Government Contracts FAC 2019-06's Four Final Rules Update the FAR
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Monday, October 7, 2019

FAC 2019-06's Four Final Rules Update the FAR

By Government Contracts Editorial Staff

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued FAC Federal Acquisition Circular 2019-06, which contains four final rules amending the Federal Acquisition Regulation: Item I, Use of Products and Services of Kaspersky Lab (FAR Case 2018-010); Item II, Update of “Affiliates” and Section 8(a) Clauses (FAR Case 2019-006); Item III, Update to Contractor Performance Assessment Reporting System (CPARS) (FAR Case 2019-005); and Item IV, New World Trade Organization Government Procurement Agreement Country—Australia (FAR Case 2019-011). The FAC also contains a Small Entity Compliance Guide. Item I went into effect on September 10, 2019, while the three other rules go into effect on October 10, 2019. For the text of FAC 2019-06, see ¶70,002.211.

Kaspersky Lab. The FAR Case 2018-010 rule finalizes, without change, the interim rule in FAC 2005-99 that prohibited the government from using hardware, software, and services of Kaspersky Lab and its related entities on or after October 1, 2018. The rule added new FAR Subpart 4.20, Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab, consisting of FAR 4.2001, Definitions, FAR 4.2002, Prohibition, and FAR 4.2003, Notification. FAR 4.2004 prescribes the associated contract clause at FAR 52.204-23. This clause prohibits contractors from providing any hardware, software, or services developed or provided by Kaspersky Lab or its related entities, or using any such hardware, software, or services in the development of data or deliverables first produced in the performance of a contract. The contractor must also report any such hardware, software, or services discovered during contract performance. The requirements of this clause must be flowed down to subcontractors. The rule also revised FAR 13.201, Actions at or Below the Micro-Purchase Threshold, with regard to micro-purchases, and made conforming changes at FAR 1.106, FAR 39.101, FAR 52.212-5, FAR 52.213-4, and FAR 52.244-6.

“Affiliates”. The final rule in FAR Case 2019-006 revises the definition of “affiliates” in FAR 19.101, as well as references to this definition in FAR 2.101, FAR 19.001, FAR 19.1303, FAR 19.1403, and in the clause at FAR 52.219-27, Notice of Service-Disabled Veteran-Owned Small Business Set-Aside. The rule updates the definition “affiliates” as meaning “business concerns, one of whom directly or indirectly controls or has the power to control the others, or a third party or parties control or have the power to control the others.” To determine whether affiliation exists, consideration must be given to all appropriate factors including common ownership, common management, and contractual relationships. The Small Business Administration determines affiliation based on the factors set forth in SBA 121.103. Finally, the rule deletes an obsolete requirement for contractors that are 8(a) Program participants. The clauses at FAR 52.219-12, Special 8(a) Subcontract Conditions, and FAR 52.219-17, Section 8(a) Award, currently require contractors that are 8(a) Program participants to obtain written approval from SBA and the contracting officer before subcontracting the performance of any contract requirements. SBA has removed this requirement from its 8(a) Program regulations at SBA Part 124, which rendered the FAR requirement obsolete.

CPARS. The FAR Case 2019-005 final rule implements changes regarding the retirement of the Past Performance Information Retrieval System and establishment of the Contractor Performance Assessment Reporting System as the official system for past performance information. Effective January 15, 2019, the government retired PPIRS and concluded the system's merger with CPARS. All data from PPIRS has been merged into CPARS.gov. The transition to a single system provides one location and one account to perform functions, such as creating and editing performance and integrity records, changes to administering users, running reports, generating performance records, and viewing/managing performance records. Accordingly, this rule amends FAR 42.1501 and FAR 42.1503 to establish CPARS as the official system for contractor past performance information. The rule makes conforming changes at FAR 9.104-6, FAR 9.105-1, FAR 9.105-2, FAR 13.106-2, FAR 15.407-1, FAR 25.702-4, and FAR 25.703-4 to replace references to PPIRS with CPARS.

WTO—Australia. The FAR Case 2019-011 final rule adds Australia as a new World Trade Organization Government Procurement Agreement country. The United States, which is also a party to the WTO GPA, has agreed to waive discriminatory purchasing requirements for eligible products and suppliers of Australia. This rule adds Australia to the list of WTO GPA countries wherever the list appears in the FAR, whether as a separate definition, part of the definition of “designated country” or “Recovery Act designated country,” or as part of the list of countries exempt from the prohibition of acquisition of products produced by forced or indentured child labor. Accordingly, the rule amends FAR 22.1503, FAR 25.003, FAR 52.222-19, FAR 52.225-5, FAR 52.225-11, and FAR 52.225-23. The rule makes conforming changes at FAR 52.212-5 and FAR 52.213-4.

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