Continuing Contract for Civil Works Project Managed by the United States Army Corps of Engineers Clauses, 2463-2466 [2010-379]
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Federal Register / Vol. 75, No. 10 / Friday, January 15, 2010 / Proposed Rules
252.244–7XXX Contractor purchasing
system administration.
As prescribed in 244.305–7X, insert
the following clause:
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Contractor Purchasing System
Administration (Date)
(a) Definitions. As used in this clause—
Deficiency means a failure to maintain any
element of an acceptable purchasing system.
Purchasing system means the Contractor’s
system or systems for purchasing and
subcontracting including make or buy
decisions, the selection of vendors, analysis
of quoted prices, negotiation of prices with
vendors, placing and administering of orders,
and expediting delivery of materials.
Purchasing system includes, but is not
limited to—
(1) Internal audits or management reviews,
training, and policies and procedures for the
purchasing department to ensure the
integrity of the purchasing system;
(2) Policies and procedures to assure
purchase orders and subcontracts contain all
flow down clauses, including terms and
conditions required by the prime contract
and any clauses required to carry out the
requirements of the prime contract;
(3) An organizational and administrative
structure that ensures effective and efficient
procurement of required quality materials
and parts at the most economical cost from
responsible and reliable sources;
(4) Selection processes to ensure the most
responsive and responsible sources for
furnishing required quality parts and
materials and to promote competitive
sourcing among dependable suppliers so that
purchases are reasonably priced and from
sources that meet contractor quality
requirements;
(5) Performance of price or cost analysis on
purchasing actions; and
(6) Procedures to ensure that proper types
of subcontracts are selected and that there are
controls over subcontracting, including
oversight and surveillance of subcontracted
effort.
(b) General. The Contractor shall establish
and maintain an acceptable purchasing
system. Failure to maintain an acceptable
purchasing system, as defined in this clause,
may result in disapproval of the system by
the ACO and/or withholding of payments.
(c) System requirements. (1) Have an
adequate system description including
policies, procedures, and operating
instructions that comply with the FAR and
DFARS.
(2) Ensure that all applicable purchase
orders and subcontracts contain all flow
down clauses, including terms and
conditions and any other clauses needed to
carry out the requirements of the prime
contract.
(3) Maintain an organization plan that
establishes clear lines of authority and
responsibility.
(4) Purchase orders are based on
authorized requisitions and include complete
history files.
(5) Establish and maintain adequate
documentation to provide a complete and
accurate history of purchase transactions to
support vendors selected and prices paid.
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(6) Apply a consistent make or buy policy
that is in the best interest of the Government.
(7) Use competitive sourcing to the
maximum extent practicable and ensure
debarred or suspended contractors are
properly excluded from contract award.
(8) Evaluate price, quality, delivery,
technical capabilities, and financial
capabilities of competing vendors.
(9) Require management level justification
and cost/price analysis as applicable for any
sole or single source award.
(10) Perform appropriate cost or price
analysis and technical evaluation for each
subcontractor and supplier proposal or quote.
(11) Document negotiations in accordance
with FAR 15.406–3.
(12) Seek, take, and document appropriate
purchase discounts, including cash
discounts, trade discounts, quantity
discounts, rebates, freight allowances, and
company-wide volume discounts.
(13) Ensure proper type of contract
selection and prohibit issuance of cost-plusa-percentage-of-cost subcontracts.
(14) Maintain subcontract surveillance to
ensure timely delivery of an acceptable
product and procedures to notify the
Government of potential subcontract
problems that may impact delivery, quantity,
or price.
(15) Document and justify reasons for
subcontract changes that affect cost or price.
(16) Notify the Government of the award of
an auditable subcontract and perform
adequate audits of those subcontracts.
(17) Enforce adequate policies on conflict
of interest, gifts, and gratuities, including the
requirements of the Anti-Kickback Act.
(d) System deficiencies. (1) The ACO will
provide an initial notification to the
Contractor of system deficiencies. The initial
notification will describe the deficiency in
sufficient detail to allow the contractor to
understand what actions are necessary to
correct the deficiencies.
(2) The Contractor shall respond within 30
days to a written initial notification from the
ACO that identifies deficiencies in the
Contractor’s purchasing system. If the
Contractor disagrees with the initial
notification, the Contractor shall state in
writing its rationale for disagreeing.
(3) The ACO will evaluate the Contractor’s
response and notify the Contractor of the
determination concerning remaining
deficiencies, the adequacy of any proposed or
completed corrective action, and system
disapproval, if applicable.
(e) Withholding payments. If the ACO
determines the Contractor’s purchasing
system contains one or more deficiencies,
and the contract includes the clause at
252.242–7XXX, Business Systems, the ACO
will withhold payments in accordance with
that clause.
(End of clause)
[FR Doc. 2010–392 Filed 1–14–10; 8:45 am]
BILLING CODE 5001–08–P
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DEPARTMENT OF DEFENSE
Department of the Army
48 CFR Parts 5132, 5136, and 5152
RIN 0710–AA69
Continuing Contract for Civil Works
Project Managed by the United States
Army Corps of Engineers Clauses
AGENCY: U.S. Army Corps of Engineers,
Department of the Army, DoD.
ACTION: Proposed rule; request for
comments.
