Acquisition Regulation: Technical Revisions or Amendments To Update Clauses, 43832-43836 [05-14810]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 70, Number 145 (Friday, July 29, 2005)]
[Proposed Rules]
[Pages 43832-43836]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-14810]


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DEPARTMENT OF ENERGY

48 CFR Parts 909, 913, and 970

RIN 1991-AB62


Acquisition Regulation: Technical Revisions or Amendments To 
Update Clauses

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Energy (DOE) is proposing to amend its 
acquisition regulation to remove and add specified clauses, and revise 
certain

[[Page 43833]]

other clauses, currently contained in the Department of Energy 
Acquisition Regulation (DEAR). This rule also proposes to revise 
associated regulatory coverage, as necessary.

DATES: Written comments (three copies) on the proposed rulemaking must 
be received on or before August 29, 2005.

ADDRESSES: This notice of proposed rulemaking is available and comments 
may be submitted online at https://www.Regulations.gov. Comments may be 
submitted by e-mail to Michael.fischetti@hq.doe.gov. Comments may be 
mailed to: Michael P. Fischetti, ME-61, U.S. Department of Energy, 
Office of Procurement and Assistance Management, 1000 Independence 
Avenue, SW., Washington, DC 20585.
    Comments by e-mail are encouraged.

FOR FURTHER INFORMATION CONTACT: Michael Fischetti at (202) 287-1304 or 
Michael.fischetti@hq.doe.gov.

SUPPLEMENTARY INFORMATION
I. Background
II. Section-by-Section Analysis
III. Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under Executive Order 12988
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act
    E. Review Under the National Environmental Policy Act
    F. Review Under Executive Order 13132
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 13211
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Approval by the Office of the Secretary of Energy

I. Background

    The purpose of this rulemaking is to update various clauses within 
48 CFR chapter 9 to specify contractor responsibility in the areas of 
performance, work authorization, and subcontract flow down provisions.
    This rulemaking would modify current guidance contained in DEAR 
clauses concerning Debarment; Fast Payment Procedures; Laws, 
Regulations, and Directives; Work Authorization; Integration of 
Environment, Safety, and Health into Work Planning and Execution; and 
Facilities Management.

