End of Fiscal Year Procurement extent possible when procuring goods and Strategies services. FAR Subpart 6.1. But there are It is that time once again, as we approach six general exceptions to the requirement the end of the government’s fiscal year, for for full and open competition, and of those, agency procurement personnel to try to two may be especially helpful when liquidate appropriated funding that has not planning end-of-year expenditures: yet been programmed, in order to avoid a (1) Simplified acquisition procedures potential budget reduction in the following and (2) statutorily authorized contracting fiscal year. At least three things will be procedures. happening in most government procurement Also, there are seven other procurement shops over the last few months of the year: scenarios where agencies may elect to use (1) a concerted push to complete “other than full and open competition.” acquisitions that were started earlier in the Among those is the scenario where there is year to get those contracts awarded before but one source available to meet the September 30; (2) a close review of agency agency’s requirements within the time frame budgets to identify unobligated procurement specified. FAR 6.302-1. funds; and (3) a fresh look at program requirements to identify potential Contracts Awarded Using the Simplified requirements not yet funded. These actions Acquisition Procedures are undertaken so that agencies can fully Agencies may use simplified acquisition spend down their appropriated funding in procedures (SAT) when the contract value order to avoid a reduction in future funding. falls below certain thresholds that are The challenge that is usually encountered is dependent on the nature of the requirement. how to fill a new or expanded requirement in One such requirement that gives rise to an such a short time frame, knowing that a increased threshold involves support of competitive procurement could take a year “contingency” operations. A contingency or more to conduct. So what can agencies operation is a military operation that do to fully liquidate appropriated funding “[1] Is designated by the Secretary of short of having to conduct a full and open Defense as an operation in which members competition or even a restricted of the armed forces are or may become competition? Well, there are exceptions involved in military actions, operations or that enable agency personnel, under limited hostilities against an enemy of the United circumstances, to forgo competition. States or against an opposing military force; We discuss below several potentially or [2] results in the call or order to, or applicable exceptions that could provide the retention on, active duty members of the agency a path forward for funding end-of- uniformed services … or any other provision year requirements without having to conduct of law during a war or during a national a formal competition. emergency declared by the President or Congress.” 10 U.S.C. § 101(a)(13). At Exceptions to the Requirement for Full present, DOD is involved in hostilities in at and Open Competition least two known foreign countries One of the fundamental policies underlying (Afghanistan and Iraq), both of which the Federal Acquisition Regulation (FAR) is involve hostile actions directed at the U.S. that federal agencies must utilize and its allies. As such, troops from any competitive procedures to the maximum National Guard installation may, at any time,

become involved in such actions. This CONUS contracts and $1 million for arguably gives rise to a justification to use OCONUS contracts. the upper SAT limits associated with 3. Simplified Acquisition Threshold for contingency operations. Commercial Items

The determination of whether the The FAR also authorizes awards of up to requirements support a contingency $6.5 million for the acquisition of operation must be made by the procuring commercial items (supplies and services). agency. In the absence of a justification to The higher threshold requires additional use the upper SAT limits for contingency agency documentation, including a written operations, the lower thresholds would justification for any sole source award. FAR govern (micro-purchase threshold and SAT 13.501(a)(1). threshold set at $150K). Statutory Contracting Procedures The Federal Supply Schedule (FSS) 1. Contracts Awarded at or Below the program, also known as the GSA Schedules Micro-purchase Threshold Program or the Multiple Award Schedule The micro-purchase threshold is generally (MAS) Program, is expressly authorized by $3,000 per order, except for acquisitions for statute. 41 U.S.C. § 253, 40 U.S.C. § 501. services or supplies to be used in support of Agencies placing orders against an FSS contingency operations, in which case the contract are exempt from the full and open limit is $15,000 for contracts awarded and competition requirements and immune from performed inside the continental U.S. FAR Parts 13, 14, 15 and 19. Blanket (CONUS), and $30,000 for contracts Purchase Agreements (BPAs) and orders awarded and performed outside the placed against an MAS contract under FAR continental U.S. (OCONUS). However, the Subpart 8.4 are considered to be issued micro-purchase threshold is reduced to using full and open competition. $2,500 per order for services that are For the acquisition of supplies and services subject to the Services Contract Act (SCA). that are listed on the FSS contract at fixed Certain services, such as medical and unit prices for specific tasks or activities, dental, should be exempt from SCA such as diagnostic or clinical treatment coverage under the professional and services, orders exceeding the simplified administrative services exemption. 29 acquisition threshold must be competed C.F.R. § 4.156. If the contract is performed among schedule holders offering the same primarily by administrative or professional services. FAR 8.405-1(d)(1); FAR 8.405- personnel or by executives, the entire 2(c)(3)(i). contract should be exempt from SCA ______coverage. The Department of Labor informally applies an 80% rule of thumb, For more information, please contact: meaning that so long as not less than 80% of the contract services are performed by Hilary S. Cairnie exempt employees, the contract is excluded National Co-Leader, Government Contracts from SCA coverage. Baker & Hostetler LLP 1050 Connecticut Avenue, Suite 1100 2. Contracts Awarded at the Simplified Washington, DC 20036 Acquisition Threshold 202.861.1668 The simplified acquisition threshold is 202.352.4100 generally $150,000 per order, except for acquisitions for services or supplies to be [email protected] used in support of contingency operations, in which case the limit is $300,000 for

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