SUMMARY: The U.S. Army Corps of
Engineers (USACE) is proposing an
interim Continuing Contracts clause for
use on specifically authorized Civil
Works projects only. This proposal is in
response to a recurring statutory
provision that requires a change to the
clause USACE had previously used.
DATES: Comments must be received by
March 16, 2010.
ADDRESSES: You may submit comments,
identified by docket number COE–
2009–0065, by any of the following
methods:
Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
E-mail:
contract.policy@usace.army.mil.
Include the docket number, COE–2009–
0065, in the subject line of the message.
Mail: U.S. Army Corps of Engineers,
Attn: CECT–P (Robin A. Baldwin), 441
G Street, NW., Washington, DC 20314–
1000.
Hand Delivery/Courier: Due to
security requirements, we cannot
receive comments by hand delivery or
courier.
Instructions: Direct your comments to
docket number COE–2009–0065. All
comments received will be included in
the public docket without change and
may be made available on-line at https://
www.regulations.gov, including any
personal information provided, unless
the commenter indicates that the
comments includes information claimed
to be Confidential Business Information
(CBI) or other information whose
disclosure is restricted by statute. Do
not submit information that you
consider to be CBI, or otherwise
protected, through regulations.gov or email. The regulations.gov Web site is an
anonymous access system, which means
we will not know your identity or
contact information unless you provide
it in the body of your comment. If you
send an e-mail directly to the U.S. Army
Corps of Engineers without going
though https://www.regulations.gov, your
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e-mail address will be automatically
captured and included as part of the
comment that is placed in the public
docket and made available on the
Internet. If you submit an electronic
comment, we recommend that you
include your name and other contract
information in the body of your
comment and with any disk or CD–ROM
you submit. If we cannot read your
comment because of technical
difficulties and cannot contact you for
clarification, we may not be able to
consider your comment. Electronic
comments should avoid the use of any
special characters, any form of
encryption, and be free of any defects or
viruses.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov. All documents in
the docket are listed. Although listed in
the index, some information is not
publicly available, such as CBI or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the Internet and will be
publicly available only in hard copy
form.
FOR FURTHER INFORMATION CONTACT: Ms.
Robin A. Baldwin, Headquarters U.S.
Army Corps of Engineers, Directorate of
Contracting, Policy Division, 441 G
Street, Washington, DC at 202–761–
8645.
SUPPLEMENTARY INFORMATION:
A. Background
The new funding clause for civil
works projects includes alternate
language and is designed to give USACE
officials options for funding contracts
spanning more than one fiscal year after
the enactment of statutory restrictions to
the Corps’ continuing contract
authority. The new clause allows
Congress more oversight over
continuing contracts and better control
over the rate at which funds are spent
on projects. The end result is contracts
that obligate funds in close alignment
with prerogatives reflected in budget
documents and appropriations acts.
USACE has submitted a report to
Congress on the overall effects, both
positive and negative, of the statutory
restriction.
Continuing contracts are authorized
by Section 10 of the River and Harbor
Act of 1922, 33 U.S.C. 621, which
provides as follows: ‘‘Any public work
on canals, rivers, and harbors adopted
by Congress may be prosecuted by
direct appropriations, by continuing
contracts, or by both direct
appropriations and continuing
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contracts.’’ The use of continuing
contracts permitted large civil work
projects, spanning more than one fiscal
year, to be accomplished in a
comprehensive manner, rather than
through a series of yearly work units.
Implementation of continuing contract
was covered under Engineers Federal
Acquisition Regulation Supplement
(EFARS) Subpart 32.7—Contract
Funding, and through the inclusion of
either clause EFARS 52.232–5001,
Continuing Contracts, or EFARS
52.232–5002, Continuing Contracts
(Alternate).
The Energy and Water Development
Appropriations Act of 2006 (06
E&WDA), Public Law 109–103, included
provisions that restricted the Corps’
authority to reprogram funds and award
continuing contracts in Fiscal Year
2006. Section 108 of the 06 E&WDA
prohibited the Corps from awarding or
modifying an existing continuing
contract when doing so would commit
an amount in excess of the amount
appropriated for that project pursuant to
the 06 E&WDA, plus any amounts
available from carryover or
reprogramming. In light of Section 108
of the 06 E&WDA, USACE changed its
implementation of continuing contracts,
as well as the clauses it uses to award
new continuing contracts that are not
fully funded. The restriction in Section
108 has been carried forward into all
E&WDAAs, and USACE anticipates that
Congress will continue to include that
restriction in future Acts.
The existing continuing contract
clause (EFARS 52.232–5001) permits
the contractor to work beyond the
amount reserved to the contract for a
fiscal year. Doing so creates a legal
liability to pay the contractor for such
costs, even though—under the existing
continuing contract clause—the Corps
does not have to make the payments
until the next fiscal year. Accordingly,
because the clause permits contractors
to commit the government in excess of
the amount appropriated for that project
plus available carryover and
reprogramming, use of this clause runs
a high risk of violating the new statutory
restriction on continuing contracts.
