Monday, January 9, 2023

Government Contracting Compliance Requirements Are Often Not Made Public

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Basics Of Federal Contracting

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The federal government may award research and development funding in the form of grants, cooperative agreements, contracts, or other transaction agreements. Unlike grants and cooperative agreements, which are assistance mechanisms, a federal contract is a procurement mechanism. This means that the principal purpose of a federal contract is to purchase property or services for the direct benefit or use of the US Government.

Federal contracts are governed by a strict set of terms and conditions, including clauses from the Federal Acquisition Regulation . They usually require frequent reporting and a high level of responsibility to the Government. A failure to perform the project in strict compliance with the contract and provide the required deliverables on time and on budget could result in criminal and/or civil penalties, as well as potential financial consequences.

Other Transaction Agreements are not subject to the administrative requirements of grants nor the federal regulations governing procurement. The Federal Contracts Services Team is responsible for processing any OTAs or subcontracts under OTAs, or proposals that may result in OTAs, both when the University is the prime recipient or a subcontractor.

*a Note About Place Of Performance

Base wages are calculated on the idea that a workers pay should reflect the cost of living in that area. So changing locations can complicate things. In some situations, there are even invisible borders within cities that will change wage rates on top of county and state lines.

Taking that one step further, if your company adds a new office, a new warehouse or an employee starts working from home that changes their location and thus, their base wage could change as well.

Make sure you stay on top of changes as DOL auditors tend to look closely at base wages.

Maintaining Necessary Capability With Respect To Acquisition Of Architectural And Engineering Services

The Administrator, in consultation with the Secretary of Defense, the Administrator of General Services, and the Director of the Office of Personnel Management, shall develop and implement a plan to ensure that the Federal Government maintains the necessary capability with respect to the acquisition of architectural and engineering services to

ensure that Federal Government employees have the expertise to determine agency requirements for those services

establish priorities and programs, including acquisition plans

establish professional standards

develop scopes of work and

award and administer contracts for those services.

.There is established a Federal Acquisition Institute in order to

foster and promote the development of a professional acquisition workforce Government-wide

promote and coordinate Government-wide research and studies to improve the procurement process and the laws, policies, methods, regulations, procedures, and forms relating to acquisition by the executive agencies

collect data and analyze acquisition workforce data from the Office of Personnel Management, the heads of executive agencies, and, through periodic surveys, from individual employees

periodically analyze acquisition career fields to identify critical competencies, duties, tasks, and related academic prerequisites, skills, and knowledge

coordinate and assist agencies in identifying and recruiting highly qualified candidates for acquisition fields

meets its statutory requirements

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Guidance On Use Of Task And Delivery Order Contracts

Guidance in Federal Acquisition Regulation .The Federal Acquisition Regulation issued in accordance with sections 1121 and 1303 of this title shall provide guidance to agencies on the appropriate use of task and delivery order contracts in accordance with this chapter and chapter 245 of title 10.

Content of Regulations .The regulations issued pursuant to subsection at a minimum shall provide specific guidance on

the appropriate use of Government-wide and other multiagency contracts entered into in accordance with this chapter and chapter 245 of title 10 and

steps that agencies should take in entering into and administering multiple award task and delivery order contracts to ensure compliance with the requirement in

section 11312 of title 40 for capital planning and investment control in purchases of information technology products and services

section 4106 of this title and section 3406 of title 10 to ensure that all contractors are afforded a fair opportunity to be considered for the award of task and delivery orders and

section 4106 of this title and section 3406 of title 10 for a statement of work in each task or delivery order issued that clearly specifies all tasks to be performed or property to be delivered under the order.

the administration of the program by the Administrator of General Services and

the ordering and program practices followed by Federal customer agencies in using schedules established under the program.

Editorial Notes

Amendments

Recent Ontario Case Law Reaffirm The Importance Of Compliance With Notice Requirements

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In the 2021 Ontario Superior Court of Justice case Elite Construction Inc. v Canada, the contractor, Elite Construction Inc., did not strictly comply with the contractual notice provisions for requests for extensions of time. Specifically, the multiple notices provided by the contractor contained various deficiencies. For example, one of the notices failed to include the required written consent of the bonding corporation and another was submitted after the timeframe stipulated in the construction contract. The Court pointed to a long list of Canadian case law reiterating the importance of compliance with notice provisions and ultimately, did not accept Elite Construction Inc.s various attempts to deliver notice, as they did not strictly comply with the provisions agreed to in the contract. Similarly, in the 2021 Ontario Divisional Court case Tower Restoration v Attorney General of Canada, the Court found that the contractor was barred from bringing the claim against the Government of Canada because they failed to deliver notice to dispute a final decision in the time frame established by the dispute resolution provisions in the contract.

