What’s new in Federal Contracting?
Federal Acquisition Circular (FAC) 2021-07
Federal Acquisition Circular (FAC) 2021-07, dated August 11, 2021, contains essential information for both large and small businesses. The Federal Acquisition Regulation (FAR) is updated by FACs and this one becomes effective September 10, 2021.
Large business prime contractors will need to know:
Good Faith in Small Business Subcontracting – This rule may impact large business prime contractors required to have small business subcontracting plans. FAR 19.705-7 now includes examples of a good faith effort to comply with the subcontracting plan, and examples of failure to make a good faith effort. Liquidated damages may be assessed to large businesses that fail to make a good faith effort. Prime contractors are now required to include indirect costs in their subcontracting goals within their commercial subcontracting plan.
Small business prime contractors will need to know:
Limitations on Subcontracting – This rule impacts small business set asides and addresses both the Limitations on Subcontracting and the Nonmanufacturer Rule. The clauses are applicable for procurements set aside for 8(a), WOSB, SDVOSB, HUBZone programs, regardless of dollar value. (Note VA may have different guidance for SDVOSB and VOSB set asides.) The clauses are applicable for small business set asides, over the Simplified Acquisition Threshold (SAT), currently $250,000.
The Limitations on Subcontracting defines “similarly situated entity” as a first-tier subcontractor that has the same small business program status as that which qualified the prime contractor for the award and is considered small for the NAICS code the prime contractor assigned to the subcontract. The actual limitations on subcontracting are for the following types of procurements.
Services – Not pay more than 50 percent of the amount paid by the Government for contract performance to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor’s 50 percent subcontract amount that cannot be exceeded.
Supplies – Not pay more that 50 percent of the amount paid by the Government for contract performance, excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor’s 50 percent subcontract amount that cannot be exceeded.
General Construction – Will not pay more that 85 percent of the amount paid by the Government for contract performance excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor’s 85 percent subcontract amount that cannot be exceeded.
Special Trade Construction – Will not pay more that 75 percent of the amount paid by the Government for contract performance excluding the cost of materials, to subcontractors that are not similarly situated entities. Any work that a similarly situated entity further subcontracts will count towards the prime contractor’s 75 percent subcontract amount that cannot be exceeded.
The Nonmanufacturer Rule defines a nonmanufacturer as a concern including a supplier that provides an end item it did not manufacture, process, or produce. Under the rule a contractor shall provide an end item that a small business has manufactured, processed, or produced in the United States or its outlying areas, be primarily engaged in the retail or wholesale trade and normally sell the type of item being supplied, and take ownership or possession of the item(s) with its personnel, equipment, or facilities in a manner consistent with industry practice; for example, providing storage, transportation, or delivery. When the end item is a kit, at least 50 percent of the total cost of the components of the kit shall be manufactured, processed, or produced in the United States or its outlying areas by small business concerns. [August 2021]
SBA Scorecard Released
The U.S. Small Business Administration announced the federal government exceeded its FY2020 small business federal contracting goal, awarding 26.01 percent or $145.7 billion in federal contract dollars to small businesses, a $13 billion increase from the previous fiscal year. It has been estimated that that the federal government also added almost a million jobs to the American economy through the $145.7 billion in prime contract dollars and $82.8 billion in subcontracts awarded to small businesses.
To see the entire report card, please click here. [August 2021]
NEW UNIQUE ENTITY ID (SAM)
As you are probably aware, all entities wanting to register to do business with the federal government must first obtain a DUNS number. The DUNS number is the current unique identifier that the government uses to verify your entity.
On April 4, 2022, the U.S. government will switch from using the DUNS number to a new Unique Entity ID (SAM), also known as a UEI. IAE systems such as SAM.gov (entity registration, contract award notification) FPDS.gov, eSRS, FSRS, FAPIIS, and CPARS will require the use of your UEI after April 4, 2022.
Depending on how you use SAM.gov, here are some things you need to know at this point:
1: I’m an entity already registered in SAM.gov:
You’ve already been assigned a new Unique Entity ID! It’s viewable in your entity registration record in SAM.gov. (Note: If you have a DUNS Number but are not registered in SAM.gov, you will not have a UEI assigned to your entity.)
