2018 Regulations Review Pt. II

      Did you miss any important regulations last year? Here is Part II of Set-Aside Alert’s review of regulatory actions in 2018. (Review Part I here)

• Protests of veteran eligibility: The SBA issued a final rule amending its Office of Hearings and Appeals rules for protests of eligibility for VA set-asides for veterans (Federal Register final rule: http://goo.gl/nWKwbv). In effect Oct. 1, 2018.
• VA Acquisition Regulation: The VA published a proposed rule to amend, update and streamline its VA Acquisition Regulation. (Federal Register proposed rule: http://goo.gl/CbJtqi).
• DOD micropurchases & SAP: The Defense Dept. issued a class deviation to acknowledge the micro-purchase increase to $5,000. Also noted was that the threshold is $2,000 for acquisitions of construction and $2,500 for services subject to 41 U.S.C. Chapter 67 Service Contract Labor Standards.

        In other exceptions, the micro-purchase threshold was raised to:

  • $10,000 for DOD basic research, science & tech reinvention labs;
  • $10,000 or higher for acquisitions from universities and non-profits;
  • $20,000 and $30,000 for contingency purchases, in the U.S. and outside the U.S., respectively.

        DOD also raised the Simplified Acquisition threshold to $250,000, and up to $500,000 for humanitarian needs, $750,000 for contingencies in the U.S. and $1.5 million for contingencies outside the U.S. Read more at DoD DPAP Memo: https://bit.ly/2HfpALR and Holland & Knight blog entry: https://bit.ly/2HpsvBK.

• DOD certified pricing data: DOD officials raised the threshold for obtaining certified cost or pricing data to $2 million, effective July 1. Previously the threshold was $750,000. Read more at DoD DPAP Memo: https://bit.ly/2qNgZJj.
• VA acquisition final rule: The VA issued a final rule to “revise and streamline” VA acquisition regulations. It provides an updated policy on exemptions regarding overtime in nursing home care contracts, revises definitions relating to debarring officials and suspending officials, and makes other changes. It went into effect May 16. Read the final rule as published at : https://bit.ly/2HbFAml.
• Army FOIA program: The Army issued a final rule to remove its Freedom of Information Act (FOIA) program rule and to conform its FOIA program to the DOD FOIA program rule. The action was taken as a result of the FOIA Improvement Act of 2016. Read more at Federal Register final rule: https://bit.ly/2HnIHre.
• SBA size standards: The SBA announced in a proposed rule that it wants comments on its new methodology for defining what it means for companies to be “small” in each industry. SBA proposed to consider economic conditions and the impact on small businesses in the industry, in addition to industry data, in setting standards. Read more at Federal Register proposed rule: https://bit.ly/2FSJsTB.
• Task order protests: DOD, GSA and NASA issued a final rule to raise the threshold for task-order and delivery-order protests to $25 million, up from $10 million. The new threshold applies to DOD, NASA and the Coast Guard.

        The final rule also raised the threshold for audits of prime contract settlement proposals and subcontract settlements to $750,000, from $100,000. The audit threshold in the future will be the same as the threshold for certified cost or pricing data (Federal Register final rule: https://bit.ly/2I8MRmn).

• 8(a) mentor-protege program: The SBA proposed to consolidate its All Small Mentor Protege Program and 8(a) Mentor Protege Program into a single program. It also may allow mentors to have more than three proteges.

        In other changes, the SBA also may stop approving joint venture agreements for 8(a) contracts, and may revise its process for approving management changes in entity-owned 8(a) firms. SBA also announced it is preparing a comprehensive revision of HUBZone program regulations. Read more at Federal Register Notification of Tribal Consultation Meetings: https://bit.ly/2K04gv5.

• HUBZone indirect ownership: The SBA’s final rule allowing indirect ownership by U.S. citizens of companies in the HUBZone program went into effect on May 25. It says HUBZone small firms must be at least 51% owned and controlled by U.S. citizens (PilieroMazza blog entry: https://bit.ly/2MF6dPu and Federal Register final rule: https://bit.ly/2sJojqL).
• Exceptions to certified pricing data: DoD, GSA, and NASA proposed a separate standard for ‘‘adequate price competition’’ in the FAR, applicable only to DoD, NASA, and the Coast Guard, consistent with section 822 of the National Defense Authorization Act for Fiscal Year 2017. Read more at Federal Register proposed rule: https://bit.ly/2LJCio1.
• Sect. 811 memos: The Army, Navy and Air Force reportedly agreed to follow reinterpreted guidelines in implementing a law that is believed to have hindered sole-source contracts above $22 million to Alaska Native Corporations (ANCs) in the 8(a) program. Under Sect. 811, contracts of $22 million or more to ANCs in the 8(a) program must obtain a Justification and Approval signed by an authorized agency official. The reinterpreted guidelines are expected to result in more sole-source contracts for ANCs. Read more at Anchorage Daily News report: https://bit.ly/2tQ8NdB and Carl H Marrs testimony to Senate Small Business Committee: https://bit.ly/2tWEMbt.
• Federal Supply Schedule set-asides The GAO ruled that US Customs and Border Control was not obligated to set aside a Federal Supply Schedule contract for small businesses. GAO said set-asides are discretionary and not mandatory in these cases (GAO Decision B-416035: https://www.gao.gov/products/D19024#mt=e-report).
• Less time to certify cost or pricing data: The Defense Procurement Acquisition Policy office issued guidance to contracting officers that reduces the timeframe for certifying cost or pricing data. This guidance may increase contractors’ risk of defective pricing claims (DoD DPAP Memo: https://bit.ly/2lxuQkK).
• Foreign military sales: On June 29, the DOD issued a final rule stating that all indirect offset costs in foreign military sales transactions are deemed reasonable, provided that the US defense contractor submits a signed offset agreement. The indirect offsets are exempt from the requirement for certified cost or pricing data (DFARS 225.73: https://bit.ly/2Ndj0YI).

     Read Part III of Set-Aside Alert’s 2018 Regulatory Review in the next issue.

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