ISM-FASMG member Charles Rumbaugh's Regulatory Update provides general insight into timely issues facing the purchasing professional and stimulates further discussion. These updates are not intended as legal advice and you should consult your own attorney before applying any item below to a specific situation or real transaction.

CHARLES E. RUMBAUGH
Arbitrator and Mediator

Tel: 310.373.1981
Fax: 310.373.4182
Toll Free: 888-ADROffice
E-mail: ADROffice@Rumbaugh.net

PO Box 2636
Rolling Hills, California 90274

PO Box 2095
Burlingame, California 94011

9 April 2001

Recent Regulatory Matters that may be of interest since the last Update include --

OFFICE OF MANAGEMENT AND BUDGET (OMB) TO REVIEW “INHERENTLY GOVERNMENTAL” TASKS. It has been reported that OMB Deputy Director Sean O’Keefe issued a memorandum on April 3, 2001, directing agency heads that they must submit a list of positions considered inherently governmental -- those that government employees must perform—to his office by June. This list should assist the government, under the Federal Activities and Inventory Reform (FAIR) Act, in ensuring positions are properly characterized as “not” being commercial.

COMMENT: Formal public input during this OMB effort is not expected to be solicited. However, those individuals/groups/organizations that have become “disenchanted” with the FAIR process may see renewed opportunities by this direction. Accordingly, “not” responding to this direction is a non-starter -- within and without the government.

AIR FORCE ISSUES POLICY ON PERFORMANCE-BASED PAYMENTS. On February 26, 2001, the AF Director of Contracting responded to field performance-based payment inquiries as to “whether the FAR limits payments to 90 percent of the performance event price while also limiting payments to 100 percent of the projected cost at that performance event.” In essence the response was that the overall plan must have 10 percent withheld until completion, the FAR does not say that performance-based payments must be less than 100 percent of the projected cost of each item. The following example was provided, “if an acquisition has four performance events with the first event priced at $100, any payment amount between $0-$100 that provided a proper incentive for the contractor to perform can be arranged for that performance event. If the acquisition total price was $1000 in our example, it is necessary to arrange the other performance event payment amounts so that a $100 withhold exists at final delivery.”

COMMENT: Substance wins over form!

Miscellaneous:

Last month’s Update provided a “caution” note on teaming arrangements. The order referenced therein arose out of the US District Court for the Central District of California case of US (ex rel. Richard Bagley) v. TRW, Inc. -- case number CV 95-4153 AHM (AJWx). The Freid, Frank, Harris, Shriver & Jacobson law firm has issued a monograph on the topic, “The Price of Teaming -- It Isn’t B&P Anymore”.

The new/deferred FAR responsibility regulation from the previous Administration requires any/all such certifications (and this includes applicable commercial item clause) be reviewed with local counsel prior to execution. The scope of the “current” so-called “blacklisting” certification has been significantly curtailed (for example, certification on tax, labor and employment, environmental, antitrust or consumer protection laws).

On April 4, 2001, the Director of Defense Procurement issued a memorandum to support contracting personnel in the proper interpretation of this certification requirement <http://www.acq.osd.mil/dp/contresp.pdf> And, on April 6, 2001, an amendment to Executive Order 13202, “PRESERVATION OF OPEN COMPETITION AND GOVERNMENT NEUTRALITY TOWARDS GOVERNMENT CONTRACTORS' LABOR RELATIONS ON FEDERAL AND FEDERALLY FUNDED CONSTRUCTION PROJECTS” was issued.

OMB issued a notice of a public meeting to discuss opportunities to “streamline” FAR Part 31—Cost Principles. The meeting will be held on April 19th at 10:00am in the Auditorium at the General Services Administration, 18th and F Streets, Washington, DC. Directions may be found on the Internet at .

COMMENT: This is an important topic and suggests your participation. For example, in 1993 industry was working a draft document for the Government to replace (most of) the Cost Accounting Standards with GAAP -- ultimately industry could not agree on an approach and nothing was forwarded on CAS to the Government. Given the contractual/legal issues involved with the Cost Principles, other than the “normal” functional areas/disciplines should also participate.

The Air Force is expected to issue interim guidance on interim award fee payments providing interim payments with payment/frequency levels and based upon interim performance assessments.

