PilieroMazza’s Weekly Update is an e-mail sent on Fridays that recaps legislative and regulatory issues affecting businesses of all sizes. When government agencies propose significant changes to existing regulations or Congress passes legislation of special interest to the small business community, we follow-up the Weekly Update with an analysis of the proposed change and the likely impact on small business.

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Weekly Report for October 22, 2018

DEFENSE DEPARTMENT

Class Deviation-Commercial Items Omnibus Clause for Acquisitions Using the Standard Procurement System

According to an article on acq.osd.mil, this class deviation rescinds and supersedes Class Deviation 2013-00019. Effective immediately, when using the Standard Procurement System (SPS) to contract for commercial items, all Department of Defense (DOD) contracting activities may deviate from the requirements at Federal Acquisition Regulation (FAR) 12.301 (b)( 4) and the clause at FAR 52.212-5, Contract Terms and Conditions Required To Implement Statutes or Executive Orders- Commercial items. The clause at FAR 52.212-5 requires the contracting officer to "check a box" to identify the clauses that are applicable to the specific acquisition of commercial items. Rather than requiring the contracting officers to "check the applicable clauses," SPS has a clause logic capability that automatically selects the clauses under FAR clause 52.212-5.

Performance-Based Payments and Progress Payments (DFARS Case 2017-D019)

The DOD is withdrawing the proposed rule on performance-based payments and progress payments that published on August 24, 2018, and is cancelling the public meeting previously scheduled to be held on October 10, 2018. 83 Fed. Reg. 193, 50052.

GOVERNMENT CONTRACTING

How Contractor Fraud Is Reported Shouldn’t Affect How It Gets Investigated

According to an article in govexec.com, while the vast majority of federal contractors are dedicated to their craft and their country, very few wrongdoers occasionally cast a shadow on the industry as a whole. Unfortunately, the way that the government resolves fraud allegations is often dictated not by the egregiousness of the fraud but rather by how the government learns of suspected wrongdoing. Given this inconsistency, it is suggested that a more uniform approach to addressing whistleblower allegations be implemented.

SMALL BUSINESS ADMINISTRATION

U.S. Department of Labor Announces New Compliance Assistance Tools to Assist New and Small Businesses

According to a press release, the U.S. Department of Labor today announced the launch of the New and Small Business Assistance and the Compliance Assistance Toolkits webpages. These new online tools assist American small businesses and workers with simple, straightforward resources that provide critical Wage and Hour Division (WHD) information, as well as links to other resources. The webpages were established in response to feedback received from new and small business stakeholders voicing their need for a centralized location to secure the tools and information they need to comply with federal labor laws. These new webpages provide the most relevant publications and answer the questions most frequently asked by new and small business owners. These tools, in conjunction with worker.gov and employer.gov, ensure greater understanding of federal requirements and provide tools to help employers find resources offered by other regulatory agencies. “The Wage and Hour Division has long understood that the majority of employers want to do the right thing and comply with the law, but they need to know how,” said the WHD’s Acting Administrator Bryan Jarrett. “These new webpages demonstrate our ongoing commitment to proactively help employers comply with the law and provide them the tools they need to understand their responsibilities. We encourage all employers to visit these new webpages and reach out to us for assistance at any time.”

OFFICE OF PERSONNEL MANAGEMENT

OPM Calls on Agencies to Implement Coaching Programs for Employees

According to an article on govexec.com, the Trump administration is calling on federal agencies to expand their use of “coaching,” an “experimental” and “creative” process designed for individuals to help other government workers realize their full potential. Office of Personnel Management Director Jeff Pon sent a memorandum to agency leaders that was made public this week aimed at highlighting the “importance of creating a coaching culture.” Such a culture would boost retention of employees, forge stronger relationships, increase focus on mission and lead to better performance, Pon said. The director tasked agencies’ human capital officers to use his memo to plan, design and implement coaching programs.

