[Federal Register: November 22, 2002 (Volume 67, Number 226)]
[Rules and Regulations]
[Page 70518-70519]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22no02-14]
[[Page 70518]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 17, 22, and 36
[FAC 2001-10; FAR Case 2001-016; Item II]
RIN 9000-AJ14
Federal Acquisition Regulation; Executive Order 13202,
Preservation of Open Competition and Government Neutrality Towards
Government Contractors' Labor Relations on Federal and Federally Funded
Construction Projects
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule; termination of stay of interim rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) published in the Federal
Register at 66 FR 27414, May 16, 2001, an interim rule implementing
Executive Order (E.O.) 13202, Preservation of Open Competition and
Government Neutrality Towards Government Contractors' Labor Relations
on Federal and Federally Funded Construction Projects. As a result of a
permanent injunction against the E.O. and pending litigation to resolve
the dispute, the Councils published an interim rule in the Federal
Register at 67 FR 10527, March 7, 2002, staying the heart of the rule.
The Federal Acquisition Regulatory (FAR) Council intended the stay
would last until final judicial resolution of the dispute. The FAR
Council requested comments on the FAR interim rule stay. This final
rule terminates the stay and adopts the May 16, 2001, interim rule as
final without change.
DATES: Effective November 22, 2002, the stay of 48 CFR 36.202(d) is
terminated. As of November 22, 2002, the interim rule amending 48 CFR
parts 17, 22, and 36 published on May 16, 2001 (66 FR 27414), is
adopted as final without change.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC, 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAC 2001-10, FAR case 2001-016.
SUPPLEMENTARY INFORMATION:
A. Background
On February 17, 2001, President George W. Bush signed Executive
Order (E.O.) 13202 revoking E.O. 12836 of February 1, 1993, and
Presidential Memorandum of June 5, 1997, entitled ``Use of Project
Labor Agreements for Federal Construction Projects.'' The E.O. was
published in the Federal Register at 66 FR 11225, February 22, 2001,
and amended by E.O. 13208 published in the Federal Register at 66 FR
18717, April 11, 2001.
The E.O. 13202 is intended to improve the internal management of
the Executive branch by--
[sbull] Promoting and ensuring open competition on Federal and
federally funded or assisted construction projects;
[sbull] Maintaining Government neutrality towards Government
contractors' labor relations on Federal and federally funded or
assisted construction projects;
[sbull] Reducing construction costs to the Government and to the
taxpayers;
[sbull] Expanding job opportunities, especially for small and
disadvantaged businesses;
[sbull] Preventing discrimination against Government contractors or
their employees based upon labor affiliation or lack thereof, thereby
promoting the economical, nondiscriminatory, and efficient
administration and completion of Federal and federally funded or
assisted construction projects; and
[sbull] Preventing the inefficiency that may result from the
disruption of a previously established contractual relationship in
particular cases.
To implement Executive Order 13202, as amended, an interim rule was
published in the Federal Register on May 16, 2001, 66 FR 27414, as part
of Federal Acquisition Circular 97-26. Consistent with Executive Order
13202, as amended, FAR 36.202(d) of that interim rule specified that
agencies could not require or prohibit offerors, contractors, or
subcontractors from entering into or adhering to agreements with one or
more labor organizations. It also permitted agency heads to exempt a
project from the requirements of the Executive order under special
circumstances, but specified that such an exemption could not be
related to a possible or an actual labor dispute. FAR 36.202(d) also
provided for the exemption of a project governed by a project labor
agreement in place as of February 17, 2001, which had a construction
contract awarded as of February 17, 2001.
In response to the interim rule, the Councils received 179 letters.
All but one of the respondents supported the rule. The one respondent
(Building and Construction Trades Department, AFL-CIO) that did not
support the rule believed the Executive order in which the rule was
based is unlawful; that the interim rule is based both on
misapprehensions about the nature of Project Labor Agreements and on
economic assumptions that lack any factual basis; and that the interim
rule is so vague as to mislead affected parties about their ability to
exercise their statutory rights. Since the rule mirrors the directives
contained in the Executive orders, the Councils agreed that no change
to the rule was necessary.
