Federal Acquisition Circular 2005-50 – Ten Interim and Final FAR rules that impact most contractors
Wednesday, March 16th, 2011
Attached is a copy of the Federal Acquisition Circular 2005-50 publishing interim and final rules effecting everyone.
The first rule of concern is “Proper Use and Management of Cost-Reimbursement Contracts (Interim)” significantly increases the threshold for COs to justify the use of Cost-Reimbursement contracts over fixed priced contracts. Expect to see contracts that would in the past be issued and Cost-Reimbursement to be issued as fixed price. This will significantly increase the risk on contractors.
The second rule of concern is “Requirements for Acquisition Pursuant to Multiple-Award Contracts (interim)” – Raises the bar on competitive requirements for the issuance of such contracts.
The third is “Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns” This final rule brings the FAR into compliance with the CAS on disclosure requirements for foreign concerns that did not exist before. Foreign concerns with CAS covered contracts must now be compliant with CAS 401 and this requirement is no included in FAR 52.230-4
I have highlighted sections of the FAC that may be of interest to you
Tim
Click here for a copy of the FAC 2005-50
DoD scales back plan to restrict payments to some contractors
Saturday, December 18th, 2010
Under a barrage of contractor criticism, the Defense Department has softened a plan to hold back contract payments as a way to prod companies to fix problems in their accounting and other business systems.
In a proposed rule released in January, DoD had sought authority to withhold 10 percent of payments if a particular business system was found to be deficient. Under a new proposal published this month in the Federal Register, that amount is cut to 5 percent and for small businesses would be limited to 2 percent. If a deficiency is considered high risk, the maximum that could withheld would be capped at 20 percent, down from 100 percent in the original proposal. And in response to complaints that the original draft was overly subjective, officials spell out compliance criteria more clearly.
In general, the revised proposal does a “much better job of laying out the attributes of each of these business systems” and then linking enforcement to compliance with those attributes, said Alan Chvotkin, executive vice president and counsel at the Professional Services Council, a contractor trade group. While not ready to give the revision a passing grade without more study, “I liked what I saw,” Chvotkin said.
But Scott Amey, general counsel at the Project on Government Oversight, viewed the new proposal as “a giant step backward” for contractor accountability. And because DoD is issuing a second proposed rule, another year may pass before contracting officers get the authority to withhold payments, said Amey, who had wanted the Pentagon to make its original draft more stringent.
Click this link for a copy of the Federal Times Article
Full CAS coverage for contracts performed entirely outside the US
Wednesday, October 20th, 2010
Attached is a Federal Register on the Office of Federal Procurement Policy seeking comments on its proposed rule change in CAS exemption CAS qualified contracts performed entirely outside the US, its territories, and possessions from the CAS. As you read through this doc you will see that OFPP submitted this same proposal for public comment in April 2009. The comments received are included in this doc and make for interesting reading. No indication why the OFPP felt it necessary to resubmit this proposal for public comment again, but this is your opportunity to voice your opinion.
Most likely this rule change will become final. It will place additional burdens on US companies with such contracts and will place these companies at a competitive disadvantage to foreign companies who, even with this change, will still only have to comply with CAS 401 and 402.
Click here for a copy of the Federal Register
