Class Deviation 2020-O0016.pdf

OFFICE OF THE UNDER SECRETARY OF DEFENSE

3000 DEFENSE PENTAGON

WASHINGTON, DC 20301-3000

ACQUISITION

AND SUSTAINMENT

In reply refer to

DARS Tracking Number: 2020-O0016

MEMORANDUM FOR COMMANDER, UNITED STATES CYBER

COMMAND (ATTN: ACQUISITION EXECUTIVE)

COMMANDER, UNITED STATES SPECIAL OPERATIONS

COMMAND (ATTN: ACQUISITION EXECUTIVE)

COMMANDER, UNITED STATES TRANSPORTATION

COMMAND (ATTN: ACQUISITION EXECUTIVE)

DEPUTY ASSISTANT SECRETARY OF THE ARMY

(PROCUREMENT)

DEPUTY ASSISTANT SECRETARY OF THE NAVY

(PROCUREMENT)

DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE

(CONTRACTING)

DIRECTORS, DEFENSE AGENCIES

DIRECTORS, DEFENSE FIELD ACTIVITIES

SUBJECT: Class Deviation—Original Documents, Signatures, Seals, and Notarization

Effective immediately, to respond to the Coronavirus Disease 2019 (COVID-19) national emergency, contracting officers shall utilize the deviations from the Federal Acquisition

Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS) authorized in attachments 1 and 2, respectively, to provide flexibility with regard to original documents, manual signatures, seals, and notarization in order to facilitate certain essential contracting procedures.

Specifically, when obtaining financial protection against losses under contracts per FAR part

28—

Electronic signatures and electronic, mechanically-applied, or printed dates may be used and shall be considered original signatures and dates, without regard to the order in which they are affixed for all of part 28, not just 28.101-3;

A corporate seal is not required on any form listed at FAR 28.106-1;

The signed statement by the contractor that payment is due and owed referenced at FAR

28.106-8 is not required to be notarized;

The Standard Form 28 executed by the individual surety pursuant to FAR 28.203(b) is not required to be sworn and notarized as indicated on the form;

A written authorization of the release signed by the surety is acceptable, in lieu of the notarized authorization of release by the surety required by FAR 28.203-5(a); and

Use the following deviation clauses, in lieu of the corresponding FAR clauses:

○ 52.228-11, Pledges of Assets (DEVIATION 2020-O0016), which removes the requirement for the Standard Form 28 to be sworn and notarized.

Class Deviation 2020-O0016 Original Documents, Signatures, Seals, and Notarization

○ 52.228-15, Performance and Payment Bonds—Construction (DEVIATION 2020-

O0016), which removes the requirements for seals on Standard Forms.

○ 52.228-16, Performance and Payment Bonds—Other than Construction

(DEVIATION 2020-O0016), which removes requirements for seals on Standard

Forms.

When processing assignment of claims per FAR subpart 32.8—

A copy of the assignment instrument is acceptable, in lieu of a true copy of the assignment instrument as required by FAR 32.802(e); and

Electronic signatures by responsible parties and electronic filing of assignment instruments and notices of assignments as outlined in attachments 1 and 2 are acceptable, in lieu of the requirements at FAR 32.805 and DFARS 232.805.

When executing novation agreements and change-of-name agreements per FAR part 42—

Copies of the documents listed at FAR 42.1204(f) are acceptable in lieu of authenticated or certified copies; and

Novation Agreements as described at FAR 42.1204(i) and Change-of-Name Agreements as described at FAR 42.1205(b) do not require corporate seals.

This class deviation remains in effect until rescinded. My point of contact is Larry

McLaury, who is available by telephone at 703-697-6710 or by email at

Larry.j.mclaury2.civ@mail.mil.

Kim Herrington

Acting Principal Director, Defense Pricing and Contracting

Attachments:

As stated

Attachment 1

Changes to the text are indicated by a change bar in the right-hand margin.

FEDERAL ACQUISITION REGULATION

PART 28—BONDS AND INSURANCE

28.002 Policy. (DEVIATION 2020-O0016)

For purposes of this part, electronic signatures and electronic, mechanically-applied, or printed dates may be used and shall be considered original signatures and dates, without regard to the order in which they were affixed.

