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THE ROLE OF ACQUISITION IN IMPLEMENTING SOCIAL & PUBLIC POLICY

Breakout Session # WC10 -111

Name: The Role of Acquisition in Implementing Social and Public Policy

Date: Tuesday, June 20

Time: 11:00 AM

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HOT ISSUES*

• Pending New WOSB RULE

• HUBZone Statutory Preference

• Effects of Recovery Act on Buy American Act

• Compliance Issues with Service Contract Act

* As addressed in Centre Consulting’s 2010 Annual Review

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FAR Parts Addressed

• FAR Part 19 – Small Business Programs• FAR Part 22 – Application of Labor Laws to Govt.

Acquisitions • FAR Part 23 – Environment, Energy & Water

Efficiency, Renewable Energy Technologies, Occupational Safety & Drug-Free Workplace

• FAR Part 24 – Protection of Privacy and Freedom of Information

• FAR Part 25 – Foreign Acquisitions • FAR Part 26 – Other Socioeconomic Programs

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FAR PART 19

SMALL BUSINESS PROGRAMS

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SCOPE OF FAR PART 19

• Eligibility for Program

• Set-Asides

• Certificate of Competency Program

• Subcontracting Assistance Program

• Types of Small Business Concerns

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Size Standards (FAR 19.1)

• Established by the SBA on an industry-by-industry basis

• Each NAICS code has a different size standard

• On 21 October 2009 SBA published proposed rule to amend size standards of five industries, part of ongoing initiative to review all size standards

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Policy of Encouraging Small Business Participation (FAR 19.2) • Govt. policy to provide maximum

practicable opportunities in federal govt. contracting to small business concerns

• Contracting officers required to take steps to allow greater small business participation

• Equal low bids – preference for small business

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Eligibility for Small Business Programs (FAR 19.3)

• Good faith representation at time of offer that qualifies as small business

• Offerors or contracting officers may protest size status

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Set-Asides (FAR 19.5)

• Set-asides – the reserving of an acquisition exclusively for small business concerns.

• May be total or partial

• May be by simplified acquisition procedures, sealed bids, or competitive proposals

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Certificate of Competency Program (FAR 19.6)

• Certificate of Competency (CoC) is the certificate issued by the SBA stating that its holder is responsible

• If question of competency, contracting officer may withhold the award or refer the matter to the cognizant Government Contracting Area Office

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The Small Business Subcontracting Program (19.7)

• Contracts for more than simplified acquisition threshold must state in contract that small business concerns will have maximum practicable opportunity to participate.

• Successful offerors must submit subcontracting plan in acquisitions over $550,000.

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Spotlight: Types of Small Business Concerns

• Women-Owned

• Service-Disabled Veteran-Owned

• HUBZones

• 8(a)

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Women-Owned Small Businesses

• Requirements – must be “small” pursuant to 13 CFR 121 and at least 51% owned and controlled by one or more women

• Proposed final rule published in Federal Register on 4 March 2010 establishes certification procedures for WOSBs and guidance on conducting set-asides

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Service-Disabled Veteran-Owned Small Businesses

• Requirements – must be “small” pursuant to 13 CFR 121 and 51% or more controlled by a service-disabled veteran. Can be any degree disabled.

• 2009 GAO reports found numerous problems with oversight and controls on SDVOSB program.

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HUBZones

• A “HUBZone” is a “historically underutilized business zone”

• Recent CoFC Mission Critical Solutions decision (Feb. 2010) held that there is a statutory preference for HUBZones over other forms of set-asides.

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8(a)

• Requirements – Be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals

• Graduate from program in nine years • SBA on 28 October 2009 proposed changes

to 8(a) program, including changes to the “economic disadvantage” and “ownership” requirements

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FAR Part 22

Application of Labor Laws to Government Acquisitions

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Basic Labor Policies (FAR 22.1)

• Agencies must maintain sound relations with industry

• Agencies must remain impartial • Administrating procuring office shall

report any dispute or potential dispute

Contract Work Hours and Safety Standards Act (FAR 22.3)

• Applies to contracts using laborers and mechanics

• Provides overtime pay requirements

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Labor Standards for Contracts Involving Construction (FAR 22.4)• FAR implements statutes prescribing

labor standard requirements for contracts in excess of $2,000

Examples:

• Davis-Bacon Act – Provides minimum wage requirements for laborers or mechanics employed directly on the work site (40 USC §3141 et. seq.)

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Davis-Bacon Act Wage Determinations

Types:• General Wage Determination– Contains

prevailing wages rates for the types of construction designated in the determination, & is used in contracts performed within a specified geographical area

• Project Wage Determination – Issued at the specific request of the agency

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Consequences for Violating Wage Determinations

• Investigation

• Payment withholdings

• Contract terminations

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FAR Subpart 22.4, Examples Continued…

• Copeland Act – Makes it unlawful to force or intimidate an employee on a public construction contract to forfeit compensation (18 USC §874, 40 USC §3145)

• Contract Work Hours Safety Standards Act – Prohibits laborers or mechanics from working on contracts for more than 40 hours unless compensated with overtime pay (1 ½) (40 U.S.C. §3701 et. seq.)

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Walsh-Healy Public Contracts Act (FAR 22.6)

Contracts over $10,000 Must include or incorporate by

reference act stipulations pertaining to minimum wages, maximum hours, child labor, convict labor, and safe and sanitary working conditions

41 USC §35-45

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Equal Employment Opportunity (FAR 22.8)

Nondiscrimination Because of Age (FAR 22.9)

• Contractors and subcontractors may not discriminate based on age

• Contractors and subcontractors may not impose maximum age limit for positions

• No contract clause required

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Service Contract Act of 1965 (FAR 22.10)

• Codified at 41 USC §351 et. seq.

