Mandatory Antiterrorism Training for Government Contractors

The Defense Department just published a proposed rule that, if adopted and most certainly will be adopted, will require its contractors to conduct anti-terrorism training to personnel that require routine physical access to a Federally-controlled facility or military installation.

Routine physical access is considered more than intermittent access, such as when a contractor employee is required to obtain a CAC card (a common access card).

Once implemented, training will need to have been completed withing 30 days and annually thereafter. Training must be completed either through DoD-sponsored and certified computer or web-based distance learning instruction, or under the instruction of a qualified Level I anti-terrorism awareness instructor.

This requirement will apply to all types of contracts, cost-type, fixed price, commercial, simplified, etc. The criteria is not the type of contract but whether contractor employees will require routine physical access to military bases or other Federally-controlled facilities.

DoD does not believe the cost will be significant. The training materials will be developed and disseminated by DoD so contractors will not need to create their own training materials. Training duration at two hours per employee per year however are not specifically reimbursed by DoD. Under a cost-type contract, contractor employees will undoubtedly charge the contract. That doesn't work for other types of contracts. It would probably be prudent to include a provision for anti-terrorism training when putting together price proposals however.

You can get more information on Level 1 Antiterrorism Awareness Training at this website. Training topics include:

• surveillance detection fundamentals
• Government facility security fundamentals
• insider threat
• active shooter fundamentals
• residential security
• air travel 
• ground travel
• hotel security
• hostage survival

Now You Can Earn Your Legal Degree at Government Expense

An educational service agreement is not a contract, but is an ordering agreement under which the Government may order educational services. Educational service agreements provide for ordering educational services when the Government pays normal tuition and fees for educational services provided to a student by the institution under its normal schedule of tuition and fees applicable to all students generally, and enrollment is at the institution under the institution's normal rules and in courses and curricula which the institution offers to all students meeting admission requirements.

Until recently, DFARS (DoD FAR Supplement) contained a prohibition under which educational service agreements could not be used for tuition or other expenses for training in any legal profession with the exception of detailing commissioned officers to law schools. That prohibition was lifted last week (see: Class Deviation - Educational Service Agreements for Training in the Legal Profession). A second prohibition against using educational service agreements for special courses or special fees for Government students still exists.

Although technically not a contract, an educational service agreement certainly has the look and feel of a contract with Schedule Provisions and General Provisions, replete with many of the same FAR and DFARS clauses one would find in a DoD contract.

DFARS requires that the Government must establish procedures to review each educational service agreement at least once each year in order to incorporate changes to reflect requirements of any statute. If the educational institution does not agree to any required changes, the Government must termination the agreement.

We don't know why DoD lifted the prohibition against legal education unless it is expecting to need a new crop of attorneys soon.

At Last, Some Relief for DOE Contractors

For the past few years, the Department of Energy (DOE) has taken an extremely literal approach to contractors claiming overtime for employee training purposes. FAR 31.205-44(a) , Training and Education Costs, states that overtime compensation for training and education is unallowable. DOE has taken the position that there can be no exceptions to this rule. It didn't matter whether a contractor could show that it was more cost effective to pay overtime for training than to hire additional staff to cover contract-required services. It didn't matter that certain training was specifically mandated by contract and not discretionary. It didn't matter that the training contributed significantly to contractor employee health and safety. Contractors had to find a way to do all of this without incurring overtime.

More than a few DOE contractors have conducted specific analyses showing that there are circumstances where incurring overtime cost the Government less in the long run. When presented to DOE contracting officers however, they have stood firm in their interpretation that overtime for any kind of training was unallowable. Actually, some contracting officers were sympathetic and wished that they had the discretion to authorize overtime for training thus saving taxpayer dollars but found that there was no way to satisfy their overseers if they broached the subject.

Someone in DOE headquarters finally took some initiative and authorized a Class Deviation to FAR 31.205-44(a). You can read all of the details here but essentially, it authorizes overtime for training purposes so long as the contractor has written approval from an agency approving official (typically a contracting officer). Additionally, approval is required before the costs are incurred. Contractors are expected to submit requests with sufficient justification to gain contracting officer approvals.

The Class Deviation applies to existing contracts as well as future contracts so that contractors in the midst of a multi-year contract will be able to benefit.

No word yet on whether other agencies will follow suit. Possibly not because we are not aware of any other agency that has taken similar positions to that of DOE rank and file.

