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Panoptic Enterprises' FEDERAL CONTRACTS DISPATCH

DATE: September 27, 2001

SUBJECT: Veterans Affairs Acquisition Regulation (VAAR); Construction and Architect-Engineer Contracts

SOURCE: Federal Register, September 27, 2001, Vol. 66, No. 188, page 49331

AGENCIES: Department of Veterans Affairs (VA)

ACTION: Proposed Rule

SYNOPSIS: VA is proposing to update the VAAR coverage on construction and architect-engineer (A-E) contracts, and to add coverage regarding the authority of the National Cemetery Administration to award A-E contracts. In addition, this proposed rule would update position titles, make minor grammatical corrections and revisions, revise and update section numbers and titles, relocate material to correspond to the Federal Acquisition Regulation (FAR), and delegate authority.

EDITOR'S NOTE: The VAAR is Chapter 8 of Title 48 of the Code of Federal Regulations. It is available on the Internet at http://www.va.gov/oa&mm/vaar/.

DATES: Comments on this proposed rule should be submitted on or before November 26, 2001.

ADDRESSES: Send written comments to Director, Office of Regulations Management (02D), Department of Veterans Affairs, 810 Vermont Avenue, NW, Room 1154, Washington, DC 20420; fax: 202-273-9289; e-mail: OGCRegulations@mail.va.gov. Comments should indicate that they are submitted in response to "RIN 2900-AJ56."

FOR FURTHER INFORMATION CONTACT: Don Kaliher, Acquisition Program Management Team (95A), Office of Acquisition and Materiel Management, Department of Veterans Affairs, 810 Vermont Ave., NW, Washington, DC 20420, 202-273-8819.

SUPPLEMENTAL INFORMATION: Though VAAR Part 852, Solicitation Provisions and Clauses, contains all VAAR provisions and clauses, it does not, in most cases, follow the organization used in the FAR regarding the location of the prescriptions. This proposed rule would reorganize the VAAR to correspond to the organization of the FAR by relocating the existing prescriptions or placing the new proposed prescriptions in the appropriate parts of the VAAR. Also, the proposed rule would make many miscellaneous changes throughout the VAAR.

The following are the main changes to the VAAR being proposed:

• VAAR 852.236-70, Clauses and Provisions for Fixed-Price Construction Contracts, currently requires that all clauses prescribed by VAAR Part 836, Construction and Architect-Engineering Contracts, be included in all construction contracts regardless of dollar value. This proposed rule would add prescriptions in VAAR Part 836 that require the use of the following clauses only if the solicitation or contract is expected to exceed the micro-purchase threshold (currently $2,000 for construction) because the FAR does not require the use of any clauses in contracts below the micro-purchase threshold and this change would correspond to the FAR:
  
        VAAR 852.236-76, Correspondence
        VAAR 852.236-77, Reference to "Standards"
        VAAR 852.236-78, Government Supervision
        VAAR 852.236-80, Subcontracts and Work Coordination
        VAAR 852.236-84, Schedule of Work Progress
        VAAR 852.236-85, Supplementary Labor Standard Provisions
        VAAR 852.236-86, Worker's Compensation
        VAAR 852.236-88, Contract Changes -- Supplement
        VAAR 852.236-91, Special Notes
  
  In addition, this proposal would add a prescription at new VAAR 836.573, Daily Report of Workers and Materials, to revise the prescription of VAAR 852.236-79, Daily Report of Workers and Materials, only if the solicitation or contract is expected to exceed the simplified acquisition threshold (currently $100,000). Use of this clause would be optional in lesser dollar value contracts. VAAR 852.236-79 requires information from the contractor that is critical to the proper administration of more complicated, larger dollar value contracts, but may not be necessary on smaller, less complicated projects.
  
  Finally, the following clauses would be required only if the solicitation or contract includes the FAR clauses that these clauses supplement because there is no reason to include them if the solicitation or contract does not also include the applicable FAR clauses:
  
        VAAR 852.236-71, Specifications and Drawings for Construction
        VAAR 852.236-72, Performance of Work by the Contractor
        VAAR 852.236-74, Inspection of Construction
        VAAR 852.236-82, Payment Under Fixed-Price Construction Contracts (Without NAS [Network Analysis System])
        VAAR 852.236-83, Payment Under Fixed-Price Construction Contracts (Including NAS)
  
  
• Because paragraph (c) of FAR 36.203, Government Estimate of Construction Costs, restricts disclosure of the overall amount of the government's construction cost estimate except as permitted by agency regulations, a new VAAR 836.203, Government Estimate of Construction Costs, would prohibit the disclosure of the government's estimate until after contract award. Then the estimate may be disclosed upon request.
  