II. Section-by-Section Analysis

    The Department of Energy proposes to amend the regulation as 
follows:
    1. DEAR 909.406, Debarment, is proposed to be revised to permit a 
debarring official to debar a contractor, based upon a preponderance of 
the evidence, for falsely certifying or otherwise representing itself 
as a small, small disadvantaged, women- or veteran-owned, or similar 
concern.
    2. DEAR subpart 913.4 Fast Payment Procedure is proposed to be 
deleted in its entirety. DEAR 913.402 currently prohibits the use of 
fast payment procedures. Upon review of the Department's policy and the 
Federal Acquisition Regulation (FAR), DOE has determined that fast 
payment procedures could be used by DOE and that FAR coverage in 
subpart 13.4, Fast Payment Procedure, is adequate to protect the 
Department's interests. Removal of this section would permit DOE to use 
fast payment procedures under FAR 13.4.
    3. DEAR 970.5204-2, Laws, Regulations, and DOE Directives, is 
proposed to be revised by adding the following three sentences to the 
end of paragraph (e): ``Unless the contract specifically instructs the 
contractor regarding subcontract flow-down, the contractor shall be 
responsible for determining the appropriate implementation of the 
requirements, including the extent to, and manner in which, 
requirements should be reflected in subcontracts. In doing so, the 
contractor retains the same responsibility for performance and cost 
management that it has for all contract efforts. Specifically, the 
contractor shall not unnecessarily or imprudently flow down 
requirements to subcontracts and shall only incur costs that would be 
incurred by a prudent person in the conduct of a competitive 
business.'' This language is intended to emphasize the contractor's 
responsibility in effective cost management in flowing down prime 
contract requirements to its subcontractors.
    4. DEAR 970.5211-1, Work Authorization, is proposed to be added, 
with prescriptive language in DEAR 970.1170-1 and a contract clause 
instruction in DEAR 970.1170-2. This clause incorporates requirements 
that are presently located in the contractor's requirements document 
attached to DOE Directive DOE O 412.1, Work Authorization System. The 
DOE O 412.1 currently establishes an assignment and control process for 
budget of estimated costs, description of work, and schedule of 
performance for individual work activities performed by designated 
contractors within the contract scope of work. The proposed clause 
would eliminate the need for a contractor requirements document by 
establishing the requirements as a DEAR clause.
    5. DEAR 970.5223-1, Integration of Environment, Safety, and Health 
(ES&H) specifies contractor requirements pertaining to ES&H. It is 
proposed to be modified by making some editorial changes to paragraphs 
(d) and (e) and adding the following three sentences to paragraph (h): 
``Unless the contract specifically instructs the contractor regarding 
subcontract flow-down, the contractor shall be responsible for 
determining the appropriate implementation of the requirements, 
including the extent to which, and manner in which, requirements should 
be reflected in subcontracts. In doing so, the contractor retains the 
same responsibility for performance and cost management that it has for 
all contract efforts. Specifically, the contractor shall not 
unnecessarily or imprudently flow down requirements to subcontracts and 
shall only incur costs that would be incurred by a prudent person in 
the conduct of a competitive business.'' This language is intended to 
emphasize the contractor's responsibility in effective cost management 
in flowing down prime contract requirements to its subcontractors.
    6. DEAR 970.5237-2, Facilities Management, and the corresponding 
instruction at DEAR 970.37, Facilities Management Contracting, are 
proposed to be deleted. They currently provide guidance concerning site 
development planning, design criteria, energy management, and 
subcontract requirements. DOE directives, such as DOE O 430.1A, Life 
Cycle Asset Management, already provide sufficient guidance.

III. Procedural Requirements

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, this rulemaking is not subject to review under that 
Executive Order by the Office of Information and Regulatory Affairs 
(OIRA) of the Office of Management and Budget (OMB).

B. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification

[[Page 43834]]

and burden reduction. With regard to the review required by section 
3(a), section 3(b) of Executive Order 12988 specifically requires that 
Executive agencies make every reasonable effort to ensure that the 
regulation: (1) Clearly specifies the preemptive effect, if any; (2) 
clearly specifies any effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction; (4) specifies the retroactive 
effect, if any; (5) adequately defines key terms; and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them. DOE has completed the required review and determined 
that, to the extent permitted by law, these proposed regulations meet 
the relevant standards of Executive Order 12988.

C. Review Under the Regulatory Flexibility Act

    This rulemaking has been reviewed under the Regulatory Flexibility 
Act, 5 U.S.C. 601 et seq., which requires preparation of an initial 
regulatory flexibility analysis for any rule that must be proposed for 
public comment and that is likely to have significant economic impact 
on a substantial number of small entities. The rulemaking would not 
have a significant economic impact on small entities. While rule 
requirements may flow down to subcontractors in certain circumstances, 
the costs of compliance are not estimated to be large and, in any 
event, would be reimbursable expenses under the contract or 
subcontract.
    Accordingly, DOE certifies that this rulemaking would not have a 
significant economic impact on a substantial number of small entities, 
and, therefore, no regulatory flexibility analysis has been prepared.

D. Review Under the Paperwork Reduction Act

    Information collection or record keeping requirements contained in 
this rulemaking have been previously cleared under Office of Management 
and Budget paperwork clearance package Number 1910-0300. There are no 
new burdens imposed by this rulemaking.

E. Review Under the National Environmental Policy Act

    DOE has concluded that promulgation of this proposed rule falls 
into a class of actions which would not individually or cumulatively 
have significant impact on the human environment, as determined by 
DOE's regulations (10 CFR part 1021, subpart D) implementing the 
National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et 
seq.). Specifically, this proposed rule is categorically excluded from 
NEPA review because the amendments to the DEAR would be strictly 
procedural (categorical exclusion A6). Therefore, this proposed rule 
does not require an environmental impact statement or environmental 
assessment pursuant to NEPA.

