FAR and Beyond Blog
Last week GSA’s Federal Acquisition Service (FAS) Office of Schedule Programs issued a Request for Information (RFI) seeking feedback on “GSA Proposed Change to Add a Cloud Computing Special Item Number (SIN) on IT Schedule 70.” The RFI indicates that the purpose of the new Cloud Computing SIN “would be to improve the way GSA offers cloud computing services through IT Schedule 70, increase visibility and access of cloud computing services to customer agencies, and to provide industry partners the opportunity to differentiate their cloud computing services from other IT related products and services. “ The RFI notes that the proposed change supports “OMB’s “Cloud First” policy by enabling agencies to take advantage of cloud computing benefits to maximize capacity utilization, improve IT flexibility and responsiveness and minimize cost.”
The goals of the RFI are to:
(1) Gain feedback from industry and any other relevant stakeholders on a proposed new Cloud Computing Services SIN; and
(2) Better understand how industry partners are selling cloud computing services today on IT Schedule 70, to support a decision on creating a Cloud Computing Services SIN.
Importantly the RFI seeks feedback from both customer agencies and industry partners.
The Coalition applauds FAS for issuing the RFI. It is a thoughtful, positive step towards implementing efficient, effective and best value delivery of commercial cloud computing services for agency customers and the American people. The due date for submission of comments is 4 pm, August 6th. The RFI can be found here.
The Coalition will be submitting comments. As a first step we are working with our IT Committee members to identify and develop consensus comments. Over the longer term, as I previously mentioned in my June 27, 2014 FAR& Beyond Blog, the Coalition is on track to launch our Coalition Innovation Task Force (CITF). The task force is charged with building on our earlier work setting forth a vision for transforming IT Schedule 70 into the IT Commercial Innovation Schedule. In addition to the transformation of IT Schedule 70, the CITF will be identifying innovation opportunities across the federal enterprise. For example, share-in-savings contracting mechanisms remain an opportunity to more cost-effective, flexible contractor support to meet mission needs. The CITF will identify procurement practices and procedures that reduce barriers to innovation and solutions based contracting that leverages the growing convergence between information technology and services—like cloud services. The Coalition and the CITF look forward to a robust dialogue with FAS on bringing best value innovation and solutions based contracting to customer agencies.
Roger Waldron
President
Last Chance to Register: Small Business Forum – July 23
How will teaming, strategic sourcing and proposed changes to the federal small business programs impact your business? This forum is excellent way for small businesses and small business program managers within large companies to get up to date on key initiatives impacting performance in the federal market. The speakers include key players from the Hill and government agencies, as well as companies with real world experience selling to federal agencies. See below for more details!
Keynote: On the Hill – How the legislative agenda will affect strategic sourcing and other federal initiatives impacting the small business community
- Emily Murphy, Senior Counsel, House Committee on Small Business
Panel: Contractor Teaming Arrangements and Joint Ventures, from Formation to Payment – what they are; how they really work; what’s the benefit. Have your questions answered by a panel with hands on experience
- Kenneth Dodds, Director, Small Business Administration
- Joseph Hornyak, Partner, Holland and Knight, LLP
- Mark Lee, Deputy Director, GSA, Office of Governmentwide Policy
- Marian Morley, Vice President, Government Sales & Operations, Allsteel
- Jim Connal, Vice President, Contracts and Compliance – Red River Computing (Moderator)
- Tom Walker, Government Manager – Nucraft, Furniture (Moderator)
Time: 8:00AM – 11:30AM
Location:
Tower Club
8000 Towers Crescent Dr #1700, Vienna, VA 22182
Pricing:
Keystone Member: Complimentary
Premier Member: $65
Standard: $95
Non-Member: $145
Click HERE to Register!
DoD IG Audit on Cost-Reimbursement Contracting
On July 11th, the Office of the Inspector General for the Department of Defense (DoD IG) published its audit report of the Navy and Marine Corps in accordance with the FY 2009 National Defense Authorization Act (NDAA). Entitled “Navy and Marine Corps Have Weak Procurement Processes for Cost-Reimbursement Contract Issuance and Management”, the report reviewed 170 contracts valued at $7.7 billion between the two branches from March 17, 2011 to February 29, 2012. The report found that for 134 of the reviewed contracts, contracting personnel did not comply with interim Federal Acquisition Regulation (FAR) revisions on the use of cost-reimbursement contracts. The interim rule required that contracting officers properly document any decision to use contract types other than firm-fixed-price and obtain the approval of a higher-level acquisition official.
