New Rule Amends FAR Adding Reporting Requirements for Service Contractors | Practical Law

New Rule Amends FAR Adding Reporting Requirements for Service Contractors | Practical Law

A final rule amending the Federal Acquisition Regulation (FAR) will require service contractors for executive agencies to submit information annually in support of agency-level inventories for service contracts.

New Rule Amends FAR Adding Reporting Requirements for Service Contractors

Practical Law Legal Update 8-556-2345 (Approx. 3 pages)

New Rule Amends FAR Adding Reporting Requirements for Service Contractors

by Practical Law Commercial
Published on 31 Jan 2014 • USA (National/Federal)
A final rule amending the Federal Acquisition Regulation (FAR) will require service contractors for executive agencies to submit information annually in support of agency-level inventories for service contracts.
A final rule amending the Federal Acquisition Regulation (FAR) requires service contractors for executive agencies to submit information annually in support of agency-level inventories for service contracts (78 Fed. Reg. 80369). The reporting requirements do not apply where the Department of Defense (DoD) fully funds a contract or order. The amendment applies to contracts awarded and solicitations issued on or after January 30, 2014.
The amendment creates new FAR subpart 4.17, implementing Section 743(a) of Division C of the Consolidated Appropriations Act of 2010 (Pub. L. No. 111-117 (2010)), which requires executive agencies covered by the Federal Activities Inventory Reform Act, except DoD, to submit an annual inventory of service contractor activity to the Office of Management and Budget.
The new reporting requirements are based on contract type and dollar amount. Under FAR 4.1703:
  • Contract types that already require contractors to track labor hours to invoice the government will have lower dollar thresholds than fixed-price contracts. Contractors are required to report all cost-reimbursement, time-and-materials and labor-hour contracts above the simplified acquisition threshold (48 C.F.R. 2.101).
  • Contractors are required to report new fixed-price definite-delivery contracts awarded or issued at or above:
    • $2.5 million in fiscal year 2014;
    • $1 million in fiscal year 2015; and
    • $500,000 in fiscal year 2016.
  • Reporting requirements for indefinite-delivery contracts will be determined based on the expected dollar amount and type of the orders issued under the contracts. This includes:
    • indefinite-delivery indefinite-quantity contracts;
    • Federal Supply Schedule contracts;
    • Government-wide Acquisition contracts; and
    • multi-agency contracts.
  • Reporting is required for all first-tier subcontracts for services using the thresholds described above.
  • Existing indefinite-delivery contracts will be bilaterally modified within six months of the effective date of the final rule if they have:
    • a performance period that extends beyond October 1, 2013; and
    • $2.5 million or more remaining to be obligated to the indefinite-delivery contract.
The rule also adds two new contract clauses:
  • Service Contract Reporting Requirements.
  • Service Contract Reporting Requirements for Indefinite-Delivery Contracts.
For more information on government contracts, see Practice Note, Government Contracts: Reduced Risk Through Commercial Item Contracting.