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 26, 2004 Regulatory Update
Recent
Regulatory matters that may be of interest since the last Update
include---
·
On April 13, 2004, Ron Poussard Deputy Director for
the Defense Acquisition Regulations System reported on the status of
the DFARS Transformation efforts including the fourteen proposals
published in the
“Federal
Register in February 2004, with a request for public comments by
April 23, 2004. One of
the proposed changes establishes the framework for a new DFARS
companion resource, Procedures, Guidance, and Information (PGI),
which will contain internal DoD procedures that do not
significantly affect the public.
PGI will be openly available on the World Wide Web, will be
electronically linked to the DFARS, and will permit rapid
dissemination of information to the acquisition community.
We (DoD) expect to publish 70 more DFARS Transformation
proposed changes before the end of FY04. Four of the legislative
proposals, recommending improvements in the areas of task and
delivery order contracts, ball and roller bearings, totally enclosed
lifeboats, and information to cooperative agreement holders, were
cleared by OMB for consideration in the FY05 National Defense
Authorization Act. We
are planning to acquire a DFARS Transformation Integrated System (DTIS),
which will provide an integrated electronic solution for the
development, issuance, and management of our acquisition
regulations. A
competitive RFP for the DTIS concept and demonstration was issued in
February 2004, and we are presently evaluating the proposals
received. We have
reached agreement with OMB that DTIS will serve as a collaboration
and workflow model for the Federal e-rulemaking initiative.”
(emphasis added)
· On May 21, 2004, the Federal Register noticed a proposed change to the FAR 31.205-16 cost
principle (“Gains and losses on disposition or impairment of depreciable property or other capital
assets”). “In particular, the Councils are recommending that the date of disposition for a sale and
leaseback arrangement be the… date of the sale and leaseback arrangement, rather than at the end
of the lease term.” Comments are due on/before July 20, 2004.
·
On May 20, 2004, Deidre Lee, Director of Defense
Procurement and Acquisition Policy, issued a memorandum on
“Emergency Procurement Flexibilities” wherein she provided some
of the flexibilities/options that are available “for acquisitions
that support urgent situations and national security
requirements.”
COMMENT:
Must reading for acquisition professionals in this wartime
environment!
· The DCAA has posted (http://www.dcaa.mil/) memoranda that may be of interest to “impacted”
contractors. For example, the April 21, 2004, memo on “Audit Management Guidance on DMIS
Requirements Related to Wide Area Work Flow” includes a spreadsheet that “contains a list of
contractors who are identified as not participating or are ineligible for direct billing in DMIS but
have … been identified …(incorrectly) as being direct bill eligible.” And, there is the April 12, 2004,
memo on “Audit Guidance on Compensation Costs for Contractor Employees Located in Foreign
Countries and Performing Work under Iraq Reconstruction Contracts” which provides guidance
(and a DCAA survey result of 37 contractors) in evaluating a “contractor’s base and/or special
overseas pay and the various employee overseas allowance, differentials, (and) bonuses” under
applicable cost principles.
COMMENT: Are contractors concerned that their cash flow is being affected by being listed as being ineligible for direct bill? And, on the subject of allowability of overseas compensation should one look at having an advance agreement under the FAR?
·
An industry/government meeting conducted on March 31,
2004, on the Unique Item Identification initiative (interim rule
effective January 1, 2004) resulted in the “following issues which
the government will continue to work with industry:
1
How should the UID/RFID cost be recovered—Should costs be
included in forward pricing rates negotiated by ACO's, or determined
on contract by contract basis by each individual PCO?
2
If and when should UID/RFID costs be spread among accounting
periods versus expensed in a single accounting period?
3.
How should UID/RFID costs be allocated to contracts and what
are the causal/beneficial relationships between the costs and
contracts?
4. Can a contractor
use an indirect cost pool that is liquidated against contracts is
such liquidation permitted by the Cost Accounting Standards and
appropriations law?”
COMMENT:
How have you resolved these types of issues?
·
Last month’s Regulatory Update noted that certain
free trade agreements under negotiation by the United States could
cause “local/state ‘preferences’ in contracting to be
preempted.” The Wall
Street Journal reported on May 14, 2004, “at least four (state)
governors have pulled out of an agreement with US trade officials
committing their state to abide by trade pacts that would bar giving
preference to local businesses or restricting outsourcing.”
COMMENT:
Considering past trends in trade negotiations on preemption
with the role of the federal government in regulating international
trade, stay tuned on how local/state preferences fare in this
election (job outsourcing) year.
·
If “you” think that an IDIQ contract (under SBA's
8(a) program) with a limitation of cost clause (FAR 52.232-20) does
not apply on an individual basis to delivery orders placed
thereunder, then “look”
at ANALYSAS CORPORATION, ASBCA No. 54183, May 12, 2004.
·
The Air Force has issued its February 2004 version of
its CONTRACTOR PERFORMANCE ASSESSMENT REPORTING SYSTEM (CPARS) guide
which is “one of many tools used to communicate contractor
strengths and weaknesses to source selection officials and
contracting officers,” i.e. is embodies source selection
information/action.
COMMENT:
And this does not have a significant impact on the public
which requires Federal Register publication?
Where is the requisite regulatory oversight when it is
needed?
·
And, the Navy has issued under a memorandum of April
29, 2004, its "Desk Guide for Service Contract Price
Adjustments" (30 April 2004).
The stated purpose of the Guide “is to provide guidance to
Navy contracting officers for processing price adjustments that
result from changes in wage determinations issued under the Service
Contract Act, or other amendments changing the minimum wage required
by the Fair Labor Standards Act. (A Navy professional adds) this is
a ‘great, how-to guide and reference source’ on price
adjustments under the Service Contract Act.”
COMMENT:
Ditto with the last comment! Or, as a reader has suggested in
an analogous situation, “Looks like another case of obscuring how
the agency does business internally (or at least not being involved
in development of processes) so us outsiders won't know the
process??” Or, should
the public participate in the development of that business process
which also impacts them? Rumor
as it that the public may have constructive input from time to time.
·
COMMENT: Notes from the May 14, 2004, Department of Homeland Security
(DHS) and industry meeting on DHS implementation of the SAFETY Act
suggests (notwithstanding assurances to the contrary) that it is
going very slowly. And
a May 3, 2004, briefing was conducted wherein a DoD representative
was quoted as stating that “DoD will not use (Public Law)
85-804 for anti-terrorist technologies.” See prior Updates.
And, the “best places to work” within the US
Government is out— http://www.bestplacestowork.org/
Charles E. Rumbaugh
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