Type: Law Bulletins
Date: 02/17/2011

Government Contracts Law Updates

If you attended one of our Fall 2010 seminars, you might remember the issues below. This e-bulletin covers the most recent changes that have occurred since the seminar.
1) ORGANIZATIONAL CONFLICTS OF INTEREST. In April 2010, the Department of Defense (“DoD”) issued a proposed rule to govern organizational conflict of interest (“OCI”) rules in the Defense Acquisition Regulation Supplement (“DFARS”). The proposed rule had expressed a preference for resolving OCI’s through mitigation. The final rule, published on December 29, 2010 and effective immediately, takes a broader approach. The final rule “emphasizes the importance of employing OCI regulation strategies that do not unnecessarily restrict the pool of potential offerors and do not impose per se restrictions on the use of particular resolution methods.” Consequently, contracting officers will have a significant amount of discretion in determining the best method for resolving an OCI. Narrower than the interim rule, the final rule applies only to major defense acquisition programs (“MDAP’s”). The rule can be found at subpart 209.5 of the DFARS.
2) BAN ON MANDATORY ARBITRATION. Our January 12, 2010, e-bulletin discussed the impact of the Franken Amendment on Defense contractors; it would prohibit these contractors from requiring employees or independent contractors to arbitrate certain claims, including Title VII of the 1964 Civil Rights Act and some tort actions, such as sexual assault or harassment. The DoD issued a final rule implementing this law on December 8, 2010. The rule is codified at DFARS 252.222-7006. The final rule clarifies that its requirements may only be waived when the secretary or deputy defense secretary personally determines that waiver is in the interest of national security. The rule applies to all DoD purchases in excess of $1 million using funding from the Defense Appropriations Act for 2010. All covered contracts using FY 2010 funds entered into before May 2010 must be bilaterally modified to include this rule. The rule does not apply to purchases of commercial items, including commercial off-the-shelf (COTS) items.
3) FAPIIS DATABASE. According to a January 24, 2011 interim rule, the Federal Awardee Performance and Integrity Information System (“FAPIIS”) database is expected to be made available to the public by April 15, 2011. The FAR clauses relevant to this new rule are FAR 9.104-6 and FAR 52.209-9. The FAPIIS database will include information regarding proceedings against contractors, including criminal proceedings, past performance evaluations, non-responsibility determinations, and other potentially negative information. While much of this information is already available to federal agencies, it was not located in one database and none of it has been available to the general public.
For contracts over the simplified acquisition threshold (currently $150,000), the rule requires contracting and grant officers to check the FAPIIS database before they make a determination of responsibility. See FAR 9.104-6. The rule also requires contractors to certify that the information about their company in FAPIIS is current, complete, and accurate. See FAR 52.209-9. And, according to the new clause, contractors will be notified when the government posts new information in the database about them so that contractors may respond by posting their own comments about new information. Contractor comments may also be publicly available.
4) WOMEN-OWNED SMALL BUSINESS PROGRAM. On October 18, 2010, we issued an e-bulletin entitled “Final Rule Issued for SBA Women-Owned Small Business Contract Program.” The much-anticipated program, which allows contracting officers to create set-asides for qualifying women-owned small businesses (“WOSBs”), became effective on February 4, 2011. According to the SBA’s website, the first WOSB set-aside awards are expected to be made in the fourth quarter of 2011. In the meantime, WOSBs can begin the registration process for participating in the program by (1) ensuring they have registered in the Central Contractor Registration (“CCR”); (2) logging in to the SBA’s General Login System to input required documentation into the WOSB Program Repository; and (3) updating their representations in the Online Representations and Certifications Application (“ORCA”). See www.sba.gov/wosb for links, FAQs, and additional information.
If you have questions about any of these issues, please feel free to contact any member of Taft’s Government Contracts practice or your primary Taft attorney.

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