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Proposed Changes to Contractor Purchasing System Clause

The Department of Energy (“DOE”) is proposing to amend the Department of Energy Acquisition Regulations (“DEAR”) to increase dollar thresholds in its contractor purchasing system clause for management and operating contracts to conform to Federal Acquisition Regulation (“FAR”) Subpart 28.1. Additionally, DOE is revising the DEAR in accordance with a class deviation addressing Buy American Act non-availability determinations.

Currently, DEAR section 970.5244-1, Contractor purchasing system, paragraphs (f)(1) through (f)(3) do not presently reflect the applicable dollar threshold in FAR 28.102-2(b) and (c). This proposed rule replaces the dollar amount in these paragraphs with reference to title 48 of the Code of Federal Regulations (“CFR”), sections 28.102-2(b) and (c), as appropriate.

Section 970.5244-1, paragraph (g) requires contractor purchasing systems on management and operating contracts to comply with the Buy American Act. Pursuant to a DEAR class deviation dated August 29, 2011, the proposed rule increases the dollar threshold in this paragraph from $100,000 to $500,000 for:

(1) Determinations of individual item non-availability requiring the prior concurrence of the Head of Contracting Activity (“HCA”); and

(2) HCA authorization of management and operating contractors with approved purchasing systems to make determinations of non-availability for individual items.

The DOE has completed the required review and determined that the proposed rules meet all requirements and standards, and does not require any additional action.

Section 970.5244-1, paragraphs (f)(1) through (f)(3) and paragraph (g) as revised would read as follows:

(f) * * * (1) The Contractor shall require performance bonds in penal amounts as set forth in 48 CFR 28.102-2(b)(1) for all fixed-price and unit-priced construction subcontracts in excess of the amount set forth in 48 CFR 28.102-2(b). * * *

(2) For fixed-price, unit-priced and cost-reimbursement construction subcontracts in excess of the amount set forth in 48 CFR 28.102-2(b), a payment bond shall be obtained on Standard Form 25A modified to name the Contractor as well as the United States of America as obligees. The penal amounts shall be determined in accordance with 48 CFR 28.102-2(b)(2).

(3) For fixed-price, unit-priced and cost-reimbursement construction subcontracts in an amount falling within the range in 48 CFR 28.102-2(c), the Contractor shall select two or more of the payment protections in 48 CFR 28.102-1(b), giving particular consideration to the inclusion of an irrevocable letter of credit as one of the selected alternatives.

(g) Buy American. The Contractor shall comply with the provisions of the Buy American Act as reflected in 48 CFR 52.225-1 and 48 CFR 52.225-9. The Contractor shall forward determinations of non-availability of individual items to the DOE Contracting Officer for approval. Items in excess of $500,000 require the prior concurrence of the Head of Contracting Activity. If the Contractor has an approved purchasing system, the Head of the Contracting Activity may authorize the Contractor to make determinations of non-availability for individual items valued at $500,000 or less.

Written comments on the proposed changes must be received by 11:59 PM EDT, on May 26, 2016. Comments can be submitted to regulations.gov, via email to DEALrulemaking@hq.doe.gov, or via snail mail to U.S. Department of Energy, Office of Acquisition Management, MA-611, 1000 Independence Avenue SW., Washington, DC 20585.  Note all comments will be made public and posted online after review by the Department of Energy.

For additional guidance on the proposed changes to the contractor purchasing system or submitting comments, contact a member of our Government Contracting Services Group.

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