F. Review Under Executive Order 13132

    Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. The Executive Order does require agencies 
to have an accountability process to ensure meaningful and timely input 
by state and local officials in the development of regulatory policies 
that have federalism implications. On March 14, 2000, DOE published a 
statement of policy describing the intergovernmental consultation 
process it will follow in the development of such regulations (65 FR 
13735). DOE has examined today's proposed rule and has determined that 
it does not preempt State law and does not have a substantial direct 
effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

G. Review Under the Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally 
requires a Federal agency to perform a written assessment of costs and 
benefits of any rule imposing a Federal Mandate with costs to State, 
local or tribal governments, or to the private sector, of $100 million 
or more. This proposed rulemaking would only affect private sector 
entities, and the impact is less than $100 million.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a 
Family Policymaking Assessment for any rulemaking or policy that may 
affect family well-being. This rulemaking will have no impact on the 
autonomy or integrity of the family as an institution. Accordingly, DOE 
has concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 13211

    Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, 
May 22, 2001), requires Federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (OIRA), Office of 
Management and Budget, a Statement of Energy Effects for any proposed 
significant energy action. A ``significant energy action'' is defined 
as any action by an agency that promulgates or is expected to lead to 
promulgation of a final rule, and that: (1) Is a significant regulatory 
action under Executive Order 12866, or any successor order; and (2) is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, or (3) is designated by the 
Administrator of OIRA as a significant energy action. For any proposed 
significant energy action, the agency must give a detailed statement of 
any adverse effects on energy supply, distribution, or use should the 
proposal be implemented, and of reasonable alternatives to the action 
and their expected benefits on energy supply, distribution, and use. 
Today's rule is not a significant energy action. Accordingly, DOE has 
not prepared a Statement of Energy Effects.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516, note) provides for agencies to review most disseminations 
of information to the public under guidelines established by each 
agency pursuant to general guidelines issued by OMB. OMB's guidelines 
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines 
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed 
today's notice under the OMB and DOE guidelines and has concluded that 
it is consistent with applicable policies in those guidelines.

[[Page 43835]]

K. Approval by the Office of the Secretary of Energy

    Issuance of this proposed rule has been approved by the Office of 
the Secretary of Energy.

List of Subjects in 48 CFR Parts 909, 913, and 970

    Government procurement.

    Issued in Washington, DC on July 20, 2005.
Richard H. Hopf,
Director, Office of Procurement and Assistance Management, Office of 
Management Budget and Evaluation/Chief Financial Officer.
Robert C. Braden,
Director, Office of Acquisition and Supply Management, National Nuclear 
Security Administration.

    For the reasons set out in the preamble, Chapter 9 of Title 48 of 
the Code of Federal Regulations is proposed to be amended as set forth 
below.

PART 909--CONTRACTOR QUALIFICATIONS

    1. The authority citation for part 909 is revised to read as 
follows:

    Authority: 42 U.S.C. 2201, 2282a, 2282b, 2282c, 7101 et seq.; 41 
U.S.C. 418(b); 50 U.S.C. 2401 et seq.


909.406  Debarment.

    2. In section 909.406-2, the section heading is revised and 
paragraph (e) is added to read as follows:


909.406-2  Causes for debarment. (DOE coverage--paragraphs (c) through 
(e)).

* * * * *
    (e) The debarring official may debar a contractor, established by a 
preponderance of the evidence, such as an SBA determination, for 
falsely certifying itself as a:
    (1) Small Business Concern;
    (2) Small Disadvantaged Business Concern;
    (3) Women-Owned Small Business Concern;
    (4) Veteran-Owned Small Business Concern;
    (5) Service-Disabled Veteran-Owned Small Business Concern;
    (6) Historically Underutilized Business Zone Concern.

