FAPIIS: An Update On The Integrity Database For Government Contractors

By Bruce Shirk

We last discussed the Federal Awardee Performance and Integrity Information System (“FAPIIS”) in June 2010. We noted then that, as implemented, the rule gives rise to two questions:
 

1. Whether FAPIIS creates a risk of disclosure of source selection sensitive information under FOIA; and
    
2. Whether FAPIIS will be used when evaluating a contractor’s past performance.
    

This posting updates our June 2010 discussion and undertakes to answer the above-stated questions in light of regulatory developments since that time.

When Congress directed the establishment of a database containing contractor “integrity” and “performance” information, a central repository for the latter half of that equation already existed in the form of the Past Performance Information and Retrieval System (“PPIRS”), which was established in FY 2002 and was designated as the standard government-wide repository for past performance assessments in July 2009. See GAO, Federal Contractors; Better Performance Information Needed To Support Agency Contract Award Decisions (GAO-09-374, April 2009); OFPP Memorandum for Chief Acquisition Officers and Senior Procurement Executives, Improving Contractor Past Performance Assessments Summary of the Office of Federal Procurement Policy’s Review, and Strategies for Improvement (January 21, 2011); see also 41 U.S.C. § 2313 (c); 74 Fed. Reg. 31557 (July 1, 2009); FAR 42.1503(c). However, with the exception of suspension and debarment information collected in the Excluded Parties Listing System (“EPLS”), there was not, in October 2008, any centrally maintained database for information relevant principally to determinations of contractor responsibility, e.g., determinations of non-responsibility, terminations for default and criminal, civil and administrative proceedings entailing a finding of contractor fault or liability. See 75 Fed. Reg. 14059 (March 23, 2010). It was this lack of readily available information relevant to contractor responsibility that Congress meant to address by creating FAPIIS. See 41 U.S.C. § 2313(a).

FAPIIS is now operational and collecting information “on an ongoing basis”, as follows:  
 

• Existing systems within the Government, i.e., EPLS and PPIRS, are linked to FAPIIS. Both of these systems will themselves be continuously in receipt of new information from suspension and debarment and agency procurement officials. 75 Fed. Reg. 14063 (March 23, 2010).
   
• Agencies are to establish focal points for submission and receipt of FAPIIS information, including information relating to determinations of non-responsibility, terminations for default and determinations that a contractor has submitted defective cost or pricing data. Agencies are to ensure information is reported directly to FAPIIS within 3 working days after a contracting officer issues “a final termination for default for cause or default notice” or “a final determination that a contractor has submitted defective cost or pricing data,” by accessing www.cpars.csd.disa.mil and selecting “the FAPIIS module.” FAR 9.105-2(b)(2); FAR 42.1503(f).  A contracting officer’s “subsequent withdrawal or conversion of the termination of default to a termination for convenience” or “subsequent change to the final determination concerning defective pricing,” is likewise to be reported directly to the FAPIIS module within 3 working days of the officer’s action. 75 Fed. Reg. 60258 (September 29, 2010); FAR 42-1503(f).
   
• Suspension and debarment officials are similarly to submit information regarding administrative agreements directly to the FAPIIS module within 3 working days after the agreement is executed. 75 Fed. Reg. 14066 (March 23, 2010); 75 Fed. Reg. 60258 (September 29, 2010); FAR 9.406-3(f).  
   
• Contractors are (a) to designate representatives responsible for the actual submission and receipt of FAPIIS information and (b) to submit directly to FAPIIS and “update on a semi-annual basis throughout the life of the contract” information relating to criminal, civil or administrative proceedings occurring within the last five years relating to performance of a Federal contract or grant. 75 Fed. Reg. 14063 (March 23, 2010); 75 Fed. Reg. 4190 (January 24, 2011); FAR 9.1004-7(a); FAR 52.209-7; FAR 52.209-9; FAR 52.209-9. 

Contractors are entitled to “timely notification” when information about them is posted in the FAPIIS module, and they are to be afforded the opportunity to submit comments pertaining to that information. 41 U.S.C. § 2313(d)(2)(B) and (C). Contractors registered with the Central Contractor Registration (“CCR”) can “post comments” on any information that has been posted by the Government in the FAPIIS module by accessing CCR and selecting “FAPIIS.” FAR 52.209-9(b). Contractor postings regarding information posted in the FAPIIS module are distinct from “the rebuttal process for past performance information as specified in FAR 42.1503(b).” The FAR Part 42 process requires that “…evaluations of contractor performance…shall be provided to the contractor as soon as practicable after completion of the evaluation…[and that] [c]contractors shall be given a minimum of 30 days to submit comments, rebutting statements or additional information” by accessing the PPIRS module through the CCR website. 75 Fed. Reg. 60259 (September 29, 2010); FAR 42.1503(b); see also Past Performance Information Retrieval System.

