CANCELLED BY PIC 05-13

05-12

Procurement Information Circular


September 28, 2005

EMERGENCY PROCUREMENT AUTHORITY

 

PURPOSE:  To notify procurement offices of the emergency procurement authority to increase the micro-purchase dollar thresholds for acquisitions in direct support of Hurricane Katrina rescue and relief operations. 

 

BACKGROUND:  Effective September 8, 2005, Section 101 of Public Law 109-62 entitled “Second Emergency Supplemental Appropriations Act to Meet Immediate Needs Arising from the Consequences of Hurricane Katrina” provided the heads of executive agencies emergency procurement authority to increase the micro-purchase threshold to $250,000 for the procurement of property or services in support of Hurricane Katrina rescue and relief efforts.  Subsequently, the Office of Management and Budget (OMB) Memorandum entitled “Implementing Management Controls to Support Increased Micro-purchase Thresholds for Hurricane Rescue and Relief Operations” dated September 13, 2005, provides guidance and recommended management controls for agencies in implementing the public law. 

 

GUIDANCE:  Take advantage of these increased threshold flexibilities for emergency situations.  Ensure all acquisitions utilizing these authorized flexibilities must be in direct support of Hurricane Katrina rescue and relief operations.  Also, ensure appropriate management controls are utilized as outlined in OMB’s guidance.  The dollar thresholds are hereby increased as follows:

 

 

Current Threshold

New Threshold pursuant to Pub. L 109-62

Micro-Purchase Authority

(FAR 2.1, 13.2 and 19.502-1)

Purchases up to $2,500

 

 

 

Purchases up to $250,000 only by a warranted CO as designated by the Head of the Contracting Activity.*

Government-Wide Purchase Cards

 

Varies (see FAR 13.301 and NFS 1813.301).

 

Acquisitions up to $250,000 after approval.  See Below.**

Simplified Acquisition (FAR 2.1 and 13)

Acquisitions up to $100,000 only by a warranted CO.

Acquisitions up to $250,000 only by a warranted CO as designated by the Head of the Contracting Activity.*

 

*Only warranted Contracting Officers designated by the Head of the Contracting Activity are authorized to acquire property or services at the increased threshold in direct support of Hurricane Katrina relief efforts.

 

**No blanket increase in purchase card authority is granted.  Individual contracting officers may be granted increased authority by Procurement Officers only after approval by the Assistant Administrator for Procurement.  The following information shall be provided in support of such a request.  It shall be provided to the attention of Patrick Flynn, NASA Headquarters - Contract Management Division.

 

·     Name of the individual, contracting certification level, and his/her role in Katrina relief.

·     Specific type and amount of increased authority requested under Sec. 101, PL 109-62 (e.g., single transaction limit, monthly limit)

·     A statement that all existing procedures, including FAR and NASA’s Purchase Card Internal Control and Audit Plan will be followed.

·     Any additional controls that will be implemented to assure correct use of this authority.

·     Date by which approval of the requested additional authority is needed.

·     Event or date when the increased authority will be terminated.

·     Concurrence of the Center Agency/Organization Program Coordinators (CAPC) and Procurement Officer.

 

It is of critical importance to ensure that these flexibilities are used only for efforts that have a clear and direct relationship to Hurricane Katrina rescue and relief operations, and that they are used in a responsible and effective manner with appropriate management controls as identified in Enclosure 1.

 

When using the micro-purchase authority including the government-wide purchase card to support Hurricane Katrina relief efforts authorized users need not comply with Section 15(j) of the Small Business Act (15 U.S.C. 644(j)); the Buy American Act (41 U.S.C. 10a-10C).  In addition, the President of the United States has determined the devastating conditions caused by Hurricane Katrina constitutes a national emergency and therefore has suspended the provisions of 40 U.S.C. 3141-3148 (the Davis-Bacon Act) for all contracts performed in the limited geographic areas most-heavily affected by the hurricane as specifically outlined in the following proclamation: http://www.acq.osd.mil/dpap/general/docs/proclamation_katrina.pdf

 

42 U.S.C. 5150 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act provides that preference shall be given, to the extent feasible and practicable, to those organizations, firms, or individuals residing or doing business primarily in the area affected by such major disaster or emergency when contracting for major disaster or emergency assistance activities such as debris clearance, distribution of supplies, or reconstruction.  Contracting Officers still must promote competition to the maximum extent practicable although FAR 6-302-5 lists 42 U.S.C. 5150 as a statute, which expressly authorizes or requires that acquisitions be made from a specified source.   

