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12-03

Procurement Information Circular


 

March 14, 2012

CLASS DEVIATION TO IMPLEMENT FUNDING RESTRICTIONS IN

NASA’S 2012 APPROPRIATIONS ACT

 

PURPOSE:  To provide a class deviation implementing funding restrictions in NASA’s 2012 Appropriations Act; to provide guidance to the contracting community on complying with the spending authority. (See also GIC 12-02 for a tandem deviation addressing grants and cooperative agreements.) 

 

BACKGROUND:  NASA’s 2012 appropriation which is included in The Consolidated and Further Continuing Appropriations Act of 2012 (Pub. L. 112-55) (hereinafter referred to as ‘the Act’) became effective November 18, 2011.  It imposes four specific funding restrictions that are summarized in the table below. 

 

         2012

  Appropriation

Entities affected

Contracts affected

Short description of prohibition

Conditions under which funding can be used.

ACORN Provision

Section 534

The Association of Community Organizations for Reform Now (ACORN) or its subsidiaries

All contracts

No funds may be made available to ACORN or its subsidiaries

None

Tax Delinquency Provision 1

Section 527

All contractors

Contracts exceeding $5M

No funds unless contractor CERTIFIES in writing to Federal tax compliance for previous 3 years

None

Tax Delinquency Provision 2

Section 544

CORPORATIONS

All contracts at any value

No funds if corporation has a delinquent tax liability

An agency has considered suspension and debarment and made a determination that suspension or debarment is not necessary to protect the interests of the Government

Felony Provision

Section 543

CORPORATIONS

All contracts of any value

No funds if corporation was convicted of a felony under Federal law in preceding 24 months

An agency has considered suspension and debarment and made a determination that suspension or debarment is not necessary to protect the interests of the Government

 

The first restriction is a prohibition on providing funds to The Association of Community Organizations for Reform Now (ACORN) or its subsidiaries.  It is an absolute restriction and there are no conditions under which NASA can contract with ACORN or its subsidiaries

 

The second restriction requires the Agency to obtain a certification from all offerors, when the resulting award will exceed $5 million, that to the best of its knowledge and belief, the offeror:

 

-       Has filed all Federal tax returns required during the preceding 3 year period;

-       Has not been convicted of a criminal offense under the Internal Revenue Code of 1986; and,

-       Has not been notified by the IRS, within the past 90 days, of an unpaid Federal tax assessment, which remains unpaid (unless an installment agreement is in place, and unless the contractor has filed a non-frivolous administrative or judicial proceeding.

 

No funds made available under the Act can be used in the absence of this certification.

 

The third and fourth restrictions apply to corporations.  No FY 2012 funds may be used to enter into a contract with a corporation, when the CO is aware of an unpaid tax delinquency or Federal felony conviction of the corporation unless an agency has considered suspension or debarment and made an affirmative decision that suspension or debarment is not necessary to protect the interests of the Government, before making an award to the offeror with the delinquent tax liability or felony conviction.  

 

Please note two key elements of the restriction which are indicated in bold.  The statute does not place a requirement on contracting officers to seek out information that is not readily available.  Awareness of a prospective awardee’s tax delinquency or Federal felony conviction may be gained through common knowledge of publicly available information or through representations, certifications, or other submissions by the contractor.  Because there is not an affirmative requirement to obtain all information from offerors that are corporations, NASA has some flexibility in establishing implementation thresholds.  As a policy matter, this PIC reflects reasonable thresholds to limit the collection burden. 

 

Further, the funding restrictions on corporations are not absolute.  Congress indicated that the purpose of the restrictions is to ensure agencies consider corporate offerors’ tax delinquency and felony conviction status and determine whether they should be suspended or debarred.  If the agency makes a determination that suspension or debarment is not necessary to protect the Government’s interests, then award can proceed and funds made available under the Act may be utilized. 

