Hot Topics 1 Executive Compensation Caps Department of Labor Initiatives Safeguarding Information Supply Chain Risk Counterfeit Electronic Items Fair and Reasonable Pricing for Schedule Purchases Recent Publications Other Rules of Interest

Senior Executive Benchmark Extension 2012 NDAA 2 Authority: Section 803, NDAA for FY 2012 Expands application of compensation cap from the five most highly compensated employees in management positions to all contractor employees Applies to compensation costs incurred after 1/1/2012, under DoD, NASA, and Coast Guard contracts entered into before, on, or after the date of the enactment of this law FAR Case – Prospective implementation for contracts awarded on or after 12/31/2011 Interim FAR rule published 6/26/2013 Final FAR rule published 5/30/2014 FAR Case – Retroactive implementation for contracts awarded prior to 12/31/2011 Proposed FAR rule published 6/26/2013 Issues relating to retroactivity Final FAR rule is in development

Limitation on Allowable Government Contractor Compensation Costs 3 ( ) Authority: Section 702, Bipartisan Budget Act (BBA) of 2013 (Pub. L ) BBA establishes a compensation cap for contractors Outcome: Interim rule sets the initial limitation on allowable contractor and subcontractor employee compensation costs at $487K/year Applies to contracts awarded on or after 6/24/2014 Stage of Rulemaking: Interim FAR rule published 6/24/2014 Next steps:adjudicating public comments and developing final FAR rule for publication

Department of Labor Initiatives ( ) 4 Executive Order 13658, Establishing a Minimum Wage for Contractors, dated 2/12/2014 Minimum wage of $10.10 effective as of 1/1/2015 for certain Federal Contractor Employees DoD Sponsor: DPAP/CPIC Implementation: OMB: Memo of 6/12/2014 requires agencies to take all reasonable and legally permissible steps for immediate implementation DOL: Proposed rule published 6/17/2014 Stage of Rulemaking: Interim FAR rule published 12/15/2014; public comment period ends 2/13/2015 Next steps: adjudicate public comments and develop final FAR rule

Department of Labor Initiatives Cont’d ( ) 5 Executive Order 13673, Fair Pay and Safe Workplaces, dated 7/31/2014 Seeks to increase efficiency and cost savings in work performed by Federal contractors by ensuring they understand and comply with labor laws designed to promote safe, healthy, fair, and effective workplaces DoD Sponsor: DPAP/CPIC Implementation: Proposed FAR rule is in development

Safeguarding Unclassified Controlled Technical Information 6 (2011-D039) Objective : Provide standards and structures for safeguarding unclassified controlled technical information and reporting the compromise of unclassified controlled technical information DoD Sponsors : CIO; OUSD(SE); DPAP/PDI Outcome : Implement security measures to safeguard unclassified DoD information within contractor information systems from unauthorized access and disclosure Stage of Rulemaking: Final DFARS rule published 11/18/2013 Future FAR rule : Implement NARA CUI rule after it is published Follow-on Related Rule : Implements section 941 of the FY13 NDAA & section 1632 of the FY15 NDAA Interim DFARS rule 2013-D018, Network Penetration Reporting and Contracting for Cloud Services, in development Class Deviation 2015-O0011: DoD Class Deviation 2015-O0011, Contracting for Cloud Services, issued 2/9/2015 to provide guidance and a clause for use in contracts, task orders, and delivery orders that require cloud computing services. Effective while interim rule 2013-D018 is in development. ht p://

Basic Safeguarding of Contractor Information Systems 7 ( ) Authorities: Federal Information Security Management Act (FISMA) of USC 3544, Federal Agency Responsibilities (paragraph (a)(1)(ii) – information systems used by an agency or contractor) DoD Sponsor: DPAP/PDI Outcome: FAR subpart and clause to address basic safeguarding of information systems that contain or process information provided by or generated for the Government (other than public information) Stage of Rulemaking Proposed FAR rule published 8/24/2012 Next steps: Ad Hoc Team adjudicating proposed rule comments and developing a final FAR rule for publication

