Federal Acquisition Regulation; FAR Case 2005-035, Changes to Lobbying Restrictions, 54255-54260 [06-7604]

Download as PDF Federal Register / Vol. 71, No. 178 / Thursday, September 14, 2006 / Proposed Rules [FAR Case 2005–035; Docket 2006–0020; Sequence 8] document search’’ tab, selecting from the agency field ‘‘Federal Acquisition Regulation’’, and typing the FAR case number in the keyword field. • Fax: 202–501–4067. • Mail: General Services Administration, Regulatory Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann Duarte, Washington, DC 20405. Instructions: Please submit comments only and cite FAR case 2005–035 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 Mr. Ernest Woodson, Procurement Analyst, at (202) 501–3775. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501–4755. Please cite FAR case 2005–035. SUPPLEMENTARY INFORMATION: RIN: 9000–AD76 A. Background 12th Street, SW., Washington DC 20554. People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202–418–0530 (voice), 202– 418–0432 (tty). Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. E6–15246 Filed 9–13–06; 8:45 am] BILLING CODE 6712–01–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 3, 12, and 52 Federal Acquisition Regulation; FAR Case 2005–035, Changes to Lobbying Restrictions Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Proposed rule. rwilkins on PROD1PC63 with PROPOSAL AGENCIES: SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) are proposing to amend the Federal Acquisition Regulation (FAR) to be consistent with the Lobbying Disclosure Act of 1995 and the OMB Interim Final Guidance, and to improve clarity of the regulation through improved use of plain language and compliance with FAR drafting conventions. DATES: Interested parties should submit written comments to the FAR Secretariat on or before November 13, 2006 to be considered in the formulation of a final rule. ADDRESSES: Submit comments identified by FAR case 2005–035 by any of the following methods: • Federal eRulemaking Portal: http://www.regulations.gov. Search for this document at the ‘‘Federal Acquisition Regulation’’ agency and review the ‘‘Document Title’’ column; click on the Document ID number. Click on ‘‘Add Comments’’. You may also search for any document using the ‘‘Advanced search/ VerDate Aug<31>2005 20:21 Sep 13, 2006 Jkt 208001 The Byrd Amendment was enacted as section 319 of the Department of Interior and Related Agencies Appropriations Act (Pub. L. 101–121), which added a new section 1352 to title 31, United States Code, entitled ‘‘Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions’’. Section 1352 prohibits the recipient of a Federal contract from using appropriated funds to pay any person for influencing or attempting to influence an officer or employee of the executive or legislative branches in connection with the awarding of any Federal contract, the making of any Federal grant or loan, the entering into of any cooperative agreement, or the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. It required OMB to issue guidance for agency implementation. • On December 18, 1989, OMB’s published interim final guidance. • On January 30, 1990, OMB’s interim final guidance was implemented in the FAR as an interim rule in FAC 84–55. FAC 84–55 added FAR Subpart 3.8, the provision at FAR 52.203–11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, and the clause at FAR 52.203–12, Limitation on Payments to Influence Certain Federal Transactions. • On June 12, 1990, the Administrator for Federal Procurement Policy and the Acting Assistant Director for Financial PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 54255 Management issued clarifications of the interim guidance. This clarification was subsequently published as a notice in the Federal Register at 55 FR 24540, June 15, 1990. • On December 19, 1995, Congress enacted the Lobbying Disclosure Act of 1995 (Pub. L. 104–65). • On January 19, 1996, OMB issued interim final amendments to its Governmentwide guidance (61 FR 1412). The Lobbying Disclosure Act of 1995 provided rules on disclosure of lobbying activities to influence the Federal Government, codified at 2 U.S.C. 1601 et seq., and also simplified the disclosure and reporting requirements of 31 U.S.C. 1352. • Under the revised statute, the person must identify the name of any registrant under the Lobbying Disclosure Act of 1995 who has made lobbying contacts on behalf of the person, but need not provide information with regard to amounts paid or descriptions of services performed, including identification of who was contacted. • Agency head semi-annual compilations to Congress and Inspector General (IG) annual reports to Congress were eliminated. The interim final amendments to OMB’s Governmentwide Guidance on Lobbying made changes to the Standard Form (SF) LLL Disclosure of Lobbying Activities, changing ‘‘Name and Address of Lobbying Entity’’ to ‘‘Name and Address of Lobbying Registrant’’ in item 10a, removing the reference to a continuation sheet in block 10, and deleting blocks 12–15. The agency head and Inspector General reporting requirements were not included in the FAR, so no FAR change was necessary to implement their elimination. The interim final amendment did not provide any suggested rewording of the lobbying disclosure provision or clause. A rule was published in the Federal Register at 70 FR 57455, September 30, 2005, under FAR case 1989–093 to finalize the interim rule that was published in the Federal Register at 55 FR 3190, January 30, 1990, to implement the Byrd Amendment. The final rule only made minor corrections to the interim rule, recognizing that a new case might be required to consider further changes to implement the OMB clarifications of 1990, the Lobbying Disclosure Act of 1995, OMB’s Interim Final Amendments of 1996, and other clarifications. In reviewing the need for further changes, the Councils reviewed the Lobbying Disclosure Act of 1995, OMB Guidance, comments on the prior case, E:\FR\FM\14SEP1.SGM 14SEP1 rwilkins on PROD1PC63 with PROPOSAL 54256 Federal Register / Vol. 71, No. 178 / Thursday, September 14, 2006 / Proposed Rules and prior agreements of the Councils as represented by a draft final rule that was presented to the FAR Council on November 2, 2001, but was not accepted by OFPP at that time. These changes represent a few changes to implement the law and OMB Guidance, but primarily consist of clarification, plain language changes, FAR drafting conventions, and editorial corrections. The Councils have incorporated in the proposed rule those changes that are necessary or beneficial, and identified the rationale for each proposed change. 1. FAR 3.800, Scope of subpart. This section is amended to cite the United States Code rather than the public law number. Although the Lobbying Disclosure Act of 1995 also added newly codified sections at 2 U.S.C. 1601, et seq., the OMB Interim Final Amendments to OMB’s Governmentwide Guidance on Lobbying does not cite 2 U.S.C. 1601, et seq. The FAR is still implementing 31 U.S.C. 1352, as amended. 2. FAR 3.801, Definitions. • ‘‘Agency’’ and ‘‘Covered Federal action’’. This rule proposes strictly editorial changes to these definitions. • ‘‘Indian tribe’’ and ‘‘tribal organization’’. This proposed rule corrects the cite from ‘‘25 U.S.C. 450B’’ to ‘‘25 U.S.C. 450b’’. • ‘‘Person’’ and ‘‘recipient’’. The proposed rule revises these definitions to be strictly consistent with the statute. 3. FAR 3.802, Prohibitions. This section is retitled and reorganized into two sections for improved clarity. • Only paragraph (a) of 3.802 is a prohibition. Paragraph (b) is a requirement for a declaration. Paragraph (c) contains exceptions. This rule proposes to retitle 3.802 as ‘‘Statutory prohibition and requirement’’ and add a new FAR 3.803 for the exceptions. • FAR 3.802(a). Instead of adding a definition of appropriated funds, this rule proposes to add the OMB explanation that the term ‘‘appropriated funds’’ does not include profit or fee from a covered Federal action, and the clarification that to the extent a person can demonstrate that the person has sufficient monies other than Federal appropriated funds, the Government shall assume that these other monies were spent for any influencing activities unallowable with Federal appropriated funds. • FAR 3.802(b). The text of the FAR is addressed to the contracting officer. Having referenced the provision and clause that set forth the declaration requirements for offerors and contractors, it is not necessary to repeat the details of the requirements in the text. VerDate Aug<31>2005 20:21 Sep 13, 2006 Jkt 208001 4. FAR 3.803, Certification and disclosure. The language in this section is deleted as duplicative of the provision at FAR 52.203–11 and clause at FAR 52.203–12. The text of the FAR is supposed to be addressed to the contracting officer. Requirements for contractors are set forth in provisions and clauses. 5. FAR 3.803, Exceptions. The exceptions have been revised and redesignated as the FAR 3.803 to eliminate unnecessary duplication within the text and also eliminate many of the current subdivision identifiers that detract from the readability of the regulation. 6. FAR 3.804, Policy. This section is revised to remove paragraph (b). Paragraph (b) was relevant when agencies were required to submit reports to the Congress. This requirement was eliminated by the Lobbying Disclosure Act. 7. FAR 3.805, Exemption. The proposed rule contains minor editorial corrections to change ‘‘section’’ to ‘‘subpart’’ and eliminate the word ‘‘such’’ in two places. 8. FAR 3.806, Processing suspected violations. Minor plain language improvements have put this requirement in active voice. 9. FAR 3.808, Solicitation provision and contract clause. The proposed rule restates the provision and clause prescriptions in active voice. 10. FAR 12.504, Applicability of certain laws to subcontracts for the acquisition of commercial items. 41 U.S.C. 430, List of laws inapplicable to procurements of commercial items in Federal Acquisition Regulations, requires in paragraph (b) that the FAR must include a list of laws inapplicable to commercial subcontracts. Covered laws shall be included on the list unless the FAR Council makes a written determination that it is not in the best interest of the Federal Government to exempt subcontracts from that provision. Covered laws include laws that set forth policies, procedures, requirements, or restrictions for the procurement of property or services by the Federal Government and that do not— • Provide for criminal or civil penalties; or • Specifically refer to 41 U.S.C. 430 and nevertheless make the law applicable to contracts for commercial items. The current FAR 12.504, Applicability of certain laws to subcontracts for the acquisition of commercial items, includes 31 U.S.C. 1352 as a law inapplicable to commercial items. Because 31 U.S.C. PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 1352 provides for civil penalties, the Councils determined that its inclusion on such list is unauthorized and propose to remove it from the list. 11. FAR 52.203–11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions. • Definitions. This proposed rule adds a definition of ‘‘lobbying contact’’. This is the key term introduced by the Lobbying Disclosure Act of 1995. With regard to the other terms used in the provision that are defined in the clause, the proposed rule lists the specific terms that are used in the provision and defined in the clause. • Prohibitions. In accordance with FAR drafting conventions, the first paragraph of a provision or clause should include any needed definitions. This rule separates into a separate paragraph the statement that was included with the definitions regarding prohibitions of the clause being incorporated in the provision by reference from the definitions paragraph to a separate paragraph (b). • Certification. Paragraph (b) is redesignated paragraph (c). The proposed rule deletes the date of December 23, 1989, which is no longer relevant, and changes ‘‘his or her’’ to ‘‘its’’ (FAR drafting convention). • Disclosure. Current paragraph (b)(2) is deleted and replaced by new paragraph (d) to implement the Lobbying Disclosure Act of 1995, which brings in the concept of registrants under the Act and lobbying contacts. • Flowdown. The current paragraph (b)(3) has been deleted because flow down can only be required through a contract clause, not a solicitation provision. • Penalty. Paragraph (c) has been redesignated as paragraph (e), and there are only minor editorial changes. 