GUIDANCE:   NASA is restricted by the Act from using funds made available under the Act to enter into a contract with entities that qualify under the restrictions.  In order to implement these funding restrictions, this PIC includes a class deviation in the form of two new representations and a new certification. 

The representation at 1852.209-73 shall be included in all solicitations, expected to result in contracts or orders of any dollar amount.  For transactions where solicitations are not used, contracting officers and purchase card holders should verify that merchants are not ACORN or subsidiaries of ACORN by asking the merchant directly or checking the internet.  A quick search on key words ‘ACORN subsidiary’ yields several lists which, though unofficial, are likely to include major affiliated organizations and thereby provide a means to perform a measure of due diligence on small dollar value transactions.

The certification requirement at NFS 1852.209-74 shall be included in solicitations where the resultant contract is expected to exceed $5 Million.  The certification is required before an award can be made.

The representation at NFS 1852.209-75 shall be included in all new solicitations when the resultant contract is expected to exceed the simplified acquisition threshold.   While the funding restrictions apply to any use of the funds, the representations are not required before adding funding to existing contracts, when issuing an order against another agency’s contract, or when executing a simplified acquisition, including one made with a purchase card because the statute does not include a requirement for contracting officers to seek out contractor information related to unpaid tax delinquencies and felony convictions.  Notwithstanding the absence of a representation on existing contracts, orders against other agencies’ contracts, or simplified acquisitions, if the CO or cardholder is aware that a contractor has a qualifying tax delinquency or felony conviction, then FY 2012 funds may not be utilized for the action without first ensuring that the required consideration and determination regarding suspension and debarment have been performed.

Only the Suspension and Debarment Official (SDO) may consider suspension and debarment and make a determination whether further action is necessary to protect the interests of the Government.  The Acquisition Integrity Program (AIP) is responsible for coordinating suspension and debarment referrals with the NASA SDO or, when appropriate, the lead agency’s SDO.  Upon receipt of an affirmative representation from an offeror, contracting officers shall initiate review and analysis of the representation in accordance with the procedures in NFS 1809.408, and await a response from AIP prior to making an award. Likewise, in the absence of an affirmative representation, if a CO or cardholder becomes aware that an unpaid tax delinquency or felony conviction may impact an award or purchase, the matter should be referred to AIP in accordance with the procedure at NFS 1809.408. 

ACTIONS REQUIRED BY CONTRACTING OFFICERS:  Contracting Officers shall begin using the deviated representation and certifications immediately in new solicitations.  Depending upon the status and schedule of open solicitations, COs should consider amending the solicitation to include the new representations and certification.  Regardless of the solicitation requirements, COs must ensure that the contractor selected for award meets the standards of the Act prior to the obligation of FY 2012 funds.

Contracting officers shall process any Agency actions arising under the funding restrictions with the AIP program, following the guidance at NFS 1809- 408 for submission, content and internal Agency coordination.

APPLICABILITY:  The funding restrictions apply to all 2012 funds which were appropriated by the Act on November 18, 2011.  Because the Act requires NASA to have collected the certification and verified offerors ACORN affiliation, tax delinquency, and felony conviction status prior to award, it is not possible to retroactively apply this guidance to contracts awarded between November 18, 2011 and the date of this class deviation. 

EFFECTIVE DATE:  This class deviation is effective upon signature, and remains in effect until incorporated in the FAR or NFS or otherwise rescinded.  

HEADQUARTERS CONTACT:  Leigh Pomponio, Contract Management Division, (202) 358-0592, email: leigh.pomponio@NASA.gov

 

      /s/

William P. McNally

Assistant Administrator for Procurement

 

Enclosure

 

DISTRIBUTION:

  PIC List


 

Class Deviation – Prohibition against Contracting with the Association of Community Organizations for Reform Now (ACORN) or its subsidiaries.

 

1852.209-73 Representation by Offerors that they are not the Association of Community Organizations for Reform Now (ACORN) or a subsidiary of ACORN.