In order to implement the USACE
Civil Works program under the new
continuing contract restrictions, USACE
has drafted a new clause for inclusion
in the AFARS. The basic clause,
‘‘5152.232–9000 Special Continuing
Contract for Civil Works Project
Managed by the United States Army
Corps of Engineers,’’ permits the Corps
to award continuing contracts while
only obligating the government’s
estimate of contractor earnings for the
first fiscal year. This basic clause does
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not permit the contractor to work
beyond the amount reserved, and it also
expressly requires the contractor to stop
working when funds are exhausted. The
alternate language, if appropriate, would
limit the government’s liability for
termination costs to the amount
reserved on the contract. In contrast,
under the basic clause, the government
is responsible for all costs pursuant to
the termination for convenience clause
regardless of the amount reserved on the
contract.
Alternatives to using the new clause
include fully funding contracts at
award; structuring the work into
segments that could be accomplished
through options, using multiple fullyfunded contracts over multiple years, or
using the clause at DFARS 252.232–
7007 to incrementally fund a contract.
Each of these alternatives is still a viable
alternative and the contracting officer
must choose which acquisition strategy
best suits the requirement. That
determination shall be based on an
analysis of the possible contracting
options with the intent that the Special
Continuing Contract for Civil Works
Project Managed by the United States
Army Corps of Engineers clause be used
as a least preferred method.
In light of the legal restrictions on
continuing contracts, USACE had to
change its implementation of existing
continuing contracts, as well as the
terms it uses to award new continuing
contracts. USACE shall no longer permit
the contractor to work beyond the
amount reserved in the contract without
first reprogramming sufficient funds to
cover the contractor’s earnings through
the end of the fiscal year. The new
clause should be used where the true
Continuing Contract clause (EFARS
52.232–5001) might have been used in
the past and alternative contract options
are not viable.
B. Regulatory Flexibility Act
This proposed rule may have a
significant economic impact upon a
substantial number of small entities.
The clause differs from the true
continuing contract clause (EFARS
52.232–5001) in that they no longer
permit the contractor to work beyond
the amount reserved to the contract.
This change may affect a contractor’s
ability to schedule work and equipment
effectively. Pursuant to authority
contained in Section 608(a) of the Act
(5 U.S.C. 608(a)) a determination has
been made that circumstances require
delay in preparation of an initial
Regulatory Flexibility Act analysis to
bring the USACE continuing contract
into compliance with existing statutory
authority. Within approximately thirty
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days an analysis will be prepared and
forwarded to the Chief Counsel for
Advocacy of the Small Business
Administration. Comments from small
entities concerning the affected AFARS
Subpart 5152 will be considered in
accordance with Section 610 of the Act.
Such comments shall be submitted
separately and cite the AFARS Proposed
Rule on Continuing Contract for Civil
Works Project in the correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the proposed rule
does not impose any new information
collection burden that requires the
approval of the Office of Management
and Budget under 44 U.S.C. 3501, et
seq.
List of Subjects in 48 CFR Parts 5132,
5136, and 5152
Government procurement.
Dated: January 7, 2010.
Approved By:
Robin A. Baldwin,
Chief, Contracting Policy Division.
For the reasons stated in the
preamble, the Corps is proposing to
amend 48 CFR Chapter 51 as set forth
below:
1. Add part 5132 to read as follows:
PART 5132—CONTRACT FINANCING
Subpart 5132.7—Contract Funding
Sec.
5132.703–90 Civil Works Project
Appropriations Act Restriction.
5132.705 Contract Clauses [Reserved].
5132.705–90 Clause for Limitation of the
Government’s Obligation for Civil Works
Projects.
Authority: 33 U.S.C. 621, 10 U.S.C. 2202,
DOD Directive 5000.35, FAR 1.301 and DOD
FAR Supplement 201.3.
Subpart 5132.7—Contract Funding
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5132.703–90 Civil Works Project
Appropriations Act Restriction.
(a) The U.S. Army Corps of Engineers
(USACE) is authorized by 33 U.S.C. 621
to prosecute its specifically authorized
civil works projects on canals, rivers
and harbors by direct appropriations or
by continuing contract, or both. A
continuing contract permits USACE to
obligate the government to the entire
contract amount at award and fund the
contract incrementally until completion.
5132.705
Contract Clauses [Reserved].
5132.705–90 Clause for Limitation of the
Government’s Obligation for Civil Works
Projects.
(a) The clause at 5152.232–9000,
Special Continuing Contract for Civil
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Works Project Managed by the United
States Army Corps of Engineers, may be
used in solicitations and contracts for
civil works water resource projects that
have been specifically adopted by
Congress in authorizing legislation and
for which future fiscal year funding is
provided in the budget. This clause
shall be used for all civil works projects
when funds are appropriated for the
project from either the operation and
maintenance (O&M) account in the
Energy and Water Development
Appropriations Act (E&WDAA) or the
O&M portion of the Mississippi River
and Tributaries account in the
E&WDAA and sufficient funds are not
available to complete the contract. The
contracting officer must insert the sum
being reserved in the clause and reserve
this amount stated in subsection (a) of
the clause at contract award and modify
the contract each fiscal year to reflect
the amount reserved. This clause is
required through 30 September 2010 in
accordance with Section 103 of the
Energy and Water Development
Appropriations Act, 2010, Public Law
111–85. If future appropriations acts
continue in the same manner, the
requirement will be extended as
appropriate beyond fiscal year 2010.
