CHARLES E. RUMBAUGH
Arbitrator/Mediator
(310) 373-1981 / FAX (310) 373-4182
(888) ADROffice (toll free)
e-mail: ADROffice@Rumbaugh.net
P.O. Box 2636
Rolling Hills, California 90274
P.O. Box 2095
Burlingame, California 94011
May
6, 2003 Regulatory
Update
Recent Regulatory matters that may be of interest
since the last Update include---
1.
DoD PROVIDES CURRENT STATUS ON “DFARS TRANSFORMATION.”
DoD recently announced interim “achievements” in connection with
its effort to “conduct a comprehensive review and transformation
of the FAR and DFARS and include operational proceedings used
to revise and implement the DFARS.”
This initiative is being led out of the office of Director of
Defense Procurement and Acquisition Policy, Deidre Lee—who is
providing “policy direction/approval” for the DoD task force.
Over 250
improvement proposals have been submitted from the “public”
(mostly government personnel) and the task force is entering its 3rd
phase which is the drafting of proposed rules and legislation.
The fourth Phase starts in September with the issuance of
those proposed rules for public comment.
A review of over
59% of the DFARS has been completed; and, accordingly to DoD,
“supports the removal of 42% of reviewed (total) content.” This on-going analysis has tentatively resulted in the
following:
Scheduled
for Elimination:
·
Standard
R&D contracting procedure
·
Prohibitions
on certain price adjustments under shipbuilding contacts
·
Duty-Free
Entry Information Requirements
Scheduled
for Moving to Instructions and Guide Book:
·
Source
Selection Procedures
·
Contract
Reporting Procedures
·
Weighted
Guidelines internal profit procedures
·
Debarment
processing procedures
Scheduled
for Legislative Change:
·
Sole
Source approval thresholds
·
External
restructuring costs
Scheduled
for Change:
·
Thresholds
for Fixed-Price R&D
·
Thresholds
for Public Announcements
·
Thresholds
for Small Business Reviews
·
Simplifying
initiating CPSRs
·
Advisory
and Assistance Contracting
·
Commercial
Ball Bearing Exemption
COMMENT: A “DoD
Transformation for the 21st Century” legislative
package was transmitted to Congress—see previous Updates.
With just over
half of the DFARS having been “reviewed,” currently 25%
of the DFARS is targeted for “removal,” 19% of the DFARS will be
“changed,” and only 15% being “retained as is.”
This DoD “review” is clearly on track with its stated
goal of reducing the DFARS by (at least) 40%,
i.e. management by objective!
Note that the
role of any public participation in future rule-making process seems
to be within DoD’s transformation scope.
Presumably the OFPP Act is also on the radar screen.
Diedre Lee is
scheduled next week to make a presentation to industry and it will
include DoD’s transformation initiative.
Is industry
ready for this? Are
contracting officers ready for this?
Given this deregulation direction, will there be
regulatory/contractual policy oversight to ensure an equal-playing
field and a government-wide acquisition system?
2.
AIR FORCE ISSUES MAJOR REVISION TO ITS “PAST PERFORMANCE EVALUATION
GUIDE.” In the first major revision since the May 2001 release
of its past performance policy, the AF rolled-out its March 2003
(Version 1.1) issue of its Past Performance Evaluation Guide.
This Guide provides the “Performance Risk Assessment Group
(PRAG) membership or the contracting officer and technical
representative(s) detailed, step-by-step activities to use in
support of a source selection conducted in accordance with AFFARS
5315.3.” Areas
revised include…
·
Lists
considerations for RFPs Sections L & M
·
Consolidates
and rewrites chapters 3 (“RFP activity”) and 5 (“Actions after
receipt of proposals”) for “clarity”
·
Lists
the steps to conduct a past performance evaluation
·
Adds
guidance on how to define and evaluate recency and relevancy
·
Provides
sample PRAG briefing format.
3.
