MODULE 1:GUIDING PRINCIPLES, AUTHORITY, ETHICS, AND CONTROLS

This chapter provides procedures, guidance and information on authority, applicability of federal statues, ethics, and other controls related to Federal Deposit Insurance Corporation (FDIC) acquisitions.

1.202 RESERVED

1.203 RESERVED

1.204 RESERVED

1.205 Modifications of Procurement Policy

The ASB Associate Director, DOA, is authorized to approve one-time deviations to procurement policy. Such deviations are accomplished through the granting of a waiver, which is processed via email. A Contracting Officer prepares the request for waiver and must follow the format in the Request for Waiver- Email Template found at http://fdic01/division/DOA/buying/acquisitiondocuments/acqdocs.html. The applicable Assistant Director must acknowledge his/her concurrence on the email and include any additional comments before submitting the request for waiver to the ASB Associate Director for approval. Any approval or coordination required from other Divisions or Offices, or waivers to other Directives, must be obtained prior to submission, and must be included in the waiver request.

1.206 RESERVED

1.207 RESERVED

1.208 Application of Federal Statutes to the FDIC Contracting Program

1.208(a) Overview

The federal statutes, regulations and executive orders described below apply to the FDIC contracting program and must be considered in the acquisition planning process. Not all laws apply to all contracts. Where a particular law applies only to a specific type of contract (e.g., some laws apply only to contracts for services), this is stated. If no such limitation is stated, the law applies to all types of contracts. Some laws apply only when FDIC is contracting in its corporate capacity and are so identified; otherwise, the laws apply to FDIC in all of its capacities. Lastly, the dollar thresholds that trigger the application of particular statutes, and the particular procedures for implementation of the requirements of the various statutes, are given.

1.208(b) RESERVED

1.208(c) Applicable Statutes and Executive Orders

(1) Labor Laws: Labor laws apply only to contracts that FDIC enters into in its corporate capacity.

§ Service Contract Act (SCA) of 1965 – 41 USC §351 et seq.: Guidance and information on the SCA is provided at Acquisition Policy Manual (APM) 5.11 and Procedures, Guidance and Information (PGI) 5.11.

§ Contract Work Hours and Safety Standards Act – 40 USC §3701 et seq.: Generally requires that contracts for the employment of laborers and mechanics provide for a forty (40) hour work week and for payment of overtime at a minimum of one and a half (1½) times the basic rate of pay for all hours worked in excess of forty (40) hours in a work week. It applies to contracts and subcontracts greater than $100,000 in value.

§ Davis-Bacon Act – 40 USC §3141 et seq.: Guidance and information on the Davis-Bacon Act is provided at PGI 5.1104.

§ 40 USC §3131 et seq. (formerly known as the Miller Act): Requires that contractors provide payment and performance bonds for construction contracts greater than $100,000 in value. It also requires a pledge of assets where the surety is an individual.

§ The Walsh-Healey Public Contracts Act – 41 USC §35-45: Applies to contracts for the manufacture or furnishing of supplies (materials, supplies, articles, or equipment), performed within the United States or its territories. It requires these contracts to incorporate by reference the stipulations in federal law governing minimum wages, maximum work hours, child labor, convict labor, and safe and sanitary working conditions. It applies to contracts greater than $10,000 in value.

(2) Socio-Economic Programs:

§ Buy American Act (BAA) – 41 USC §10a: The BAA requires FDIC to give preference to American-made goods when it procures goods for use in the United States.

§ Trade Agreements Act (TAA) of 1979 – 19 USC §2501 et seq.: The TAA is the statutory authority for many of the trade agreements to which the United States is a party.

In general, the BAA applies to contracts with a value greater than the micropurchase threshold, currently $3,000, and applies to contracts entered into by FDIC in its corporate capacity only.

Application of the BAA is waived when a free trade agreement (FTA) applies to the acquisition. FTAs apply to contracts for goods, services and construction at different dollar thresholds; they apply to FDIC when it contracts in its corporate capacity only.

There is significant interplay between the BAA and the TAA; both need to be considered when planning an acquisition. See PGI 5.12 for a comprehensive discussion of the application of the BAA, the special procedures mandated by the TAA, the dollar thresholds and the exceptions to their application.

§ Rehabilitation Act of 1973 – 29 USC §794d (commonly known as Section 508): Section 508 requires that electronic and information technology (EIT) developed, procured, maintained or used by the FDIC or its contractors be as accessible to persons with disabilities as it is to persons without disabilities. Acquisitions of EIT must comply with Section 508 and the regulations published by the Architectural and Transportation Barriers Compliance Board. The FDIC has adopted its own regulation on Section 508 in 12 CFR Part 352. Detailed procedures are set out at PGI 5.3.

