FAR | The Contracting Education Academy

December 12, 2019 By cs

GAO says DoD’s fraud assessment efforts should include examination of contractor ownership

Some companies doing business with the Defense Department have opaque ownership structures that may conceal who owns, controls, or benefits from the company.

This GAO illustration depicts how DoD’s use of an ineligible foreign manufacturer — that illegally exported sensitive military data and provided defective and nonconforming parts — led to the grounding of at least 47 U.S. fighter aircraft.

The Government Accountability Office (GAO) recently identified fraud and national security risks to DoD from opaque ownership such as ineligible contractors receiving contracts and foreign firms receiving sensitive information through U.S.-based companies.

These risks, identified through GAO’s review of 32 adjudicated cases, include price inflation through multiple companies owned by the same entity to falsely create the appearance of competition, contractors receiving contracts they were not eligible to receive, and a foreign manufacturer receiving sensitive information or producing faulty equipment through a U.S.-based company.

For example, one case involved an ineligible foreign manufacturer that illegally exported sensitive military data and provided defective and nonconforming parts that led to the grounding of at least 47 fighter aircraft.

The GAO reports that DoD has taken some steps that could address some of the risks related to contractor ownership in the procurement process but has not yet assessed these risks across the department. DoD, in coordination with other agencies, revised the Federal Acquisition Regulation (FAR) in 2014 to require contractors to self-report some ownership information. In addition, DoD has taken steps to identify and use ownership information — for example, as part of its supply-chain risk analysis when acquiring critical components. DoD has also begun a department-wide fraud risk management program but, according to GAO, it has neither assessed risks of contractor ownership across the department nor identified risks posed by contractor ownership as a specific area for assessment.

GAO contends that assessing risks arising from contractor ownership would allow DoD to take a strategic approach to identifying and managing these risks, make informed decisions on how to best use its resources, and evaluate its existing control activities to ensure they effectively respond to these risks.

Keep reading this GAO report summary at: https://www.gao.gov/products/GAO-20-106#summary

December 3, 2019 By cs

FAR Fundamentals course kicks off 2020

The New Year at the Georgia Tech’s Contracting Education Academy (The Academy) begins with a four-day course on Tuesday, January 28, 2020, covering the fundamentals of the Federal Acquisition Regulation (FAR).

The course is being conducted at Georgia Tech’s world-class professional education facilities in the Global Learning Center located on campus in midtown Atlanta.

This contracting overview of the FAR, covers Module 1 of the Defense Acquisition University’s CON 090: Federal Acquisition Regulation (FAR) Fundamentals.

The course includes:

Identification of the basic principles of contracting by the federal government,
Access to and use of relevant on-line resources, and
Instruction on the location, citation, and interpretation of the FAR, the Defense Federal Acquisition Regulation Supplement (DFARS), and other agency FAR supplements.

More information about this course is available at: http://www.pe.gatech.edu/courses/con-090-1-contracting-overview-far. Complete registration information is located there, too.

**Students attending Georgia Tech’s acquisition courses work in teams to tackle real-life contracting problems.**

Originally designed exclusively for federal contracting officers, this course’s scope has been expanded by The Academy so that it is relevant to multiple audiences, including contractors seeking to learn more about the federal contracting process, federal officials who need to satisfy job-related continuous education requirements, and anyone seeking more information about the federal acquisition profession.

In all, there are four modules that make-up the CON 090 course series. Information about the entire series can be found at: https://pe.gatech.edu/courses/con-090-1-contracting-overview-far.

The Academy’s complete list of government acquisition courses, and course scheduling, is at: http://contractingacademy.gatech.edu/training.

The Contracting Education Academy at Georgia Tech is an official equivalency training provider of the Defense Acquisition University (DAU) and the Federal Acquisition Institute.

Students attending CON 090 courses at Georgia Tech receive expert instruction, a printed Student Guide, helpful handouts, a deck of FAR Cards, and access to exclusive on-line resources. Students earn 2.8 CEUs. In addition, a complimentary breakfast in provided each class day.

November 28, 2019 By cs

Federal Circuit issues controversial decision involving expressly unallowable costs

In its second significant cost allowability decision of the year, the Federal Circuit held that salaries associated with lobbying activities are expressly unallowable under Federal Acquisition Regulation (FAR) 31.205-22.

Although the decision is limited to salary costs associated with lobbying activities, its rationale creates uncertainty for other types of costs subject to a FAR Part 31 Cost Principle that uses similar “associated with” language. Contractors should anticipate closer scrutiny from auditors, who may feel emboldened by the Federal Circuit’s decision to characterize costs as expressly unallowable. The decision may also have implications for compliance with Cost Accounting Standard 405.

