DFARS Clause 252.222-7000 - Inadequate Clause Prescription

[NavyKO08]

Background Information: I am drafting a solicitation (under FAR Part 15) that involves services (SCA applicable) predominantly in Hawaii and also in Guam.

According to DFARS 222.7000( (2), I am required to include the clause at 252.222-7000 when "the unemployment rate in the noncontiguous State (e.g. Guam) is in excess of the national average rate of unemployment as determined by the SECRETARY OF LABOR." (Please note that the definition of "Noncontiguous State" in this subpart includes Hawaii and Guam.)

However, I have found a serious issue with this prescription. After researching online (and finding nothing from the Secretary of Labor in regards to the current unemployment rate in Guam), I contacted the Bureau of Labor Statistics (BLS), the Secretary of Labor agency responsible for determining unemployment rates. I received an e-mail back from the BLS indicating that the BLS does NOT publish unemployment data for Guam. Therefore, utilizing only statistics provided by the Secretary of Labor, there is no way for contracting officers to determine whether or not the unemployment rate in Guam is "in excess of the national average rate of unemployment."

My question is - what approach should I take? I was able to confirm that Hawaii's unemployment rate is lower than the national average. Therefore, I would only need to include the clause if Guam's unemployment rate was higher than the national average. Since Guam's rate is not available from the Secretary of Labor, do I simply not include the clause?

Has anyone else had experience with this clause or another clause where it was impossible to determine if the clause was required based on an inadequate clause prescription?

Thanks in advance for any advice or thoughts.

[ji20874]

Sounds to me like the Secretary of Labor has not determined that the unemployment rate in Guam is in excess of the natrional average of unemployment. Therefore, sounds to me like you don't use the clause, because the Secretary of Labor has not determined...

Now, this could devolve into a matter of sentence structure. Does "as determined by the Secretary of Labor" apply to the unemployment rate in Guam or the national average unemployment rate, or both combined? For my answer above, I'm using both combined.

[NavyKO08]

Thanks. I agree with you. Just hoping there wasn't a different precedent (or point of view) I wasn't aware of.

[Don Mansfield]

Here's DFARS 222.7000( b ) in its entirety:

This subpart applies only—

(1) To construction and service contracts to be performed in whole or in part within a noncontiguous State; and

(2) When the unemployment rate in the noncontiguous State is in excess of the national average rate of unemployment as determined by the Secretary of Labor.

​

I think you are misinterpreting (2). The Secretary of Labor determines the national average rate of unemployment. They do not determine whether the unemployment rate in a noncontiguous state exceeds the national average rate of unemployment.

BTW, unemployment rate for Guam.

[joel hoffman]

A High Five goes to Don today Good Show.

[NavyKO08]

It depends on how it's interpreted. I think (2) can reasonably be interpreted to mean that the Secretary of Labor will determine both the National Average unemployment rate and the non-contiguous unemployment rate.

Practically speaking, it would make sense if that is what the clause prescription authors meant. You need to have one consistent source for both data points, otherwise, you may be comparing apples and oranges. How Guam's BLS determines Guam's unemployment rate may be very different than how the Secretary of Labor determines the U.S. unemployment rate. Furthermore, the most current Guam rate is for September 2013 while the current BLS rate is for March 2014. Am I supposed to compare September 2013 unemployment rates to March 2014 rates. That doesn't make sense. Also, it doesn't make sense to compare the Guam rates to September 2013 U.S. rates because those are both outdated.

[joel hoffman]

While the clause prescription may well "technically" be inadequate, it doesn't make any sense to me to simply say that the clause doesn't apply to Guam because the DOL's Bureau of Labor Statistics doesn't publish unemployment statistics for Guam. In researching (a little) the background for the original requirement, as of the January 1997 DFARS edition, Subpart 222.7000 only applied to construction and service contracts in Alaska and Hawaii. Then there were provisions in a couple of Defense Appropriations Acts adding other areas, including Guam. The original language pertaining to determinations by the Secretary of Labor did not change from that in the 1997 DFARS. If you look for the explanations in the Federal Record and elsewhere in the various DFARS cases, it merely indicated that the clause was revised to add (Guam, etc.) to apply to such contracts where the unemployment rate exceeded that of the national average unemployment rate. The intent of those adding the additional areas probably had nothing to do with who - the state or BLS - determines or publishes the unemployment rate. For gosh sakes - the Island's population base is miniscule compared with most (all?) of the contiguous States.

At any rate, your distinction would seem to render the requirement meaningless, regardless of the intent of Congress. As Nash and Cibinic teach in contract interpretation on pages 167-175 of the Fourth Edition of "Administration of Government Contracts" (no, this isn't contract interpretation but the principles seem to be good for trying to interpret ambiguous regs, too) , one should try to interpret writings to avoid rendering terms meaningless, interpret to avoid conflict, and interpret to fulfill the principal purpose of the parties.

Thus, it would appear that Congressional intent was to add Guam to the non-contiguous areas where local labor preferences were to apply, if Guam's unemployment rate exceeds that of the National average. With all the construction going on in Guam to relocate US Forces from Okinawa, etc., I would think that someone in the Navy would have made this determination long before today, hasn't it?

[NavyKO08]

Thank you Joel for your response. However, I still can't imagine a scenario where Congress (or any other policy maker or statistician for that matter) would want us to compare unemployment rates that were potentially calculated using different criteria from completely different time periods.

In addition, please consider the fact that the term "Noncontiguous State" in this subpart also includes "Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Island." How do you suppose this clause should apply to services on these islands?

[joel hoffman]

Thank you Joel for your response. However, I still can't imagine a scenario where Congress (or any other policy maker or statistician for that matter) would want us to compare unemployment rates that were potentially calculated using different criteria from completely different time periods.

In addition, please consider the fact that the term "Noncontiguous State" in this subpart also includes "Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Island." How do you suppose this clause should apply to SCA-covered services on these islands?

Navy, one would have to use the latest data available and compare it with the US unemployment rate for the same period. As for the Service Contract Act, what does that have to do with this clause? Plus what do these other locations have to do with your original question concerning whether or not to use the clause for a service contract in Guam? Finally, the Navy is quite present in Guam. Doesn't anyone in the Navy know if the clause is being used there?

[NavyKO08]

I should have said "services" not "SCA covered services." My bad. I corrected it.

These other locations have everyting to do with the logic/reasoning you are using. So, that's why I'm asking how you would apply your logic to "Baker Island, Howland Island, Jarvis Island..." to determine whether their unemployment rates are higher than the U.S. unemployment rate. I assume we should apply the same logic to all of the "Noncontiguous States" and I think it would be valuable to see how your logic applied to these other territories.

As far as the U.S. Navy having a policy or standard procedure on whether this clause should be used for Guam, it doesn't exist as far as I know. I certainly would not be posting this question on this board if I knew such a thing existed. And, just because one Navy contracting officer included it (or didn't include it) in one contract does not mean that it is the correct interpretation and definitely does not represent the Navy's stance as a whole.