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30 minutes ago, Don Mansfield said:

This has been all cleared up by the FAR Councils. From today's Federal Register

 

So we all know what this means now, right?

It was interesting when a comment mentioned the inequity of not allowing local foreign owned small businesses in a foreign area from competing against small US based businesses in a FAR 19 set-aside in their own country. The Council essentially said that foreign owned businesses can apply to be classified as small businesses.

”b. Rule Excludes Small Foreign Entities

Comment: A respondent commented that, since non-U.S. businesses are not considered “small,” applying small business size standards outside the United States excludes foreign entities and limits competition to U.S. companies only, contrary to CICA.

Response: As explained in the response to the comment under category 10a, SBA's regulations allow “non-U.S. businesses” to be considered small business concerns for the purposes of FAR part 19 procurements if they meet the criteria at 13 CFR 121.105. The Councils note that CICA provides an exception that allows agencies to exclude from competition other than small businesses in furtherance of sections 9 and 15 of the Small Business Act (see 10 U.S.C. 2304(b)(2) and 41 U.S.C. 3303(b)).”

Thus, we are now permitted (discretionary) to use set-asides to hire foreign owned small businesses. Awards to such firms would also count toward Small Business award “goals”… And if the foreign entity could meet the requirements as a Small Disadvantaged or other small business category…

The Councils did recognize that overseas construction, A/E and many service contracts are subject to [many] considerations that are unique to the overseas environment.  Thus the acquisition team needs to determine [use discretion] whether or not to set-aside such contracts.

Is all that within the scope and Intent of Small Business Administration Part 19 Programs? Since when has the SBA and its programs decide to apply to foreign owned small businesses. And what is a minority or disadvantaged owned business entity in a foreign country anyway? Can qualifying foreign owned firms from any country compete in other countries under set-asides? 

 

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I am okay with the response in the Federal Register.  The rule is written to provide maximum flexibility to contracting officers.  As I have previously shared, I am okay with that flexibility, but I know that many here are not okay with it.

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20 minutes ago, ji20874 said:

I am okay with the response in the Federal Register.  The rule is written to provide maximum flexibility to contracting officers.  As I have previously shared, I am okay with that flexibility, but I now that many here are not okay with it.

I don’t have a problem with the flexibility [it is discretionary], provided that the KO’s have sense enough to use it. I have a huge problem with the practicality of it and some of the responses and implications of those responses to the public comments.

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There are a lot of areas where the FAR provides flexibility, but where contracting officers should be careful in using that flexibility.  I hope HCAs and contracting officer chiefs will help guide contracting officers in the careful use of the available flexibility, rather than removing the flexibility.

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4 hours ago, ji20874 said:

There are a lot of areas where the FAR provides flexibility, but where contracting officers should be careful in using that flexibility.  I hope HCAs and contracting officer chiefs will help guide contracting officers in the careful use of the available flexibility, rather than removing the flexibility.

HCAs and contracting officer chiefs can’t remove the flexibility if it contradicts a treaty or other country to country agreements, e.g., foreign assistance agreements, NATO, etc.

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Joel, No one here has suggested contradicting treaties or other country-to-country agreements, so your posting seems non-sequitur.  I'm all in favor of careful use of available flexibility -- aren't you?

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8 hours ago, ji20874 said:

Joel, No one here has suggested contradicting treaties or other country-to-country agreements, so your posting seems non-sequitur.  I'm all in favor of careful use of available flexibility -- aren't you?

Having worked overseas on two continents for 6 1/2 years and leading source selections for, negotiating contracts for and overseeing work In Central and South America for seven more years, I’m not in favor of using FAR 19 set-asides outside the US and it’s territories, etc. 

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9 hours ago, ji20874 said:

I'm all in favor of careful use of available flexibility -- aren't you?

@ji20874Yes, when the personnel exercising a "flexibility" have been trained in how to do it properly, know and understand the "whys" of the underlying policies, know the principles of discretionary choice in a regulated activity, know right reasons for choice from wrong ones, can state their reasons in clear and persuasive terms, and know not to make such choices for the wrong reasons.

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So, to make clear for folks who have not run across this before, the FAR Council is pointing not only to criteria for "small" as most folks might expect, but also to criteria for "business concern" or "concern" when deciding whether to set-aside a services acquisition outside the United States; the Contracting Officer would need to consider not only whether the entity is small, but also whether it satisfies one of the two criteria of a "business concern", at 13 CFR 121.105. A small business entity that is not located within the US may none the less meet the criteria of a business concern in that it "makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor."

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17 hours ago, joel hoffman said:

discretionary

 

9 hours ago, ji20874 said:

careful use

 

33 minutes ago, Vern Edwards said:

choices for the wrong reasons

In the reality of Federal Government contracting discretion is simply a gate propped open that is rarely swung for the purposes its swing is intended.

 I would suggest that the long standing echo found in Forum regarding the knowledge, skills and abilities of individual CO's has a lot less to do with "careful" and "wrong" and more to do with their very myopic view of the their view of their authority pursuant to the FAR. 

