CANCELLED BY PIC 09-06C

09-06B

Procurement Information Circular


July 8, 2009

CONTRACTING WITH RECOVERY ACT FUNDS

 

PURPOSE:   This Procurement Information Circular (PIC) is issued to provide guidance to the procurement community on the implementation of the American Recovery and Reinvestment Act (Recovery Act) of 2009, PL 111-5.  Applicability of this guidance is limited to contracts.  Grants will be addressed under a separate Grant Information Circular. 

 

This guidance is supplemental to Agency guidance on implementation of the Recovery Act.  Contractors, as recipients of Recovery Act funds, have specific tracking and reporting requirements which are different from and should not be confused with the tracking and reporting requirements NASA, as a Federal Agency, has pursuant to the Recovery Act. 

 

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, and

-          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) rules to make changes to the FAR.  The interim rules were published and became effective on March 31, 2009.  The new and revised clauses included in the rules are available for use in contract actions through the Contract Management Module (CMM).  Final rules, which will reflect consideration of public comments on the interim rules, are expected to be published within the next 60 days.

 

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

 

a.    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 preservation, job creation, and economic recovery.

 

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

 

c.    NASA has established Program Plans and more specific Project Plans which set forth the Agency’s strategic plan for allocating and spending Recovery Act funds.

 

d.      Recovery Act funds shall not be used on any new contract, order, or modification to an existing contract or order if payments on the contract or order are to be made by a Letter of Credit.

 

2.   Requisition Requirements

 

a.    The requiring office is responsible for generating a requisition to initiate a procurement action under the Recovery Act, and for ensuring that the requisition is consistent with approved Program and Project Plans.  A separate requisition is required for each Recovery Act action, and a Recovery Act requisition may not include any requirements or funds for other than Recovery Act actions. 

 

b.      The requiring office is also responsible for including a specific description of the supplies or services to be contracted for pursuant to the requisition.  The description must identify discrete supplies or services that are severable from non-Recovery Act funded supplies or services.  Recovery Act funding may not be used for incremental funding unless the increment has distinct parameters and the contractor’s performance of the specific increment is measurable.

 

-          Distinct parameters mean that the work can be distinguished by a beginning and an end.  If an increment of work under an existing contract is to be funded with Recovery Act funds, the requiring office is responsible for establishing a beginning and an end of the Recovery Act work.  Among other options, the beginning and end may be expressed as dates or as identifiable points of service or completion.  For example, Recovery Act increments may:

 

o    begin on Sept. 1, 2009 and continue until December 31, 2009. 

o    begin following NASA’s approval of a plan or report, and end upon NASA’s  acceptance of a plan or report.

o   begin when a specific project is 25 percent complete and end when it is 40 percent complete. 

 

Parameters should be established which ensure that NASA will be able to examine and evaluate Recovery Act work separate and distinct from non-Recovery Act work. 

 

-          Measurable performance means that NASA can quantify and judge the quality of service or production received during the specified increment.  Because the Federal Government will be measuring what it receives for corresponding amounts spent under the Recovery Act, it is insufficient to say, for example, that NASA received three months of service.  Therefore, the requiring office is responsible for specifying performance for the incremental period in a manner that permits evaluation and review of the work performed.  For example, measurements for a Recovery Act increment may include:

       

         meeting specified milestones between beginning and ending dates.

         successful completion of significant identified activities.

         on time delivery of required reports, documents, or supplies.

     

  1. In support of the transparency requirements of the Recovery Act, and in order to facilitate mandatory reporting requirements, the description must clearly identify the supplies or services without using technical jargon, Agency-unique language, or acronyms.  The description should be easily understood by the general public and suitable for public disclosure.

 

d.      COs are responsible for reviewing the requisition to ensure that spending is consistent with the intent of the Recovery Act, but COs may generally rely upon the requesting office for assurance that the requested acquisition is consistent with approved Program and Project Plans.

 

3.  Pre-award Considerations; CO Responsibilities

 

a.       Recovery Act funds may not be obligated unless the contract, order, or modification includes the Federal Acquisition Regulation (FAR) Recovery Act clauses.  If offerors or contractors refuse to accept the Recovery Act clauses, and hence, Recovery Act funds, the CO shall notify the HQ Office of Procurement, Contract Management Division. Notifications should include a brief summary of the Recovery Act action and the contractor’s objection.  Also identify efforts made by NASA to secure acceptance, CO contact information, and contractor point of contact with contact information.