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Payments For Commercial Products And Commercial Services

Terms and Conditions for Payments .Payments under section 4501 of this title for commercial products or commercial services may be made under terms and conditions that the head of the executive agency determines are appropriate or customary in the commercial marketplace and are in the best interests of the Federal Government.

Security for Payments .The head of the executive agency shall obtain adequate security for the payments. If the security is in the form of a lien in favor of the Federal Government, the lien is paramount to all other liens and is effective immediately on the first payment, without filing, notice, or other action by the Federal Government.

Limitation on Advance Payments .Advance payments made under section 4501 of this title for commercial products or commercial services may include payments, in a total amount not more than 15 percent of the contract price, in advance of any performance of work under the contract.

Nonapplication of Certain Conditions .The conditions of sections 4503 and 4504 of this title need not be applied if they would be inconsistent, as determined by the head of the executive agency, with commercial terms and conditions pursuant to this section.

Editorial Notes

Amendments

2018Pub. L. 115232, §836, substituted “Payments for commercial products and commercial services” for “Payments for commercial items” in section catchline.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Effect On Other Standards And Regulations

Previously Existing Standards .All cost accounting standards, waivers, exemptions, interpretations, modifications, rules, and regulations prescribed by the Cost Accounting Standards Board under section 719 of the Defense Production Act of 1950 1

remain in effect until amended, superseded, or rescinded by the Board under this chapter and

are subject to the provisions of this division in the same manner as if prescribed by the Board under this division.

Inconsistent Agency Regulations .To ensure that a regulation or proposed regulation of an executive agency is not inconsistent with a cost accounting standard prescribed or amended under this chapter, the Administrator, under the authority in sections 1121, 1122 to , 1125, 1126, 1130, 1131, and 2305 of this title, shall rescind or deny the promulgation of the inconsistent regulation or proposed regulation and take other appropriate action authorized under sections 1121, 1122 to , 1125, 1126, 1130, 1131, and 2305.

Costs Not Subject to Different Standards .Costs that are the subject of cost accounting standards prescribed under this chapter are not subject to regulations established by another executive agency that differ from those standards with respect to the measurement, assignment, and allocation of those costs.

Editorial Notes

References in Text

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Validation Of Proprietary Data Restrictions

Contract That Provides for Delivery of Technical Data .A contract for property or services entered into by an executive agency that provides for the delivery of technical data shall provide that

a contractor or subcontractor at any tier shall be prepared to furnish to the contracting officer a written justification for any restriction the contractor or subcontractor asserts on the right of the Federal Government to use the data and

the contracting officer may review the validity of a restriction the contractor or subcontractor asserts under the contract on the right of the Federal Government to use technical data furnished to the Federal Government under the contract if the contracting officer determines that reasonable grounds exist to question the current validity of the asserted restriction and that the continued adherence to the asserted restriction by the Federal Government would make it impracticable to procure the item competitively at a later time.

Challenge of Restriction .If after a review the contracting officer determines that a challenge to the asserted restriction is warranted, the contracting officer shall provide written notice to the contractor or subcontractor asserting the restriction. The notice shall state

the grounds for challenging the asserted restriction and

the requirement for a response within 60 days justifying the current validity of the asserted restriction.

the restriction is cancelled and

continues to be bound by the restriction and

Use Of Noncompetitive Procedures

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When Noncompetitive Procedures May Be Used .An executive agency may use procedures other than competitive procedures only when

the property or services needed by the executive agency are available from only one responsible source and no other type of property or services will satisfy the needs of the executive agency

the executive agency’s need for the property or services is of such an unusual and compelling urgency that the Federal Government would be seriously injured unless the executive agency is permitted to limit the number of sources from which it solicits bids or proposals

it is necessary to award the contract to a particular source

to maintain a facility, producer, manufacturer, or other supplier available for furnishing property or services in case of a national emergency or to achieve industrial mobilization

to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a Federally funded research and development center

to procure the services of an expert for use, in any litigation or dispute involving the Federal Government, in any trial, hearing, or proceeding before a court, administrative tribunal, or agency, whether or not the expert is expected to testify or

to procure the services of an expert or neutral for use in any part of an alternative dispute resolution or negotiated rulemaking process, whether or not the expert is expected to testify

3304 41:253.

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Simplified Acquisition Threshold For Contract In Support Of Humanitarian Or Peacekeeping Operation

In general .In division C, the term “simplified acquisition threshold” has the meaning provided that term in section 134 of this title, except that, in the case of a contract to be awarded and performed, or purchase to be made, outside the United States in support of a humanitarian or peacekeeping operation, the term means an amount equal to two times the amount specified for that term in section 134 of this title.

Definition .In paragraph , the term “humanitarian or peacekeeping operation” means a military operation in support of the provision of humanitarian or foreign disaster assistance or in support of a peacekeeping operation under chapter VI or VII of the Charter of the United Nations. The term does not include routine training, force rotation, or stationing.