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1 hour ago, Vern Edwards said:

@ji20874Yes, when the personnel exercising a "flexibility" have been trained in how to do it properly, know and understand the "whys" of the underlying policies, know the principles of discretionary choice in a regulated activity, know right reasons for choice from wrong ones, can state their reasons in clear and persuasive terms, and know not to make such choices for the wrong reasons.

One of my biggest gripes about our field is the lack of contracting officer ability to exercise “flexibility.”  Warrants should only be given to people with experience, demonstrated knowledge, and a track record of using sound judgement.  Let them be accountable for results.  Reward them for proper efforts and discipline them for dumb mistakes. 

The barriers are a risk adverse culture we created, the perceived need by management including Congress to provide close oversight and controls, and the extensive agency/office reviews of solicitations, contracts, and other decisional documents before any actions can be taken.

I talked with a Navy CO recently.  He told be out of curiosity he looked at the electronic size of all his “guidance.”  The FAR was small in comparison with the DFARS, PGI, Nav Sup and command procedures, office SOPs, and internal directives. 

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@Vern Edwards @Don Mansfield well, the final rule is out and the response to questions.  They still do not describe what they mean by "performance" or  "outside the US".  So if services are "performed" BOTH in the US and overseas under the same contract, I am still not clear if I must  set-aside or I may set-aside.    Any other reads on this?

 

2022-08577.pdf?utm_medium=email&utm_camp

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Tzarina,

If the contract is for janitorial services, for example, the key is the location where the floor sweeping and toilet scrubbing will occur.  If the covered building is in Greece, then performance occurs entirely outside the United States.  It is irrelevant where the company's headquarters is -- it is irrelevant where the janitors are recruited -- it is irrelevant where the cleaning products are sourced -- it is irrelevant if the company has a U.S. branch office -- it is irrelevant if the payroll function is in the U.S.

At least, that's my take on it.

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10 minutes ago, ji20874 said:

Tzarina,

If the contract is for janitorial services, for example, the key is the location where the floor sweeping and toilet scrubbing will occur.  If the covered building is in Greece, then performance occurs entirely outside the United States.  It is irrelevant where the company's headquarters is -- it is irrelevant where the janitors are recruited -- it is irrelevant where the cleaning products are sourced -- it is irrelevant if the company has a U.S. branch office -- it is irrelevant if the payroll function is in the U.S.

At least, that's my take on it.

If you are providing technical assistance services and writing reports and part of the team is in Egypt and the other is in Arlington VA, is the contract performed overseas?

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12 minutes ago, Tzarina of Compliance said:

If you are providing technical assistance services and writing reports and part of the team is in Egypt and the other is in Arlington VA, is the contract performed overseas?

Please note that the new rule does not tie the applicability of Part 19 to place of performance. It says that the CO "shall" apply Part 19 "in the United States and its outlying areas" and "may" apply it outside the United States and its outlying areas.

The councils have not resolved the issue of what the phrases "in the United States" and "outside the United States" mean. What must be "in the United States"? Why didn't they say "when performance will be in the United States" or outside the United States? And why didn't they say what constitutes "performance"?

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58 minutes ago, Tzarina of Compliance said:

If you are providing technical assistance services and writing reports and part of the team is in Egypt and the other is in Arlington VA, is the contract performed overseas?

Does the specification or work statement used in the solicitation require any of those services to be performed in the U.S., and/or for reports to be written in the U.S.? 

But regardless, a simple question such as you asked may not be useful.  For example, a useful question to be considered pre-award is whether the acquisition will be a set-aside.  Questions need to be for a purpose, and within a context.

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54 minutes ago, ji20874 said:

For example, a useful question to be considered pre-award is whether the acquisition will be a set-aside.  Questions need to be for a purpose, and within a context.

If the CO determines that the procurement is "outside" the U.S., then the relevant question becomes: Should we apply Part 19?

It's discretionary. Is the discretion "unfettered", or must the CO have reasons? If the CO must have reasons, what kinds must they be?

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And how many pages of documentation will be needed to support the answer, and how many levels of review will have to concur?  Yes, there are a lot of questions -- someone could paralyze the entire process if he or she wanted to.

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54 minutes ago, ji20874 said:

Yes, there are a lot of questions -- someone could paralyze the entire process if he or she wanted to.

If no one asks and answers those questions the lawyers will take the entire process to court and kill it, the way Amazon killed JEDI. Or the way Boeing killed the first KC-X acquisition. There is no sense complaining because there are lawyers and you have to THINK. People who don't want to think should go fishing.

It's the way our system works. But it might have been easier if the FAR Councils had earned their pay. 

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11 hours ago, ji20874 said:

Right on, Vern, we agree.  Your text matches my intent with the word "careful."

What DAU or FAI contracting courses provide training on policy analysis and policy-based reasoning so that contracting officers can be ‘careful’?

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