(b) The Alternate language for clause
5152.232–9000 may be used in
solicitations and contracts for civil
works water resource projects that have
been specifically adopted by Congress
in authorizing legislation but for which
future fiscal year funding is not
provided in the budget or when use of
the 5152.232–9000 clause could be
used. The contracting officer must insert
the sum being reserved in the clause
and reserve this amount stated in
subsection (a) of the clause at contract
award and modify the contract each
fiscal year to reflect the amount
reserved. Section 103 of the Energy and
Water Development Appropriations Act,
2010, Public Law 111–85. If future
appropriations acts continue in the
same manner, the requirement will be
extended as appropriate beyond fiscal
year 2010.
2. Add part 5136 to read as follows:
PART 5136—SPECIAL ASPECTS OF
CONTRACTING FOR CONSTRUCTION
Subpart 5136.290—Civil Works
Construction Contracts
Sec.
5136.290–1
5136.290–2
Policy.
Definition.
Authority: 33 U.S.C. 621, 10 U.S.C. 2202,
DOD Directive 5000.35, FAR 1.301 and DOD
FAR Supplement 201.3.
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Subpart 5136.290—Civil Works
Construction Contracts
5136.290–1
Policy.
The Secretary of the Army, acting
through the Chief of Engineers, is
authorized by 33 U.S.C. 621 to carry out
projects for improvement of rivers and
harbors (other than surveys, estimates,
and gaugings) by contract or otherwise,
in the manner most economical and
advantageous to the United States. The
U.S. Army Corps of Engineers (USACE)
is the only contracting organization
authorized to contract for civil works
construction projects. See AFARS Part
5132.703–90.
5136.290–2
Definition.
As used in this subpart—
‘‘Civil works’’ means authorized civil
functions of the Department of the Army
pertaining to rivers and harbors, flood
control, shore protection and storm
damage reduction, aquatic ecosystem
restoration, and related purposes.
PART 5152—TEXTS AND PROVISIONS
OF CLAUSES
3. The authority citation for part 5152
is revised to read as follows:
Authority: 10 U.S.C. 2202, 33 U.S.C. 621,
DoD Directive 5000.35, FAR 1.301, DoD FAR
Supplement 201.301, and DOD FAR
Supplement 201.3.
4. Add 51.232–9000 to read as
follows:
5152.232–9000 Special Continuing
Contract for Civil Works Project Managed
by the United States Army Corps of
Engineers.
As prescribed in 5132.290–1 and
5132.705–90(a), use the following
clause:
(a) Funds are not available at the
inception of this contract to cover the
entire contract price. The liability of the
Government is limited by this clause
notwithstanding any contrary provision
of the ‘‘Payments to Contractor’’ clause
or any other clause of this contract,
except the Termination for Convenience
clause. The sum of $llll [Each
fiscal year of contract execution,
Contracting Officer shall insert the
specific dollar amount that is reserved
for this contract and available for
payment to the contractor during the
current fiscal year. The Contracting
Officer shall modify that amount to
reflect any funds added to or subtracted
from the contract during a current fiscal
year.] has been reserved for this contract
and is available for payment to the
Contractor during the current fiscal
year. It is expected that Congress will
make appropriations for future fiscal
years from which additional funds,
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together with funds provided by one or
more non-federal project sponsors, will
be reserved for this contract.
(b) Failure to make payments in
excess of the amount currently reserved,
or that may be reserved from time to
time, shall not be considered a breach
of contract and shall not entitle the
Contractor to a price adjustment under
the terms of this contract.
(c) The Government may at any time
reserve additional funds for payments
under the contract if there are funds
available for such purpose. The
Contracting Officer will promptly notify
the Contractor of any additional funds
reserved for the contract by issuing an
administrative modification to the
contract.
(d) If earnings will be such that funds
reserved for the contract will be
exhausted before the end of any fiscal
year, the Contractor shall give written
notice to the Contracting Officer of the
estimated date of exhaustion and the
amount of additional funds which will
be needed to meet payments due or to
become due under the contract during
that fiscal year. This notice shall be
given not less than 120 days prior to the
estimated date of exhaustion. Unless
informed in writing by the Contracting
Officer that additional funds have been
reserved for payments under the
contract, the Contractor shall stop work
upon the exhaustion of funds.
(e) No payments will be made after
exhaustion of funds except to the extent
that additional funds are reserved for
the contract.
(f) Any suspension, delay, or
interruption of work arising from
exhaustion or anticipated exhaustion of
funds shall not constitute a breach of
this contract and shall not entitle the
Contractor to any price adjustment
under the ‘‘Suspension of Work’’ clause
or in any other manner under this
contract.
(g) An equitable adjustment in
performance time shall be made for any
increase in the time required for
performance of any part of the work
arising from exhaustion of funds or the
reasonable anticipation of exhaustion of
funds.
(h) If, upon the expiration of onehundred (100) days after the beginning
of the fiscal year following an
exhaustion of funds, the Government
has failed to reserve additional funds for
this contract sufficient to cover the
Government’s estimate of funding
required for the first quarter of that
fiscal year, the Contractor, by written
notice delivered to the Contracting
Officer at any time before such
additional funds are reserved, may elect
to treat his right to proceed with the
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work as having been terminated. Such a
termination shall be considered a
termination for the convenience of the
Government.
