2024: The FAR - Federal Acquisition Regulations, Part 50

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The FAR:
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THE FAR

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THE FAR
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2024: The FAR - Federal Acquisition Regulations, Part 50

2024 Webinar Series
THE FAR
THE FAR – PART 50

2024 Webinar Series
THE FAR
FAR PART #50:
Extraordinary Contractual Actions And The Safety
Act
SPEAKER: Alejandro Sarria
FIRM: Miller & Chevalier Chartered
EMAIL: asarria@milchev.com

• FAR Subpart 50.1 - Extraordinary Contractual Actions
Policies and procedures for entering into, amending, or modifying contracts in
order to facilitate the national defense under the extraordinary emergency
authority granted by Public Law 85-804
• FAR Subpart 50.2 - SAFETY Act
Implements SAFETY Act liability to promote development and use of anti-terrorism
technologies
2024 Webinar Series
THE FAR

FAR 50.1 - Extraordinary Contract Actions
• Public Law 85-804: empowers the President to authorize agencies to enter into,
amend, and modify contracts, without regard to other provisions of the law related
to making, performing, amending, or modifying contracts, when the President
considers that such action would facilitate the national defense
• Agencies with authority include DoD, Army, Navy, AF, DHS, NASA, and GSA
• Policy (50.101-2): Authority may not (1) be used in a manner that encourages
carelessness or laxity on the part of persons engaged in the defense effort, or (2) be
relied upon when other adequate legal authority exists within the agency
2024 Webinar Series
THE FAR

• Contract Adjustment Boards (50.102-2): may be established with the authority to approve,
authorize, and direct appropriate action under FAR 50.1 and to make appropriate
determinations and findings
• Limitations on Pub. L. 85-804 Authority (50.102-3)
- Must facilitate national defense
- Other legal authority deemed to be lacking or inadequate
- Does not obligate Government to an amount over $35 million without Congressional approval
- Full and Open competition for contract award still required
- No amendment or modification unless Contractor submits a request before all obligations under the
contract have been discharged
- Additional limitations apply to use of authority by persons below the level of deputy assistant agency head
2024 Webinar Series
THE FAR

Types of Contract Adjustment (50.103-2)
• Amendments without consideration: requires (1) contractor performance to be essential
to the national defense, (2) a loss under the contract, and (3) the loss impair the
contractor’s “productive ability”
• Example scenarios:
-Fixed price contract, not typically subject to adjustment, hampered by supply chain
issues/inflation
- Government action unfairly interferes with performance, resulting in actual loss
• Correcting mistakes
• Formalizing informal commitments: to permit payment to persons who have taken
action without a formal contract

Request for Contract Adjustment (50.103-3): Contractor will submit a request, typically a letter,
to the contracting officer with the following information:
• Adjustment requested
• Essential facts
• Contractor’s conclusions as to why it believes adjustment is warranted
• Whether all contract obligations have been discharged and the status of any final payments
• If seeking an adjustment above the simplified acquisition threshold, the contractor will certify
the request is made in good faith and all supporting information is accurate and complete
• Contracting officer may request additional information, including evidence supporting the
contractor’s essentiality to the national defense

• Disposition (50.103-6): When approving or denying a contractor’s adjustment request,
the approving authority will sign a Memorandum of Decision containing: (1) contractor
info, (2) description of supplies/services, (3) decision reached and associated cost,
(4) justification for decision, and (5) a statement that the authorized action will facilitate
the national defense
• Contract Requirements (50.103-7): Any contract entered into, amended, or modified
pursuant to subpart 50.1 shall contain a:
- Citation to Pub. L. 85-804 and Executive Order 10789
- Statement of the circumstances justifying the action
- Recital of the finding that the action will facilitate the national defense

• Indemnification: Pub. L. 85-804 also empowers the President to authorize federal
agencies to indemnify contractors for unusually hazardous or nuclear risks that may
arise during the performance of a government contract
- What is an “unusually hazardous risk?”
• Indemnification under Pub. L. 85-804 generally available (1) if the contractor’s work will
involve unusually hazardous or nuclear risks for which insurance is too expensive or
unavailable, and (2) when granted such indemnity would facilitate the national defense
• Indemnification covers a broad range of claims including third-party lawsuits: (a) for
death, personal injury or property damage, and (b) alleging contractor negligence,
wrongful acts, omissions and even willful misconduct or lack of good faith

Special procedures for unusually hazardous or nuclear risks (50.104-3)
• Contractor submits request for the indemnification clause, including statement of the
unusually hazardous risks and how the contractor would be exposed to them
- Request should be submitted shortly after contract award, preferably before
performance begins
• Contracting officer, with assistance from legal counsel and cognizant program office
personnel, reviews request and makes determination
- If denied, CO must promptly notify contractor with reasoning
- If approved, CO executes Memorandum of Decision, incorporating FAR 52.250-1
into the contract. Contractor may, with Government approval, indemnify
subcontractors.

