§ 668.1 - General.

(a) Scope. This part sets forth reporting requirements, and related policies and procedures, for labor work year equivalents performed by contractors (also called Contractor Man-year Equivalents (CMEs)) in support of the Army, pursuant to 10 U.S.C. 129a, 10 U.S.C. 2461(g), and Section 343 of Public Law 106-65.

(b) Purpose and Background. (1) Purpose. The purpose of this data collection and related contractor reporting is to respond to Congressional requests, and to internal Army manpower and force management planning information requirements, to quantify the extent of CMEs used to support Army operations and management broadly under the Federal Supply Class and Service Codes for “Research and Development” and “Other Services and Construction.” The data collected will provide unprecedented Departmental level visibility of the missions supported and functions performed by contractors in support of major Army organizational elements at the tactical level and higher, by linking the Federal Supply Class and Service Code data to appropriation data and organizational data on an Army-wide basis. This information will also provide visibility of contractor manpower capabilities and labor costs in support of Army missions and functions.

(2) Background. The lack of adequate and reliable data on the missions supported and functions performed by service contractors, as well as the resources expended by the Department on those contractors on an Army-wide basis, has resulted in uninformed assumptions and decisionmaking in the Planning, Programming and Budgeting System process. This, in turn, results in a failure to properly prioritize or validate the relative importance of missions performed or supported by contractors, as opposed to the very intense prioritization and mission validation decisions made with regard to the Department's expenditures on the more visible in-house performance of similar functions. This can unduly skew the prioritization of in-house resources and manpower. In addition, the CME data will provide information needed at HQDA to assess whether, and to what extent, contractors may be performing functions that the Army senior leadership has determined to be inherently Governmental, or commercial functions, which, when contracted out beyond a certain level of reliance, increase operational risks to overall Army mission capabilities and readiness. When evaluating military capabilities in the generating forces and operating forces under the Quadrennial Defense Review and Total Army Analysis simulations, a critical unit of analysis for assessing military capability is the manpower available to perform a function as linked to major Army organizational elements. The capabilities provided by service contractors consume at least one third of the Department's obligation authority; and yet, due to lack of reliable data, senior Army planners lack the ability to assess the total manpower capabilities within a function and major Army organization to the extent that the organization and function may rely heavily on contractor support. The data collected under this reporting requirement will remedy these defects by compiling and integrating contractor manpower and cost data in aggregated functional categories associated with the major Army organizational elements, in order to make this critical information visible to HQDA planning and programming officials.

(c) Applicability. These reporting requirements apply to all Department of the Army agencies, commands, and activities and to contracting actions awarded by such activities Army-wide, except as set forth in paragraph (c)(3) of this section.

(1) Policy. These requirements shall be cited and further implemented as necessary in the Army Federal Acquisition Regulation Supplement, and shall be promulgated to procurement and manpower channels Army-wide. Changes to the administrative aspects of this section (such as reporting formats, methods of incorporation of the requirements into solicitations and contracts, waivers and exemptions), may be published in the Army FAR Supplement after coordination with the Deputy Assistant Secretary of the Army (Force Management, Manpower and Resources). The objective of this reporting requirement is to collect as much significant CME data as possible to allow accurate reporting to Congress and for Army planning purposes. The reporting should not be viewed as an “all or nothing” requirement. Even partial reporting, e.g., direct labor hours, appropriation data, place of performance, Army customer, etc., will be helpful.

(2) Contracting office responsibilities. Contracting officers shall ensure that the reporting requirements set forth herein are included in all covered contract actions. Although every effort has been made to facilitate reporting and to reduce administrative burden on both contractors and contracting offices, there may be situations when a contractor is properly exempt in part or cannot comply with the requirement (e.g., foreign contractor who has no internet access or capability; or is unable to comply without extraordinary costs or effort not recoverable in normal overhead). At the discretion of the contracting officer, contractor self-exemption may be more liberally construed and applied in the case of small foreign contractors not reporting as sub-contactors, with contract values generally less than $200,000, if they lack internet access or are a non-English speaking firm that would have to employ a translator and/or an English speaking financial specialist to calculate, collect and report all of the data. In such cases, and in those situations where the contracting officer failed to timely include this requirement in solicitations and contracts, the contracting office is required to report the required information, to the best of their ability, by the end of the reporting period (end of contract period or end of fiscal year). Army Heads of Contracting Activities and their Principal Assistants Responsible for Contracting shall ensure that contracting offices found to be significantly non-compliant with these requirements, are tasked to directly report the required data to the Army website. The secure Army website will support surrogate reporting of contract(or) data by contracting offices. Classified contract actions are not, per se, exempt from reporting (guidance at DoD FAR Supplement 48 CFR 202.670-8 applies). No classified information will be included in a contracting office report.

(3) Covered actions. The contract reporting requirements specified in § 668.2 below shall be included in all Army solicitations issued and contract actions awarded (including orders under GSA Schedule contracts and contracts awarded by other agencies that allow direct ordering by the Army), and all bilateral modifications of existing Army contracts, after March 15, 2000, except the following:

(i) Contracts valued at $100,000 or below. Indefinite Delivery contracts estimated to exceed $100,000 in value shall contain the requirement for reporting, for all orders placed in excess of $25,000. Orders placed against GSA Schedule contracts or contracts awarded by non-Army agencies, shall contain the requirement if the value of the order exceeds $100,000.

(ii) Contracts awarded by an Army contracting office solely as a contracting agent in support of non-Army customer(s) and requirements. The reporting requirement is limited to contractor labor hour and cost data in support of Army customers and requirements. If the organization receiving the benefit of the services is an Army organization, then the contractor labor hour data is reportable as an Army requirement, even though the appropriations funding all or part of the requirement may be other than Army appropriations.

(iii) Contracts for the acquisition of supplies and equipment. The reporting requirement applies only to services covered by Federal Supply Class or Service codes for “Research and Development,” and “Other Services and Construction.” However, when non-incidental services are discretely included in a contract for supplies and equipment, and can be characterized as “Research and Development,” or “Other Services and Construction,” contractors shall be required to characterize and report such services under this requirement. (Example: Ongoing facility management or maintenance and quality assurance services separately priced under the contract.)

(4) Effective dates for reporting. For covered contracts in effect prior to March 15, 2000, including previously exempt contract actions (such as those entered into under FAR Part 12 (48 CFR Part 12) procedures prior to December 31, 2000), once a contract is modified to include this reporting requirement, reporting is required retroactive to October 1, 1999, or the start of the contract/order, whichever is later.