Federal Awardee Performance and Integrity Information System (FAPIIS) is a database that has been established to track contractor misconduct and performance. The database contains Federal contractor criminal, civil, and administrative proceedings in connection with federal awards; suspensions and debarments; administrative agreements issued in lieu of suspension or debarment; nonresponsibility determinations; contracts terminated for fault; defective pricing determinations; and past performance evaluations.
Effective April 22, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (“FAR Councils”) amended the Federal Acquisition Regulation (“FAR”) to implement the Federal Awardee Performance and Integrity Information System (“FAPIIS”). (See provisions at FAR Parts 9.1, 15.407, 42.15, & 52.209)
FAPIIS’s purpose, according to Section 872 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, is to “significantly enhance the Government’s ability to evaluate the business ethics and quality of prospective contractors competing for Federal contracts and to protect taxpayers from doing business with contractors that are not responsible sources.” The rule imposes heavy obligations on both government contractors and the Government by requiring contractors to disclose additional information to the Government and obligating contracting officers to consider all available new information when making responsibility determinations. Thus, “[a]lthough FAPIIS is designed to be a ‘one-stop’ resource,” its existence will “not alter contracting officers’ obligation . . . to possess or obtain information sufficient to determine that a prospective contractor meets the applicable standards for establishing responsibility.” 75 Fed. Reg. 14060 (Mar. 23, 2010).
FAPIIS is to be established and maintained by the General Services Administration (GSA) and is intended both to consolidate information from existing systems such as the Excluded Parties List System (“EPLS”), the Past Performance Information Retrieval System (“PPIRS”), and the Contractor Performance Assessment Reporting System (“CPARS”) and to collect new information from government contractors, including contracting officer non-responsibility determinations, contract terminations for default or cause, agency defective pricing determinations, administrative agreements entered into following a resolution of a suspension or debarment, and contractor self-reporting of criminal convictions, civil liability and adverse administrative proceedings.
Under the new rule, the FAPIIS database will notify the contractor when the government posts new information regarding the contractor’s record of responsibility. The contractor will then have an opportunity to post a response concerning the information posted by the government. The contractor’s response will be retained as long as the associated information is retained, i.e., for a total of six years, although “only government personnel and authorized users performing business on behalf of the government will be able to view the contractor’s record on the system.” 75 Fed. Reg. 14067 (March 23, 2010).
Agencies must insert FAR clause 52.209-7, “Information Regarding Responsibility Matters,” in all solicitations issued after April 22, 2010. The clause requires vendors who are submitting proposals for government contracts with an expected value of over $500,000 and having more than $10 million in active contracts and grants at the time of proposal submission to report information relating civil, criminal, and administrative proceedings. The information is to be entered through the Central Contractor Registration (“CCR”) system. Id. FAPIIS contains no exemption for commercial item or commercial off-the-shelf (“COTS”) acquisitions.
Government contractors must report and maintain accurate information on FAPIIS concerning occurrences “within the last five years” relating to the following categories:
- Criminal Convictions: An offeror must provide information concerning whether the offeror and/or its principals has, in connection with the award or performance of a federal contract or grant, been subject to a federal or state criminal proceeding that resulted in a criminal conviction. The clause also requires the contractor to write a narrative description for all reported actions. 75 Fed. Reg. 14067 (Mar. 23, 2010).
- Civil Proceedings: An offeror must provide information concerning whether the offeror and/or its principals has, in connection with the award or performance of a federal contract or grant, been subject to a federal or state civil proceeding that resulted in a finding of fault and liability and required the payment of a monetary fine or penalty, reimbursement, restitution or damages of $5000 or more. Id.
- Administrative Proceedings: The new rule defines an “administrative proceeding” as a “non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability.” Id. The rule provides the following examples of what is considered an administrative proceeding: (1) Securities and Exchange Commission proceedings; (2) Civilian Board of Contract Appeals proceedings; and (3) Armed Services Board of Contract Appeals proceedings. The rule also states that the definition does not include agency actions such as contract audits, site visits, correction plans, or inspection of deliverables. Id.
Under the new rule, an offeror must provide information concerning whether the offeror and/or its principals has, in connection with the award or performance of a federal contract or grant, been subject to a state or federal administrative proceeding that resulted in a finding of fault and liability that required the payment of a monetary fine or penalty of $5,000 or more, or the payment for any reimbursement, restitution, or damages in excess of $100,000. Id.
Settlements: An offeror also must provide information relating to the award or performance of a government contract or grant where a federal or state administrative proceeding was disposed of by consent or settlement with an acknowledgment of fault by the contractor. Id.
Additionally, a government contractor must certify that the information provided is “current, accurate, and complete as of the date of the submission.” Id. Therefore, in order to ensure that the information provided is “current, accurate, and complete,” many contractors will find it necessary to amend their internal procedures and processes because the information required goes above and beyond the pre-FAPIIS requirements set forth in FAR 52.209-5, “Certification Regarding Responsibility Matters.” The increased reporting obligation is readily apparent from a comparison of the existing requirements of FAR 52.209-5 with the additional requirements of FAR 52.209-7, “Information Regarding Responsibility Matters.” Examples include:
- FAR 52.209-5 only requires the government contractor to check a box if a contractor has or has not been criminally convicted. In contrast, FAR 52.209-7, requires the contractor to draft a narrative commenting on the activity;
- FAR 52.209-5 requires offerors to look back three years while the new FAR 52.209-7 requires a five year look-back.
Semi-Annual Reporting Requirements
The new rule also imposes a requirement that certain contractors update their FAPIIS disclosures. The new clause set forth at FAR 52.209-8, “Updates of Information Regarding Responsibility Matters,” must be incorporated into (1) all solicitations where the expected value exceeds $500,000 and (2) contracts where the contractor has more than $10 million in active contracts and grants as of the time for proposal submission. Pursuant to the new clause, contractors must update the information in FAPIIS relating to the criminal, civil, and administrative proceedings discussed above on a semi-annual basis for the entire life of the contract. 75 Fed. Reg. 14060 (Mar. 23, 2010).
The Contracting Officer’s Role
Contracting officers will also have additional obligations under the new rule in that they will be required to:
- Review the information in FAPIIS in connection with contracts over the simplified acquisition threshold for the purpose of making a responsibility determination;
- Document the contract file to explain how the information in FAPIIS was considered in any responsibility determination (as well as the action that was taken as a result of the information); and
- Prior to proceeding with award, notify the agency official responsible for initiating debarment or suspension if information is identified in FAPIIS that appears appropriate for that official’s consideration. <http://www.governmentcontractslawblog.com/2010/06/articles/far/fapiis-the-new-integrity-database-for-government-contractors/#_ftn1>
Most importantly, contracting officers must give offerors the opportunity to provide additional information that demonstrates their responsibility before the contracting officer makes a non-responsibility determination if the information concerns:
- Criminal, civil, or administrative proceedings in connection with the award of a Government contract;
- Terminations for default or cause; or
- Determinations of non-responsibility because the contractor does not have a satisfactory performance record or a satisfactory record of integrity and business ethics, or comparable information relating to a grant.
75 Fed. Reg. 14059 (Mar. 23, 2010).
The Federal Acquisition Institute has developed a tutorial detailing the purpose of FAPIIS and the types of data it will include. The site is available at http://www.fai.gov/FAPIIS/trailer/module.htm.