[Federal Register: June 16, 2010 (Volume 75, Number 115)]
[Rules and Regulations]
[Page 34279-34281]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jn10-22]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 13, 14, 15, and 52
[FAC 2005-42; FAR Case 2009-011; Item VI; Docket 2009-0012, Sequence 1]
RIN 9000-AL20
Federal Acquisition Regulation; FAR Case 2009-011, American
Recovery and Reinvestment Act of 2009 (Recovery Act)--GAO/IG Access
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (the Councils) have adopted as final,
with changes, the interim rule amending the Federal Acquisition
Regulation (FAR) to implement the American Recovery and Reinvestment
Act of 2009 (Recovery Act) with respect to sections 902, 1514, and
1515.
DATES: Effective Date: July 16, 2010.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Edward N. Chambers, Procurement Analyst, at (202) 501-3221. For
information pertaining to status or publication schedules, contact the
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-42, FAR Case
2009-011.
SUPPLEMENTARY INFORMATION:
A. Background
The Councils published an interim rule in the Federal Register at
74 FR 14646 on March 31, 2009, to implement the Recovery Act with
respect to sections 902, 1514, and 1515. Technical amendments to the
interim rule were published in the Federal Register at 74 FR 22810 on
May 14, 2009. The interim rule added alternate clauses to FAR 52.214-26
``Audit and Records--Sealed Bidding'', FAR 52.212-5 ``Contract Terms
and Conditions Required to Implement Statutes or Executive Orders--
Commercial Items'', and FAR 52.215-2 ``Audit and Records--
Negotiation''.
Further, the interim rule amended FAR 12.504(a)(7) for contracts
using Recovery Act funds to apply 41 U.S.C. 254d(c) and 10 U.S.C.
2313(c), Examination of Records of Contractor, to commercial item
subcontracts which are otherwise exempt when subcontractors are not
required to provide cost or pricing data.
Comments were received from 5 respondents. The Councils considered
the comments received and concluded that the interim rule, as revised
by the technical amendments, should be converted to a final rule with
minor changes to the clause prescriptions.
The comments received are addressed as follows:
1. Scope of records that can be examined.
Comment: A respondent states that the language in FAR 52.212-
5(d)(i) and FAR 52.212-5(d)(ii) is unnecessarily broad by not limiting
the scope of records that can be examined by the
[[Page 34280]]
Inspector General (IG) to only those records related or funded with
Recovery Act funds. The respondent made the same comment with regard to
the scope of the IG examination of records in FAR 52.214-26(c)(2)
Alternate I and 52.215-2(d)(1) Alternate I. Likewise, a respondent
expressed concern that the interim rule is not clear whether it applies
only to task orders that are funded with Recovery Act funds.
Response: Section 902 of the Recovery Act provides that each
contract awarded using funds made available by the Recovery Act shall
provide the Comptroller General, and his representatives, with the
access specified in the statutory provision. Section 1515 provides that
each contract awarded using covered funds shall provide the appropriate
IG with the access specified in the statutory provision. The Councils
have revised the clause prescriptions to clarify that ``contract,'' as
defined in FAR 2.101, may mean bilateral contract modification or an
individual task or delivery order. In the case of a bilateral
modification that will use funds appropriated or otherwise made
available by the Recovery Act, the contracting officer shall specify
the applicability of the Recovery Act to that modification. In the case
of a task- or delivery-order contract in which not all orders will use
funds appropriated or otherwise made available by the Recovery Act, the
contracting officer will specify the task or delivery orders to which
the Recovery Act applies.
2. Advance notice.
Comment: A respondent states that they believe an IG must provide
reasonable advance notice to contractors and their employees before a
review of contractor transactions to include when and where the review
and interviews will occur; the topics to be covered; the employees
affected; and the total amount of time required to conduct the review.
Response : The Councils disagree. The purpose of this rule is to
put contractors on notice that they may need to make their records and
employees available in the event a review is requested. The FAR is an
acquisition regulation and the exact review procedures that the
Comptroller General or his authorized representatives use to execute
such procedures are not required to be detailed in the FAR.