  
• Current VAAR 836.208, Concurrent Performance of Firm-Fixed-Price and Other Type of Construction Contracts, restricts the authority to approve the use of cost-plus-fixed-fee, price-incentive, or other cost-variation type contracts concurrently with firm-fixed-price contracts to the Chief Facilities Management Officer or the Under Secretary for Health. Since FAR 36.208, Concurrent Performance of Firm-Fixed-Price and Other Type of Construction Contracts, delegates this authority to the head of the contracting activity, VAAR 836.208 would be removed, thus making the FAR delegation of authority applicable to VA.
  
  
• FAR 36.209, Construction Contracts with Architect-Engineer Firms, requires the approval of the head of the agency or authorized representative before a contract for construction can be awarded to the A-E firm that designed the project. FAR 36.209 does not specify whether it applies to both design-bid-build projects (in which the design and construction are sequential and contracted for separately) and design-build projects (in which both the design and construction work are combined in a single contract with one contractor), as defined in FAR 36.102, Definitions, or to design-bid-build projects only. Since such approval would not be necessary with a design-build project, a statement would be added to VAAR 836.209 stating that the provisions of FAR 36.209 and VAAR 836.209 only apply to design-bid-build projects, and not to design-build projects.
  
  
• FAR 36.211, Distribution of Advance Notices and Solicitations, states that advance notices and solicitations should be distributed to reach as many prospective offerors as practicable and provides other guidance to contracting officers on how to accomplish this. VAAR 836.211 currently authorizes the VA Central Office Project Manager to determine how VA Central Office construction specifications will be distributed. It is proposed that VAAR 836.211 be removed because there is no need for VA to have a separate section covering distribution of advance notices and solicitations applicable only to Central Office.
  
  
• VAAR 836.213-4, Notice of Award, would be added to require that the contracting officer provide a notice of award (letter of acceptance) for any construction contract in excess of $25,000. Though the FAR specifies that the contracting officer shall make award by written notice when using sealed bid procedures (see FAR 14.408-1, General) and by furnishing the executed contract or other notice of award when using negotiated procedures (see FAR 15.504, Award to Successful Offeror), FAR Part 13 does not specify the method of notice when using simplified procedures. FAR 36.213-4 requires the contracting officer to provide certain information to the contractor when a notice of award is issued, including information on bonds. VA believes that a letter of acceptance is the best way to provide that information to the contractor.
  
  
• VAAR 836.371, Notice to Proceed, currently requires the contracting officer to send the "notice of proceed" (the letter sent to contractors on construction contracts establishing the start date for contract work) by certified mail, return receipt requested, to provide proof of delivery. Other methods of delivery, such as overnight package delivery services, provide proof of delivery and may be less expensive or less administratively burdensome than certified mail. Therefore, VAAR 836.371 would be redesignated as VAAR 836.213-70 and revised to allow the contracting officer to use any delivery method that would provide proof of delivery.
  
  
• The introductory text of VAAR 852.236-88, Contract Changes -- Supplement, requires that all proposed construction contract changes costing between $100,000 and $500,000 must be accompanied by certificates of current cost or pricing data. This introductory text would be moved to new VAAR 836.578, Contract Changes -- Supplement, and revised to require certificates of current cost or pricing data only if the proposed change exceeds $500,000. (EDITOR'S NOTE: Federal Acquisition Circular (FAC) 97-20 increased the threshold for obtaining cost or pricing data under the Truth in Negotiations Act from $500,000 to $550,000, so the VAAR dollar threshold should be changed correspondingly. For more on this, see the October 11, 2000, FEDERAL CONTRACTS DISPATCH "Federal Acquisition Circular (FAC) 97-20, Veterans Entrepreneurship and Truth in Negotiations Act Threshold.")
  
