International Users Conference 2014

ACQUISITION UPDATE MAY 2014 International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

1. REVIEW - THE FY 13 NATIONAL DEFENSE AUTHORIZATION ACT: A. REAUTHORIZED THE COMMERCIAL ITEM TEST PROGRAM FOR CERTAIN COMMERCIAL ITEMS. CONTRACTING OFFICERS ARE NOW ABLE TO USE SIMPLIFIED ACQUISITION PROCEDURES FOR PROCUREMENTS FROM $150,000 UP TO $6.5 MILLION. B.ELIMINATED THE CAP ON WOMEN-OWNED BUSINESS SET-AIDES (PREVIOUSLY WAS $6.5 MILLION FOR SERVICES AND $4 MILLION FOR GOODS). C.EXPANDED WHISTLEBLOWER PROTECTION FOR CONTRACTOR EMPLOYEES WORKING UNDER CIVILIAN AGENCY CONTRACTS. AS OF SEPTEMBER 30, 2013 ALL FEDERAL CONTRACTORS ARE REQUIRED TO NOTIFY EACH EMPLOYEE IN WRITING OF THEIR WHISTLEBLOWER RIGHTS- WHAT THEY CAN DISCLOSE AND TO WHOM THEY CAN DISCLOSE THE INFORMATION, AND NOT BE RETALIATED AGAINST BY THEIR EMPLOYER. IF THE EMPLOYEE DOES NOT SPEAK ENGLISH, THE LETTER MUST BE TRANSLATED FOR THEM INTO THEIR PREDOMINANT LANGUAGE. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

D.EXTENDED CONTRACTOR DUTIES REGARDING HUMAN TRAFFICKING. REQUIRES CONTRACTORS TO TRAIN EVERY EMPLOYEE AND TO DEVELOP WRITTEN PLANS TO DETECT AND PREVENT HUMAN TRAFFICKING. E.CLARIFIED THAT DCAA HAS ACCESS TO INTERNAL CONTRACTOR AUDIT REPORTS. F.ELIMINATED THE SUNSET DATE FOR ALLOWING PROTESTS ON TASK AND DELIVERY ORDERS OVER $5 MILLION. THE GAO CAN STILL HEAR THEM. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

SEPARATELY : G.AS OF JANUARY 1, 2014 THE GOVERNMENT REDUCED THE AMOUNT CONTRACTORS CAN INCLUDE IN THEIR G&A FOR EXECUTIVE COMPENSATION. THE NEW CEILING IS $462,000; THE PREVIOUS CEILING WAS IN EXCESS OF $920,000. CONTRACTORS CAN STILL PAY THEIR EXECUTIVES ANY AMOUNT OF COMPENSATION- BUT ANYTHING OVER THE NEW CEILING COMES OUT OF PROFIT. H.EFFECTIVE IMMEDIATELY, DOD CONTRACTING OFFICERS ARE PROHIBITED FROM AWARDING CONTRACTS USING FY13 or FY14 FUNDS TO ANY CONTRACTOR THAT HAS A FEDERAL TAX LIABILITY OR HAS BEEN CONVICTED OF A FELONY CRIMINAL VIOLATION OF ANY FEDERAL LAW WITHIN THE PRECEDING 24 MONTHS. I.AS OF THE END OF DECEMBER, 2013 DOD ISSUED NEW RULES REQUIRING CONTRACTORS TO PROTECT UNCLASSIFIED TECHNICAL DATA. THE RULES REQUIRES CONTRACTORS TO PROTECT DOZENS OF DATA ELEMENTS, FROM DELIVERY SCHEDULES TO DEMOBILIZATION PLANS. DOD CONTRACTORS ARE REQUIRED TO NOTIFY DOD OF ANY SUCCESSFUL HACKING ATTACK, INCLUDING DENIAL OF SERVICE ATTACKS. CONTRACTOR EMPLOYEES ON TRAVEL MUST GO THROUGH A FIREWALL BEFORE GETTING ACCESS TO ANY COMPANY DATABASES, INCLUDING S. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

