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December 23, 2019 By cs

SBA ‘beats the odds’ by finalizing several major contracting regulations

In November 2018, Federal News Network and procurement expert Larry Allen set some odds about whether certain acquisition regulations would be completed sometime in 2019.

For the most part, the odds makers were not optimistic, given the fact that during 2017 and 2018, the number of FAR rules that were either proposed or finalized were scarce.

So here we are a year later, and it’s nice to be able to report that the Small Business Administration, at least, may just have beaten the odds on several important procurement provisions.

Over the last few weeks, SBA finalized rules to improve the HUBZone program, to change the way the government calculates small business sizes based on earnings and a half dozen other rules that have been in the works since the 2015.

Keep reading this article at: https://federalnewsnetwork.com/reporters-notebook-jason-miller/2019/12/sba-beats-the-odds-by-finalizing-several-major-contracting-regulations/

Filed Under: Government Contracting News Tagged With: acquisition regulation, FAR, FAR Council, HUBZone, OFPP, Runway Extension Act, SBA, small business

July 16, 2019 By AMK

Proposed rule offers foreign military sales as a potential pathway to commerciality

Earlier this month, the FAR Council issued a proposed rule to expand the definition of “commercial item” under the Federal Acquisition Regulation (FAR) to include certain items sold in substantial quantities to foreign governments.  This new rule implements section 847 of the National Defense Authorization Act (NDAA) for FY 2018 (Pub. L. 115-91), and has the potential to extend commercial item status to defense articles that have been sold to foreign militaries, including sales under the Foreign Military Financing program.

Ensuring the commercial item status of products and services has long been a key point of federal contracting compliance for many businesses, as commercial item contracts typically avoid many of the more burdensome provisions imposed by the FAR.  While the term “commercial item” is often generalized to refer to items offered for sale to the general public for non-governmental purposes, the definition of “commercial item” under FAR 2.101 includes certain items used for governmental purposes and sold in substantial quantities to multiple state and local governments.  See FAR 2.101.  This provision permitted products like protective equipment used by police and fire departments to be deemed commercial items.

Specifically, the FAR provides that a “nondevelopmental item” can qualify for commercial item status “if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local governments.”  See FAR 2.101.  While the foregoing provision is limited to sales to state and local governments, the FAR separately defines “nondevelopmental item” as “[a]ny previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement.”  (emphasis added)  So while the FAR defines “nondevelopment item” to include products sold to foreign governments, the commercial item definition only extends to products sold to state and local governments.

The proposed rule expands the commercial item definition to include nondevelopmental items sold in substantial quantities to foreign governments.  While this change results in adding only four words to the FAR, it represents a potentially significant expansion to the concept of commerciality in federal contracting, as items used exclusively for defense applications would potentially be deemed commercial items under the proposed rule.  The notice of proposed rulemaking is clear that intent of the rule is to include defense articles previously developed at private expense for U.S. allies under the definition of commercial item.

Keep reading article at: https://www.insidegovernmentcontracts.com/2019/05/proposed-rule-offers-foreign-military-sales-as-a-potential-pathway-to-commerciality/

Filed Under: Government Contracting News Tagged With: acquisition regulation, commercial item, commerciality, contract award, DoD, FAR, foreign government, mutual defense cooperation agreement, NDAA, nondevelopmental item

June 5, 2019 By AMK

A Pentagon contractor’s 9,400% profit on a half-inch metal pin is challenged

As the Pentagon weighs whether to recommend legislation to require more disclosure by contractors, the House Committee on Oversight and Reform will review the audit and TransDigm’s pricing policies in a hearing on Wednesday.

The inspector general’s report “exposes how a company entrusted with supporting our military men and women took advantage of American taxpayers by overcharging the government more than $16 million” in parts sales sold between 2015 and 2017, Oversight Chairman Elijah Cummings said in a statement. The hearing will “investigate whether these pricing issues are more widespread, and demand answers,” he said.

From 2013 through 2015, according to the audit, the contractor increased the price of a valve that opens and closes to change the pressure of fuel moving through an engine to $9,801 from $543. In those years, TransDigm also charged $1,443 each for a “non-vehicular clutch disk” that cost $32 to make.

Planes, Copters

The Pentagon’s inspector general first raised pricing concerns over TransDigm in a 2006 report, followed by the one this year that was released in redacted form in February.

TransDigm manufactures spare parts for airplanes and helicopters including the AH-64 Apache, C-17 Globemaster III, F-16 Fighting Falcon and the CH-47 Chinook. From April 2012 through January 2017, DOD issued 4,942 contracts valued at $471 million to TransDigm.

Liza Sabol, a spokeswoman for the Cleveland-based company, said in an email “that we are not providing comments on specific questions related to the IG report.”

Keep reading article at: http://amp.timeinc.net/fortune/2019/05/14/transdigm-pentagon-costs

Filed Under: Government Contracting News Tagged With: acquisition regulation, aerospace, audit, contracting officers, defense contracts, Defense Logistics Agency, Federal Acquisition Streamlining Act, House Committee, investigation, legislation, military, oversight, parts contracts, Pentagon, policy bills, pricing, reform, taxpayers, TransDigm, watchdog

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