(i) If at any time it becomes apparent
that the funds reserved for any fiscal
year are in excess of the funds required
to meet all payments due or to become
due the Contractor because of work
performed and to be performed under
the contract during the fiscal year, the
Government reserves the right, after
notice to the Contractor, to reduce said
reservation by the amount of such
excess.
(j) The term ‘‘Reservation’’ means
monies that have been set aside and
made available for payments under this
contract. Reservations of funds shall be
made in writing via an administrative
modification issued by the Contracting
Officer.
Alternate I
If future funding for the specifically
authorized civil works project for which
use of the continuing contract is
contemplated is not included in the
following year’s President’s Budget,
substitute the following paragraphs (a)
and (h) for paragraphs (a) and (h) of the
basic clause:
(a) Funds are not available at the
inception of this contract to cover the
entire contract price. The liability of the
Government is limited by this clause
notwithstanding any contrary provision
of the ‘‘Payments to Contractor’’ clause
or any other clause of this contract. The
sum of $llll [Each fiscal year of
contract execution, Contracting Officer
shall insert the specific dollar amount
that is reserved for this contract and
available for payment to the contractor
during the current fiscal year. The
Contracting Officer shall modify that
amount to reflect any funds added to or
subtracted from the contract during a
current fiscal year.] has been reserved
for this contract and is available for
payment to the Contractor during the
current fiscal year. It is expected that
Congress will make appropriations for
future fiscal years from which
additional funds, together with funds
provided by one or more non-federal
project sponsors, will be reserved for
this contract.
(h) If, upon the expiration of onehundred (100) days after the beginning
of the fiscal year following an
exhaustion of funds, the Government
has failed to reserve additional funds for
this contract sufficient to cover the
Government’s estimate of funding
required for the first quarter of that
fiscal year, the Contractor, by written
notice delivered to the Contracting
Officer at any time before such
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additional funds are reserved, may elect
to treat his right to proceed with the
work as having been terminated. The
Government will not be obligated in any
event to reimburse the Contractor for
any costs incurred after the exhaustion
of funds regardless of anything to the
contrary in the clause entitled
‘‘Termination for Convenience of the
Government.’’
[FR Doc. 2010–379 Filed 1–14–10; 8:45 am]
BILLING CODE 3720–58–P
DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 234
[Docket No. FRA–2009–0032, Notice No. 4]
RIN 2130–AC20
State Highway-Rail Grade Crossing
Action Plans
AGENCY: Federal Railroad
Administration (FRA), Department of
Transportation (DOT).
ACTION: Notice of public hearing and
extension of comment period.
SUMMARY: By notice of proposed
rulemaking (NPRM) published on
November 13, 2009 (74 FR 58589), FRA
proposed a rule to require the ten States
with the most highway-rail grade
crossing collisions, on average, over the
past three years, to develop State
highway-rail grade crossing action
plans. This document announces a
public hearing to provide interested
parties the opportunity to comment on
the NPRM and announces a fourteen
(14) day extension of the comment
period, which closed December 14,
2009, to commence on the date of the
public hearing. The extension provides
interested parties the opportunity to
comment on the NPRM and to respond
to matters that arise at the public
hearing related to the NPRM.
DATES: (1) Public Hearing: A public
hearing will be held on the date and at
the location listed below to provide
interested parties the opportunity to
comment on the proposed rule
contained in the NPRM. A fourteen (14)
day extension of the comment period
will commence on the date of the
hearing. The date of the public hearing
is as follows: Monday, February 22,
2010, at 9:30 a.m. in Washington, DC.
(2) Extension of Comment Period: The
comment period will reopen Monday,
February 22, 2010 and written
comments must be received by Monday,
March 8, 2010. Comments received after
that date will be considered to the
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]]>Agencies
[Federal Register Volume 75, Number 10 (Friday, January 15, 2010)]
[Proposed Rules]
[Pages 2463-2466]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-379]
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DEPARTMENT OF DEFENSE
Department of the Army
48 CFR Parts 5132, 5136, and 5152
RIN 0710-AA69
Continuing Contract for Civil Works Project Managed by the United
States Army Corps of Engineers Clauses
AGENCY: U.S. Army Corps of Engineers, Department of the Army, DoD.
ACTION: Proposed rule; request for comments.
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SUMMARY: The U.S. Army Corps of Engineers (USACE) is proposing an
interim Continuing Contracts clause for use on specifically authorized
Civil Works projects only. This proposal is in response to a recurring
statutory provision that requires a change to the clause USACE had
previously used.
DATES: Comments must be received by March 16, 2010.
ADDRESSES: You may submit comments, identified by docket number COE-
2009-0065, by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov. Follow the
instructions for submitting comments.
E-mail: contract.policy@usace.army.mil. Include the docket number,
COE-2009-0065, in the subject line of the message.
Mail: U.S. Army Corps of Engineers, Attn: CECT-P (Robin A.
Baldwin), 441 G Street, NW., Washington, DC 20314-1000.
Hand Delivery/Courier: Due to security requirements, we cannot
receive comments by hand delivery or courier.
Instructions: Direct your comments to docket number COE-2009-0065.