Privacy Act Training for Contractor Employees

Beginning in January, you might see a new clause showing up in solicitations and contracts. The new clause will mandate privacy training on contracts where contractor employees will have access to a system of records where they will create, collect, use, process, store, maintain, disseminate, disclose, dispose, or otherwise handle personally identifiable information, or contractor employees will be designing, maintaining, or operating such a system of records.

Personally identifiable information in this context means information that can be used to distinguish or trace an individual's identity, either alone or when combined with other information that is linked or linkable to a specific individual.

The new requirements, to be found in FAR 24.3, contains some very detailed and specific elements to be included in privacy training. It requires initial privacy training and annual privacy training thereafter for all employees having access to personally identifiable information. The training must include the following:

• The provisions of the Privacy Act of 1974 including penalties for violations of the Act
• The appropriate handling and safeguarding of personally identifiable information
• The authorized and official use of a system of records or any other personally identifiable information
• The restriction on the use of unauthorized equipment to create, collect, use, process, store, maintain, disseminate, disclose, dispose, or otherwise access personally identifiable information
• The prohibition against the unauthorized use of a system of records or unauthorized disclosure, access, handling, or use of personally identifiable information, and
• Procedures to be followed in the event of a suspected or confirmed breach of a system of records or unauthorized disclosure, access, handling, or use of personally identifiable information.

Contractors may prepare and provide its own training or use the training of another agency unless the contracting officer specifies that only its agency-provided training is acceptable.

Contractors will be required to maintain and, upon request, provide documentation of completion of privacy training for all applicable employees.

No contractor employee shall be permitted to have or retain access to a system of records, create, collect, use, process, store, maintain, disseminate, disclose, or dispose, or otherwise handle personally identifiable information, or design, develop, maintain, or operate a system of records, unless the employee has completed privacy training that, at a minimum, addresses the elements described above.

In some cases, there may be a very short window between the award of a contract and the need to begin accessing personally identifiable information. In those cases, contractors must have already developed and be prepared to deliver the required training quickly.

Read more about the proposed rule here.

Overtime Compensation for Employees Being Trained

The FAR cost principles contain a very brief and straight-forward statement concerning the payment of overtime to training and education. FAR 31.205-44 states that the cost of training and education that are related to the field in which the employee is working or may reasonable be expected to work are allowable except that overtime compensation for training and education is unallowable. There are also a few other exceptions that fall outside of this discussion.

The Government has been very inconsistent in applying this prohibition against paying overtime compensation however. In some cases, contracting officers have maintained that the training contemplated by this cost principle applies to discretionary training and not to training required by the terms of the contract (e.g. ethics, standards of conduct, safety, etc). Other contracting officers have asked contractors to demonstrate that overtime compensation for training is the most cost-effective way to achieve its training goals. For example, if you have to pay someone else overtime so that a person can leave his/her position for training on regular time, there is no cost impact to the contract. The Department of Energy has taken the extreme position that overtime payments for training purposes - any kind of training - are never allowable under any circumstances regardless of whether the outcome costs the Government more money.

Recently, someone posed a question to the Department of Defense's "Ask a Professor" website noting the general FAR prohibition against overtime for training stating that a contractor provided convincing evidence that paying overtime for training would ultimately save the Government significant costs.

Here's DoD's answer:

Many of the cost principles that relate to allowability of personnel costs mirror treatment of similar costs for Federal employees. In this case Title 5 CFR 410.402(a) states for Federal employees "Prohibitions. Except as provided by paragraph (b) of this section, an agency may not use its funds, appropriated or otherwise available, to pay premium pay to an employee engaged in training by, in, or through Government or non-government facilities." Section (b) that follows provides a list of exceptions that may be useful in requesting a waiver to FAR 31.205-44.

What are those exceptions referenced?

1. Continuation of premium pay. An employee given training during a period of duty for which he or she is already receiving premium pay for overtime, night, holiday, or Sunday work shall continue to receive that premium pay.
2. Training at night. An employee given training at night because situations that he or she must learn to handle occur only at night shall be paid by the applicable premium pay.
3. Cost savings. An employee given training on overtime, on a holiday, or on a Sunday because the costs of the training, premium pay include, are less than the costs of the same training confined to regular work hours shall be paid the applicable premium pay.

There are eight exceptions in total but these three are the ones most likely to apply to Government contractors.

So, according to DoD, there is a little wiggle-room in the prohibition against overtime for training purposes. That's good to know. Contractors just need to build a business case to show the efficacy of their decisions.

