Series of acquisition regulation changes announced

A series of rule changes to the Federal Acquisition Regulation were announced on Wednesday, including one that allows the Government Accountability Office to interview employees of contractors undergoing audits.

In addition to the rule change affecting GAO audits, another regulation limits the length of contracts awarded noncompetitively under "unusual and compelling urgency" circumstances to the minimum period necessary to meet requirements. Without a waiver from the head of the contracting agency, this period will not exceed one year. Both changes are effective immediately.

Several other FAR-related regulations published in the Federal Register on Wednesday are interim rules, subject to a comment period ending on Dec. 14. One rule aims to minimize excessive cost to the government stemming from unnecessary layers of subcontracting. The rule would eliminate pass-through charges, in which the contractor or subcontractor makes a profit or earns a fee for work performed by a lower-tier subcontractor despite having added little or no value to the job.

Another interim regulation defines a series of terms relating to contract award fees, aimed at ensuring those bonuses are linked to contract objectives on cost, schedule and technical performance. The rule, which will be finalized after the comment period, intends to ensure award fees are not given if the contractor's overall performance is less than satisfactory; it also will stipulate that the government alone has the authority to make those awards. The rule also will establish that award fee determinations are documented in the contract file and that the procedures necessary to make a sound award fee decision will be built into the relevant contracts. In addition, it will prohibit the rollover of unearned award fees from one evaluation period to another.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council, which issued all the rules, stated in the announcement that rollover "diminishes the effectiveness of the award-fee rating given for a specific evaluation period, since the unearned award fee could be earned by the contractor in a subsequent evaluation period."

Another interim rule clarifies the definition of commercial services. The rule states that services not offered or sold competitively in substantial quantities in the commercial marketplace only can be considered commercial items for FAR purposes if the contracting officer determines in writing that the offeror has submitted sufficient information to allow a price analysis to be performed and that price is deemed reasonable.

All but one rule implements provisions either from the 2009 Defense Authorization Act, or from a May 31, 2007, Office of Federal Procurement Policy memo. That regulation, required by the 2007 Homeland Security spending bill, mandated that the Federal Emergency Management Agency must establish and maintain a registry of contractors willing to perform certain activities in the event of an emergency. Information on contractors willing to do debris removal, supply distribution, reconstruction and a variety of other activities will be kept in the database, and contracting officers are to consult the registry during market research and acquisition planning.

Those wishing to comment on the rules announced on Wednesday can do so at Regulations.gov.