• Documentation Sufficient to Allocate Costs to Contract
• Contractor Was Seeking Interpretation, Not Specific Performance
• CO Did Not Consider Potential Unfair Competitive Advantage

• DoD Finalizes Five Interim Rules
• DoD Rule Addresses Government Rights in Vessel Designs
• Rule Adds Taiwan to DFARS List of WTO Designated Countries
• Proposed ITAR Rules Address Technical Data, Transfer Programs

• Engine Installation - $1.72 Billion
• Airborne Electronic Attack Kits - $386 Million
• Aircraft Tooling and Equipment - $329 Million
• Facilities Support - $322 Million
• Light Utility Helicopters - $247 Million

Executive Order Targets Improper Government Payments

President Obama has issued Executive Order 13520, Reducing Improper Payments, which seeks "to reduce improper payments by intensifying efforts to eliminate payment error, waste, fraud, and abuse in the major programs administered by the Federal Government." The November 20, 2009, order creates a number of new policies.

The order assigns the Director of the Office of Management and Budget the tasks of identifying the federal programs in which the highest dollar value or majority of government-wide improper payments occur, establishing targets for reducing improper payments associated with each high-priority program, and issuing government-wide guidance on the implementation of the order.

In addition, the Secretary of the Treasury must publish on the Internet information about improper payments under the high-priority programs. The information must include the names of the accountable officials, current and historical rates and amounts of improper payments, causes of the improper payments, current and historical rates and amounts of recovery of improper payments, targets for reducing and recovering improper payments, and the entities that have received the greatest amount of outstanding improper payments.

The Secretary is also directed to establish an Internet-based method for collecting information concerning improper payments from the public.

The order also instructs agencies to designate an official who holds an existing Senate-confirmed position to be accountable for meeting the targets for reducing improper payments. Thereafter, the official must submit to the agency's Inspector General a report containing the methodology for identifying and measuring improper payments in the high-priority programs and the plans for meeting the reduction targets. If the targets are not met, the official must prepare a remedial plan.

Agencies also must submit a publicly available report outlining high-dollar improper payments they have identified. The report must describe any actions an agency has taken or plans to take to recover improper payments, as well as any actions it intends to take to prevent improper payments from occurring in the future.

A section that directly impacts contractors requires the Federal Acquisition Regulatory Council to recommend to the President actions designed to enhance contractor accountability for improper payments. The consequences for knowingly failing to disclose in a timely manner credible evidence of significant overpayments received on a government contract may include debarment, suspension, financial penalties, and identification through a public Internet website.

Documentation Sufficient to Allocate Costs to Contract

The Armed Services Board of Contract Appeals sustained an appeal of the government's disallowance of labor and transportation costs because the contractor met its burden of proof regarding allocability. The testimony presented by the contractor, which was credible and supported by contemporaneous documentation and prior declarations, constituted a "robust" prima facie case supporting allocability, which the contracting officer's confused and counterintuitive testimony, the government's dismissive characterizations of the costs, and a successor CO's post-trial analysis did not overcome. (BearingPoint, Inc., ASBCA, ¶92,723) [full story]

Contractor Was Seeking Interpretation, Not Specific Performance

A motion to dismiss an appeal involving a government decision to preclude a contractor from receiving further task orders was denied by the Armed Services Board of Contract Appeals because the contractor asserted a contract interpretation claim. The issue of the proper interpretation of the Small Business Administration mentor-protégé clause was at the core of the parties' dispute, and the contract's Disputes clause provided for Contract Disputes Act jurisdiction over claims seeking the adjustment or interpretation of contract terms. (^HMRTECH2, LLC, ASBCA, ¶92,721) [full story]

CO Did Not Consider Potential Unfair Competitive Advantage

A contract award for managed care support services was tainted by the appearance of impropriety because the government never considered whether the facts surrounding the awardee's use of a former government official to prepare its proposal created an unfair competitive advantage. The Comptroller General sustained the protest, finding the former official had access to the protester's non-public proprietary information and the contracting officer never considered the appearance of impropriety, as required by FAR 3.101-1. The protest was also sustained with respect to the past performance evaluation, the realism evaluation of the awardee's price/cost proposal, and the government's failure to consider the protester's proposed provider network discounts in the final selection decision. (Health Net Federal Services, LLC, 24 CGEN ¶112,966) [full story]