12. FAR 52.203–12, Limitation on Payments to Influence Certain Federal Transactions. This clause is revised to make conforming changes to parallel the changes made to FAR Subpart 3.8. In addition— • Paragraph (c)(2)(iii). The Councils propose to delete the long examples and discussion of advice and analysis that directly apply any professional or technical discipline, substituting a reference to FAR 3.803 where the examples are also found. • Paragraph (d). The events that materially affect disclosure are no longer in accordance with the disclosure requirements. The only relevant change now is a change in the name and address of the lobbying registrant or the individuals performing the services. E:\FR\FM\14SEP1.SGM 14SEP1 Federal Register / Vol. 71, No. 178 / Thursday, September 14, 2006 / Proposed Rules rwilkins on PROD1PC63 with PROPOSAL • Paragraph (d)(2). The contractor shall file a declaration at the end of each calendar quarter in which a change occurs. • Agreement. For consistency with previous changes to the FAR, the Councils have removed the requirement for ‘‘contractor agreement’’ and reworded the prohibition in paragraph (b) to state that ‘‘the Contractor shall’’. This is the preferred method of imposing a requirement upon a contractor. • Paragraph (g). The requirements regarding subcontractors and flowdown have been moved to the last paragraph of the clause, in accordance with FAR drafting conventions. The requirement for the subcontractors to pass the disclosure up the chain to the prime contractor is retained, even though the agency head and IG reporting requirements have been deleted. In order for the information to have any value, it must be passed to the Government. 13. 52.212–3(e), Certification Regarding Payments to Influence Federal Transactions (31 U.S.C. 1352). The Councils propose to add the new language on disclosure at paragraph (d) of the provision at 52.203–11 and to the certification requirement at 52.212–3(e). Since acquisitions of commercial items are subject to the requirements of 31 U.S.C. 1352, and there are civil penalties for failure to submit the required disclosure as well as the certification, it is important to include this requirement. 14. OMB SF LLL and LLL-A. SF LLL and SF LLL-A were developed as an interim measure to accommodate OMB’s interim guidance. These forms are illustrated in the FAR under ‘‘Forms Authorized for Local Reproduction’’. The SF LLL-A must be removed to conform to OMB’s January 19, 1996, Federal Register Notice. 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 proposed rule to 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 this proposed rule mainly implements improvements in clarity and consistency. The Federal Government awards approximately 90,000 contracts per year to approximately 18,000 small VerDate Aug<31>2005 21:17 Sep 13, 2006 Jkt 208001 entities. The disclosure requirements of the rule will only apply to small entities on whose behalf a registered lobbyist has made lobbying contacts with respect to a particular Federal contract. Based on OMB Control No. 0348–0046, Disclosure of Lobbying Activities for SF LLL, which is the standard disclosure form for lobbying paid for with nonFederal funds as required by the Byrd Amendment, 300 responses were received annually from states, local governments, non-profit organizations, individuals, and businesses. The number of such small entities is estimated to be near zero, based on the small number of lobbyists reported to have registered under the Byrd Amendment and the improbability that such lobbyists represent small entities. The rule does not impose new requirements that impose a burden on contractors. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. The Councils will consider comments from small entities concerning the affected FAR Parts 3, 12, and 52 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (FAR case 2005–035), in correspondence. C. Paperwork Reduction Act The Paperwork Reduction Act does apply. The reporting requirements are approved under OMB Control Number 0348–0046. OMB claimed a reduction in the information collection requirement upon issuance of the Interim Final Amendments to OMB’s Governmentwide Guidance on Lobbying in January 1996, due to the simplified SF LLL. This rule will not impact the reporting requirement. List of Subjects in 48 CFR Parts 3, 12, and 52 Government procurement. Dated: September 6, 2006. Ralph De Stefano, Director, Contract Policy Division. Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 3, 12, and 52 as set forth below: 1. The authority citation for 48 CFR parts 3, 12, 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). PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 54257 PART 3—IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST 2. Revise section 3.800 to read as follows: 3.800 Scope of subpart. This subpart prescribes policies and procedures implementing 31 U.S.C. 1352, ‘‘Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions’’. 3. Amend section 3.801 by— a. Adding a new introductory paragraph; b. Revising the definitions ‘‘Agency’’, ‘‘Covered Federal action’’ and ‘‘‘Indian tribe’ and ‘tribal organization’’’; c. Removing from the definitions ‘‘Influencing or attempting to influence’’ and ‘‘Local government’’ ‘‘, as used in this section,’’; d. Removing from the definition ‘‘Officer or employee of an agency,’’ ‘‘, as used in this section’’; and redesignating paragraphs (a), (b), (c), and (d) as (1), (2), (3), and (4), respectively; e. Revising the definition ‘‘Person’’; f. Removing from the definitions ‘‘Reasonable compensation’’ and ‘‘Reasonable payment’’ ‘‘, as used in this section,’’; g. Revising the definition ‘‘Recipient’’; and h. Removing from the definitions ‘‘Regularly employed’’ and ‘‘State’’ ‘‘, as used in this section,’’. The added and revised text reads as follows: 3.801 Definitions. As used in this subpart— Agency means ‘‘executive agency’’ as defined in 2.101. Covered Federal action means any of the following actions: (1) Awarding any Federal contract. (2) Making any Federal grant. (3) Making any Federal loan. (4) Entering into any cooperative agreement. (5) Extending, continuing, renewing, amending, or modifying any Federal contract, grant, loan, or cooperative agreement. Indian tribe and tribal organization have the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b) and include Alaskan Natives. * * * * * Person means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for E:\FR\FM\14SEP1.SGM 14SEP1 54258 Federal Register / Vol. 71, No. 178 / Thursday, September 14, 2006 / Proposed Rules profit or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization eligible to receive Federal contracts, grants, cooperative agreements, or loans from an agency, but only with respect to expenditures by such tribe or organization that are made for purposes specified in 3.802(a) and are permitted by other Federal law. * * * * * Recipient includes the contractor and all subcontractors. This term excludes an Indian tribe, tribal organization, or any other Indian organization eligible to receive Federal contracts, grants, cooperative agreements, or loans from an agency, but only with respect to expenditures by such tribe or organization that are made for purposes specified in 3.802(a) and permitted by other Federal law. * * * * * 4. Revise sections 3.802 and 3.803 to read as follows: rwilkins on PROD1PC63 with PROPOSAL 3.802 Statutory Prohibition and Requirement. (a) 31 U.S.C. 1352 prohibits a recipient of a Federal contract, grant, loan, or cooperative agreement from using appropriated funds to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with covered Federal actions. (1) For purposes of this subpart, the term ‘‘appropriated funds’’ does not include profit or fee from a covered Federal action. (2) To the extent a person can demonstrate that the person has sufficient monies, other than Federal appropriated funds, the Government shall assume that these other monies were spent for any influencing activities unallowable with Federal appropriated funds. (b) 31 U.S.C. 3152 also requires offerors to furnish a declaration consisting of both a certification and a disclosure, with periodic updates of the disclosure after contract award. These requirements are contained in the provision at 52.203–11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, and the clause at 52.203–12, Limitation on Payments to Influence Certain Federal Transactions. 3.803 Exceptions. (a) The prohibition of 3.802(a) does not apply under the following conditions: VerDate Aug<31>2005 20:21 Sep 13, 2006 Jkt 208001 (1) Agency and legislative liaison by own employees. (i) Payment of reasonable compensation made to an officer or employee of a person requesting or receiving a covered Federal action if the payment is for agency and legislative liaison activities not directly related to a covered Federal action. For purposes of this paragraph, providing any information specifically requested by an agency or Congress is permitted at any time. (ii) Participating with an agency in discussions that are not related to a specific solicitation for any covered Federal action, but that concern— (A) The qualities and characteristics (including individual demonstrations) of the person’s products or services, conditions or terms of sale, and service capabilities; or (B) The application or adaptation of the person’s products or services for an agency’s use. (iii) Providing prior to formal solicitation of any covered Federal action any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action. (iv) Participating in technical discussions regarding the preparation of an unsolicited proposal prior to its official submission. (v) Making capability presentations prior to formal solicitation of any covered Federal action when seeking an award from an agency pursuant to the provisions of the Small Business Act, as amended by Pub. L. 95–507, and subsequent amendments. (2) Professional and technical services. (i) Payment of reasonable compensation made to an officer or employee of a person requesting or receiving a covered Federal action, if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action. (ii) Any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action, if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action, or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action. Persons other than officers or employees of a person requesting or receiving a covered PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 Federal action include consultants and trade associations. (iii) As used in paragraph (a)(2), of this section, ‘‘professional and technical services’’ are limited to advice and analysis directly applying any professional or technical discipline. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional or a technical person are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client’s proposal, but generally advocate one proposal over another, are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action. (iv) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation and any other requirements in the actual award documents. (b) Only those communications and services expressly authorized by paragraph (a) of this section are permitted. (c) The disclosure requirements of 3.802(b) do not apply with respect to payments of reasonable compensation made to regularly employed officers or employees of a person. 3.804 [Amended] 5. Amend section 3.804 by removing the paragraph designation (a) and paragraph (b). 