SUBPART 28.1—BONDS AND OTHER FINANCIAL PROTECTIONS

28.106 Administration.

28.106-1 Bonds and bond-related forms. (DEVIATION 2020-O0016)

The following Standard Forms (SF’s) and Optional Forms (OF’s), shall be used, except in foreign countries, when a bid bond, performance or payment bond, or an individual surety is required. The bond forms shall be used as indicated in the instruction portion of each form, except that a seal is not required. For SF 28 also see 28.203(b).

28.106-8 Payment to subcontractors or suppliers. (DEVIATION

2020-O0016)

The contracting officer will only authorize payment to subcontractors or suppliers from an ILC (or any other cash equivalent security) upon a judicial determination of the rights of the parties, a signed statement by the contractor that the payment is due and owed, or a signed agreement between the parties as to amount due and owed.

SUBPART 28.2 – SURETIES AND OTHER SECURITY FOR BONDS

28.203 Acceptability of individual sureties. (DEVIATION 2020-

O0016)

(b) An individual surety must execute the bond, and the unencumbered value of the assets (exclusive of all outstanding pledges for other bond obligations) pledged by the individual surety, must equal or exceed the penal amount of each bond. The individual surety shall provide a security interest in accordance with 28.203-1 and execute the Standard Form 28, except that the words “being duly sworn, depose and say” on the

Standard Form 28 are replaced with the word “affirm” and such

Standard Form 28 is not required to be sworn and notarized. One individual surety is adequate support for a bond, provided the unencumbered value of the assets pledged by that individual surety equal or exceed the amount of the bond. An offeror may submit up to three individual sureties for each bond, in which case the pledged assets, when combined, must equal or exceed the penal amount of the bond. Each individual must accept both joint and several liability to the extent of the penal amount of the bond.

28.203-5 Release of lien. (DEVIATION 2020-O0016)

(a) After consultation with legal counsel, the contracting officer shall release the security interest on the individual surety’s assets using the Optional Form 90, Release of Lien on

Real Property, or Optional Form 91, Release of Personal Property from Escrow, or a similar release as soon as possible consistent with the conditions in subparagraphs (a)(1) and (2) of this subsection. A surety’s assets pledged in support of a payment bond may be released to a subcontractor or supplier upon

Government receipt of a Federal district court judgment, or a sworn statement by the subcontractor or supplier that the claim is correct along with a written authorization of the release signed by the surety saying that it approves of such release.

PART 32 – CONTRACT FINANCING

SUBPART 32.8 – ASSIGNMENT OF CLAIMS

32.802 Conditions. (DEVIATION 2020-O0016)

(e) The assignee sends a written notice of assignment together with a copy of the assignment instrument to the—

(1) Contracting officer or the agency head;

(2) Surety on any bond applicable to the contract; and

(3) Disbursing officer designated in the contract to make payment.

32.805 Procedure. (DEVIATION 2020-O0016)

(a) Assignments.

(1) Assignments by corporations shall be-

(i) Signed by an authorized representative;

(ii) Signed by the secretary or the assistant secretary of the corporation; and

(iii) Accompanied by a copy of the resolution of the corporation’s board of directors authorizing the signing representative to sign the assignment.

(3) Assignments by an individual shall be signed by that individual.

(b) Filing. The assignee shall forward by email or other electronic means the notice of assignment and a copy of the instrument of assignment to each party specified in 32.802(e).

See DFARS 232.805 (DEVIATION 2020-O0016).

(c) Format for notice of assignment. The following is a suggested format for use by an assignee in providing the notice of assignment required by 32.802(e).

Notice of Assignment

To: _______ [Name, address and email address for one of the parties specified in 32.802(e)].

This has reference to Contract No. __________ dated ______, entered into between ______ [Contractor’s name and address] and

______ [Government agency, name of office, and address], for

________ [Describe nature of the contract].

Monies due or to become due under the contract described above have been assigned to the undersigned under the provisions of the Assignment of Claims Act of1940, as amended, (31 U.S.C.

3727, 41 U.S.C.6305).

A copy of the instrument of assignment executed by the

Contractor on ___________ [Date], is attached to this notice.

