FEDERAL ACQUISITION REGULATION (FAR)

I. Mission and Overview

The Federal Acquisition Regulation (FAR) was established to codify uniform policies for acquisition of supplies and services by executive agencies. It is issued and maintained jointly, pursuant to the Office of Federal Procurement Policy (OFPP) Reauthorization Act, under the statutory authorities granted to the Secretary of Defense, Administrator of General Services, and the Administrator, National Aeronautics and Space Administration. Statutory authorities to issue and revise the FAR have been delegated to the procurement executives in Department of Defense (DoD), GSA, and National Aeronautics and Space Administration (NASA). The FAR Council formulated a plan for a retrospective analysis of existing rules and a paperwork burden plan in response to the President's Executive Orders 13563 and 13610. The plan conducts a periodic review of existing significant regulations and also focuses on reducing the paperwork burdens on small business. The plan is located at http://www.acquisition.gov.

II. Statement of Regulatory and Deregulatory Priorities

Federal Acquisition Regulation Priorities:

Specific FAR cases that the FAR Council plans to address in Fiscal Year 2015 include:

Regulations of Concern to Small Businesses

Small Business Subcontracting Improvements-This case implements statutory requirements from the Small Business Jobs Act of 2010 aimed at protecting small business subcontractors and increasing subcontracting opportunities for small business. (FAR Case 2014-003)

Set-Asides under Multiple Award Contracts-This case implements statutory requirements from the Small Business Jobs Act of 2010 and is aimed at providing agencies with clarifying guidance on how to use multiple award contracts as a tool to increase Federal contracting opportunities for small businesses. (FAR Case 2014-002)

Payment of Subcontractors-This case implements section 1334 of the Small Business Jobs Act of 2010 and the Small Business Administration's (SBA) Final Rule 78 FR 42391, Small Business Subcontracting. The rule requires prime contractors of contracts requiring a subcontracting plan to notify the contracting officer in writing if the prime contractor pays a reduced price to a subcontractor or if payment is more than 90 days past due. A contracting officer will then use his or her best judgment in determining whether the late or reduced payment was justified and if not the contracting officer will record the identity of a prime contractor with a history of unjustified untimely payments to subcontractors in the Federal Awardee Performance and Integrity Information System (FAPIIS) or any successor system. (FAR Case 2014-004)

Consolidation of Contract Requirements-This case implements section 1313 of the Small Business Jobs Act of 2010 and SBA's final rule to ensure that decisions made by Federal agencies regarding consolidation of contract requirements are made with a view to providing small businesses with appropriate opportunities to participate as prime and subcontractors. (FAR Case 2014-015)

Clarification of Requirement for Justifications for 8(a) Sole-Source Contracts-This case amends the FAR in response to GAO Report to the Chairman, Subcommittee on Contracting Oversight, Committee on Homeland Security and Governmental Affairs, U.S. Senate, entitled Federal Contracting: Slow Start to Implementation of Justifications for 8(a) Sole-Source Contracts (GAO-13-118 dated December 2012). The GAO report indicated that the FAR is not clear on whether a justification is required and suggested that clarifying guidance is needed to help ensure that agencies are applying the justification requirement consistently. Based on GAO's recommendation, this case further clarifies the processes and procedures in the FAR to ensure uniform, consistent, and coherent guidance regarding the use of sole-source 8(a) justifications. (FAR Case 2013-018)

Contracts under the Small Business Administration 8(a) Program-This case clarifies FAR subpart 19.8, "Contracting with the Small Business Administration (The 8(a) Program)." Clarifications include the evaluation, offering, and acceptance process for requirements under the 8(a) program, procedures for acquiring SBA's consent to procure an 8(a) requirement outside the 8(a) program, and the impact of exiting the 8(a) program in terms of the firm's ability to receive future 8(a) requirements and its current contractual commitments. (FAR Case 2012-022)

