs a determination and finding (D&F) that states a T&M or Labor Hour contract is the only type of contract appropriate for this requirement. Also, for IDIQ contracts, a similar D&F is needed for each task order. [The D&F has some specific requirements that need to be included, so be certain to check them out (FAR 12.207(b)(2)). Also, the D&F authority is HCA for contracts longer than 3 years (FAR 16.601(d)(1)(ii))]

Next, there must be a ceiling price beyond which another determination must be made.

Further:

• The contract must be a competitive award (or small business set aside)
• If using an "other than full and open competition" Justification and Approval (J&A), must have 2 or more offers/proposals or are placing an order under the fair opportunity procedures of a multiple award delivery order contract.

Keep this type of contract arrangement in mind and remember to properly justify its use and make the proper determinations.

Consolidated site to find rules, regs and regs awaiting public comment

There is a new "one face to government regulation" website. It is now the only place where Federal Acquisition Circulars will be posted. In addition, all the Federal Register notices will be at this one spot too.

One point (you probably will not have a problem with it)...When searching for a rule or FAC, click the "All Documents" radio button. Otherwise, the only results that you will see are those items that are still awaiting public comments. If you are looking for something that is already a rule, it will not show in your results list.

Go to it and bookmark it.

Do you use criminal background checks for contractor responsibility determinations?

The Government Accountability Office (GAO) was asked (by the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs) to comment on whether criminal background investigations were used to determine contractor responsibility before contract award.

In a nutshell, the GAO said, "no" and that the FAR doesn't say to do that. Then, as part of their discussion, GAO mentioned that the only use of them in the contracting world is when allowing access to military bases or for security clearances.

Perhaps this is another of the "oversight" categories that the current session of Congress will be focusing on. The "good" news is that all the focus on the failings of contractors will mean more emphasis on government employees doing that work.

Until we all retire and go away.

Looking for federal case law to back up your "hunch?"

Here is a great website find federal court decisions. Featuring Supreme Court, Courts of Appeal and others, if you need to find it, it seems to be here.

Good luck on your search for answers.

And speaking of more oversight...

The GovExec.com blog and FCW.com (Federal Computer Weekly's daily news report) reports that the House Government Reform Committee has a new name: the Committee on Oversight and Government Reform.

The GovExec article includes a brief history on that committee and how it has transformed since its founding in 1927.

Returning "oversight" to its name means there will be probably more attention to micromanaging what we do.

More trouble for non-DoD contracts

The DoD IG has recently issued two reports regarding use of non-DoD contracts. Both showed that there is a great potential for Anti-Deficiency Act (ADA) violations. The first report focuses on DoD use of Treasury FedSource contracts. According a GovExec.com article, the IG found 21 potential ADA violations, including

funds being kept after the end of the year for which they were appropriated, and spending from the wrong accounts for particular projects.

The next report is an excellent review of ADA guidance and a good reference on potentially deficient practices. Focused on non-DoD contracts, it is a good resource to review (skip down to the section on potential violations- about page 13- for better explanations on ADA and how to avoid a violation).

This report is examining 38 potential violations by GSA and then an additional 69 by other agencies, including NASA and Treasury (all of these were for FY 2005). The report does not reference the other report's 21 for the Treasury. Its count was 25.

How did they fail? According to the report, the majority of failures of ADA were for violations of the bona fide need rule- severable services are covered here- (24 of the 38 and 60 of the 69 were for bona fide need).

Check this out for its potential as a good resource on ADA.

Interim payments for cost-reimbursable contracts need this clause

Sometimes we forget that our business is in the details. Here is another reminder.

If you have a cost-reimbursable contract, make sure you add Alternate I to the Prompt Payment clause and modify the standard payment time to 14 days. This allows contractors to receive quicker payments and to deflect DoD IG audit concerns.

In case you missed this...

Just before the end of last fiscal year (September 28, 2006) new thresholds were established for micro purchase and others. The full text, in html, is here.