The DoD IG determined that contracting personnel were either not clear about the interim rule requirements or were not aware of the interim rule. The IG expressed concern in the report that the failure to comply with the rule increased risk for the Defense Department because “cost-reimbursement contracts provide less incentive for contractors to control costs.”
The report recommends that Naval Sea Systems Command Headquarters and Naval Supply Center-San Diego further emphasize FAR revisions to contracting personnel, among other recommendations. Both organizations are taking steps to ensure that contracting personnel properly comply with the FAR requirements on the proper use and management of other than firm-fixed-price contracts.
DoD’s Whistleblower Protection Program
This week the Coalition was invited by the Department of Defense Inspector General (DoD IG) to attend a media roundtable on current contractor and subcontractor whistleblower rights and protections. With the recent changes in whistleblower protections for contractors and subcontractors, the DoD IG is reaching out to relevant individuals in both government and industry to share the new whistleblower protection policies that took effect July 1, 2013. These changes include the following:
- Extending whistleblower protections to employees of DoD subcontractors, no longer just to employees of prime contractors.
- Protecting whistleblowers from reprisal actions requested by executive branch officials.
- Granting employees three years from the date of the alleged reprisal action to file a reprisal complaint
DoD IG officials noted that while they continue to support and enhance their strategy for informing government and industry of the changes in whistleblower protection policy, it is too early to tell if the changes have made a significant impact. During this week’s media roundtable, the DoD IG explained that there have been 20 more whistleblower cases reported this year than last year. For more information on these changes and a list of FAQs for Whistleblowers, members can visit the link here: www.dodig.mil/Programs/Whistleblower/updates.html.
Mary Davie to Join GWAC/MAC Committee, July 22
The Coalition is pleased to announce that the GWAC/MAC Committee will be hosting GSA Assistant Commissioner for the Office of Integrated Technology Services Mary Davie on July 22. Mary Davie will join the committee for an informative dialogue on a host of ITS priorities and upcoming initiatives. The member meeting will take place at 1:30pm on July 22 in Fairfax, VA at CGI Federal. For more information and to RSVP contact Roy Dicharry at rdicharry@thecgp.org.
FBI Cloud Solicitation
The Federal Bureau of Investigation (FBI) has released a sources sought solicitation for on-premise cloud infrastructure and services. According to the RFI, the FBI is looking to conduct market research for its Criminal Justice Information Services (CJIS) Division Information, Technology Management Section Enterprise Technology Service Unit regarding commercially available on-premise Infrastructure as a Service (IaaS) solutions and the ability to expand the proposed solution with existing CJIS servers. The RFI comes as the FBI is exploring opportunities to move to online storage of criminal records, fingerprints and other biometric data, partly to expedite rap sheet searches and lower the costs of future expansion.
Join the FSSI HR Services and Training (HRST) Working Group
The Coalition will provide feedback to GSA on the FSSI acquisition strategy for Human Resources and Training and Capital Management. This is a joint GSA/OPM initiative which will replace OPM’s existing Training and Management Assistance (TMA) contract vehicle. If you are interested in participating in the Coalition’s working group, please send an email to Aubrey at awoolley@thecgp.org.
Members: Submit Feedback on Cloud RFI
As mentioned in today’s FAR & Beyond blog, the Coalition will submit comments in response to GSA’s Cloud Computing Request for Information (RFI). The RFI is seeking industry feedback on a proposed change to add a Cloud Computing Special Item Number (SIN) to IT Schedule 70. The Coalition is interested in receiving member input to include in our comments. Please submit your feedback on the RFI by August 1st to Aubrey Woolley at (202) 315-1053 or awoolley@thecgp.org.