Although many types of cost may be generally unallowable, a smaller subset of costs are expressly unallowable. An expressly unallowable costs is “a particular item or type of cost which, under the express provisions of an applicable law, regulation, or contract, is specifically named and stated to be unallowable.” Contractors are subject to penalty if they submit to the government any expressly unallowable cost. Congress made clear that the penalty was intended for limited circumstances where the regulations explicitly prohibit inclusion of a type of cost; providing alcohol as an example.

FAR 31.205-22(a) provides that costs “associated with” a list of lobbying and political activities are unallowable. FAR 31.205-22 does not specifically name and state salary, or any other type of cost; it merely states “associated with.” The narrow question presented to the Federal Circuit was whether salary costs of employees engaging in such lobbying activity qualify as expressly unallowable costs.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/860020/

November 22, 2019 By cs

GAO clarifies reach of new LPTA restrictions

The National Defense Authorization Act for Fiscal Year 2017 and the NDAA for Fiscal Year 2018 imposed new limitations on when the Department of Defense can use Lowest Price Technically Acceptable source selection methods.

Just last month, the Department of Defense issued a final rule amending the Defense Federal Acquisition Regulation Supplement to implement those provisions. Now, in Inserso Corp., B-417791, B-417791.3, Nov. 4, 2019, GAO has weighed in on what counts as LPTA for purposes of those restrictions. This decision may indicate a potentially significant limitation on the reach of the NDAA provisions, new DFARS rule, and proposed FAR rule.

In Inserso, the protester argued that the 2017 NDAA restricted not only DoD’s use of an LPTA source selection process, but also the use of (what the protestor labeled) LPTA criteria within the evaluation process. Specifically, the protester challenged the fact that, under the RFQ, the agency would (1) “first rank quotations according to price, from lowest to highest”; (2) then “evaluate the five lowest-priced quotations as either technically acceptable or unacceptable” (while “reserving the right to evaluate additional quotations”); (3) then “evaluate only technically acceptable quotations under the past performance factor”; and (4) award the task order to the offeror “considered to be the Best Value based upon a price/past performance trade-off” (alteration omitted). According to the protester, the 2017 NDAA required the agency to conduct a tradeoff between price and technical factors — rather than relegating the technical factor to a pass/fail gating criterion.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/11/what-is-lowest-priced-technically-acceptable-gao-clarifies-reach-of-new-lpta-restrictions/

November 19, 2019 By cs

Frictionless federal acquisition? — It’s possible and a new online tool can help

One of the best questions that came up at the recent 2019 Imagine Nation ELC conference in Philadelphia, Pennsylvania was during a panel on acquisition. It went something like this: If the Federal Acquisition Regulations are a Frankenstein monster of cobbled together rules and requirements, why not just start over?

A question many federal acquisition and program managers probably have asked themselves at least a dozen times a year.

While the 2,000 page FAR probably has some body parts that agencies could do without, there is no reason to kill the monster.

Meagan Metzger, founder and CEO of Dcode, which promotes the use of commercial technology in the public sector, said there are important concepts that the FAR promotes that every contracting officer or program manager needs to know.

Chris Hamm, the director of FEDSIM at the General Services Administration, offered a common refrain—the FAR lets you do almost anything, especially under Parts 8.4 and 12.

Then why are agencies and vendors alike so excited about Other Transaction Authorities (OTAs) or Commercial Solution Openings (CSOs) as a way to avoid—get around—using the FAR?

New data from the Professional Services Council’s 2019 Vision Forecast found the Defense Department’s use of OTA’s mushroomed by 40% in 2018 over 2017 and some estimates say the Pentagon could spend as much as $7 billion through this approach in 2019.

GSA and the Department of Homeland Security also have begun using similar authorities.

GSA, for instance, has done eight awards under its CSO authority. Tom Howder, the acting deputy commissioner of the Federal Acquisition Service, said at the PSC event that 75% of the awards went to companies without a GSA schedule, meaning non-traditional contractors.

Keep reading this article at: https://federalnewsnetwork.com/reporters-notebook-jason-miller/2019/11/frictionless-federal-acquisition-its-possible-and-a-new-online-tool-can-help/

Some companies doing business with the Defense Department have opaque ownership structures that may conceal who owns, controls, or benefits from the company.

The New Year at the Georgia Tech’s Contracting Education Academy (The Academy) begins with a four-day course on Tuesday, January 28, 2020, covering the fundamentals of the Federal Acquisition Regulation (FAR).

In its second significant cost allowability decision of the year, the Federal Circuit held that salaries associated with lobbying activities are expressly unallowable under Federal Acquisition Regulation (FAR) 31.205-22.

The National Defense Authorization Act for Fiscal Year 2017 and the NDAA for Fiscal Year 2018 imposed new limitations on when the Department of Defense can use Lowest Price Technically Acceptable source selection methods.

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