All comments received will be included in the public docket without
change and may be made available on-line at https://www.regulations.gov,
including any personal information provided, unless the commenter
indicates that the comments includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI, or otherwise protected, through regulations.gov or
e-mail. The regulations.gov Web site is an anonymous access system,
which means we will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail directly to the U.S. Army Corps of Engineers without going though
https://www.regulations.gov, your
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e-mail address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet. If you submit an electronic comment, we recommend that
you include your name and other contract information in the body of
your comment and with any disk or CD-ROM you submit. If we cannot read
your comment because of technical difficulties and cannot contact you
for clarification, we may not be able to consider your comment.
Electronic comments should avoid the use of any special characters, any
form of encryption, and be free of any defects or viruses.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov. All documents in
the docket are listed. Although listed in the index, some information
is not publicly available, such as CBI or other information whose
disclosure is restricted by statute. Certain other material, such as
copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form.
FOR FURTHER INFORMATION CONTACT: Ms. Robin A. Baldwin, Headquarters
U.S. Army Corps of Engineers, Directorate of Contracting, Policy
Division, 441 G Street, Washington, DC at 202-761-8645.
SUPPLEMENTARY INFORMATION:
A. Background
The new funding clause for civil works projects includes alternate
language and is designed to give USACE officials options for funding
contracts spanning more than one fiscal year after the enactment of
statutory restrictions to the Corps' continuing contract authority. The
new clause allows Congress more oversight over continuing contracts and
better control over the rate at which funds are spent on projects. The
end result is contracts that obligate funds in close alignment with
prerogatives reflected in budget documents and appropriations acts.
USACE has submitted a report to Congress on the overall effects, both
positive and negative, of the statutory restriction.
Continuing contracts are authorized by Section 10 of the River and
Harbor Act of 1922, 33 U.S.C. 621, which provides as follows: ``Any
public work on canals, rivers, and harbors adopted by Congress may be
prosecuted by direct appropriations, by continuing contracts, or by
both direct appropriations and continuing contracts.'' The use of
continuing contracts permitted large civil work projects, spanning more
than one fiscal year, to be accomplished in a comprehensive manner,
rather than through a series of yearly work units. Implementation of
continuing contract was covered under Engineers Federal Acquisition
Regulation Supplement (EFARS) Subpart 32.7--Contract Funding, and
through the inclusion of either clause EFARS 52.232-5001, Continuing
Contracts, or EFARS 52.232-5002, Continuing Contracts (Alternate).
The Energy and Water Development Appropriations Act of 2006 (06
E&WDA), Public Law 109-103, included provisions that restricted the
Corps' authority to reprogram funds and award continuing contracts in
Fiscal Year 2006. Section 108 of the 06 E&WDA prohibited the Corps from
awarding or modifying an existing continuing contract when doing so
would commit an amount in excess of the amount appropriated for that
project pursuant to the 06 E&WDA, plus any amounts available from
carryover or reprogramming. In light of Section 108 of the 06 E&WDA,
USACE changed its implementation of continuing contracts, as well as
the clauses it uses to award new continuing contracts that are not
fully funded. The restriction in Section 108 has been carried forward
into all E&WDAAs, and USACE anticipates that Congress will continue to
include that restriction in future Acts.
The existing continuing contract clause (EFARS 52.232-5001) permits
the contractor to work beyond the amount reserved to the contract for a
fiscal year. Doing so creates a legal liability to pay the contractor
for such costs, even though--under the existing continuing contract
clause--the Corps does not have to make the payments until the next
fiscal year. Accordingly, because the clause permits contractors to
commit the government in excess of the amount appropriated for that
project plus available carryover and reprogramming, use of this clause
runs a high risk of violating the new statutory restriction on
continuing contracts.
In order to implement the USACE Civil Works program under the new
continuing contract restrictions, USACE has drafted a new clause for
inclusion in the AFARS. The basic clause, ``5152.232-9000 Special
Continuing Contract for Civil Works Project Managed by the United
States Army Corps of Engineers,'' permits the Corps to award continuing
contracts while only obligating the government's estimate of contractor
earnings for the first fiscal year. This basic clause does not permit
the contractor to work beyond the amount reserved, and it also
expressly requires the contractor to stop working when funds are
exhausted. The alternate language, if appropriate, would limit the
government's liability for termination costs to the amount reserved on
the contract. In contrast, under the basic clause, the government is
responsible for all costs pursuant to the termination for convenience
clause regardless of the amount reserved on the contract.
Alternatives to using the new clause include fully funding
contracts at award; structuring the work into segments that could be
accomplished through options, using multiple fully-funded contracts
over multiple years, or using the clause at DFARS 252.232-7007 to
incrementally fund a contract. Each of these alternatives is still a
viable alternative and the contracting officer must choose which
acquisition strategy best suits the requirement. That determination
shall be based on an analysis of the possible contracting options with
the intent that the Special Continuing Contract for Civil Works Project
Managed by the United States Army Corps of Engineers clause be used as
a least preferred method.
In light of the legal restrictions on continuing contracts, USACE
had to change its implementation of existing continuing contracts, as
well as the terms it uses to award new continuing contracts. USACE
shall no longer permit the contractor to work beyond the amount
reserved in the contract without first reprogramming sufficient funds
to cover the contractor's earnings through the end of the fiscal year.
The new clause should be used where the true Continuing Contract clause
(EFARS 52.232-5001) might have been used in the past and alternative
contract options are not viable.