Regulations Which Promote Fiscal Responsibility

Notification of Pass-Through Contracts-This case implements section 802 of the NDAA for FY 2013. Section 802 requires in those instances where an offeror for a contract, task order, or delivery order informs the agency pursuant to FAR 52.215-22 of their intention to award subcontracts for more than 70 percent of the total cost of work to be performed under the contract, task order, or delivery order, the contracting officer is required to (1) consider the availability of alternative contract vehicles and the feasibility of contracting directly with a subcontractor or subcontractors that will perform the bulk of the work; (2) make a written determination that the contracting approach selected is in the best interest of the Government; and (3) document the basis for such determination. (FAR Case 2013-012)

Limitation on Allowable Government Contractor Compensation Costs-This interim rule implements section 702 of the Bipartisan Budget Act of 2013. In accordance with section 702, the interim rule revises the allowable cost limit relative to the compensation of contractor and subcontractor employees. Also, in accordance with section 702, this interim rule implements the possible exception to this allowable cost limit for scientists, engineers, or other specialists upon an agency determination that such exceptions are needed to ensure that the executive agency has continued access to needed skills and capabilities. (FAR Case 2014-012)

Regulations Which Promote Ethics and Integrity in Contractor Performance

Information on Corporate Contractor Performance and Integrity-This case implements section 852 of the NDAA for FY 2013 (Pub. L. 112-239). Section 852 requires that the Federal Awardee Performance and Integrity Information System (FAPPIIS) include, to the extent practicable, identification of any immediate owner or subsidiary, and all predecessors of an offeror that held a Federal contract or grant within the last three years. The objective is to provide a more comprehensive understanding of the performance and integrity of a contractor in awarding a Federal contract. (FAR Case 2013-020)

Trafficking in Persons-This case implements Executive Order 13627, and title XVII of the NDAA for FY 2013, to strengthen protections against trafficking in persons in Federal contracts. The case creates a stronger framework and additional requirements related to awareness, compliance, and enforcement. Contractors and subcontractors must disclose to employees the key conditions of employment, starting with wages and work location. (FAR Case 2013-001)

Prohibition on Contracting with Corporations with Delinquent Taxes or a Felony Conviction-This case implements multiple sections of the Consolidated Appropriations Act, 2014 (Pub. L. 113-76) to prohibit using any of the funds appropriated by the Act to enter into a contract with any corporation with a delinquent Federal tax liability or a felony conviction. (FAR case 2014-019)

Prohibition On Contracting with Inverted Domestic Corporations-This case implements section 733 of Division E of the Consolidated Appropriations Act, 2014 (Pub. L. 113-76), which prohibits expenditure of appropriated funds for contracts with a foreign incorporated entity that is treated as an inverted domestic corporation or any subsidiary of such entity. The FAR is being updated to 1) revise the methods used to implement the inverted domestic corporation contracting prohibition; 2) amend the definition to clarify entities considered to be an inverted domestic corporation; 3) revise the representation to require two affirmative yes/no representations with respect to inverted domestic corporation status; and require a contractor to promptly inform the contracting officer, in writing, in the event the contractor becomes either an inverted domestic corporation or a subsidiary of an inverted domestic corporation during the performance of the contract. (FAR Case 2014-017)

Regulations Which Promote Accountability and Transparency

Commercial and Government Entity (CAGE) Code-This case requires the use of CAGE codes, an alpha-numeric identifier used extensively throughout the Government, for awards valued greater than the micropurchase threshold. The case also requires identification of the immediate corporate/organization parent and highest level corporate/organization parent during contractor registration for Federal contracts. The goal is to provide for standardization across the Federal government, and to facilitate data collection as means of promoting increased traceability and transparency. (FAR Case 2012-014)

Uniform Procurement Identification-This case requires the use of a unique identifier for contracting offices and a standard unique Procurement Instrument Identification Number for transactions. The goal is to provide for standardization across the Federal government and to facilitate data tracking and collection. (FAR Case 2012-023)

