Nonprocurement Debarment and Suspension, 34983-34999 [07-3086]

Agencies

• Office of the Secretary
• DEPARTMENT OF DEFENSE

[Federal Register Volume 72, Number 122 (Tuesday, June 26, 2007)]
[Rules and Regulations]
[Pages 34983-34999]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-3086]



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Federal Register / Vol. 72, No. 122 / Tuesday, June 26, 2007 / Rules 
and Regulations

[[Page 34983]]



DEPARTMENT OF DEFENSE

Office of the Secretary

[DoD-2006-OS-0137]
RIN 0790-AH97

2 CFR Part 1125

32 CFR Parts 21, 22, 25, 32, 33, 34 and 37


Nonprocurement Debarment and Suspension

AGENCY: Office of the Secretary, DoD.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Defense (DoD) is revising the DoD Grant and 
Agreement Regulations (DoDGARs) to adopt and implement Office of 
Management and Budget (OMB) guidance on nonprocurement suspension and 
debarment and to make needed technical corrections. DoD is adopting and 
implementing the OMB guidance in a new part in title 2 of the CFR, the 
Governmentwide title recently established for OMB guidance and 
agencies' implementing regulations on grants and agreements. The 
Department also is removing the common rule on nonprocurement 
suspension and debarment that is in 32 CFR, Chapter I, Subchapter C, 
since the common rule is superseded by the new part implementing the 
OMB guidance. Adopting and implementing the OMB guidance and removing 
the common rule completes the DoD actions that the OMB guidance 
specifies. This regulatory action also is the first step toward 
relocating all of the DoDGARs to 2 CFR.

DATES: This final rule is effective on August 27, 2007 without further 
action. Submit comments by July 26, 2007 on any unintended changes this 
action makes in DoD policies and procedures for nonprocurement 
debarment and suspension. All comments on unintended changes will be 
considered and, if warranted, DoD will revise the rule.

ADDRESSES: You may submit comments, identified by docket number and or 
RIN number and title, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Federal Docket Management System Office, 1160 
Defense Pentagon, Washington, DC 20301-1160.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
Federal Register document. The general policy for comments and other 
submissions from members of the public is to make these submissions 
available for public viewing on the Internet at https://regulations.gov 
as they are received without change, including any personal identifiers 
or contact information.

FOR FURTHER INFORMATION CONTACT: Mark Herbst, (703) 588-1377 or 
mark.herbst@osd.mil.

SUPPLEMENTARY INFORMATION:

Governmentwide Context for This DoD Regulatory Action

    This DoD regulatory action is part of a Governmentwide initiative 
to streamline and simplify the Federal Government's policy framework 
for grants and agreements. As part of this initiative, OMB established 
a new title 2 of the CFR for grants and agreements [69 FR 26276, May 
11, 2004], a step recommended by an interagency work group helping to 
implement the Federal Financial Assistance Management Improvement Act 
of 1999 (Pub. L. 106-107). The primary purpose of the title is to co-
locate OMB circulars and other guidance on grants and agreements with 
Federal agencies' regulations implementing those OMB issuances.
    The Federal Register notice establishing 2 CFR also stated that OMB 
would issue in that new title Governmentwide guidance on nonprocurement 
debarment and suspension in a form that agencies could adopt by 
regulation. That approach enables a Federal agency to implement the 
guidance without having to repeat the full text, as it must do with a 
common rule. Instead, the agency's brief adopting regulation just needs 
to state any agency-specific additions and clarifications to the 
guidance. The approach is similar to the one that OMB and the agencies 
have used to implement the Governmentwide cost principles in OMB 
Circulars A-21, A-87, and A-122, and the audit guidance in OMB Circular 
A-133.
    This new approach has two major advantages. First, it will reduce 
the volume of Federal regulations. We estimate that today's regulatory 
action reduces the volume of the DoDGARs by about eight percent. 
Second, the brief adopting part makes it easy for the affected public 
to identify an agency's additions and clarifications to the 
Governmentwide policies and procedures, something that was difficult 
with the common rule.

DoD Implementation of the OMB Guidance on Nonprocurement Suspension and 
Debarment

    DoD is taking three steps in this regulatory action to implement 
the OMB guidance. First, DoD is establishing Chapter XI, ``Department 
of Defense,'' in Subtitle B of 2 CFR, where all of the DoDGARs 
ultimately will be located. Second, it is adding a new part 1125 to 
Chapter XI, as the brief part to adopt the OMB guidance and state DoD-
specific additions and clarifications. Third, it is removing 32 CFR 
part 25, the part containing the common rule on nonprocurement 
debarment and suspension that the OMB guidance supersedes.

