Government Contracts Update
News for the Week of September 17, 2018


Hot Topic:
FAC 2005-100 Issued with Three Final Rules
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued Federal Acquisition Circular 2005-100, which contains three final rules amending the Federal Acquisition Regulation: Item I—Paid Sick Leave for Federal Contractors (FAR Case 2017-001); Item II—Non-Retaliation for Disclosure of Compensation Information (FAR 2016-007); and Item III—Technical Amendments. The rules went into effect on August 22, 2018.

The interim rule in FAR Case 2017-001, issued in FAC 2005-93, has been finalized without change. The interim rule amended the FAR to implement Executive Order 13706 and a September 30, 2016, Department of Labor final rule, both entitled "Establishing Paid Sick Leave for Federal Contractors."

The E.O. sought to increase efficiency and cost savings in work performed by contractors by ensuring their employees can earn up to seven days or more of paid sick leave annually, including paid sick leave for family care.

The interim rule required contractors to allow all employees performing work on or in connection with a contract covered by the E.O. to accrue and use paid sick leave in accordance with E.O. 13706 and 29 CFR Part 13. Specifically, the rule added new FAR Subpart 22.21 to prescribe policies and procedures that implement these requirements.

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Regulatory News:
DoD Removes Requirement for Technical Interchange on IR&D Costs
The Department of Defense has removed from the Defense Federal Acquisition Regulation Supplement a requirement for major contractors to have a technical interchange with the government prior to generating independent research and development costs. The final rule (DFARS Case 2017-D041) removes the text at DFARS 231.205-18(c)(iii)(C)(4). This requirement caused contractors to expend time preparing for a discussion, contacting appropriate government personnel, and discussing the IR&D project.
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Rule Repeals DFARS Contractor Employee Clause
A final rule (DFARS Case 2018-D042) removes the clause at DFARS 252.247-7006, Removal of Contractor's Employees, and the associated prescription at DFARS 247.270-4. The clause served as an agreement from the contractor to use only experienced, responsible, and capable people to perform the work under stevedoring contracts. The information conveyed in DFARS 252.247-7006 was directly related to performance of the work under a stevedoring contract.
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Amendments to CBCA Rules Finalized
The General Services Administration has issued a final rule amending the rules of procedure for the Civilian Board of Contract Appeals for cases arising under the Contract Disputes Act (41 USC 7101 – 7109). The amendments simplify and modernize access to the board by establishing a preference for electronic filing, increasing conformity between the board's rules and the Federal Rules of Civil Procedure, streamlining the wording of the rules, and clarifying current rules and practices.
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2019 Contractor Minimum Wage Increased to $10.60
The Department of Labor has announced the 2019 minimum wage rate for contracts covered by Executive Order 13658, Establishing a Minimum Wage for Contractors. For 2019, the minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will rise to $10.60 per hour. The required minimum cash wage for covered tipped employees will remain at $7.40 per hour.
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Legal News:
Government Ordered to Amend Five-Year-Old Solicitation
The Court of Federal Claims issued an injunction ordering the government to amend a 2013 solicitation for base operations services because the government's requirements to support military installations on Guam had markedly changed, triggering the obligation under FAR 15.206(a) to amend. The protester contended the reevaluation was unreasonable for failing to consider the current circumstances in Guam and not taking into account the significant increase in operations requirements since 2013 and the bridge contracts, which the protester performed. (DZSP 21, LLC v. U.S., et al., FedCl, 62 CCF ¶81,451)
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Injunctive Relief Did Not Preclude Award of Protester's Costs
A prevailing protester was entitled to both injunctive relief and bid preparation and proposal costs, according to the Court of Federal Claims, because a latently ambiguous solicitation provision induced the protester to prepare and submit a proposal, and a solicitation amendment prevented the protester from competing for the award. The court previously found the protester's removal from the competitive range and the award of a task order for pharmacy automation equipment were arbitrary, and it enjoined the government from proceeding with the award and making any award without amending the solicitation to clarify the meaning of two requirements. (ARxIUM, Inc. v. U.S., et al., FedCl, 62 CCF ¶81,454)
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Release of Claims Was Executed Under Duress and Unenforceable
A release was unenforceable, according to the Armed Services Board of Contract Appeals, because the contractor executed it under duress. The contractor submitted a $1,023,898 settlement proposal, but at a subsequent meeting to discuss the settlement, the CO offered $350,000, then $375,000, and told the contractor's lawyer that $375,000 was "take it or leave it" and if the contractor did not "take it" she would terminate the contract for default. Because the contractor was effectively out of business and its equipment and the president's home were about to be sold to pay creditors, the contractor had no other alternative but to accept the government's terms. (North American Landscaping, Construction and Dredge, Co., ASBCA, ¶95,550)
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Set-Aside Decision Was Based on Incomplete Information
A protest of the government's failure to set aside two contract line items for small businesses was sustained because the decision was based on flawed market research and a misapplication of the nonmanufacturer rule. The Comptroller General deferred to the Small Business Administration, which confirmed the nonmanufacturer rule did not apply to the two CLINs and that each of them was subject to the traditional FAR 19.502-2 Rule of Two analysis. (AeroSage, LLC, 33 CGEN ¶116,078)
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Major Contract Awards:
Research and Development — $28 Billion
Ten contractors have each been awarded a maximum $28,000,000,000 indefinite-delivery/indefinite-quantity, multiple award research and development contract for the competed Information Analysis Center multiple award contract for Department of Defense Information Analysis Center Program Management Office sponsored by Defense Technical Information Center. Air Force Installation Contracting Agency/KD, Offutt Air Force Base, Nebraska, is the contracting activity.
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Information Technology Services and Solutions — $17.5 Billion
Twenty contractors were awarded a suite of multiple award indefinite-delivery/indefinite-quantity contracts for providing a full range of information technology services and solutions required by Defense Information Systems Agency, the Department of Defense and other agencies of the federal government. The total cumulative face value of the contracts is $17,500,000,000 (cumulative ceiling amount) for all ID/IQ contracts issued in both the full and open and small business set aside suites combined. The Defense Information Technology Contracting Organization, Scott Air Force Base, Illinois, is the contracting activity.
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Ammunition — $1.85 Billion
Alliant Techsystems Operations LLC, Plymouth, Minnesota; and General Dynamics Ordnance and Tactical Systems, Marion, Illinois, will compete for each order of the $1,850,000,000 fixed-price with economic-price-adjustment contract for the procurement of 20 mm, 25mm, 30x113mm, and 30x173mm medium caliber ammunition. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity.
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A-29 Aircraft Support — $1.8 Billion
Sierra Nevada Corp., Centennial, Colorado, has been awarded a ceiling $1,808,000,000 indefinite-delivery/indefinite quantity contract for potential procurement, sustainment, modifications, ferry, and related equipment for the A-29. This contract involves foreign military sales to Afghanistan. The contracting activity is the Air Force Life Cycle Management Center, Wright-Patterson Air Force Base, Ohio.
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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


Complimentary Whitepaper!


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