DoD Finalizes Five Interim Rules

The Department of Defense has finalized, without change, five interim rules amending the Defense Federal Acquisition Regulation Supplement: Competition Requirements for Purchases from Federal Prison Industries (DFARS Case 2008-D015); Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority (DFARS Case 2008-D030); Senior DoD Officials Seeking Employment with Defense Contractors (DFARS Case 2008-D007); Steel for Military Construction Projects (DFARS Case 2008-D038); and Whistleblower Protections for Contractor Employees (DFARS Case 2008-D012). All of the final rules carry an effective date of November 19, 2009. For the text of the rules, see ¶70,016.541 through ¶70,016.544 and ¶70,016.546. [full story]

DoD Rule Addresses Government Rights in Vessel Designs

The Department of Defense has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement to implement Section 825 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (PL 110-417) and the Vessel Hull Design Protection Amendments of 2008 (PL 110-434). Both statutory changes provide new requirements for the acquisition of vessels and hulls covered by vessel hull design registrations. The interim rule is effective November 23, 2009. Comments are due January 22, 2010. For the text of the rule, see ¶70,016.547. [full story]

Rule Adds Taiwan to DFARS List of WTO Designated Countries

A Department of Defense interim rule amends the Defense Federal Acquisition Regulation Supplement to add Taiwan to the list of World Trade Organization Government Procurement Agreement designated countries. The rule amends the trade agreements provisions and clauses at DFARS 252.225-7021 and DFARS 252.225-7045. Comments are due January 22, 2010. For the text of the interim rule, which carries a November 23, 2009, effective date, see ¶70,016.548. [full story]

Proposed ITAR Rules Address Technical Data, Transfer Programs

The Department of State has issued two proposed rules that would amend the International Traffic in Arms Regulations. The first addresses the exemption for technical data at ITAR 125.4(b)(9), while the second concerns government transfer programs and exports involving foreign-owned military aircraft and naval vessels. Comments on each rule are due January 25, 2010. For the text of the proposed rules, see ¶70,450.04 and ¶70,450.05. [full story]

Engine Installation - $1.72 Billion

United Technologies Corp., East Hartford, Conn., was awarded a $1,722,906,899 contract which provides F117-PW-100 installation of engines, spare engines and associated data for the C-17 aircraft. 577 AESG/PK, Wright-Patterson Air Force Base, Ohio, is the contracting activity. [full story]

Airborne Electronic Attack Kits - $386 Million

McDonnell Douglas Corp., a wholly owned subsidiary of The Boeing Co., St. Louis, Mo., is being awarded a $386,046,463 modification to a previously awarded firm-fixed-price contract for the procurement of 22 EA-18G Lot 33 Full Rate Production (FRP) airborne electronic attack (AEA) kits, 22 EA-18G Lot 34 FRP AEA kits, and the associated non-recurring engineering. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity. [full story]

Aircraft Tooling and Equipment - $329 Million

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $329,400,000 modification to the previously awarded Joint Strike Fighter air system low rate initial production Lot III cost-plus-incentive-fee/award-fee contract for special tooling and special test equipment. The Naval Air Systems Command, Patuxent River, Md. is the contracting activity. [full story]

Facilities Support - $322 Million

General Dynamics Information Technology, Fairfax, Va., was awarded on November 23, 2009 a $322,111,129 cost-plus-fixed-fee contract to provide initial outfitting and transition services to support one new military medical facility, and the new additions and newly renovated spaces at one military facility in the National Capitol Region. U.S. Army Medical Research Acquisition Activity, Fort Detrick, Md., is the contracting activity. [full story]

Light Utility Helicopters - $247 Million

EADS North American Defense, Arlington, Va., was awarded on December 1, 2009, a $247,242,722 firm-fixed-price contract. This contract is for the funding of program year 2005 of the Army's Light Utility Helicopter program for 45 light utility helicopters (UH-72A), 30 medical evacuation (MEDEVAC) mission equipment packages, 30 MEDEVAC B-kits, 30 hoist B-kits, four very important personnel mission equipment packages, 11 engine inlet barrier filters, 34 environmental control units, and 45 airborne radio communication 231s. U.S. Army Aviation & Missile Command, CCAM-BH-C, Redstone Arsenal, Ala., is the contracting activity. [full story]

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