Uniform Use of Line Items-This case establishes a requirement for use of a standardized uniform line item numbering structure in Federal procurement. This case is one component of the effort to implement Federal spending data standards in Federal procurement. This effort will help improve analysis and management decision that can reduce duplication in Federal spending, reduce costs for recipients of Federal dollars by reducing variations in standards for reporting and billing purposes, and provide greater transparency on outcomes of spending. (FAR Case 2013-014)

Privacy Training-This case creates a FAR clause to require contractors that (1) need access to a system of records, (2) handle personally identifiable information, or (3) design, develop, maintain, or operate a system of records on behalf of the Government have their personnel complete privacy training. This addition complies with subsections (e) (agency requirements) and (m) (Government contractors) of the Privacy Act (5 U.S.C. 552a) (FAR Case 2010-013)

Regulations that Promote Protection of Government Information and Systems

Basic Safeguarding of Contractor Information Systems-This case amends the FAR to implement procedures for safeguarding contractor information systems that contain information provided by or generated for the Government. The purpose of these safeguards is to provide the Government with the necessary assurance that contractors are taking basic security measures on their information systems containing Government information. (FAR Case 2011-020)

Expanded Reporting of Nonconforming Items-This case expands Government and contractor requirements for reporting of nonconforming items. A nonconforming item includes items that are likely to result in failure of the supplies or services, or materially reduces the usability of the supplies or services for their intended purpose. It is a partial implementation of section 818 of the NDAA for FY 2012. (FAR Case 2013-002)

Higher-Level Contract Quality Requirements- This case clarifies when to use higher-level quality standards in solicitations and contracts. The rule also updates the examples of higher-level quality standards by removing obsolete standards and adding new industry standards that pertain to quality assurance for avoidance of counterfeit items. (FAR Case 2012-032)

Regulations Which Promote Fair Labor Practices

Fair Pay and Safe Workplaces-This rule implements Executive Order 13673, Fair Pay and Safe Workplaces, seeks to increase efficiency in the work performed by Federal contractors by ensuring that they understand and comply with labor laws designed to promote safe, healthy, fair and effective workplaces. (FAR Case 2014-025)

Minimum wage for contractors-This rule implements Executive Order 13658, Establishing a Minimum Wage for Contractors, requires agencies, to the extent permitted by law, to include a clause in new solicitations and resultant contract specifying, as a condition of payment, that the minimum wage to be paid to workers, in the performance of the contract or any subcontract there under, shall be at least $10.10 per hour beginning January 1, 2015.

Equal Employment and Affirmative Action for Veterans and Individuals with Disabilities-This rule implements DOL regulations at 41 CFR 60-250 and 60-300 designed to promote equal opportunity for veterans and individuals with disabilities. (FAR case 2014-013)

Regulations that Promote Environmental Goals

EPEAT Items-This case expands the Federal requirement to procure EPEAT®-registered products beyond personal computer products to cover imaging equipment (i.e., copiers, digital duplicators, facsimile machines, mailing machines, multifunction devices, printers, and scanners) and televisions and modify the existing FAR requirements to recognize the revised standard applicable to computer products. (FAR Case 2013-016)

High Global Warming Potential Hydrofluorocarbons- This case implements the President's Climate Action Plan by setting forth policies and procedures for the acquisition of items that contain, use, or are manufactured with ozone-depleting substances; or contain or use high global warming potential hydrofluorocarbons. Contractors shall refer to EPA's Significant New Alternatives Policy (SNAP) program (available at http://www.epa.gov/ozone/snap) which has additional information and a list of alternatives to ozone-depleting substances and lower global warming hydrofluorocarbons. (FAR Case 2014-026)

Dated: September 19, 2014

NAME: Jeffrey A. Koses,

Senior Procurement Executive/Deputy CAO,

Office of Acquisition Policy,

U.S. General Services Administration.