CAPITOL HILL

Senate Small Business Committee Passes Six Bills to Assist Current, Prospective Small Business Owners

On October 12, 2018, the Senate Committee on Small Business & Entrepreneurship favorably reported six bills to the full Senate that would, among other things, help veterans transition from service to entrepreneurship, create an equal playing field for small business borrowers receiving a real estate loans through the Small Business Administration’s (SBA) loan programs, aid recovery in natural disasters, and require the SBA to assess the size of businesses based on average revenues of five years rather than three. The full list of bills reported is as follows:

• S. 2679, Veterans Small Business Enhancement Act
• S. 3552, 7(a) Real Estate Appraisal Harmonization Act
• S. 3553, Small Business Access to Capital and Efficiency Act
• S. 3554, A bill to extend the effective date for the sunset for collateral requirements for SBA disaster loans
• S. 3561, National Guard and Reserve Entrepreneurship Act
• S. 3562, Small Business Runway Extension Act of 2018

President Signs Risch, Peters Bill Helping Small Businesses Access Patent Protection

Earlier this week, President Trump signed into law legislation aimed at helping small businesses safeguard their intellectual property with expanded education on obtaining and protecting patents. The Small Business Innovation Protection Act is expected to build upon existing SBA and United States Patent and Trademark Office (USPTO) programs, to better inform small businesses on domestic and international intellectual property protections. This Act requires the SBA and USPTO to develop partnerships in order to develop high quality training relating to domestic and international intellectual property protection by leveraging existing training materials developed for small businesses. It also requires the SBA and USPTO to enter partnerships in order to increase the effectiveness of Small Business Development Centers by providing training that addresses small business concerns related to domestic and international intellectual property protections which may be conducted in person or online. You can find more information here.

PilieroMazza Blogs

Submitting a Proposal Soon? Make Sure Your SAM Registration Is Active

By Meghan F. Leemon

While there has been some confusion and a bit of a grey area surrounding when an offeror's profile with the System for Award Management (SAM) must be active, the confusion will be put to rest effective October 26, 2018. Recently, a final rule was released clarifying that offeror registration in SAM is required prior to submission of an offer. [Read More].



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Weekly Report for October 1, 2018

 

DEFENSE DEPARTMENT

Federal Acquisition Regulation: Evaluation Factors for Multiple-Award Contracts

The Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) are proposing to amend the Federal Acquisition Regulation to implement a section of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017. Section 825 of the NDAA for FY 2017 amends 10 U.S.C. 2305(a)(3) to modify the requirement to consider cost or price as an evaluation factor for the award for certain multiple award task order contracts issued by DoD, NASA, or the Coast Guard. Section 825 provides that, at the Government’s discretion, solicitations for multiple award contracts for the same or similar services that state the Government intends to award a contract to each qualifying offeror that do not require price or cost as an evaluation factor for contract award. This exception does not apply to solicitations for multiple-award contracts that provide for sole source orders pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)). 83 Fed. Reg. 185, 48271.

Federal Acquisition Regulation: Federal Acquisition Circular 2005-101; Introduction, System for Award Management Registration, One Dollar Coins

This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council in this Federal Acquisition Circular (FAC) 2005-101. A companion document, the Small Entity Compliance Guide, follows this FAC. 83 Fed. Reg. 187, 48690. Further, DoD, GSA, and NASA are issuing a final rule amending the FAR to update the instructions for registration in the System for Award Management and clarify the timing of registration in the System for Award Management. 83 Fed. Reg. 187, 48691. DoD, GSA, and NASA are also issuing a final rule amending the FAR to implement a section of the National Defense Authorization Act for FY 2018 that provides an exception for business operations conducted by a contractor while performing under a Government contract from the requirement to accept and dispense $1 coins. 83 Fed Reg. 187, 48700.

Federal Acquisition Regulation: Federal Acquisition Circular 2005-101; Small Entity Compliance Guide

The Small Entity Compliance Guide has been prepared consistent with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of the rules appearing in the FAC, which amends the FAR 83 Fed. Reg. 187, 48702.

SMALL BUSINESS ADMINISTRATION

Ownership and Control of Service-Disabled Veteran-Owned Small Business Concerns

The U.S. Small Business Administration (SBA) is amending its regulations to implement provisions of the National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017). The NDAA 2017 placed the responsibility for issuing regulations relating to ownership and control for the Department of Veteran Affairs (VA) verification of Veteran-Owned (VO) and Service-Disabled Veteran-Owned (SDVO) Small Business Concerns with the SBA. Pursuant to NDAA 2017, SBA issued one definition of ownership and control for these concerns, which applies to the VA in its verification and Vets First Contracting Program procurements, and all other Government acquisitions, which require self-certification. The legislation also provided that in certain circumstances a firm can qualify as VO or SDVO when there is a surviving spouse or an employee stock ownership plan. 83 Fed. Reg. 189, 48908.