Use Of FAPIIS Information.

Subject to a determination of relevance, any information in FAPIIS, including information linked from PPIRS and information in the FAPIIS module, may be used: (i) to make responsibility determinations; and (ii) to evaluate offerors’ past performance. 41 U.S.C.§2313(3)(2)(A); 75 Fed. Reg. 14062, 14065, 14067 (March 23, 2010); 75 Fed. Reg. 60259 (September 29, 2010); FAR 9.104-6; FAR Subpart 42.15. As to “responsibility determinations, the contracting officer is to “consider all the information in [the FAPIIS module] and other past performance information [contained in the PPIRS module] when making a responsibility determination.” FAR 9.104-6; 9.105-1(c); 42.1503(c). As to the separate process of evaluating offerors’ past performance, “[t]he final rule incorporates the use of FAPIIS into the procedures addressing agency evaluations of past performance in FAR 42.1503 since there may be information in FAPIIS, such as terminations for default or cause and defective pricing assessments, that is not in PPIRS but still may be appropriately used, along with information in PPIRS to evaluate an offeror’s performance.” 75 Fed. Reg. 14062 (March 23, 2010); 75 Fed. Reg. 66258 (September 29, 2010); FAR 42.1503(e); see also FAR 15.305(a)(2).

Public Disclosure of FAPIIS Information

A recent amendment to the 2010 Supplemental Appropriations Act, provides that – as of April 15, 2011 – “the information in FAPIIS, excluding past performance reviews [which are considered to be and marked as source selection sensitive], is to be made publicly available” and that “FAPIIS will now become the publicly available website.” 74 Fed. Reg. 4188 (January 24, 2011); FAR 42. 1503(b). Noting that “[p]ublic requests for information posted prior to April 15, 2011” will continue to be “handled under Freedom of Information Act procedures,” the FAR Councils make no mention of “source selection sensitive” information, but merely instruct Government officials to take steps to ensure that information is not posted either before or after April 15, 2011 that “could create a harm protected by a disclosure exemption under FOIA.” 75 Fed. Reg. 4190 (January 24, 2011). It is obviously possible that information posted to FAPIIS by the Government – information relating to, e.g., to a termination for default or a non-responsibility determination – could contain facts, opinions or conclusions potentially harmful to a contractor’s competitive position in a pending procurement.  Contractors must therefore be alert to the possibility that harmful information could be disclosed and, to the extent possible, work with the Contracting Officer to identify such information before the decision or determination is final so as to assure it is redacted prior to posting.

We anticipate additional changes to the FAPIIS rule, including but not limited to a pending change included in the National Defense Authorization Act of 2011, Sections 831 and 834, which requires the posting of final determinations of fault relating to security contractors whose recklessness or gross negligence has caused injury or death to government military or civilian personnel.  We will update this FAPIIS posting to address significant changes in the rule as they appear.

Authored By:

W. Bruce Shirk
(202) 741-8426
bshirk@sheppardmullin.com

Source: http://feeds.lexblog.com/~r/GovernmentContractsBlog/~3/FuHuCyNHtsw/

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Objects In SBA's Mirror Are Smaller Than They Appear: A Summary Of SBA's Proposed Rule To Increase Small Business Size Standards

By Townsend L. Bourne

The U.S. Small Business Administration (“SBA”) issued a proposed rule on March 16, 2011 that increases the small business size standards for 35 industries and one sub-industry in North American Industry Classification System (“NAICS”) Sector 54, Professional, Scientific and Technical Services and one industry in NAICS Sector 81, Other Services. The proposed rule is one of several rules to be proposed by the SBA that will examine and potentially change the small business size standards for industries grouped by NAICS Sector. The SBA undertook this effort following passage of the Small Business Jobs Act of 2010, implemented on September 27, 2010, and Executive Order 13563, signed by President Obama on January 18, 2011, which calls for agencies to undertake a review of possible ineffective or outdated rules and, if necessary, update and streamline their rules to better meet regulatory objectives.
 

The SBA’s proposed rule focuses on receipts-based size standards, as it covers all industries with receipts-based standards in NAICS Sector 54. In an effort to “simplify managing and using size standards” the SBA proposes to reduce the total number of receipts-based standards that are used from 31 to eight “fixed” size standards. These eight “fixed” receipts-based standards are $5 million, $7 million, $10 million, $14 million, $19 million, $25.5 million, $30.0 million, and $35.5 million. The SBA considered five primary factors in order to determine the appropriate receipts-based standard for the targeted industries:
 

1. average firm size;
    
2. startup costs and entry barriers;
    
3. industry competition;
    
4. distribution of firms by size; and
    
5. impact on Federal contracting and SBA loan programs. 

