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
Have
a Great Turkey Day!
November
21, 2003, Regulatory
Update
Volume Eight, Thirteenth Issue
Recent Regulatory
matters that may be of interest since the last Update include---
1.
PROVISIONAL AWARD FEES AUTHORIZED. On
November 14, 2003, the Federal Register noticed a final DFARS
rule that “provides for the payment of provisional award fees
within an evaluation period prior to a final evaluation for that
period. The provisional payments would be based on (1) successful
evaluations for prior evaluation periods, and (2) the expectation
that payment of provisional fee amounts will not reduce the overall
effectiveness of the award fee incentive.”
Contracting officers are authorized to make provisional
payments under cost plus award fee contracts, on a case by case
basis, “provided those payments—
(A)
Are made no more frequently than monthly;
(B)
Are limited to no more than-- (1) For the initial award fee
evaluation period, 50 percent of the award fee available for that
period; and (2) For subsequent award fee evaluation periods, 80
percent of the evaluation score for the prior evaluation period
times the award fee available for the current period…;
(C)
Are superceded by an interim or final award fee evaluation for the
applicable evaluation period…; and
(D)
May be discontinued, or reduced in such amounts deemed appropriate
by the contracting officer, when the contracting officer determines
that the contractor will not achieve a level of performance
commensurate with the provisional payment. The contracting officer
shall notify the contractor in writing of any discontinuance or
reduction in provisional award fee payments.”
This DFARS change is applicable “to
solicitations issued on or after January 13, 2004.”
“Contracting officers may, at their discretion, apply the
DFARS changes to solicitations issued before January 13, 2004,
provided award of the resulting contract(s) occurs on or after
January 13, 2004. Contracting officers may, at their discretion,
apply the DFARS changes to any existing contract with appropriate
consideration.”
COMMENT: If you have “any” questions, read the
extensive and excellent summary of the public questions/comments
provided in the Federal Register.
A training module is available through the Defense
Acquisition University.
2.
SAFETY ACT INTERIM RULE SHIELDS SELLERS OF ANTITERRORISM TECHNOLOGY. The Department of Homeland Security on October 16, 2003,
noticed in the Federal Register an interim rule that
implements the Support Anti-terrorism by Fostering Effective
Technologies Act of 2002 (SAFETY Act).
This rule “provides critical incentives for the development
and deployment of anti-terrorism technologies by providing liability
protections for sellers of ‘qualified anti-terrorism
technologies.’” The rule also “provides the application
process by which a seller will apply for liability protections for
anti-terrorism technologies. Its purpose is to facilitate and
promote the development and deployment of anti- terrorism
technologies that will save lives.”
Items
highlighted in the rule include applicable product/technical
standards, insurance coverage and amount, expiration of SAFETY Act
designation, services verse goods, “clarification” of government
contractor defense, availability
of PL 85-804 indemnification, what is an “act of terrorism,”
non-appeal of any determination, etc.
The rule is effective October 16th and comments
are due on/before December 15, 2003. Also, see July 11, 2003, Regulatory Update for additional
background information.
3.
FINAL “CONTRACT” BUNDLING RULE ISSUED.
On October 20, 2003, the Federal Register noticed a final FAR
rule which accomplishes the following: “Revises the definition of
contract bundling to expressly include multiple award contract
vehicles and task and delivery orders under such contract vehicles;
mandates that procuring activities coordinate with the Small
Business Specialist (SBS) proposed acquisition strategies or plans
contemplating awards above specified dollar thresholds ($7M for DoD,
$5M for NASA/GSA/DoE, and $2M for all other agencies) and that the SBS
notify the agency Office of Small and Disadvantaged Business
Utilization (OSDBU) when those strategies include contract bundling
that is unnecessary or unjustified; revises the threshold
and documentation required for substantial bundling; and requires
agency OSDBUs to perform certain oversight functions.”
The rule is effective on October 20, 2003.
Miscellaneous:
·
NASA
noticed on November 17, 2003, in the Federal Register a
proposed rule that would remove from the NASA FAR Supplement (NFS)
“those portions of the NFS containing information that consists of
internal Agency administrative procedures and guidance that does not
control the relationship between NASA and contractors or prospective
contractors.” Comments
due on/before January 16, 2004.
COMMENT: Transformation started at NASA?
A significant number of changes are proposed and include
those that no longer will be subject to public notice/comment
process. Internal NASA
guidance is on the increase and is not required to be published and
codified. Only those items “which may have a significant effect
beyond the internal operating procedures of the Agency or have a significant
cost or administrative impact on contractors or offerors” will be
published/codified.
·
The
Navy has issued a memorandum on November 17, 2003, announcing NAPS
Change #97-20 which implements the requirement on the use of
performance based service acquisitions, unless specified approvals
are obtained.
