09-06A

Procurement Information Circular


May7, 2009

 

CONTRACTING WITH RECOVERY ACT FUNDS

 

PURPOSE:   This Procurement Information Circular (PIC) is issued to provide guidance on the implementation of the American Recovery and Reinvestment Act (Recovery Act) of 2009, PL 111-5.

 

BACKGROUND:  On February 17, 2009, The President signed the Recovery Act (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf).

The Act’s purpose is to provide a stimulus to the US economy, and, among other provisions, it provides funds to Federal agencies for use on contracts and assistance agreements.

 

On March 20, 2009, The Administration issued a memorandum addressing responsible spending of Recovery Act Funds (http://www.whitehouse.gov/the_press_office/Memorandum-for-the-Heads-of-Executive-Departments-and-Agencies-3-20-09/).  The Administration is committed to ensuring that Recovery Act funds are spent responsibly and in a manner that is transparent to the American public.  Consequently, use of the funds is limited to projects that demonstrate the potential to:

 

-          deliver programmatic results,

-          achieve economic stimulus  by optimizing economic activity and the number of jobs created or saved in relation to the Federal dollars obligated,

-          achieve long-term public benefits

-          satisfy the Recovery Act’s transparency and accountability objectives.

 

The Administration empowers agencies to exercise their discretion and judgment in implementing the Act and stresses responsible management.  Agencies are to ensure that Recovery Act funds are expended for projects that promote economic recovery and are not used for imprudent projects.  For example, the guidance specifically forbids spending under the Recovery Act for casinos, aquariums, zoos, golf courses, and swimming pools.  Projects of a similar nature are also inappropriate for receipt of Recovery Act funds.  

 

The Office of Management and Budget (OMB) has issued implementation guidance to Federal agencies which will be updated and supplemented periodically (http://www.whitehouse.gov/omb/recovery_default).

 

The Federal Acquisition Regulation (FAR) Council has issued five (5) interim rules to make changes to the FAR.  The interim rules will be published on and will be effective as of March 31, 2009.

 

Furthermore, automated systems, both internal to NASA and Government-wide, have been created or modified to support the posting and reporting requirements of the Recovery Act.  They are designed to meet the accountability and transparency requirements of the Act. 

 

GUIDANCE:

  

1.  General Principles

 

Contracting officers (COs), in coordination with the requesting office, shall ensure that requests for contract services to be funded with Recovery Act funds meet the objectives of the Act, and that projects funded are based on merit and further the objectives of the Act, including job creation and economic recovery.

 

The Recovery Act and all associated guidance express a clear preference for award of fixed-price, competitive contracts.  COs shall support these principles and, as appropriate, maximize the use of fixed price, competitive contracts in awarding contracts that use Recovery Act funding.

 

COs are reminded to make careful and considered responsibility determinations for companies receiving Recovery Act funds.   Particular attention should be paid to the Excluded Parties List System (EPLS), which should be checked and verified several times prior to award to ensure that no parties that have been excluded from Federal contracting will receive Recovery Act funds.

 

2.  Posting Requirements

 

a.       Posting of Presolicitation Notices

 

       In accordance with FAR 5.704, COs shall use FedBizOpps to post presolicitation notices for contract actions that will be made using Recovery Act funds.  Inasmuch as the Recovery Act includes specific elements for presolicitation notices that are in addition to the standard requirements for presolicitation requirements, it is important to carefully follow the instructions in FAR 5.7.

 

      In addition, because the FedBizOpps system will be undergoing modification to accommodate Recovery Act postings, and because specific posting procedures may change from time to time during the period of Recovery Act contracting, instructions will be prominently posed on the FedBizOpps home page at www.FBO.gov. 

 

      b.   Announcing Contract Awards

 

       In accordance with FAR 5.705, COs must publicize awards that are made, in whole or in part, with Recovery Act funds.  The Recovery Act requires that, if the award is not both fixed

price and competitive, the award notice shall include the rationale for using other than a fixed price and/or competitive approach.

 

       In addition to the posting at FedBizOpps, the supporting information for a non-competitive and/or other than fixed price award must be displayed in a distinct area at www.Recovery.gov, in accordance with the Recovery Act instructions posted on the home pages of both FedBizOpps and Recovery.gov.  

 

   c.   Entering Data into the Federal Procurement Data System (FPDS)

 

      FAR 4.605(c) provides the requirements for entering awards made using Recovery Act funds in FPDS.  In addition, and because FPDS entry directions are likely to change from time to time during the course of Recovery Act spending, instructions shall be prominently displayed on the home page at https://www.fpds.gov. 