PART 913--SIMPLIFIED ACQUISITION PROCEDURES

    3. The authority citation for part 913 continues to read as 
follows:

    Authority: 42 U.S.C. 7101 et seq; 41 U.S.C. 418(b); 50 U.S.C. 
2401 et seq.

Subpart 913.4--[Removed]

    4. Subpart 913.4 is removed.

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

    5. The authority citation for part 970 continue to read as follows:

    Authority: 42 U.S.C. 2201, 2282b, 2282c, 7101 et seq.; 41 U.S.C. 
418b; 50 U.S.C. 2401 et seq.

Subpart 970.11--Describing Agency Needs

    6. Sections 970.1170, 970.1170-1, and 970.1170-2 are added to read 
as follows:


970.1170  Work authorization.


970.1170-1  Policy.

    Each contract for the management and operation of a DOE site or 
facility, and other contracts designated by the DOE or NNSA Procurement 
Executive, must contain a scope of work section that describes, in 
general terms, work planned and/or required to be performed. Work to be 
performed under the contract shall be assigned through the use of a 
work authorization to control individual work activities performed 
within the scope of work. Work authorizations must be issued prior to 
the commencement of the work and incurrence of any costs.


970.1170-2  Contract provision.

    The Contracting Officer shall insert the clause at 48 CFR 970.5211-
1, Work Authorization, in each solicitation and contract for the 
management and operation of a DOE site or facility and in other 
contracts designated by the DOE or NNSA Procurement Executive.

Subpart 970.37--Facilities Management Contracting


970.3770-2  [Removed and Reserved]

    7. Section 970.3770-2 is removed and reserved.

Subpart 970.52--Solicitation Provisions and Contract Clauses for 
Management and Operating Contracts

    8. Section 970.5204-2 is amended by revising the clause date and 
paragraph (e) to read as follows:


970.5204-2  Laws, regulations, and DOE directives.

* * * * *

Laws, Regulations, and DOE Directives (XXX-XXXX)

* * * * *
    (e) Regardless of the performer of the work, the contractor is 
responsible for compliance with the requirements of this clause. The 
contractor is responsible for flowing down the requirements of this 
clause to subcontracts at any tier to the extent necessary to ensure 
the contractor's compliance with the requirements. Unless the 
contract specifically instructs the contractor regarding subcontract 
flow-down, the contractor shall be responsible for determining the 
appropriate implementation of the requirements, including the extent 
to, and manner in which, requirements should be reflected in 
subcontracts. In doing so, the contractor retains the same 
responsibility for performance and cost management that it has for 
all contract efforts. Specifically, the contractor shall not 
unnecessarily or imprudently flow down requirements to subcontracts 
and shall only incur costs that would be incurred by a prudent 
person in the conduct of a competitive business.

(End of clause)

    9. Section 970.5211 is added to read as follows:


970.5211-1  Work authorization.

    As prescribed in 970.1170-2, insert the following clause.

WORK AUTHORIZATION (XXX-XXXX)

    (a) Work Authorization Proposal. Prior to the start of each 
fiscal year, the Contracting Officer (CO) or designee shall provide 
the contractor with program execution guidance in sufficient detail 
to enable the contractor to develop an estimated cost, scope, and 
schedule. In addition, the Contracting Officer may unilaterally 
assign work. The contractor shall submit to the Contracting Officer 
or other designated official, a detailed description of work, a 
budget of estimated costs, and a schedule of performance for the 
work it recommends be undertaken during that upcoming fiscal year.
    (b) Cost Estimates. The contractor and the Contracting Officer 
shall establish a budget of estimated costs, description of work, 
and schedule of performance for each work assignment. If agreement 
cannot be reached as to scope, schedule, and estimated cost, the 
Contracting Officer may issue a unilateral work authorization, 
pursuant to this clause. The work authorization, whether issued 
bilaterally or unilaterally shall become part of the contract. No 
activities shall be authorized or costs incurred prior to 
Contracting Officer issuance of a work authorization or direction 
concerning continuation of activities of the contract.
    (c) Performance. The contractor will perform work as specified 
in the work authorization, consistent with the terms and conditions 
of this contract.
    (d) Modification. The Contracting Officer may at any time, 
without notice, issue changes to work authorizations within the 
overall scope of the contract. A proposal for adjustment in 
estimated costs and schedule for performance of work, recognizing 
work made unnecessary as a result, along with new work, shall be 
submitted by the contractor in accordance with paragraph (a) of this 
clause. Resolution shall be in accordance with paragraph (b) of this 
clause.
    (e) Increase in Estimated Cost. The contractor shall notify the 
Contracting Officer immediately whenever the cost incurred, plus the 
projected cost to complete work is projected to differ (plus or 
minus) from the estimate by 10 percent. The contractor shall submit 
a proposal for modification in