DoD has posted its Commercial Items Handbook for unofficial comments. The Handbook can be accessed at <http://www.acq.osd.mil/ar/whatsnew.htm>

COMMENT: Earlier Updates addressed the inadequacies of Handbooks in general and this Handbook in particular. These Documents/Guides/Books address policy issues, impact the public/contractors, cover government-wide topics, circumvent the statutory OFPP Act notice/comment process and, now, the current regulatory moratorium.

The Navy recently re-sent a “reminder” that it is looking for candidates for its two phased “Innovative Commercial Contracting Strategies” effort. Input on commercial opportunities are being actively sought in order “to acquire better products and services faster and at lower costs” for the Navy.

GAO (again) recently reported that DFAS makes “too many excess payments and underpayments to contractors.”

A recharter of the Single Process Initiative (SPI) Executive Council is expected under the Department of Defense/Industry Supplier Partnership Executive Council (DISPEC).
COMMENT: The expanded role for subcontractors/small business in this re-energized effort remain to be seen.

A reader provided an excellent index of useful websites -- see attached listing of “Contracts and Export Compliance Internet Sites”

Director of Defense Procurement Deidre Lee asked at a recent meeting for input on potential top regulatory issues for consideration in developing a regulatory agenda. Have any candidates?

Angela Styles will be nominated for the position of OFPP Administrator.

Recent Publications include --

Since 1997 I have been the lead author in various alternative dispute resolution (ADR) notes/columns under the caption of “ADR ‘Tips’” published in the American Arbitration Association Dispute Resolution Times. These short “Tips” provide insight for those new or experienced in the area of ADR. Titles of recent “Tips” include the following -- if you want copies, please let me know:
“How to Make Arbitration Awards ‘Binding’ On Non-Parties”
“How to Manage Arbitrations When There are Thousands of Exhibits”
“When are ‘Corrections’ to Arbitration Awards ‘Permitted’”
“Disclosure Obligations of the Parties to an Arbitration”
“Whose Award Is It?”
“What Is Mediation?”
“Mediator Subject Matter Expertise”
“Party-Appointed Arbitrator”
“Baseball Arbitration I and II -- Or, How to Facilitate Negotiations / Settlements”
“Preliminary Hearings I and II”

© 2001 Charles E. Rumbaugh

Contracts and export compliance Internet Sites

Rev. April 4, 2001

EXPORT and IMPORT COMPLIANCE

Department of Commerce/Export Administration Regulations
Department of Commerce Bureau of Export Administration (BXA) http://www.bxa.doc.gov
Department of Commerce Bureau of Export Administration (site search) http://www.bxa.doc.gov/sitesearch.htm
Department of Commerce Bureau of Export Administration - Newport Beach Office http://www.primenet.com~bxawest
Department of Commerce Bureau of Export Administration – EAR Training Courses http://www.primenet.com/~bxawest/work1.html
Export Administration Regulations (EAR) http://w3.access.gpo.gov/bxa/ear/ear_data.html

Department of State/International Traffic in Arms Regulations
Department of State Export Licensing Forms http://www.pmdtc.org/forms/dlforms.html
Department of State Office of Defense Trade Controls (ODTC) http://www.pmdtc.org/
International Traffic in Arms Regulations (ITAR) http://www.saied.org/indexafree.html
Society for International Affairs (SIA) http://www.saied.org/indexafree.html
Society for International Affairs - ITAR Training Courses http://www.saied.org/events.html

Department of the Treasury
Department of the Treasury Office of Foreign Assets Control (OFAC) http://www.treas.gov/ofac

U.S. Customs Service
U.S. Customs Service http://www.customs.ustreas.gov/

U.S. Laws and Regulations
Code of Federal Regulations http://www.access.gpo.gov/nara/cfr/cfr-table-search.html
Federal Register http://www.access.gpo.gov/su_docs/aces/aces140.html
Thomas Legislative Information http://thomas.loc.gov/

Federal acquisition regulations
FAR (GSA Acquisition Reform Network) http://www.arnet.gov/far/
FAR (USAF FARSite) http://farsite.hill.af.mil/
FAR (Department of Defense) http://www.acq.osd.mil/dp/dars