3. Rights of contractor employees.
Comment: A respondent is concerned that the rule is silent on the
protection of the rights of employees subject to an interview. The
respondent recommends clearly outlining the rights of contractor
employees to include prescribing the right to have counsel present
during the interviews and clearly spelling out the process that the
Government Accountability Office (GAO)/IG will use in both notifying
employees of the intent to interview and the process to be followed.
Response: The Councils disagree. The FAR does not prescribe GAO
processes or grant legal rights to contractors regarding GAO/IG
interview processes.
4. IG authority to interview subcontractor employees.
Comment: A respondent commented that while they generally support
the rule, they feel that the rule failed to include an IG authority to
interview subcontractor employees.
Response: The Councils disagree. The FAR rule follows the statute.
The Councils do not find evidence that there was an inadvertent
omission in the statute with reference to allowing an IG to interview
subcontractor employees.
5. Technical amendments.
Comment: A respondent believes that there are overlapping changes
between this case and the Whistleblower case, FAR 2009-012, with
respect to FAR clause 52.212-5, Alternate II. This same comment was
made by a second respondent recommending the inclusion of the
Whistleblower case in FAR clause 52.212-5, Alternate II.
Response: The Councils agree. FAC 2005-032, Technical Amendments,
reconciled this issue by adding the Whistleblower reference to
Alternate II of FAR 52.212-5.
6. Outside scope of this case.
a. Comment: A respondent commented that the application of
reporting requirements is overly broad and recommends exempting
contracts at or below the simplified acquisition threshold, commercial
item contracts, and Commercially available off-the-shelf (COTS)
contracts from the reporting requirements.
Response: Reporting requirements are covered under FAR Case 2009-
009.
b. Comment: A respondent commented that FAR 12.504(a)(7)
incorrectly states that 41 U.S.C. 254(c) and 10 U.S.C. 2313(c) are
required ``when a subcontractor is not required to provide cost or
pricing data''.
Response: This comment does not address a change made by this rule.
The comment may be taken under consideration for appropriateness as a
future case.
c. Comment: A respondent notes that if FAR 52.203-15 is intended to
be flowed down to commercial item subcontractors, then it should also
be included in the list of clauses under FAR 52.244-6.
Response: This comment is not directed at changes made under this
rule and does not require a change to FAR Case 2009-011.
This is a significant regulatory action and, therefore, was subject
to Office of Management and Budget (OMB) 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.
B. Applicability to Commercial Item contracts
Section 8003 of Pub. L. 103-355, the Federal Acquisition
Streamlining Act (FASA) (41 U.S.C. 430), governs the applicability of
laws to commercial items, and is intended to limit the applicability of
laws to commercial items. The FASA provides that if a provision of law
contains criminal or civil penalties, or if the Federal Acquisition
Regulatory Council makes a written determination that it is not in the
best interest of the Federal Government to exempt commercial item
contracts, the provision of law will apply to contracts for commercial
items. The same applies for subcontracts for commercial items.
Therefore, given sections 902 and 1515 of the Recovery Act, which
requires Comptroller General and agency inspector general access to
contractor and subcontractor records, the FAR Council has determined
that the rule should apply to commercial items, as defined at FAR
2.101, both at the prime and subcontract levels.
C. Applicability to commercially available off-the-shelf (COTS) item
contracts
Section 4203 of Pub. L. 104-106, the Clinger-Cohen Act of 1996 (41
U.S.C. 431), governs the applicability of laws to the procurement of
COTS items, and is intended to limit the applicability of laws to them.
The Clinger-Cohen Act provides that if a provision of law contains
criminal or civil penalties, or if the Administrator for Federal
Procurement Policy makes a written determination that it is not in the
best interest of the Federal Government to exempt COTS item contracts,
the provision of law will apply.
Therefore, given sections 902 and 1515 of the Recovery Act, which
requires Comptroller General and agency IG access to contractor and
subcontractor records, the Administrator for Federal Procurement
Policy, has determined that the rule
[[Page 34281]]
should apply to COTS item contracts, as defined at FAR 2.101.
