United States: November 2018 Legislative And Regulatory Update

Our November edition of "Government Contracts Legislative and Regulatory Update" offers a summary of the relevant changes that took place during the month of October.

Highlights this month include:

  • DoD Issues Final Rule Updating DFARS Clause on Section 8(a) Direct Award
  • DoD Issues Final Rule Repealing DFARS Clause "Option for Supervision and Inspection Services"
  • DoD Issues Final Rule Repealing DFARS Clause "Acquisition Streamlining"
  • DoD Issues Final Rule Repealing DFARS Provision "Bonds or Other Security"
  • DoD Withdraws Proposed Rule on Performance-Based Payments and Progress Payments
  • DoD Issues Proposed Rule Regarding Amendments Related to General Solicitations
  • DoD Issues Proposed Rule Regarding the Use of Brand Name or Equal Proprietary Specifications or Standards

This update will also be available in Contract Management Magazine, which is published monthly by the National Contract Management Association (NCMA).

Legislation

As the legislative calendar was limited in October due to midterm elections, no relevant legislative government contract updates occurred this month. Legislative activity is expected to resume after midterms.

Regulations

  • DoD Issues Final Rule Updating DFARS Clause on Section 8(a) Direct Award
  • DoD Issues Final Rule Repealing DFARS Clause "Option for Supervision and Inspection Services"
  • DoD Issues Final Rule Repealing DFARS Clause "Acquisition Streamlining"
  • DoD Issues Final Rule Repealing DFARS Provision "Bonds or Other Security"
  • DoD Withdraws Proposed Rule on Performance-Based Payments and Progress Payments
  • DoD Issues Proposed Rule Regarding Amendments Related to General Solicitations
  • DoD Issues Proposed Rule Regarding the Use of Brand Name or Equal Proprietary Specifications or Standards

Regulations

DoD Issues Final Rule Updating DFARS Clause on Section 8(a) Direct Award (DFARS Case 2018-D052)

On October 31, 2018, DoD issued a final rule, effective immediately, to remove an obsolete requirement from DFARS 252.219-7009, Section 8(a) Direct Award. Currently, the clause requires 8(a) contractors to obtain written approval from the Small Business Administration (SBA) and the contracting officer prior to subcontracting the performance of any contract requirements. This requirement, however, no longer exists in SBA's regulations. The final rule deletes paragraph (c)(2); the remaining paragraphs (c) and (c)(1) are combined in to a single paragraph (c). The clause currently applies to solicitations and contracts below the simplified acquisition threshold (SAT) and to the acquisition of commercial items, including commercially available off-the-shelf items (COTS). DoD plans to apply the rule to contracts below the SAT and to the acquisition of commercial items, including COTS items to ensure that contracts with 8(a) Program participants are covered by the rule. (83 Fed. Reg. 54681, Oct. 31, 2018).

DoD Issues Final Rule Repealing DFARS Clause "Option for Supervision and Inspection Services" (DFARS Case 2018-D041)

On October 31, 2018, DoD issued a final rule, effective immediately, to remove DFARS 252.236-7009, Option for Supervision and Inspection Services, remove the associated clause prescription at DFARS 236.609-70(a)(1), and revise a cross reference in the introductory text to DFARS 252.236-7011. DFARS 252.236-7009 was used in fixed-price solicitations and contracts for architect-engineering services when the architect may also be required to provide supervision and inspection services during construction. DoD determined that the need for architect-engineers to perform supervision and inspection services during construction is uncommon. When necessary, an option that accurately describes the scope of services can be included in the contract pursuant to FAR subpart 17.2, Options. (83 Fed. Reg. 54680, Oct. 31, 2018).

DoD Issues Final Rule Repealing DFARS Clause "Acquisition Streamlining" (DFARS Case 2018-D033)

On October 31, 2018, issued a final rule, effective immediately, amending the DFARS to remove DFARS 252.211-7000, Acquisition Streamlining, and the associated prescription at DFARS 211.002-70. DFARS 252.211-7000 was included in all solicitations and contracts for systems acquisition programs and required contractors to: prepare acquisition streamlining recommendations in accordance with the performance work statement; format and submit the recommendations in accordance with the contract data requirements list of the contract; and include the clause in all subcontracts valued over $1.5 million that are awarded in the performance of the contract. The clause was originally added to the DFARS to implement DoD Directive 5000.43, Acquisition Streamlining. The Directive has since been cancelled by DoD instruction 5000.02, Operation of the Defense Acquisition System, requiring contractors to submit acquisition streamlining recommendations. DoD found that FAR subpart 7.1, Acquisition Plans, already includes acquisition streamlining and industry engagement as considerations to be made when preparing a written acquisition plan. As the implementing Directive has been cancelled and FAR subpart 7.1 addresses acquisition streamlining, DFARS 252.211-7000 was considered unnecessary and removed. (83 Fed. Reg. 54676, Oct. 31, 2018).

DoD Issues Final Rule Repealing DFARS Provision "Bonds or Other Security" (DFARS Case 2018-D036)

On October 31, 2018, DoD issued a final rule, effective immediately, amending the DFARS to remove DFARS 252.228-7004, Bonds or Other Security, and the associated clause prescription at DFARS 228.170. The Miller Act (40 U.S.C. § 3131-3134) requires contractors on certain construction contracts to post bonds that guarantee performance of the contract and payment to subcontractors and supplies. DoD notes that several FAR clauses are available to implement these requirements on construction contracts. Specifically, DoD notes that FAR clause 52.228-16, Performance and Payment Bonds—Other than Construction, and FAR provision 52.228-1, Bid Guarantee, provide the information contained in the DFARS provision and can be included in solicitations and contracts that involve dismantling, demolition, or removal of improvements. Since the FAR provision and clause can be used to provide the same information included in the DFARS provision, DoD determined that the DFARS provision is no longer necessary and should be removed. This rule only removes the obsolete DFARS provision and does not impose any new requirements on contracts at or below the simplified acquisition threshold and for commercial items, including commercial available off-the-shelf items. (83 Fed. Reg. 54679, Oct. 31, 2018).