2: I’m a sub-awardee NOT registered in SAM.gov and I currently provide a DUNS number for sub-award reporting:
Starting in October 2021, you’ll be able to request a new UEI-only in SAM.gov; full SAM.gov registration will not be required if you only need a UEI. Sub-award reporting will not require the Unique Entity ID (SAM) until April 2022. Work closely with your primes to determine their timeline for providing them the Unique Entity ID (SAM).
3: I pull award data and reports from IAE sites and view the DUNS number:
The Unique Entity ID (SAM) is available now, along with the DUNS number, in SAM.gov APIs, data extracts, contract data reports, and the FPDS Atom Feed. In April 2022, only the new UEI will be provided in the data and reports, and the DUNS field will go away.
4a. I’m going to register my entity in the future but prior to April 4, 2022. Do I still need the DUNS number? How do I get a Unique Entity ID (SAM)?
Prior to April 2022, you will continue going to D&B to get a DUNS number to register your entity in SAM.gov. You will be assigned a Unique Entity ID (SAM) as a part of the SAM.gov registration process.
4b. I’m going to register my entity in the future but after April 4, 2022. Do I still need the DUNS number? How do I get a Unique Entity ID (SAM)?
After April 2022, you will be assigned a Unique Entity ID (SAM) as part of the SAM.gov registration process. You will no longer need a DUNS number for registration.
In preparation for the full transition to the Unique Entity ID (SAM), you should prepare any of your own internal systems to accept the new identifier and to stop using the DUNS number for federal awards processes by April 2022.
5: When should I start using my new Unique Entity ID (SAM)?
That depends on how you interact with federal award systems. Federal agencies will begin to migrate to the Unique Entity ID between now and April 2022. Pay special attention to instructions they provide regarding the use of the new identifier.
You can also start to include the new Unique Entity ID (SAM) on your capabilities statement.
If you need assistance with your SAM.gov account or have other questions on the new Unique Entity ID (SAM), contact Carol Murphy at CarolM2@wispro.org. [August 2021]
Small Business Size Standards: A Historical Analysis of Contemporary Issues – from the Congressional Research Service – Updated May 28, 2021 https://crsreports.congress.gov/product/pdf/R/R40860 [June 2021]
New Security Offering for SAM.gov for Entity Administrators Available May 24 – The new security enhancements – called identity proofing – will be voluntary (and recommended) at first, and will become mandatory in fiscal year 2022. Posted by the Integrated Award Environment (IAE) Industry Community https://interact.gsa.gov/blog/new-security-offering-samgov-entity-administrators-available-may-24 [February 2021]
Executive Order on Ensuring the Future Is Made In All of America by All of America’s Workers
Federal financial assistance awards and Federal procurements to maximize the use of goods, products, and materials produced in, and services offered in, the US https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/25/executive-order-on-ensuring-the-future-is-made-in-all-of-america-by-all-of-americas-workers/ [January 2021]
As 2021 began, Congress passed two landmark laws that will help improve the transparency of federal contractors and combat the use of anonymous shell companies for money laundering. https://www.pogo.org/analysis/2021/01/defense-bill-includes-two-landmark-transparency-provisions/
From the Office of the Under Secretary of Defense
SUBJECT: FY 2020 Procurement Management Review “Year in Review” Newsletter https://www.acq.osd.mil/dpap/policy/policyvault/USA002501-20-DPC.pdf [January 2021]
Final Rule Implements Changes to the Buy American Act Regulations
Effective Date: 01/21/2021 – DoD, GSA, and NASA published a proposed rule at 85 FR 56558 on September 14, 2020, to implement E.O. 13881, Maximizing Use of American-Made Goods, Products, and Materials (84 FR 34257, July 18, 2019). In order to implement the E.O., this final rule changes FAR clauses implementing the Buy American statute by increasing the— 1. Domestic content requirements; and 2. Price preference for domestic products. https://www.federalregister.gov/documents/2021/01/19/2021-00710/federal-acquisition-regulation-maximizing-use-of-american-made-goods-products-and-materials [January 2021]
The Defense Department has announced the succession plan for Jan. 20, 2021.
