Government Contracts Update
News for the Week of October 15, 2018


Hot Topic:
FAC 2005-101 Issued with Two Final Rules
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued Federal Acquisition Circular 2005-101, which contains two final rules amending the Federal Acquisition Regulation: Item I—System for Award Management Registration (FAR Case 2015-005) and Item II—One Dollar Coins (FAR 2018-009). The rules go into effect on October 26, 2018.

The FAR Case 2015-005 final rule amends the FAR to update the instructions for System for Award Management registration. The rule amends FAR Subpart 4.11, System for Award Management, and related solicitation provisions and contract clauses, to clarify when an offeror must register in SAM.

The rule resolves an inconsistency between FAR 52.204-7, which instructs offerors to complete representations and certifications by registering in SAM prior to the submission of offers, and FAR 4.1102, which states SAM registration must be completed by the time of award, by requiring offeror registration in SAM prior to submission of an offer. Once an offeror is registered in SAM, it only needs to update SAM registration in accordance with the FAR 52.204-8 clause.

The final rule in FAR Case 2018-005 amends the FAR to provide an exception for business operations conducted by a contractor while performing under a government contract from the requirement to accept and dispense $1 coins. Specifically, the rule removes FAR 37.116, and its subsections FAR 37.116-1 and FAR 37.116-2, and the clause at FAR 52.237-11, Accepting and Dispensing of $1 Coin.
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Regulatory News:
DFARS Rules Repeal Unnecessary Contract Clauses
Following the recommendations of the Department of Defense Regulatory Reform Task Force, DoD has issued four final rules amending the Defense Federal Acquisition Regulation Supplement to repeal contract clauses, and associated prescriptions, that are outdated or no longer needed. The DFARS Case 2018-D027 final rule (¶70,016.952) amends the DFARS to remove the contract clause DFARS 252.247-7020, Additional Services, and the associated clause prescription at DFARS 247.271-3(n).
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Rule Would Modify Evaluation Factor for Multiple-Award Contracts
A proposed rule seeks to amend the Federal Acquisition Regulation 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 the Department of Defense, the National Aeronautics and Space Administration, or the Coast Guard. The rule would amend FAR 13.106-1, Soliciting competition, FAR 15.304, Evaluation factors and significant subfactors, and FAR 16.505, Ordering.
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SBA Issues Rule on Ownership and Control of SDVOSBs
A final rule amends the Small Business Administration's regulations to implement provisions of the National Defense Authorization Act for Fiscal Year 2017 (PL 114-328), which placed responsibility for issuing regulations relating to ownership and control for the Department of Veterans Affairs' verification of veteran-owned and service-disabled veteran-owned small business concerns with the SBA. The amendments to SBA 125.12 describe who SBA considers to own an SDVOSB. Changes to SBA 125.13 incorporate provisions from SBA's 8(a) BD program and VA's former ownership and control regulations to describe who SBA considers to control an SDVOSB.
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VA Rule Updates VOSB Verification Guidelines
The Department of Veterans Affairs is amending its regulations at 38 CFR Part 74, which govern VA's Veteran-Owned Small Business Verification Program. The rule implements the National Defense Authorization Act for Fiscal Year 2017 (PL 114-840), which placed the responsibility for issuing regulations relating to ownership and control for the verification of VOSBs with the Small Business Administration. This rule references SBA's regulations at SBA Part 125 governing ownership and control and adds and clarifies certain terms and references that are currently part of the verification process.
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Legal News:
Cancellation of Student Loan Debt Collection Solicitation Enjoined
A protest of the cancellation of a solicitation was sustained by the Court of Federal Claims because the government did not document a reasonable basis for its action. The record was "scant; … just 33 pages long," and it appeared to be "slipshod." The notice was the government's first public announcement of the enhanced servicer program, and it "flatly" acknowledged the program still needed to be reviewed for compliance with applicable laws and regulations. (FMS Investment Corp., et al. v. U.S., et al., FedCl, 62 CCF ¶81,475)