Requirements Relating to Supply Chain Risk (2012-D050) 8 Authority: Section 806, NDAA of FY 2011 DoD Sponsor: CIO Outcome: Enable agencies to exclude sources that are identified as having a supply chain risk on information technology purchases relating to national security systems Stage of Rulemaking Interim DFARS rule published 11/18/2013 Next steps: Adjudicating interim rule comments and preparing DFARS final rule for publication

Detection and Avoidance of Counterfeit Electronic Parts 9 (2012-D055) Authorities: Section 818, NDAA for FY 2012 Section 833, NDAA for FY 2013 DoD Sponsor: DPAP/PDI; L&MR Outcome: Reduce the incidence of counterfeit electronic parts in DoD systems Public Meeting: 6/28/2013 Further Implementation public meetings: 3/27/2014 and 6/16/2014 Stage of Rulemaking Final DFARS rule published 5/6/2014 Next step: Follow-on DFARS Case 2014-D005 opened to consider further implementation - proposed rule is in development

Class Deviation 2014-O Class Deviation: 2014-O0011, dated March 13, 2014 Subject: Determination of Fair and Reasonable Prices When Using Federal Supply Schedule Contracts Outcome: Ordering office contracting officers are responsible for making a determination of fair and reasonable pricing for individual orders, BPAs, and orders under BPAs, using the proposal analysis techniques at FAR when using ordering under Federal Supply Schedules. An excerpt from the class deviation is provided on the following slide. Effective: The class deviation is in effect until incorporated into the DFARS or otherwise rescinded.

SUBJECT: Class Deviation—Determination of Fair and Reasonable Prices When Using Federal Supply Schedule Contracts Effective immediately, contracting officers shall comply with the following policy, in lieu of FAR 8.404(d), Pricing, when using Federal Supply Schedules. This class deviation clarifies that ordering activity contracting officers are responsible for making a determination of fair and reasonable pricing when using Federal Supply Schedules (d) Pricing. (DEVIATION) Supplies offered on the schedule are listed at fixed prices. Services offered on the schedule are priced either at hourly rates, or at a fixed price for performance of a specific task (e.g., installation, maintenance, and repair). GSA has determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, to be fair and reasonable for the purpose of establishing the schedule contract. GSA’s determination does not relieve the ordering activity contracting officer from the responsibility of making a determination of fair and reasonable pricing for individual orders, BPAs, and orders under BPAs, using the proposal analysis techniques at The complexity and circumstances of each acquisition should determine the level of detail of the analysis required. 11

Recent Publications 12 Contractor Comment Period Past Performance Evaluations Commercial and Government Entity Code Contracting with Women-Owned Small Businesses Contractor Personnel Supporting US Armed Forces Ending Trafficking in Persons Uniform Procurement Identification EPEAT Items

Contractor Comment Period Past Performance Evaluations 13 ( ) Authorities: Section 853, NDAA for FY 2013 Section 806, NDAA for FY 2012 DoD Sponsors: DPAP/PDI; DPAP/CPIC Outcome: Revised past performance evaluation language Contractor comment period is 14 calendar days from date of notification of past performance evaluation in CPARS Evaluations and contractor comments are automatically transmitted to PPIRS no later than 14 days after contractor notification Government must update PPIRS with comments provided after 14 days and any subsequent agency review of comments Stage of Rulemaking Final FAR rule published 5/30/2014

Commercial and Government Entity Code ( ) 14 Objective: Require the use of Commercial and Government Entity (CAGE) codes,including North Atlantic Treaty Organization CAGE codes for foreign entities, for awards valued at greater than the micro-purchase threshold DoD Sponsor: D,DPAP; DPAP/PDI Outcome: Require offerors, if owned by another entity, to identify that entity Increase transparency and accuracy of Federal procurement data Stage of Rulemaking Final FAR rule published 5/30/2014; effective 11/1/2014