Technical Corrections to the DoD Grant and Agreement Regulations

    The technical corrections that DoD is making to the DoDGARs through 
this regulatory action accomplish two purposes. First, they replace the 
references to 32 CFR part 25 that appeared in other DoDGARs parts with 
references to the OMB guidance, as implemented by the new 2 CFR part 
1125 (see amendment numbers 2.d, 3.b, 3.d-f, 3.i, 5.b-f, 6.b, 7.b-d, 
and 8.b-d following this preamble). Second, they correct typesetting 
errors made to some DoDGARs parts in an August 2005 Federal Register 
notice [70 FR 49460] (see amendment numbers 2.c, 3.c, 3.e-h, and 8.c 
following this preamble).

Administrative Procedure Act

    Under the Administrative Procedure Act (5 U.S.C. 553) agencies 
generally

[[Page 34984]]

offer interested parties the opportunity to comment on proposed 
regulations before they become effective. However, in this case, the 
substance of the regulation already has been subject to comment on two 
occasions. The first occasion was through DoD's adoption of the update 
to the Governmentwide nonprocurement debarment and suspension common 
rule that recast the regulation in plain English and made other needed 
changes. DoD proposed that regulation for comment on January 23, 2002 
[67 FR 3265], before adopting the final rule on November 26, 2003 [68 
FR 65534]. As permitted by OMB, DoD made a few agency-specific 
additions and clarifications to the Governmentwide wording when it 
adopted the common rule.
    The second opportunity to comment was through OMB's conversion of 
the substance of the Governmentwide common rule to guidance suitable 
for agency adoption. OMB issued the guidance in interim final form on 
August 31, 2005 [70 FR 51863], with an opportunity for comment. It then 
issued the final guidance on November 15, 2006 [71 FR 66431].
    Adopting 2 CFR part 1125 as a direct final rule constitutes an 
administrative simplification that makes no substantive changes to DoD 
policy or procedures for nonprocurement debarment and suspension. The 
new part includes the same agency-specific additions and clarifications 
to the OMB guidance that DoD made when it adopted the Governmentwide 
common rule in 2003. The substance of this final rule therefore is 
unchanged from what was adopted previously with opportunity for 
comment.
    Accordingly, the Department finds that the solicitation of public 
comments on this direct final rule is unnecessary and that ``'good 
cause''' exists under 5 U.S.C. 553(b)(B) and 553(d) to make this rule 
effective on August 27, 2007 without further action.

Invitation To Comment

    Although it is not necessary, DoD is providing an opportunity for 
comment. In doing so, we are not seeking to revisit substantive issues 
that were resolved during the adoption of the final common rule in 
2003. Rather, we specifically invite comments only on any unintended 
substantive changes that the new 2 CFR part 1125 makes relative to DoD 
policy and procedures in 32 CFR part 25, the part that it is 
supersedes. If any comments identifying unintended substantive changes 
are received by July 26, 2007, the Department will make any amendments 
to the final rule that are warranted.

Executive Order 12866

    This rule is not significant because the replacement of the common 
rule with OMB guidance and a brief DoD adopting regulation does not 
make any changes in current policies and procedures.

Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b))

    This regulatory action will not have a significant adverse impact 
on a substantial number of small entities.

Unfunded Mandates Act of 1995 (Sec. 202, Pub. L. 104-4)

    This regulatory action does not contain a Federal mandate that will 
result in the expenditure by State, local, and tribal governments, in 
aggregate, or by the private sector of $100 million or more in any one 
year.

Paperwork Reduction Act of 1995 (44 U.S.C., Chapter 35)

    This regulatory action will not impose any additional reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

Federalism (Executive Order 13132)

    This proposed regulatory action does not have Federalism 
implications, as set forth in Executive Order 13132. It will not have 
substantial direct effects 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.

List of Subjects

2 CFR Part 1125

    Administrative practice and procedure, Debarment and suspension, 
Grant programs, Reporting and recordkeeping requirements.

32 CFR Part 21

    Grant programs, Reporting and recordkeeping requirements.

32 CFR Part 22

    Accounting, Grant programs, Grant programs--education, Reporting 
and recordkeeping requirements.

32 CFR Part 25

    Administrative practice and procedure, Grant programs, Loan 
programs, Reporting and recordkeeping requirements.

32 CFR Part 32

    Accounting, Colleges and universities, Grant programs, Hospitals, 
Nonprofit organizations, Reporting and recordkeeping requirements.

32 CFR Part 33

    Grant programs, Indians, Intergovernmental relations, Reporting and 
recordkeeping requirements.

32 CFR Part 34

    Accounting, Government property, Grant programs, Nonprofit 
organizations, Reporting and recordkeeping requirements.

