FAPIIS101: Now That It's Here and Final, What Do We Do?
By Jeffery M. Chiow
Introduction: On April 22, 2010, when the rule requiring a Federal Awardee Performance and Integrity Information System (FAPIIS) originally took effect, the regulatory history revealed many concerns about the potential for inaccuracies and misuse of sensitive information in a database about contractors. See 75 Fed. Reg. 14059, Mar. 23, 2010. Despite the effort expended in addressing those concerns and the original Federal Acquisition Regulations clause’s assurance that “only Government personnel and authorized users performing business on behalf of the Government will be able to view the Contractor’s record,” (see FAR 52.209-9(b)(3) (2010)) the reality is that significant amounts of sensitive and potentially misleading information about contractors, their teammates and competitors are now publicly available. When the President signed the 2010 Supplemental Appropriations Act on July 29, 2010, a provision of that law directed the General Services Administration (“GSA”) to make nearly all of the information in the FAPIIS database available to the public. Past performance reports are the only information exempted from this public disclosure requirement. After subsequent modifications to FAPIIS and the related reporting provisions a new Final Rule was recently published in the Federal Register. See Vol. 77, No. 1, Fed. Reg. 197-202, January 3, 2012. Contractors should be aware of the parameters of their self-reporting obligations and the short deadline to object to publication of protected information. They should also monitor proposals to expand the FAPIIS database even further.
The FAPIIS database includes data from the Past Performance Information Retrieval System (“PPIRS”) and the Contractor Performance Assessment Reporting System (“CPARS”) relating to contractor performance, data from the Excluded Parties List System (“EPLS”) relating to responsibility determinations, and contractor self-reported information from the Central Contractor Registry (“CCR”) including, among other things, information concerning criminal, civil and administrative actions and/or settlements involving contractors and their business principals.
FAPIIS was created to satisfy requirements imposed by Section 872 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417). In accordance with Section 872(e)(1) of that Act, the FAPIIS database was only to be made available to contracting officers, certain other government personnel by request, individual contractors for the purpose of verifying the accuracy of information about themselves, and to the Chairperson and Ranking Member of Congressional committees. By a single amendment to the Supplemental Appropriations bill, however, all of this highly sensitive and potentially misleading, incorrect, and/or outdated information was required to be made available to the public.
Mandatory Self-Reporting in CCR
For every proposal relating to a government contract or grant opportunity with a value expected to exceed $500,000, companies must report certain criminal or civil violations, administrative actions, or settlements of such matters within the last five years. See FAR 9.104-7(b); FAR 52.209-7(c). This requirement applies to all such opportunities including those for commercial and commercial off the shelf (“COTS”) items. Moreover, there is no exemption for small businesses. Companies that hold government contracts or grants in excess of $10 Million are deemed to have represented that the information they have entered into FAPIIS via the CCR website is “current, accurate, and complete as of the date of submission” of their offer. FAR 52.209-7(c), Information Regarding Responsibility Matters (FEB 2012).
The current FAR clause specifically requires contractors to report via CCR information regarding whether, within the last five years, the offeror or its principals have been the subject of a proceeding at the Federal or State level resulting in: (1) a conviction in a criminal proceeding; (2) a civil judgment of greater than $5,000 in damages with a finding of contractor liability; (3) an administrative finding of fault or liability with greater than a $5,000 fine or damages, restitution or reimbursement greater than $100,000; and (4) a settlement of any such matter that could have led to the above results where the contractor admits liability. The requirement to report such events does not apply unless the contractor’s or principal’s underlying actions were related to the award or performance of a federal government contract or grant. Id.
Certification Regarding Matters of Responsibility
In addition to the mandatory self-reporting required by FAR 52.209-7, for every solicitation exceeding the simplified acquisition threshold (currently $150,000), offerors must make a certification regarding their responsibility as set out in FAR 52.209-5. Every offeror must certify: (1) it is or is not presently debarred, suspended, proposed for debarment or declared ineligible for award of contracts by any agency; (2) it has or has not within the previous 3 years, been criminally convicted or been subject to a civil judgment for fraud or a criminal offense relating to the pursuit or award of a public contract, or any of several enumerated laws involving theft or dishonesty; (3) it is or is not presently indicted or civilly charged with violating the same enumerated laws; and whether (4) it has within 3 years been notified of an unpaid tax obligation exceeding $3000 that remains unsatisfied. FAR 52.209-5 Taxes are not considered delinquent unless the tax obligation is finally determined and not subject to any legal or administrative challenge. Id. at clause (a)(1)(i)(D). Offerors must “provide immediate written notice to the Contracting Officer if, at any time prior to contract award” it learns that its certification was erroneous or has become erroneous due to changed circumstances. Id. at clause (b).