  
• FAR 36.602-2, Evaluation Boards, states that agencies shall provide for one or more A-E evaluation boards. VAAR 836.602-2 delegates authority to, and provides procedures for the establishment of A-E evaluation boards by, the Office of Facilities Management (OFM) and VA medical facilities. VAAR 836.602-2 would be amended to delegate the same authority to the National Cemetery Administration (NCA).
  
  Also, VAAR 836.602-2 currently provides that the head of the contracting activity (HCA) or alternate shall serve on A-E evaluation boards at VA field facilities. However, not all VA field facilities have an HCA on site. Therefore, VAAR 836.602-2 would be revised to allow the senior contracting officer to serve on the board if an on-site HCA is not present.
  
  
• FAR 36.602-5, Short Selection Process for Contracts Not to Exceed the Simplified Acquisition Threshold, permits the use of either of two short selection procedures for A-E contracts not expected to exceed the simplified acquisition threshold. VAAR 836.602-5 currently requires the approval of specified VA officials to use those procedures. VAAR 836.602-5 would be revised to remove the approval requirements and to simply authorize the use of the short selection procedures.
  
  
• FAR 36.603, Collecting Data On and Appraising Firms' Qualifications, requires offices or permanent evaluation boards, to maintain an A-E qualifications file. New VAAR 836.603 would state that the following would be responsible for maintaining this file: the Chief Facilities Management Officer for VA Central Office; the Director, Technical Support Service, for the National Cemetery Administration; and the Chief, Engineering Service, for field facilities.
  
  
• FAR 46.710, Contract Clauses, authorizes agencies to use FAR 52.246-21, Warranty of Construction, if its use has been approved under agency procedures. The VAAR does not currently contain agency procedures for use of FAR 52.246-21. Instead, VAAR 852.236-75, Guaranty, which is similar to FAR 52.246-21, is used. VAAR 852.236-75 would be deleted except for paragraph (f) and Supplement I. Paragraph (f), which provides additional protections not found in FAR 52.246-21, would be redesignated as a new VAAR 852.246-1, Special Warranties. Supplement I, which is currently included in construction contracts that include guarantee period services and provides remedies if the contractor fails to furnish the guarantee period services, would be redesignated as VAAR 852.246-2, Warranty for Construction -- Guarantee Period Services, to supplement FAR 52.246-21, which does not contain provisions addressing guarantee period services.
  
  
• VAAR 852.236-89, Buy American Act, cites FAR 52.225-5, Buy American Act -- Construction Materials, and places extensive limitations on the acceptance of any foreign material on a VA construction project, regardless of the country of origin. However, FAC 97-15 rewrote FAR Part 25, Foreign Acquisition, and reorganized all the provisions and clauses. Old FAR 52.225-5 was converted into two new clauses, FAR 52.225-9, Buy American Act -- Balance of Payment Program -- Construction Materials, and FAR 52.225-11, Buy American Act -- Balance of Payment Program -- Construction Materials Under Trade Agreements. These two clauses address the provisions of the Trade Agreements Act (TAA) and the North American Free Trade Agreement (NAFTA), which provide that construction materials from TAA or NAFTA designated countries over certain dollar thresholds will be exempt from the Buy American Act restrictions. Therefore, VAAR 852.236-89 would be revised to cite FAR 52.225-9 and FAR 52.225-11, and revised to correspond to the FAR changes and comply with TAA and NAFTA.
  
  
• VAAR 852.236-91, Special Notes, currently states that "signing of the bid shall be deemed to be a certification by the bidder..." The Clinger-Cohen Act of 1996 precludes agencies from requiring certifications in agency procurement regulations except those required by law or as approved by the head of the agency. To comply with the Clinger-Cohen Act, the word "certification" would be changed to "representation." In this manner, VA would still be able to collect the information and be in compliance with the Clinger-Cohen Act.

In addition, the method used in the VAAR to identify alternate clauses would be revised to match the method used in the FAR. For example, the introductory text for VAAR 852.236-81, Work Coordination (Alternate Provision), states that it may be substituted for paragraph (b) of VAAR 852.236-80, Subcontracts and Work Coordination. In other words, VAAR 852.236-81 is an alternate for VAAR 852.236-80. Under this proposed rule, VAAR 852.236-81 would be deleted, and the text would be redesignated as Alternate I to VAAR 852.236-80. Similar changes would be made to the other VAAR alternates and supplements to match the way alternates are used in the FAR.

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

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