REPRESENTATION BY OFFERORS THAT THEY ARE NOT THE ASSOCIATION of COMMUNITY ORGANIZATIONS for REFORM NOW (ACORN) or a SUBSIDIARY of ACORN (DEVIATION FEB 2012)

(a)    In accordance with section 534 of The Consolidated and Further Continuing Appropriation Act of 2012 (Pub. L.112-55) none of the funds made available by the Act may be distributed to the Association of Community Organizations for Reform Now (ACORN) or its subsidiaries.

(b)   The offeror represents, by submission of its offer, that it is not the Association of Community Organizations for Reform Now (ACORN) or a subsidiary thereof.

 

(End of provision)

 

 

Class Deviation – Certification by Offerors regarding Federal income tax filing and Federal income tax violations.

 

1852-209.74 CERTIFICATION BY OFFERORS REGARDING FEDERAL INCOME TAX FILING and FEDERAL INCOME TAX VIOLATIONS. (DEVIATION FEB 2012)

 

(a)    In accordance with section 527 of The Consolidated and Further Continuing Appropriation Act of 2012 (Pub. L.112-55) none of the funds made available by the Act may be used to enter into a contract in an amount greater than $5 Million unless the prospective contractor certifies in writing to NASA that, to the best of its knowledge and belief, the contractor has filed all Federal tax returns required during the three years preceding the certification, has not been convicted of a criminal offense under the Internal revenue Code of 1986, and has not, more than 90 days prior to certification, been notified of any unpaid Federal tax assessment for which the liability remains unsatisfied, unless the assessment is the subject of an installment agreement or offer in compromise that has been approved by the Internal Revenue Service and is not in default, or the assessment is the subject of a non-frivolous administrative or judicial proceeding.

 

 

(b)               The offeror’s proposal shall include a signed written certification as follows –

 

To the best of my knowledge and belief, ---(name of offeror)--- has filed the Federal tax returns required during the three years preceding this certification, has not been convicted of a criminal offense under the Internal revenue Code of 1986, and has not, more than 90 days prior to certification, been notified of any unpaid Federal tax assessment for which the liability remains unsatisfied, unless the assessment is the subject of an installment agreement or offer in compromise that has been approved by the Internal Revenue Service and is not in default, or the assessment is the subject of a non-frivolous administrative or judicial proceeding.

 

Firm _____________________________________________

Signature _________________________________________

Name ____________________________________________

Title _____________________________________________

Date of execution __________________________________

(End of Provision)

 

Class Deviation – Prohibition against Contracting with Corporations that have an Unpaid Delinquent Tax Liability or a Felony Conviction under Federal Law.

1852.209-75 Representation by Corporations Regarding an Unpaid Delinquent Tax Liability or a Felony Conviction under any Federal Law.

REPRESENTATION BY CORPORATIONS REGARDING AN UNPAID DELINQUENT TAX LIABILITY OR A FELONY CONVICTION UNDER ANY FEDERAL LAW (DEVIATION FEB 2012)

(a)    In accordance with sections 544 and 543 of The Consolidated and Further Continuing Appropriation Act of 2012 (Pub. L.112-55), none of the funds made available by that Act may be used to enter into a contract with any corporation that-

 

(1)   Has any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, where the awarding agency is aware of the unpaid tax liability, unless the agency has considered suspension or debarment of the corporation and made a determination that this action is not necessary to protect the interests of the Government; or

 

(2)   Was convicted (or had an officer or agent of such corporation acting on behalf of the corporation convicted) of a felony criminal violation under any Federal law within the preceding 24 months, where the awarding agency is aware of the conviction, unless the agency has considered suspension or debarment of the corporation and made a determination that this action is not necessary to protect the interests of the Government.

 

(b)   The offeror represents that –

 

(1)   It is  [   ]   is not   [   ] a corporation that has had any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability; and

 

(2)    It is  [   ]  is not  [    ] a corporation that was convicted, or had an officer or agent acting on behalf of the corporation convicted, of a felony criminal violation under a Federal law within the preceding 24 months.

 

(End of provision)