§ Javits-Wagner-O’Day Act (JWOD) – 41 USC §46 et seq.: JWOD applies to contracts for supplies and may apply to certain contracts for services. The JWOD program creates jobs and training opportunities for people who are blind or who have other severe disabilities. Its primary means of doing so is by requiring government agencies to purchase selected products and services from nonprofit agencies employing such individuals. The JWOD Program, also known as AbilityOne, maintains procurement lists of supplies and services available from groups participating in AbilityOne. FDIC is required to fill its procurement needs for items on AbilityOne’s procurement lists from AbilityOne groups. Additional information may be found at APM 3.3 and PGI 3.3.

§ Rehabilitation Act of 1973 – 29 USC §793: This act requires that contractors not discriminate against any employee or applicant qualified for a position because of any physical or mental disability. It also requires contractors to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled individuals without discrimination because of their disabilities. FDIC voluntarily complies with this statute.

§ Executive Order 11246 – Equal Opportunity: This Executive Order prohibits discrimination by contractors in employment practices. It applies to all contracts with a value greater than $10,000.

§ The FDIC Minority and Women Outreach Program for Contracting – 12 USC §1833e and 12 CFR Part 361: This program seeks to include minority and women-owned businesses (MWOBs) and small disadvantaged businesses (SDBs) in FDIC procurements. The Office of Minority and Women Inclusion manages this outreach program and works with the Acquisition Services Branch (ASB) to solicit MWOB and SDB firms. APM 2.105, 3.105, and 3.205 provide more information about FDIC’s Socio-Economic Programs.

§ Vietnam Era Veterans Rehabilitation Act of 1972 – 38 USC §4212: This act applies to contracts with a value greater than $100,000. It requires that contractors not discriminate against any employee or applicant qualified for a position because they are a disabled veteran or veteran of the Vietnam era. It also requires contractors to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled veterans and veterans of the Vietnam era without discrimination based upon their disability or veteran status.

§ Executive Order 12564 (Drug Free Workplace): This executive order addresses drugs in the work place. It applies to FDIC contracts where the contractor is an individual or, if other than an individual, to contracts exceeding $100,000, by virtue of the FDIC policy of voluntary compliance with its mandates. For a contract where the contractor is an individual, the contractor must agree not to engage in the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance in the performance of the contract. For a contract exceeding $100,000, the contractor must agree to make a good faith effort to maintain a drug-free workplace.

§ Federal Prison Industries (FPI) – 18 USC §4124: The FPI program directs federal departments and agencies to purchase prison-made products, subject to certain conditions, from the FPI (trade name UNICOR). It applies to contracts for goods of the classes listed in the Schedule of Products Made in Federal Penal and Correctional Institutions; see the FPI Schedule on the FPI website, http://www.unicor.gov. It is FDIC policy that goods valued at greater than $5,000 must be purchased on the FPI Schedule, when available, to fill its requirements so long as the FPI prices do not exceed current market prices. Detailed procedures for complying with the FPI statute are found at PGI 3.304.

§ Small Business Act – 15 USC §644e: This section of the Small Business Act deals with contract bundling. It applies to contracts entered into by FDIC in its corporate capacity only. See APM 2.204 for the specifics of its application.

(3) Privacy and Payment Laws:

§ Privacy Act of 1974 – 5 USC §552a: This section applies to FDIC contracts for the design, development or operation of a system of records on individuals, whether that system is automated or paper-based. FDIC Circular 1031.1, Administration of the Privacy Act, is the FDIC comprehensive statement of procedures on the subject. The circular is available at http://fdic01/division/doa/adminservices/records/directives/1000/index.html. During acquisition planning, the Program Office must identify whether the Privacy Act applies to the proposed acquisition. Contractors must comply with the requirements of the Privacy Act and the contract must contain a clause describing the requirements imposed on the contractor.

§ Prompt Payment Act – 31 USC §3901-05: This act applies to the FDIC only when it contracts in its corporate capacity. It requires the payment of interest on properly submitted invoices more than thirty (30) days past due.

§ Assignment of Claims Act – 31 USC §3727: This act permits a contractor to assign claims for monies due to it from FDIC under a contract to a bank, trust company or other financing institution.

(4) Ethics and Integrity Laws:

§ Anti-Kickback Act of 1986 – 41 USC §§51-58: This Act prohibits both the payment and acceptance of kickbacks. It also prohibits including of the cost of kickbacks in the price of a contract. It provides substantial penalties, both criminal and civil, for violations.

§ Byrd Amendment – 31 USC §1352(b): This requirement limits the use of appropriated funds to influence, or attempt to influence, certain federal contracting and financial transactions. It applies to contracts greater than $100,000 in value, entered into by FDIC in its corporate capacity. An offeror must certify to compliance with the Byrd Amendment when it submits a bid.

§ Copeland (Anti-Kickback) Act – 40 USC §3145 and 18 USC §874: This act applies to construction contracts greater than $2,000, using laborers and mechanics for construction, alteration or repair of FDIC buildings. It makes it unlawful to use threats or intimidation to induce a worker to give up part of the wages to which he is entitled.