D. Applicability to Contracts at or Below the Simplified Acquisition
Threshold
Section 4101 of Pub. L. 103-355, the Federal Acquisition
Streamlining Act (FASA) (41 U.S.C. 429), governs the applicability of
laws to contracts or subcontracts in amounts not greater than the
simplified acquisition threshold. It is intended to limit the
applicability of laws to them. The FASA provides that if a provision of
law contains criminal or civil penalties, or if the Federal Acquisition
Regulatory Council (FARC) makes a written determination that it is not
in the best interest of the Federal Government to exempt contracts or
subcontracts at or below the simplified acquisition threshold, the law
will not apply to them. Therefore, given sections 902 and 1515 of the
Recovery Act, which requires Comptroller General and agency IG access
to contractor and subcontractor records, the FARC has determined that
this rule should apply to contracts or subcontracts at or below the
simplified acquisition threshold, as defined at FAR 2.101.
E. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because it merely requires
contractors to make available existing records of transactions covered
by the Recovery Act. Contractors are not obligated to create additional
records.
F. 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 OMB under 44 U.S.C. chapter 35, et seq.
List of Subjects in 48 CFR Parts 12, 13, 14, 15, and 52
Government procurement.
Dated: June 2, 2010.
Edward Loeb,
Acting Director, Acquisition Policy Division.
0
Accordingly, the interim rule published in the Federal Register at 74
FR 14646 on March 31, 2009, is adopted as a final rule with the
following changes:
0
1. The authority citation for 48 CFR parts 12, 13, 14, 15, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 12--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend section 12.301 by revising paragraph (b)(4)(ii) to read as
follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(b) * * *
(4) * * *
(ii)(A) If the acquisition will use funds appropriated or otherwise
made available by the American Recovery and Reinvestment Act of 2009
(Pub. L. 111-5), the contracting officer shall use the clause with its
Alternate II.
(B)(1) In the case of a bilateral contract modification that will
use funds appropriated or otherwise made available by the American
Recovery and Reinvestment Act of 2009, the contracting officer shall
specify applicability of Alternate II to that modification.
(2) In the case of a task- or delivery-order contract in which not
all orders will use funds appropriated or otherwise made available by
the American Recovery and Reinvestment Act of 2009, the contracting
officer shall specify the task or delivery orders to which Alternate II
applies.
(C) The contracting officer may not use Alternate I when Alternate
II applies.
* * * * *
PART 14--SEALED BIDDING
0
3. Amend section 14.201-7 by revising paragraph (a)(2) to read as
follows:
14.201-7 Contract clauses.
(a) * * *
(2)(i) If the acquisition will use funds appropriated or otherwise
made available by the American Recovery and Reinvestment Act of 2009,
use the clause with its Alternate I in all solicitations and contracts.
(ii)(A) In the case of a bilateral contract modification that will
use funds appropriated or otherwise made available by the American
Recovery and Reinvestment Act of 2009, the contracting officer shall
specify applicability of Alternate I to that modification.
(B) In the case of a task- or delivery-order contract in which not
all orders will use funds appropriated or otherwise made available by
the American Recovery and Reinvestment Act of 2009, the contracting
officer shall specify the task or delivery orders to which Alternate I
applies.
* * * * *
PART 15--CONTRACTING BY NEGOTIATION
0
4. Amend section 15.209 by revising paragraph (b)(2) to read as
follows:
15.209 Solicitation provisions and contract clauses.
* * * * *
(b) * * *
(2)(i) When using funds appropriated or otherwise made available by
the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5)--
(A) The exceptions in paragraphs (b)(1)(i) through (b)(1)(iii) are
not applicable; and
(B) Use the clause with its Alternate I.
(ii)(A) In the case of a bilateral contract modification that will
use funds appropriated or otherwise made available by the American
Recovery and Reinvestment Act of 2009, the contracting officer shall
specify applicability of Alternate I to that modification.
(B) In the case of a task- or delivery-order contract in which not
all orders will use funds appropriated or otherwise made available by
the American Recovery and Reinvestment Act of 2009, the contracting
officer shall specify the task or delivery orders to which Alternate I
applies.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.214-26 [Amended]
0
5. Amend section 52.214-26 in the introductory text by removing
``14.201-7(a)'' and adding ``14.201-7(a)(1)'' in its place; and
removing from Alternate I introductory text ``14.201-7(a)(2)'' and
adding ``14.201-7(a)(2),'' in its place.
[FR Doc. 2010-14170 Filed 6-15-10; 8:45 am]
BILLING CODE 6820-EP-S