Proposed GSA Construction Budget Shrinks in 2015
According to the Federal Times, the House of Representatives passed an appropriations bill on July 10th that would cut the GSA’s construction budget for fiscal year 2015. GSA would receive $420 million for new construction projects, which is $86 million less than the agency received last year. And while GSA received $1 billion for renovations and repairs in FY 2014, this year’s appropriations bill allocates $965 million. In addition, no funding was allocated in the bill for continued construction of the Department of Homeland Security consolidated headquarters on the former St. Elizabeth’s hospital campus in southeast Washington, D.C.
DAPA Holders are Caught in the Middle of a Disagreement between the VA and DLA over the Application of the IFF to DAPA Sales
By Jack Horan, Partner, McKenna Long & Aldridge LLP
Sales to the Department of Defense under its Distribution and Pricing Agreement program are very important to many VA FSS contractors. The VA, itself, views DAPA sales as integral to the success of VA Schedule contracts, telling contractors that “success of your VA FSS contract requires the development of a strong federal customer base and active promotion of your business to these customers” and “[p]articipation in the Defense Logistics Agency’s (DLA) Troop Support Distribution and Pricing Agreements (DAPA) program is a surefire way to penetrate the federal healthcare marketplace.” See VA FSS eNewsletter, No. 55 (March 2014) at 1
Despite the importance of these sales to VA FSS contractors, DOD and the VA are in the midst of a disagreement over whether VA FSS contractors are required to pay the industrial funding fee on sales of items through the DAPA when those items are also listed on the contractor’s VA Schedule Contract. The VA’s position is explicitly set forth in a somewhat unusual appendage to the standard Industrial Funding Fee and Sales Reporting Clause, GSAR 552.238-74, included in VA Schedule contracts:
NOTICE REGARDING DISTRIBUTION AND PRICING AGREEMENTS (DAPA)
If your firm has a DAPA with the Department of Defense, items available therein that are also awarded under FSS contract must, during the course of the FSS contract, be reported as FSS sales and included in quarterly FSS Sales Reports and Industrial Funding Fee (IFF) remittance.
See, e.g. RFP 797-FSS-99-0025-R9, Solicitation Document at 38.
The VA recently confirmed (and justified) its position that FSS Contractors must pay the IFF on DAPA sales in its FSS eNewsletter:
One of the questions we most often receive is “I have a DAPA, do I need to report those sales on my quarterly sales report?” In 1999, DoD and the VA signed a memorandum of understanding indicating that FSS pricing is the preferred method of pricing for products identified on DAPAs and as such sales for items awarded under a VA FSS contract that are also available under a DAPA must be reported as FSS sales.
Any delivery/task order placed against a VA Schedule contract – whether for a base contract item, blanket purchase agreement, or DAPA, is a reportable sale and must be included in the quarterly sales report & IFF payment. Additionally, all sales made to agencies other than the VA, state & local governments, and through prime vendor programs & direct-to-patient distribution must be reported. Direct all FSS sales reporting & IFF remittance questions to the VA Sales Desk.
See VA FSS eNewsletter, No. 55 (March 2014) at 5 (emphasis in original).
So the VA’s answer is a firm “yes” – VA Schedule contractors must pay the IFF on DAPA sales. Based on the VA’s eNewsletter, the VA appears to believe it has two justifications for the requirement: (1) a 1999 memorandum of understanding with DOD; and (2) its apparent view that items purchased under a DAPA is “placed against a VA Schedule contract.” Id.
A major problem with the VA’s position is that DOD apparently does not agree. The Defense Logistics Agency, the DOD Executive Agent for Medical Material. responsible for administration of DAPAs, is instructing its DAPA holders not to pay the IFF for sales to prime vendors under a DAPA:
The following is specific DAPA guidance:
• There is no direct relationship between a Federal Supply Schedule (FSS) and DAPA.
• A DAPA does not require a vendor to establish or have a FSS.
• Prime Vendor contracts are separate acquisitions and sales thereunder using the DAPA catalogue do not require reporting or payment through the Department of Veterans Affairs (DVA) Industrial Funding Fee (IFF) process.
Any DAPA holder given contrary guidance should immediately contact DLA.
See DLA Memorandum to Prime Vendor DAPA Program, found at https://www.medical.dla.mil/Portal/.
