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
February 21, 2004, Regulatory Update
Recent
Regulatory matters that may be of interest since the last Update
include---
·
On February 20, 2004, the Federal Register
noticed an interim rule issued pursuant to the Homeland Security Act
“regarding the
receipt, care, and storage of critical infrastructure information
voluntarily submitted to the Department of Homeland Security… (in
order to) encourage private sector entities to share information
pertaining to their particular and unique vulnerabilities, as well
as those that may be systemic and sector-wide. As part of its
responsibilities under the Homeland Security Act of 2002, this
information will be analyzed by the Department of Homeland Security
to develop a more thorough understanding of the critical
infrastructure vulnerabilities of the nation. By offering an
opportunity for protection from disclosure under the Freedom of
Information Act for information that qualifies under section 214,
the Department will assure private sector entities that their
information will be safeguarded from abuse by competitors or the
open market. In addition, information from individual private sector
entities combined with those from other entities, will create a
broad perspective from which the Federal government, State and local
governments, and individual entities and organizations in the
private sector can gain a better understanding of how to design and
develop structures and improvements to strengthen and defend those
infrastructure vulnerabilities from future attacks.”
Comments
are due on/before May 20, 2004.
Additional information is at
http://www.dhs.gov/dhspublic/interapp/press_release/press_release_0350.xml
·
On February 20, 2004, the Federal Register
noticed the DoD suspension in the use of a “price evaluation
adjustment for small disadvantaged businesses (SDBs) in DoD
procurements, as required by 10 U.S.C. 2323(e)(3), because DoD
exceeded its 5 percent goal for contract awards to SDBs in fiscal
year 2003. The suspension will be in effect for 1 year and will be
reevaluated based on the level of DoD contract awards to SDBs
achieved in fiscal year 2004…and is applicable to all
solicitations issued during the period from February 24, 2004, to
February 23, 2005.” The Director of Defense Procurement and Acquisition had
earlier issued a memorandum on January 23, 2004, announcing this
suspension.
· The January 29, 2004, Federal Register noticed a “proposed amendment to FAR 31.205-44,
Training and education costs, (that) is intended to increase the clarity of this cost principle and
to make it consistent with recent statutory changes that cover payment of costs for Federal
employee academic degree training. The proposed rule makes training and education costs
generally allowable, except for training and education for the sole purpose of obtaining an
academic degree or as a means of qualifying for a position that requires a degree, as well as
six public policy exceptions that are retained from the current cost principle. The reasonableness
of specific contractor training and education costs that are not subject to one of the expressly
unallowable cost exceptions can best be assessed by reference to FAR 31.201-3, Determining
reasonableness.” Comments are due on/before March 29, 2004.
·
The Director of Defense Procurement and Acquisition
Policy on February 18, 2004, provided a “heads-up” memo on
“Contract Period for Task and Delivery Order Contracts” whereby
the contracting community was advised of the forthcoming DFARS
change that “limits a task or delivery order contract awarded
under 10 USC 2304a to a total period of not more than 5 years.”
This change will be “effective for solicitations issued on
or after the date of the DFARS interim rule” which is expected to
be published in the Federal Register in March 2004.
·
The Air Force has issued a “substantially revised”
Air Force Instruction (AFI) 63-124 “PERFORMANCE-BASED SERVICES
ACQUISITION (PBSA)” under a date of
11 February 2004. “This
is the first revision of AFI 63-124…and removes mandated
processes, empowers field personnel to tailor the acquisition,
introduces the Air Force Program Executive Office for Combat and
Mission Support (AFPEO/SV), and supports agile acquisition and
procurement transformation.”
And, “compliance with this publication (AFI 63-124) is
mandatory.” The
Government policy is to award contracts over $25,000 using
Performance-Based contracting for 50 percent of total eligible
service contracting dollars by FY 2005. As a reminder see the tool,
“Seven Steps to Performance-Based Services Acquisitions,” at http://www.arnet.gov/Library/OFPP/BestPractices/pbsc/home.html.