6. Revise sections 3.805 and 3.806 to read as follows: 3.805 Exemption. The Secretary of Defense may exempt, on a case-by-case basis, a covered E:\FR\FM\14SEP1.SGM 14SEP1 Federal Register / Vol. 71, No. 178 / Thursday, September 14, 2006 / Proposed Rules Federal action from the prohibitions of this subpart whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a copy of the exemption to Congress immediately after making the determination. 3.806 Processing suspected violations. The contracting officer shall report suspected violations of the requirements of 31 U.S.C. 1352 in accordance with agency procedures. 3.808 [Amended] 7. Amend section 3.808 in paragraphs (a) and (b) by removing ‘‘The’’ and adding ‘‘Insert the’’ in its place; and by removing ‘‘shall be included’’. PART 12—ACQUISITION OF COMMERCIAL ITEMS 12.504 [Amended] 8. Amend section 12.504 by removing and reserving paragraph (a)(3). PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 9. Revise section 52.203–11 to read as follows: 52.203–11 Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions. As prescribed in 3.808(a), insert the following provision: rwilkins on PROD1PC63 with PROPOSAL CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS (DATE) (a) Definitions. As used in this provision— Lobbying contact has the meaning provided at 2 U.S.C. 1602(8). The terms ‘‘agency,’’ ‘‘influencing or attempting to influence,’’ ‘‘officer or employee of an agency,’’ ‘‘person,’’ ‘‘reasonable compensation,’’ and ‘‘regularly employed’’ are defined in the FAR clause of this solicitation entitled, Limitation on Payments to Influence Certain Federal Transactions, (52.203– 12). (b) Prohibition. The prohibition and exceptions contained in the FAR clause of this solicitation entitled Limitation on Payments to Influence Certain Federal Transactions, (52.203–12), are hereby incorporated by reference in this provision. (c) Certification. The offeror, by signing its offer, hereby certifies to the best of its knowledge and belief that no Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or VerDate Aug<31>2005 20:21 Sep 13, 2006 Jkt 208001 employee of Congress, or an employee of a Member of Congress on its behalf in connection with the awarding of this contract. (d) Disclosure. If any registrants under the Lobbying Disclosure Act of 1995 have made a lobbying contact on behalf of the offeror with respect to this contract, the offeror shall complete and submit, with its offer, OMB Standard Form LLL, Disclosure of Lobbying Activities, to provide the name of the registrants. The offeror need not report regularly employed officers or employees of the offeror to whom payments of reasonable compensation were made. (e) Penalty. Submission of this certification and disclosure is a prerequisite for making or entering into this contract imposed by 31 U.S.C. 1352. Any person who makes an expenditure prohibited under this provision or who fails to file or amend the disclosure required to be filed or amended by this provision, shall be subject to a civil penalty of not less than $10,000, and not more than $100,000, for each such failure. (End of provision) 10. Amend section 52.203–12 by— a. Revising the date of the clause; b. Amending paragraph (a) by— i. Revising the introductory text and the definitions ‘‘Agency’’, ‘‘Covered Federal action’’, and ‘‘‘Indian tribe’ and ‘tribal organization’’’; ii. In the definitions ‘‘Influencing or attempting to influence’’, ‘‘Local government’’, and ‘‘Officer or employee of an agency,’’ removing ‘‘, as used in this clause,’’; iii. Revising the definition ‘‘Person’’ iv. In the definitions ‘‘Reasonable compensation’’ and ‘‘Reasonable payment’’ removing ‘‘, as used in this clause,’’; v. Revising the definition ‘‘Recipient’’; and vi. In the definitions ‘‘Regularly employed’’ and ‘‘State’’ removing ‘‘, as used in this clause,’’. c. Revising paragraph (b); d. Removing paragraph (d), redesignating paragraph (c) as paragraph (d), and revising the newly designated paragraph (d); e. Adding a new paragraph (c); f. Revising the first sentence of paragraph (e)(1); and g. Adding a new paragraph (g). The revised and added text reads as follows: 52.203–12 Limitations on Payments to Influence Certain Federal Transactions. * PO 00000 * * Frm 00025 * Fmt 4702 * Sfmt 4702 54259 LIMITATIONS ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS (DATE) (a) Definitions. As used in this clause— Agency means ‘‘executive agency’’ as defined in Federal Acquisition Regulation 2.101. Covered Federal action means any of the following actions: (1) Awarding any Federal contract. (2) Making any Federal grant. (3) Making any Federal loan. (4) Entering into any cooperative agreement. (5) Extending, continuing, renewing, amending, or modifying any Federal contract, grant, loan, or cooperative agreement. Indian tribe and tribal organization have the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b) and include Alaskan Natives. * * * * * Person means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization eligible to receive Federal contracts, grants, cooperative agreements, or loans from an agency, but only with respect to expenditures by such tribe or organization that are made for purposes specified in paragraph (b) of this clause and are permitted by other Federal law. * * * * * Recipient includes the Contractor and all subcontractors. This term excludes an Indian tribe, tribal organization, or any other Indian organization eligible to receive Federal contracts, grants, cooperative agreements, or loans from an agency, but only with respect to expenditures by such tribe or organization that are made for purposes specified in paragraph (b) of this clause and permitted by other Federal law. * * * * * (b) Prohibitions. 31 U.S.C. 1352 prohibits a recipient of a Federal contract, grant, loan, or cooperative agreement from using appropriated funds to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with covered Federal actions. In accordance with 31 U.S.C. 1352, the Contractor shall not use appropriated funds to pay any person for influencing or attempting to E:\FR\FM\14SEP1.SGM 14SEP1 rwilkins on PROD1PC63 with PROPOSAL 54260 Federal Register / Vol. 71, No. 178 / Thursday, September 14, 2006 / Proposed Rules influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the award of this contract or the extension, continuation, renewal, amendment, or modification of this contract. (1) The term ‘‘appropriated funds’’ does not include profit or fee from a covered Federal action. (2) To the extent the Contractor can demonstrate that the Contractor has sufficient monies, other than Federal appropriated funds, the Government shall assume that these other monies were spent for any influencing activities unallowable with Federal appropriated funds. (c) Exceptions. The prohibition in paragraph (b) of this clause does not apply under the following conditions: (1) Agency and legislative liaison by Contractor employees. (i) Payment of reasonable compensation made to an officer or employee of the Contractor if the payment is for agency and legislative liaison activities not directly related to this contract. For purposes of this paragraph, providing any information specifically requested by an agency or Congress is permitted at any time. (ii) Participating with an agency in discussions that are not related to a specific solicitation for any covered Federal action, but that concern— (A) The qualities and characteristics (including individual demonstrations) of the person’s products or services, conditions or terms of sale, and service capabilities; or (B) The application or adaptation of the person’s products or services for an agency’s use. (iii) Providing prior to formal solicitation of any covered Federal action any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action. (iv) Participating in technical discussions regarding the preparation of an unsolicited proposal prior to its official submission. (v) Making capability presentations by persons seeking awards from an agency pursuant to the provisions of the Small Business Act, as amended by Pub. L. 95–507, and subsequent amendments. (2) Professional and technical services. (i) A payment of reasonable compensation made to an officer or employee of a person requesting or receiving a covered Federal action, if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for VerDate Aug<31>2005 20:21 Sep 13, 2006 Jkt 208001 that Federal action or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action; (ii) Any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action or an extension, continuation, renewal, amendment, or modification of a covered Federal action if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action. Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations. (iii) As used in paragraph (c)(2) of this clause, ‘‘professional and technical services’’ are limited to advice and analysis directly applying any professional or technical discipline (for example, See FAR 3.803(a)(2)(iii)). (iv) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation and any other requirements in the actual award documents. (3) Only those communications and services expressly authorized by paragraphs (c)(1) and (2) of this clause are permitted. (d) Disclosure. (1) If the Contractor did not submit OMB Standard Form LLL, Disclosure of Lobbying Activities, with its offer, but registrants under the Lobbying Disclosure Act of 1995 have subsequently made a lobbying contact on behalf of the Contractor with respect to this contract, the Contractor shall complete and submit OMB Standard Form LLL to provide the name of the lobbying registrants, including the individuals performing the services. (2) If the Contractor did submit OMB Standard Form LLL disclosure pursuant to paragraph (c) of the provision at FAR 52.203–11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, and a change occurs that affects block 10 of the OMB Standard Form LLL (name and address of lobbying registrant or individuals performing services), the Contractor shall submit to the Contracting Officer an updated disclosure using OMB Standard Form LLL at the end of the calendar quarter, in which the change occurs. (e) Penalties. (1) Any person who makes an expenditure prohibited under paragraph (b) of this clause or who fails PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 to file or amend the disclosure to be filed or amended by paragraph (d) of this clause shall be subject to civil penalties as provided for by 31 U.S.C. 1352. * * * * * * * * (g) Subcontracts. (1) The Contractor shall obtain a declaration, including the certification and disclosure in paragraphs (c) and (d) of the provision at FAR 52.203–11, Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions, from each person requesting or receiving a subcontract exceeding $100,000 under this contract. The Contractor or subcontractor that awards the subcontract shall retain the declaration. (2) A copy of each subcontractor disclosure form (but not certifications) shall be forwarded from tier to tier until received by the prime Contractor. The prime Contractor shall submit a copy of all disclosures to the Contracting Officer at the end of the calendar quarter in which the disclosure form is submitted by the subcontractor. Each subcontractor certification shall be retained in the subcontract file of the awarding Contractor. (3) The Contractor shall include the substance of this clause, including this paragraph (g), in any subcontract exceeding $100,000. (End of clause) 11. Amend section 52.212–3 by revising the date of the clause and adding two sentences at the end of paragraph (e) to read as follows: 52.212–3 Offeror Representations and Certifications— Commercial Items. * * * * * OFFEROR REPRESENTATIONS AND CERTIFICATIONS-COMMERCIAL ITEMS (DATE) * * * * * (e) * * * If any registrants under the Lobbying Disclosure Act of 1995 have made a lobbying contact on behalf of the offeror with respect to this contract, the offeror shall complete and submit, with its offer, OMB Standard Form LLL, Disclosure of Lobbying Activities, to provide the name of the registrants. The offeror need not report regularly employed officers or employees of the offeror to whom payments of reasonable compensation were made. * * * * * [FR Doc. 06–7604 Filed 9–13–06; 8:45 am] BILLING CODE 6820–EP–S E:\FR\FM\14SEP1.SGM 14SEP1