DLA views DAPAs as “DLA pricing vehicles used to establish and manage pricing with manufacturers and/or distributors for medical material purchased under DLA’s Prime Vendor contracts” rather than orders “placed against a VA Schedule contract,” Compare, id and VA FSS eNewsletter at 5. DLA also sees its Prime Vendor contracts – “FAR Par 12 acquisitions that use pricing vehicles such as DAPA under FAR Part 16 as single source awards within a region” — as separate from VA’s FSS contracts. Id. Thus, these opposite views on the IFF grow out of a fundamentally different view of the role of VA Schedule contracts in DAPA orders. VA views the DAPA orders as “placed against” Schedule contracts while DLA views them as placed under DLA’s Prime Vendor contracts independent of the VA’s Schedule contracts. In its instruction to DAPA holders, DLA does not address the 1999 memorandum referenced in the VA’s eNewsletter.
So, FSS contractors with a DAPA, at least for now, are caught between the conflicting views of the VA and DLA – one telling them that they have to pay the IFF and the other telling them that they should not. Each relying on a fundamentally different view of the status of orders placed through DLA Prime Vendors based on DAPA pricing.
Moreover, a contractor faces risk in following either position. By excluding DAPA sales from the IFF, as instructed by DLA, the contractor risks a claim by the VA that it is not complying with its FSS contract, or worse, a potential claim under the False Claims Act. By paying the IFF, the contractor faces at least the financial risk of paying a fee that it is not obligated to pay. To the extent the fee is included in the cost in its DAPA, the DAPA holder also faces a potential request for a price reduction under the DAPA to eliminate the IFF. Given these risks, the VA and DLA have an obligation to their contractors to resolve this issue.
VA and DLA are involved in a discussion of these issues and we hope to report a resolution soon.
Important Decision Impacting Government Contractors
IN RE: KELLOGG BROWN &ROOT, INC., (KBR) (D.C. Circuit June 27, 2014)
This week the court decided a significant case for government contractors. The case is important because a contrary ruling would have eliminated the attorney-client privilege in connection with internal investigations conducted by companies required by law to maintain compliance programs. Given the requirements for compliance plans and mandatory disclosure of FAR Subpart 3.10, Contractor Code of Business Ethics and Conduct, many contractors would have been affected. Because of the potential impact, a number of organizations, including The Coalition for Government Procurement, submitted an amicus brief in support of KBR. The court cited the amicus brief as demonstrating the depth of industry concern with this issue. The following is an analysis of the case from McKenna Long & Aldridge. We suggest that you share it with your corporate attorneys and internal audit staff.
D.C. Circuit Upholds the Attorney-Client Privilege for Corporate Internal Investigations
By: Jack Horan, Partner, McKenna Long & Aldridge LLP, Jason Workmaster, Partner, McKenna Long & Aldridge LLP and Sandeep Nandivada, Associate, McKenna Long & Aldridge LLP
On June 27, 2014, the U.S. Court of Appeals for the D.C. Circuit granted Kellogg Brown & Root’s (KBR) petition for a writ of mandamus and vacated the District Court’s order in United States ex rel. Barko v. Halliburton Co., No. 05-cv-1276, 2014 WL 1016784 (D.D.C Mar. 5, 2014) compelling KBR to produce internal investigation documents. In Re: Kellogg Brown & Root, Inc., No. 1:05-cv-1276 (D.C. Cir. June 27, 2014). The D.C. Circuit’s ruling has upheld important protections for companies conducting internal investigations pursuant to statute or regulation, and affirmed the continued vitality of the Supreme Court’s decision in Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) for companies claiming the attorney-client privilege.
District Court Proceedings
In Barko, the relator sought documents created by KBR during its internal investigation of the allegations that are the basis for the relator’s qui tam case. KBR’s legal department oversaw the investigation, which was conducted pursuant to KBR’s Code of Business Conduct. KBR asserted the attorney-client privilege over the investigation, arguing that KBR created the documents so that KBR’s internal lawyers could provide legal advice to the company. The relator argued that the documents were not privileged because they were ordinary business records. The District Court applied a “but for” test for determining whether the purpose of the documents was to obtain legal advice – analyzing whether the documents would have been created “but for” the need for legal advice. The District Court reasoned that because regulations and KBR’s own corporate policy required KBR to conduct the investigation, KBR had not created the documents solely to obtain legal advice. The Court concluded that the documents were not privileged because KBR created them to satisfy regulatory and corporate requirements.
