What could FAR 13.202 mean when it says a clause automatically applies?

[Witty_Username]

This seems so basic, but I can't make sense of it: What does FAR 13.202 mean when it says "The clause at 52.232-39, Unenforceability of Unauthorized Obligations, automatically applies to any micro-purchase, including those made with the Governmentwide purchase card"?

The interim rule in Federal Register Vol. 78, No. 120, subsequently adopted without change in the final rule, discusses the problem they are trying to solve (open-ended indemnification) and the proposed fix is "FAR 13.202, Unenforceability of unauthorized obligations in micropurchases, is added to require the clause at 52.232–39, Unenforceability of Unauthorized Obligations, to automatically apply to any micropurchase, to prevent violations of the Anti-Deficiency Act."

That language, "automatically apply", is different from any other prescription I could find in the FAR, implying that it is not simply requiring that the clause be included in some type of order, but if it were not included in an order (or ordering agreement) through what mechanism would that clause apply to a vendor?

Maybe it was just strangely worded (although the use of "automatic" wasn't a one-time thing, it shows up multiple times across the interim and final rules before ending up in the FAR) because later in the 2020 final rule implementing the increased micro-purchase threshold it says "The additional awards at or below the MPT would not require provisions or clauses, except as provided in FAR 13.202" which seems to acknowledge that an award below the micropurchase threshold would, in fact, require the clause as provided in FAR 13.202, and so maybe it is not "automatically" applicable at all?

[ji20874]

As I understand, Congress passed a law saying EULA click acceptances by Government employees are not enforceable against the Government.  Based on that, the FAR clause was drafted, and the micro-purchases statement was put in the FAR.

[Don Mansfield]

52 minutes ago, Witty_Username said:

through what mechanism would that clause apply to a vendor?

By virtue of the FAR saying it applied. Remember the vendor has constructive knowledge of everything in the FAR, so they "know" that clause will apply to micro-purchases. 🙂

[C Culham]

2 hours ago, Witty_Username said:

automatically applies

Thoughts that will most likely confuse but offered all the same.....

Interesting on how GSA handles in their supplement to the FAR (see below).   Makes me wonder what other agency supplements may or may not state.

I have not really worked it out in my own brain but consider and think what one might do if establishing a contract or BPA where the GPC is used as the payment method.

And even  more research, which I am not going to do but could, is what does SAM registration and annual certs/reps etc. have any inference to the clause (yes clause not a provision) but all the same SAM may say something when a vendor say "Yes" to accepting credit card?

I will stop here...........

513.302-5 Clauses.

Where the supplies or services are offered under a commercial supplier agreement (as defined in 502.101), the purchase order or modification shall incorporate clause 552.232-39, Unenforceability of Unauthorized Obligations (FAR DEVIATION), in lieu of FAR 52.232-39, and clause 552.232-78, Commercial Supplier Agreements-Unenforceable Clause

[Vern Edwards]

Go here https://obamawhitehouse.archives.gov/sites/default/files/omb/memoranda/2013/m-13-10.pdf

Read.

Then go here https://www.govinfo.gov/content/pkg/FR-2013-06-21/pdf/2013-14614.pdf

Read.

Then go here https://www.lexology.com/library/detail.aspx?g=9c86071c-4432-4b84-b6a6-7b1954e2e08c "New procurement rule is intended to limit the Government’s acceptance of standard commercial terms of service for social media applications"

Read. 

@Witty_Username

5 hours ago, Witty_Username said:

That language, "automatically apply", is different from any other prescription I could find in the FAR, implying that it is not simply requiring that the clause be included in some type of order, but if it were not included in an order (or ordering agreement) through what mechanism would that clause apply to a vendor?

Keep in mind that the people who write the FAR are neither thoughtful implementers of policy nor procedural practitioners. They just scribble and move on, leaving it up to you to figure it out. So put it all together and figure it out.

[Vern Edwards]

5 hours ago, Don Mansfield said:

Remember the vendor has constructive knowledge of everything in the FAR, so they "know" that clause will apply to micro-purchases.

"Remember"? Remember from when? Where?

On what is that proposition based?

Where does it say that in FAR?

If not in FAR, where else?

[FAR-flung 1102]

I'm not convinced this is a small matter. Indemnification is only a part of the larger issue the Federal Government has with routine terms of Commercial Supplier Agreements, Terms of Service, EULAs and other like terms usually found in online agreements. In 2015 GSA identified 15 common terms it takes exception to as incompatible with federal law, below is the initial action taken (Class Deviation) and the below that the 2018 Final Rule.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.gsa.gov/cdnstatic/insite/MV-15-03.pdf&ved=2ahUKEwiXrtup6ZfwAhU9ITQIHQFEAlYQFjAAegQIBhAC&usg=AOvVaw1ob28-WHisQyxZKSBV6KId

https://www.federalregister.gov/documents/2018/02/22/2018-03350/general-services-administration-acquisition-regulation-unenforceable-commercial-supplier-agreement

The tactic used by GSA is to render is to render such agreements unenforceable.

At what cost does this solution come? 

Availability of commercial goods and services won't help the Government much if year by year more and more of the potential solutions remain out of reach due only to online terms which the Government continues to treat as alien. This issue won't go away until the Government learns a few new skills (both legislative and administrative) and models compatibility with online markets.  Only then can innovation take center stage and the Government hope to keep pace at the speed of relevance.