 

b.      When making Recovery Act awards, COs shall not combine multiple requisitions on a single contract action.  Each Recovery Act requisition shall result in a separate contract award, order award, or modification to an existing contract or order.  Any contractual document that obligates Recovery Act funds must not include any non-Recovery Act funds, or any Recovery Act funds that were provided via another requisition.

 

c.        FAR 4.1501 identifies procedures for ensuring that Recovery Act acquisitions are appropriately identified as such, and that they are distinguished from other, non-Recovery Act acquisitions. It is a NASA requirement that COs establish specific contract line item numbers (CLINs) to identify all work on any contract or order which is funded, in whole or in part, with Recovery Act funds.  When Recovery Act funds are added to existing contracts, COs must establish and assign CLINs to describe and segregate both Recovery Act requirements and non-Recovery Act requirements. For new awards that are funded in full with Recovery Act dollars, establishment of a CLIN to describe and segregate the work will facilitate later additions of non-Recovery Act funds to that contract. 

 

d.       For contracts that contain NASA Form 533 reporting requirements, COs shall ensure that the contract contains directions for contractors to segregate Recovery Act funds from non-Recovery Act funds on NASA Form 533, Financial Management Reporting.  Because segregation of funds is an existing requirement under NASA FAR Supplement (NFS) Clause 1852.242-73, and NASA Procedural Requirement (NPR) 9501.2, referenced therein, direction to the contractor is consistent with paragraph (a) of the clause. When adding Recovery Act funds, COs should set forth detailed reporting categories in the schedule.  Directing the contractor to segregate Recovery Act funds on NF 533 is not viewed as a change as described in paragraph (e) of 1852.242-73.  NASA does not anticipate any additional charges associated with segregation of Recovery Act funds on NF 533.

 

e.    COs shall obtain a proposal for each and every Recovery Act requirement. A proposal is required not only for new awards, but also for Recovery Act requirements added to existing contracts, even if the Recovery Act work is work that was covered by the contractor’s original proposal.  Because Recovery Act requirements on existing contracts will be identified with distinct parameters and measurable performance criteria, COs must request, and contractors must provide, a proposal to price the Recovery Act modification.  COs shall direct offerors or contractors to submit separate proposals for Recovery Act requirements and non-Recovery Act requirements. Recovery Act and non-

 

Recovery Act costs cannot be combined in one proposal. Negotiation documents shall indicate that pricing of work to be performed with Recovery Act funds was negotiated as a stand-alone effort, and is separately identifiable.  COs, in conjunction with the requiring office, should determine the appropriate level of detail for proposals, consistent with the contract action.  When Recovery Act funds are added to existing contracts, the level of detail should be sufficient to allow separate pricing of the Recovery Act effort, and to permit segregation of costs associated with the Recovery Act effort.  Care should be taken to request only the level of detail necessary, thereby minimizing bid and proposal costs.

 

f.    COs shall create all Recovery Act contractual documents in the Contract Management Module (CMM).  Further, COs shall utilize the PRISM milestone templates in CMM.  NASA’s ability to track, manage, and report on Recovery Act requirements is enhanced when NASA can place reliance on its automated systems and leverage the ability to share information between systems.  Automated systems also provide checks and balances which serve as an oversight mechanism to identify missing, incomplete, or incorrect actions.  CMM’s interface with the financial management system will facilitate proper implementation of the Recovery Act.  Therefore, it is vital that documents are created in CMM in accordance with the milestone templates. 

 

g.   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.

 

4.   Posting Requirements

 

a.       Posting of Presolicitation Notices

 

In accordance with FAR 5.704, COs shall use FedBizOpps (FBO) to post presolicitation notices for contract actions that will be made using Recovery Act funds.  Contract actions include new contract awards, new task or delivery orders, and modifications to existing contracts or orders.  Some Recovery Act presolicitation notices are for informational purposes only, as identified in FAR 5.704.  They serve the transparency objectives of the Act by notifying the public of anticipated Recovery Act awards, regardless of whether a presolicitation notice was posted at the time of original award.  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.