B. Regulatory Flexibility Act
This proposed rule may have a significant economic impact upon a
substantial number of small entities. The clause differs from the true
continuing contract clause (EFARS 52.232-5001) in that they no longer
permit the contractor to work beyond the amount reserved to the
contract. This change may affect a contractor's ability to schedule
work and equipment effectively. Pursuant to authority contained in
Section 608(a) of the Act (5 U.S.C. 608(a)) a determination has been
made that circumstances require delay in preparation of an initial
Regulatory Flexibility Act analysis to bring the USACE continuing
contract into compliance with existing statutory authority. Within
approximately thirty
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days an analysis will be prepared and forwarded to the Chief Counsel
for Advocacy of the Small Business Administration. Comments from small
entities concerning the affected AFARS Subpart 5152 will be considered
in accordance with Section 610 of the Act. Such comments shall be
submitted separately and cite the AFARS Proposed Rule on Continuing
Contract for Civil Works Project in the correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
rule does not impose any new information collection burden that
requires the approval of the Office of Management and Budget under 44
U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 5132, 5136, and 5152
Government procurement.
Dated: January 7, 2010.
Approved By:
Robin A. Baldwin,
Chief, Contracting Policy Division.
For the reasons stated in the preamble, the Corps is proposing to
amend 48 CFR Chapter 51 as set forth below:
1. Add part 5132 to read as follows:
PART 5132--CONTRACT FINANCING
Subpart 5132.7--Contract Funding
Sec.
5132.703-90 Civil Works Project Appropriations Act Restriction.
5132.705 Contract Clauses [Reserved].
5132.705-90 Clause for Limitation of the Government's Obligation for
Civil Works Projects.
Authority: 33 U.S.C. 621, 10 U.S.C. 2202, DOD Directive 5000.35,
FAR 1.301 and DOD FAR Supplement 201.3.
Subpart 5132.7--Contract Funding
5132.703-90 Civil Works Project Appropriations Act Restriction.
(a) The U.S. Army Corps of Engineers (USACE) is authorized by 33
U.S.C. 621 to prosecute its specifically authorized civil works
projects on canals, rivers and harbors by direct appropriations or by
continuing contract, or both. A continuing contract permits USACE to
obligate the government to the entire contract amount at award and fund
the contract incrementally until completion.
5132.705 Contract Clauses [Reserved].
5132.705-90 Clause for Limitation of the Government's Obligation for
Civil Works Projects.
(a) The clause at 5152.232-9000, Special Continuing Contract for
Civil Works Project Managed by the United States Army Corps of
Engineers, may be used in solicitations and contracts for civil works
water resource projects that have been specifically adopted by Congress
in authorizing legislation and for which future fiscal year funding is
provided in the budget. This clause shall be used for all civil works
projects when funds are appropriated for the project from either the
operation and maintenance (O&M) account in the Energy and Water
Development Appropriations Act (E&WDAA) or the O&M portion of the
Mississippi River and Tributaries account in the E&WDAA and sufficient
funds are not available to complete the contract. The contracting
officer must insert the sum being reserved in the clause and reserve
this amount stated in subsection (a) of the clause at contract award
and modify the contract each fiscal year to reflect the amount
reserved. This clause is required through 30 September 2010 in
accordance with Section 103 of the Energy and Water Development
Appropriations Act, 2010, Public Law 111-85. If future appropriations
acts continue in the same manner, the requirement will be extended as
appropriate beyond fiscal year 2010.
(b) The Alternate language for clause 5152.232-9000 may be used in
solicitations and contracts for civil works water resource projects
that have been specifically adopted by Congress in authorizing
legislation but for which future fiscal year funding is not provided in
the budget or when use of the 5152.232-9000 clause could be used. The
contracting officer must insert the sum being reserved in the clause
and reserve this amount stated in subsection (a) of the clause at
contract award and modify the contract each fiscal year to reflect the
amount reserved. Section 103 of the Energy and Water Development
Appropriations Act, 2010, Public Law 111-85. If future appropriations
acts continue in the same manner, the requirement will be extended as
appropriate beyond fiscal year 2010.
2. Add part 5136 to read as follows:
PART 5136--SPECIAL ASPECTS OF CONTRACTING FOR CONSTRUCTION
Subpart 5136.290--Civil Works Construction Contracts
Sec.
5136.290-1 Policy.
5136.290-2 Definition.
Authority: 33 U.S.C. 621, 10 U.S.C. 2202, DOD Directive
5000.35, FAR 1.301 and DOD FAR Supplement 201.3.
Subpart 5136.290--Civil Works Construction Contracts
5136.290-1 Policy.
The Secretary of the Army, acting through the Chief of Engineers,
is authorized by 33 U.S.C. 621 to carry out projects for improvement of
rivers and harbors (other than surveys, estimates, and gaugings) by
contract or otherwise, in the manner most economical and advantageous
to the United States. The U.S. Army Corps of Engineers (USACE) is the
only contracting organization authorized to contract for civil works
construction projects. See AFARS Part 5132.703-90.
5136.290-2 Definition.
As used in this subpart--
``Civil works'' means authorized civil functions of the Department
of the Army pertaining to rivers and harbors, flood control, shore
protection and storm damage reduction, aquatic ecosystem restoration,
and related purposes.