AIR FORCE ISSUES REVISED DIRECTION ON USE OF “AWARD TERM
CONTRACTING.” On
April 17, 2003, the Air Force issued updated direction on use of the
award term contracting wherein it concluded that “award term
incentives can be used effectively on any contract type, if
properly structured.” Award
term contracting is one aspect in its SAF/AQC toolkit which the Air
Force advocates as non-cost incentives.
This memorandum provides the following direction…
“To
structure a non-cost incentive effectively, language in a contact
must not create a contractual entitlement for the contractor in the
advance of funds. Regardless
of the type of non-cost incentive selected, the contract language
must ensure that the ‘rights of the parties’ are clear regarding
entitlement.”
Miscellaneous:
·
On
April 17, 2003, the President authorized the US Agency for
International Development to exercise authority under PL 85-804 with
respect to repair/reconstruction in Iraq for any such contract
“awarded on or before September 30, 2003.”
·
The
April 18, 2003, Federal Register noticed a proposed rule
amending the FAR in order “to incorporate policies for services
and to strengthen the procedures for establishing Blanket Purchase
Agreements under the Federal Supply Schedules.”
Comments are due/on before June 17, 2003.
And on April 25,
2003, the SBA issued a proposed Federal Register rule “requiring
small businesses to re-certify their size every year, on the
anniversary of the contract award.”
Recent events have apparently confirmed the “rapid”
change in size status.
COMMENT: How
will this “annual” certification impact “your”
subcontracting goals? Will
there be fewer small businesses but more mentoring in the future?
·
In
the Department of Energy mail…
“On
March 31, 2003, Deputy Secretary of Energy Kyle McSlarrow approved
DOE M 413.3-1 Project Management for the Acquisition of Capital
Assets (http://www.directives.doe.gov/)
that furthers the President's management agenda goals of improving
the success rate and the management of DOE projects. DOE currently
has 136 capital asset projects totaling $40 billion in value. The
manual is not intended to impose new requirements; however, it does
contain changes and clarifications to existing requirements.
The Project Management Manual helps to define the essential
up-front planning that is needed in the early phases of a
project….”
·
In
a recent Court of Federal Claims decision, DIGICON CORPORATION v.
US, COFC No. 02-666C, April 22, 2003, “Air Force contract
Judge Smith denies the government's motion for summary judgment and
rejects its arguments that the CO lacked authority to enter into the
contract and that the contract was never ratified by an appropriate
official. Judge Smith
finds that the was ‘institutionally’ ratified by the
government as it had sought and obtained benefits from the otherwise
unauthorized contract.”
·
Defense
Finance and Accounting Service (DFAS), Columbus, Ohio, has issued an
invite to its private sector contractors to attend the next
quarterly Contractor Service Open House on July 10, 2003.
This is an opportunity “to visit the Columbus site and
obtain knowledge of day-to-day operations and ongoing customer
service initiatives” at DFAS.
Contractors are also provided an opportunity to “openly
discuss issues/concerns” with DFAS management team.
Future Speaking Topics
Include—
·
May
19, 2003, “DoD Regulatory/Contractual Developments Impacting
Subcontracting”—ISM International Conference, Nashville.
·
May
22, 2003, “How to Negotiate With Sole Source Suppliers,” NCMA
Buffalo Chapter.
·
May
28, 2003, “Tools to Use In Negotiating Sole Source
Procurements,” NCMA Finger Lakes Chapter, Rochester, New York.
·
May
29, 2003, “Industry Perspective of Government ADR Programs,”
NCMA Leatherstocking Chapter, Rome, New York.
·
June
12, 2003, “Negotiating Sole Source Procurements, OR (Another
‘Tool’ On) How to Close the Deal!,” NCMA High Desert Chapter.
Information
on arranging speaking/teaching engagements on the above and/or
various aspects of Alternative Dispute Resolution (ADR),
basic/advanced negotiation techniques seminars/workshops, or on
substantive topics
may be arranged by sending a message to
CERumbaugh@earthlink.net
Charles E. Rumbaugh
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