[Federal Register: December 13, 2010 (Volume 75, Number 238)]
[Rules and Regulations]
[Page 77739-77741]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13de10-12]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 9 and 52
[FAC 2005-47; FAR Case 2009-036; Item V; Docket 2010-0109, Sequence 1]
RIN 9000-AL75
Federal Acquisition Regulation; Uniform Suspension and Debarment
Requirement
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (the Councils) are issuing an interim
rule amending the Federal Acquisition Regulation (FAR) to implement
section 815 of the National Defense Authorization Act for Fiscal Year
2010. Section 815 extends the flowdown of the restriction on
subcontracting to lower tier subcontractors that have been suspended or
debarred, with some exceptions for contracts for the acquisition of
commercial items and commercially available off-the-shelf items.
DATES: Effective Date: December 13, 2010.
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat on or before February 11, 2011 to be
considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-47, FAR Case 2009-
036, by any of the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2009-036'' under the heading ``Enter Keyword or ID'' and selecting
``Search''. Select the link ``Submit a Comment'' that corresponds with
``FAR Case 2009-036''. Follow the instructions provided at the ``Submit
a Comment'' screen. Please include your name, company name (if any),
and ``FAR Case 2009-036'' on your attached document.
Mail: General Services Administration, Regulatory
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE.,
Washington, DC 20417.
[[Page 77740]]
Instructions: Please submit comments only and cite FAC 2005-47, FAR
Case 2009-036, in all correspondence related to this case. All comments
received will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Ms. Millisa Gary, Procurement Analyst, at (202) 501-0699. Please cite
FAC 2005-47, FAR Case 2009-036. For information pertaining to status or
publication schedules, contact the Regulatory Secretariat at (202) 501-
4755.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule revises the FAR to implement section 815 of the
National Defense Authorization Act for Fiscal Year 2010 (Pub. L. 111-
84). Section 815 amends section 2455(c)(1) of the Federal Acquisition
Streamlining Act of 1994 (31 U.S.C. 6101 note) by amending the
definition of ``procurement activities'' to include subcontracts at any
tier, except--
It does not include subcontracts for commercially
available off-the-shelf (COTS) items; and
In the case of commercial items, such term includes only
the first-tier subcontracts.
This has the effect, except for COTS items, of expanding the
requirement of 2455(a), which states that ``No agency shall allow a
party to participate in any procurement * * * activity if any agency
has debarred, suspended, or otherwise excluded * * * that party from
participation in a procurement * * * activity.''
Prime contractors will not be restricted from subcontracts with
suspended or debarred entities for COTS items; subcontractors for COTS
items will not be required to disclose to the prime contractor whether
the subcontractor, or any of its principals, is debarred, suspended, or
proposed for debarment at the time of subcontract award.
This interim rule amends--
(1) FAR 9.405-2 to exclude COTS items from the restrictions on
subcontracting with contractors that have been debarred, suspended, or
proposed for debarment;
(2) The clause at FAR 52.209-6, Protecting the Government's
Interest When Subcontracting with Contractors Debarred, Suspended, or
Proposed for Debarment, by flowing down the requirements to check
whether a subcontractor is suspended or debarred beyond the first-tier,
with the stated exceptions for COTS items; and
(3) The clause at FAR 52.212-5, Contract Terms and Conditions
Required to Implement Statutes or Executive Orders--Commercial Items,
because the requirement that commercial contracts must flow the
requirement down to the first-tier is now statutory.
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.
B. Regulatory Flexibility Act
The Councils do not expect this interim rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act. The rule removes the current
requirements relating to subcontracts for COTS items, and in the case
of commercial items, the requirement extends only to the first-tier
subcontracts. This rule will impact small entities that are awarded a
lower-tier subcontract for a non-COTS item that exceeds $30,000, in
that these entities must now disclose to the higher-tier subcontractor
whether they are suspended, debarred, or proposed for suspension.
Although a substantial number of small entities may be impacted by this
rule, the impact is not significant. It will likely only take one
minute to include the required information with an offer. For the other
impact of the rule, which will require the higher-tier subcontractor to
provide an explanation if desiring to subcontract with an entity that
has been debarred, suspended, or proposed for debarment, the Councils
do not expect this requirement to impact a substantial number of small
entities, because it would only be in rare circumstances that a
subcontractor would potentially jeopardize performance or integrity by
knowingly contracting with an entity that is debarred, suspended or
proposed for debarment. Therefore, an Initial Regulatory Flexibility
Analysis has not been performed. The Councils invite comments from
small business concerns and other interested parties on the expected
impact of this rule on small entities.
The Councils will also consider comments from small entities
concerning the existing regulations in parts affected by this rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAC 2005-47, FAR Case
2008-036) in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does apply; however, these changes to
the FAR only impose minimal additional information collection
requirements to the paperwork burden previously approved under OMB
Control Number 9000-0094. Because the change in burden hours is so
slight, no new approval by OMB is required.
D. Determination to Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense, the Administrator of General Services, and the
Administrator of the National Aeronautics and Space Administration that
urgent and compelling reasons exist to promulgate this interim rule
without prior opportunity for public comment. This action is necessary
to implement the changes resulting from the enactment of Section 815 of
the National Defense Authorization Act for Fiscal Year 2010 (Pub. L.
111-84), effective October 28, 2009. However, pursuant to 41 U.S.C.
418b and FAR 1.501-3(b), the Councils will consider public comments
received in response to this interim rule in the formation of the final
rule.