J.AS OF EARLY JANUARY 2014, THE SBA AUTHORIZED PROCEDURES FOR SET-ASIDES ON MULTIPLE AWARD CONTRACTS. THIS WILL GREATLY REDUCE THE VALUE OF THESE MACS TO THEIR LARGE BUSINESS HOLDERS, AND WILL GREATLY ENHANCE THE NEED FOR MENTOR-PROTÉGÉ AGREEMENTS BETWEEN LARGE BUSINESSES AND SMALL BUSINESSES. K.EFFECTIVE AUG 27, 2013 A NEW SBA RULES ESTABLISHED A LEGAL PRESUMPTION OF LOSS FOR THE FULL VALUE OF ANY CONTRACT AWARDED TO A COMPANY THAT HAS MISREPRESENTED ITS SOCIO-ECONOMIC STATUS. THIS WILL INCREASE PENALTIES CONTRACTORS WILL HAVE TO PAY IN DAMAGES (IN ADDITION TO CRIMINAL SANCTIONS). L.AS OF 30 AUGUST 2013, DOD CREATED A NEW CLAUSE TO BE USED IN ALL CONTRACTS WITH PERFORMANCE IN AFGHANISTAN (EXCEPT FOR COMMODITIES CONTRACTS). THE CLAUSE REQUIRES CONTRACTORS TO FORMULATE DEMOBILIZATION PLANS FOR BOTH EQUIPMENT AND PERSONNEL AND SUBMIT THEM FOR GOVERNMENT APPROVAL. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

M.AS OF MARCH 24, 2014 CONTRACTORS HAVE TO HAVE 8% OF THEIR EMPLOYEE WORK FORCE BE VETERANS AND 7% OF THEIR WORK FORCE TO BE DISABLED, OR HAVE A WRITTEN PLAN TO ACHIEVE THOSE GOALS WITHIN ONE YEAR. CONTRACTORS MUST START OBTAINING THAT INFORMATION FROM THEIR EMPLOYEES AND KEEPING DATABASES FOR BOTH AREAS. N.IN LATE MARCH/EARLY APRIL 2014 PRESIDENT OBAMA ISSUED AN EXECUTIVE ORDER MANDATING THAT THE MINIMUM WAGE BE ESTABLISHED AT $10.10 FOR ALL EMPLOYEES OF FEDERAL CONTRACTORS EFFECTIVE JAN 1, IF CONTRACTORS ARE PROPOSING ON RFPS NOW THAT COVER PERFORMANCE PERIODS INTO 2015 AND BEYOND, THEY MUST ACCOUNT FOR THE NEW WAGE STRUCTURE. O.IN MID APRIL 2014 PRESIDENT OBAMA ISSUED AN EXECUTIVE ORDER PROHIBITING FEDERAL CONTRACTORS FROM RETALIATING AGAINST EMPLOYEES IF THEY DISCLOSE THEIR SALARY OR COMPENSATION TO OTHER COMPANY EMPLOYEES. IF YOU HAVE THAT RESTRICTION IN YOUR EMPLOYEE HANDBOOK- TAKE IT OUT NOW. THE EXECUTIVE ORDER ALSO REQUIRES CONTRACTORS TO KEEP RECORDS OF EMPLOYEE SALARY/COMPENSATION BY GENDER AND AGE. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