FEDERAL ACQUISITION REGULATIONS SUPPLEMENTS
DOD FAR Supplement (DFARS) http://www.acq.osd.mil/dp/dars
DoD Grant and Agreement Regulations (DoDGARS) http://web7.whs.osd.mil/html/32106r.htm
Air Force FAR Supplement (AFFARS) http://farsite.hill.af.mil/vfafar1.htm
Army FAR Supplement (AFARS) http://acqnet.sarda.army.mil/library/zpafar.htm
NASA FAR Supplement (NFS) http://www.hq.nasa.gov/office/procurement/regs/nfstoc.htm
Navy Acquisition Procedures Supplement (NAPS) http://www.abm.rda.hq.navy.mil/naps/index.html

Federal Laws and Regulations and miscellaneous resources
Acquisition Reform Network http://www.arnet.gov/

Contains extensive links to acquisition information.
Commerce Business Daily http://cbdnet.access.gpo.gov/index.html
Free version of the Commerce Business Daily.
Cost Estimating Resource Links (hosted by NASA) http://www.jsc.nasa.gov/bu2/resources.html
Cost and Pricing Reference Guides http://www.gsa.gov/staff/v/volumes.htm
Defense Acquisition Deskbook http://web2.deskbook.osd.mil/default.asp
Federal Acquisition Jump Station http://nais.nasa.gov/fedproc/home.html
Provides links to Internet sites for federal procurement information.
Federal Register http://www.access.gpo.gov/su_docs/aces/aces140.html
FedLaw http://fedlaw.gsa.gov/
FedWorld Information Network (Dept. of Commerce) http://www.fedworld.gov/
A “one-stop shop” for locating and ordering government information.
Jane’s Defence Discovery www.defence-discovery.com
Search over 3,000 defense-related sites containing over 2 million documents.
NCMA South Bay Chapter Newsletter and Legislative Update Service http://www.ncmalasb.org/news-regs.htm
National Technical Information Service (Dept. of Commerce) http://www.ntis.gov/about/
Resource for government-funded scientific, technical, engineering, and business information.
National Technology Transfer Center http://www.nttc.edu/
Links to federal laboratories.
National Archives & Records Administration http://www.access.gpo.gov/nara
Public Laws http://www.access.gpo.gov/nara/#pl
Standards Documents Library http://www-library.itsi.disa.mil/index.html
U.S. Code (Cornell University) http://www4.law.cornell.edu/uscode/
U.S. Code (House of Representatives) http://uscode.house.gov/usc.htm
U.S. Code of Federal Regulations (GPO Web Site) http://www.access.gpo.gov/nara/cfr/cfr-table-search.html

Government Agencies
Air Force http://www.af.mil/
Army http://www.army.mil/
Coast Guard http://www.uscg.mil/
U.S. Customs Service http://www.customs.ustreas.gov/
Defense Contract Audit Agency (DCAA) http://www.dtic.mil/dcaa/
Defense Contract Management Command (DCMC) http://www.dcmc.hq.dla.mil/
Defense Finance and Accounting Service (DFAS) http://www.dfas.mil/
Defense Logistics Agency http://www.dla.mil/
Defense Threat Reduction Agency (DTRA) http://www.dtra.mil/
Department of Commerce http://www.doc.gov/
Department of Defense http://www.defenselink.mil/
Federal Communications Commission http://www.fcc.gov/
General Accounting Office http://www.gao.gov/
General Services Administration (GSA) http://www.gsa.gov/
Marine Corps. http://www.usmc.mil/
NASA http://www.nasa.gov/
National Guard http://www.ngb.dtic.mil/
National Science Foundation http://www.nsf.gov/
Navy http://www.navy.mil/

National contract management association
NCMA National http://www.ncmahq.org/
NCMA Southwest Region (Arizona; California; Nevada) http://www.swrncma.org .
NCMA Beach Cities Chapter (Long Beach) http://www.ncma.8m.com/
NCMA Orange County Chapter http://www.csupomona.edu/~jbwyatt/swrncma/orange.htm
NCMA South Bay Chapter http://www.ncmalasb.org/
NCMA South Bay Chapter Newsletter and Legislative Update Service http://www.ncmalasb.org/news-regs.htm

Search Engines
GOOGLE http://www.google.com

STATE LAW NEWS
Council of State Governments www.statesnews.org/

TRAINING
Defense Acquisition University http://www.dau.mil/
DoD Education Gateway http://www.acq.osd.mil/ddre/edugate/
Federal Publications Seminars http://www.fedpubseminars.com/
Federal Acquisition Institute http://www.gsa.gov/staff/v/training.htm

NCMA (see NCMA sites above)

U.S. Congress NEWS
Thomas Legislative Information http://thomas.loc.gov/

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