KBR immediately requested that the District Court certify the privilege question for interlocutory appeal and to stay its order compelling production pending a petition for a writ of mandamus from the D.C. Circuit. The District Court denied those requests. Left with no other choice, KBR took the extraordinary action of filing a petition for writ of mandamus with the D.C. Circuit. The D.C. Circuit stayed the District Court’s order pending a ruling on the mandamus petition.
D.C. Circuit’s Analysis
KBR had two difficult hurdles to clear to prevail on mandamus – it had to show legal error and that the error justified the extraordinary writ of mandamus. It cleared both of them.
The Circuit found two fundamental legal errors. First, the District Court improperly used a “but for” causation analysis when applying the “primary purpose test.” The correct formulation of the “primary purpose” test requires legal advice to be a significant purpose of the communication. The significant purpose of legal advice is not undermined simply because the internal investigation is also required by statute, regulation or a company’s compliance program.
Second, the District Court misinterpreted Upjohn. The D.C. Circuit noted that Upjohn does not require any of the following for the privilege to apply: (1) the involvement of outside counsel to claim the attorney-client privilege; (2) that attorneys personally conduct employee interviews when the investigation is conducted at the direction of counsel; or (3) the use “magic words” informing employees of the purpose of the interview.
The D.C. Circuit noted that KBR’s assertion of the privilege was “materially indistinguishable” from the basis upheld in Upjohn. As in Upjohn, KBR initiated an internal investigation in response to reports of potential misconduct and as part of a concerted effort to gather facts and ensure compliance with applicable laws and regulations. As in Upjohn, KBR’s in-house legal counsel coordinated the investigation. In short, the Circuit confirmed the continuing validity of Upjohn procedures in establishing the attorney-client privilege.
After finding clear legal error, the D.C Circuit applied the three factors required for mandamus as set forth in Cheney v. U.S. District Court for the District of Columbia, 542, U.S. 367, 380 (2004): (1) no other adequate means to secure the desired relief; (2) the right to relief must be clear and indisputable; and (3) the writ is appropriate under the circumstances. KBR easily met the first two factors. Mandamus provided KBR with the only meaningful remedy. The District Court had denied KBR’s motion for interlocutory appeal, and an interlocutory appeal under the collateral order doctrine is not available for attorney-client privilege orders. An appeal after final judgment would be too late to protect the documents that KBR was ordered to produce. The DC Circuit’s finding of clear legal error itself made KBR’s right to relief clear and indisputable.
The third factor, “a relatively broad and amorphous totality of the circumstances consideration”, also favored KBR. The potential for grave harm to the attorney-client privilege if the District Court’s decision remained in effect made mandamus “appropriate under the circumstances.” Left in place, the District Court’s decision could “work a sea change in the well-settled rules governing internal corporate investigations”:
Because defense contractors are subject to regulatory requirements of the sort cited by the District Court, the logic of the ruling would seemingly prevent any defense contractor from invoking the attorney-client privilege to protect internal investigations undertaken as part of a mandatory compliance program. See 48 C.F.R. § 52.203-13 (2010). And because a variety of other federal laws require similar internal controls or compliance programs, many other companies likewise would not be able to assert the privilege to protect the records of their internal investigations. See, e.g., 15 U.S.C. §§ 78m(b)(2), 7262; 41 U.S.C. § 8703. As KBR explained, the District Court’s decision “would disable most public companies from undertaking confidential internal investigations.” KBR Pet. 19.
Id. at 15. Thus, although not binding, the incorrect “but for” analysis could gain traction in other district courts. To protect against these harms to both KBR and the attorney-client privilege more broadly, the D.C. Circuit granted KBR’s petition for a writ of mandamus.