VETERANS AFFAIRS

VA Veteran-Owned Small Business (VOSB) Verification Guidelines

The VA is amending its regulations governing VA's Veteran-Owned Small Business (VOSB) Verification Program. The NDAA for FY 2017 placed the responsibility for issuing regulations relating to ownership and control for the verification of VOSBs with the SBA. This regulation implements the NDAA by referencing SBA's regulations governing ownership and control and adds and clarifies certain terms and references that are currently part of the verification process. The NDAA also provides that in certain circumstances a firm can qualify as a VOSB or Service-Disabled Veteran-Owned Small Business when there is a surviving spouse or an employee stock ownership plan. 83 Fed. Reg. 185, 48221.

VA Acquisition Regulation: Taxes; Quality Assurance; Transportation; Solicitation Provisions and Contract Clauses; and Special Procurement Controls

The VA is amending and updating its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the FAR, to remove procedural guidance internal to the VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency specific regulations or policies. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce the burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. The VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, we will publish them in the Federal Register. In particular, this rulemaking revises VAAR concerning Taxes; Quality Assurance; Transportation; Solicitation Provisions and Contract Clauses; and Special Procurement Controls. 83 Fed. Reg. 185, 48257.

WHITE HOUSE

‘Unprecedented’ Government Spending Spree Picks Up Speed

According to an article on Nextgov.com, the federal Government is primed to spend as much as $300 billion in the final quarter of fiscal 2018 as agencies rush to obligate money appropriated by Congress before Sept. 30 or return it to the Treasury Department. The spending spree is the product of the omnibus budget agreement signed six months late in March, coupled with funding increases of $80 billion for defense and $63 billion for civilian agencies. The shortened time frame left procurement officials scrambling to find ways to spend the money. Through August, defense and civilian agencies obligated some $300 billion in contracts. Nevertheless, to spend all the money appropriated to them by Congress, they may have to obligate well over $200 billion more in the final quarter of fiscal 2018, which ends in two weeks.

PILIEROMAZZA BLOGS

GAO Rebukes Agency for Finding Proposal Nonresponsive Based on Buy American Act Submission

By Julia Di Vito

The U.S. Government Accountability Office ("GAO") recently sustained a bid protest in which the U.S. Department of Energy ("DOE") found a construction contractor's bid to be nonresponsive due to the contractor's failure to provide all information required by Federal Acquisition Regulation ("FAR") 52.225-9 and 52.225-10. When these FAR provisions are included in a solicitation, they set out a preference that a contractor use domestic products and materials in its construction project. If a contractor wishes to use foreign materials instead of domestic ones based on cost reasons, these FAR provisions require a contractor to provide data about the construction materials the contractor plans to use so that the agency can determine whether the Buy American Act should be applied to the contract. To read the full blog, please follow this Link.

New Receipts Calculation for Federal Contractors?

By Megan C. Connor

Congress is considering changing the receipts calculation for small businesses. Currently, a company’s size is determined based on the average annual receipts of the three recently completed fiscal years. However, in the Small Business Runway Extension Act of 2018, H.R. 6330, which the House passed on September 25, 2018, the House of Representatives, proposes amending the Small Business Act to change this time period to five years. For the full blog, please follow this Link.

Effective October 1, 2018: A Universal Set of Ownership and Control Requirements for VOSBs and SDVOSBs

By Meghan F. Leemon

Just one week before taking effect, the VA issued a final rule on verification guidelines for veteran-owned and service-disabled veteran-owned small businesses, found in the National Defense Authorization Act for Fiscal Year 2017 (NDAA 2017). The final rule implements the NDAA 2017, which placed the responsibility for issuing regulations relating to ownership and control for the VA’s verification of VOSBs and SDVOSBs with SBA. For the full blog, please follow this Link.

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Weekly Report for September 21, 2018

SMALL BUSINESS ADMINISTRATION

House Small Business Committee Calls for a Status Update on FAR Revision of Limitations on Subcontracting.

