Government Contracts Update
News for the Week of November 20, 2017


Hot Topic:
FAC 2005-96 Rescinds Fair Pay and Safe Workplaces Rule
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued Federal Acquisition Circular 2005-96, which contains one final rule, Removal of Fair Pay and Safe Workplaces Rule (FAR Case 2017-015).

Executive Order 13782, Revocation of Federal Contracting Executive Orders, dated March 27, 2017, rescinded the prior executive orders authorizing the rule.

E.O. 13673, Fair Pay and Safe Workplaces, directed the Federal Acquisition Regulatory Council to amend the FAR consistent with the order's requirements and directed the Secretary of Labor to develop guidance to assist agencies in implementing the order.

The final rule removes FAR Subpart 22.20, Fair Pay and Safe Workforces and related contract clauses and solicitation provisions. By statute, the prior rule is treated as if it had never taken effect, and clauses created by the rule are unenforceable, even if they were included in a contract.

The new rule directs contracting officers to modify, to the maximum extent practicable, existing contracts to remove any solicitation provisions and contract clauses related to the prior rule.

This final rule went into effect on November 6, 2017, and it applies to solicitations issued and contracts awarded before, on, or after the October 25, 2016, effective date of the rescinded rule.
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Legal News:
Government Imposed Unnecessary Construction Delays and Costs
The Court of Federal Claims awarded a construction contractor 116 days of compensable delay and $418,962 in damages because the government improperly attempted to shift responsibility for obtaining electrical service to the contractor. The government was the sole cause of the delay because it failed to obtain necessary easements, unreasonably attempted to shift responsibility for executing a line extension agreement to the contractor, engaged in misleading discussions with the utility, and failed to cooperate with the contractor. (MW Builders, Inc. v. U.S., FedCl, 61 CCF ¶81,254)
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Government Breached Duty to Disclose Superior Knowledge
A construction contractor was entitled to excusable delay, according to the Civilian Board of Contract Appeals, because the government withheld superior knowledge regarding possible difficulties in securing permits. The dispute arose from a firm-fixed-price contract to design and build a consulate compound in India. According to the contractor, the government failed to disclose prior to award the government's knowledge that India sought to gain leverage in a lawsuit filed by the state of New York regarding real property taxes, and in a dispute involving the government's own outstanding property tax bills in India, by blocking construction permits for the project. (Yates-Desbuild JV v. Dept. of State, CBCA, ¶95,304)
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Appeal from Default Termination Was Sustained
A termination for default was converted to one for the government's convenience by the Armed Services Board of Contract Appeals because the government waived the original delivery date and did not establish a new one, and it failed to establish the contractor did not comply with contract requirements. The dispute arose from a commercial item supply contract for the delivery of jet fuel from the contractor's facility to an air base in Afghanistan via a contractor-owned and operated pipeline. The government did not meet its initial burden to demonstrate a prima facie case of the contractor's default. (Asia Commerce Network, ASBCA, ¶95,306)
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Awardee Required Arbitration Agreements for New Hires
The Comptroller General sustained a protest of a task order award for the operation of the Navy's towed array facility because the government never considered whether the awardee violated the statutory prohibition on the use of mandatory arbitration agreements. The record showed the awardee proposed four key employees as contingent hires. Each of them executed a letter of intent agreeing to accept employment with the awardee, and each of the letters expressly conditioned the individual's employment on the execution of an arbitration agreement. (L3 Unidyne, Inc., 32 CGEN ¶115,720)
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Major Contract Awards:
IT Services and Solutions — $17.5 Billion
Nineteen contractors were awarded a suite of not-to-exceed multiple award indefinite-delivery/indefinite-quantity contracts for providing a full range of information technology services and solutions required by the Defense Information Systems Agency, the Department of Defense, and other agencies. The total cumulative face value of the contracts is $17,500,000,000. The Defense Information Technology Contracting Organization, Scott Air Force Base, Illinois, is the contracting activity.
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R&D — $8.3 Billion
Multiple contractors will share in an $8,276,161,000 hybrid (cost, cost-plus-fixed-fee, cost-plus-incentive-fee, firm-fixed-price, fixed-price-incentive, and fixed-price-redetermination) contract for Joint Enterprise Research, Development, Acquisition and Production and Procurement program to support research and development of chemical, biological, radiological, nuclear, and high-yield explosives defense systems, capabilities, equipment, supplies and material. U.S. Army Contracting Command, Natick, Massachusetts, is the contracting activity.
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Training Support — $2.9 Billion
Raytheon Co., Orlando, Florida, has been awarded a $2,870,000,000 hybrid (cost, fixed-price-award-fee, time-and-materials, cost-plus-fixed-fee and firm-fixed-fee) contract for performance-based services supporting the Army, combatant commanders, and other Department of Defense customers by providing integrated, life cycle contractor support and services for training aids, devices, simulators and simulations. U.S. Army Contracting Command, Orlando, Florida, is the contracting activity.
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Aircraft Engines — $643 Million
General Electric, Cincinnati, Ohio, has been awarded a $643,000,000 indefinite-delivery/indefinite-quantity undefinitized contract action to provide F110-GE-129 install engines, spare engines, modernized engine monitoring system computers, over-and-above repair for government furnished property, and technical data reports. Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio, is the contracting activity.
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Fuel — $605 Million
Defense Logistics Agency Awards $605 Million Fuel Contract. BP Products North America Inc., Chicago, Illinois, has been awarded an estimated $604,895,386 fixed-price with economic-price-adjustment contract for various types of fuel. The contracting agency is the Defense Logistics Agency Energy, Fort Belvoir, Virginia.
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Reentry System Support — $386 Million
Lockheed Martin Space Systems Co., King of Prussia, Pennsylvania, has been awarded a $386,000,000 indefinite-delivery/indefinite-quantity modification to a previously awarded contract for reentry system/reentry vehicles subsystem support. Air Force Nuclear Weapons Center, Hill Air Force Base, Utah, 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.



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Federal Acquisition Regulation (FAR) & Department of Defense FAR Supplement (DFARS), July 2017 Combo