Agencies

[Federal Register Volume 71, Number 178 (Thursday, September 14, 2006)]
[Proposed Rules]
[Pages 54255-54260]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-7604]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 3, 12, and 52

[FAR Case 2005-035; Docket 2006-0020; Sequence 8]
RIN: 9000-AD76


Federal Acquisition Regulation; FAR Case 2005-035, Changes to 
Lobbying Restrictions

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Proposed rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) are proposing to amend the 
Federal Acquisition Regulation (FAR) to be consistent with the Lobbying 
Disclosure Act of 1995 and the OMB Interim Final Guidance, and to 
improve clarity of the regulation through improved use of plain 
language and compliance with FAR drafting conventions.

DATES: Interested parties should submit written comments to the FAR 
Secretariat on or before November 13, 2006 to be considered in the 
formulation of a final rule.

ADDRESSES: Submit comments identified by FAR case 2005-035 by any of 
the following methods:
     Federal eRulemaking Portal:
     http://www.regulations.gov. Search for this document at the 
``Federal Acquisition Regulation'' agency and review the ``Document 
Title'' column; click on the Document ID number. Click on ``Add 
Comments''.
    You may also search for any document using the ``Advanced search/
document search'' tab, selecting from the agency field ``Federal 
Acquisition Regulation'', and typing the FAR case number in the keyword 
field.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VIR), 1800 F Street, NW., Room 4035, ATTN: Laurieann 
Duarte, Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR case 2005-
035 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 
Mr. Ernest Woodson, Procurement Analyst, at (202) 501-3775. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat at (202) 501-4755. Please cite FAR case 2005-035.