Last week, House Small Business Committee Chairman Steve Chabot and Ranking Member Nydia Velázquez sent a letter to the acting administrator of the Office of Federal Procurement Policy requesting a status update of Federal Acquisition Regulation Case Number 2016-011, titled “Revision of Limitations on Subcontracting. Section 1651 of Public Law 112-239, the National Defense Authorization Act for Fiscal Year 2013 (2013 NDAA), made significant changes to the limitations on federal subcontracting, which were reflected in corresponding regulations made by the Small Business Administration (SBA) on May 31, 2016. Section 1651 of the 2013 NDAA and SBA regulations require that the limitations on subcontracting for full or partial small business set-aside contracts, HUBZone contracts, 8(a) contracts, service-disabled veteran-owned small business contracts, women-owned small business, and economically disadvantaged women-owned small business contracts be evaluated based on the amount paid by the federal government, rather than the previously used cost of labor, or cost of manufacturing calculation. Significantly, the 2013 NDAA and SBA regulations exclude from the limitations on subcontracting the work performed by first-tier subcontractors that are considered "similarly situated entities." It has been 6 years since the 2013 NDAA was signed into law and Congress has respectfully requested a status update and timeline. You can find the article here.

Improvements Needed in SBA’s Oversight of 8(A) Continuing Eligibility Processes

The Small Business Administration’s (SBA’s) 8(a) Business Development Program provides economically and socially disadvantaged small business owners with business development assistance and greater access to Federal contracting opportunities. The objective was to determine whether SBA’s oversight ensured 8(a) program participants met continuing eligibility requirements. To answer this objective, OIG judgmentally selected two samples for review. First, they reviewed 15 individually owned 8(a) firms, with the highest 8(a) set-aside contract dollars in FY 2016. The 15 firms received $461 million, or 3.96 percent, of the $11.6 billion in 8(a) set-aside contract dollars awarded to individually owned firms in FY 2016. Second, they reviewed 10 individually owned 8(a) firms based on complaints that the OIG Hotline referred to SBA between October 1, 2015, and May 4, 2017, regarding the continuing eligibility of 8(a) participants to assess SBA’s complaint review process as part of its oversight of the program. The OIG also met with SBA officials to gain an understanding of the current 8(a) program structure and processes. Additionally, the OIG reviewed documents associated with the firms’ annual and continuing eligibility reviews, information in SBA’s 8(a) information systems, and third-party sources for indications of ineligibility. It was found that SBA did not consistently identify ineligible firms in the 8(a) program and did not always act to remove firms it determined were no longer eligible for the program. Additionally, SBA did not perform required continuing eligibility reviews when it received specific and credible complaints regarding firms’ eligibility and did not log all complaints. It was found that 20 of the 25 firms reviewed should have been removed from the 8(a) program. These firms received $126.8 million in new 8(a) set-aside contract obligations in FY 2017 at the expense of eligible disadvantaged firms. For more information on the Audit Report, follow this link.

DEFENSE DEPARTMENT

Class Deviation- Permanent Supply Chain Risk Management Authority

The Office of the Undersecretary of Defense issued a Class Deviation, which, effective immediately, removes the sunset date at Defense Federal Acquisition Regulations (“DFARS”) SUBPART 239.73--REQUIREMENTS FOR INFORMATION RELATING TO SUPPLY CHAIN RISK, Section 239.7300(b) and changes the statutory citations in OF ARS subpart 239.73 from section 806 Pub. L. 111-383 to 10 U.S.C. 2339a. Contracting officers shall use the provision and clause provided in the attachment to this deviation in lieu of the provision at OF ARS 252.225-7017, Notice of Supply Chain Risk, and clause at 252.225-7018, Supply Chain Risk, as prescribed in the attachment.

Organizational Name Change to Defense Pricing and Contracting


The Office of the Undersecretary of Defense issued the following Memorandum, which, effective immediately, renamed the organization formerly known as Defense Pricing/Defense Procurement and Acquisition Policy (DP/DP AP), as Defense Pricing and Contracting (DPC). The DPC office is currently evaluating their mission, function, and responsibility.

Performance-Based Payments and Progress Payments

The Department of Defense (DoD) is hosting a public meeting on October 10, 2018, to obtain views of experts and interested parties in Government and the private sector regarding revising policies and procedures relating to customary progress payment rates and maximum performance-based payment rates for DoD contracts. 83 Fed. Reg. 184, 47867.