Following review of the targeted industries based on the identified factors, SBA proposed revisions to the current small business size standards. For a comprehensive summary of the proposed revisions to the size standards, see Table 7 – Summary of Proposed Revisions to Size Standards, at 76 Fed. Reg. 14335. 

While the SBA’s review could have supported lowering the size standards for some industries and sub-industries, in a nod to the realities of the current economic climate, the SBA proposes to maintain the current size standards for those industries that otherwise would warrant a lower standard based on the SBA’s review.  

The SBA seeks public comments on the proposed rule, and specifies several areas in which it is particularly interested. These areas include, for example:
 

1. whether its proposal to simplify the size standards by using eight fixed size levels for receipts-based size standards is appropriate;
    
2. whether the proposed size standards are appropriate based on the economic characteristics of each industry or sub-industry and suggestions for alternative standards;
    
3. the appropriateness of using a common size standard for certain industries;
    
4. whether the SBA should consider factors in addition to the five primary factors (noted above) when determining size standards;
    
5. whether equal weight should be given to the five primary factors;
    
6. whether the SBA should limit the increase to a size standard (the SBA’s evaluation resulted in proposed increased size standards for some industries that are more than three times the current size standards); and
    
7. whether SBA should lower some size standards (as noted above, SBA’s current position is that lowering any size standards runs afoul of the current regulatory vision for increasing opportunities for small businesses). 

Comments on the proposed rule are due by May 16, 2011. The proposed rule in its entirety can be found at 76 Fed. Reg. 14323.

Authored By:

Townsend L. Bourne
(202) 469-4917
tbourne@sheppardmullin.com  

Source: http://feeds.lexblog.com/~r/GovernmentContractsBlog/~3/VtzJMaETygw/

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Federal Construction Contract Claims Must be Evaluated Fairly

By: Michael H. Payne

The growth of contracting by negotiation or “best value” procurement, has had a chilling effect on the submission of claims by construction contractors. There seems to be a growing fear that claims are frowned upon by contracting officers and that they will be counted against a contractor during future proposal evaluations. This fear, in my opinion, is misplaced provided that the claims are not frivolous and are technically and legally supported.

The Contract Disputes Act of 1978, 41 U.S.C. § 601 et. seq., requires contractors to certify that claims in excess of $100,000 are “made in good faith,” that all “supporting data are accurate and complete to the best of [the contractor's] knowledge and belief,” and that the amount requested “accurately reflects the contract adjustment for which the contractor believes the government is liable.” 41 U.S.C. § 605(c)(1). A contractor who is willing to make that certification should not be denied the opportunity to recover the additional costs, or time, that the contract and the law specifically allow. There are a number of clauses in federal construction contracts, including “Changes” (FAR 52.243-4), “Differing Site Conditions” (FAR 52.236-2) “Suspension of Work” (FAR 52.242-14) “Termination for Convenience” (FAR 52.249-2), etc., that afford contractors with the right to seek an equitable adjustment to the contract. These clauses apply to sealed bidding and negotiated procurements alike, and the fear of retribution on proposal evaluations should not be used to deny contractors the very rights that the contract and the law provide.

It is also important to note that contracting officer’s are required to deal with claims fairly, and there is a duty of good faith and fair dealing in government contracting. As the U.S. Court of Federal Claim noted in Lavezzo v. United States, a contracting officer is obligated to “put his own mind to the problems and render his own decisions.” Such decisions must be “personal [and] independent,” and “even the appearance of coercion [must] be avoided.” 74 Fed.Cl. 502, 509 (2006). In addition, a Contracting Officer's outright denial of meritorious contractor claims to gain some advantage over the contractor will not be condoned by the Court. In other words, a contracting officer's review of certified claims submitted in good faith is not intended to be a negotiating game where the agency may deny meritorious claims to gain leverage over the contractor. Moreland Corp. v. U.S., 76 Fed.Cl. 268 (2007). Contractors are legally entitled to submit claims, to have those claims fairly and impartially reviewed, and contractors are entitled to do so without fear of the impact on future source selections.

Michael H. Payne is the Chairman of the firm's Federal Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters, including teaming arrangements, negotiated procurements, bid protests, claims, and appeals.

Source: http://feeds.lexblog.com/~r/FederalConstructionContractingBlog/~3/HGUwU6-VUBs/

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