SUPPLEMENTARY INFORMATION:

A. Background

    The Byrd Amendment was enacted as section 319 of the Department of 
Interior and Related Agencies Appropriations Act (Pub. L. 101-121), 
which added a new section 1352 to title 31, United States Code, 
entitled ``Limitation on use of appropriated funds to influence certain 
Federal contracting and financial transactions''. Section 1352 
prohibits the recipient of a Federal contract from using appropriated 
funds to pay any person for influencing or attempting to influence an 
officer or employee of the executive or legislative branches in 
connection with the awarding of any Federal contract, the making of any 
Federal grant or loan, the entering into of any cooperative agreement, 
or the extension, continuation, renewal, amendment, or modification of 
any Federal contract, grant, loan, or cooperative agreement. It 
required OMB to issue guidance for agency implementation.
     On December 18, 1989, OMB's published interim final 
guidance.
     On January 30, 1990, OMB's interim final guidance was 
implemented in the FAR as an interim rule in FAC 84-55. FAC 84-55 added 
FAR Subpart 3.8, the provision at FAR 52.203-11, Certification and 
Disclosure Regarding Payments to Influence Certain Federal 
Transactions, and the clause at FAR 52.203-12, Limitation on Payments 
to Influence Certain Federal Transactions.
     On June 12, 1990, the Administrator for Federal 
Procurement Policy and the Acting Assistant Director for Financial 
Management issued clarifications of the interim guidance. This 
clarification was subsequently published as a notice in the Federal 
Register at 55 FR 24540, June 15, 1990.
     On December 19, 1995, Congress enacted the Lobbying 
Disclosure Act of 1995 (Pub. L. 104-65).
     On January 19, 1996, OMB issued interim final amendments 
to its Governmentwide guidance (61 FR 1412).
    The Lobbying Disclosure Act of 1995 provided rules on disclosure of 
lobbying activities to influence the Federal Government, codified at 2 
U.S.C. 1601 et seq., and also simplified the disclosure and reporting 
requirements of 31 U.S.C. 1352.
     Under the revised statute, the person must identify the 
name of any registrant under the Lobbying Disclosure Act of 1995 who 
has made lobbying contacts on behalf of the person, but need not 
provide information with regard to amounts paid or descriptions of 
services performed, including identification of who was contacted.
     Agency head semi-annual compilations to Congress and 
Inspector General (IG) annual reports to Congress were eliminated.
    The interim final amendments to OMB's Governmentwide Guidance on 
Lobbying made changes to the Standard Form (SF) LLL Disclosure of 
Lobbying Activities, changing ``Name and Address of Lobbying Entity'' 
to ``Name and Address of Lobbying Registrant'' in item 10a, removing 
the reference to a continuation sheet in block 10, and deleting blocks 
12-15. The agency head and Inspector General reporting requirements 
were not included in the FAR, so no FAR change was necessary to 
implement their elimination. The interim final amendment did not 
provide any suggested rewording of the lobbying disclosure provision or 
clause.
    A rule was published in the Federal Register at 70 FR 57455, 
September 30, 2005, under FAR case 1989-093 to finalize the interim 
rule that was published in the Federal Register at 55 FR 3190, January 
30, 1990, to implement the Byrd Amendment. The final rule only made 
minor corrections to the interim rule, recognizing that a new case 
might be required to consider further changes to implement the OMB 
clarifications of 1990, the Lobbying Disclosure Act of 1995, OMB's 
Interim Final Amendments of 1996, and other clarifications.
    In reviewing the need for further changes, the Councils reviewed 
the Lobbying Disclosure Act of 1995, OMB Guidance, comments on the 
prior case,

[[Page 54256]]

and prior agreements of the Councils as represented by a draft final 
rule that was presented to the FAR Council on November 2, 2001, but was 
not accepted by OFPP at that time. These changes represent a few 
changes to implement the law and OMB Guidance, but primarily consist of 
clarification, plain language changes, FAR drafting conventions, and 
editorial corrections. The Councils have incorporated in the proposed 
rule those changes that are necessary or beneficial, and identified the 
rationale for each proposed change.
    1. FAR 3.800, Scope of subpart. This section is amended to cite the 
United States Code rather than the public law number. Although the 
Lobbying Disclosure Act of 1995 also added newly codified sections at 2 
U.S.C. 1601, et seq., the OMB Interim Final Amendments to OMB's 
Governmentwide Guidance on Lobbying does not cite 2 U.S.C. 1601, et 
seq. The FAR is still implementing 31 U.S.C. 1352, as amended.
    2. FAR 3.801, Definitions.
     ``Agency'' and ``Covered Federal action''. This rule 
proposes strictly editorial changes to these definitions.
     ``Indian tribe'' and ``tribal organization''. This 
proposed rule corrects the cite from ``25 U.S.C. 450B'' to ``25 U.S.C. 
450b''.
     ``Person'' and ``recipient''. The proposed rule revises 
these definitions to be strictly consistent with the statute.
    3. FAR 3.802, Prohibitions. This section is retitled and 
reorganized into two sections for improved clarity.
     Only paragraph (a) of 3.802 is a prohibition. Paragraph 
(b) is a requirement for a declaration. Paragraph (c) contains 
exceptions. This rule proposes to retitle 3.802 as ``Statutory 
prohibition and requirement'' and add a new FAR 3.803 for the 
exceptions.
     FAR 3.802(a). Instead of adding a definition of 
appropriated funds, this rule proposes to add the OMB explanation that 
the term ``appropriated funds'' does not include profit or fee from a 
covered Federal action, and the clarification that to the extent a 
person can demonstrate that the person has sufficient monies other than 
Federal appropriated funds, the Government shall assume that these 
other monies were spent for any influencing activities unallowable with 
Federal appropriated funds.
     FAR 3.802(b). The text of the FAR is addressed to the 
contracting officer. Having referenced the provision and clause that 
set forth the declaration requirements for offerors and contractors, it 
is not necessary to repeat the details of the requirements in the text.
    4. FAR 3.803, Certification and disclosure. The language in this 
section is deleted as duplicative of the provision at FAR 52.203-11 and 
clause at FAR 52.203-12. The text of the FAR is supposed to be 
addressed to the contracting officer. Requirements for contractors are 
set forth in provisions and clauses.
    5. FAR 3.803, Exceptions. The exceptions have been revised and 
redesignated as the FAR 3.803 to eliminate unnecessary duplication 
within the text and also eliminate many of the current subdivision 
identifiers that detract from the readability of the regulation.
    6. FAR 3.804, Policy. This section is revised to remove paragraph 
(b). Paragraph (b) was relevant when agencies were required to submit 
reports to the Congress. This requirement was eliminated by the 
Lobbying Disclosure Act.
    7. FAR 3.805, Exemption. The proposed rule contains minor editorial 
corrections to change ``section'' to ``subpart'' and eliminate the word 
``such'' in two places.
    8. FAR 3.806, Processing suspected violations. Minor plain language 
improvements have put this requirement in active voice.
    9. FAR 3.808, Solicitation provision and contract clause. The 
proposed rule restates the provision and clause prescriptions in active 
voice.
    10. FAR 12.504, Applicability of certain laws to subcontracts for 
the acquisition of commercial items.
    41 U.S.C. 430, List of laws inapplicable to procurements of 
commercial items in Federal Acquisition Regulations, requires in 
paragraph (b) that the FAR must include a list of laws inapplicable to 
commercial subcontracts. Covered laws shall be included on the list 
unless the FAR Council makes a written determination that it is not in 
the best interest of the Federal Government to exempt subcontracts from 
that provision. Covered laws include laws that set forth policies, 
procedures, requirements, or restrictions for the procurement of 
property or services by the Federal Government and that do not--
     Provide for criminal or civil penalties; or
     Specifically refer to 41 U.S.C. 430 and nevertheless make 
the law applicable to contracts for commercial items.
    The current FAR 12.504, Applicability of certain laws to 
subcontracts for the acquisition of commercial items, includes 31 
U.S.C. 1352 as a law inapplicable to commercial items. Because 31 
U.S.C. 1352 provides for civil penalties, the Councils determined that 
its inclusion on such list is unauthorized and propose to remove it 
from the list.
    11. FAR 52.203-11, Certification and Disclosure Regarding Payments 
to Influence Certain Federal Transactions.
     Definitions. This proposed rule adds a definition of 
``lobbying contact''. This is the key term introduced by the Lobbying 
Disclosure Act of 1995. With regard to the other terms used in the 
provision that are defined in the clause, the proposed rule lists the 
specific terms that are used in the provision and defined in the 
clause.
     Prohibitions. In accordance with FAR drafting conventions, 
the first paragraph of a provision or clause should include any needed 
definitions. This rule separates into a separate paragraph the 
statement that was included with the definitions regarding prohibitions 
of the clause being incorporated in the provision by reference from the 
definitions paragraph to a separate paragraph (b).
     Certification. Paragraph (b) is redesignated paragraph 
(c). The proposed rule deletes the date of December 23, 1989, which is 
no longer relevant, and changes ``his or her'' to ``its'' (FAR drafting 
convention).
     Disclosure. Current paragraph (b)(2) is deleted and 
replaced by new paragraph (d) to implement the Lobbying Disclosure Act 
of 1995, which brings in the concept of registrants under the Act and 
lobbying contacts.
     Flowdown. The current paragraph (b)(3) has been deleted 
because flow down can only be required through a contract clause, not a 
solicitation provision.
     Penalty. Paragraph (c) has been redesignated as paragraph 
(e), and there are only minor editorial changes.
    12. FAR 52.203-12, Limitation on Payments to Influence Certain 
Federal Transactions.
    This clause is revised to make conforming changes to parallel the 
changes made to FAR Subpart 3.8. In addition--
     Paragraph (c)(2)(iii). The Councils propose to delete the 
long examples and discussion of advice and analysis that directly apply 
any professional or technical discipline, substituting a reference to 
FAR 3.803 where the examples are also found.
     Paragraph (d). The events that materially affect 
disclosure are no longer in accordance with the disclosure 
requirements. The only relevant change now is a change in the name and 
address of the lobbying registrant or the individuals performing the 
services.