 


Maximum practicable competition, in this case, means soliciting quotations or offers from organizations, firms, or individuals residing or doing business primarily in the area affected by Hurricane Katrina.  In the event that local firms are not available, contracting officers still must promote competition to the maximum extent practicable to obtain supplies and services from the source whose offer is the most advantageous to the Government, considering the administrative cost of the purchase (See FAR 13.104).  Contracting officers shall retain appropriate documentation/records supporting the purchases to the extent and duration necessary for management review and audit purposes. 

 

Contracting officers shall ensure the procurement flexibilities identified herein are only used for Hurricane Katrina rescue and relief efforts.  Contracting officers shall follow the procedures outlined in the Purchase Card Audit and Internal Control Plan that is available on the NASA Fleet, Purchase, and Travel Card home page http://ptf.larc.nasa.gov/ as follows: http://ptf.larc.nasa.gov/Purchase_Card_Audit_and_Internal_Control_Plan_Sept_2004.doc

And OMB’s Circular A-123 for Management’s Responsibility for Internal Control provided as follows: http://www.whitehouse.gov/omb/circulars/a123/a123_appendix_b.pdf

 

A checklist of applicable laws, executive orders, and statutory requirements for the acquisition of commercial items is contained in Enclosure 2.

 

In addition, see PIC 05-11 for the limited exemption and waiver from some of the requirements of the laws administered by the Office of Federal Contract Compliance Programs (OFCCP), U.S. Department of Labor for contracts for Hurricane Katrina Relief Efforts.  This includes affirmative action programs under OFCCP regulations and the modification of equal opportunity FAR Clauses 52.222-26, 52.222-35, and 52.222-36. The limited exemptions and waivers in PIC 05-11 have been incorporated in Enclosure 2.

 

EFFECTIVE DATE:  This PIC is effective as dated and shall remain in effect until canceled or superseded.  There is a possibility that Congress may appeal this authority and if so, NASA procurement offices will be notified immediately.

 

HEADQUARTERS CONTACTS:  Marilyn J. Seppi, Contract Management Division, (703) 553-2551, email: marilyn.j.seppi@nasa.gov.  For the government-wide purchase card contact: Patrick Flynn, Contract Management Division, 202-358-0460, email: patrick.flynn@nasa.gov

 

 

 

Tom Luedtke

Assistant Administrator for Procurement

 

Enclosures



 

Enclosure 1

NASA’s Management Control Guidelines and Procedures

 

These controls, guidelines and procedures implement Section 101 of Pub. L. 109-62, the “Second Emergency Supplemental Appropriations Act to Meet Immediate Needs Arising from the Consequences of Hurricane Katrina” and OFPP Memorandum dated September 13, 2005.

 

A.  Program management responsibilities.

 

  1. Contracting activities shall work with card issuing banks to raise monthly and single transaction limits accordingly. 

 

  1. Contracting activities must establish and communicate policies and procedures for determining whether a transaction is “in support of Hurricane Katrina rescue and relief operations” and therefore allowable under Section 101 of the Act. 

 

  1. The head of the contracting activity will designate officials to conduct follow-up reviews of transactions made pursuant to Section 101 of the Act.  These follow-up reviews will take place as soon as practicable, but no later than 60 days after any given transaction.  The officials shall evaluate whether the transaction: (a) was consistent with agency’s policies and procedures identified in paragraph A.4, above, and was otherwise reasonable and appropriate; (b) provided the maximum practicable opportunity for small business participation under the circumstances (see paragraph B.2, below), and (c) was appropriately documented by the cardholder.  Based on these reviews, the official shall make recommendations to the head of the agency on changes to the policies and procedures identified in paragraph A.4 above, and any administrative or disciplinary actions required.