VETERANS AFFAIRS

VA Acquisition Regulation Changes:

The Department of Veterans Affairs (VA) is amending and updating its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency-specific regulations or policies. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce the burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, to be published in the Federal Register. The first rulemaking revises VAAR concerning Subcontracting Policies and Procedures and Government Property. 83 Fed. Reg. 181, 47097. An additional rulemaking revises VAAR concerning Construction and Architect-Engineer Contracts, as well as affected parts covering the Department of Veterans Affairs Acquisition Regulations System, Foreign Acquisition, Contract Administration and Audit Services, Quality Assurance, Solicitation Provisions and Contract Clauses, and Forms. 83 Fed. Reg. 174, 45384. Finally, a third rulemaking revises the VAAR concerning Contracting by Negotiation and Service Contracting, as well as affected parts covering the Department of Veterans Affairs Acquisition Regulation System, Types of Contracts, Termination of Contracts, Solicitation Provisions and Contract Clauses, and Loan Guaranty and Vocational Rehabilitation and Employment Programs. 83 Fed. Reg. 174, 45374.

WHITE HOUSE

‘Unprecedented’ Government Spending Spree Picks Up Speed

According to an article on Nextgov.com, the federal government is primed to spend as much as $300 billion in the final quarter of fiscal 2018 as agencies rush to obligate money appropriated by Congress before Sept. 30 or return it to the Treasury Department. The spending spree is the product of the omnibus budget agreement signed six months late in March coupled with funding increases of $80 billion for defense and $63 billion for civilian agencies. The shortened time frame left procurement officials scrambling to find ways to spend the money. Through August, defense and civilian agencies obligated some $300 billion in contracts. But to spend all the money appropriated to them by Congress, they may have to obligate well over $200 billion more in the final quarter of fiscal 2018, which ends in two weeks.

CAPITOL HILL

House Small Business Committee Calls for Transparency from Federal Agencies

Last week, House Small Business Committee Chairman Steve Chabot and Ranking Member Nydia Velázquez sent follow-up letters to the heads of three federal agencies requesting further information on small entity compliance guide reporting as required by Section 212 of the Small Business Regulatory Enforcement Fairness Act.

“Small businesses deserve transparency from the federal government and for their voices to be heard in the federal rulemaking process. It is imperative that all federal agencies comply with the law by producing these documents to the Committee, so we can understand the unique effects of regulations on small businesses,” said Chairman Chabot. You can find the letter and more information about this topic here.

Small Business Optimism Hits 45-Year High

On Tuesday, September 11th, the National Federation of Independent Business (NFIB) released its Small Business Optimism Index from August, which marks a new record high in the survey’s 45-year history. New records were set for job creation plans and unfilled job openings. Inventory investment plans were also at the strongest level since 2005, and capital spending plans were the highest since 2007.

“With small business optimism at the highest its been in 45 years, it’s clear that Americans are prospering, and small businesses are thriving. These historic gains are proof that the new tax law and a reduction in regulations are significantly driving our economic gains. I look forward to seeing continued growth in our economy,” said Chairman Chabot (R-OH)

Chairman Chabot: Our Economy is Full Speed Ahead

On Friday, September 7th, House Small Business Committee Chairman Steve Chabot released a statement in light of a U.S. Department of Labor report that 201,000 jobs were created in August, with wages up 2.9 percent for the year, which is the largest increase since June 2009.

“Our economy is going full speed ahead, as evidenced by today’s jobs report released by the Department of Labor. With the unemployment rate remaining near historic lows of 3.9 percent and 201,000 jobs added in August, we are seeing the effects of the tax law and a reduction in regulations. In fact, small business owner’s optimism levels are among the highest in history. It is not just more jobs, but better jobs as wages increased by 2.9 percent from last year, putting more money in hardworking Americans’ pockets. I look forward to more growth from small businesses on Main Street,” said Chairman Chabot.

You can find more information, including the Department of Labor report here.