§ Federal Deposit Insurance Act – 12 USC 1822f (and the corresponding regulations -12 CFR Part 366): Establishes the minimum standards of contractor integrity and fitness FDIC requires of its service contractors. An offeror must certify to the standards of this act when it submits a proposal valued at $100,000 or greater.

(5) Environmental Laws: For construction contracts, FDIC complies with the provisions of the Clean Air Act (CAA) of 1990 – 42 USC 7401 et seq., (specifically 42 USC §7414) and the Clean Water Act - 33 USC §1251 et seq. (specifically 33 USC §1318). These acts cover the inspection and monitoring of facilities related to the development of implementation plans and the monitoring of compliance with air and water quality standards.

For contracts for either goods or services associated with refrigeration equipment or air conditioning, or goods containing ozone-depleting substances, FDIC complies with the CAA of 1990 – 42 USC Sections 7671g (servicing of refrigeration and air conditioning equipment), 7671h (national program for recycling and emissions reduction) and 7671j (labeling of products containing ozone-depleting substances).

(6) Information Security Law: The Federal Information Security Management Act of 2002 – 44 USC §§3541-49 establishes a comprehensive program for the management of government information security. It applies to contracts for both goods and services involving information technology. It requires the FDIC to consider information security in its contract planning, to incorporate terms governing information security in its contracts, and to adequately oversee the information security practices of its contractors. Information regarding information security and protection of sensitive information is found at APM 5.1.

(7) Tax Law: The Federal Deposit Insurance Act – 12 USC § 1825. This act exempts FDIC from all federal, state and local taxes, except taxes on real property.

(8) Office of Management and Budget (OMB)Approval under the Paperwork Reduction Act - The Paperwork Reduction Act of 1980 - Pub. L. 96-511 requires Federal agencies to obtain approval from the OMB before collecting information from ten (10) or more members of the public. The information collection and recordkeeping requirements in the sections set out below have been approved by the OMB; the OMB Control Number 3064-0072 covers all FDIC procurement-related information collections, which are contained in the following PGI sections:

1.304

1.309(c)

3.210(b)

3.215(a)

5.203(c)

5.12

7.3.2-44 through -55

7.5.2-1 through -3

7.5.12-2, -4, -6 and -8.

1.209 Contracting Officer Authority

1.209(a) RESERVED

1.209(b) RESERVED

1.209(c) RESERVED

1.209(d) Contracting Officer Warrant Program

(1) Warrant Levels: Contracting Officers are delegated contracting authority for specified contracting dollar thresholds based on training and experience as follows:

§ Level I Contracting Officer (Up to $100,000);

§ Level II Contracting Officer (Up to $1,000,000);

§ Level III Contracting Officer (Up to $5,000,000);

§ Level IV Contracting Officer (Up to $10,000,000); and

§ Level V Contracting Officer (Unlimited)

Contracting Officers may award contracts or modifications within their delegated authority. When determining the value of a contract action, the total includes the basic contract and all options. However, for contract modifications, the dollar threshold is not cumulative. For example, although a $25,000 modification may push total contract value above $100,000, a Level I Contracting Officer can still sign the modification, unless the modification increases the total value by more than fifteen (15) percent of the total contract value. In those cases, the modification must be signed by a Contracting Officer with authority for the new cumulative value.

(2) Experience Requirements: Table 1 shows Contracting Officer warrant levels with associated minimum business and contracting experience requirements for each. Contracting experience may also be used to partially satisfy the business experience requirements.

Table 1. Contracting Officer Warrant Level Experience Requirements

Level	Dollar Threshold	Business Experience	Contracting Experience
I	Not to exceed $100,000	4 Years	2 Years
II	Not to exceed $1,000,000	5 Years	3 Years
III	Not to exceed $5,000,000	6 Years	3 Years
IV	Not to exceed $10,000,000	7 Years	4 Years
V	Unlimited	8 Years	5 Years

(3) Continuous Learning Requirements: Contracting Officers must complete a minimum of forty (40) hours of continuous learning annually, or eighty (80) hours every two years, in order to maintain their Contracting Officer Appointment. Other ASB personnel in the 1102 job series must also meet the continuous learning requirement. Continuous learning may be in the form of training or may be earned by attending conferences, symposia, internal ASB workshops, and other events that offer topical presentations of value.

§ Training: In order to satisfy the continuous learning requirement, any training must enable the individual to: (1) demonstrate an in-depth functional knowledge of the laws, policies, procedures, and contracting methods that apply to FDIC contracts and to government contracts in general; and (2) effectively manage complex contracting actions. Examples of acceptable training subjects include:

o Negotiation techniques;

o Price analysis;

o Price evaluations;

o Contract terminations;

o Contract administration;

o Commercial and government contract law;

o Best value contracting;

o Contract claims;

o Incentive contracting;

o Performance-based contracting; and

o Oversight management.

§ Additional Training Requirements:

o Training must be directly related to the knowledge required for success in a position that has responsibility for contracts;

o Training may be provided by FDIC or by FDIC-approved external organizations;