[[Page 54257]]

     Paragraph (d)(2). The contractor shall file a declaration 
at the end of each calendar quarter in which a change occurs.
     Agreement. For consistency with previous changes to the 
FAR, the Councils have removed the requirement for ``contractor 
agreement'' and reworded the prohibition in paragraph (b) to state that 
``the Contractor shall''. This is the preferred method of imposing a 
requirement upon a contractor.
     Paragraph (g). The requirements regarding subcontractors 
and flowdown have been moved to the last paragraph of the clause, in 
accordance with FAR drafting conventions. The requirement for the 
subcontractors to pass the disclosure up the chain to the prime 
contractor is retained, even though the agency head and IG reporting 
requirements have been deleted. In order for the information to have 
any value, it must be passed to the Government.
    13. 52.212-3(e), Certification Regarding Payments to Influence 
Federal Transactions (31 U.S.C. 1352). The Councils propose to add the 
new language on disclosure at paragraph (d) of the provision at 52.203-
11 and to the certification requirement at 52.212-3(e). Since 
acquisitions of commercial items are subject to the requirements of 31 
U.S.C. 1352, and there are civil penalties for failure to submit the 
required disclosure as well as the certification, it is important to 
include this requirement.
    14. OMB SF LLL and LLL-A. SF LLL and SF LLL-A were developed as an 
interim measure to accommodate OMB's interim guidance. These forms are 
illustrated in the FAR under ``Forms Authorized for Local 
Reproduction''. The SF LLL-A must be removed to conform to OMB's 
January 19, 1996, Federal Register Notice.
    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 proposed rule to 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 this proposed rule mainly implements improvements in clarity 
and consistency. The Federal Government awards approximately 90,000 
contracts per year to approximately 18,000 small entities. The 
disclosure requirements of the rule will only apply to small entities 
on whose behalf a registered lobbyist has made lobbying contacts with 
respect to a particular Federal contract. Based on OMB Control No. 
0348-0046, Disclosure of Lobbying Activities for SF LLL, which is the 
standard disclosure form for lobbying paid for with non-Federal funds 
as required by the Byrd Amendment, 300 responses were received annually 
from states, local governments, non-profit organizations, individuals, 
and businesses. The number of such small entities is estimated to be 
near zero, based on the small number of lobbyists reported to have 
registered under the Byrd Amendment and the improbability that such 
lobbyists represent small entities. The rule does not impose new 
requirements that impose a burden on contractors.
    An Initial Regulatory Flexibility Analysis has, therefore, not been 
performed. We invite comments from small businesses and other 
interested parties. The Councils will consider comments from small 
entities concerning the affected FAR Parts 3, 12, and 52 in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 601, et seq. (FAR case 2005-035), 
in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does apply. The reporting requirements 
are approved under OMB Control Number 0348-0046. OMB claimed a 
reduction in the information collection requirement upon issuance of 
the Interim Final Amendments to OMB's Governmentwide Guidance on 
Lobbying in January 1996, due to the simplified SF LLL. This rule will 
not impact the reporting requirement.

List of Subjects in 48 CFR Parts 3, 12, and 52

    Government procurement.

    Dated: September 6, 2006.
Ralph De Stefano,
Director, Contract Policy Division.

    Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 3, 12, 
and 52 as set forth below:
    1. The authority citation for 48 CFR parts 3, 12, 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 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

    2. Revise section 3.800 to read as follows:


3.800   Scope of subpart.

    This subpart prescribes policies and procedures implementing 31 
U.S.C. 1352, ``Limitation on use of appropriated funds to influence 
certain Federal contracting and financial transactions''.
    3. Amend section 3.801 by--
    a. Adding a new introductory paragraph;
    b. Revising the definitions ``Agency'', ``Covered Federal action'' 
and ```Indian tribe' and `tribal organization''';
    c. Removing from the definitions ``Influencing or attempting to 
influence'' and ``Local government'' ``, as used in this section,'';
    d. Removing from the definition ``Officer or employee of an 
agency,'' ``, as used in this section''; and redesignating paragraphs 
(a), (b), (c), and (d) as (1), (2), (3), and (4), respectively;
    e. Revising the definition ``Person'';
    f. Removing from the definitions ``Reasonable compensation'' and 
``Reasonable payment'' ``, as used in this section,'';
    g. Revising the definition ``Recipient''; and
    h. Removing from the definitions ``Regularly employed'' and 
``State'' ``, as used in this section,''.
    The added and revised text reads as follows:


3.801   Definitions.

    As used in this subpart--
    Agency means ``executive agency'' as defined in 2.101.
    Covered Federal action means any of the following actions:
    (1) Awarding any Federal contract.
    (2) Making any Federal grant.
    (3) Making any Federal loan.
    (4) Entering into any cooperative agreement.
    (5) Extending, continuing, renewing, amending, or modifying any 
Federal contract, grant, loan, or cooperative agreement.
    Indian tribe and tribal organization have the meaning provided in 
section 4 of the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450b) and include Alaskan Natives.
* * * * *
    Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for

[[Page 54258]]

profit or not for profit. This term excludes an Indian tribe, tribal 
organization, or any other Indian organization eligible to receive 
Federal contracts, grants, cooperative agreements, or loans from an 
agency, but only with respect to expenditures by such tribe or 
organization that are made for purposes specified in 3.802(a) and are 
permitted by other Federal law.
* * * * *
    Recipient includes the contractor and all subcontractors. This term 
excludes an Indian tribe, tribal organization, or any other Indian 
organization eligible to receive Federal contracts, grants, cooperative 
agreements, or loans from an agency, but only with respect to 
expenditures by such tribe or organization that are made for purposes 
specified in 3.802(a) and permitted by other Federal law.
* * * * *
    4. Revise sections 3.802 and 3.803 to read as follows:


3.802   Statutory Prohibition and Requirement.

    (a) 31 U.S.C. 1352 prohibits a recipient of a Federal contract, 
grant, loan, or cooperative agreement from using appropriated funds to 
pay any person for influencing or attempting to influence an officer or 
employee of any agency, a Member of Congress, an officer or employee of 
Congress, or an employee of a Member of Congress in connection with 
covered Federal actions.
    (1) For purposes of this subpart, the term ``appropriated funds'' 
does not include profit or fee from a covered Federal action.
    (2) To the extent a person can demonstrate that the person has 
sufficient monies, other than Federal appropriated funds, the 
Government shall assume that these other monies were spent for any 
influencing activities unallowable with Federal appropriated funds.
    (b) 31 U.S.C. 3152 also requires offerors to furnish a declaration 
consisting of both a certification and a disclosure, with periodic 
updates of the disclosure after contract award. These requirements are 
contained in the provision at 52.203-11, Certification and Disclosure 
Regarding Payments to Influence Certain Federal Transactions, and the 
clause at 52.203-12, Limitation on Payments to Influence Certain 
Federal Transactions.


3.803   Exceptions.

    (a) The prohibition of 3.802(a) does not apply under the following 
conditions:
    (1) Agency and legislative liaison by own employees. (i) Payment of 
reasonable compensation made to an officer or employee of a person 
requesting or receiving a covered Federal action if the payment is for 
agency and legislative liaison activities not directly related to a 
covered Federal action. For purposes of this paragraph, providing any 
information specifically requested by an agency or Congress is 
permitted at any time.
    (ii) Participating with an agency in discussions that are not 
related to a specific solicitation for any covered Federal action, but 
that concern--
    (A) The qualities and characteristics (including individual 
demonstrations) of the person's products or services, conditions or 
terms of sale, and service capabilities; or
    (B) The application or adaptation of the person's products or 
services for an agency's use.
    (iii) Providing prior to formal solicitation of any covered Federal 
action any information not specifically requested but necessary for an 
agency to make an informed decision about initiation of a covered 
Federal action.
    (iv) Participating in technical discussions regarding the 
preparation of an unsolicited proposal prior to its official 
submission.
    (v) Making capability presentations prior to formal solicitation of 
any covered Federal action when seeking an award from an agency 
pursuant to the provisions of the Small Business Act, as amended by 
Pub. L. 95-507, and subsequent amendments.
    (2) Professional and technical services. (i) Payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a covered Federal action, if payment is for professional or 
technical services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal 
action or for meeting requirements imposed by or pursuant to law as a 
condition for receiving that Federal action.
    (ii) Any reasonable payment to a person, other than an officer or 
employee of a person requesting or receiving a covered Federal action, 
if the payment is for professional or technical services rendered 
directly in the preparation, submission, or negotiation of any bid, 
proposal, or application for that Federal action, or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal action. Persons other than officers or employees of a 
person requesting or receiving a covered Federal action include 
consultants and trade associations.
    (iii) As used in paragraph (a)(2), of this section, ``professional 
and technical services'' are limited to advice and analysis directly 
applying any professional or technical discipline. For example, 
drafting of a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on 
the performance or operational capability of a piece of equipment 
rendered directly in the negotiation of a contract is allowable. 
However, communications with the intent to influence made by a 
professional or a technical person are not allowable under this section 
unless they provide advice and analysis directly applying their 
professional or technical expertise and unless the advice or analysis 
is rendered directly and solely in the preparation, submission or 
negotiation of a covered Federal action. Thus, for example, 
communications with the intent to influence made by a lawyer that do 
not provide legal advice or analysis directly and solely related to the 
legal aspects of his or her client's proposal, but generally advocate 
one proposal over another, are not allowable under this section because 
the lawyer is not providing professional legal services. Similarly, 
communications with the intent to influence made by an engineer 
providing an engineering analysis prior to the preparation or 
submission of a bid or proposal are not allowable under this section 
since the engineer is providing technical services but not directly in 
the preparation, submission or negotiation of a covered Federal action.
    (iv) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation and any other requirements in the actual award documents.
    (b) Only those communications and services expressly authorized by 
paragraph (a) of this section are permitted.
    (c) The disclosure requirements of 3.802(b) do not apply with 
respect to payments of reasonable compensation made to regularly 
employed officers or employees of a person.


3.804   [Amended]

    5. Amend section 3.804 by removing the paragraph designation (a) 
and paragraph (b).
    6. Revise sections 3.805 and 3.806 to read as follows:


3.805   Exemption.

    The Secretary of Defense may exempt, on a case-by-case basis, a 
covered

[[Page 54259]]

Federal action from the prohibitions of this subpart whenever the 
Secretary determines, in writing, that such an exemption is in the 
national interest. The Secretary shall transmit a copy of the exemption 
to Congress immediately after making the determination.


3.806   Processing suspected violations.

    The contracting officer shall report suspected violations of the 
requirements of 31 U.S.C. 1352 in accordance with agency procedures.


3.808   [Amended]

    7. Amend section 3.808 in paragraphs (a) and (b) by removing 
``The'' and adding ``Insert the'' in its place; and by removing ``shall 
be included''.

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.504   [Amended]

    8. Amend section 12.504 by removing and reserving paragraph (a)(3).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    9. Revise section 52.203-11 to read as follows:


52.203-11   Certification and Disclosure Regarding Payments to 
Influence Certain Federal Transactions.

    As prescribed in 3.808(a), insert the following provision:

CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE CERTAIN 
FEDERAL TRANSACTIONS (DATE)

    (a) Definitions. As used in this provision--
    Lobbying contact has the meaning provided at 2 U.S.C. 1602(8). The 
terms ``agency,'' ``influencing or attempting to influence,'' ``officer 
or employee of an agency,'' ``person,'' ``reasonable compensation,'' 
and ``regularly employed'' are defined in the FAR clause of this 
solicitation entitled, Limitation on Payments to Influence Certain 
Federal Transactions, (52.203-12).
    (b) Prohibition. The prohibition and exceptions contained in the 
FAR clause of this solicitation entitled Limitation on Payments to 
Influence Certain Federal Transactions, (52.203-12), are hereby 
incorporated by reference in this provision.
    (c) Certification. The offeror, by signing its offer, hereby 
certifies to the best of its knowledge and belief that no Federal 
appropriated funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress on its behalf in connection with the 
awarding of this contract.
    (d) Disclosure. If any registrants under the Lobbying Disclosure 
Act of 1995 have made a lobbying contact on behalf of the offeror with 
respect to this contract, the offeror shall complete and submit, with 
its offer, OMB Standard Form LLL, Disclosure of Lobbying Activities, to 
provide the name of the registrants. The offeror need not report 
regularly employed officers or employees of the offeror to whom 
payments of reasonable compensation were made.
    (e) Penalty. Submission of this certification and disclosure is a 
prerequisite for making or entering into this contract imposed by 31 
U.S.C. 1352. Any person who makes an expenditure prohibited under this 
provision or who fails to file or amend the disclosure required to be 
filed or amended by this provision, shall be subject to a civil penalty 
of not less than $10,000, and not more than $100,000, for each such 
failure.
    (End of provision)
    10. Amend section 52.203-12 by--
    a. Revising the date of the clause;
    b. Amending paragraph (a) by--
    i. Revising the introductory text and the definitions ``Agency'', 
``Covered Federal action'', and ```Indian tribe' and `tribal 
organization''';
    ii. In the definitions ``Influencing or attempting to influence'', 
``Local government'', and ``Officer or employee of an agency,'' 
removing ``, as used in this clause,'';
    iii. Revising the definition ``Person''
    iv. In the definitions ``Reasonable compensation'' and ``Reasonable 
payment'' removing ``, as used in this clause,'';
    v. Revising the definition ``Recipient''; and
    vi. In the definitions ``Regularly employed'' and ``State'' 
removing ``, as used in this clause,''.
    c. Revising paragraph (b);
    d. Removing paragraph (d), redesignating paragraph (c) as paragraph 
(d), and revising the newly designated paragraph (d);
    e. Adding a new paragraph (c);
    f. Revising the first sentence of paragraph (e)(1); and
    g. Adding a new paragraph (g).
    The revised and added text reads as follows:


52.203-12   Limitations on Payments to Influence Certain Federal 
Transactions.