This same respondent, along with other plaintiffs, commenced a
lawsuit to enjoin the enforcement of the E.O. issued by the President.
A permanent injunction against enforcement of Executive Order 13202 was
issued November 7, 2001, by the U.S. District Court for the District of
Columbia (see Building and Construction Trades Department, AFL-CIO v.
Allbaugh, D.D.C., 172 F.Supp.2d 138, D.D.C. 2001). The Government
submitted its appeal (No. 01-5436 (D.C. Cir.)). In order to comply with
the court order, a stay of the heart of the interim rule with a request
for comments was published in the Federal Register at 67 FR 10527,
March 7, 2002, pending resolution of the litigation.
In response to the interim rule stay, one respondent (The
Associated General Contractors of America (AGC)) submitted comments.
AGC believed that the unresolved legal challenge to the Executive Order
13202 does not require a stay of the interim rule, and it is
inappropriate for the Councils to impede the enforcement of the E.O.
The Councils determined that the stay would remain pending resolution
of the litigation.
A decision by the United States Court of Appeals for the District
of Columbia Circuit on July 12, 2002, reversed the judgment of the
District Court and vacated the injunction (295 F.3d 28, D.C. Cir.
2002). Accordingly, the Councils are terminating the stay and adopting
the May 16, 2001, interim rule as final without change.
This is not a significant regulatory action and, therefore, was not
subject to review under Section 6(b) of Executive Order 12866,
Regulatory Planning and Review, dated September 30, 1993. This rule is
not a major rule under 5 U.S.C. 804.
[[Page 70519]]
B. Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601, et seq., applies to
this final rule. The Councils prepared a Final Regulatory Flexibility
Analysis (FRFA), and it is summarized as follows:
This rule amends FAR parts 17, 22, and 36 to implement Executive
Order 13202 as amended on April 6, 2001 (E.O. 13208). The Executive
orders require that any construction contract awarded after February
17, 2001, or any obligation of funds pursuant to such contract, must
not require or prohibit offerors, contractors, or subcontractors to
enter into or adhere to agreements with one or more labor
organizations on the same or other related construction project(s);
or otherwise discriminate against offerors, contractors, or
subcontractors for becoming or refusing to become or remaining
signatories or otherwise adhere to agreements with one or more
organizations, on the same or other related construction projects.
The rule primarily affects the internal operating procedures of
Government agencies. The rule will apply to all large and small
entities that seek award of construction contracts that are Federal
and federally funded. During fiscal year 2001, there were over
forty-seven thousand contract actions awarded to small businesses
according to the Federal Procurement Data System. These actions were
worth a total of over $6 billion. It is expected that the awarding
offices neutrality toward Government contractors' and subcontractors
labor relations regarding project labor agreements will expand job
opportunities to small entities, specifically nonunion small
businesses. This gives small businesses the ability to negotiate and
establish business relationships to deliver efficient and cost
effective high quality construction projects.
Interested parties may obtain a copy of the FRFA from the FAR
Secretariat. The FAR Secretariat has submitted a copy of the FRFA to
the Chief Counsel for Advocacy of the Small Business Administration.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the changes to
the FAR do not impose information collection requirements that require
the approval of the Office of Management and Budget under 44 U.S.C.
3501, et seq.
List of Subjects in 48 CFR Parts 17, 22, and 36
Government procurement.
Dated: November 12, 2002.
Al Matera,
Director, Acquisition Policy Division.
Stay Terminated; Interim Rule Adopted as Final Without Change
Accordingly, DoD, GSA, and NASA terminate the interim rule stay
published in the Federal Register at 67 FR 10527 on March 7, 2002, and
further adopt as a final rule without change the interim rule amending
48 CFR parts 17, 22, and 36, which was published in the Federal
Register at 66 FR 27414 on May 16, 2001.
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
[FR Doc. 02-29090 Filed 11-21-02; 8:45 am]
BILLING CODE 6820-EP-P