Contracting with Women-Owned Small Businesses 15 ( ) Authority: Section 1697, NDAA of FY 2013 DoD Sponsors: SBP; DPAP/CPIC Purpose: Leveled playing field among small business socio- economic programs; eliminated mandatory dollar limit caps for set-asides under the Women-Owned Small Business Program: $6.5 million for manufactured requirements $4 million for all other requirements Outcome: Contracting officers may set aside requirements under the Women-Owned Small Business Program at any dollar threshold above the micro-purchase threshold, provided all other eligibility criteria are met Implements: SBA final rule published 5/7/2013 Stage of Rulemaking Final FAR rule published and effective 6/24/2014

Contractor Personnel Supporting US Armed 16 Forces Deployed Outside the US (2013-D015) Authority: DoDI , Operational Contract Support DoD Sponsors: DPAP/CC; PS Objective: Implement DoDI and apply DFARS clause to non-CAAF as well as CAAF (Contractors Authorized to Accompany the Force) Stage of Rulemaking Final DFARS rule published 5/28/2014

Ending Trafficking in Persons ( ) 17 Authorities: Executive Order Title XVII of the NDAA for FY 2013 DoD Sponsors: DPAP/CPIC; USD(P&R) CTIP Objective: Strengthen protections against trafficking in persons Public Meeting : 3/2/2013 Stage of Rulemaking Final rule published 1/29/2015; effective 3/2/2015 Associated DFARS Final Rule: 2013-D007, Further Implementation of Trafficking in Persons Policy, final rule published and effective on 1/29/2015

Uniform Procurement Identification ( ) 18 DoD Sponsors: D,DPAP; DPAP/PDI Objective: Implement a uniform Procurement Instrument Identification (PIID) number system, which will require the use of Activity Address Codes (AACs) as the unique identifier for contracting offices and other offices Outcome: Provide for standardization across the Federal Government Will facilitate tracking of Federal spending data Stage of Rulemaking Proposed FAR rule published 6/6/2013 Final FAR rule published 10/14/2014; effective 11/13/2014

EPEAT® Items ( ) 19 Authorities: Executive Order and Executive Order DoD Sponsors: DPAP/CC; GSA Proponent: EPA Objectives: Revise the EPEAT® standard for personal computer products Add new EPEAT® standards for imaging equipment and televisions Outcome: Expand the use of EPEAT® Standards to fully implement EO’s Initial Implementation: Final FAR rule , effective 2/17/2009, initially implemented EO and established EPEAT® requirements for personal computer products Stage of Rulemaking Interim FAR rule published and effective 6/24/2014 Next steps: adjudicating public comments and developing final FAR rule for publication

Other Rules of Interest 20 OCI/ Unequal Access to Information Service Contract Reporting (eCMRA) Uniform Use of Line Items Expanded Reporting of Nonconforming Items (GIDEP) Enhancements to Past Performance Evaluation Systems Contracts Under the SBA 8(a) Program Small Business Subcontracting Improvements Set-Asides Under Multiple Award IDIQ Contracts

Organizational Conflicts of Interest and Unequal Access to Information 21 ( ) Authority: Section 841, NDAA for FY 2009 DoD Sponsor: DPAP/CPIC Objectives: Provide an approach that focuses on risk of harm to the business interests of the Government or to the integrity of the competitive process Differentiate unequal access to information from organizational conflicts of interest Stage of Rulemaking Proposed FAR rule published 4/26/2011 Also considered public comments of DFARS 2009-D015 proposed rule (based on incorporation of GAO case law), published 4/22/2010 Next steps: adjudicating public comments and preparing final FAR rule for publication

Service Contract Reporting (2012-D051) 22 Authority: Section 807, NDAA for FY 2008, which amended 10 USC 2330a DoD Sponsor: DPAP/CPIC Outcome: Require contractors to annually report service contract data, to include direct labor hours and cost data, into an online DoD database Purpose: Enable SECDEF to report to Congress an annual inventory of service contracts above the SAT The data also supports DoD’s total force management and strategic workforce planning decisions (10 USC 129a) Stage of Rulemaking Proposed DFARS rule published 6/5/2014 Next steps: adjudicating public comments and preparing final DFARS rule for publication

