DATE: March 15, 2000

FROM: Barry McVay, CPCM

SUBJECT: Army; Report On Use of Contractor Employees to Provide Services

SOURCE: Federal Register, March 15, 2000, Vol. 65, No. 51, page 13906

AGENCIES: Department of the Army

ACTION: Interim Rule

SYNOPSIS: The Army is seeking comments on its implementation of the Fiscal Year 2000 Department of Defense Authorization Act (Public Law 106-65), Section 343, Report on Use of Employees of Non-Federal Entities to Provide Services to Department of Defense. Section 343 directs the Secretary of Defense to provide to Congress not later than March 1, 2001, a report summarizing the number of direct labor and indirect labor work year equivalents performed by contractors providing services to the Department of Defense (DOD) in the FY2000, categorized by federal supply class or service code, appropriation supporting the services, and major organizational element of DOD procuring the services.

DATES: This interim rule is effective March 15, 2000. Comments on the interim rule must be submitted not later than May 15, 2000.

ADDRESSES: Comments should be submitted to the Office of the Assistant Secretary of the Army for Manpower & Reserve Affairs (ASA (M&RA), Attention SAMR-FMMR, Rm. 2A672, Washington, DC 20310.

FOR FURTHER INFORMATION CONTACT: Dr. John Anderson, SAMR-FMMR, 703-614-8247, e-mail: John.Anderson@hqda.army.mil; or John R. Conklin, SAAL-ZP, e-mail: John.Conklin@sarda.army.mil.

SUPPLEMENTAL INFORMATION: Section 343 of Public Law 106-65 requires the Secretary of Defense to report to Congress by March 1, 2001, "the use during the previous fiscal year of non-Federal entities to provide services to the Department of Defense." It requires that the information be collected from existing data collection and reporting systems "to the extent practicable," and that the information "(1) specify the number of work year equivalents performed by individuals employed by non-Federal entities in providing services to the Department, including both direct and indirect labor attributable to the provision of the services; (2) categorize the information by Federal supply class or service code; and (3) indicate the appropriation from which the services were funded and the major organizational element of the Department procuring the services." However, the Secretary of Defense may not require non-federal entities (that is, contractors) to provide information beyond that which is currently provided to DOD "except for the number of direct and indirect work year equivalents associated with Department of Defense contracts, identified by contract number, to the extent this information is available to the contractor from existing data collection systems."

The Army is one of DOD's services and is to provide this information to the Secretary. The Army has decided that "the only way to collect the required information economically, in a timely way, accurately and credibly, with the least burden on the public and expense to the Government, is to request contemporaneous submission directly from affected contractors."

Therefore, the Army will direct its contracting officers to include in new solicitations and contracts, and any existing contract bilaterally modified, a requirement that contractors providing services to the Army identify, itemize, and report their direct labor hours of support, and that the contractors provide a related composite indirect labor rate so the Army can estimate the relevant indirect hours. "This submission is expected to be coincident with requests for payment (e.g., contract vouchers, invoices, or requests for progress payments)...For security and convenience, a secure web site will be established for this purpose" (http://contractormanpower.us.army.mil). The labor hour information provided will be protected as company proprietary data.

Contractors with contracts awarded before March 15, 2000, will be asked to report from October 1, 1999, or the date the contract began, whichever is later. Contractors will be required to provide the following information:

However, the following contracts and situations will be exempt from this reporting requirement:

The Army is adding this interim rule to its regulations in Title 32 of the Code of Federal Regulations, Chapter V, as Subchapter L -- Army Contracting, Part 668 - Contractor Manhour Reporting Requirement (consisting of Sections 668.1, General, and 668.2, Contract Administration Data).

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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