PART 5152--TEXTS AND PROVISIONS OF CLAUSES
3. The authority citation for part 5152 is revised to read as
follows:
Authority: 10 U.S.C. 2202, 33 U.S.C. 621, DoD Directive
5000.35, FAR 1.301, DoD FAR Supplement 201.301, and DOD FAR
Supplement 201.3.
4. Add 51.232-9000 to read as follows:
5152.232-9000 Special Continuing Contract for Civil Works Project
Managed by the United States Army Corps of Engineers.
As prescribed in 5132.290-1 and 5132.705-90(a), use the following
clause:
(a) Funds are not available at the inception of this contract to
cover the entire contract price. The liability of the Government is
limited by this clause notwithstanding any contrary provision of the
``Payments to Contractor'' clause or any other clause of this contract,
except the Termination for Convenience clause. The sum of $--------
[Each fiscal year of contract execution, Contracting Officer shall
insert the specific dollar amount that is reserved for this contract
and available for payment to the contractor during the current fiscal
year. The Contracting Officer shall modify that amount to reflect any
funds added to or subtracted from the contract during a current fiscal
year.] has been reserved for this contract and is available for payment
to the Contractor during the current fiscal year. It is expected that
Congress will make appropriations for future fiscal years from which
additional funds,
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together with funds provided by one or more non-federal project
sponsors, will be reserved for this contract.
(b) Failure to make payments in excess of the amount currently
reserved, or that may be reserved from time to time, shall not be
considered a breach of contract and shall not entitle the Contractor to
a price adjustment under the terms of this contract.
(c) The Government may at any time reserve additional funds for
payments under the contract if there are funds available for such
purpose. The Contracting Officer will promptly notify the Contractor of
any additional funds reserved for the contract by issuing an
administrative modification to the contract.
(d) If earnings will be such that funds reserved for the contract
will be exhausted before the end of any fiscal year, the Contractor
shall give written notice to the Contracting Officer of the estimated
date of exhaustion and the amount of additional funds which will be
needed to meet payments due or to become due under the contract during
that fiscal year. This notice shall be given not less than 120 days
prior to the estimated date of exhaustion. Unless informed in writing
by the Contracting Officer that additional funds have been reserved for
payments under the contract, the Contractor shall stop work upon the
exhaustion of funds.
(e) No payments will be made after exhaustion of funds except to
the extent that additional funds are reserved for the contract.
(f) Any suspension, delay, or interruption of work arising from
exhaustion or anticipated exhaustion of funds shall not constitute a
breach of this contract and shall not entitle the Contractor to any
price adjustment under the ``Suspension of Work'' clause or in any
other manner under this contract.
(g) An equitable adjustment in performance time shall be made for
any increase in the time required for performance of any part of the
work arising from exhaustion of funds or the reasonable anticipation of
exhaustion of funds.
(h) If, upon the expiration of one-hundred (100) days after the
beginning of the fiscal year following an exhaustion of funds, the
Government has failed to reserve additional funds for this contract
sufficient to cover the Government's estimate of funding required for
the first quarter of that fiscal year, the Contractor, by written
notice delivered to the Contracting Officer at any time before such
additional funds are reserved, may elect to treat his right to proceed
with the work as having been terminated. Such a termination shall be
considered a termination for the convenience of the Government.
(i) If at any time it becomes apparent that the funds reserved for
any fiscal year are in excess of the funds required to meet all
payments due or to become due the Contractor because of work performed
and to be performed under the contract during the fiscal year, the
Government reserves the right, after notice to the Contractor, to
reduce said reservation by the amount of such excess.
(j) The term ``Reservation'' means monies that have been set aside
and made available for payments under this contract. Reservations of
funds shall be made in writing via an administrative modification
issued by the Contracting Officer.
Alternate I
If future funding for the specifically authorized civil works
project for which use of the continuing contract is contemplated is not
included in the following year's President's Budget, substitute the
following paragraphs (a) and (h) for paragraphs (a) and (h) of the
basic clause:
(a) Funds are not available at the inception of this contract to
cover the entire contract price. The liability of the Government is
limited by this clause notwithstanding any contrary provision of the
``Payments to Contractor'' clause or any other clause of this contract.
The sum of $-------- [Each fiscal year of contract execution,
Contracting Officer shall insert the specific dollar amount that is
reserved for this contract and available for payment to the contractor
during the current fiscal year. The Contracting Officer shall modify
that amount to reflect any funds added to or subtracted from the
contract during a current fiscal year.] has been reserved for this
contract and is available for payment to the Contractor during the
current fiscal year. It is expected that Congress will make
appropriations for future fiscal years from which additional funds,
together with funds provided by one or more non-federal project
sponsors, will be reserved for this contract.
(h) If, upon the expiration of one-hundred (100) days after the
beginning of the fiscal year following an exhaustion of funds, the
Government has failed to reserve additional funds for this contract
sufficient to cover the Government's estimate of funding required for
the first quarter of that fiscal year, the Contractor, by written
notice delivered to the Contracting Officer at any time before such
additional funds are reserved, may elect to treat his right to proceed
with the work as having been terminated. The Government will not be
obligated in any event to reimburse the Contractor for any costs
incurred after the exhaustion of funds regardless of anything to the
contrary in the clause entitled ``Termination for Convenience of the
Government.''
[FR Doc. 2010-379 Filed 1-14-10; 8:45 am]
BILLING CODE 3720-58-P