P.ON MAY 6 th, DoD PUBLISHED A DFARS FINAL RULE REQUIRING LARGE BUSINESSES TO HAVE AN ACTIVE PREVENTION AND DETECTION PROGRAM FOR COUNTERFEIT PARTS. UNDER THE NEW DFARS COVERAGE, COMPANIES MUST DEVELOP PROCESSES AND METHODOLOGIES THROUGHOUT THEIR SUPPLY CHAIN TO ENSURE COUNTERFEIT PARTS ARE EXCLUDED FROM ALL SYSTEMS. THEY MUST FLOWDOWN THESE REQUIREMENTS TO ANY SUBCONTRACTORS PROVIDING ELECTRONIC PARTS OR International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014 ITEMS THAT CONTAIN ELECTRONIC PARTS. IF ANY ITEMS ARE DELIVERED TO DOD WITH COUNTERFEIT PARTS, THE CONTRACTOR WILL REPLACE AND/OR REPAIR THE ITEMS AT NO CHARGE TO THE GOVERNMENT. THESE REQUIREMENTS APPLY TO COMMERCIAL ITEMS AND ALL SUBCONTRACTORS /SUPPLIERS/VENDORS REGARDLESS OF SIZE.

COMING “ATTRACTIONS”: Q.STILL GET READY FOR FITARA! THE FEDERAL INFORMATION TECHNOLOGY ACQUISITION REFORM ACT IS LIKELY TO BECOME LAW. THE ACT SPECIFICALLY AUTHORIZES, “FIXED PRICE TECHNICAL COMPETITIONS”. UNDER THIS PROCESS, THE GOVERNMENT SETS THE PRICE OF THE CONTRACT IN ADVANCE, AND INDUSTRY COMPETES FOR THE AWARD BASED UPON TECHNICAL AND MANAGEMENT FACTORS. IF A COMPANY DOESN’T LIKE THE ESTABLISHED PRICE, IT CAN CHOOSE NOT TO COMPETE- NO PRICE NEGOTIATIONS ALLOWED. R.THE HOUSE PASSED LEGISLATION GIVING THE GAO THE RIGHT TO TAKE TESTIMONY FROM WITNESSES, BOTH GOVERNMENT AND INDUSTRY, WHEN CONDUCTING AUDITS OR FRAUD INVESTIGATIONS. S.BOTH THE HOUSE AND SENATE ARE LOOKING AT EXPANDING THE DEFINITION OF “HUBZONE” TRACTS TO INCLUDE AREAS AROUND A BASE BEING CLOSED PURSUANT TO A BRAC STATUTE. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

T.THE HOUSE IS CONSIDERING PROHIBITING ANY PUBLICLY TRADED COMPANY FROM QUALIFYING AS A SMALL BUSINESS. U.CONGRESS PASSED A NEW LAW ON HOW SMALL BUSINESSES MUST COMPLY WITH THE 50% REQUIREMENT ON SET-ASIDES. UNDER THE OLD LAW, A SMALL BUSINESS HAD TO INCUR AT 50% OF THE LABOR COSTS OF THE CONTRACT FOR ITS OWN EMPLOYEES (SERVICES CONTRACTS). THE SAME RULE APPLIED FOR SUPPLY CONTRACTS, MINUS THE COST OF MATERIAL. PROFIT AND/OR FEE WAS NOT INCLUDED IN THE CALCULATION. UNDER THE NEW LAW NO CALCULATIONS ARE NEEDED. THE PRIME CANNOT SUBCONTRACT MORE THAN 50% OF THE CONTRACT VALUE FOR SERVICE CONTRACTS, OR 50% OF THE CONTRACT VALUE FOR SUPPLY CONTRACTS, LESS MATERIAL COSTS. THESE NEW RULES ARE NOT YET IN EFFECT. THE SBA IS SUPPOSED TO ISSUE IMPLEMENTING REGULATIONS SHORTLY. International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014

International Users Conference 2014 INTERNATIONAL USERS CONFERENCE 2014 WHAT IS THE SHORTEST PERIOD OF TIME THE FAR ALLOWS A CONTRACTING OFFICER TO AUTHORIZE A COMPANY TO REPETITIVELY INVOICE? HINT: IT’S NOT 30 DAYS HOW MANY MICROPURCHASE THRESHHOLDS ARE THERE AND WHAT ARE THEY?