Our October edition of "Government Contracts Legislative and Regulatory Update" offers a summary of the relevant changes that took place during the month of September.
Highlights this month include:
- FAR Council Issues Final Rule Regarding System for Award Management Registration
- FAR Council Issues Proposed Rule Regarding Rental Cost Analysis in Equipment Acquisitions
- FAR Council Issues Proposed Rule Regarding Evaluation Factors for Multiple-Award Contracts
- DoD Issues Proposed Rule Regarding Inapplicability of Certain Laws and Regulations to Commercial Items
This update will also be available in Contract Management Magazine, which is published monthly by the National Contract Management Association (NCMA).
FAR Council Issues Final Rule Regarding System for Award Management Registration (FAR Case 2015-005)
On September 26, 2018, DoD, GSA, and NASA issued a final rule, without change, updating instructions for registration in the System for Award Management (SAM) and clarifying the timing of registration in the SAM. The proposed rule, issued on May 20, 2016, proposed changes to FAR subpart 4.11, System for Award Management, (specifically, FAR 4.1102, 4.1103), FAR 52.204-7, SAM, and FAR 52.212-1(k), Instructions to Offerors--Commercial Items. In an effort to correct inconsistencies in current FAR language about when registration in SAM is required, the proposed rule made clear that all offerors are required to register in SAM prior to submission of an offer and required contracting officers to use the name and physical address from the contractor's SAM registration for the provided Data Universal Numbering System. The final rule adopts these changes and is made effective on October 26, 2018. (83 Fed. Reg. 48691, Sept. 26, 2018.)
FAR Council Issues Proposed Rule Regarding Rental Cost Analysis in Equipment Acquisitions (FAR Case 2017-017)
On September 5, 2018, DoD, GSA, and NASA issued a proposed rule to clarify the term "lease" in the Federal Acquisition Regulations. The proposed rule would amend the term "lease" as used in FAR subpart 7.4, Equipment Lease or Purchase, to include the "rental" of equipment and to identify some general factors that may vary when leasing or renting equipment. The proposed change clarifies that agencies are required to evaluate comparative costs and other factors when considering whether to lease or rent equipment versus purchase equipment. The proposed rule clarifies that although the term "lease" applies to both the lease and rental of equipment, there are some differences between renting and leasing in many industries, and there is no standard distinction between both renting and leasing that spans across all industries. Thus, agencies should take this into account when evaluating comparative costs. (83 Fed. Reg. 45072, Sept. 5, 2018.)
FAR Council Issues Proposed Rule Regarding Evaluation Factors for Multiple-Award Contracts
On September 24, 2018, DoD, GSA, and NASA issued a proposed rule to implement Section 825 of the National Defense Authorization Act (NDAA) of Fiscal Year (FY) 2017, which amends 10 U.S.C. § 2305(a)(3) to modify the requirement to consider cost or price as an evaluation factor for the award for certain multiple-award task order contracts. The proposed rule would amend FAR Part 13, Simplified Acquisition Procedures, and FAR Part 15, Contracting by Negotiation, to add the exception to requiring price or cost as an evaluation factor in solicitations valued above the simplified acquisition threshold for multiple-award contracts for the same or similar services when the Government intends to award a contract to each and all qualifying offerors. The proposed rule also explains what a qualifying offeror is in terms of the rule and clarifies that the exception shall not apply to solicitations for multiple-award contracts that provide for sole source orders pursuant to section 8(a) of the Small Business Act (15 U.S.C. § 637(a)). FAR Part 16 would be revised to add the exceptions for use of other than full and open competition, listed in FAR 6.302, to the list of exceptions to fair opportunity at FAR 16.505(b)(2). (83 Fed. Reg. 48271, Sept. 24, 2018.)
DoD Issues Proposed Rule Regarding Inapplicability of Certain Laws and Regulations to Commercial Items (DFARS Case 2014-D010)
On August 29, 2018, DoD reopened the public comment period for a proposed rule, issued June 29, 2018, to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 874 of the NDAA FY 2017 which addresses the inapplicability of certain laws and regulations to the acquisition of commercial items, including commercially available off-the-shelf items (COTS). Under the proposed rule, DoD limits the review of the applicability of provisions of law and contract clauses to subcontract for commercial items to those provisions of law and contract clauses enacted after January 1, 2015. Based on this limitation, DoD has identified DFARS and FAR provisions and clauses published as final rules after January 1, 2015, determined whether these provisions and clauses were based on statute or executive order, and reviewed their applicability to commercial item procurements. Additionally, the proposed rule provides that any discretion to flow down clauses that are not based on statute or executive order rests with the Government, not with contractors. Contractors will be prohibited from flowing down FAR or DFARS clauses in commercial items procurements or to commercial item subcontractors, unless flow down is specifically required in the FAR or DFARS. The public comment period on the proposed rule has been extended until October 28, 2018. (83 Fed. Reg. 440104, Aug. 29, 2018.)
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