Government contractors (and the many other companies subject to statutory and regulatory requirements to conduct internal investigations) can now breathe a sigh of relief – the application of the attorney-client privilege to corporate internal investigations required by law or regulation has been vindicated and upheld. Companies following Upjohn procedures can conduct their internal investigations with the assurance that the attorney-client privilege will protect candid and full communications.
GSA Issues Notice to Proceed for FSSI MRO
GSA announced this week that they have issued a notice to proceed with the Maintenance, Repair and Operations (MRO) Federal Strategic Sourcing Initiative (FSSI) BPA for the purchasing channel. According to GSA, the official notice signals to the 12 BPA vendors that they have 30 days to make their FSSI discounted pricing available to Federal agencies. The MRO FSSI BPA offers products such as hardware, tools, paints, adhesives and sealants. GSA anticipates that it will save $16 million in the first year of the BPA.
DPAP Proposes Update to DFARS Business Systems Rule
On July 15th, Defense Procurement and Acquisition Policy (DPAP) published a proposed update to the Defense Federal Acquisition Regulation Supplement (DFARS) Business Systems Rule. The update would require contractors to conduct self-assessments and report on business systems compliance. Inadequate or inaccurate reports could result in significant penalties, including liability under the False Claims Act. To view the proposed rule, visit www.acq.osd.mil/dpap/dars/dfars/changenotice/2014/20140715/fr_2012-D042.pdf.
Senate Appropriations Committee Approves DoD Spending Bill
On July 17th, the Senate Committee on Appropriations marked up and approved the Department of Defense (DoD) Fiscal Year 2015 Appropriations Bill. This year’s DoD Appropriations bill allocates $549.3 billion for base spending and Overseas Contingency Operations (OCO), compared to the $572 billion enacted in FY 2014, and the President’s requested budget for this year of $550.7 billion. The bill also cuts $500 million for IT spending from the President’s budget request. For more information, visit the Senate Appropriations Committee website.
John Tenaglia Named Director of Contract Policy at DoD
On Thursday, Defense Procurement and Acquisition Policy (DPAP) Director Richard Ginman promoted John Tenaglia to Deputy Director for Contract Policy and International Contracting in the Office of the Under Secretary of Defense (OUSD) for Acquisition Technology and Logistics (AT&L). Tenaglia and his staff are responsible for developing and improving procurement policies for the Department of Defense (DoD). Policy issue areas that Tenaglia will be responsible for include: competition advocacy, competition advocacy, development and negotiation of reciprocal defense procurement agreements with foreign partner nations, and others. The Coalition for Government Procurement congratulates Mr. Tenaglia and looks forward to working with him in his new role.
GSA Assesses New Technologies for Green Buildings
GSA’s Public Buildings Service has released an update concerning its Green Proving Ground (GPG) program. GPG is an initiative that was launched in accordance with Executive Order 13514. To meet target sustainability goals and enable the realization of net zero buildings, GSA’s GPG leverages GSA’s real estate portfolio to evaluate innovative sustainable building technologies and provide recommendations on their deployment.
In a blog post this week, Green Proving Ground program manager Kevin Powell released three new sets of evaluation results for three technologies selected by GSA to be a part of the program:
- Daylight harvesting, the use of natural light to offset electric light in perimeter workspaces, offers the opportunity to reduce lighting energy by between 20% and 60%. By utilizing this method of energy saving at five Federal building sites, GPG found an average annual energy savings of 27% and simple payback as low as four years.
- A wood-pellet-fired biomass boiler is a renewable energy technology that powers hot-water-heating systems with solid wood fuel—such as wood pellets, chips, or sawdust—instead of more expensive liquid fuels. Employed at a public building in Alaska, GPG found the boiler to be running smoothly with minimal maintenance after a year of operation, at a tested performance level of 85.6% efficiency, and a strong alternative to natural gas heating systems.
- Condensing boilers reduce energy consumption by extracting more of the heat energy released through steam in the combustion process. In Georgia and Colorado, GPG assessed the performance of condensing boilers at federal sites and experienced significant reductions in natural gas consumption, with savings over 14% compared with conventional boilers.