Energy Department Bans Overtime for Training

The Department of Energy (DOE) recently issued one of its Acquisition Letters concerning, this time, the allowability of overtime paid for training and education. See Acquisition Letter No. AL 2016-05 dated May 3, 2016, Subject: Determining if an activity is a FAR 31.205-44 training and education activity (and consequently rendering the overtime costs caused by the activity specifically unallowable); and Managing all overtime costs.

We've known about the long-simmering feud between the Department of Energy and some of its major contractors at various clean-up sites throughout the States over contractor overtime payments to employees for training and education purposes. DOE has now taken the step of formalizing its position in a policy that applies to all DOE contractors.

The policy letter itself is long, rambling, repetitious, confusing, and contradictory. But we'll try to explain it.

FAR 31.205-44(a) states that overtime cost incurred during training or education related to the field in which the employee is working or may reasonably be expected to work is unallowable. DOE calls this an "absolute" ban on overtime and compares it to the prohibition on costs of alcoholic beverages at FAR 31.205-51. But perhaps it's not an "absolute" prohibition because the Acquisition Letter then states that if training is a "side effect" of another activity, overtime is okay. Try that logic on alcoholic beverages (my beer was only a side effect of a legitimate business luncheon so it is allowable). Then DOE describes situations where it may be in the Government's best interest to pay overtime for training. If so, contractors can ask for pre-approval from the contracting officer. So, the prohibition doesn't seem to be absolute after all. If it were absolute, a contracting officer could not allow overtime for training under any circumstances. A contracting officer cannot make allowable, costs that are expressly unallowable.

Perhaps the most significant issue in this brouhaha the Acquisition Letter does not cover is training that is a condition of the contract. Some DOE contracts require contractors to maintain minimum certifications and their employees to maintain certain certifications and competencies. Contractors have sought to minimize production interruptions through the judicious use of overtime. The alternative, everyone acknowledges, is to hire additional staff to cover absences due to training, something that would increase costs to the Government. DOE's response to that argument has been ostrich-like.

Another argument contractors have raised is that the "training and education" required as a condition of a contract is not the same definition of "training and education" contemplated in the FAR 31.205-44 cost principle. We would defer to attorneys to argue that position but it does seem to have merit.

Fortunately, this DOE Acquisition Letter only applies to DOE contracts and then, only until it is challenged and tossed out.

SBA Has Free Training Resources for Government Contracting

If you are like us, you receive numerous offers (perhaps daily) of training, seminars, and conferences related to Government contracting. We've taken a few of these ourselves, participated in some, and a few years back offered training as part of business. Typically, these offerings are very good with excellent content and experienced and competent speakers. But they are also expensive. One could easily spend $2,000 and more to register for a two-day seminar/conference. If you have to travel to get there, that's added cost. There are alternatives to spending a lot of money. The Small Business Administration, for example, offers a number of FREE online training modules that cover many topics of interest for companies desiring to enter the Government contracting arena. Let's look at a few.

Learn How to Prepare Government Contract Proposals. This is a 30 minute course comes with a 50 page workbook and explains the Government's contract solicitation process and describes how to prepare a proposal. Topics include:

• Building the foundation
• Types of solicitations
• Standard forms
• How to actually write the proposal
• Cost and pricing
• Relationships and the wisdom of others
• Resources and assistance

You can burn through this course in 30 minutes but if you take the time to follow and study many of the "links" provided in the course, it will take longer.

Government Contracting 101, Parts 1,Part 2, and Part 3. These three courses lasting 30, 18, and 33 minutes each respectively, cover topics that help small business understand Government contracting programs. All three courses come with workbooks. Part 1 provides a small business introduction to Government contracting, describing prime and subcontracting assistance programs, SBA certification programs as well as woman-owned and veteran-owned business programs. Parts 2 and 3 provides a lot of information on how the Government buys and how to sell to the Government.

There are many other free training courses available in SBA's Learning Center (59 as of today). If you're interested in Government contracting, using SBA's resources is an economical way to proceed.

Privacy Training for Contractor Employees

Twice a year the FAR Councils issue a regulatory agenda summarizing regulations under development. The Report issued last week lists two regulations at the "proposed rule stage", 15 items at the "final rule stage" and three items considered "completed actions". We have reported on most of these upcoming changes at one time or another but there was one item that we had forgotten about. We didn't realize that it was still an active case. The public comment period to the proposed rule ended four years ago, December 2011.

The case deals with privacy training for contractors, contractors with employees who require access to a Government system of records, handle personally identifiable information, or design, develop, maintain, or operate a system of records on behalf of the Federal Government.