32 CFR Part 37

    Accounting, administrative practice and procedure, Grant programs, 
Grants administration, Reporting and recordkeeping requirements.


0
Accordingly, under the authority of 5 U.S.C. 301 and 10 U.S.C. 113, the 
Department of Defense amends the Code of Federal Regulations, Title 2, 
Subtitle B, and Title 32, Chapter I, Subchapter C, to read as follows:

Title 2--Grants and Agreements

0
1. Chapter XI, consisting of part 1125, to Subtitle B is added to read 
as follows:

Chapter XI--Department of Defense

PART 1125--NONPROCUREMENT DEBARMENT AND SUSPENSION

Sec.
1125.10 What does this part do?
1125.20 Does this part implement the OMB guidance in 2 CFR part 180 
for all DoD nonprocurement transactions?
1125.30 Does this part apply to me?
1125.40 What policies and procedures must I follow?
Subpart A--General
1125.137 Who in the Department of Defense may grant an exception to 
let an excluded person participate in a covered transaction?
Subpart B--Covered Transactions
1125.220 What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
1125.332 What method must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of DoD Officials Regarding Transactions
1125.425 When do I check to see if a person is excluded or 
disqualified?
1125.437 What method do I use to communicate to a participant the 
requirements described in the OMB guidance at 2 CFR 180.435?
Subpart E--H [Reserved]
Subpart I--Definitions
1125.930 Debarring official (DoD supplement to Governmentwide 
definition at 2 CFR 180.930).

[[Page 34985]]

1125.937 DoD Component.
1125.1010 Suspending official (DoD supplement to Governmentwide 
definition at 2 CFR 180.1010).

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 
12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 
235; 5 U.S.C. 301 and 10 U.S.C. 113.


Sec.  1125.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in Subparts A through I of 2 CFR part 180, as supplemented by this 
part, as the Department of Defense (DoD) policies and procedures for 
nonprocurement debarment and suspension. It thereby gives regulatory 
effect for the Department of Defense to the OMB guidance as 
supplemented by this part. This part satisfies the requirements in 
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3 CFR 
1986 Comp., p. 189), Executive Order 12689, ``Debarment and 
Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note 
(Section 2455, Public Law 103-355, 108 Stat. 3327).


Sec.  1125.20  Does this part implement the OMB guidance in 2 CFR part 
180 for all DoD nonprocurement transactions?

    This part implements the OMB guidelines in 2 CFR part 180 for most 
DoD nonprocurement transactions. However, it does not implement the 
guidelines as they apply to prototype projects under the authority of 
Section 845 of the National Defense Authorization Act for Fiscal Year 
1994 (Pub. L. 103-160), as amended. The Director of Defense Procurement 
and Acquisition Policy maintains a DoD issuance separate from this part 
that addresses section 845 transactions.


Sec.  1125.30  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in Subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
Subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970, as supplemented by Subpart B of this 
part), other than a section 845 transaction described in Sec.  1125.20;
    (b) Respondent in a DoD Component's nonprocurement suspension or 
debarment action;
    (c) DoD Component's debarment or suspension official; or
    (d) DoD Component's grants officer, agreements officer, or other 
official authorized to enter into a nonprocurement transaction that is 
a covered transaction.


Sec.  1125.40  What policies and procedures must I follow?

    (a) General. You must follow the policies and procedures specified 
in applicable sections of the OMB guidance in Subparts A through I of 2 
CFR part 180, as implemented by this part.
    (b) Specific sections of OMB guidance that this part supplements. 
In implementing the OMB guidance in 2 CFR part 180, this part 
supplements eight sections of the guidance, as shown in the following 
table. For each of those sections, you must follow the policies and 
procedures in the OMB guidance, as supplemented by this part.

------------------------------------------------------------------------
                                   Section in
                                    this part            What the
    Section of OMB guidance           where          supplementation
                                  supplemented          clarifies
------------------------------------------------------------------------
(1) 2 CFR 180.135..............            Sec.  Who in DoD may grant an
                                       1125.137   exception for an
                                                  excluded person to
                                                  participate in a
                                                  covered transaction.
(2) 2 CFR 180.220..............            Sec.  Which lower-tier
                                       1125.220   contracts under a
                                                  nonprocurement
                                                  transaction are
                                                  covered transactions.
(3) 2 CFR 180.330..............            Sec.  What method a
                                       1125.332   participant must use
                                                  to communicate
                                                  requirements to a
                                                  lower-tier
                                                  participant.
(4) 2 CFR 180.425..............            Sec.  When a DoD awarding
                                       1125.425   official must check to
                                                  see if a person is
                                                  excluded or
                                                  disqualified.
(5) 2 CFR 180.435..............            Sec.  What method a DoD
                                       1125.437   official must use to
                                                  communicate
                                                  requirements to a
                                                  participant.
(6) 2 CFR 180.930..............            Sec.  Which DoD officials are
                                       1125.930   debarring officials.
(7) 2 CFR 180.1010.............            Sec.  Which DoD officials are
                                      1125.1010   suspending officials.
------------------------------------------------------------------------

    (c) Sections of the OMB guidance that this part does not 
supplement. For any section of OMB guidance in Subparts A through I of 
2 CFR 180 that is not listed in paragraph (b) of this section, DoD 
policies and procedures are the same as those in the OMB guidance.