GSA notes that these reports along with nine previously released reports and more information about GSA’s Green Proving Ground program are available at gsa.gov/GPG. The Green Proving Ground estimates that the RFI for the selection of the next round of GPG technologies will be published in the fall of 2014.
OMB Extends Accelerated Payments Policy
Recently, the Office of Management and Budget released a memo regarding the Policy to Provide Accelerated Payment to Small Business Subcontractors. The memorandum extends the policy to temporarily accelerate payments to all prime contractors in order to allow them adequate time to provide prompt payments to small business subcontractors. The policy sets a goal of paying prime contractors within 15 days of receipt of proper invoices. The policy, previously set to expire on July 11, 2014 is now extended until December 31, 2016.
DOL Proposed Rule: Minimum Wage for Contractors, Extended to July 28
The Department of Labor (DOL) has extended the deadline to comment on the Minimum Wage for Contractors proposed rulemaking. The new deadline is July 28. The rule implements Presidential Executive Order (EO) 13658, which set a new minimum wage of $10.10 per hour, effective January 1, 2015. Beginning on January 1, 2016, and annually thereafter, the applicable minimum wage will be determined by the Secretary of Labor.
DOL has posted a fact sheet about the rule on its website. The fact sheet includes the following helpful information about the proposed rule.
A. Contracts covered – new contracts and replacements for expiring contracts that result from solicitations issued on or after January 1, 2015 in the following four major categories
(1) procurement contracts for construction covered by the Davis-Bacon Act (DBA);
(2) service contracts covered by the Service Contract Act (SCA);
(3) concessions contracts, including any concessions contract excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b); and
(4) contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.
B. Contracts not covered
(1) grants;
(2) contracts and agreements with and grants to certain Indian Tribes
(3) procurement contracts for construction that are not subject to the DBA (i.e., procurement contracts for construction under $2,000); and
(4) contracts for services that are exempted from coverage under the SCA or its implementing regulations. For example, the SCA exempts contracts for public utility services, including electric light and power, water, steam, and gas, from its coverage.
(5) employment contracts providing for direct services to a Federal agency by an individual.
(6) contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government, i.e., those subject to the Walsh-Healey Public Contracts Act.
C. Contractor Obligations
(1) contractors and subcontractors must pay not less than the Executive Order minimum wage to workers for all hours spent performing on covered contracts;
(2) include the Executive Order minimum wage contract clause in lower-tiered subcontracts; and
(3) comply with obligations related to wage deductions, frequency of pay, and recordkeeping.
The proposed rule also prohibits taking kickbacks from wages paid to workers on covered contracts and retaliation against any worker for exercising his or her rights under the Executive Order or the implementing regulations.
Under the proposed rule, prime contractors and upper-tier contractors would be responsible for the compliance of any subcontractor or lower-tier subcontractor. Contractors would be required to maintain records for three years including for each worker the rate or rates of wages paid, the number of daily or weekly hours worked and any deductions made. Compliance with the EO’s requirements will be monitored by the Department of Labor’s Wage and Hour Division.
The Labor Secretary is scheduled to issue the final regulations implementing EO 13658 by October 1, 2014. Within 60 days of their release, the Federal Acquisition Regulatory (FAR) Council will update the FAR with the appropriate contract clause.
The Coalition is interested in hearing member feedback on the rule. Please send your comments to Carolyn Alston at calston@thecgp.org or (202) 600-2915 by Tuesday, July 22. We will be providing written comments to the Labor Department by July 28.
Sweeping Counterfeit Reporting Proposed Rule
The FAR Council published a proposed rule on June 10th extending certain reporting requirements for contractors beyond what is already required for counterfeit electronic parts to a broader scope of products and services. The proposed rule, titled “Extending Reporting of Nonconforming Items”, is intended to reduce the risk of counterfeit items entering the supply chain by ensuring that contractors report suspect items to a government database. According to an article by Crowell & Moring, “a contractor would be required to report to the contracting officer within 30 days of becoming aware that any ‘end item, component, subassembly, part or material contained in supplies purchased by the Contractor for delivery to, or for the Government is counterfeit or suspect counterfeit’”. It would also require that the contractor report the incidence to the Government-Industry Data Exchange Program (GIDEP) and monitor this site regularly to avoid delivery of any reported items to the government. For more details on the proposed rule, access Crowell & Moring’s article here. Comments on the rule are due August 11, 2014. Members who would like to provide feedback on the rule to the Coalition, please contact Aubrey Woolley at awoolley@thecgp.org.
