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
March
16, 2004, Regulatory Update
Recent
Regulatory matters that may be of interest since the last Update
include---
1.
DoD PUBLISHES FIRST PHASE OF PROPOSED TRANSFORMATION
CHANGES. On
February 23, 2004, the Federal Register noticed 14 proposed
rules as “a result of DFARS Transformation, which is a major DoD
initiative to dramatically change the purpose and content of the
DFARS. The transformed DFARS will contain only requirements of law,
DoD-wide policies, delegations of FAR authorities, deviations from
FAR requirements, and policies/procedures that have a significant
effect on the public. The objective is to improve the efficiency and
effectiveness of the acquisition process, while allowing the
acquisition workforce the flexibility to innovate”— while
removing 40% of the DFARS. Proposed changes include the following:
·
Procedures, Guidance, and Information (PGI)—Maintenance
and availability of same, i.e. those current provisions of the DFARS
not impacting the public will be included in a PGI document,
e.g. guides, and available on a website.
·
Sealed Bidding— Implements DFARS Transformation
noncomplex proposals relating to DFARS Part 214—includes deletion
of unnecessary text and “list of officials authorized to permit
correction of mistakes in bid.”
·
Research and Development Contracting—Deletion of
“obsolete formats, movement to PGI, updating of clauses, etc.
·
Part 251, Use of Government Sources by
Contractors—Clarifies contractor requirements for payment of
invoices from Government supply sources and moves certain items to
PGI.
·
Protection of Privacy and Freedom of
Information—Deletion of items covered in other DoD publications.
·
Insurance—“Relocates procedural text on
risk-pooling insurance arrangements and requests for waiver of
overseas workers’ compensation requirements to PGI.”
·
Cost Principles and Procedures—“Deletes obsolete
and duplicative text…and removes procedural text…to PGI.”
·
Major System Acquisitions—clarifications, updates,
etc. and removal of internal review procedures to PGI.
·
Competition Requirements—Deletes
obsolete/duplicative text in FAR “and relocates procedures for
documenting reasons for use of other than full and open competition
to PGI.”
·
DFARS Part 203, Improper Business Practices and
Organizational Conflicts of Interest, and Applicable Sections of
Part 209 that Relate to Debarment.
·
Applicable Sections of Part 209, Contractor
Qualifications, that Relate to Contract Placement.
COMMENT:
The March 8, 2004, issue of Federal Computer Week
discussed this DoD initiative under an article, “Defense
Procurement Regs Meet Atkins.”
On March 11, 2004, OFPP issued a memorandum announcing a
“streamlining” of the number of FAR drafting committees, greater
participaton in the future by OFPP, etc. in order to increase
process efficiency.
2. TRANSFORMATION AT NASA. On March 12, 2004, the Federal Register noticed
some NASA proposed “transformation” related changes, i.e. the removal of prior regulatory
direction in the NASA FAR Supplement to NASA “internal” documents since, purportedly,
that prior regulatory direction does not (now) affect the public.
Comment: Similar to the DoD transformation initiative, should NASA’s
past-regulatory direction “now” constitute a policy that does not impact your operation?
Review with counsel and stay on top of these changes and assess how they may impact
you and your operations. Comments are due on/before May 11, 2004.
3. ETHICS AND INTEGRITY.
Last month’s Update referenced the “Do’s and
Don’ts” checklist on procurement integrity in an article “Safe
Harbors of Ethical Conduct Needed in Defense Procurement” (http://nationaldefense.ndia.org/article.cfm?Id=1347)
published in the February 2004 issue of NDIA’s National Defense.
The March issue of National Defense also had another
excellent article on the topic, “Small Companies Need Ethics
Programs Too” (http://nationaldefense.ndia.org/article.cfm?Id=1370).
And,
for an approach by one company and recommended actions by its law
firm, visit http://www.boeing.com/news/releases/2004/q1/rudman_030904.pdf
(“A Report to the Chairman and Board of Directors of the
Boeing Company Concerning the Company’s Policies and Practices for
the Hiring of Government and Former Government Employees”) and an
earlier report at http://www.boeing.com/news/releases/2003/q4/rudman.pdf.
(“A Report to the Chairman and Board of Directors of the
Boeing Company Concerning the Company’s Ethics Program and its
Rules and Procedures for the Treatment of Competitors’ Proprietary
Information”).
COMMENT: Must
reading! A
“self-audit/compliance” template that could establish an
ethical/integrity metric. Also,
the Washington Post on February 19, 2004, had an interesting
article on hiring of former government officials/employees under the
heading, “Recruiting Uncle Sam.”
Miscellaneous Items:
·
The Federal Acquisition Council has updated its
“Manager’s Guide to Competitive Sourcing” (Second Edition,
February 20, 2004). This
“best practices” guide issued under the auspices of OFPP is
posted at http://www.fac.gov/documents/EileenFACManagerGuide.doc
· “NASA will conduct an open forum meeting (on May 6, 2004) to solicit questions, views and
opinions of interested persons or firms concerning NASA's procurement policies, practices, and
initiatives. The purpose of the meeting is to have an open discussion between NASA's Associate
Administrator for Procurement, industry, and the public…. The meeting will be held at NASA
Johnson Space Center, Robert R. Gilruth Center, Lone Star Room (second floor), Houston, TX.”