Under the proposed regulation, contractors are responsible for conducting initial privacy training and annual privacy training thereafter. The training shall, at a minimum, address the following seven topics:

1. The protection of privacy, in accordance with the Privacy Act
2. The handling and safeguarding of personally identifiable information
3. The authorized and official use of a Government system of records
4. Restrictions on the use of personally-owned equipment to process, access, or store personally identifiable information
5. The prohibition against access by unauthorized users and unauthorized use by authorized users, of personally identifiable information or systems of records on behalf of the Federal Government
6. Breach notification procedures (i.e. procedures for notifying appropriate individuals when privacy information is lost, stolen, or compromised) to minimize risk and to ensure prompt and appropriate actions are taken should a breach occur; and 
7. Any agency-specific privacy training requirements.

There are two versions of the applicable contract clause, one for contractor-developed training and the other for Agency-developed training. The option to have the contractor provide the training or the Government to provide the training is up to the Agency.  If Government provided, it will be the same training the Government provides to its own employees.

Training on the Go - iTunes University

The Defense Acquisition University (DAU) provides formal classroom courses and continuous learning modules to help the Defense acquisition workforce develop and manage acquisition programs, projects, and systems. The University operates and offers formal classroom courses out of several regional locations but also offers courses on-line (continuous learning environment). These courses cover the full range of contract management including cost analysis, EVMS, FAR, rates, terminations, market research, indirect costs, to name a very few. The courses, including the on-line course are generally restricted to Government personnel.

However, some of DAU's offerings are now available through iTunes University. To get there, open the iTunes Store and search for "Defense Acquisition University" or drill down through the menu system. There are about 40 offerings at present with plans to add more. All of them are free.

The materials posted to iTunes University by DAU are not comprehensive in nature although we found a couple of nuggets; one on EVMS which provides good overview of what is required and another on COR (Contracting Officer Representative) duties and functions. Many of them are too narrowly focused to be useful for generalized training needs. Also, audio and video quality are not the greatest.

So, the next time you travel, load up your iPod/iPad with some DAU training material and redeem some of the "downtime".

FAR to Require Contractors to Conduct Privacy Training

The FAR Councils are proposing to amend the Federal Acquisition Regulations (FAR) to add a new section related to privacy training. It will require contractors to identify employees who require access to a Government system of records, handle personally identifiable information, or design, develop, maintain, or operate a system of records on behalf of the Federal Government, and then to ensure that those employees complete privacy training immediately upon award of the procurement and at least annually thereafter. In addition, contractors are required to keep records indicating that employees have completed the required training and, upon request, provide those records to the Government.

The proposal specifies the minimum privacy training coverage as follows:

1. The protection of privacy, in accordance with the Privacy Act (5 USC 552s)
2. The handling and safeguarding of personally identifiable information
3. The authorized and official use of a Government system of records
4. Restrictions on the use of personally-owned equipment to process, access, or store personally identifiable information
5. The prohibition against access by unauthorized users, and unauthorized use by authorized users, of personally identifiable information or systems of records on behalf of the Federal Government
6. Breach notification procedures (i.e., procedures for notifying appropriate individuals when privacy information is lost, stolen, or compromised) to minimize risk and to ensure prompt and appropriate actions are taken should a breach occur
7. Any agency-specific privacy training requirements.

The FAR councils estimate that this requirement will affect about 1,500 small businesses in additions to an unknown number of other firms but does not expect that impacted contractors will find the requirement burdensome.

Training Opportunity in June - Seattle Area

Registration is now open for PNWC's training session on Business System Fundamentals for Government Contracting. This two-day session on June 22nd and 23rd will focus on four key compliance areas that are essential for performing Government contracts:

• Accounting systems
• Timekeeping systems
• FAR Part 31 Cost Principles
• Indirect expense rates

Click here to download the brochure, registration forms, and other information.

Midwest Training Opportunies

For government contractors, prospective government contractors and anyone interested in exploring Government contracting opportunities, we heartily recommend The Contracting Academy (TCA) based in Oklahoma City as a source to meet your training needs and requirements. TCI offers affordable and targeted training opportunities related to Government contracting as well as opportunities to network with key like-minded professionals. Courses are presented by industry specialists.

We were honored to present "An Introduction to Government Contracting" at a recent TCA event in Oklahoma City. The organization, facilities, meals, and refreshments were absolutely first class. The participants were actively engaged and either desired to enter the Government contracting areana or expand upon their company's existing Government work. Here's the class photo.

If interested, contact TCA on the web or call Kay Bills directly at 405-603-5306.

You might also enjoy reading this news article concerning TCA.