Two New Clauses Add Requirements for Service Contract Reporting

Federal Acquisition Circular 2005-72 contains a final rule (FAR Case 2010-010), effective January 30, that amends the Federal Acquisition Regulation to require service contractors for executive agencies to submit information annually in support of agency-level inventories for service contracts. The requirement does not apply if the Department of Defense fully funds the contract or order.

Inventory of Activities. The rule implements Section 743(a) of Division C of the Consolidated Appropriations Act, 2010 (PL 111–117), which requires executive agencies covered by the Federal Activities Inventory Reform Act (PL 105-270), except DoD, to submit to the Office of Management and Budget annually an inventory of activities performed by service contractors. The public will be able to access the information reported. The rule creates a new FAR Subpart 4.17, Service Contracts Inventory, and adds two contract clauses, FAR 52.204-14, Service Contract Reporting Requirements, and FAR 52.204-15, Service Contract Reporting Requirements for Indefinite-Delivery Contracts.

New Requirements. FAR 4.1703 sets out the reporting requirements as follows:

  • Contract types (e.g., cost reimbursement, time-and-materials, and labor-hour contracts), which already require contractors to track labor hours closely in order to invoice the government, will have lower dollar thresholds than fixed-price contracts. Contractors will now be required to report on all cost-reimbursement, time-and-materials, and labor-hour contracts and orders above the simplified acquisition threshold.
  • Contractors will be required to report on new fixed-price definite-delivery contracts at or above $2.5 million in fiscal year 2014, $1 million in FY 2015; and $500,000 in FY 2016 onwards.
  • For indefinite-delivery contracts including, but not limited to, indefinite-delivery indefinite-quantity contracts, Federal Supply Schedule contracts, governmentwide acquisition contracts, and multi-agency contracts, reporting requirements will be determined based on the expected dollar amount and type of the orders issued under the contracts.
  • First-tier subcontracts for services will be reported using the phase-in thresholds.
  • Existing indefinite-delivery contracts will be bilaterally modified within 6 months of the effective date of the final rule if sufficient time and value remain on the base contract, which is defined as a performance period that extends beyond October 1, 2013, and $2.5 million or more remaining to be obligated to the indefinite-delivery contract.

Effective Date. These new requirements apply to solicitations issued and contracts awarded on or after January 30, 2014. Here is a listing of all the regulations impacted by this rule: FAR 1.106, FAR 4.1700 through FAR 4.1705, FAR 8.404, FAR 17.504, FAR 37.103, FAR 52.204-14, FAR 52.204-15, and FAR 52.212-5.

About George Gullo

George Gullo is an attorney editor in the Government Contracts group at Wolters Kluwer Law and Business. George serves as the principal editor of Cost Accounting Standards Guide and supports all of the group’s print and electronic publications, as well as legal research tools, including the Government Contracts Reporter, Board of Contract Appeals Decisions, and the FAR and DFARS Matrix Smart Charts. With more than 20 years experience in the legal publishing industry, including over 10 years in the government contracts area, George also has a background in legal and business transactions. He is a graduate of DePaul University College of Law and a licensed Illinois attorney.
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