[[Page 43836]]

accordance with paragraph (a) of this clause. Resolution shall be in 
accordance with paragraph (b) of this clause.
    (f) Expenditure of Funds and Incurrence of Costs. The 
expenditure of monies by the contractor in the performance of all 
authorized work shall be governed by the ``Obligation of Funds'' or 
equivalent clause of the contract.
    (g) Responsibility to achieve Environment, Safety, Health, and 
Security Compliance. Notwithstanding other provisions of the 
contract, the contractor may, in the event of an emergency, take 
that corrective action necessary to sustain operations consistent 
with applicable environmental, safety, health, and security 
statutes, regulations, and procedures. If such action is taken, the 
contractor shall notify the Contracting Officer within 24 hours of 
initiation and, within 30 days, submit a proposal for adjustment in 
estimated costs and schedule established in accordance with 
paragraphs (a) and (b) of this clause.

(End of clause)

    10. The clause at section 970.5223-1 is amended by revising the 
clause date, paragraphs (d), (e), and (h) to read as follows:


970.5223-1  Integration of environment, safety, and health into work 
planning and execution.

* * * * *

Integration of Environment, Safety, and Health into Work Planning and 
Execution (XXX-XXXX)

* * * * *
    (d) The System shall describe how the contractor will establish, 
document, and implement safety performance objectives, performance 
measures, and commitments consistent with DOE program guidance while 
maintaining the integrity of the System. The System shall also 
describe how the contractor will evaluate its effectiveness as well 
as maintenance and improvement processes.
    (e) The contractor shall submit to the Contracting Officer 
documentation of its System for review and approval. Dates for 
submittal, discussions, and revisions to the System will be 
established by the Contracting Officer. Guidance on the preparation, 
content, review, and approval of the System will be provided by the 
Contracting Officer. The contractor will evaluate System 
implementation and effectiveness annually. Formal change control and 
maintenance of the System is required. On an annual basis, the 
contractor shall review and update, for DOE approval, its safety 
performance objectives, performance measures, and commitments 
consistent with DOE's program guidance and direction. Resources 
shall be identified and allocated to meet the safety objectives and 
performance commitments as well as maintain the integrity of the 
entire System. Accordingly, the System shall be integrated with the 
contractor's business processes for work planning, budgeting, 
authorization, execution, and change control.
* * * * *
    (h) Regardless of the performer of the work, the contractor is 
responsible for compliance with the ES&H requirements applicable to 
this contract. Unless the contract specifically instructs the 
contractor regarding subcontract flow-down, the contractor shall be 
responsible for determining the appropriate implementation of the 
requirements, including the extent to which, and manner in which, 
requirements should be reflected in subcontracts. In doing so, the 
contractor retains the same responsibility for performance and cost 
management that it has for all contract efforts. Specifically, the 
contractor shall not unnecessarily or imprudently flow down 
requirements to subcontracts and shall only incur costs that would 
be incurred by a prudent person in the conduct of a competitive 
business.
* * * * *


970.5237-2  [Removed and reserved]

    11. Section 970.5237-2 is removed and reserved.

[FR Doc. 05-14810 Filed 7-28-05; 8:45 am]
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