FAC 2005-76 Issued with One Interim, Three Final Rules

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued FAC 2005-76, which contains one interim rule and three final rules amending the Federal Acquisition Regulation. The rules are Item I—Equal Employment and Affirmative Action for Veterans and Individuals with Disabilities (FAR Case 2014-013, Interim), Item II—Small Business Protests and Appeals (FAR Case 2012-014), Item III—Allowability of Legal Costs for Whistleblower Proceedings (FAR Case 2013-017), and Item IV—Technical Amendments. This FAC also includes a Small Entity Compliance Guide, which contains a regulatory flexibility analysis for the first three rules. Unless otherwise noted, all of the rules are effective July 25, 2014. Comments on the interim rule, identified by its FAR case number, are due September 23, 2014. A full listing of all the regulations impacted by this FAC appears in the table below. For the text of FAC 2005-76, see ¶70,002.170.

Equal Employment and Affirmative Action

The FAR Case 2014-013 interim rule implements final rules issued by the Office of Federal Contract Compliance Programs at the Department of Labor relating to equal opportunity and affirmative action for veterans and individuals with disabilities. The rule amends the definitions in FAR Subpart 22.13, Equal Opportunity for Veterans, to conform to the definitions in 41 CFR 60–300.2, and adds at FAR 22.1301 the definitions of “active duty wartime or campaign badge veteran” and “protected veteran.” The rule also expands policy at FAR 22.1302 to address appropriate outreach and recruitment, and hiring benchmarks; amends FAR Subpart 22.14, Employment of Workers with Disabilities, to conform to DOL regulations at 41 CFR Part 60–741; expands policy atFAR 22.1401 to address appropriate outreach and recruitment, and utilization goals, as prescribed in the DOL regulations; and amends the waiver authority atFAR 22.1403 to be the Director of the OFCCP and revises the policy at FAR 22.1403 (b) concerning national security waivers. The DOL regulations contain two revised Equal Opportunity clauses at 41 CFR 60–300.5, relating to veterans, and 41 CFR 60–741.5, relating to individuals with disabilities. Both clauses add requirements with regard to contractor solicitations or advertisements for employees, requiring inclusion of statements that all qualified applicants will receive consideration for employment, without regard to their protected veteran status, and that qualified applicants will not be discriminated against on the basis of disability. Accordingly, the interim rule revises FAR 52.222–35, Equal Opportunity for Veterans, and FAR 52.222–36, Equal Opportunity for Workers with Disabilities, to provide a citation to the applicable clause in the DOL regulations. Each clause also includes a statement that summarizes contractors’ top level obligations under the DOL clause. A conforming change to FAR 52.222–37, Employment Reports on Veterans, adds a definition of “active duty wartime or campaign badge veterans.” Also, the rule amends FAR 52.212–5 (e) and FAR 52.244–6 to require flowdown of FAR 52.222-37 to commercial subcontracts.

Small Business

The final rule associated with FAR Case 2012-014 amends the FAR to implement the Small Business Administration’s revision of the small business size and small business status protest and appeal procedures. SBA issued a final rule ( ¶70,425.420) that amended SBA’s regulations to clarify the effect, across all small business programs, of initial and appeal eligibility decisions. SBA also issued an interim rule ( ¶70,425.450) that amended its regulations pertaining to the Women-Owned Small Business Federal Contract Program so that its protest and appeal procedures would be consistent with all other small business programs. This final rule restructures sections of the FAR to provide uniformity to the protest and appeals guidance provided at FAR 19.306, Protesting a firm’s status as a HUBZone small business concern; FAR 19.307, Protesting a firm’s status as a service-disabled veteran-owned small business concern; and FAR 19.308, Protesting a firm’s status as an economically disadvantaged women-owned small business concern or WOSB concern eligible under the WOSB Program. This rule also updates the protest and appeals guidance found at FAR 19.302, Protesting a small business representation or rerepresentation. The changes proposed to FAR 19.001 and FAR 19.102 (f) pertaining to the nonmanufacturer rule were not implemented because more clarification regarding the nonmanufacturer rule is warranted. See ¶70,006.276 for the text of the proposed rule. This rule goes into effect on August 25, 2014.

Allowability of Legal Costs

The FAR Case 2013-017 rule finalizes, with change, the interim rule issued with FAC 2005-70, which implemented the parts of sections 827 and 828 of the National Defense Authorization Act for Fiscal Year 2013 (PL 112-239) relating to the allowability of legal costs for whistleblower proceedings. Section 827(g) amended 10 USC 2324(k), Allowable costs under defense contracts, and section 828(d) amended 41 USC 4310, Proceeding costs not allowable, to address the allowability of legal costs incurred by a contractor or subcontractor in connection with a whistleblower proceeding commenced by an employee submitting a complaint of reprisal under the applicable whistleblower statute and pilot program. Accordingly, the interim rule amended the cost principle at FAR 31.205-47to prohibit the allowability of these legal costs if the contractor is found liable for fraud or similar misconduct in the whistleblower proceeding, or if an agency head orders the contractor or subcontractor to take corrective action. In response to a comment, the final rule adds language to expressly include whistleblower complaints in the provisions at FAR 31.205-47 (c) and provide the same treatment for whistleblower complaints as is currently provided for settlement of a proceeding under the False Claims Act.