• Applies to service contracts over $2500

• Contracts must provide minimum wage and fringe benefits as determined by locality wage determination or CBA

Service Contract Act of 1965 (FAR 22.10)

Emerging Issues and Problems

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SCA Considerations

• Answers to questions are fact-specific

• Wages/fringe benefits provided by incumbent contractor – effect on successor obligations

• Price Adjustments for changes to wage determinations

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Professional Employee Compensation (FAR 22.11)

• Covers bona fide executive, administrative or professional employees not covered by the SCA

• Provides that all professional employees shall be compensated fairly and properly

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FAR Part 23

Environment, Energy and Water Efficiency, Renewable Energy

Technologies, Occupational Safety, and Drug-Free Workplace

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Scope of FAR Part 23

Ensuring a drug-free workplace Protecting and improving the quality of

the environment.

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Energy & Water Efficiency & Renewable Energy (FAR 23.2)

• Applies to acquisitions in US & outlying areas

Hazardous Material Identification & Material Safety Data (FAR 23.3)

• Policies and procedures for acquiring deliverable items including hazardous materials

• Administered by the Occupational Safety and Health Administration (OSHA)

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Use of Recovered Materials and Biobased Products (FAR 23.4)

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Drug-Free Workplace (FAR 23.5)

• FAR implements the Drug-Free Workplace Act of 1988 (Pub. L. 100-690)

• Requires offerors to publish a statement notifying employees of drug-free policies and to establish an ongoing drug-free awareness program

• Does not apply outside U.S.

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FAR Part 24

Protection of Privacy and Freedom of Information

Privacy Act Requirements (FAR 24.1)

• 5 USC §552a

• When an agency contracts for a system of records on individuals on behalf of the agency to accomplish an agency function, must apply the Act to the contractor and its employees

• An agency officer or employee may be criminally liable for violations of the Act.

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Freedom of Information Act Requirements (5 USC §552a, as amended) (FAR 24.2)

• Information must be made available to the public by publication in the Federal Register, providing an opportunity to read and copy records at convenient locations, or providing a copy of a reasonably described record

• Some documents may not be made available – proposals, exemptions under FOIA, dispute resolution communications

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FAR Part 25

Foreign Acquisitions

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Scope of FAR Part 25

• FAR provides policies and procedures for acquisition of foreign supplies, services, and construction materials and contracts performed outside the United States

• Implements the Buy American Act, trade agreements, and other laws and regulations

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Buy American Act - Supplies (FAR 25.1)

• Restricts the purchase of supplies that are not domestic end products, for use within the United States

• Is not subject to certain trade agreements • Uses a two-part test to define “domestic end

product:” – Manufactured in U.S. – Cost of domestic components exceeds 50% of

the cost of all components (waived for COTS items)

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Buy American Act – Supplies (Exceptions)

• Public Interest – Agency head makes determination, applies when agency has agreement with foreign government that provides blanket exception

• Nonavailability – FAR provides for both class determinations and individualized determinations

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Buy American Act – Construction Materials (FAR 25.2)

• Provides only domestic construction materials may be used in construction contracts performed in the U.S.

• Applies to contracts for the construction, alteration, or repair of any public work or any public building in the U.S.

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Buy American Act – Construction Materials (Exceptions)• If impracticable or inconsistent with the

public interest

• Nonavailability

• Unreasonable cost

• Determinations and findings - required when a determination is made to apply any of the three exceptions

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Trade Agreements (FAR 25.4)

FAR provides policies and procedures applicable to acquisitions that are covered by the WTO Government Procurement Agreement, Free Trade Agreements, least developed country designations, the Caribbean Basin Trade Initiative, Israeli Trade Act, & Agreement on Trade in Civil Aircraft.

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Trade Agreement - Exceptions

• Set-Asides • Acquisition of arms, national defense or

national security acquisitions• Acquisition of end products for resale• Authorized acquisitions not using Full &

Open Competition• Acquisitions from Federal Prison Industries,

Inc. • Acquisitions from Non-Profits Employing

People Who Are Blind or Severely Disabled

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American Recovery & Reinvestment Act – BAA – Construction (FAR 25.6)• No funds appropriated or otherwise made

available by the Recovery Act may be used in public building or public work construction projects unless certain conditions met

• Exceptions: nonavailability, unreasonable cost, inconsistent with public interest

• Exceptions shall be listed in contract & agency head shall publish notice in Federal Register within two weeks after determination is made

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FAR Part 26

Other Socioeconomic Programs

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Indian Incentive Program (FAR 26.1)

• Implements 25 USC §1544, which provides an incentive to prime contractors to use Indian organizations and economic enterprises as sub-contractors (incentive payment of 5% where allowed)

• Aims to provide Indian organizations and economic enterprises maximum opportunity to participate in federal government contracts.

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Disaster or Emergency Assistance Activities (FAR 26.2)

Implements the Robert T. Stafford Disaster Relief & Emergency Assistance Act (42 USC §5150), which provides a preference for local organizations, firms, and individuals when contracting for major disaster or emergency assistance activities.

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Other Socioeconomic Programs Under FAR Part 26

• Historically Black Colleges & Universities (HBCUs) and Minority Institutions (MIs)(FAR 26.3) – FAR promotes participation of HBCUs and MIs in federal procurements

• Food Donations to Nonprofit Organizations (FAR 26.4) – FAR implements the Federal Food Donation Act of 2008

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Questions?

bkinosky@centreconsult.com

sschauerte@centreconsult.com

Thank you!