Government Contracts Update
News for the Week of March 4, 2019


Hot Topic:
E.O. Stresses Domestic Preferences for Infrastructure Projects
Executive Order 13858, Strengthening Buy-American Preferences for Infrastructure Projects, requires executive agencies to encourage recipients of new federal financial assistance awards pursuant to a covered program to use, to the greatest extent practicable, iron and aluminum, as well as steel, cement, and other manufactured products produced in the United States in every contract, subcontract, and purchase order.

A "covered program" is any program for which a focus of the statutory authorities under which it is administered is the award of federal financial assistance for the alteration, construction, conversion, demolition, extension, improvement, maintenance, reconstruction, rehabilitation, or repair of an infrastructure project in the U.S.
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Regulatory News:
GSA Repeals Its Mentor-Protégé Program
A direct final rule amends the General Services Administration Acquisition Regulation to remove coverage on GSA's Mentor-Protégé Program and associated clauses that duplicate the Small Business Administration's governmentwide Mentor-Protégé program. To repeal the regulations implementing the GSA Mentor-Protégé Program and transition contractors to the governmentwide mentor-protégé program, this direct final rule removes GSAR Subpart 519.70, and the clauses at GSAR 552.219-75 and GSAR 552.219-76.
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Navy Rules Remove Obsolete Acquisition Regulations
The Department of the Navy has issued three final rules amending the Navy Federal Acquisition Regulation Supplement. The rules remove three parts of the NARS that have been superseded by existing FAR and Department of Defense FARS guidance. The first rule (¶70,027.19) removes NARS Part 5215, Contracting by Negotiation.
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Proposed Rule Continues VAAR Streamlining
A proposed rule would amend the Department of Veterans Affairs Acquisition Regulation to revise VAAR Part 806, Competition Requirements. In particular, the rule would add a definition provision at VAAR 806.004-70; add VAAR Subparts 806.1, Full and Open Competition, and 806.2, Full and Open Competition After Exclusion of Sources; and revise VAAR Subparts 806.3, Other Than Full and Open Competition, and 806.5, Competition Advocates.
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DoD Class Deviation Addresses Acquisitions of Magnets, Tungsten
The Department of Defense has issued Class Deviation 2019-O0006, Restriction on Acquisition of Certain Magnets and Tungsten. The deviation, which adds new DFARS 225.7018 and a new clause, DFARS 252.225-7978, implements section 871 of the National Defense Authorization Act for Fiscal Year 2019 (PL 115-232), which generally prohibits the acquisition of any covered material melted or produced in a covered country or any end item that contains a covered material manufactured in a covered country.
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Legal News:
Arbitrator's Disregard of FAR Passthrough Provisions Was Irrational
The Court of Appeals for the Ninth Circuit affirmed a district court's order vacating an arbitration award because, by concluding the local Afghanistan subcontractor was not required to comply with the Federal Acquisition Regulation clauses incorporated in the subcontracts, the award was irrational and the arbitrator exceeded his authority. The award was irrational because it directly conflicted with the subcontracts' FAR-related provisions, without evidence of the parties' past practices deviating from them, to achieve a desired result. (Aspic Engineering and Construction Co. v. ECC Centcom Constructors LLC, et al., CA-9, 63 CCF ¶81,576)
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Professional Compensation Evaluation Provision Misinterpreted
The Court of Federal Claims sustained a pre-award protest of the government's decision to not conduct a realism analysis of professional compensation rates because the decision was inconsistent with the solicitation's FAR 52.222-46 professional compensation evaluation provision. The government could not disavow a mandatory RFQ provision through contrary statements or claims of differences in interpretation. (Sparksoft Corp. v. U.S., et al., FedCl, 63 CCF ¶81,580)
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Government Not Permitted to Unilaterally Change Contract Terms
The Armed Services Board of Contract Appeals summarily sustained an appeal seeking allowable costs, plus a reasonable profit, because the government had no right to unilaterally change the terms of the contract's award option plan. The contract included an award-option plan, which provided the contractor was eligible for an award-option for an associated performance period if it earned an end-of-performance rating of "very good" or "exceptional." (Fluor Federal Solutions, LLC, ASBCA, ¶95,671)
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CO's Organizational Conflict of Interest Findings Unsupported
A protest of a task order award for charter schools program support was sustained because the government's organizational conflict of interest analysis was unreasonable. The awardee's subcontractor was performing a related monitoring and data collection contract. The subcontractor had substantial involvement in the monitoring processes under its contract that would lead, eventually, to technical assistance services being provided to grantees under the awarded task order. (Safal Partners, Inc., 34 CGEN ¶116,262)
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Major Contract Awards:
Ship Maintenance — $407 Million
Three contractors were each awarded firm-fixed-price modifications to exercise options for complex, emergent, and continuous maintenance and Chief of Naval Operations availabilities on amphibious ships. Each company will have the opportunity to provide offers for individual delivery orders, with an estimated cumulative combined value of $406,853,897. The Southwest Regional Maintenance Center, San Diego, California, is the contracting activity.
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Aviation Radio Suite — $406 Million
The Raytheon Co., Fort Wayne, Indiana, was awarded a $406,280,000 hybrid (cost, cost-plus-fixed-fee, firm-fixed-price and fixed-price-incentive) contract for AN/ARC-231 Multiple-Mode Aviation Radio Suite, hardware components, repair services, technical, engineering and logistical support services. U.S. Army Contracting Command, Aberdeen Proving Ground, Maryland, is the contracting activity.
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AH-1Z Helicopters — $240 Million
Bell Helicopter Textron Inc., Fort Worth, Texas, was awarded $240,266,448 for a modification to a previously awarded fixed-price-incentive contract for the manufacture and delivery of 12 Lot 16 AH-1Z aircraft for the kingdom of Bahrain under the Foreign Military Sales program. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity.
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APKWS II Weapon System — $225 Million
BAE Systems Information and Electronic Systems Integration Inc., Hudson, New Hampshire, is awarded $225,034,247 for firm-fixed-price delivery order against a previously awarded indefinite-delivery/indefinite-quantity contract to procure 9,999 additional Lot 7, full-rate production units of the Advanced Precision Kill Weapon System II. The Naval Air Systems Command, Patuxent River, Maryland, 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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