Strategies for Federal Market Success in Q4: 2014 and Beyond, July 31
It’s a familiar federal market ritual. Each year federal agencies race to spend their remaining budget dollars in the End of the Year Scramble. For contractors, spend-it-or-lose-it often means a sprint to win these last minute contracts. How do contractors turn the end of year scramble to an enduring strategy for success?
Bloomberg Government, in partnership with The Coalition for Government Procurement, moves the conversation beyond specific contracting opportunities at the end of fiscal year 2014, to a focus on shaping companies’ Q4 strategies to always be prepared for the End of the Year Scramble. We will also conduct this conversation with an eye towards 2015 appropriations, which industry segments can expect increased federal opportunities, and how to best prepare
for them.
Confirmed Speakers Include:
Roger Waldron, President, The Coalition for Government Procurement
Kevin Brancato, Senior Defense Analyst, Bloomberg Government
To register, visit http://successinq4.eventbrite.com/?aff=cgp.
Two-Part Webinar Series for GSA Schedule Contractors
The Coalition for Government Procurement, in conjunction with Baker Tilly, is pleased to announce an upcoming Two-Part Webinar Series for GSA Schedule Contractors:
The landscape for GSA Schedule contractors has become increasingly difficult. Both products and services contractors are facing new challenges as they negotiate new GSA Schedule contracts or administer their existing GSA Schedule contracts. Pricing, contract terms and conditions, and post-award compliance have all come under the microscope, and contractors must be ready to respond. This two part series will address some of GSA’s and GSA OIG’s recent focal points so that contractors can consider potential impacts to their business and how they can best prepare.
Part 2: Challenges Facing Products Contractors
Thursday, August 14th, at Noon EDT
Presented by Jeff Clayton and Steven Brewer
GSA is facing immense pressure to achieve lower prices for its federal government customers. This has impacted the government’s negotiation tactics and in turn it has impacted, and will continue to impact, products contractors. Prices paid data is being tracked and horizontal pricing comparisons are becoming the norm. Federal Strategic Sourcing Initiatives, an increasingly popular tool for GSA, continue their march across the supply side of the Schedules program. The presentation will discuss all of this and more, including best practices, so that contractors can prepare themselves to respond to these issues.
The Coalition’s Second Annual Joseph P. Caggiano Memorial Golf Tournament
Please join us for The Coalition’s 2nd Annual Joseph P. Caggiano Memorial Golf Tournament on August 27th at Whiskey Creek Golf Club! This charity tournament is to honor our good friend and colleague, Joe Caggiano, who was not only a 23-year veteran of the federal contracting marketplace but a naval veteran as well.
We believe Joe would be proud of the fact this year’s tournament proceeds are going to a brand new cause that will continue to support our nation’s veterans. In honor of the 35th Anniversary of The Coalition for Government Procurement, and in conjunction with The George Washington University, we are creating a scholarship/fellowship to provide financial support to a veteran. Specifically, qualified veterans concentrating their studies in the field of US Government procurement and pursuing the JD or LLM degree in Government Procurement Law or the interdisciplinary Masters of Science in Government Contracting degree (MSGC) at The George Washington University will benefit from the fund as we count on them to become the next generation of skilled professionals leading this critically important sector of the US economy.
Registration will begin at 9:30am with an 11:00am shotgun start, followed by a 4:30 pm post-tournament reception. The tournament will consists of a 4 player scramble with 144 maximum players. Please click here to register your foursome or as an individual golfer!
We have several exciting sponsorships available from title sponsors to beverage cart sponsors to hole sponsors, and also a wide range in pricing so no matter what your budget, you will still have an opportunity to support this wonderful cause. Please click here to review sponsorship opportunities and contact Matt Cahill at mcahill@thecgp.org or 202-315-1054 with any questions or sponsor commitments.
We look forward to your support and a fun and rewarding day for everyone!