 

      COs must enter the Treasury Account Symbol (TAS) in the Description of Requirements field in FPDS to identify obligations of Recovery Act funds.  This applies to original awards, awards of orders, and to modifications of existing contracts or orders. The TAS should be entered in the following format:  TAS::XX XXXX::TAS.  (The acronym TAS followed by two colons precede the code and two colons followed by the acronym TAS follow the code.)  The TAS entry, in this format, must be the first thing entered in the Description of Requirements field.  The TAS must precede the description of the contract action.  While Recovery Act funds may be added to an existing contract or order, Recovery Act funds cannot be co-mingled with non-Recovery Act funds for reporting purposes.  Therefore, COs must record each obligation of Recovery Act funds as a separate entry in FPDS.

 

      OMB has designated five TAS codes for NASA’s use in obligating Recovery Act funds:

 

         Science, Recovery Act – 80-0119

         Aeronautics, Recovery Act – 80-0125

         Exploration, Recovery Act – 80-0123

         Cross Agency Support, Recovery Act – 80-0121

         Office of Inspector General, Recovery Act – 80-0116

 

3.  Reporting Requirements

 

   a. Contractors that receive Recovery Act funds are required to report on the use of the funds quarterly.  Accordingly, a new FAR clause, 52.204-11, has been created.  The clause will be available in the Contracts Management Module (CMM) approximately 30 days after its publication in the Federal Register.  For contracts issued prior to clause availability in the automated system, COs shall copy the clause from an official source such as FAC 2005-32, or the GSA FAR website.  COs must ensure that all solicitations, contracts, or orders that include Recovery Act funds also include the clause.  The clause requires contractors to utilize the tool at www.FederalReporting.gov to report first-tier subcontracts, executive compensation, and jobs created or retained, work progress, and amount invoiced, among other things.  The Federal

 

Reporting website is publically available and the information reported by Federal contractors will serve to provide transparent information on the use and affectiveness of Recovery Act funds. 

 

   b. Consistent with accountability and transparency requirements of the Act, the reporting requirements apply to Commercial Off-the-Shelf (COTS) items, Commercial item purchases, and Simplified Acquisitions. 

 

4.  Audit Rights, GAO/IG Access to Contractor Employees, and Whistleblower Protection

 

   a. Contracts, orders, and modifications that are funded with Recovery Act dollars are subject to audit and examination, consistent with the accountability and transparency requirements of the Recovery Act.  The FAR previously provided audit rights for certain types of contracts.  Where that right did not previously exist, changes have been made to existing clauses to add an alternate that addresses audit rights for Recovery Act contract actions. 

 

      CMM will be updated approximately 30 days after the publication of FAC 2005-32 in the Federal Register.  For contracts issued prior to clause availability in the automated system, COs shall copy the clause from an official source such as FAC 2005-32, or the GSA FAR website.  COs must ensure that any contract that includes Recovery Act funds, includes the appropriate clause to provide audit rights:  FAR 52.212-5 (Commercial Items), 52.214-26 (Sealed Bidding) and 52.215-2 (Negotiation).  COs shall modify, on a bilateral basis, in accordance with FAR 1.108(d)(3), existing contracts to include the FAR clauses (Alternates) for future orders, if Recovery Act funds will be used.  In the event that a contractor refuses to accept such a modification, the contractor will not be eligible for receipt of Recovery Act funds.

 

   b. In order to prevent fraud, waste, and abuse of Recovery Act funds, FAR has been amended to provide for agency Inspectors General and the Government Accountability Office (GAO) to review concerns raised by the public.  Therefore, the clauses cited above which provide audit rights have also been revised to provide for the right of IG and GAO to have access to contractor and first-tier subcontractor personnel. 

 

   c.  Likewise, FAR 3.9 has been added to provide whistleblower protections for contractor employees who report ‘covered information’ related to use of Recovery Act funds.  A new FAR clause, 52.203- 5, requires contractors to post notice of employee whistleblower protections.  COs must ensure that this clause included in all contracts that obligate Recovery Act funds.  The clause will be available in CMM approximately 30 days after its publication in the Federal Register.  For contracts issued prior to clause availability in the automated system, COs shall copy the clause from an official source such as FAC 2005-32, or the GSA FAR website.

 

5.  Construction Contracts 

 

   a. The Recovery Act requires that any construction project funded with Recovery Act funds be in the US and outlying areas.  Definitions and limitations are set forth in FAR 25.6.