 

4.   Contracting activities should increase management controls to mitigate risk under the new micro-purchase authority.  OMB Circular A-123, Appendix B, Improving the Management of Government Charge Card Programs, provides guidance on implementing strong internal controls.  Examples include, but are not limited to the following, as may be appropriate:

    • Increasing the frequency and scope of reviews of spending and transaction limits to ensure appropriateness;
    • Limiting the number of individuals authorized to use the increased micro-purchase threshold and the length of time this authority can be used;
    • Evaluating the span of control for approving officials; 
    • Blocking card use for high risk merchant category codes; and
    • Establishing a control to ensure that card accounts are canceled when the employee returns from temporary duty or leaves the agency.

 

Contracting activities should review OMB Circular A-123, Appendix B for additional guidance on appropriate controls for charge card programs, with special emphasis on Sections 2.3 (planning), 3.4 - 3.5 (training), 4.3 - 4.7 (disciplinary actions, use of data, key personnel, etc.), 6.3 - 6.4 (creditworthiness), and Attachment 5 (best practices).

8.  When initiating administrative or disciplinary actions for card misuse, charge card managers should, in addition to consultation with agency human resources professionals, where appropriate:

    • Communicate clearly the penalties for fraud and misuse of the purchase card; 
    • Initiate verbal counseling and warning;
    • Provide written warning;
    • Suspend or revoke charge card privileges;
    • Suspend or revoke employee security clearance;
    • Include misuse occurrence in employee performance evaluations;
    • Suspend or terminate employment;
    • Ensure consistent enforcement of penalties; and
    • Publish actions taken by the agency for misuse of charge cards.

 

9.   Responsibilities identified in this Enclosure may not be delegated to a level lower than the Head of the Contracting Activity.

 

B.   Additional acquisition responsibilities.

 

1.   Cardholders and ordering officials are reminded to ensure that prices are reasonable.  These common sense determinations may take into consideration the extraordinary circumstances of the rescue and recovery operations. 

 

  1. Although there is no absolute requirement to award micro-purchases to small businesses, contracting activities using this authority are expected to provide small businesses maximum practicable opportunity under the circumstances to participate in federal acquisitions as prime contractors and subcontractors.  Where possible and consistent with efficient acquisition of needed supplies and services, local small businesses should be given priority.

 

  1. Section 307 of the Stafford Act (P.L. 93-288) establishes a preference, to the extent feasible and practicable, for contracting with local organizations, firms, or individuals for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities.

 

  1. If making a purchase on behalf of another agency, the agency making the purchase will ensure the requesting agency has the authority to make the purchase and fully document the purchase card transaction, including the date and time of the request, the name and contact information of the requesting official, and funding authorization.


Enclosure 2

Checklist of Applicable Laws and Requirements

For the Acquisition of Commercial Items

Not greater than the Micro-Purchase Threshold of $250,000

In Support of Hurricane Katrina Relief Efforts

 

I.  Applicable to all Purchases:

 

           

Statute or Executive Order (EO)

 

Requirements

For more information see FAR/DFARS

31 U.S.C. 1352

Anti-lobbying.  Do not use appropriated funds to lobby for award of Federal contract.

FAR Subpart 3.8

18 U.S.C. 431

Officials Not to Benefit.

 

 41 U.S.C. 51-58,

Anti-Kickback Act of 1986.  The requirement for the incorporation of the contractor procedures for the prevention and detection of violations, and the contract requirement for contractor cooperation in investigations are inapplicable.

FAR Subpart 3.502

41 U.S.C. 265, 10 U.S.C. 2409

Whistle-Blower Protection.

FAR Subpart 3.9

49 U.S.C. 40118

Fly American

FAR Subpart 47.4

41 U.S.C. 423

Procurement Integrity. 

FAR 3.104

31 CFR Chapter 5.

The Contractor shall not provide products from Cuba, Iran, Libya, Sudan, or North Korea, or any entity or individual listed by the Office of Foreign Assets Control as Specially Designated Nationals or Blocked Persons.