PILIEROMAZZA BLOGS

NLRB Proposes Rule to Limit Joint Employer Test: Small Businesses Beware

By Sarah L. Nash

If at first you don't succeed, try, try again. The National Labor Relations Board ("NLRB") has taken this proverb to heart when it comes to implementing a new test for what it means to be a "joint employer" under the National Labor Relations Act. Following a failed attempt to change the standard through case law, the NLRB is now attempting to revise it by issuing a proposed rule. [Read more]

How New Minimum Wage and Service Contract Act Health and Welfare Rates Apply to Your Contract

By Nichole D. Atallah

As we head into a busy proposal and award season, keep in mind some important changes to Service Contract Act ("SCA") wages and fringe benefits. In July, the Department of Labor ("DOL") issued revised SCA health and welfare ("H&W") benefit amounts, increasing the base rate from $4.41 per hour to $4.48 per hour. An H&W rate of $4.18 per hour is now applicable to employees performing work on contracts that include FAR 52.222-62, Sick Leave for Contractors. This rate takes into account that employers who are required to provide sick leave cannot count sick leave provided against the H&W benefit. Hawaii employers should look closely for special rates that apply to contracts performed there. [Read more]

How a CTA Can Help You Qualify for Government Contracts

By Julia Di Vito

You may have heard of Contractor Team Arrangements ("CTA") that can be used to pursue General Services Administration ("GSA") Schedule contract opportunities, but do you know how a CTA can maximize your ability to qualify for government contracts? CTAs are distinct from traditional prime contractor-subcontractor relationships and joint ventures, and they provide different methods for making your company a more attractive offeror. [Read more]

Taking Advantage of State and Local Small Business Certifications

By Meghan F. Leemon

Many federal government contractors are familiar with certain federal certifications, such as small business, woman-owned small business, service-disabled veteran-owned small business, and the like, and the contract set-aside benefits that are associated with such socioeconomic designations. While some of these federal certifications may flow down to state and local procurements, many government contractors may also qualify for state and local certifications, which can generate more revenue outside of the ever-competitive federal government contracting marketplace. [Read more]


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Weekly Report for September 7, 2018

SMALL BUSINESS ADMINISTRATION

Boosting small business demands big ideas

According to an article in dcma.mil, there are 28 million small businesses in America, and Defense Contract Management Agency’s small business team wants as many of them as possible to join the defense industrial base. “Our mission is to provide small business support to our defense and government customers by ensuring subcontracting compliance and optimizing subcontracting opportunities,” said Tatia Evelyn-Bellamy, the director of DCMA’s Small Business Office and Small Business Compliance Center. “Our strategy is to actively assist customers in developing aggressive but reasonable subcontracting plans for their contractors and review contractor subcontracting program compliance.” In line with the agency’s over-arching mission of warfighter support, Evelyn-Bellamy explained her team’s effort “in assisting military partners with pre-award and post-award subcontract management, and working with prime contractors to achieve subcontract success” helps foster business innovation and new technology, supports the warfighter, strengthens and sustains the military and economic industrial base, and promotes private enterprise.

DEFENSE DEPARTMENT

In Pursuit of Innovative Technologies, Department of Defense Creates Another Pathway Around Traditional Acquisition Rules

Amid the hype over its growing use of Other Transaction Agreements (OTAs), the Defense Department is taking yet another step into unorthodox contracting methods as it pursues more participation from non-traditional vendors. As part of a four-year pilot program, the Pentagon issued new rules that will let its contracting officers move though streamlined acquisition processes when they’re buying “innovative” commercial goods and services. Much like the department’s burgeoning use of OTAs, they will allow the Department of Defense (DoD) to make purchases without issuing traditional requests for proposal and conducting formal competitions. But unlike OTAs, those purchases won’t be restricted mainly to prototypes. And the term “innovative” is fairly broad, under the June 26 guidance DoD published, known as a class deviation. It sweeps up any commercial “technology, process, or method, including research and development, that is new as of the date of submission of a proposal, or any application that is new as of the date of submission of a proposal of a technology, process, or method.” For more information, please visit here.

The Defense Department Federal Acquisition Regulation Supplement made the following changes:

DFARS Case 2018-D042: Repeal of DFARS Clause, Removal of Contractor's Employees. (August 24, 2018) 83 Fed. Reg 165, 42788

DFARS Case 2017-D041: Repeal of Independent Research and Development Technical Interchange. (August 24, 2018) Proposed. 83 Fed. Reg 165, 42787

DFARS Case 2017-D034: Antiterrorism Training Requirements for Contractors. (August 24, 2018) 83 Fed. Reg 165, 42820

DFARS Case 2018-D011: Exemption from Design-Build Selection Procedures. (August 24, 2018) 83 Fed. Reg 165, 42850

DFARS Case 2018-D028: Modification of DFARS Clause, Transportation of Supplies by Sea. (August 24, 2018) 83 Fed. Reg 165, 42826