Special procedures for unusually hazardous or nuclear risks (50.104-3)
• Tribunals generally lack jurisdiction to review agency decisions denying Pub. L. 85-804
indemnity, except when provided by contract.
• Pub. L. 85-804 indemnification provisions will be enforced once incorporated into a
contract.
• Keys to securing indemnification: persuade the Government that (1) the contractor is
delivering a product/service that is critical to national defense, (2) based on past
experience, there is a material chance the contractor could be exposed to significant
third-party liability, and (3) insurance and other forms of protection are either not
available, too expensive, or too limited in coverage

FAR 50.2 – SAFETY Act
Support anti-terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act)
• Enacted to (1) encourage development and use of anti-terrorism technology, and (2)
provide risk management and litigation management for QATT sellers
• Created liability limitations for claims arising out of, relating to, or resulting from an
act of terrorism where QATT had been deployed
• Qualified Anti-Terrorism Technology (QATT): any technology designed, developed,
modified, procured, or sold for the purpose of preventing or deterring acts of
terrorism or limiting the harm such acts might otherwise cause
- Ex: screening services, venue security, detection systems, threat and
vulnerability assessment systems

• Scope (50.200): Implements the SAFETY Act liability protections to promote
development and use of anti-terrorism technologies
• Parties covered are referred to as “sellers” – include any person, firm, or other entity
that provides a QATT to customers
- Protection extends to users – claims may not be brought against the buyers,
buyers’ contractors, or downstream users of the QATT

Two Levels of Liability Protection
• Designation: seller’s liability for products/services deemed “Designated Technology”
is limited to the amount of liability insurance that DHS determines seller must
maintain
- Developmental Test & Evaluation Designation: for technology that is in prototype
stage and shows potential, but more evidence of effectiveness needed
- Full Designation: for technology with proven effectiveness
• Certification: (1) provides “Designation” protections , (2) allows seller to assert
Government Contractor Defense for claims arising from acts of terrorism, and (3)
“Certified Technology” placed on SAFETY Act’s approved product list for homeland
security

Developmental & Test
Designation
Full Designation Certification
Effectiveness
Evaluation
Needs more proof, but
potential exists
Proven effectiveness
with confidence of
repeatability
Consistently proven
effectiveness with high
confidence of enduring
effectiveness
Liability
Protection
Liability cap, only for
identified test events
and for limited
duration (less than 3
years)
Liability cap, for any
and all deployments
made within 5 years
Government Contract
Defense for any and all
deployments made
within 5 years

SAFETY Act Criteria for Designation
• Prior Government use or demonstrated substantial utility and effectiveness
• Availability of the technology for immediate deployment
• Existence of extraordinarily large or un-quantifiable potential third-party liability risk exposure to the Seller
• Substantial likelihood that the technology will not be deployed unless SAFETY Act protection granted
• Evaluation of scientific studies that can be feasibly conducted to assess the capability of the technology to
substantially reduce risks of harm
SAFETY Act Criteria for Certification
• Designation Criteria and
• QATT must be shown to (1) perform as intended, (2) conform to seller’s specifications, and (3) be safe for
use as intended

• Policy (50.204):
- Agencies should encourage offerors to seek protections for their offered
technologies, even in advance of the issuance of a solicitation
- The DHS determination to extend SAFETY Act protections for a technology is not a
determination that the technology meets, or fails to meet solicitation requirements
• Procedure Considerations (50.205-1):
- Requiring activities should review requirements to identify potential technologies
that may be appropriate for SAFETY Act protections
- Acquisition officials should consider SAFETY Act issues early in acquisition cycle

• Pre-qualified designation notice (50.205-2): If the requiring activity determines
technology to be acquired may qualify for SAFETY Act protection, they are responsible for
requesting a pre-qualification designation notice from DHS.
- DHS will determine whether the technology affirmatively or presumptively satisfies
criteria for SAFETY Act protection and will authorize offerors to submit streamlined
applications for protection
• Authorization of offers contingent upon SAFETY Act protection (50.205-3)
• Authorization of awards made presuming SAFETY Act protection (50.205-4)

2024 Webinar Series
THE FAR
THANK YOU FOR ATTENDING!
FAR PART #50:
Extraordinary Contractual Actions And The Safety Act
SPEAKER: Alejandro Sarria
FIRM: Miller & Chevalier Chartered
EMAIL: asarria@milchev.com

2024 Webinar Series
THE FAR
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2024 Webinar Series
The FAR:
Federal Acquisition Regulations
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2024: The FAR - Federal Acquisition Regulations, Part 50

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2024: The FAR - Federal Acquisition Regulations, Part 50