FAR Subpart 25.7

 

II. Construction Contracts more than $2,000:

 

Statute or Executive Order (EO)

 

Requirements

For more information see FAR/DFARS

18 U.S.C. 874 and 40 U.S.C. 276c

Copeland Act.  The contractor agrees to comply with this act as implemented by the clause at 52.222-10 which is required in contracts over $2,000.  The Copeland (Anti-Kickback) Act makes it unlawful to induce, by force, intimidation, threat of procuring dismissal from employment, or otherwise, any person employed in the construction or repair of public buildings or public works, financed in whole or in part by the United States, to give up any part of the compensation to which that person is entitled under a contract of employment. The Copeland Act also requires each contractor and subcontractor to furnish weekly a statement of compliance with respect to the wages paid each employee during the preceding week. Contracts subject to the Copeland Act shall contain a clause (see 52.222-10) requiring contractors and subcontractors to comply with the regulations issued by the Secretary of Labor under the Copeland Act.

FAR Subpart 22.4

 

III. More than $2,500:

 

Statute or Executive Order (EO)

 

Requirements

For more information see FAR/DFARS

41 U.S.C. 351 et seq.

Application of Labor Laws.  The Contractor agrees to comply with the Service Contract Act of 1965, as amended.  If this is a service contract, each service employee shall be paid not less than the minimum monetary wages and shall be furnished fringe benefits in accordance with the wages and fringe benefits determined by the Secretary of Labor, or authorized representative, as specified in any wage determination attached to this contract.  No employee shall be paid less than the currently applicable minimum wage specified under section 6(a) (1) of the Fair Labor Standards Act of 1938, as amended.

FAR Subpart 22.1006

 

IV. More than $10,000:

 

Statute or Executive Order (EO)

 

Requirements

For more information see FAR/DFARS

E.O. 11246

Application of Labor Laws.  The Contractor represents that the Contractor complies with Equal Employment Opportunity (EEO) and does not maintain or provide segregated facilities for its employees.  The Contractor will not be obligated to develop the affirmative action program, prepare the reports, or provide the notices usually required under the regulations implementing E.O. 11246, as amended.

FAR Subpart 22.8

29 U.S.C. 793 6

Application of Labor Laws.  The contractor agrees to comply with Affirmative Action for Workers with Disabilities.  The Contractor will not be obligated to develop the affirmative action program, prepare the reports, or provide the notices usually required under the regulations implementing Section 503 of the Rehabilitation Act of 1973, as amended.

FAR Subpart 22.14

42 U.S.C. 6962

Use of recovered material.  If this contract is for an EPA designated product, the contractor certifies that the percentage of recovered materials used in the performance of the contract will be at least the amount required by the applicable contract specifications.

FAR Subpart 11.3

 

V. More than $100,000:

 

Statute or Executive Order (EO)

 

Requirements

For more information see FAR/DFARS

31 U.S.C. 1352

The offeror certifies that no Federal appropriated funds have been paid to any person to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress, on his or her behalf in connection with the award of this contract.  Disclosure using OMB Form LLL is required if the contractor makes payments with non-appropriated funds which would be prohibited is paid for with appropriated funds

FAR Subpart 3.8

38 U.S.C. 4212

Application of Labor Laws.  The contractor agrees to comply with Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans.  The Contractor will not be obligated to develop the affirmative action program, prepare the reports, provide the notices, or list the job openings usually required under the regulations implementing section 4212 of the Vietnam Era Veteran’ Re-adjustment Assistance Act, as amended. 

FAR Part 22.13

40 U.S.C. 3701 327-333 et seq.

Contract Work Hours and Safety Standards Act.  The contractor agrees to comply with this Act which requires that certain contracts contain clause 52.222-4 specifying that no laborer or mechanic doing any part of the work contemplated by the contract shall be required or permitted to work more than 40 hours in any workweek unless paid for all additional hours at not less than 1 1/2 times the basic rate of pay.

FAR Subpart 22.305

 

VI. Construction Contracts More than $100,000:

 

Statute or Executive Order (EO)

 

Requirements

For more information see FAR/DFARS

40 U.S.C. 3701 327-333 et seq.

Contract Work Hours and Safety Standards Act.  The contractor agrees to comply with this Act which requires that certain contracts contain clause 52.222-4 specifying that no laborer or mechanic doing any part of the work contemplated by the contract shall be required or permitted to work more than 40 hours in any workweek unless paid for all additional hours at not less than 1 1/2 times the basic rate of pay.

FAR Subpart 22.305

40 U.S.C. 270a-270f

The Miller Act. The contractor agrees to comply with this act which requires performance and payment bonds for any construction contract exceeding $100,000. 

FAR 28