Obligation to Update FAPIIS
In solicitations where the resultant contract is expected to exceed $500,000 and in contracts where the offeror has indicated that it holds active Federal contracts and grants with total value greater than $10,000,000, the contractor is obligated to update the information in FAPIIS by posting the required information in the CCR database on a semi-annual basis throughout the life of the contract. FAR 9.104-7(c); 52.209-9(a).
Ability to Challenge Data in FAPIIS
When negative past performance information is posted in FAPIIS, contractors are currently able to submit up to 5000 words to rebut or explain the government’s entry. These contractor submissions are preserved in FAPIIS for six years, like all other information, and may provide context when Contracting Officers review negative information in the process of determining a contractor’s responsibility. See FAR 52.209-9(c)(2), 9.104-6; see also FAR 42.1503 (allowing contractors 30 days to respond to negative past performance information).
In response to industry concerns about the publication of proprietary information in FAPIIS, the Final Rule published on January 3, 2012 contains a provision advising Contracting Officers not to publish data that is subject to a FOIA exemption. FAR 9.105-2(b)(2)(iv); 52.209-9(c)(1). The Final Rule also contains a mechanism, albeit an onerous one, for contractors to challenge to publication of any data they believe should be withhold as exempt under FOIA. FAR 9.105-2(b)(2); 52.209(c). Contractors will be notified when new information about them is posted to FAPIIS. Initially, all new information will be posted to the non-public section of FAPIIS. Within 7 days, contractors must identify any information to be withheld from publication based upon a FOIA concern. When contractors so challenge publication, the Contracting Officer is to remove the challenged data and resolve its publication consistent with FOIA challenge procedures. If a contractor does not lodge a timely challenge, the information will move to the public section of FAPIIS 14 days after it was first posted in the non-public section.
Proposed Modifications to FAPIIS
Throughout the life of FAPIIS promised safeguards and provisions that balanced the concerns of contractors have been stripped away via legislative and regulatory changes. There continue to be legislative and regulatory proposals that would sweep more information into the FAPIIS reporting requirements and reduce contractors’ rights to challenge negative information. As noted in the preamble to the original FAR clause, information concerning state level contracts will eventually be added to FAPIIS. Additionally, the government has considered lowering the threshold for triggering FAPIIS and increasing the types of information that must be reported. A proposal in 2010 would have increased the period for retaining FAPIIS data from 5 to 10 years, and require reporting of all administrative proceedings (not just those where there is a finding of fault or liability). In a provision of a Senate-proposed contingency contracting reform bill, contractors would lose the opportunity to post information to FAPIIS whereby contractors are currently able to explain negative past performance information.
Contractors should be cognizant of the specific parameters of their reporting obligation and should ensure that they provide accurate information, but not more information than is required. Any information submitted by a contractor will be available to the public, and may be used by so-called watchdog organizations or even competitors to cast the company or its leadership in a negative and potentially misleading light. Accordingly, contractors must monitor all information concerning their company and its principals in FAPIIS and take prompt action to correct any inaccurate or false information and to prevent disclosure of FOIA-exempt proprietary information.
When contractor personnel update information in the CCR database, they should seek advice and guidance from counsel as new questions and issues arise and must carefully evaluate what information falls within the requirements of the FAPIIS reporting regulation. Moreover, contractors must monitor the potential developments and expansion of FAPIIS discussed above in order to ensure that they comply with all pertinent reporting and certification requirements. Now that the database exists, lawmakers and regulators are likely to continue to expand FAPIIS’ coverage, and contractors’ compliance systems must evolve to meet the increasing demand for data and expansion of reporting requirements.
Questions or Concerns: Follow-up
If you have any questions about this article or other government contracts issues please contact the authors or any RJO attorney from our Government Contracts Practice http://www.rjo.com/govcontracts.html in our Washington, DC or San Francisco, CA offices. The FAPIIS Final Rule is publicly available: http://www.gpo.gov/fdsys/pkg/FR-2012-01-03/pdf/2011-33420.pdf. A minor correction to the rule to clarify timing of its provisions is available here: http://www.gpo.gov/fdsys/pkg/FR-2012-01-11/pdf/2012-291.pdf.
Back to top