CHARLES E. RUMBAUGH
Arbitrator/Mediator
(310) 373-1981 / FAX (310) 373-4182
(888) ADROffice (toll free)
e-mail: cerumbaugh@aol.com
P.O. Box 2636
Rolling Hills, California 90274
P.O. Box 2095
Burlingame, California 94011
October 23, 2002 Regulatory Update
Recent Regulatory matters that may be of interest
since the last Update include---
DoD
DIRECTOR OF DEFENSE PROCUREMENT ISSUES MEMORANDUM ON PURPOSE OF DoD
“GUIDANCE” On September 10, 2002, Deidre
Lee, Director of Defense Procurement, issued a memorandum on
“Purpose and Applicability of Guidance Issued By Director, Defense
Procurement.” The
substance of that memorandum reads:
“Concerns have been expressed regarding the purpose
and applicability of guidance issued by the Director, Defense
Procurement. Guidance
issued by the Director, Defense Procurement represents procurement
policy to be applied by Government contracting personnel in
negotiating and administering Government contracts.
The guidance is not legally binding on contractors.
When contracting issues arise, contracting personnel should
cite the applicable regulatory reference (e.g., Federal Acquisition
Regulations, Cost Accounting Standards) or specific contract clause
that supports the Government position.”
COMMENT: FAR/DFARS
Part 1 also cover the topic as does the OFPP Act. On a related
item… on August 28, 2002, DCAA issued supplementary audit guidance
concerning “unilateral adjustment of indirect cost rates when a
contractor does not timely submit a certified incurred costs
proposal.” Is there a
DCAA memorandum around the corner on the role/impact of its
“guidance?”
Miscellaneous:
·
Past
Updates have touched on various aspects of contractual
“indemnification,” Homeland Security legislative related issues,
sale of military products/services for homeland defense, etc.
An excellent article entitled, “Extraordinary Contractual
relief: P.L. 85-804 in the Homeland Security Era,” by Kevin Mullen
Esq., is in the Summer 2002 issue of The Procurement Lawyer
published by the ABA Public Contract Law Section.
·
On
October 7, 2002, the Federal Register noticed a proposal by
DoD “to simplify and clarify policy pertaining to the acquisition
of supplies and services from foreign sources.”
The Federal Register summary states the proposal:
Ø
Provides
streamlined procedures for evaluating foreign offers when acquiring
supplies, and adds procedures for evaluating foreign offers in
acquisitions in which price is not the determining factor.
Ø
Changes
the definition of “qualifying country end product” to permit the
qualifying country manufacturing the product to use components from
any other qualifying country.
Ø
Lowers
the required approval levels for determinations of nonavailability
under the Buy American Act.
Ø
Lowers
the required approval levels for individual public interest
determinations for acquisition of end products from qualifying
countries.
Ø
Provides
that the Government will evaluate duty only if it is to be paid.
Except for qualifying country supplies or eligible end products, the
contractor will request duty-free entry only on foreign supplies for
which the contractor estimates that duty will exceed $200 per unit
(end product or component). One duty-free entry clause replaces five
existing clauses.
Ø
Makes
use of the clause pertaining to Waiver of United Kingdom Levies
optional for acquisitions not expected to exceed the simplified
acquisition threshold.
Ø
Eliminates
the requirement for a contractor to represent that it will comply
with all laws, decrees, labor standards, and regulations of the
foreign country in which the contract will be performed.
Ø
Moves
restrictions on contracting with firms owned or controlled by the
government of a terrorist country or other foreign governments from
Part 209, Contractor Responsibility, to Part 225, Foreign
Acquisition.
Ø
Deletes
obsolete text and clauses relating to outdated appropriations act
restrictions, resulting in the elimination of four clauses.
Ø
Incorporates
the DFARS changes proposed under Case 2002- D008, Trade Agreements
Act-Exception for U.S.-Made End Products, published at 67 Federal
Register 49278 on July 30, 2002.
Due
to the “complexity of the Buy American Act and the trade
agreements,” an on-line training module is in preparation by DoD.
Comments due on/before December 6, 2002.
·
On
October 17, 2002, OMB published a Federal Register notice
that identified “Agency inventories of activities that are not
inherently governmental are now available” for review—FAIR Act
posting. “This is the first release of the 2002 FAIR Act
inventories…. Interested
parties who disagree with the agency's initial judgment can
challenge the inclusion or the omission of an activity on the list
and, if not satisfied with this review, may also demand a higher
agency review/appeal.”
·
The
long awaited industry “sharing of savings” endeavor whereby a
contractor receives savings for adopted initiatives could be
published for comment in the October/November timeframe.
This topic was also addressed with OFPP Administrator Angela
Styles at an August 19, 2002, industry briefing session.
·
And,
DoD has directed Defense Finance and Accounting Service to take
“action as is appropriate” to collect/withhold $2.3 billion from
Boeing and GD on the Navy’s A-12 default termination.
·
Mitchell
Daniels, Jr., OMB Director, on October 21, 2002, issued a memorandum
on
“Increased Oversight for Government Purchase and Travel Cards.”
The memorandum highlights remedial actions by agencies in combating
fraud, etc. in the use of credit cards with a focus on cancellations
and on-going reporting on those actions.
Earlier on September 25, 2002, the
DoD Inspector General, released Guidance for the
Investigation of Fraud, Waste, and Abuse Involving the Use of
Purchase Cards and Travel Cards.
·
On
September 24, 2002, the Federal Register noticed a request
for comments from Government and industry on how the FAR, DFARS, and
GSAR “can be revised to facilitate timely contract
closeout.” Input on
regulatory changes that are needed to improve the process is
requested. Comments are due on/before November 25, 2002.
·
It
is reported that a new draft AF clause entitled “Performance Input
for Senior Executive Compensation Determination” may be used to
document contract performance as a “factor” in determining
contract performance.
·
On
October 23, 2002, the Federal Register published proposed
guidelines that the United States Patent and Trademark Office will
apply to its acquisitions—it will
not adhere to the FAR.
Comments are due on/before November 22, 2002.
·
Epstein
Becker and Green has worked up a very useful chart-format summary of
typical Government contract-type subcontract clauses and the reasons
why buyers or sellers would want them included.
The chart also includes current FAR flow-down clauses. Contact Alan Dickson, Esq. at adickson@ebglaw.com for a copy.
Recent/Future
Speaking/Teaching Topics Include—
·
"Government
ADR from Industry's Perspective--Opportunities for
Improvement?"
·
"Arbitration
workshop"
·
"ADR
Tools for Purchasing from Sole Source Suppliers"
·
"Negotiation
and Conflict Resolution" MBA course
·
"Advance
Negotiation Seminar"
·
"Drafting
Arbitration Clauses in Commercial Contracts"
·
"Utilization
of ADR in Franchise/Securities Disputes"
Back Top
Back to FASMG's Home Page