On April 6, contractors who do business with the Department of Defense, NASA and the General Services Administration will have yet another new reporting and certification requirement. This time, the obligation will be to annually identify (by name and CAGE code) any parent, subsidiary or predecessor entity that has held a federal contract or grant within the last three years, but only information related to the most recent predecessor.
While the regulation does not specifically refer to "affiliated" companies, it can be inferred from the definition of "immediate owner" that the rule may reach affiliated companies as well. An immediate owner is defined as an "entity, other than the offeror, that has direct control of the offeror," and control is defined to include "ownership or interlocking management, identity of interests among family members, shared facilities and equipment and common use of employees." See FAR § 52.204-17, Ownership or Control of Offeror, and FAR § 52.212-3, Offeror Representations and Certifications-Commercial Items. Other FAR provisions reflecting the new certification requirement are FAR § 52.204-8, Annual Representations and Certifications, and FAR § 52.204-20, Predecessor of Offeror.
The rule will apply to all solicitations and resulting contracts. Unlike other certifications geared toward contract size, dollar volume or a focus on custom-made goods or services, this certification will apply across the board. It will reach contracts and subcontracts, and it will even apply to contracts and subcontracts below the simplified acquisition threshold ($150,000). It will also apply to small businesses and to contracts for commercial items (including COTS).
The information obtained from this requirement will be available on the Federal Awardee Performance and Integrity Information System (FAPIIS) website, based on the data obtained from an offeror’s response to FAR § 52.204-17, Ownership or Control of Offeror.
This new jewel is brought to you by the members of Congress. It implements section 852 of the FY 2013 National Defense Authorization Act. According to Congress, the point of this exercise is to aid the government by providing it with a more complete understanding of a contractor’s performance and integrity before awarding federal work. Congress believes the impact of compliance on contractors will be minimal.
The final rule can be found here: https://federalregister.gov/a/2016-04773.
This law update was co-authored by Taft partner Suzanne Sumner and Taft paralegal Christina Heidecker.