Payments due or to become due under this contract should be made to the undersigned assignee.

Please acknowledge receipt on behalf of the addressee by return email or other electronic means to the undersigned.

Very truly yours, _______________________________________ [Name of Assignee]

By ________________________ [Signature of Signing Officer]

_______________________________ [Title of Signing Officer]

____________________________________ [Address of Assignee]

______________________________ [Email Address of Assignee]

(e) Release of assignment.

(2) The assignee, under a further assignment or reassignment, in order to establish a right to receive payment from the Government, must send to the addressees listed in

32.802(e) a-

(i) Written notice of release of the contractor by the assigning financing institution;

(ii) Copy of the release instrument;

(iii) Written notice of the further assignment or reassignment; and

(iv) Copy of the further assignment or reassignment instrument.

(3) If the assignee releases the contractor from an assignment of claims under a contract, the contractor, in order to establish a right to receive payment of the balance due under the contract, must send a written notice of release together with a copy of the release of assignment instrument to the addressees noted in 32.802(e).

PART 42—CONTRACT ADMINISTRATION AND AUDIT SERVICES

SUBPART 42.12—NOVATION AND CHANGE-OF-NAME AGREEMENTS

42.1204 Applicability of novation agreements. (DEVIATION 2020-

O0016)

(f) Except as provided in paragraph (g) of this section, the contractor shall submit to the responsible contracting officer one copy of each of the following documents, as applicable, as the documents become available:

(1) A copy of the instrument effecting the transfer of assets; e.g., bill of sale, certificate of merger, contract, deed, agreement, or court decree.

(2) A copy of each resolution of the corporate parties’ boards of directors authorizing the transfer of assets.

(3) A copy of the minutes of each corporate party’s stockholder meeting necessary to approve the transfer of assets.

(4) A copy of the transferee’s certificate and articles of incorporation, if a corporation was formed for the purpose of receiving the assets involved in performing the Government contracts.

(i) The responsible contracting officer shall use the following format for agreements when the transferor and transferee are corporations and all the transferor's assets are transferred. This format may be adapted to fit specific cases and may be used as a guide in preparing similar agreements for other situations.

NOVATION AGREEMENT

(b) * * *

(9) The contracts shall remain in full force and effect, except as modified by this Agreement. Each party has executed this Agreement as of the day and year first above written.

UNITED STATES OF AMERICA,

By _______________________________________________

Title _____________________________________________

ABC Corporation, XYZ Corporation, CERTIFICATE

I, ___________, certify that I am the Secretary of ABC

Corporation, that ________________, who signed this Agreement for this corporation, was then _____________ of this corporation; and that this Agreement was duly signed for and on behalf of this corporation by authority of its governing body and within the scope of its corporate powers.

Witness my hand this day of __________________ 20 ___.

I, ____________, certify that I am the Secretary of XYZ

Corporation, that ________________, who signed this Agreement for this corporation, was then _____________ of this corporation; and that this Agreement was duly signed for and on behalf of this corporation by authority of its governing body and within the scope of its corporate powers.

Witness my hand this day of ____________________20___.

42.1205 Agreement to recognize contractor’s change of name.

(DEVIATION 2020-O0016)

(b) * * *

CHANGE-OF-NAME AGREEMENT

(b) In consideration of these facts, the parties agree that-

(1) The contracts covered by this Agreement are amended by substituting the name “ABC Corporation” for the name “XYZ

Corporation” wherever it appears in the contracts; and

(2) Each party has executed this Agreement as of the day and year first above written.

UNITED STATES OF AMERICA,

ABC CORPORATION,

I, ___________, certify that I am the Secretary of ABC

Corporation; that ___________, who signed this Agreement for this corporation, was then _____________ of this corporation;

and that this Agreement was duly signed for and on behalf of this corporation by authority of its governing body and within the scope of its corporate powers.

Witness my hand this ________ day of ____________ 20___.