DoD Withdraws Proposed Rule on Performance-Based Payments and Progress Payments

On October 4, 2018, the DoD withdrew a proposed rule, published on August 24, 2018, regarding performance-based payments and progress payments. The proposed rule intended to implement Section 831 of the FY 2017 National Defense Authorization Act (NDAA) which addresses the preference for performance-based payments, and to streamline the performance-based payment process. The proposed rule would have amended the DFARS to revise progress payments and performance-based payments policies for DoD contracts. Under the proposed rule, a customary progress payment rate of 50 percent (50%) would apply for other than small businesses and the 90 percent (90%) rate would apply for small businesses. The proposed rule would have provided criteria by which contractors can achieve customary progress payment rate of up to 95 percent (95%). DoD is withdrawing the rule in order to conduct additional outreach with the industry regarding contract financing methods. Implementation of Section 831 of the FY 2017 NDAA will be addressed in a proposed rule to be published in 2019. (83 Fed. Reg, 50052, Oct. 4, 2018).

DoD Issues Proposed Rule Regarding Amendments Related to General Solicitations (DFARS Case 2018-D021)

On October 31, 2018, DoD issued a proposed rule to implement Sections 221 and 861 of the FY 2018 NDAA by expanding the definition of other competitive procedures, and extending the terms and increasing the dollar value under the contract authority for advanced development of initial or additional prototype units. Section 221 amends 10 U.S.C. § 2302(2)(B) to allow for an expanded application of other competitive procedures by replacing the words "basic research" with "science and technology." Competitive procedures are defined in 10 U.S.C. 2302(2) as "procedures under which the head of an agency enters into a contract pursuant to full and open competition." Changing the words "basic research" to science and technology expands the authority to use other competitive procedures for "advanced technology development" and "advanced component development and prototypes" research proposals, in addition to the previously authorized "basic research" and "applied research" proposals. Section 221 permits the use of broad agency announcements (BAAs) for competitive selection of science and technology proposals by authorizing the use of the competitive procedures at 10 U.S.C. 2302(2)(B) that result from a general solicitation and peer or scientific review of such proposals—a key element of the BAA process. Section 861 amends 10 U.S.C. § 2302e to allow for an extended term limit and increased dollar threshold under the contract authority for advanced development of initial or additional prototype units awarded from a competitive selection, as specified in 10 U.S.C. § 2302(2)(B). The statutory term limit extends from 12 months to 2 years and the dollar threshold increases from $20 million to $100 million in fiscal year 2017 constant dollars. In summary, the proposed rule expands the application of other competitive procedures to include the competitive selection of science and technology proposals beyond "basic research" proposals. This proposed rule also expands the contract authority for advanced development of initial or additional prototype units. The objective of this rule is to implement Sections 221 and 861 to establish BAAs as a competitive procedure that may be used to select science and technology proposals and to expand the term limit and dollar threshold for the contract authority for advanced development of initial or additional prototype units. Comments on the proposed rule are due by December 31, 2018. (83 Fed. Reg. 54698, Oct. 31, 2018).

DoD Issues Proposed Rule Regarding the Use of Brand Name or Equal Proprietary Specifications or Standards (DFARS Case 2017-D040)

On October 31, 2018, DoD issued a proposed rule to implement Section 888(a) of the FY 2017 NDAA, which requires the use of brand name or equivalent descriptions or proprietary specifications or standards in solicitations to be justified and approved. Section 888(a) requires that competition on DoD contracts not be limited through the use of brand name or equivalent descriptions, or proprietary specifications or standards, in solicitations, unless a justification for such specification is provided and approved in accordance with 10 U.S.C. § 2304(f). The requirements of 10 U.S.C. § 2304(f) are implemented in FAR subparts 6.303 and 6.304, which addresses the content, format, and approval authorities for justifications for other than full and open competition. The proposed rule amends DFARS 206.302-1 to add a new paragraph (c)(2) advising contracting officers that, notwithstanding FAR 6.302-1(c)(2), a justification and approval described at FAR 6.303 is required when using brand name or equal descriptions. The rule further amends DFARS 213.501 advising contracting officers that a justification and approval for brand name or equal descriptions or proprietary specifications or standards is required when using FAR subpart 13.5 simplified procedures for the acquisition of certain commercial items. The objective of the proposed rule is to ensure that contracting officers execute a justification and approval in accordance with FAR 6.302-1 when including brand name or equal descriptions, or proprietary specifications or standards in a solicitation. Comments on the proposed rule are due by December 31, 2018. (83 Fed. Reg. 54696, Oct. 31, 2018).

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
22 Jan 2019, Seminar, San Francisco, United States

Dentons is pleased to offer a full day of classes, just in time for the California MCLE compliance period deadline of January 31, 2019.*

30 Jan 2019, Other, Chicago, United States

Please join us on January 30, 2019, for the Fifth Annual Courageous Counsel Leadership Institute. This year's theme is "Risk and reward: Creating a culture that promotes innovation, change and growth.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions