Department of Veterans Affairs.
Final rule.
This document amends the Department of Veterans Affairs Acquisition Regulation (VAAR). This document updates position titles, makes minor grammatical corrections and revisions, revises and updates section numbers and titles, relocates material to correspond to the Federal Acquisition Regulation (FAR), and delegates authority. In addition, the document updates regulations and adds coverage regarding the authority of the National Cemetery Administration to award architect-engineer contracts. Also, it replaces a general prescription directing the use of all VAAR clauses relating to construction contracts with specific prescriptions for each clause, removes obsolete or duplicative material, updates the VAAR regarding the requirement for certificates of current cost or pricing data, and provides agency procedures regarding disclosure of the Government cost estimate on construction contracts. This document also removes a “guaranty” clause from the VAAR and provides agency procedures for VA contracting officers to use the FAR “warranty” clause for construction contracts exceeding the micro-purchase threshold in order to protect the best interests of the Government. In addition, this document revises provisions regarding the acceptance of foreign construction materials to correspond to changes made in the FAR and to comply with the Trade Agreements Act and the North American Free Trade Agreement.
Don Kaliher, Acquisition Program Management Team (0495A), Office of Acquisition and Materiel Management, Department of Veterans Affairs, 810 Vermont Ave., NW, Washington, DC 20420, telephone (202) 273–8819.
On September 27, 2001, we published in the
Based on the rationale set forth in the proposed rule, we are adopting the provision of the proposed rule as a final rule with nonsubstantive changes discussed below.
The proposed rule included collections of information regarding clauses and provisions for use in both commercial and non-commercial item, service, and construction solicitations and contracts. The Office of Management and Budget (OMB) has approved the information collections under OMB Control Numbers 2900–0622 and 2900–0623.
The intent of the proposed rule was to update the VAAR to match the FAR regarding the requirement for submission of certificates of current cost or pricing data, but the proposed rule referenced an incorrect dollar threshold of $500,000. The FAR threshold for submission of certificates of current cost or pricing data has been revised to $550,000 and will be adjusted in the future to account for inflation. Therefore, to match the FAR, § 836.578(b) has been revised to clarify when cost or pricing data is required and § 836.578(c) has been revised to reference the FAR threshold for submission of cost of pricing data rather than a specific dollar amount and for clarity. In addition, the FAR requires the approval of the head of the contracting activity prior to requiring submission of cost or pricing data for pricing actions below this threshold, so a reference to this approval requirement has been added to § 836.578(c).
The intent of the proposed rule was to update the VAAR to correspond to the FAR regarding the acceptance of foreign construction materials and to comply with the Trade Agreements Act (TAA) and the North American Free Trade Agreement (NAFTA). The proposed rule designated Alternate I to the clause at 852.236–89 for use when NAFTA applied to a solicitation. This was incorrect. Under the current dollar thresholds in the FAR, Alternate I should reference the TAA rather than NAFTA, since the dollar threshold for application of the TAA is less than the dollar threshold for the application of NAFTA. Therefore, Alternate I has been revised to apply to the TAA to correspond with the FAR.
Also, we revised § 832.111 for purposes of clarity and §§ 836.209, 836.602–2, 836.602–4, and 836.603 to update titles and/or for purposes of clarity.
This document contains provisions constituting a collection of information that have been approved by the Office of Management and Budget (OMB) under OMB Control Numbers 2900–0622 and 2900–0623.
This document has been reviewed by the Office of Management and Budget under Executive Order 12866.
The Secretary hereby certifies that this rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (RFA), 5 U.S.C. 601–612. The changes are small-business neutral and will not have a significant economic impact on a substantial number of small businesses. Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.
Foreign currencies, Foreign trade, Government procurement.
Government procurement.
Government procurement, Reporting and recordkeeping requirements.
38 U.S.C. 501 and 40 U.S.C. 486(c).
(b) Contractors will not be requested to maintain systems of records unless prescribed in FAR or VAAR.
(1) A deviation to this prohibition may be processed in accordance with 801.403 in order to allow the contracting officer to require contractor reporting or recordkeeping beyond that prescribed in the FAR and VAAR. The request for deviation will clearly specify what information or recordkeeping will be required and why it is required. The request will be signed by the head of the contracting activity.
(c) * * *
38 U.S.C. 501 and 40 U.S.C. 486(c).
(a) The Buy American Act (41 U.S.C. 10a–d), except as modified by the Trade Agreements Act (TAA) and the North American Free Trade Agreement (NAFTA)), requires that only domestic construction material shall be used in the performance of contracts for construction. To clarify VA's position on foreign material, the contracting officer shall insert the clause at 852.236–89, Buy American Act, in solicitations and contracts for construction that contain the FAR clause at 52.225–9, Buy American Act'Balance of Payments Program'Construction Materials.
(b) For solicitations and contracts for construction that include the FAR clause at 52.225–11, Buy American Act'Balance of Payment Program'Construction Materials Under Trade Agreements, with its Alternate I (i.e., subject only to the TAA), insert the clause at 852.236–89, Buy American Act, with its Alternate I.
(c) For solicitations and contracts that include the FAR clause at 52.225–11 without its Alternate I (i.e., subject to both the TAA and NAFTA), insert the clause at 852.236–89, Buy American Act, with its Alternate II.
38 U.S.C. 501 and 40 U.S.C. 486(c).
(a) In solicitations and contracts for construction that include the FAR clause at 52.232–5, Payments Under Fixed-Price Construction Contracts, but that do not contain a section entitled “Network Analysis System (NAS),” the contracting officer shall insert the clause at 852.236–82, Payments under fixed-price construction contracts (without NAS). When the solicitations or contracts include guarantee period services, the contracting officer shall use the clause with its Alternate I.
(b) In solicitations and contracts for construction that include the FAR clause at 52.232–5, Payments Under Fixed-Price Construction Contracts, and that also contain a section entitled “Network Analysis System (NAS),” the contracting officer shall insert the clause at 852.236–83, Payments under fixed-price construction contracts (including NAS). When the solicitations or contracts include guarantee period services, the contracting officer shall use the clause with its Alternate I.
38 U.S.C. 501 and 40 U.S.C. 486(c).
The overall amount of the Government estimate shall not be disclosed until after award of the contract. After award, the overall amount may then be disclosed upon request.
When it is considered necessary or advantageous to award a contract for construction of a design-bid-build project, as defined at FAR 36.102, to the firm or person that designed the project, prior approval will be requested from the facility director or manager or, for National Cemetery Administration contracts, the Director, Office of Construction Management, for contracts involving nonrecurring maintenance (NRM) funds or from the Chief Facilities Management Officer, Office of Facilities Management, for contracts involving construction funds. Complete justification will be furnished in the request. This section does not apply to design-build contracts, as defined at FAR 36.102.
The contracting officer shall provide the contractor a notice of award (letter of acceptance) for any contract award in excess of $25,000.
The contracting officer shall insert the clause at 852.236–72, Performance of work by the contractor, in solicitations and contracts for construction that contain the FAR clause at 52.236–1, Performance of Work by the Contractor. When the solicitations and contracts include a section entitled “Network Analysis System (NAS),” the contracting officer shall use the clause with its Alternate I.
The contracting officer shall insert the clause at 852.236–71, Specifications and drawings for construction, in solicitations and contracts for construction that contain the FAR clause at 52.236–21, Specifications and Drawings for Construction.
The contracting officer shall insert the clause at 852.236–76, Correspondence, in solicitations and contracts for construction expected to exceed the micro-purchase threshold.
The contracting officer shall insert the clause at 852.236–77, Reference to “standards,” in solicitations and contracts for construction expected to exceed the micro-purchase threshold.
The contracting officer shall insert the clause at 852.236–78, Government supervision, in solicitations and contracts for construction expected to exceed the micro-purchase threshold.
The contracting officer shall insert the clause at 852.236–79, Daily report of workers and materials, in solicitations and contracts for construction expected to exceed the simplified acquisition threshold. The contracting officer may, when in the best interest of the Government, insert the clause in solicitations and contracts for construction when the contract amount is expected to be at or below the simplified acquisition threshold.
The contracting officer shall insert the clause at 852.236–80, Subcontracts and work coordination, in solicitations and contracts for construction expected to exceed the micro-purchase threshold. When the solicitations or contracts are for new construction work with complex mechanical-electrical work, the contracting officer may use the clause with its Alternate I.
The contracting officer shall insert the clause at 852.236–84, Schedule of work progress, in solicitations and contracts for construction that are expected to exceed the micro-purchase threshold and that do not contain a section entitled “Network Analysis System (NAS).”
The contracting officer shall insert the clause at 852.236–85, Supplementary labor standards provisions, in solicitations and contracts for construction that are expected to exceed the micro-purchase threshold.
The contracting officer shall insert the clause at 852.236–86, Worker's compensation, in solicitations and contracts for construction that are expected to exceed the micro-purchase threshold.
(a) The contracting officer shall insert the clause at 852.236–88, Contract changes—supplement, in solicitations and contracts for construction that are expected to exceed the micro-purchase threshold.
(b) When negotiated changes exceed $500,000, paragraph (a) of the clause at 852.236–88 will apply. Because paragraph (a) does not provide ceiling rates for indirect expenses, the contractor must supply cost breakdowns and other supporting data on its rates for indirect expenses as part of its price proposal. The contracting officer must negotiate the rates for indirect expenses with the contractor and may request an audit in accordance with FAR 15.404–2. When the negotiated change will be $500,000 or less, paragraph (b) of the clause at 852.236–88 will apply.
(c) As provided in FAR 15.403–4, proposals exceeding the cost or pricing data threshold shall be accompanied by certificates of current cost or pricing data. The contracting officer, if authorized by the head of the contracting activity, may require the submission of cost or pricing data for proposals valued at less than the cost or pricing data threshold specified in FAR 15.403–4(a)(1) and may require that the data be certified in accordance with FAR 15.403–4(a)(2).
(d) It is emphasized that the indirect cost rates in paragraph (b) of the clause at 852.236–88, for changes costing $500,000 or less, are ceiling rates only and the contracting officer must negotiate the indirect expense rates within the ceiling limitations. The clause is a result of an approved FAR deviation pursuant to subpart 801.4.
The contracting officer shall insert the clause at 852.236–91, Special notes, in solicitations and contracts for construction that are expected to exceed the micro-purchase threshold.
A. In paragraph (a), removing “board will be chaired by the Director of the Architect-Engineer Evaluation Staff, or the Area Project Manager (or Deputy Area Project Manager) will be designated to act when” and adding, in its place, “board for the Office of Facilities Management will be chaired by the Director, A/E Evaluation and Program Support Service. The Project Director or Project Manager will be
B. In paragraph (b), removing “activity and” and adding, in its place, “activity (HCA) (or the senior contracting officer at the facility if there is no HCA on site) and”.
C. Paragraph (c) is added.
The addition reads as follows:
(c) The evaluation board for National Cemetery Administration (NCA) contracts will be appointed by the Director, Office of Construction Management, and will consist of no less than three members, one of whom will serve as the board's Chair, and one of whom will be an NCA senior level contracting officer.
Either of the procedures provided in FAR 36.602–5 may be used to select firms for architect-engineer contracts not expected to exceed the simplified acquisition threshold.
The Chief Facilities Management Officer, Office of Facilities Management, for Central Office; the Director, Office of Construction Management, for National Cemetery Administration acquisitions; and the Chief, Engineering Service, for field facilities, are responsible for collecting Standard Forms 254 and 255 and for maintaining a data file on architect-engineer qualifications.
38 U.S.C. 501 and 40 U.S.C. 486(c).
The contracting officer shall insert the clause at 852.236–74, Inspection of construction, in solicitations and contracts for construction that contain the FAR clause at 52.246–12, Inspection of Construction.
Contracting officers shall insert the FAR clause at 52.246–21, Warranty of Construction, in solicitations and contracts for construction that are expected to exceed the micro-purchase threshold.
The contracting officer shall insert the clause at 852.246–1, Special warranties, in solicitations and contracts for construction that include the FAR clause at 52.246–21, Warranty for Construction.
The contracting office shall insert the clause at 852.246–2, Warranty for construction'guarantee period services, in solicitations and contracts for construction that include the FAR clause at 52.246–21, Warranty for Construction, and also include guarantee period services.
38 U.S.C. 501 and 40 U.S.C. 486(c).
The clause entitled “Specifications and Drawings for Construction” in FAR 52.236–21 is supplemented as follows:
The clause entitled “Performance of Work by the Contractor” in FAR 52.236–1 is supplemented as follows:
(b) The contractor shall submit, simultaneously with the schedule of costs
(d) In the event the contractor fails or refuses to meet the requirement of the FAR clause at 52.236–1, it is expressly agreed that the contract price will be reduced by 15 percent of the value of that portion of the percentage requirement that is accomplished by others. For the purpose of this clause, it is agreed that 15 percent is an acceptable estimate of the contractor's overhead and profit, or mark-up, on that portion of the work which the contractor fails or refuses to perform, with his/her own forces, in accordance with the FAR clause at 52.236–1.
For requirements which include Network Analysis System (NAS), substitute the following paragraphs (b) and (c) for paragraphs (b) and (c) of the basic clause:
(c) If, during progress of work hereunder, the contractor requests a change in activities of work to be performed by the contractor's forces and the contracting officer determines it to be in the best interest of the Government, the contracting officer may, at his or her discretion, authorize a change in such activities of said work.
As prescribed in 846.312, insert the following clause:
The clause entitled “Inspection of Construction” in FAR 52.246–12 is supplemented as follows:
The clause entitled “Warranty of Construction” in FAR 52.246–21 is supplemented as follows:
Should the contractor fail to prosecute the work or fail to proceed promptly to provide guarantee period services after notification by the contracting officer, the Government may, subject to the default clause contained at FAR Section 52.249–10, Default (Fixed-Price Construction), and after allowing the contractor 10 days to correct and comply with the contract, terminate the right to proceed with the work (or the separable part of the work) that has been delayed or unsatisfactorily performed. In this event, the Government may take over the work and complete it by contract or otherwise, and may take possession of and use any materials, appliance, and plant on the work site necessary for completing the work. The contractor and its sureties shall be liable for any damages to the Government resulting from the contractor's refusal or failure to complete the work within this specified time, whether or not the contractor's right to proceed with the work is terminated. This liability includes any increased costs incurred by the Government in completing the work.
For new construction work with complex mechanical-electrical work, the following paragraph relating to work coordination may be substituted for paragraph (b) of the basic clause:
(b) * * *
(2) Costs as shown on this schedule must be true costs and, should the resident engineer so desire, he/she may require the contractor to submit the original estimate sheets or other information to substantiate the detailed makeup of the schedule.
(3) The sum of the subbranches, as applied to each branch, shall equal the total cost of
If the specifications include guarantee period services, the contracting officer shall include the following paragraphs as additions to paragraph (b) of the basic clause:
(6)(i) The contractor shall at the time of contract award furnish the total cost of the guarantee period services in accordance with specification section(s) covering guarantee period services. The contractor shall submit, within 15 calendar days of receipt of the notice to proceed, a guarantee period performance program which shall include an itemized accounting of the number of work-hours required to perform the guarantee period service on each piece of equipment. The contractor shall also submit the established salary costs, including employee fringe benefits, and what the contractor reasonably expects to pay over the guarantee period, all of which will be subject to the contracting officer's approval.
(ii) The cost of the guarantee period service shall be prorated on an annual basis and paid in equal monthly payments by VA during the period of guarantee. In the event the installer does not perform satisfactorily during this period, all payments may be withheld, and the contracting officer shall inform the contractor of the unsatisfactory performance, allowing the contractor 10 days to correct deficiencies and comply with the contract. The guarantee period service is subject to those provisions as set forth in the Payments and Default clauses.
The clause entitled “Payments Under Fixed-Price Construction Contracts” in FAR 52.232–5 is implemented as follows:
If the specifications include guarantee period services, the contracting officer shall include the following paragraphs as additions to paragraph (b) of the basic clause:
(6)(i) * * *
(ii) The contractor shall submit with the CPM a guarantee period performance program which shall include an itemized accounting of the number of work-hours required to perform the guarantee period service on each piece of equipment. The contractor shall also submit the established salary costs, including employee fringe benefits, and what the contractor reasonably expects to pay over the guarantee period, all of which will be subject to the contracting officer's approval.
(iii) The cost of the guarantee period service shall be prorated on an annual basis and paid in equal monthly payments by VA during the period of guarantee. In the event the installer does not perform satisfactorily during this period, all payments may be withheld and the contracting officer shall inform the contractor of the unsatisfactory performance, allowing the contractor 10 days to correct and comply with the contract. The guarantee period service is subject to those provisions as set forth in the Payments and Default clauses.
The Act of June 25, 1936, 49 Stat. 1938 (40 U.S.C. 290) authorizes the constituted authority of States to apply their worker's compensation laws to all lands and premises owned or held by the United States.
(a) Paragraphs (a)(1) through (a)(4) apply to proposed contract changes costing over $500,000:
(b) Paragraphs (b)(1) through (b)(11) apply to proposed contract changes costing $500,000 or less:
(a) Reference is made to the clause entitled “Buy American Act—Balance of Payments Program—Construction Materials,” FAR 52.225–9.
(b) Notwithstanding a bidder's right to offer identifiable foreign construction material in its bid pursuant to FAR 52.225–9, VA does not anticipate accepting an offer that includes foreign construction material.
(c) If a bidder chooses to submit a bid that includes foreign construction material, that bidder must provide a listing of the specific foreign construction material he/she intends to use and a price for said material. Bidders must include bid prices for comparable domestic construction material. If VA determines not to accept foreign construction material and no comparable domestic construction material is provided, the entire bid will be rejected.
(d) Any foreign construction material proposed after award will be rejected unless the bidder proves to VA's satisfaction: (1) It was impossible to request the exemption prior to award, and (2) said domestic construction material is no longer available, or (3) where the price has escalated so dramatically after the contract has been awarded that it would be unconscionable to require performance at that price. The determinations required by (1), (2), and (3) of this paragraph shall be made in accordance with subpart 825.2 and FAR 25.2.
(e) By signing this bid, the bidder declares that all articles, materials and supplies for use on the project shall be domestic unless specifically set forth on the Bid Form or addendum thereto.
As prescribed in 825.1102(b), substitute the following paragraphs for paragraphs (a) and (b) of the basic clause:
(a) Reference is made to the clause entitled “Buy American Act—Balance of Payment Program—Construction Materials Under Trade Agreements,” FAR 52.225–11.
(b) The restrictions contained in this clause 852.236–89 are waived for Trade Agreements Act (TAA) designated country construction material, as defined in FAR 52.225–11. Notwithstanding a bidder's right to offer identifiable foreign construction material in its bid pursuant to FAR 52.225–11, VA does not anticipate accepting an offer that includes foreign construction material, other than TAA designated country construction material.
As prescribed in 825.1102(c), substitute the following paragraphs for paragraphs (a) and (b) of the basic clause:
(a) Reference is made to the clause entitled “Buy American Act—Balance of Payment Program—Construction Materials Under Trade Agreements,” FAR 52.225–11.
(b) The restrictions contained in this clause 852.236–89 are waived for Trade Agreements Act (TAA) designated country construction material and North American Free Trade Agreement (NAFTA) country construction material, as defined in FAR 52.225–11. Notwithstanding a bidder's right to offer identifiable foreign construction material in its bid pursuant to FAR 52.225–11, VA does not anticipate accepting an offer that includes foreign construction material, other than TAA designated country construction material or NAFTA country construction material.
As prescribed in 836.579, insert the following clause:
(a) Signing of the bid shall be deemed to be a representation by the bidder that:
As prescribed in 846.710–70, insert the following clause:
The clause entitled “Warranty of Construction” in FAR 52.246–21 is supplemented as follows:
Any special warranties that may be required under the contract shall be subject to the elections set forth in the FAR clause at 52.246–21, Warranty of Construction, unless otherwise provided for in such special warranties.