Subpart A--General


Sec.  1125.137  Who in the Department of Defense may grant an exception 
to let an excluded person participate in a covered transaction?

    Within the Department of Defense, the Secretary of Defense, 
Secretary of a Military Department, Head of a Defense Agency, Head of 
the Office of Economic Adjustment, and Head of the Special Operations 
Command have the authority to grant an exception to let an excluded 
person participate in a covered transaction, as provided in the OMB 
guidance at 2 CFR 180.135.

Subpart B--Covered Transactions


Sec.  1125.220  What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?

    Although the OMB guidance at 2 CFR 180.220(c) allows a Federal 
agency to do so (also see optional lower tier coverage in the figure in 
the Appendix to 2 CFR part 180), the Department of Defense does not 
extend coverage of nonprocurement suspension and debarment requirements 
beyond first-tier procurement contracts under a covered nonprocurement 
transaction.

Subpart C--Responsibilities of Participants Regarding Transactions


Sec.  1125.332  What method must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    You as a participant in a covered transaction must include a term 
or condition in any lower-tier covered transaction into which you 
enter, to require the participant of that transaction to--
    (a) Comply with Subpart C of the OMB guidance in 2 CFR part 180; 
and
    (b) Include a similar term or condition in any covered transaction 
into which it enters at the next lower tier.

[[Page 34986]]

Subpart D--Responsibilities of DoD Officials Regarding Transactions


Sec.  1125.425  When do I check to see if a person is excluded or 
disqualified?

    In addition to the four instances identified in the OMB guidance at 
2 CFR 180.425, you as a DoD Component official must check to see if a 
person is excluded or disqualified before you obligate additional 
funding (e.g., through an incremental funding action) for a pre-
existing grant or cooperative agreement with an institution of higher 
education, as provided in 32 CFR 22.520(e)(5).


Sec.  1125.437  What method do I use to communicate to a participant 
the requirements described in the OMB guidance at 2 CFR 180.435?

    You as a DoD Component official must include a term or condition in 
each covered transaction into which you enter, to communicate to the 
participant the requirements to--
    (a) Comply with subpart C of 2 CFR part 180, as supplemented by 
Subpart C of this part; and
    (b) Include a similar term or condition in any lower-tier covered 
transactions into which the participant enters.

Subpart E-H--[Reserved]

Subpart I--Definitions


Sec.  1125.930  Debarring official (DoD supplement to Governmentwide 
definition at 2 CFR 180.930).

    DoD Components' debarring officials for nonprocurement transactions 
are the same officials identified in 48 CFR part 209, subpart 209.4, as 
debarring officials for procurement contracts.


Sec.  1125.937  DoD Component

    In this part, DoD Component means the Office of the Secretary of 
Defense, a Military Department, a Defense Agency, a DoD Field Activity, 
or any other organizational entity of the Department of Defense that is 
authorized to award or administer grants, cooperative agreements, or 
other nonprocurement transactions.


Sec.  1125.1010  Suspending official (DoD supplement to Governmentwide 
definition at 2 CFR 180.1010).

    DoD Components' suspending officials for nonprocurement 
transactions are the same officials identified in 48 CFR part 209, 
subpart 209.4, as suspending officials for procurement contracts.

Title 32--National Defense

PART 21--DOD GRANTS AND AGREEMENTS--GENERAL MATTERS

0
1. The authority citation for part 21 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


0
2. Section 21.330 is amended by revising paragraph (a) to read as 
follows:


Sec.  21.330  How are the DoDGARs published and maintained?