* * * * *

LIMITATIONS ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS 
(DATE)

    (a) Definitions. As used in this clause--
    Agency means ``executive agency'' as defined in Federal Acquisition 
Regulation 2.101.
    Covered Federal action means any of the following actions:
    (1) Awarding any Federal contract.
    (2) Making any Federal grant.
    (3) Making any Federal loan.
    (4) Entering into any cooperative agreement.
    (5) Extending, continuing, renewing, amending, or modifying any 
Federal contract, grant, loan, or cooperative agreement.
    Indian tribe and tribal organization have the meaning provided in 
section 4 of the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450b) and include Alaskan Natives.
* * * * *
    Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization eligible to receive Federal contracts, 
grants, cooperative agreements, or loans from an agency, but only with 
respect to expenditures by such tribe or organization that are made for 
purposes specified in paragraph (b) of this clause and are permitted by 
other Federal law.
* * * * *
    Recipient includes the Contractor and all subcontractors. This term 
excludes an Indian tribe, tribal organization, or any other Indian 
organization eligible to receive Federal contracts, grants, cooperative 
agreements, or loans from an agency, but only with respect to 
expenditures by such tribe or organization that are made for purposes 
specified in paragraph (b) of this clause and permitted by other 
Federal law.
* * * * *
    (b) Prohibitions. 31 U.S.C. 1352 prohibits a recipient of a Federal 
contract, grant, loan, or cooperative agreement from using appropriated 
funds to pay any person for influencing or attempting to influence an 
officer or employee of any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with covered Federal actions. In accordance with 31 U.S.C. 
1352, the Contractor shall not use appropriated funds to pay any person 
for influencing or attempting to

[[Page 54260]]

influence an officer or employee of any agency, a Member of Congress, 
an officer or employee of Congress, or an employee of a Member of 
Congress in connection with the award of this contract or the 
extension, continuation, renewal, amendment, or modification of this 
contract.
    (1) The term ``appropriated funds'' does not include profit or fee 
from a covered Federal action.
    (2) To the extent the Contractor can demonstrate that the 
Contractor has sufficient monies, other than Federal appropriated 
funds, the Government shall assume that these other monies were spent 
for any influencing activities unallowable with Federal appropriated 
funds.
    (c) Exceptions. The prohibition in paragraph (b) of this clause 
does not apply under the following conditions:
    (1) Agency and legislative liaison by Contractor employees. (i) 
Payment of reasonable compensation made to an officer or employee of 
the Contractor if the payment is for agency and legislative liaison 
activities not directly related to this contract. For purposes of this 
paragraph, providing any information specifically requested by an 
agency or Congress is permitted at any time.
    (ii) Participating with an agency in discussions that are not 
related to a specific solicitation for any covered Federal action, but 
that concern--
    (A) The qualities and characteristics (including individual 
demonstrations) of the person's products or services, conditions or 
terms of sale, and service capabilities; or
    (B) The application or adaptation of the person's products or 
services for an agency's use.
    (iii) Providing prior to formal solicitation of any covered Federal 
action any information not specifically requested but necessary for an 
agency to make an informed decision about initiation of a covered 
Federal action.
    (iv) Participating in technical discussions regarding the 
preparation of an unsolicited proposal prior to its official 
submission.
    (v) Making capability presentations by persons seeking awards from 
an agency pursuant to the provisions of the Small Business Act, as 
amended by Pub. L. 95-507, and subsequent amendments.
    (2) Professional and technical services. (i) A payment of 
reasonable compensation made to an officer or employee of a person 
requesting or receiving a covered Federal action, if payment is for 
professional or technical services rendered directly in the 
preparation, submission, or negotiation of any bid, proposal, or 
application for that Federal action or for meeting requirements imposed 
by or pursuant to law as a condition for receiving that Federal action;
    (ii) Any reasonable payment to a person, other than an officer or 
employee of a person requesting or receiving a covered Federal action 
or an extension, continuation, renewal, amendment, or modification of a 
covered Federal action if the payment is for professional or technical 
services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal 
action or for meeting requirements imposed by or pursuant to law as a 
condition for receiving that Federal action. Persons other than 
officers or employees of a person requesting or receiving a covered 
Federal action include consultants and trade associations.
    (iii) As used in paragraph (c)(2) of this clause, ``professional 
and technical services'' are limited to advice and analysis directly 
applying any professional or technical discipline (for example, See FAR 
3.803(a)(2)(iii)).
    (iv) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation and any other requirements in the actual award documents.
    (3) Only those communications and services expressly authorized by 
paragraphs (c)(1) and (2) of this clause are permitted.
    (d) Disclosure. (1) If the Contractor did not submit OMB Standard 
Form LLL, Disclosure of Lobbying Activities, with its offer, but 
registrants under the Lobbying Disclosure Act of 1995 have subsequently 
made a lobbying contact on behalf of the Contractor with respect to 
this contract, the Contractor shall complete and submit OMB Standard 
Form LLL to provide the name of the lobbying registrants, including the 
individuals performing the services.
    (2) If the Contractor did submit OMB Standard Form LLL disclosure 
pursuant to paragraph (c) of the provision at FAR 52.203-11, 
Certification and Disclosure Regarding Payments to Influence Certain 
Federal Transactions, and a change occurs that affects block 10 of the 
OMB Standard Form LLL (name and address of lobbying registrant or 
individuals performing services), the Contractor shall submit to the 
Contracting Officer an updated disclosure using OMB Standard Form LLL 
at the end of the calendar quarter, in which the change occurs.
    (e) Penalties. (1) Any person who makes an expenditure prohibited 
under paragraph (b) of this clause or who fails to file or amend the 
disclosure to be filed or amended by paragraph (d) of this clause shall 
be subject to civil penalties as provided for by 31 U.S.C. 1352. * * *
* * * * *
    (g) Subcontracts. (1) The Contractor shall obtain a declaration, 
including the certification and disclosure in paragraphs (c) and (d) of 
the provision at FAR 52.203-11, Certification and Disclosure Regarding 
Payments to Influence Certain Federal Transactions, from each person 
requesting or receiving a subcontract exceeding $100,000 under this 
contract. The Contractor or subcontractor that awards the subcontract 
shall retain the declaration.
    (2) A copy of each subcontractor disclosure form (but not 
certifications) shall be forwarded from tier to tier until received by 
the prime Contractor. The prime Contractor shall submit a copy of all 
disclosures to the Contracting Officer at the end of the calendar 
quarter in which the disclosure form is submitted by the subcontractor. 
Each subcontractor certification shall be retained in the subcontract 
file of the awarding Contractor.
    (3) The Contractor shall include the substance of this clause, 
including this paragraph (g), in any subcontract exceeding $100,000.
    (End of clause)
    11. Amend section 52.212-3 by revising the date of the clause and 
adding two sentences at the end of paragraph (e) to read as follows:


52.212-3   Offeror Representations and Certifications-- Commercial 
Items.

* * * * *

OFFEROR REPRESENTATIONS AND CERTIFICATIONS-COMMERCIAL ITEMS (DATE)

* * * * *
    (e) * * * If any registrants under the Lobbying Disclosure Act of 
1995 have made a lobbying contact on behalf of the offeror with respect 
to this contract, the offeror shall complete and submit, with its 
offer, OMB Standard Form LLL, Disclosure of Lobbying Activities, to 
provide the name of the registrants. The offeror need not report 
regularly employed officers or employees of the offeror to whom 
payments of reasonable compensation were made.
* * * * *
[FR Doc. 06-7604 Filed 9-13-06; 8:45 am]
BILLING CODE 6820-EP-S