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Awardee Shouldn't Have Been Included in Competitive Range
A contract award for technical and administrative support services was arbitrary and capricious, the Court of Federal Claims ruled, because the government improperly included the awardee in the competitive range, unreasonably evaluated the awardee's proposal under the staffing plan and key personnel factor, and treated the offerors unequally. The government continued in its unfair and unequal treatment by failing to provide a rational explanation for including the awardee in the competitive range, instead opting to reevaluate the proposals to "further tip the scales against [the protester]." (2M Research Services, LLC v. U.S., et al., FedCl, 62 CCF ¶81,466)
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Board Awarded CDA Interest in Appeal Involving an NAFI
The Armed Services Board of Contract Appeals awarded a contractor interest in an appeal involving a non-appropriated funds instrumentality because the board concluded it had jurisdiction under the Contract Disputes Act. A 2011 en banc Federal Circuit decision, which held the NAFI doctrine no longer applied to lawsuits brought in the Court of Federal Claims pursuant to the Tucker Act (Slattery v. U.S., 635 F3d 1298), called into question the viability of the NAFI doctrine with respect to CDA appeals. (Parsons Evergreene, LLC, ASBCA, ¶95,571)
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Exclusion for Failure to Provide Contract Number Unreasonable
A protest of the exclusion of a proposal from a competition was sustained by the Comptroller General because the government's rationale for the exclusion lacked a reasonable basis. As part of its technical and past performance narratives, the protester, a joint venture, provided a contract number for a contract reference, but the government subsequently informed the protester its proposal was "non-compliant [with] the [i]nstructions to [o]fferors" because "citing the IDIQ contract number alone [did] not comply with the ITO." (Veteran Technology Integrators, LLC, 33 CGEN ¶116,103)
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Major Contract Awards:
Information Technology — $12.1 Billion
Multiple awardees will compete for each order of the $12,100,000,000 hybrid (cost, firm-fixed-price, and time-and-materials) contract for Information Technology Enterprise Solutions-3 services. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity.
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Aircraft Trainers — $9.2 Billion
The Boeing Co., St. Louis, Missouri, has been awarded an indefinite-delivery/indefinite-quantity contract with an estimated ceiling of $9,202,568,686 for the Advanced Pilot Training aircraft and ground-based training systems. The contract provides for the anticipated delivery of 351 aircraft, 46 associated training devices, and other ancillary supplies and service. Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Dayton, Ohio, is the contracting activity.
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Ship Construction — $5.1 Billion
Huntington Ingalls Industries, Pascagoula, Mississippi, was awarded a $5,104,668,778 fixed-price-incentive, firm target multiyear contract for construction of six DDG 51 class ships, two in fiscal 2018 and one each in fiscal 2019 through 2022. This contract includes options for engineering change proposals, design budgeting requirements, and post-delivery availabilities on the awarded firm multiyear ships. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity.
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Space Vehicles — $1.4 Billion
Lockheed Martin Corp., Littleton, Colorado, has been awarded a $1,362,089,314 contract for GPS IIIF Space Vehicles 11 and 12. This contract provides for the non-recurring engineering, space vehicle test bed and simulators, and production of GPS IIIF Space Vehicles 11 and 12 as well as options for the production of up to 22 GPS III Space Vehicles, Space Vehicle storage, and launch and on-orbit support. The Space and Missile System Center, Los Angeles Air Force Base, California, is the contracting activity.
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About this Newsletter

From Wolters Kluwer Legal & Regulatory's Government Contracts editors, here are summaries of the important recent developments in this practice area. Complete coverage of these issues, and more, appears in Government Contracts Reports, the Government Contracts Reporter, and related CCH products.



Complimentary Whitepaper:
Summary of various agency government contracts-related rules issued since January 1, 2018


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Federal Acquisition Regulation (FAR) & Department of Defense FAR Supplement (DFARS), July, 2018 Combo