    (a) The DoD publishes the DoDGARs in the Code of Federal 
Regulations (CFR) and in a separate internal DoD document (DoD 3210.6-
R).
    (1) The location of the DoDGARs in the CFR currently is in 
transition. They are moving from Chapter I, Subchapter C, Title 32, to 
a new location in Chapter XI, Title 2 of the CFR. During the 
transition, there will be some parts of the DoDGARs in each of the two 
titles.
    (2) The DoD document is divided into parts, subparts, and sections, 
to parallel the CFR publication. Cross references within the DoD 
document are stated as CFR citations (e.g., a reference to section 
21.215 in part 21 would be to 32 CFR 21.215), which also is how they 
are stated in the CFR publication of the DoDGARs.
* * * * *

0
3. Section 21.565 is revised to read as follows:


Sec.  21.565  Must DoD Components' electronic systems accept Data 
Universal Numbering System (DUNS) numbers?

    The DoD Components must comply with paragraph 5.e of the Office of 
Management and Budget (OMB) policy directive entitled, ``Requirement 
for a DUNS number in Applications for Federal Grants and Cooperative 
Agreements.'' \6\ Paragraph 5.e requires electronic systems that handle 
information about grants and cooperative agreements (which, for the 
DoD, include Technology Investment Agreements) to accept DUNS numbers. 
Each DoD Component that awards or administers grants or cooperative 
agreements must ensure that DUNS numbers are accepted by each such 
system for which the DoD Component controls the system specifications. 
If the specifications of such a system are subject to another 
organization's control and the system can not accept DUNS numbers, the 
DoD Component must alert that organization to the OMB policy 
directive's requirement for use of DUNS numbers with a copy to: 
Director for Basic Sciences, ODDR&E, 3040 Defense Pentagon, Washington, 
DC 20301-3040.
---------------------------------------------------------------------------

    \6\ This OMB policy directive is available at the Internet site 
https://www.whitehouse.gov/omb/grants/grants_docs.html.

0
4. Appendix A to part 21 is revised to read as follows:
BILLING CODE 5001-06-P

[[Page 34987]]

Appendix A to Part 21--Instruments to Which DoDGARs Portions Apply
[GRAPHIC] [TIFF OMITTED] TR26JN07.007

BILLING CODE 5001-06-C

[[Page 34988]]

PART 22--DOD GRANTS AND AGREEMENTS--AWARD AND ADMINISTRATION

0
5. The authority citation for part 22 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.

0
6. Section 22.100 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  22.100  Purpose, relation to other parts, and organization.

* * * * *
    (b) * * *
    (1) The DoD implementation, in 2 CFR part 1125, of OMB guidance on 
nonprocurement debarment and suspension.
* * * * *

0
7. Section 22.315 is amended by:
0
a. Revising paragraph (a)(2) to read as follows; and
0
b. Revising footnotes 2, 3, and 4 to read as follows:


Sec.  22.315  Merit-based, competitive procedures.

* * * * *
    (a) * * *
    (2) In accordance with that OMB policy directive, DoD Components 
also must post on the Internet any notice under which domestic entities 
may submit proposals, if the distribution of the notice is unlimited. 
DoD Components are encouraged to simultaneously publish the notice in 
other media (e.g., the Federal Register), if doing so would increase 
the likelihood of its being seen by potential proposers. If a DoD 
Component issues a specific notice with limited distribution (e.g., for 
national security considerations), the notice need not be posted on the 
Internet.
* * * * *
    \2\ This OMB policy directive is available at the Internet site 
https://www.whitehouse.gov/omb/grants/grants_docs.html (the link is 
``Final Policy Directive on Financial Assistance Program 
Announcements'').
    \3\ This OMB policy directive is available at the Internet site 
https://www.whitehouse.gov/omb/grants/grants_docs.html (the link is 
``Office of Federal Financial Management Policy Directive on Use of 
Grants.Gov FIND'').
    \4\ This OMB policy directive is available at the Internet site 
https://www.whitehouse.gov/omb/grants/grants_docs.html (the link is 
``Use of a Universal Identifier by Grant Applicants'').


Sec.  22.405  [Amended]

0
8. Section 22.405, paragraph (a) is amended by revising 
``Governmentwide policy, stated at 32 CFR 25.110(a), to do business 
only with responsible persons'' to read ``Governmentwide policy to do 
business only with responsible persons, which is stated in OMB guidance 
at 2 CFR 180.125(a) and implemented by the Department of Defense in 2 
CFR part 1125''.

0
9. Section 22.420 is amended by revising paragraph (c)(1) to read as 
follows:


Sec.  22.420  Pre-award procedures.

