• Fall 2011 - Regulatory Updates
• Winter 2011 Regulatory Updates
• Winter 2010 Regulatory Updates
• Fall 2010 Regulatory Updates
• Spring 2010 Regulatory Updates

Contracting Officers Withholds

A new rule that modifies FAR 52.232-10 has been adopted by DOD, GSA, and NASA. This modification now gives Contracting Officers the right to make decisions regarding the amount of payment to be withheld concerning fixed-price architect-engineer contracts. This will allow the withheld amount to be applied at a rate that is in the government’s best interest. Implemented on April 19, 2010, this rule modifies the current standard of a 10% withholding on all payments with no wiggle room and now grants complete discretion to the contracting officer when deciding withholding amounts.

OFPP Sets Executive Compensation Cap for FY 2010 and Beyond

On April 15, 2010 the Office of Federal Procurement Policy set the new executive compensation cap for FY 2010 and beyond at $693,951. [Federal Register Notice Volume 75, Number 72] The cap applies to all compensation costs incurred on or after January 1, 2010 to all Defense and Civilian agency contractors subject to the Cost Principles at FAR Part 31. The cap applies to senior executives as defined in FAR Subparts 31.205-6(p)(2)(i) and (ii).

FAR to implement the Federal Awardee Performance and Integrity Information Systems (FAPIIS)

On April 22, 2010, DOD, GSA, and NASA implemented a rule that introduced the Federal Awardee Performance and Integrity Information Systems (FAPIIS). The rule will enhance the ability of the government to evaluate different characteristics of potential future contractors. This will reduce the risk that the government assumes associated with awarding business to unworthy contractors. The rule has three different requirements. First, if a contract exceeds the simplified acquisition threshold, the contracting officer must review FAPIIS in order to make an informed decision on the responsibility of the candidate. Second, before decisions on the responsibility of candidates are made, the contracting officer must allow all candidates the opportunity to provide supplemental information that attests to their level of responsibility. Lastly, all contractors with proposals over $500,000 and who also have more than $10 million in active contracts outstanding, must report all information relating to criminal, civil, and administrative proceedings in which legal fault was established.

DFARS - issued that requires any loss, theft, damage, or destruction (LTDD) of government property

On April 30, A proposed rule that amends the DFARS has been issued by DOD that requires any loss, theft, damage, or destruction (LTDD) of government property to be reported to the Defense Contract Management Agency using the “eTools” application. This will create one single data storehouse used for reporting LTDD property.

DCAA Issues New Guidance to its Auditors pertaining to Reporting on Forward Pricing Rates in Pricing Proposals

On June 4, 2010 the Defense Contract Audit Agency (DCAA) issued new guidance to its auditors on reporting on forward pricing rates in pricing proposals. [DCAA memo 10-PSP-018(R)] To the extent that indirect costs rates used for pricing proposals have not been audited by the Government or are not otherwise based on an established Forward Pricing Rate Agreement (FPRA), the DCAA is instructing its auditors to either qualify reports on proposal audits or audit the indirect rates during the course of the proposal audit. If indirect costs are a “significant portion” of the proposal price and there is no budgetary data for the indirect costs [for either base and option years] the auditors are being instructed to issue an adverse opinion on the proposal. During proposal audits, the DCAA will start asking for separate budget for indirect costs for all option years. The absence of budgetary data for out year indirect rates could result in the DCAA issuing an adverse opinion on a contractor’s proposal.

Aligning FAR with Cost Accounting Standards

Effective June 16, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council introduced an interim rule that attempts to align FAR with the revised Cost Accounting Standards Board Clause, Disclosure and Consistency of Cost Accounting Practices for Contracts Awarded to Foreign Concerns [Revised March 26, 2008]

Aligning FAR with CAS 412 and 415 – ESOP Clarification

Effective June 16, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued an interim rule with request for comments aligning the FAR with the revised CAS 412, “Cost Accounting Standard for composition and measurement of pension cost,” and CAS 415 “Accounting for the cost of deferred compensation”, which were amended In May of 2008.