Government Contracts Update
News for the Week of December 10, 2018

Hot Topic:
FAR Council Previews Upcoming Rules
The Department of Defense, General Services Administration, and National Aeronautics and Space Administration have issued a semiannual regulatory agenda for the Federal Acquisition Regulation.

The agenda provides summary descriptions of regulations being developed by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council. The agenda shows 33 rules in the proposed stage, 9 rules in the final stage, and 7 completed actions. The rules in the proposed stage include:
  • FAR Case 2015-021, which would direct ordering activity contracting officers to make a determination of fair and reasonable pricing when placing an order against GSA's Federal Supply Schedules;
  • FAR Case 2017-005, which would implement 41 USC 4712, Enhancement of contractor protection from reprisal for disclosure of certain information, and make a 2013 whistleblower protection pilot program permanent;
  • FAR Case 2016-002, which would implement SBA 125.2 and a 2013 Small Business Administration final rule to clarify that overseas contracting is not excluded from agency responsibilities to foster small business participation; and
  • FAR Case 2016-011, which would revise and standardize the limitations on subcontracting, including the nonmanufacturer rule, that apply to small business concerns under FAR Part 19 procurements.
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Regulatory News:
GSA Proposes Guidance on Construction Manager as Constructor
A proposed rule would amend the General Services Administration Acquisition Regulation to adopt an additional project delivery method for construction, construction manager as constructor. The rule would revise sections of GSAR Part 536, Construction and Architect-Engineer Contracts. This delivery method engages the construction contractor during the design phase of the project and establishes a ceiling on the eventual construction price before construction documents are prepared.
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Rule Removes GSAR Guidance That Duplicates FAR
A direct final rule amends the General Services Administration Acquisition Regulation to remove duplicative text already contained in the Federal Acquisition Regulation. Both GSAR 509.105-1(b) and FAR 9.105(b) provide guidance for obtaining information from government sources for a responsibility determination of potential contractors. GSAR 509.105-1(b) simply paraphrases FAR 9.105-1(b) as it restates that a contracting officer should obtain information regarding a contractor's responsibility through "any appropriate activities."
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Legal News:
Without Notice, Contractor Entitled to Withheld Costs
A contractor was granted partial summary judgment on its claim the government arbitrarily withheld subcontractor labor costs because, according to the Court of Federal Claims, the government failed to provide the required notice of its intent to disallow the costs. The government asserted it gave notice when it notified the contractor "in writing through the invoice review process that supporting data to facilitate [the government's] determination of cost allowability ... was required." However, this writing did not convey the government intended to disallow costs, as required by DEAR 942.803. (CB&I Areva Mox Services, LLC v. U.S., FedCl, 62 CCF ¶81,518)
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Dissolved LLC Had Standing to Pursue Appeal
A dissolved limited liability company had standing to appeal a termination for cause because, according to the Armed Services Board of Contract Appeals, under state law the company continued to exist with the power to prosecute or defend proceedings. The government's argument that the contractor could not perform after its dissolution pertained to the merits of the dispute and not to the issue of standing. (Bulova Technologies Ordnance Systems LLC, ASBCA, ¶95,617)
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Responsibility for Performance Problems Never Resolved
The Comptroller General sustained a protest of a task order award for information technology infrastructure services because the evaluation under the organizational experience factor was inadequately documented and unreasonable. Moreover, the evaluation under the qualifications factor was unreasonable. (Ekagra Software Technologies, Ltd., 33 CGEN ¶116,169)
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Government Didn't Document Staffing Evaluation
The Comptroller General sustained a protest of a contract award for dense wavelength digital multiplexing fiber services because the contemporaneous record contained no evidence showing the government considered the awardee's proposed staffing. The evaluation report contained no discussion at all of the awardee's proposed staffing. The evaluation simply concluded, without explanation, that the awardee's proposal was acceptable. (AOC Connect, LLC, 33 CGEN ¶116,178)
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Major Contract Awards:
F-35 Aircraft — $22.7 Billion
Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $22,712,874,822 not-to-exceed undefinitized contract modification to a previously awarded fixed-price-incentive-firm-target, firm-fixed-price advanced acquisition contract for 255 aircraft. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.
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Marketing and Advertising Program Support — $4 Billion
DDB Chicago Inc., Chicago, Illinois, was awarded a $4,000,000,000 hybrid (cost, cost-plus-award-fee, cost-plus-fixed-fee, and firm-fixed-price) contract for services in support of the U.S. Army Marketing and Advertising Program. U.S. Army Mission and Installation Contracting Command, Fort Knox, Kentucky, is the contracting activity.
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Software Licenses— $3.2 Billion
Six contractors were awarded multiple-award, firm-fixed-price blanket purchase agreements in accordance with a General Services Administration Federal Supply Schedule contract. The overall estimated value of this BPA is $3,170,000,000. This agreement will provide commercially available Microsoft brand name perpetual software licenses and annual subscriptions. The Space and Naval Warfare Systems Center Pacific, San Diego, California, is the contracting activity.
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Vehicles and Kits — $1.7 Billion
Oshkosh Defense LLC, Oshkosh, Wisconsin, was awarded a $1,698,639,588 modification to a contract to exercise available options for 6,107 vehicles and 22,166 kits. U.S. Army Contracting Command, Warren, Michigan, 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 select 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