 

   b. New FAR coverage has been added at FAR 25.6 to specify the application of the Buy American Act to construction projects funded with Recovery Act funds.  The Recovery Act provides a strong preference for American-made materials by mandating use of evaluation factors designed to favor awards to firms offering domestic materials.

 

   c.  For all Recovery Act contract actions, it is important that Recovery Act funds not be comingled with non-Recovery Act funding.  This is particularly important in construction contracting when Recovery Act funds are added to existing contracts.  In order to meet the accountability requirements of the Act, the new work should be separately identifiable and able to be segregated from prior work funded with non-Recovery Act funds.

 

   d. Contract provisions and clauses are provided at FAR 52.225-21, -22, -23, and -24 to specify a preference for domestic iron, steel, and manufactured goods in construction contracts, and to address Trade Agreements when foreign-made materials are proposed.  These provisions and clauses must be included in any construction contract which obligates Recovery Act funds.  The provisions and clauses will be available in CMM approximately 30 days after their publication in the Federal Register.  For contracts issued prior to clause availability in the automated system, COs shall copy the clause from an official source such as FAC 2005-32, or the GSA FAR website.

 

   e.  COs are reminded that the Davis-Bacon Act applies to Recovery Act construction contracts, regardless of dollar value.  The Recovery Act specifies that all laborers and mechanics employed by contractors and subcontractors on projects funded in whole or in part with Recovery Act funds shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor.

 

6.  Treatment of Lobbyists

 

   a.  In the event COs or other Agency officials are contacted by lobbyists concerning particular projects, applications, or applicants for funding under the Recovery Act, special requirements apply to the conduct and documentation of the communications.  Prior to any discussions with any entities concerning any specific Recovery Act projects, applications, or applicants, agency officials shall inquire whether any of the individuals or parties are lobbyists registered under the Lobbying Disclosure Act of 1995.  Registered lobbyists may not participate in any verbal discussions on specific Recovery Act projects, applications or applicants.  They may submit a communication in writing, and any written communication received from a lobbyist must be posted on NASA’s Recovery website within 3 business days of receipt.

 

   b. Agency officials may communicate orally with lobbyists concerning general Recovery Act policy issues.  Any such discussions shall be immediately documented in writing by the Agency official and the document must be posted on NASA’s Recovery website within 3 business days of the communication. 

 

   c. Contracting personnel who receive communications from lobbyists, or hold general discussions with lobbyists and then document the discussions, must advise Headquarters Contract Management Division (CMD).  CMD will assist with the handling of the communication. 

 

7.  Prohibition on the use of the Governmentwide Commercial Purchase Card for purchases funded with Recovery Act appropriations

 

Recovery Act funds are provided to support distinct NASA projects which will preserve and create jobs, further scientific and technological advances, and. stimulate the economy.  These actions are best supported through contracts or grants, not purchase card transactions.  Additionally, implementing Recovery Act reporting requirements necessitates collecting detailed information on expenditures, items purchased, recipients, and performance which is not normally tracked for purchase card transactions. 

 

Purchases using Recovery Act funds shall be placed using the appropriate purchasing vehicle, e.g., purchase order, task order, etc. by contracting officers within the Center’s procurement office.  The contracting officer is responsible for ensuring purchases using Recovery Act funding are placed in accordance with the requirements of this PIC and are recorded in the Federal Procurement Data System (FPDS).

 

8.  Evolving Guidance

 

   a.  Federal implementing guidance for the Recovery Act is being reevaluated on an ongoing basis and will be revised periodically.  This PIC will be updated as necessary to reflect changes made by Federal offices as well as changes made internally to NASA procedures.

 

   b.  The Integrated Acquisition Environment (IAE) program has committed to posting the most current direction related to reporting under the Recovery Act at the various websites including Recovery.gov, FederalReporting.gov, FedBizOpps and FPDS.  COs are encouraged to visit the sites for current direction. To the extent that the websites specify instructions that differ from those in this PIC, the website’s instructions supersede the instructions in this PIC.

 

CANCELLATION:  This PIC supersedes 09-06 and shall remain in effect until canceled or superseded.

 

HEADQUARTERS CONTACTS:  Leigh Pomponio, Office of Procurement, Contract Management Division, (202) 358-0592, e-mail: Leigh.Pomponio@nasa.gov.

 

  /s/

James A. Balinskas

Director, Contract Management Division

 

DISTRIBUTION:

  PIC List