* * * * *
    (c) * * *
    (1) Is not identified in the Governmentwide Excluded Parties List 
System (EPLS) as being debarred, suspended, or otherwise ineligible to 
receive the award. In addition to being a requirement for every new 
award, note that checking the EPLS also is a requirement for subsequent 
obligations of additional funds, such as incremental funding actions, 
in the case of pre-existing awards to institutions of higher education, 
as described at 32 CFR 22.520(e)(5). The grants officer's 
responsibilities include (see the OMB guidance at 2 CFR 180.425 and 
180.430, as implemented by the Department of Defense at 2 CFR 1125.425) 
checking the EPLS for:
    (i) Potential recipients of prime awards; and
    (ii) A recipient's principals (as defined in OMB guidance at 2 CFR 
180.995, implemented by the Department of Defense in 2 CFR part 1125), 
potential recipients of subawards, and principals of those potential 
subaward recipients, if DoD Component approval of those principals or 
lower-tier recipients is required under the terms of the award (e.g., 
if a subsequent change in a recipient's principal investigator or other 
key person would be subject to the DoD Component's prior approval under 
32 CFR 32.25(c)(2), 33.30(d)(3), or 34.15(c)(2)(i)).
* * * * *

0
10. Section 22.520 is amended by revising:
0
a. Paragraphs (c)(3) and (4);
0
b. Paragraph (d)(1);
0
c. Paragraphs (e)(1), (3), (4), (5) introductory text, (5)(i), and 
(5)(ii); and
0
d. Paragraph (f)(2)


Sec.  22.520  Campus access for military recruiting and Reserve Officer 
Training Corps (ROTC).

* * * * *
    (c) * * *
    (3) The Secretary of a Military Department or Secretary of Homeland 
Security from gaining access to campuses, or access to students (who 
are 17 years of age or older) on campuses, for purposes of military 
recruiting in a manner that is at least equal in quality and scope to 
the access to campuses and to students that is provided to any other 
employer; or
    (4) Access by military recruiters for purposes of military 
recruiting to the following information pertaining to students (who are 
17 years of age or older) enrolled at that institution (or any 
subelement of that institution):
    (i) Names, addresses, and telephone listings.
    (ii) Date and place of birth, levels of education, academic majors, 
degrees received, and the most recent educational institution enrolled 
in by the student.
    (d) Policy--(1) Applicability to cooperative agreements. As a 
matter of DoD policy, the restrictions of 10 U.S.C. 983, as implemented 
by 32 CFR part 216, apply to cooperative agreements, as well as grants.
    (2) * * *
    (e) Grants officers' responsibilities. (1) A grants officer shall 
not award any grant or cooperative agreement to an institution of 
higher education that has been identified pursuant to the procedures of 
32 CFR part 216. Such institutions are identified as being ineligible 
on the Governmentwide Excluded Parties List System (EPLS). The cause 
and treatment code on the EPLS indicates the reason for an 
institution's ineligibility, as well as the effect of the exclusion. 
Note that OMB guidance in 2 CFR 180.425 and 180.430, as implemented by 
the Department of Defense at 2 CFR part 1125, require a grants officer 
to check the EPLS prior to determining that a recipient is qualified to 
receive an award.
    (2) * * *
    (3) A grants officer shall include the following award term in each 
grant or cooperative agreement with an institution of higher education 
(note that this requirement does not flow down and that recipients are 
not required to include the award term in subawards):

    ``As a condition for receipt of funds available to the 
Department of Defense (DoD) under this award, the recipient agrees 
that it is not an institution of higher education (as defined in 32 
CFR part 216) that has a policy or practice that either prohibits, 
or in effect prevents:
    (A) The Secretary of a Military Department from maintaining, 
establishing, or operating a unit of the Senior Reserve Officers 
Training Corps (in accordance with 10 U.S.C. 654 and other 
applicable Federal laws) at that institution (or any subelement of 
that institution);
    (B) Any student at that institution (or any subelement of that 
institution) from enrolling in a unit of the Senior ROTC at another 
institution of higher education;
    (C) The Secretary of a Military Department or Secretary of 
Homeland Security from

[[Page 34989]]

gaining access to campuses, or access to students (who are 17 years 
of age or older) on campuses, for purposes of military recruiting in 
a manner that is at least equal in quality and scope to the access 
to campuses and to students that is provided to any other employer; 
or
    (D) Access by military recruiters for purposes of military 
recruiting to the names of students (who are 17 years of age or 
older and enrolled at that institution or any subelement of that 
institution); their addresses, telephone listings, dates and places 
of birth, levels of education, academic majors, and degrees 
received; and the most recent educational institutions in which they 
were enrolled.

If the recipient is determined, using the procedures in 32 CFR part 
216, to be such an institution of higher education during the period 
of performance of this agreement, the Government will cease all 
payments of DoD funds under this agreement and all other DoD grants 
and cooperative agreements to the recipient, and it may suspend or 
terminate such grants and agreements unilaterally for material 
failure to comply with the terms and conditions of award.''