June 30, 1949, ch. 288, title III, §309, as added Pub. L. 104201, title VIII, §807, Sept. 23, 1996, 110 Stat. 2606.

In paragraph , the words “a contingency operation or”, and the text of 41 U.S.C. 259, are omitted because the increased simplified acquisition threshold established under section 32A of the Office of Federal Procurement Policy Act in the case of a contract to be awarded and performed, or purchase to be made, outside the United States in support of a contingency operation supersedes the threshold established under this section. Section 32A is restated as section 1903 of the revised title.

List Of Laws Inapplicable To Procurements Of Commercial Products And Commercial Services

Definition .In this section, the term “Council” has the meaning given that term in section 1301 of this title.

Inclusion in federal acquisition regulation .The Federal Acquisition Regulation shall include a list of provisions of law that are inapplicable to contracts for the procurement of commercial products or commercial services. A provision of law properly included on the list pursuant to paragraph does not apply to purchases of commercial products or commercial services by an executive agency. This section does not render a provision of law not included on the list inapplicable to contracts for the procurement of commercial products or commercial services.

Laws enacted after october 13, 1994 .A provision of law described in subsection that is enacted after October 13, 1994, shall be included on the list of inapplicable provisions of law required by paragraph unless the Council makes a written determination that it would not be in the best interest of the Federal Government to exempt contracts for the procurement of commercial products or commercial services from the applicability of the provision.

Waiver not authorized .This subsection does not authorize the waiver of the applicability of any provision of law with respect to any subcontract under a contract with a prime contractor reselling or distributing commercial products or commercial services of another contractor without adding value.

provides for criminal or civil penalties or

Editorial Notes

Amendments

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Government Contractor Compliance Requirements

The first compliance requirements youll encounter as a government contractor are the Federal Acquisition Regulations . Both government contractors and the federal agencies that hire them are bound by these regulations and at 2,100 pages long, these regulations are certainly comprehensive!

But dont worry: you dont need to read the equivalent of one and a half copies of War and Peace to understand how to comply with federal contractor standards. The most important thing you need to know is that the government requires any business they contract to operate honestly, which means you need to have a written ethics system.

Your ethics system must:

  • Be appropriate for the size of your organization and the level of your involvement in government contracting
  • Allow timely disclosure for reporting any misconduct to your government contacts
  • Make sure that workers always follow corrective measures when misconduct occurs

If you can prove that your organization has measures in place that meet these requirements, you will be eligible to apply for government contracts. Of course, if you land a contract you will likely have more department-specific standards to follow, but the FAR is a good place to start.

If A State Or Local Government Has Government Contracts Is It Subject To The Requirements Of Executive Order 11246

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Yes, if the contracts meet the threshold for coverage. However, the requirements of Executive Order 11246 apply only to the agency, instrumentality or subdivision of the State or local government that participates in work on or under the Government contract or subcontract. Further, except for universities and medical facilities, a state or local government agency, instrumentality, or subdivision that has a government contract is exempt from the requirement to develop and maintain a written affirmative action program.

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Contract Clauses And Certifications

Repetitive Nonstandard Contract Clauses Discouraged .The Council shall prescribe regulations to discourage the use of a nonstandard contract clause on a repetitive basis. The regulations shall include provisions that

clearly define what types of contract clauses are to be treated as nonstandard clauses and

require prior approval for the use of a nonstandard clause on a repetitive basis by an official at a level of responsibility above the contracting officer.

In federal acquisition regulation .A requirement for a certification by a contractor or offeror may not be included in the Federal Acquisition Regulation unless

the certification requirement is specifically imposed by statute or

Definition .In subparagraph , the term “head of the executive agency” with respect to a military department means the Secretary of Defense.

When certification requirement may be included in regulation .A requirement for a certification by a contractor or offeror may not be included in a procurement regulation of an executive agency unless

the certification requirement is specifically imposed by statute or

Statutory Notes and Related Subsidiaries

Current Certification Requirements

Pub. L. 104106, div. D, title XLIII, §4301, Feb. 10, 1996, 110 Stat. 656, provided that:

” the Administrator approves in writing the retention of the certification requirement.

” the head of the executive agency approves in writing the retention of such certification requirement.

Executive Documents

Is An Insurance Company That Supplies Workers Compensation Insurance To A Federal Contractor Subject To The Requirements Of Executive Order 11246

No, an insurance company that supplies workers compensation insurance to a federal contractor does not need to meet the requirements of Executive Order 11246 however, if such insurance company has a separate covered federal contract or subcontract other than providing worker compensation insurance, they may be subjected to the requirements of Executive Order 11246. Liberty Mutual Insurance Co. v. Friedman, 639 F. 2d 164 .

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