 

When using NAIS EPS for submitting pre-award notices to FedBizOpps, using their electronic e-mail interface, COs must select the radio button that indicates the acquisition is a Recovery Act action and use the word “Recovery” as the first entry in the title field, prior to the actual title of the pre-solicitation notice.  For reporting purposes, automated systems will use the “Recovery” tag to pull and identify actions, so it is important to ensure that the word Recovery appears first and is spelled correctly.  The entry/search is not case sensitive.  

 

      b.   Announcing Contract Awards

 

In accordance with FAR 5.705, COs must publicize contract actions that are made, in whole or in part, with Recovery Act funds.  Contract actions include new contract awards, new task and delivery order awards, and modifications to existing contracts and orders.  Recovery Act award announcements shall be posted as ‘post award notices’ rather than any other type of notice.  The Recovery Act requires that, if the award is not both fixed price and competitive, the award notice include the rationale for using other than a fixed price and/or competitive approach.

 

b.   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 obligation 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

           

On reimbursable actions, where other agencies have provided Recovery Act funds to NASA for obligation on NASA contracts, the requesting agency should advise the NASA CO of the appropriate TAS code.

 

In support of the transparency provisions of the Act, COs must enter clear and concise descriptions of the supplies or services being procured, avoiding technical jargon and

 

Agency-specific language and acronyms.  Furthermore, COs should take extra care to ensure that the competition information entered in FPDS matches competition information identified in FBO.

 

5.   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 is available in the Contract Management Module (CMM).   COs must ensure that all solicitations, contracts, or orders that include Recovery Act funds also include the clause.  If contractors refuse to accept the clause and Recovery Act funds, COs must notify the HQ Office of Procurement, Contract Management Division.  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 effectiveness 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, Simplified Acquisitions, and Sealed Bid awards, in addition to negotiated awards made pursuant to FAR Part 15. 

 

6.   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. 

 

b.      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.

 

c.          In order to prevent fraud, waste, and abuse of Recovery Act funds, the 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. 

 

d.       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, 52.203-15, requires contractors to post notice of employee whistleblower protections.  COs must ensure that this clause is included in all contracts that obligate Recovery Act funds. 

 

7.   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 contracts where Recovery Act funds are expected to be 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 requirement 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 are available in CMM.

 

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.

 

8.  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) immediately upon such communication. CMD will assist with the handling of the communication. 

 

9.  Invoicing Procedures:

 

The Office of Procurement is developing and promulgating a NASA FAR Supplement clause which will set forth instructions to contractors for submitting invoices for contract work funded with Recovery Act money.  Additional guidance will be forthcoming as the clause is finalized and made available for use.  In the interim, COs shall include specific Recovery Act invoicing instructions in all Recovery Act contract actions, worded substantially as follows:

 

Special Invoicing Instructions for Contracts Containing Recovery Act Funds

 

In addition to the requirements set forth in any payment and invoicing clauses contained within the contract, the following special requirements apply to those contracts with work authorized under the American Recovery and Reinvestment Act (ARRA) of 2009 (herein after referred to as the Recovery Act). 

 

            -  All requests for payment for work performed subject to the Recovery Act shall be submitted separately from requests for payment for any other work performed under the contract.

            -  All requests for payment for work on contracts, funded in whole or in part, with Recovery Act funds, shall identify the applicable Contract Line Item Number(s) (CLINs) associated with the supplies or services being invoiced.

            -  All invoices/vouchers shall be submitted via e-mail with no more than one invoice/voucher per e-mail submission.

            - The NASA Shared Services Center is the Designated Billing Office for Recovery Act invoices, except for cost type contracts where DCAA is designated as the billing office for verification of vouchers.

 

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

 

  1. 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. 

 

  1. Purchases using Recovery Act funds shall be placed using the appropriate purchasing vehicle, e.g., purchase order, task order, etc. by COs within the Center’s procurement office.  The CO is responsible for ensuring purchases using Recovery Act funds are placed in accordance with the requirements of this PIC and are recorded in FPDS.

 

11.  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.

 

c.       The HQ Office of Procurement, Contract Management Division, will post Frequently Asked Questions (FAQs) and answers to the knowledge management portal.  These FAQs will not change existing policy but may provide interpretation of information in this PIC, the FAR, or OMB guidance.  FAQs will be located at: http://prod.nais.nasa.gov/portals/km/recovery_act.html

 

CANCELLATION:  This PIC supersedes PIC 09-06A 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.

 

 

 

James A. Balinskas

Director, Contract Management Division

 

 

DISTRIBUTION:

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