MEMO for Senior Pentagon Leadership Defense Agency and DOD Field Activity Directors https://media.defense.gov/2021/Jan/20/2002567440/-1/-1/0/SUCCESSION-PLAN-FOR-JANUARY-20-2021-OSD000392-21-RES-FINAL.PDF?source=GovDelivery [January 2021]
The Department of Defense (DOD) releases the Fiscal Year 2020 Industrial Capabilities Report
The FY20 Industrial Capabilities Report transcribes the defense department’s priority industrial base risks and vulnerabilities; major developments and impacts of the coronavirus pandemic; and industrial base investments and initiatives executed in the previous fiscal year. The report promotes a strategy for a robust, resilient, secure, and innovative industrial base, which will require a substantial commitment of capital investment and resources, and continuation of the reforms undertaken in the past several years.
DOD Releases Report on Defense Spending by State in Fiscal Year 2019
Read more at defense.gov. The FY19 report, as well as previous years’ reports, can be found on the OLDCC website at: https://oea.gov/defense-spending-state-fiscal-year-2019. [January 2021]
On January 6, 2021, the Department of Labor announced a final rule clarifying the standard for employee versus independent contractor under the Fair Labor Standards Act (FLSA). The effective date of the final rule is March 8, 2021. https://www.dol.gov/agencies/whd/flsa/2021-independent-contractor [January 2021]
OFCCP’s Year in Review – U.S. DOL Office of Federal Contract Compliance Programs bulletin https://content.govdelivery.com/accounts/USDOLOFCCP/bulletins/2b3c2ed [January 2021]
(DOD) Class Deviation 2021-O0002 Verification of Eligibility for the Women-Owned Small Business Program. Contracting officers shall verify in the Dynamic Small Business Search (DSBS) that the concern is designated as an economically disadvantaged women-owned small business concern (EDWOSB) or as a WOSB concern eligible for the WOSB Program. A concern is not eligible for a set-aside or sole-source award under the WOSB program unless designated as either an EDWOSB or WOSB in DSBS. DSBS is available at https://web.sba.gov/pro-net/search/dsp_dsbs.cfm. https://www.acq.osd.mil/dpap/policy/policyvault/USA002184-20-DPC.pdf [December 2020]
The Federal Register published the final rule titled “National Industrial Security Program Operating Manual (NISPOM)” (32 CFR part 117) today. The rule can be found here. The NISPOM establishes requirements for the protection of classified information disclosed to or developed by contractors, licensees, grantees, or certificate holders to prevent unauthorized disclosure. The rule will become effective February 24, 2021, and authorizes the contractor no more than 6 months to comply with changes from the effective date of the rule. [December 2020]
This week, FSD.gov got a makeover, with a new skin and some new functionalities. Following the same trajectory as a number of the General Services Administration’s acquisition tools and websites this year, the Federal Service Desk—the go-to help desk for all of the agency’s procurement tools and services—got a new look and stronger security measures.
Upcoming MAS Solicitation Changes to Implement the Verified Products Portal (VPP) – represents an integral piece of FAS’s Catalog Management effort under the Federal Marketplace (FMP) initiative https://interact.gsa.gov/blog/upcoming-mas-solicitation-changes-implement-verified-products-portal-vpp-0 [December 2020]
Office of Federal Contract Compliance Programs (OFCCP) has issued a Technical Assistance Guide (guide) to serve as a self-assessment tool for contractors to review the practices they have in place to eliminate discrimination and achieve their EEO goals. https://www.dol.gov/sites/dolgov/files/OFCCP/SupplyService/files/508_OFCCP_SS_TAG.pdf [December 2020]
The Defense Department will soon release a new guide to help engineers and the acquisition community as they pursue new capabilities for the military. The initiative comes as the Pentagon is trying to implement the 2018 National Defense Strategy and engage in great power competition with China and Russia. LEARN MORE [November 2020]
As of Nov. 30, 2020, contractors will use DocuSign to digitally sign documents in eOffer and eMod. This change to DocuSign aligns with GSA’s overall IT modernization efforts to support security and provide a solution that is legally recognized internationally. LEARN MORE [November 2020]
From Department of Defense Improving Compliance with Buy American Laws memo https://www.acq.osd.mil/dpap/policy/policyvault/USA002277-20-DPC.pdf [October 2020]
The Office of Federal Contract Compliance Programs (OFCCP) has revamped the Employment Referral Resource Directory (ERRD). The ERRD lists government and nonprofit organizations as references to assist federal contractors’ hiring of qualified applicants. ERRD was developed as a compliance assistance tool to help federal contractors identify local job referral services for veterans, individuals with disabilities, women, and minority groups. LEARN MORE [October 2020]
The MAS PMO and National Industrial Operations Analyst (IOA) Program are excited to announce that the MAS Contractor Assessment (CA) Reference Guide is now available for download at the Vendor Support Center. This reference guide provides a foundational, transparent understanding of the MAS CA process for our industry partners. CAs are conducted regularly by GSA’s IOAs and verify contractors are complying with their contractual terms and conditions and have the support necessary to be successful. READ MORE [October 2020]
WASHINGTON: The Pentagon’s top acquisition official says the military is doubling down on efforts to move microelectronics manufacturing away from China, citing worries about the security of supply chains.