· On March 3, 2004, the Federal Register noticed a proposed FAR rule that “revises the policies
and procedures for the submission of material safety data sheets (MSDS) by government contractors
who provide hazardous materials to the government.” This is the second notice of proposed
rule-making on the subject. It has as a primary focus Federal Standard No. 313. Comments
are due on/before May 3, 2004.
·
On March
8, 2004, the Air Force issued mandatory/interim guidance on
“Capabilities Based Test and Evaluation.”
This guidance is planned to be issued as AF Instruction
99-103 within 90 days and
“describes
the planning, conduct, and reporting of cost effective test and
evaluation (T&E) programs as an efficient continuum of
integrated testing known as seamless verification. It implements the policies in Department of Defense Directive
(DoDD) 5000.1, The Defense Acquisition System, and DoD Instruction (DoDI)
5000.2, Operation of the Defense Acquisition System (collectively
called the DoD 5000-series); National Security Space (NSS)
Acquisition Policy 03-01; Chairman of the Joint Chiefs of Staff
Instruction (CJCSI) 3170.01C, Joint Capabilities Integration and
Development System, and CJCS Manual (CJCSM) 3170.01, Operation of
the Joint Capabilities Integration and Development System. …
This Interim Guidance must be used in conjunction with
Interim Guidance that will become AFI 10-601, Capabilities Based
Operational Requirements, and Interim Guidance that will become AFI
63-101, Operation of the Capabilities Based Acquisition System.
This Interim Guidance applies to all Air Force organizations
conducting T&E activities, including the Air National Guard and
Air Force Reserve Command. It
applies to all acquisition projects and programs regardless of
acquisition category (ACAT).”
·
On February 23, 2004, the Federal Register
noticed an interim FAR rule
“to implement the special
emergency procurement authorities of section 1443 of the Services
Acquisition Reform Act of 2003…(which) increases the amount of the
micro-purchase threshold and the simplified acquisition threshold
for procurements of supplies or services by or for an executive
agency that, as determined by the head of the agency, are to be used
in support of a contingency operation or to facilitate the defense
against or the recovery from nuclear, biological, chemical, or
radiological attack. Section 1443 also authorizes the expanded use
of Simplified Acquisition and Commercial Items procedures.”
Comments are due on/before April 23, 2004.
·
The Air Force issued Acquisition Circular (AFAC)
2004-0205 on February 5, 2004, which “incorporates language from
existing Air Force guides as
Mandatory Procedures (MP) or Informational Guidance (IG) via
addition of heading
and pointer language into the text of the AFFARS.
Also, an
updated direction on bankruptcy procedures is available at http://www.safaq.hq.af.mil/contracting/affars/5342/mandatory/MP5342.902-bankruptcy.doc.
· On March 10, 2004, the Air Force issued a “reminder” on the necessity of compliance in
“the acquisition of services,” i.e. performance-based service acquisition requirements.
· The US Department of Commerce, Bureau of Industry and Security, Export Enforcement
has published a booklet entitled, “Don’t Let This Happen To You!!! Recent Export Enforcement
and Antiboycott Cases.” Forty-Three pages replete with situations where criminal, civil, etc.
penalties were imposed.
· Finally, the March 5, 2004, NCMA/University of California Annual Educational
Symposium, had an excellent presentation by a DCMA representative on Wide Area
Work Flow (WAWF), “a Paperless Contracting DoD-wide application designed to
eliminate paper from the receipts and acceptance process of the DoD contracting lifecycle.
The goal is to enable authorized Defense contractors and DoD personnel the ability to create
invoices and receiving reports and access contract related documents. In the traditional DoD
business method, three documents are required to make a payment - the contract, the Receiving
report and the invoice. Each of these may arrive at the payment office separately - if they are paper.
They are processed individually as they arrive. Information is then manually keyed in to the payment
system. Using WAWF-RA, electronic documents are shared, eliminating paper and redundant data
entry. Data accuracy is increased and the risk of losing a document is greatly reduced.” Copies of the powerpoint slides (1977 KBs) are available.
Future
Speaking Topics Include—
·
ISM 89th Annual International Purchasing Conference,
Philadelphia, Pennsylvania, “An Effective Dispute Resolution
Process for Subcontractors” and “Update on DoD Transformation
Initiative."
·
ISM Phoenix Affiliate, "How 'Baseball
Arbitration' will help in Negotiating Sole Source Procurements--or
how to get through Impasse."
·
National Purchasing Institute, “"How to get
through Impasse—Can Baseball Arbitration be the Answer?"
·
NCMA World Congress, Orlando, Florida, “Designing
the Ultimate Dispute Resolution Clause for Enhanced Subcontractor
Relationships.”
·
NCMA Dayton Chapter, “Hot Topics in ADR.”
·
NCMA Puget Sound Chapter, “Baseball and Negotiations
are Always In Season!”
·
California State Bar Business Law Conference,
“Utilization of ADR in Franchise and Securities Industries.”
Charles E. Rumbaugh
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