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Stimulus Contractors Face New Reporting Rules

Tuesday, July 13, 2010

First-tier subcontractors working on contracts of $25,000 or more funded by the Recovery Act have significant new reporting requirements, as do the prime contractors for whom they work, under an interim rule issued by several federal agencies.

The interim rule, issued July 2, amends Federal Acquisition Regulation (FAR) Case 2009–009, published in March 2009, to revise the clause at FAR 52.204–11. The rule does not require renegotiation of existing Recovery Act contracts that include the clause dated March 2009; it would apply to all new solicitations and contracts issued on or after July 2.

The original clause imposed a public reporting burden on prime contractors and, in a more limited way, on their first-tier subcontractors. The interim rule will increase the burden on both prime contractors and first-tier subcontractors who receive new awards.

About 80% of contracts funded by the American Recovery and Reinvestment Act have already been awarded, which should blunt the rule’s impact, the interim rule says. The rule states, however, that the additional reporting requirements “may have a significant economic impact on a substantial number of small entities.”

“In addition to the burden of first-tier subcontractors having to collect and report jobs information to the prime contractor, there is also the burden on the prime contractor for preparing and monitoring subcontractors who will have to collect and report this information to the prime,” the interim rule states.

As a “significant regulatory action,” the interim rule requires first-tier subcontractors to report jobs information to the prime contractor for reporting into http://FederalReporting.gov.

Subcontractors must report their physical address, their performance address, and “a narrative description of the employment impact of work funded by the Recovery Act.”

“At a minimum,” according to the rule, the subcontractor will provide an estimate of the number of jobs created or retained by the contract in the United States and outlying areas, as well as “a brief description” of those jobs.

An example of how to calculate the number of jobs is available at http://www.whitehouse.gov/omb/recovery_faqs_contractors.

Prime contractors will be required to report similar information for their subcontractors on or before the 10th day after the end of the calendar quarter in which the prime contractor received the award, and quarterly thereafter.

The interim rule applies to all federal contractors regardless of size or business ownership.

The revised clause also refers contractors and their first-tier subcontractors to a set of Frequently Asked Questions (FAQs) available online. Contractors subject to 52.204–11 were initially notified of the FAQs through a Federal Register notice (74 FR 48971), published Sept. 25, 2009.

The interim rule comes from the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

Public comments on the measure must be submitted by Aug. 31, 2010, to be considered for final formulation of the rule.

Comments may be submitted online through the Federal eRulemaking portal (http://www.regulations.gov); by fax to (202) 501–4067; or by postal mail to the General Services Administration, Regulatory Secretariat (MVCB), 1800 F Street NW, Room 4041, ATTN: Hada Flowers, Washington, DC 20405.