Comment:
Also, noted at AFI 63-124 §1.4.1 is the statement, “The
selected contract type, source selection procedures, and
contract incentives must align with performance requirements and
objectives to achieve mission success.”
With “results-based” SOWs will there be “more” FFP
contracts for “services?”
·
And, the Navy Space and Naval Warfare Systems Command
(SPAWAR) on
17 February 2004, issued a memorandum on “Contracting for
Services” reiterating the “prohibition on the acquisition of
services through use of a contract or task order that is not
performance based unless specified approval is obtained.”
The Navy has posted some excellent training material on the
topic at http://www.acq-ref.navy.mil/tools/pbrfp/index.cfm
·
The Army has issued a revised Acquisition Regulation
70-1, dated 31 December 2003, which is effective 31 January 2004.
A copy of major update is available at http://www.usapa.army.mil/pdffiles/r70_1.pdf.
·
On February 12, 2004, the Air Force notified
contracting officers of significant omissions in obtaining approvals
in providing contract required “services and base support” for
contractors in overseas locations.
Specifically, authorization for contractor “use of
commissary and exchange privileges, medical treatment, etc.”
requires approval before contract award pursuant to DFARS
225.802-70.
·
The January 5, 2004, “Guide for the use of Robust
Engineering in Air Force Acquisition Programs” (Guide on Systems
Engineering) that was referred to in last month’s Update is now
available at http://cse.afit.edu./SEGuide_6_Jan_2004.pdf.
·
The Navy posted an excellent tutorial on “Doing
Business With The Navy.”
Ten steps to success on doing business with the Navy are
provided with a particular focus on Small Businesses finding an
“entry portal” to the US Navy.
Download this January 30, 2004,
presentation at http://acquisition.navy.mil/
·
The Beach Cities NCMA Chapter is sponsoring its Annual
Educational Conference, “Sharpening the Skills of the
Contracts/Subcontracts Professionals” on March 5, 2004.
Registration information is available at 714-896-1774 or by
email at william.e.vargo@boeing.com.
·
The February 2004 issue of National Defense
published by the National Defense Industrial Association (NDIA) has
an excellent article by Jim MaAleese on “Safe Harbors of Ethical
Conduct Needed in Defense Procurement” with an overview of
applicable procurement integrity principles.
He also provides a “Do’s and Don’ts”
Procurement checklist for Contractor and Government
personnel—must reading!
·
Additional insight on the new DFARS policy on Unique
Item Identification and Valuation—covered in recent Updates—is
available in an article by Leantha Sumpter (DoD) and Ed Will
(Boeing) published in the January 2004 issue of NCMA Contract
Management magazine. The
authors will also be leading a great panel on the topic at the March
1, 2004, NDIA educational seminar in St. Petersburg, Florida.
Registration information is available at 703-247-2598 or rfranklin@ndia.org.
·
The 2004 DoD Procurement Conference, “The
Transformation of Defense Procurement – People, Policy,
Processes” will be
held May 25-28, 2004, in Orlando, Florida.
Future
Speaking Topics Include—
·
ISM San Fernando Valley Affiliate and ISM Phoenix
Affiliate, "How 'Baseball Arbitration' will help in Negotiating
Sole Source Procurements--or how to get through Impasse."
·
California State Bar Business Law Conference,
“Utilization of ADR in Franchise and Securities Industries.”
·
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.”
·
ISM Los Angeles Affiliate Executive Council, “Using
ADR Tools for Impasses.”
·
National Purchasing Institute, “"How to get
through Impasse—Can Baseball Arbitration be the Answer?"
·
Beach Cities NCMA Chapter and University of
California, Irvine Annual Educational Symposium, "Current
Issues Impacting the Government Contracting/Buying
Professional."
Charles E. Rumbaugh
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