Uniform Use of Line Items ( ) final FAR rule for publication 23 Authority: Federal Funding Accountability and Transparency Act of 2006 DoD Sponsors: D,DPAP; DPAP/PDI Objective:Establish a uniform contract line item numbering structure in Federal procurement Outcome: Improve the accuracy, traceability, and usability of procurement data Will support tracing of funding from obligation through expenditure on a Federal-wide basis Current funding traceability is limited to contract-level Stage of Rulemaking Proposed FAR rule published 8/5/2014 Next steps:adjudicating public comments and preparing

Expanded Reporting of Nonconforming Items ( ) final FAR rule for publication 24 Authorities: Section 818, NDAA for FY 2012 OFPP Letter 9-13, “Reporting Nonconforming Products” DoD Sponsor: DPAP/PDI Outcome: FAR clause to require contractors to use GIDEP to screen for and report items that are counterfeit, suspect counterfeit, or contain a major or critical nonconformance Public Meeting: 6/16/2014 Stage of Rulemaking Proposed FAR rule published 6/10/2014 Next steps: adjudicating public comments and preparing

Enhancements to Past Performance Evaluation Systems 25 ( ) Objective:Update FAR subpart 42.15, Contractor Performance Information DoD Sponsors: OFPP; DPAP/CPIC Outcome: Incorporate two stand-alone past-performance reporting modules into the CPARS database Architect-Engineer Contract Administration Support System (ACASS Construction Contractor Appraisal Support System (CCASS) Provide reference to the CPARS Guide at Update the list of evaluation factors to consider when assessing performance to better align with CPARS Stage of Rulemaking Proposed FAR rule published 9/15/2014 Next steps: adjudicating public comments and preparing final FAR rule for publication

Contracts Under the Small Business Administration 8(a) Program 26 ( ) Authority: SBA’s final rule amending the 8(a) program DoD Sponsors: SBP; DPAP/CPIC Purpose: Clarifies 8(a) procurement processes as follows: Separate offering and acceptance not required for orders under Multiple Award IDIQ contracts that were set-aside for 8(a) Agencies may take SB/SDB credit for awards to “post- graduate” 8(a) concerns, as long as firm foes not represent itself as other than small Obtain release of a requirement currently under the 8(a) program A firm recently graduated from the 8(a) program may still be awarded a competitive 8(a) contract, as long as it was eligible for the award on the initial date specified for receipt of offers Stage of Rulemaking Proposed FAR rule published 2/3/2014 Next steps: adjudicating public comments and developing final FAR rule for publication

Small Business Subcontracting Improvements 27 ( ) Authority: Sections 1321 and 1322, Small Business Jobs Act of 2010 DoD Sponsors: SBP; DPAP/CPIC Purpose: Provide additional safeguards for small business subcontractors: Prime contractor must notify the contracting officer in writing if it does not use the SB subcontractors set forth in its offer Contracting officer is responsible to monitor and evaluate the prime’s adherence to its subcontracting plan Clarifies which subcontracts must be included in the prime’s subcontracting data reporting Funding agencies will be allowed to receive subcontracting credit for FSS and GWAC orders Implements: SBA final rule Stage of Rulemaking Proposed FAR rule is in development

Set-asides Under Multiple Award IDIQ Contracts ( ) 28 Authority: Section 1331, Small Business Jobs Act of 2010 DoD Sponsors: SBP; DPAP/CPIC Purpose: Provide uniform policy for conducting SB set- asides under multiple award (MA), IDIQ solicitations/ contracts; provides three new MA/IDIQ authorities to: Set-aside part or parts Set-aside orders for SB awardees Reserve one or more contract awards under full and open solicitations Implements: SBA final rule published 10/2/2013 Stage of Rulemaking Prior partial implementation: interim FAR rule published 11/2/2011 Proposed FAR rule is in development