List of Subjects in 48 CFR Parts 9 and 52
Government procurement.
Dated: November 24, 2010.
Millisa Gary,
Acting Director, Acquisition Policy Division.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 9 and 52 as set forth
below:
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1. The authority citation for 48 CFR parts 9 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 9--CONTRACTOR QUALIFICATIONS
0
2. Amend section 9.405-2 by revising paragraph (b) introductory text to
read as follows:
9.405-2 Restrictions on subcontracting.
* * * * *
(b) The Government suspends or debars contractors to protect the
Government's interests. By operation of the clause at 52.209-6,
Protecting the Government's Interests When Subcontracting with
Contractors Debarred, Suspended or Proposed for Debarment, contractors
shall not enter into any subcontract in excess of $30,000, other than a
subcontract for a commercially available off-the-shelf
[[Page 77741]]
item, with a contractor that has been debarred, suspended, or proposed
for debarment unless there is a compelling reason to do so. If a
contractor intends to subcontract, other than a subcontract for a
commercially available off-the-shelf item, with a party that is
debarred, suspended, or proposed for debarment as evidenced by the
parties' inclusion in the EPLS (see 9.404), a corporate officer or
designee of the contractor is required by operation of the clause at
52.209-6, Protecting the Government's Interests when Subcontracting
with Contractors Debarred, Suspended, or Proposed for Debarment, to
notify the contracting officer, in writing, before entering into such
subcontract. For contracts for the acquisition of commercial items, the
notification requirement applies only for first-tier subcontracts. For
all other contracts, the notification requirement applies to
subcontracts at any tier. The notice must provide the following:
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend section 52.209-6 by--
0
a. Revising the date of the clause;
0
b. Redesignating paragraphs (a) through (c) as paragraphs (b) through
(d), respectively; and adding a new paragraph (a);
0
c. Revising the newly designated paragraphs (b), (c), and (d)
introductory text; and
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d. Adding paragraph (e).
The revised and added text reads as follows:
52.209-6 Protecting the Government's Interest When Subcontracting
With Contractors Debarred, Suspended, or Proposed for Debarment.
* * * * *
Protecting the Government's Interest When Subcontracting With
Contractors Debarred, Suspended, or Proposed for Debarment (DEC 2010)
(a) Definition. Commercially available off-the-shelf (COTS)
item, as used in this clause--
(1) Means any item of supply (including construction material)
that is--
(i) A commercial item (as defined in paragraph (1) of the
definition in FAR 2.101);
(ii) Sold in substantial quantities in the commercial
marketplace; and
(iii) Offered to the Government, under a contract or subcontract
at any tier, without modification, in the same form in which it is
sold in the commercial marketplace; and
(2) Does not include bulk cargo, as defined in section 3 of the
Shipping Act of 1984 (46 U.S.C. App. 1702), such as agricultural
products and petroleum products.
(b) The Government suspends or debars Contractors to protect the
Government's interests. Other than a subcontract for a commercially
available off-the-shelf item, the Contractor shall not enter into
any subcontract, in excess of $30,000 with a Contractor that is
debarred, suspended, or proposed for debarment by any executive
agency unless there is a compelling reason to do so.
(c) The Contractor shall require each proposed subcontractor
whose subcontract will exceed $30,000, other than a subcontractor
providing a commercially available off-the-shelf item, to disclose
to the Contractor, in writing, whether as of the time of award of
the subcontract, the subcontractor, or its principals, is or is not
debarred, suspended, or proposed for debarment by the Federal
Government.
(d) A corporate officer or a designee of the Contractor shall
notify the Contracting Officer, in writing, before entering into a
subcontract with a party (other than a subcontractor providing a
commercially available off-the-shelf item) that is debarred,
suspended, or proposed for debarment (see FAR 9.404 for information
on the Excluded Parties List System). The notice must include the
following:
* * * * *
(e) Subcontracts. Unless this is a contract for the acquisition
of commercial items, the Contractor shall include the requirements
of this clause, including this paragraph (e) (appropriately modified
for the identification of the parties), in each subcontract that--
(1) Exceeds $30,000 in value; and
(2) Is not a subcontract for commercially available off-the-
shelf items.
(End of clause)
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4. Amend section 52.212-5 by--
0
a. Revising the date of the clause; and
0
b. Redesignating paragraphs (b)(6) through (b)(44) as paragraphs (b)(7)
through (b)(45), respectively; and adding a new paragraph (b)(6).
The revised and added text reads as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (DEC 2010)
(b) * * *
(6) 52.209-6, Protecting the Government's Interest When
Subcontracting with Contractors Debarred, Suspended, or Proposed for
Debarment (DEC 2010) (31 U.S.C. 6101 note). (Applies to contracts
over $30,000). (Not applicable to subcontracts for the acquisition
of commercially available off-the-shelf items).
* * * * *
0
5. Amend section 52.213-4 by revising the date of the clause and
paragraph (b)(2)(i) to read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items) (DEC 2010)
(b) * * *
(2) * * *
(i) 52.209-6, Protecting the Government's Interest When
Subcontracting with Contractors Debarred, Suspended, or Proposed for
Debarment (DEC 2010) (Applies to contracts over $30,000). (Not
applicable to subcontracts for the acquisition of commercially
available off-the-shelf items).
* * * * *
[FR Doc. 2010-30565 Filed 12-10-10; 8:45 am]
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