A full 75% of microelectronics manufacturing and 98% of packaging takes place in Asia, acquisition boss Ellen Lord said at the ComDef conference today.
“While the U.S. continues to serve as the leader in microelectronics research and development,” Lord said, “our lack of ability to manufacture, package and test, has resulted in the loss of employment opportunities, economic growth and the lack of ability to fulfill DoD requirements.” LINK [October 2020]
From GSA Interact For MAS Schedule holders – Happy FY 2021 from the MAS PMO! We worked through some unprecedented situations in FY 2020 – grateful for all of your engagement and continued participation in our MAS Consolidation efforts. Important information and deadlines contractors should be aware of READ HERE. [October 2020]
Defense Federal Acquisition Regulation Supplement: Assessing Contractor Implementation of Cybersecurity Requirements (DFARS Case 2019-D041)
A Rule by the Defense Acquisition Regulations System on 09/29/2020 – DoD is issuing an interim rule to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to implement a DoD Assessment Methodology and Cybersecurity Maturity Model Certification framework in order to assess contractor implementation of cybersecurity requirements and enhance the protection of unclassified information within the DoD supply chain. This rule adds a new DFARS subpart, Subpart 204.75, Cybersecurity Maturity Model Certification (CMMC), to specify the policy and procedures for awarding a contract, or exercising an option on a contract, that includes the requirement for a CMMC certification. Specifically, this subpart directs contracting officers to verify in SPRS that the apparently successful offeror’s or contractor’s CMMC certification is current and meets the required level prior to making the award. Dates: Effective November 30, 2020. DOCUMENT [September 2020]
The National Institute for Standards and Technology released the draft of NIST Special Publication 800-172 (“NIST SP 800-172”) on July 6, 2020. This draft special publication succeeds the prior draft NIST SP 800-171B that NIST published in June 2019, and operates as a supplement to the NIST SP 800-171 controls that federal contractors generally must comply with in order to transmit, process, and store Controlled Unclassified Information (“CUI”). [August 2020]
The National Security Agency released a Limiting Location Data Exposure Cybersecurity Information Sheet (CSI) today to guide National Security System (NSS) and Department of Defense (DoD) mobile device users on how they might reduce risk associated with sharing sensitive location data. The guide summarizes how and why mobile devices expose location data and explains potential risk that comes with using them. It provides mitigations to limit the sharing of this information, but warns there is no solution to fully mitigate a mobile device from being located. [August 2020]
Multi-Factor Authentication Replaces Digital Certification and PIN Requirements for Signing Mass Mods on Aug. 8, 2020. Attention contract holders! Updates to GSA’s IT infrastructure mean changes to the way you access our Mass Mod Portal. [August 2020]
DoD, GSA, and NASA issued an interim rule amending the Federal Acquisition Regulation (FAR) to implement section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232). Federal Acquisition Circular (FAC) 2020-08 published in the Federal Register on July 14, 2020.
Implementation of the Section 889(a)(1)(B) Prohibition on Contracting with Entities Using Certain Telecommunications and Video Surveillance Services or Equipment. The purpose of this memorandum is to facilitate implementation of interim FAR rule 2019-009, published on July 14, 2020, and effective on August 13, 2020.
Copy of Cybersecurity Maturity Model Certification (CMMC) Ver. 1.02 (March 18, 2020)