DFARS Case 2017-D011: Restrictions on Acquisitions from Foreign Sources. (August 24, 2018) 83 Fed. Reg 165, 42828

DFARS Case 2018-D007: Sunset of Provision Relating to the Procurement of Certain Goods. (August 24, 2018) 83 Fed. Reg 165, 42822

DFARS Case 2017-D019: Performance-Based Payments and Progress Payments. (August 24, 2018) 83 Fed. Reg 165, 42831

Early Engagement Opportunity: Implementation of National Defense Authorization Act for Fiscal Year 2019. (August 24, 2018) 83 Fed. Reg 165, 42883

GOVERNMENT CONTRACTING

Class Deviation-Micro-Purchase Threshold, Simplified Acquisition Threshold, and
Special Emergency Procurement Authority

According to a memorandum on acq.osd.mil, this class deviation rescinds and supersedes Class Deviation 201 8-00013, dated April 13, 2018. This class deviation increases the micro-purchase threshold for DOD in Class Deviation 2018-00013, from $5,000 to $10,000. Please note, this class deviation does not change the micro-purchase threshold exceptions of $2,000 for acquisitions of construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction); and $2,500 for acquisitions of services subject to 41 U.S.C. chapter 67, Service Contract Labor Standards, provided in the FAR 2.101 definition of "micro-purchase threshold."

LABOR AND EMPLOYMENT

Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019

The Wage and Hour Division of the U.S. Department of Labor is issuing this notice to announce the applicable minimum wage rate for workers performing work on or in connection with federal contracts covered by Executive Order 13658, beginning January 1, 2019. Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), was signed on February 12, 2014, and raised the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $10.10 per hour, beginning January 1, 2015, with annual adjustments thereafter as determined by the Secretary of Labor (the Secretary) in accordance with the methodology set forth in the Order. The Secretary's determination of the Executive Order minimum wage rate also affects the minimum hourly cash wage for tipped employees performing work on or in connection with covered contracts. The Secretary is required to provide notice to the public of the new minimum wage rate at least 90 days before the rate takes effect. The applicable minimum wage under the Executive Order is currently $10.35 per hour, in effect since January 1, 2018.

Pursuant to the Executive Order and its implementing regulations in the Code of Federal Regulations, notice is hereby given that beginning January 1, 2019, the Executive Order minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase to $10.60 per hour. Notice is also hereby given that, beginning January 1, 2019, the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts will increase to $7.40 per hour. 83 Fed. Reg. 171, 44906

CAPITOL HILL

Surveying Storms: A Deeper Dive into SBA’s Disaster Response

On September 5, 2018, the House Small Business Committee held a hearing to examine the U.S. Small Business Administrations’ disaster response. Members of the Committee heard directly from James Rivera, Associate Administrator of the Office of Disaster Assistance at SBA, about the agency’s actions during the 2017 storm season and SBA’s disaster response moving forward. You can find more information here.

NDAA PILIEROMAZZA BLOGS:

The 2019 NDAA Streamlines, Reorganizes, and Redefines

By Timothy F. Valley

Title VIII—Acquisition Policy, Acquisition Management, and Related Matters of the National Defense Authorization Act for Fiscal Year 2019 ("2019 NDAA") includes a number of changes to the Department of Defense ("DoD") acquisition statutes and the definition of commercial items. These changes appear to be in direct response to the recommendations from the Section 809 Panel (the "Panel") reports from January and June of 2018. In its reports, the Panel noted the sometimes cumbersome and unnecessary complexity of the DoD acquisition system and the confusion surrounding the definition of commercial items. [Read more]

The 2019 NDAA's Impact on Small Business Procurement

By Samuel S. Finnerty

On August 13, 2018, the John S. McCain National Defense Authorization Act ("NDAA") for Fiscal Year 2019 was signed into law by President Trump. As with prior NDAAs, the 2019 NDAA includes a number of provisions that affect procurement policy, management, and related matters. Below, we summarize some of the more notable provisions that will impact small business procurement. [Read more]

2019 NDAA Raises Micro-purchase Threshold for DoD

By Kathryn V. Flood

The 2019 NDAA brought a welcome surprise for many defense contractors—the DoD plans to increase its micro-purchase threshold from $5,000 to $10,000, which matches the increase given to civilian agencies in last year's NDAA. For the full blog, visit [Read more]

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Weekly Report for August 24, 2018

FEDERAL ACQUISITION REGULATIONS

Federal Acquisition Regulation; Paid Sick Leave for Federal Contractors

The Department of Defense (DoD), General Services Administration (GSA), and NASA are adopting as final, without change, an interim rule amending the FAR to implement the Executive Order, Establishing Paid Sick Leave for Federal Contractors. The interim rule also implemented a final rule issued by the Department of Labor. 83 Fed. Reg. 163, 42569.