PART 52 – SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.228-11 Pledges of Assets. (DEVIATION 2020-O0016)

As prescribed in 28.203-6, insert the following clause:

PLEDGES OF ASSETS (APR 2020)(DEVIATION 2020-O0016)

(a) Offerors shall obtain from each person acting as an individual surety on a bid guarantee, a performance bond, or a payment bond—

(1) Pledge of assets; and

(2) Standard Form 28, Affidavit of Individual Surety, except that the words “being duly sworn, depose and say” on the

Standard Form 28 are replaced with the word “affirm” and the

Standard Form 28 is not required to be sworn and notarized in block 12.

(b) Pledges of assets from each person acting as an individual surety shall be in the form of—

(1) Evidence of an escrow account containing cash, certificates of deposit, commercial or Government securities, or other assets described in FAR 28.203-2 (except see 28.203-

2(b)(2) with respect to Government securities held in book entry form); and/or

(2) A recorded lien on real estate. The offeror will be required to provide—

(i) A mortgagee title insurance policy, in an insurance amount equal to the amount of the lien, or other evidence of title that is consistent with the requirements of Section 2 of the United States Department of Justice Title Standards at https://www.justice.gov/enrd/page/file/922431/download. This title evidence must show fee simple title vested in the surety along with any concurrent owners; whether any real estate taxes are due and payable; and any recorded encumbrances against the property, including the lien filed in favor of the Government as required by FAR 28.203-3(d);

(ii) Evidence of the amount due under any encumbrance shown in the evidence of title;

(iii) A copy of the current real estate tax assessment of the property or a current appraisal dated no earlier than 6 months prior to the date of the bond, prepared by a professional appraiser who certifies that the appraisal has been conducted in accordance with the generally accepted appraisal standards as reflected in the Uniform Standards of Professional Appraisal

Practice, as promulgated by the Appraisal Foundation.

(End of clause) https://www.justice.gov/enrd/page/file/922431/download

52.228-15 Performance and Payment Bonds-Construction.

As prescribed in 28.102-3(a), insert a clause substantially as follows:

PERFORMANCE AND PAYMENT BONDS-CONSTRUCTION (APR 2020)

(DEVIATION 2020-O0016)

(a) Definitions. As used in this clause—

Original contract price means the award price of the contract;

or, for requirements contracts, the price payable for the estimated total quantity; or, for indefinite-quantity contracts, the price payable for the specified minimum quantity. Original contract price does not include the price of any options, except those options exercised at the time of contract award.

(b) Amount of required bonds. Unless the resulting contract price is $150,000 or less, the successful offeror shall furnish performance and payment bonds to the Contracting Officer as

(1) Performance bonds (Standard Form 25, except that no seal is required). The penal amount of performance bonds at the time of contract award shall be 100 percent of the original contract price.

(2) Payment bonds (Standard Form 25A, except that no seal is required). The penal amount of payment bonds at the time of contract award shall be 100 percent of the original contract price.

(3) Additional bond protection.

(i) The Government may require additional performance and payment bond protection if the contract price is increased.

The increase in protection generally will equal 100 percent of the increase in contract price.

(ii) The Government may secure the additional protection by directing the Contractor to increase the penal amount of the existing bond or to obtain an additional bond.

https://www.acquisition.gov/content/part-28-bonds-and-insurance#i1088607 https://www.gsa.gov/forms-library/performance-bond https://www.gsa.gov/forms-library/payment-bond

(c) Furnishing executed bonds. The Contractor shall furnish all executed bonds, including any necessary reinsurance agreements, to the Contracting Officer, within the time period specified in the Bid Guarantee provision of the solicitation, or otherwise specified by the Contracting Officer, but in any event, before starting work.

(d) Surety or other security for bonds. The bonds shall be in the form of firm commitment, supported by corporate sureties whose names appear on the list contained in Treasury Department

Circular 570, individual sureties, or by other acceptable security such as postal money order, certified check, cashier's check, irrevocable letter of credit, or, in accordance with

Treasury Department regulations, certain bonds or notes of the

United States. Treasury Circular 570 is published in the Federal

Register or may be obtained from the U.S. Department of the

Treasury, Financial Management Service, Surety Bond Branch, 3700

East West Highway, Room 6F01, Hyattsville, MD 20782. Or via the internet at http://www.fms.treas.gov/c570/.

(e) Notice of subcontractor waiver of protection (40 U.S.C.

