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CLIENT ALERT

IMPORTANT NEW FAR CHANGES

Pre-award Debriefing Requirements Established

Effective January 1, 1997, the FAR has been amended to require that contracting officers must provide a debriefing concerning an offeror’s exclusion from the competitive range in a competitive negotiation. Under FAR 15.1003, a contracting officer must "promptly" notify an offeror when it has been excluded from the competitive range or otherwise excluded from further competition. The notice must:

(1) state the reason(s) for the contracting officer’s determination to exclude the offeror’s proposal;

(2) advise the offeror that, if a preaward or postaward debriefing is desired, a written request must be submitted to the contracting officer within 3 days; and

(3) state that, without a timely written request, the Government is not obligated to provide a debriefing.

The debriefing should be held before award, but if providing it then is "not in the best interests of the Government," the contracting officer may delay the debriefing until after award. A debriefing must contain the following:

(1) the agency’s evaluation of significant elements in the offeror’s proposal;

(2) a summary of the rationale for excluding the offeror from the competitive range; and

(3) reasonable responses to relevant questions about whether source selection procedures contained in the solicitation, applicable regulations, and other applicable authorities were followed in the process of excluding the offeror from the competitive range.

Due to the adverse effect of not requesting a debriefing, we strongly suggest that you submit a written request for a debriefing immediately upon notification of exclusion from the competitive range or upon notification of contract award to another offeror. Failure to do so may significantly affect your legal rights.

Liberalized Rules for Commercial Items

Effective January 1, 1997, commercial items have an even stronger exemption from the requirement for submission of cost or pricing data under the Truth-in-Negotiations Act. FAR 15.804-1 now directs that the contracting officer shall not require submission of cost or pricing data in an acquisition of commercial items. This exemption applies without regard to any other exemption, such as the "catalog or market price" provision. Because the new rule eliminates the criteria established by FASA for the exemption, difficulties in determining price reasonableness can no longer justify not granting the exemption. Finally, the new rule also eliminates the clause at FAR 52.215-43 (Audit—Commercial Items). Also effective January 1, 1997, contracts for commercial items are generally exempt from the Cost Accounting Standards (CAS).

New Procurement Integrity Rules

Effective January 1, 1997, the FAR rules governing procurement integrity, Subpart 3.1, have been completely revamped. The familiar Certificates of Procurement Integrity (such as those at FAR 52.203-8 and 52.303-9) have been eliminated. Other noteworthy changes include:

A Federal agency official can hold an "individual meeting" with an offeror or potential offeror for, or a recipient of, a contract or subcontract. However, there must be no unauthorized disclosure or receipt of contractor bid or proposal information, or source selection information, at the meeting.

When proposal contents are marked with the standard FAR legend (52.215-12), they become subject to the protections of the integrity rules. However, the rules provide that the contracting officer may remove the proprietary legend from the contractor’s data following written notification to the contractor and a review of the contractor’s justification for the legend.

There are important new rules applicable to certain agency officials involved in a procurement when they contact or are contacted by offerors regarding post-Federal employment. Contacts are regulated whether they occur directly between principals or through an agent or other intermediary.

Above a $10 million contract threshold (liberally interpreted), an agency official is prohibited from accepting compensation from a contractor for 1 year if the official either served in an identified position or made certain contract decisions.

The new rules may prohibit one bidder or offeror from obtaining contractor bid or proposal information directly from a competitor, and not just through the Government.

No protest may be filed at GAO on procurement integrity issues unless the protester reported to the contracting officer "the information constituting evidence of the violation within 14 days of its discovery." No such restriction applies, however, to suits in Federal court.

Because of the significant adverse consequences if these rules are violated, including possible criminal or civil penalties, we advise proceeding with caution.