Federal Acquisition Regulation: Non-Retaliation for Disclosure of Compensation Information

The DoD, GSA, and NASA adopted as final, without change, an interim rule amending the FAR to implement Executive Order, Non-Retaliation for Disclosure of Compensation Information. The interim rule also implemented a final rule issued by the Department of Labor. 83 Fed. Reg. 163, 42570.

DEFENSE DEPARTMENT

Office of the Inspector General, Freedom of Information Act Program

This final rule removes the DoD’s regulation concerning the Office of the Inspector Genera, Freedom of Information Act program (FOIA). On February 6, 2018, the DoD published a revised FOIA program rule as a result of the FOIA Improvement Act of 2016. When the DoD FOIA program rule was revised, it included DoD component information and removed the requirement for component supplementary rules. The DoD now has one DoD-level rule for the FOIA program that contains all the codified information required for the Department. Therefore, this part can be removed from the CFR. 83 Fed. Reg. 161, 42025.

GOVERNMENT CONTRACTING

Government-Wide Commercial Purchase Card Prohibited Purchases

The Defense Federal Acquisition Regulations Supplement Part 213.3 provides direction for authorizing, establishing, and operating Government-wide Commercial Purchase Card programs (GPC), and directs personnel to follow the guidance in the Department of Defense Government Charge Card Guidebook for Establishing and Managing Purchase, travel, and fuel Card programs. Section A.1.2.4 of the guidebook establishes a list of items prohibited from purchase using GPC. This memo adds the following items to the prohibited list:
• Video surveillance Cameras
• Commercial Unmanned Aerial Systems

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WHITE HOUSE

‘Trump Will Get His Wall,’ Says Senator

According to an article in govexec.com, less than two months after activists launched the edgy slogan “Abolish ICE,” the White House on Monday brought more than 100 law enforcement agency leaders and staff to Washington to hear praise and gratitude for Immigration and Customs Enforcement’s work. Both President Trump and Sen. David Perdue, R-Ga., also took the opportunity in the East Room ceremony to predict victory in fulfilling Trump’s long-time campaign promise to build a wall along the U.S.-Mexico border. “I think he will” get his border wall, Perdue said when asked at a panel discussion of agency heads. “It’s no longer a debate between zero and $25 billion, but between $2 billion and $5 billion,” for wall funding provided in preliminary Senate and House versions of the fiscal 2019 Homeland Security appropriations bill. The reason the Senate is in session during August, Perdue said, is partly to tackle the DHS spending bill “soon” after his chamber completes work on the Defense spending bill.

PILIEROMAZZA BLOGS

Congress Lowers the Acceptability of LPTA

By Michelle Litteken

Government contractors have criticized lowest-priced technically acceptable (“LPTA”) procurements since LPTA was first introduced as a source selection method. In an LPTA procurement, all offerors that meet the requirements in a solicitation are deemed technically acceptable, and award is based solely on price. Critics of LPTA have argued that this source selection technique does not allow an agency to exercise the type of judgment needed when a contract involves complex requirements or when quality, safety, and innovation are paramount. [Read more]

Contractor Who Brought Lawsuit Against Government Faces False Claims Act and Fraud Counterclaims

By Ambika J. Biggs

The U.S. Court of Federal Claims ("COFC") recently issued an opinion that should give pause to contractors who seek to bring suit against the U.S. government but have not complied with materially relevant government regulations. In LW Construction of Charleston, LLC v. U.S., a government contractor filed suit against the Department of Veterans Affairs ("VA"), alleging that its contract for a construction project at Fort Jackson National Cemetery was wrongfully terminated. The procurement under which LW Construction of Charleston ("LW") had been awarded the contract had been set aside for service-disabled veteran-owned small businesses ("SDVOSB"). Three years after LW filed suit, the government brought counterclaims alleging that LW was not an eligible SDVOSB. [Read more]



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