3133(c)). Any waiver of the right to sue on the payment bond is void unless it is in writing, signed by the person whose right is waived, and executed after such person has first furnished labor or material for use in the performance of the contract.

52.228-16 Performance and Payment Bonds-Other Than Construction.

As prescribed in 28.103-4, insert a clause substantially as

PERFORMANCE AND PAYMENT BONDS-OTHER THAN CONSTRUCTION (APR 2020)

(DEVIATION 2020-O0016

(a) Definitions. As used in this clause—

Original contract price means the award price of the contract or, for requirements contracts, the price payable for the estimated quantity; or, for indefinite-quantity contracts, the price payable for the specified minimum quantity. Original contract price does not include the price of any options, except those options exercised at the time of contract award.

http://www.fms.treas.gov/c570/ https://www.acquisition.gov/content/part-28-bonds-and-insurance#i1088657

(b) The Contractor shall furnish a performance bond (Standard

Form 1418), except that a seal is not required) for the protection of the Government in an amount equal to _______ percent of the original contract price and a payment bond

Standard Form 1416, except that s seal is not required) in an amount equal to ______ percent of the original contract price.

(c) The Contractor shall furnish all executed bonds, including any necessary reinsurance agreements, to the

Contracting Officer, within __ days, but in any event, before starting work.

(d) The Government may require additional performance and payment bond protection if the contract price is increased. The

Government may secure the additional protection by directing the

Contractor to increase the penal amount of the existing bonds or to obtain additional bonds.

(e) The bonds shall be in the form of firm commitment, supported by corporate sureties whose names appear on the list contained in Treasury Department Circular 570, individual sureties, or by other acceptable security such as postal money order, certified check, cashier's check, irrevocable letter of credit, or, in accordance with Treasury Department regulations, certain bonds or notes of the United States. Treasury Circular

570 is published in the Federal Register, or may be obtained from the U.S. Department of the Treasury, Financial Management

Service, Surety Bond Branch, 3700 East West Highway, Room 6F01, Hyattsville, MD 20782. Or via the internet at http://www.fms.treas.gov/c570/.

Alternate I (APR 2020) (2020-O0016). As prescribed in 28.103-

4 , substitute the following paragraphs (b) and (d) for paragraphs (b) and (d) of the basic clause:

(b) The Contractor shall furnish a performance bond

(Standard Form 1418, except that a seal is not required) for the protection of the Government in an amount equal to ______ percent of the original contract price.

https://www.gsa.gov/forms-library/payment-bond-other-construction-contracts http://www.fms.treas.gov/c570/ https://www.acquisition.gov/content/part-28-bonds-and-insurance#i1088657 https://www.acquisition.gov/content/part-28-bonds-and-insurance#i1088657 https://www.gsa.gov/forms-library/performance-bond-other-construction-contracts

(d) The Government may require additional performance bond protection if the contract price is increased. The Government may secure the additional protection by directing the Contractor to increase the penal amount of the existing bond or to obtain an additional bond.

Attachment 2

DEFENSE FEDERAL ACQUISITION REGULATION SUPPLEMENT

PART 232—ASSIGNMENT OF CLAIMS

SUBPART 232.8—ASSIGNMENT OF CLAIMS

232.805 Procedure. (DEVIATION 2020-O0016)

(b) The assignee shall forward by email or other electronic means, the notice of assignment and a copy of the instrument of assignment—

(i) To the administrative contracting officer (ACO). The ACO shall acknowledge receipt by signing and dating the notice of assignment and shall—

(A) File the copy of the instrument of assignment and signed and dated notice in the contract file;

(B) Forward a copy of the signed and dated notice to the disbursing officer of the payment office cited in the contract;

(C) Return a copy of the signed and dated notice to the assignee; and

(D) Advise the contracting officer of the assignment;

(ii) To the surety or sureties, if any. The surety shall acknowledge receipt by signing and dating the notice of assignment and shall return a copy of the signed and dated notice to the assignee, who shall forward a copy to the disbursing officer designated in the contract.

(iii) To the disbursing officer of the payment office cited in the contract. The disbursing officer shall acknowledge receipt by signing and dating the notice of assignment and return to the assignee the copy of the signed and dated notice and shall file the copy of the instrument and original notice.