    (4) If an institution of higher education refuses to accept the 
award term in paragraph (e)(3) of this section, the grants officer 
shall:
    (i) Determine that the institution is not qualified with respect to 
the award. The grants officer may award to an alternative recipient.
    (ii) Transmit the name of the institution, through appropriate 
channels, to the Director for Accession Policy, Office of the Deputy 
Under Secretary of Defense for Military Personnel Policy (ODUSD(MPP)), 
4000 Defense Pentagon, Washington, DC 20301-4000. This will allow 
ODUSD(MPP) to decide whether to initiate an evaluation of the 
institution under 32 CFR part 216, to determine whether it is an 
institution that has a policy or practice described in paragraph (c) of 
this section.
    (5) With respect to any pre-existing award to an institution of 
higher education that currently is listed on the EPLS pursuant to a 
determination under 32 CFR part 216, a grants officer:
    (i) Shall not obligate additional funds available to the DoD for 
the award. A grants officer therefore must check the EPLS before 
approving an incremental funding action or other additional funding for 
any pre-existing award to an institution of higher education. The 
grants officer may not obligate the additional funds if the cause and 
treatment code indicates that the reason for an institution's EPLS 
listing is a determination under 32 CFR part 216 that institutional 
policies or practices restrict campus access of military recruiters or 
ROTC.
    (ii) Shall not approve any request for payment submitted by such an 
institution (including payments for costs already incurred).
    (iii) * * *
    (f) * * *
    (2) Awarding offices in DoD Components that may be identified from 
data in the Defense Assistance Awards Data System (see 32 CFR 21.520 
through 21.555) as having awards with such institutions for which post-
award payment administration was not delegated to ONR. The ONR is to 
alert those offices to their responsibilities under paragraph (e)(5) of 
this section.

0
11. Section 22.710 is amended by revising the introductory text to read 
as follows:


Sec.  22.710  Assignment of grants administration offices.

    In accordance with the policy stated in Sec.  22.705(b), the DoD 
offices (referred to in this part as ``grants administration offices'') 
that are assigned responsibility for performing field administration 
services for grants and cooperative agreements are (see the ``Federal 
Directory of Contract Administration Services (CAS) Components'' \10\ 
for specific addresses of administration offices):
---------------------------------------------------------------------------

    \10\ The ``Federal Directory of Contract Administration Services 
(CAS) Components'' may be accessed through the Defense Contract 
Management Agency hompage at https://www.dcma.mil.
---------------------------------------------------------------------------

* * * * *

0
12. Section 22.715 is amended by revising paragraph (a)(4) to read as 
follows:


Sec.  22.715  Grants administration office functions.

* * * * *
    (a) * * *
    (4) Issuing timely management decisions, in accordance with DoD 
Directive 7640.2, ``Policy for Follow-up on Contract Audit Reports,'' 
\13\ on single audit findings referred by the OIG, DoD, under DoD 
Directive 7600.10, ``Audits of States, Local Governments, and Non-
Profit Organizations.'' \14\
---------------------------------------------------------------------------

    \14\ See footnote 13 to Sec.  22.715(a)(4).
---------------------------------------------------------------------------

* * * * *

0
13. Appendix B to part 22 is revised to read as follows:
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Appendix B to Part 22--Suggested Award Provisions for National Policy 
Requirements that Often Apply
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PART 25--[REMOVED]

0
14. Under the authority of 5 U.S.C. 301, 32 CFR part 25 is removed.

PART 32--ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH 
INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT 
ORGANIZATIONS

0
15. The authority citation for part 32 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


0
16. Section 32.2 is amended by revising the introductory text and the 
definition of ``suspension'' to read as follows:


Sec.  32.2  Definitions.

    The following are definitions of terms used in this part. Grants 
officers are cautioned that terms may be defined differently in this 
part than they are in other parts of the DoD Grant and Agreement 
Regulations, because this part implements OMB Circular A-110 and uses 
definitions as stated in that Circular. In such cases, the definition 
given in this section applies to the term as it is used in this part, 
and the definition given in other parts applies to the term as it is 
used in those parts. For example, ``suspension'' is defined in this 
section to mean temporary withdrawal of Federal sponsorship under an 
award, but is defined in the part of the DoD Grant and Agreement 
Regulations on nonprocurement suspension and debarment (2 CFR part 
1125, which implements OMB guidance at 2 CFR part 180) to be an action 
taken to exclude a person from participating in a grant, cooperative 
agreement, or other covered transaction (see definition at 2 CFR 
180.1015).
* * * * *
    Suspension. An action by a DoD Component that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by the DoD 
Component. Suspension of an award is a separate action from suspension 
of a participant under 2 CFR part 1125.
* * * * *

0
17. Section 32.13 is revised to read as follows:


Sec.  32.13  Debarment and suspension.

