USDA | The Contracting Education Academy

September 10, 2012 By AMK

GAO: Federal programs to aid entrepreneurs overlap

Agency efforts to support private entrepreneurs are ineffectual and fragmented, according to Government Accountability Office research on 52 programs in such departments as Agriculture, Commerce and Housing and Urban Development.

In a paper dated Aug. 23, auditors identified overlap among initiatives to offer grants, loans and technical training to businesses and found that too few agencies track the assistance they provide, resulting in a failure of 19 programs to meet performance goals.

The report said Agriculture and the Small Business Administration, for instance, “entered into a formal agreement in 2010 to coordinate their efforts to support businesses in rural areas; however, the agencies’ programs that can support startup businesses — such as USDA’s Rural Business Enterprise Grant program and SBA’s Small Business Development Centers — have yet to determine roles and responsibilities, find ways to leverage each other’s resources, or establish compatible policies and procedures.”

Keep reading this article at: http://www.govexec.com/contracting/2012/08/federal-programs-aid-entrepreneurs-overlap/57677/

February 2, 2012 By AMK

USDA backs off controversial labor rule targeting contractors

In a win for federal contractors and contracting officers alike, Agriculture Department officials decided on Jan. 30 to withdraw a new final rule requiring companies to keep their subcontractors and suppliers in line with federal labor laws, a department spokesman told Washington Technology on Jan. 31.

Under USDA’s rule, companies contracting with the department would have to certify that they comply with labor laws and that their subcontractors of any tier and their suppliers also comply. It would have included reporting requirements for violations and the threat of tough action by the department if there were violations.

Officials took a unique approach to rule-making and added it as a direct final rule to the Agriculture Acquisition Regulation on Dec. 1. It was set to take effect Feb. 29. However, they said if the rule garnered any adverse comments, they would withdraw the rule in part or in whole.

The Council of Defense and Space Industry Associations, a group of six industry groups, objected to the rule in a letter to the USDA last week. The council said the rule overlapped more than 180 federal labor laws and regulations to implement the laws. The rule would also add additional work to both the prime contractors, which would have to monitor their subcontractors and suppliers, and the contracting officers who would review reports on compliance. Further, USDA could possibly bump heads with the Labor Department in the case of a labor law violation.

The council’s letter pushed USDA to withdraw the whole rule.

“Yesterday, USDA withdrew the Dec. 1, 2011, direct final rule adding a new clause to the Agriculture Acquisition Regulation,” the USDA spokesman said.

Alan Chvotkin, executive vice president and counsel for the Professional Services Council, a member of the overarching-industry group objecting the rule, said the USDA did well to withdraw its rule after receiving the letter from the council about the rule’s ambiguities and overlap with other standing laws.

“I’m pleased USDA acted promptly in light of well-reasoned comments from the council,” he said.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared on Jan. 31, 2012 at http://washingtontechnology.com/articles/2012/01/31/usda-withdraws-labor-law-rule.aspx?s=wtdaily_010212.

February 1, 2012 By AMK

Industry objects to USDA labor rule, cites extra burden on contractors

Six industry groups are objecting to a new Agriculture Department rule on labor law violations, claiming the rule is redundant and would cause extra work for businesses and contracting officers. The groups made their complaint known in a Jan. 26 letter to department officials.

Under USDA’s rule, companies contracting with the department must certify that they comply with labor laws and that their subcontractors of any tier and their suppliers also comply. It includes reporting requirements for violations and the threat of tough action if there are violations.

The rule was issued Dec. 1 as a direct final rule, amending the Agriculture Acquisition Regulation (AGAR). It takes effect on Feb. 29. In their notice, department officials said they would pull back their final rule, if they received “adverse comments” on it.

In the letter, six business groups, called the Council of Defense and Space Industry Associations, said the government already has 180 federal labor laws, as well as regulations to implement those laws. The government also has numerous offices within the Labor Department, such as the Office of Federal Contract Compliance Programs, to ensure companies abide by the complex web of laws. The council said the USDA officials would have to be careful that they not usurp other agencies’ authorities, which could lead to conflicting rulings on enforcement.

The rule would add a significant burden on companies with large numbers of employees and facilities, and with significant numbers of subcontractors and suppliers. They would have to develop procedures to monitor and report on their own compliance with each of the labor laws. Then, companies would have to set up similar procedures to monitor compliance up and down their supply chain.

Contracting officers also would have a lot of extra work as a result of the law. Acquisition officials would be responsible for reviewing reports of noncompliance and taking action against companies. Meanwhile, officials may not have the expertise and resources to interpret and then enforce the myriad labor laws.

The council noted several ambiguities in the rule, such as which labor laws apply to the rule. Another concern was with the compliance clause. When awarded a contract, the prime contractor deems that all its subcontractors and suppliers are complying with labor laws. However, companies often will not have a contractual relationship with its subcontractors until after award.

“We urge USDA to immediately cancel the direct final rule and also withdraw the proposed rule,” the letter said.

The council is comprised of the Aerospace Industries Association, American Council of Engineering Companies, U.S. Chamber of Commerce, National Defense Industrial Association, Professional Services Council, and TechAmerica.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared on Jan. 30, 2012 at http://washingtontechnology.com/articles/2012/01/30/usda-labor-law-compliance-complaints.aspx?s=wtdaily_310112.

October 12, 2011 By AMK

Suspension and debarment could discourage rebate schemes

The federal government should consider suspending and debarring food service contractors who exploit invoice loopholes to overcharge the Agriculture and Defense departments, witnesses told a Senate panel Wednesday.

Agriculture Department Inspector General Phyllis Fong suggested threatening to prevent contractors from doing business with the government either temporarily (suspension) or over the long-term (debarment) to deter rebate schemes, in which companies that receive rebates from food manufacturers for large-volume purchasing leave them off invoices and pocket the difference. The IG has been investigating contractors providing food purchasing services for the National School Lunch Program since 2002, and has found omitting information on rebates to be a frequent issue.

Withheld rebates account for between 5 percent and 50 percent of the price charged to the school districts participating in the lunch program, John Carroll, assistant attorney general for New York, told the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight.

“Every dollar that’s being lost through rebate schemes is a dollar we cannot use to feed our soldiers and our children who need nutrition,” said Sen. Claire McCaskill, D-Mo., chairwoman of the subcommittee.

Previous USDA audits found a service management company overcharged school districts more than $8 million through inflated invoices in 2003, and another company received $1.3 million in hidden rebates in 2005.

Agriculture’s inspector general is starting a new investigation this month to assess the effectiveness of the recommendations issued after previous audits.

Similar fraud occurs with contractors working with the Defense Department to provide food to soldiers serving overseas, witnesses said.

Public Warehousing Co. is reportedly in talks to reach a settlement with the Justice Department after allegedly violating its prime vendor contract with the Defense Logistics Agency, overcharging the agency for food costs by $8.5 billion in 2009.

Charles Tiefer, a former member of the Wartime Contracting in Iraq and Afghanistan Commission and a law professor at the University of Baltimore, suggested revising contracts to allow auditors more access and requiring companies to identify any rebates on invoices. Tiefer also recommended conducting a survey of contractors to determine the extent of rebate schemes.

McCaskill announced that the subcommittee intends to submit document requests to investigate the issue more. “I think there’s real money here if we pull this thread,” she said.

– by Caitlin Fairchild – Government Executive – October 6, 2011 – http://www.govexec.com/story_page.cfm?articleid=49010&dcn=e_tma

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