·
The
Department of Labor has launched a new website “Wage
Determinations Online” providing “a single location for federal
contracting officers to use in obtaining appropriate Service
Contract Act (SCA) and Davis-Bacon Act (DBA) wage determinations (WDs)
for each official contract action. The website is available to the
general public as well. Guidance in selecting WDs from this website
is provided in the WDOL.gov User’s Guide.” http://www.wdol.gov/
·
DoD
prime contractors are being reminded that contracts usually require
the reporting of subcontracts being placed with foreign sources, see
e.g. DFARS 252.225-7004.
·
Federal
Acquisition Circular 2001-16 was published in the Federal
Register on October 1, 2003.
Topics include…
Ø
Central
Contractor Registration
Ø
Electronic
Commerce in Federal Procurement
Ø
Unique
Contract and Order Identifier Numbers
Ø
Procurements
for Defense Against or Recovery From Terrorism or Nuclear,
Biological, Chemical or Radiological Attack, and Temporary Emergency
Procurement Authority
Ø
Notification
of Overpayment, Contract Financing Payments
Ø
Prohibited
Sources
Ø
Economic
Planning, Employee Morale, and Travel Costs Principles
·
COMMENT:
Doing any exporting or importing?
Have you been tracking the recent WTO related disputes and
how the WTO dispute resolution process is intended to work?
The “discussion” in the international community is
getting quite “warm” on several topics including the U.S Foreign
Sales Export Credits and the U.S. steel safeguard tariffs and, on
the latter, could soon result in retaliatory tariffs on unrelated
U.S products exported to several countries, including China and the
EU, in order to “to freely rebalance trade.”
This scenario of WTO permitted international sanctions
arises where there are subsidies and tariffs that have been found to
be “improper” by WTO. This could seriously impact you and
your products being exported.
Again, products unrelated to the underlying dispute
would be disrupted and, thus, could interfere with your
operations/pricing in previously unforeseen ways!
It is recommended your import/export terms
and conditions be reviewed from this perspective.
Further, how are your foreign proposals (currently) being
priced in view of these WTO developments?
And, recall that all of this flows from the untested waters
of the WTO dispute regime established by adoption of WTO in 1994.
·
Finally,
speaking of dispute resolution, check out the excellent report from
a research study sponsored by the American Arbitration Association
(AAA). This 2003
study provides new light on the attitudes and experiences
associated with using non-judicial dispute resolution processes
including arbitration and mediation.
The trends from the highly acclaimed 1998 Cornell University
study, “The Appropriate Resolution of Corporate Disputes:
A Report on the Growing Use of ADR by U.S. Corporations,”
are also quite revealing and show how the business community in a
multitude of industries uses ADR in order to enhance its
bottom-line as well as have positive relationships with customers
and suppliers! The report of this AAA sponsored study, “Dispute-Wise
Management®--Improving Economic and Non-Economic
Outcomes in Managing Business Conflicts,” is available at http://www.adr.org/index2.1.jsp
Future
Speaking Topics Include—
·
“Creative Thinking to
Conflict Resolution for the 21st Century,” California
State University (January/February 2004)
How
do we strategically manage or respond to conflicts that surface in
our professional and personal lives? How do we analyze a critical
situation at work or in the multitude of interpersonal environments
we find ourselves in? Should everything be decided on what is best
on an individual basis, or what's best for the organization or team?
Participants in this interactive course will learn the methods to
successfully prevent and resolve conflicts. Through role play and
case studies, students will apply creative thinking tools and models
as they explore the
·
appropriate use and
importance of power and leverage
·
role of verbal and
non-verbal communication
·
rights and
interest-based approaches to managing conflict
Info/registration:
http://www.csun.edu/exl/schedule/winter/xbmg_exl.htm#040041
·
NCMA Beach Cities
Chapter, “Baseball and Negotiations are Never Out of Season!”
·
ISM San Fernando Valley
Affiliate, "How 'Baseball Arbitration' will help in Negotiating
Sole Source Procurements--or how to get through Impasse"
·
NCMA China Lake
Chapter, “Current Government Contracting Issues Impacting
Contracting/Buying Profession”
·
California State Bar
Business Conference, “Drafting Critical Dispute Resolution
Clauses.”
·
NCMA Dayton Chapter,
“Hot Topics in ADR.”
·
ISM 89th Annual
International Purchasing Conference, Philadelphia, Pennsylvania,
“An Effective Dispute Resolution Process for Subcontractors” and
“Update on DoD Transformation Initiative."
·
NCMA World Congress,
Orlando, Florida, “Designing the Ultimate Dispute Resolution
Clause for Enhanced Subcontractor Relationships”
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 ADROffice@rumbaugh.net
Charles E. Rumbaugh
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