• District Court Enjoins Debarment Decision
• Cost Reduction Removed Contractor's Pension Surplus Liability
• Failure to Take Cost Savings into Account Was Improper

• DHS Issues Guidelines for Prohibiting Awards to Felons
• Proposed Rule Intended to Prevent Personal Conflicts of Interest

• Propulsion Components - $249 Million
• Aviation Fuel - $118 Million

Report Examines Contractors Supporting Governmental Functions

A November 20, 2009, Government Accountability Office report entitled “Further Actions Needed to Address Weaknesses in DOD's Management of Professional and Management Support Contracts” (http://www.gao.gov/cgi-bin/getrpt?GAO-10-39) finds Department of Defense policies do not require assessments of the risks associated with contractors closely supporting inherently governmental functions at key points in the acquisition process. According to the GAO, DoD's failure to consider these risks when approving acquisition strategies or issuing task orders could lead to the loss of government control over mission-related policy and program decisions.

The report also concludes DoD faces challenges in defining requirements and outcome-based measures when using a performance-based approach to acquire professional and management services. GAO found in its review that DoD stated task order requirements in terms of a broad range of activities that contractors may perform, but used standards and measures that were not always well-suited to assess outcomes. Although objective measures were widely used to assess cost and schedule performance, subjective measures were generally used to assess the quality of the contractors’ work. The report also cites concerns with DoD's progress in ensuring trained surveillance personnel are assigned to monitor contract performance.

District Court Enjoins Debarment Decision

The District Court for the District of Columbia preliminarily enjoined a debarment decision because the debarring official's rationale for the decision was likely flawed and the plaintiff established he would suffer some degree of irreparable harm. The court found the two most important factors for interim injunctive relief were present. First, the plaintiff was likely to succeed on the merits of his complaint, and second, if he were to succeed on the merits but could not obtain other government contracts, the plaintiff would be unable to recoup lost income. (Alf v. Donley, et al., DC DofC, 53 CCF ¶79,197) [full story]

Cost Reduction Removed Contractor's Pension Surplus Liability

A contractor’s motion for summary judgment on the government’s claim for surplus pension assets arising from closed business segments was granted by the Court of Federal Claims because the government received cost reductions that exceeded the contractor’s payment obligations under Cost Accounting Standard 413-50. The Credits provision at FAR 31.201-5 does not require double payment where the seller’s segment closing payment obligation is satisfied by the cost reduction the government received under its contracts with the buyer due to the pension asset surplus transferred by the segment seller. (DIRECTV Group, Inc. v. U.S., FedCl, 53 CCF ¶79,195) [full story]

Failure to Take Cost Savings into Account Was Improper

A technical evaluation and source selection decision were unreasonable because the government failed to fully account for the cost savings from a protester's network provider discounts, as required by the solicitation. The Comptroller General recommended the government reevaluate the proposals, and if the awardee's proposal did not represent the best value, terminate the awardee's contract for convenience and make a new award. (Humana Military Healthcare Services, 24 CGEN ¶112,959) [full story]

DHS Issues Guidelines for Prohibiting Awards to Felons

The Department of Homeland Security has issued a final rule amending the Homeland Security Acquisition Regulation to establish guidelines for prohibiting awards of Federal Protective Service contracts for guard services to business concerns controlled by individuals convicted of serious felonies. The rule, which implements provisions of the Federal Protective Service Guard Contracting Reform Act of 2008, defines serious felonies as those which cast doubt on the integrity or business ethics of a business concern, or are of a nature inconsistent with the mission of FPS. For the text of the rule, which goes into effect December 16, 2009, see ¶72,300.12. [full story]

Proposed Rule Intended to Prevent Personal Conflicts of Interest

A proposed rule to the Federal Acquisition Regulation addresses personal conflicts of interest for contractor employees performing acquisition functions. The rule implements the requirements of Section 841(a) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (PL 110-417), which requires the Office of Federal Procurement Policy to develop policy to prevent personal conflicts of interest by contractor employees performing acquisition functions closely associated with inherently governmental functions for or on behalf of a federal agency or department. Comments on the rule are due by January 12, 2010. The text of the proposed rule appears at ¶70,006.237. [full story]

Propulsion Components - $249 Million.

Bechtel Plant Machinery, Inc., Monroeville, Pa., is being awarded a $248,787,610 modification to previously awarded contract for naval nuclear propulsion components. The Naval Sea Systems Command, Washington, D.C., is the contracting activity. [full story]

Aviation Fuel - $118 Million.

Valero Marketing & Supply Co., San Antonio, Texas is being awarded a maximum $118,035,840 fixed-price with economic price adjustment, indefinite-delivery and indefinite-quantity contract for aviation turbine fuel. The date of performance completion is October 31, 2010, and the contracting activity is the Defense Energy Support Center, Fort Belvoir, Va. [full story]

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