NCURA 2012 Annual Meeting - Tour of The FAR

Report
A Whimsical Tour of the Federal
Acquisition Regulation:
A Prescription for Fun!
John Hanold ([email protected])
The Pennsylvania State University
A typical federal contract includes
pages of lovely FAR clauses.
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Remember: The FAR is exactly like Hee Haw.
http://en.wikipedia.org/wiki/File:MinniePearlKBF_2.jpg
http://en.wikipedia.org/wiki/File:WIKI_ROY_CLARK.jpg
http://en.wikipedia.org/wiki/File:Louis_%27Grandpa%27_Jones.jpg
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Story #1: Entering the Spider Web
The first time I realized the magic of the FAR was
in 2001 when I confronted FAR 52.227-3 (Patent
Indemnity) for the first time.
No one had
explained to me
how prescriptions
worked.
I was so young and
naïve.
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Story #1: Follow the thread . . . .
Back in the day, FAR 52.227-1 started in this
charming, low-key way: “Insert the following
clause as prescribed at 27.203-1(b) . . . .”
27.203-1(b) said “A patent indemnity
clause shall not be used in the following
situations: (1) when the clause at
52.227-1, Authorization and Consent,
with its Alternate I, is included in the
contract . . . .”
The prescription for 52.227-1 (which could be found at
27.201-2(a)) said that this clause, with its Alternate I, was to
be included in “all R&D solicitations and contracts” unless
performed outside of the U.S.
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Story #1: Disclaimer
This section of the FAR has been rewritten
significantly in the last 11 years. The prescriptive
thread is no longer so clear!
Today we need to argue that:
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1.
52.227-1, Alt I applies to
R&D, and
2.
52.227-3 is inconsistent
with 52.227-1, Alt I.
What is the FAR?
The FAR can be traced back to
1792 when Congress granted
the Departments of War and
Treasury the authority to
contract.
The purpose of the FAR is to
establish uniform rules for
federal contracting.
http://www.solarnavigator.net/history/explorers
_history/President_George_Washington.jpg
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Why is the FAR important?
Without uniform rules, there
would be nothing preventing
federal contracting officers from:
• Issuing contracts to their
friends
• Engaging in other forms of
corruption
• Acting in self-serving or
arbitrary ways
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The FAR is focused mainly on commercial procurements.
Educational
Non-Profit
Hospital
State & Local
For-Profit
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Type of Award
Cost
Principles
Admin.
Requirements
Audit
Requirements
Assistance
A-21
A-110
A-133
Procurement
A-21
FAR
A-133
Assistance
A-122
A-110
A-133
Procurement
A-122
FAR
A-133
Assistance
45 CFR 74-E
A-110
A-133
Procurement
45 CFR 74-E
FAR
A-133
Assistance
A-87
A-102
A-133
Procurement
A-87
FAR
A-133
Procurement
FAR
FAR
FAR
Slide developed by David Mayo, Caltech. Used with permission.
Story #2: Working under Commercial Terms
Contracting Officers see themselves as
“buyers” on behalf of the federal
government.
In order to protect the government’s
interests, they are inclined to impose
clauses like these:
52.212-4 (Commercial Items)
52.246-8 (Inspection R&D)
52.249-6 (Termination for Default)
52.246-20 (Warranty)
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Story #2: Re-performance Requirements
Many of these clauses include “reperformance requirements.”
What this means is that if the government
isn’t satisfied with your work, they can
force you to do it again at no additional
cost.
If they lose confidence in your ability to do
the work, they can ask someone else to
redo it and then charge you the cost!!
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Story #2: Universities cannot offer a warranty.
How will we pay if the
government isn’t satisfied?
Student tuition
dollars?
State
appropriations?
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Other
sponsors?
Story #2: Universities must avoid “default” clauses.
University researchers should not be put in a
position where they can be accused of
defaulting (i.e., failing to make progress).
Can a cancer researcher guarantee that she will cure cancer? Can any
cutting-edge researcher guarantee a particular outcome?
It is o.k. for the government to terminate university contracts for its
convenience, but not for default. (If a university is accused of
defaulting on a federal contract, it might jeopardize its ability to
pursue additional federal funds.)
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Agencies are permitted to supplement the FAR with their
own regulations.
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Story #3: The Dreaded 7000 Clause
Universities always try to negotiate out
DFARS 252.204-7000 whenever they
can. Publication restrictions are
inconsistent with the university mission
and undermine the fundamental
research exclusion.
Based on the prescription, this clause
should only apply to projects that
involve information which “may be
sensitive and inappropriate for release
to the public.”
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Story #3: Fighting Arbitrary Restrictions
Contracting Officers will
sometimes try to impose the
clause, because they don’t
always have a clear idea of
whether the research is
“sensitive” or not.
What can we do in such cases?
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Story #3: Other Resources
The DoD offers additional guidance
to contracting officers, discouraging
them from excessive, arbitrary use
of the 7000 clause:
http://www.research.psu.edu/osp/manage-awards/export-control/exportdocuments/DODMemo.pdf
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Story #3: Is the 7000 clause always arbitrary?
Well, no!
It is important to
know what you’ve
proposed to do in
your scope of work!
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Story #4: My Favorite FAR Story!!
Once upon a time, there was a contract from
the U.S. Department of Education.
It was a nice, multimillion dollar
contract without any
restrictions . . . .
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Story #4: The Scary Mod Appears
Then one day we received a modification
imposing FAR 52.227-17 (Rights in Data –
Special Works).
“Why is this
happening to us?”
we asked.
But the CO was
eerily silent . . . .
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Story #4: Why 52.227-17 is dumb
52.227-17 says we cannot publish our data or
even use our data without the CO’s prior
approval.
(We typically receive 52.227-14, Alt IV, which
allows us to publish, use, and claim copyright in
all data first produced.)
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Story #4: Why we love PI’s
The PI, who was copied on the modification,
immediately replied to the CO, informing her
that the requested modification “would not be
a problem.”
Thank you, sir!
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Story #4: Entering the Spider Web
The prescription states that the clause is to be
used in contracts “primarily for the production
or compilation of data . . . for the
Government’s internal use.”
But the purpose of this
project was to evaluate
different ways of teaching
math to 4th graders!
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Story #4: Deeper into the Web
The prescription includes a link to
a list of examples where 52.22717 might be appropriate, e.g.,
• A history of a government
agency
• A survey of government
employees
• A training guide for government
officials
Story #4: The Confrontation
We objected to the clause,
because its use in this case was
clearly inconsistent with the
prescription.
The CO said she didn’t care. Their
boss had informed them that they
were to modify all agreements in
their division to include the
clause.
Story #4: Pushed to the Breaking Point
I informed the CO that we were
refusing to sign the modification.
So the CO rescinded the bilateral
mod and re-issued it as a
unilateral mod.
General Resources
Good source for the FAR: http://farsite.hill.af.mil/
Archived versions can be found here:
https://www.acquisition.gov/far/
FAR clauses can be included anywhere in a federal contract, most
frequently in Section H (Special Contract Requirements) and
Section I (Contract Clauses).
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