    DoD Components and recipients shall comply with the policy and 
procedural requirements in the OMB guidance on nonprocurement debarment 
and suspension (2 CFR part 180), as implemented by the Department of 
Defense in 2 CFR part 1125. Those policies and procedures restrict 
subawards and contracts with certain parties that are debarred, 
suspended or otherwise excluded from or ineligible for participation in 
Federal assistance programs or activities.


Sec.  32.44  [Amended]

0
18. Paragraph (d) of Sec.  32.44 is amended in the third sentence by 
revising ``contracts with certain parties are restricted by the DoD 
implementation, in 32 CFR part 25, of E.O.s 12549 (3 CFR, 1986 Comp., 
p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), ``Debarment and 
Suspension'' to read ``contracts with certain parties are restricted by 
the DoD implementation, in 2 CFR part 1125, of OMB guidance on 
nonprocurement debarment and suspension (2 CFR part 180)''.


Sec.  32.62  [Amended]

0
19. Paragraph (d) of section 32.62 is amended by revising ``debarment 
and suspension under 32 CFR part 25'' to read ``debarment and 
suspension under 2 CFR part 1125''.

0
20. Paragraph 8 of Appendix A to part 32 is revised to read as follows:

Appendix A to Part 32--Contract Provisions

* * * * *
    8. Debarment and Suspension (E.O.s 12549 and 12689)--A contract 
award with an amount expected to equal or exceed $25,000 and certain 
other contract awards (see 2 CFR 1125.220, which implements OMB 
guidance at 2 CFR 180.220) shall not be made to parties listed on 
the Governmentwide Excluded Parties List System, in accordance with 
the DoD adoption at 2 CFR part 1125 of the OMB guidance implementing 
E.O.s 12549 (3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR, 1989 
Comp., p. 235), ``Debarment and Suspension.'' The Excluded Parties 
List System accessible on the Internet at www.epls.gov contains the 
names of parties debarred, suspended, or otherwise excluded by 
agencies, as well as parties declared ineligible under statutory or 
regulatory authority other than E.O. 12549.

PART 33--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND 
COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS

0
21. The authority citation for part 33 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


Sec.  33.35  [Amended]

0
22. Section 33.35 is amended by revising ``comply with the requirements 
of Subpart C, 32 CFR part 25, including the restrictions on entering 
into a covered transaction with'' to read ``comply with the 
requirements of OMB guidance in Subpart C, 2 CFR part 180, as 
implemented by the Department of Defense in 2 CFR part 1125. Those 
requirements include restrictions on entering into a covered 
transaction with''.

PART 34--ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH 
FOR-PROFIT ORGANIZATIONS

0
23. The authority citation for part 34 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


0
24. Section 34.2 is amended by revising the definition of 
``suspension'' to read as follows:


Sec.  34.2  Definitions.

* * * * *
    Suspension. An action by a DoD Component that temporarily withdraws 
Federal sponsorship under an award, pending corrective action by the 
recipient or pending a decision to terminate the award by the DoD 
Component. Suspension of an award is a separate action from suspension 
of a participant under 2 CFR part 1125.
* * * * *


Sec.  34.52  [Amended]

0
25. Paragraph (d) of section 34.52 is amended by revising ``debarment 
and suspension under 32 CFR part 25'' to read ``debarment and 
suspension under 2 CFR part 1125''.
0
26. Paragraph 7 of Appendix A to part 34 is revised to read as follows:

Appendix A to Part 34--Contract Provisions

* * * * *
    7. Debarment and Suspension (E.O.s 12549 and 12689)--A contract 
award with an amount expected to equal or exceed $25,000 and certain 
other contract awards (see 2 CFR 1125.220, which implements OMB 
guidance at 2 CFR 180.220) shall not be made to parties listed on the 
Governmentwide Excluded Parties List System, in accordance with the DoD 
adoption at 2 CFR part 1125 of the OMB guidance implementing E.O.s 
12549 (3 CFR, 1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 
235), ``Debarment and Suspension.'' The Excluded Parties List System 
accessible on the Internet at www.epls.gov contains the names of 
parties debarred, suspended, or otherwise excluded by agencies, as well 
as parties declared ineligible under statutory or regulatory authority 
other than E.O. 12549.

[[Page 34999]]

PART 37--TECHNOLOGY INVESTMENT AGREEMENTS

0
27. The authority citation for part 37 continues to read as follows:

    Authority: 5 U.S.C. 301 and 10 U.S.C. 113.


0
28. Section 37.130 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  37.130  Which other parts of the DoD Grant and Agreement 
Regulations apply to TIAs?

* * * * *
    (b) * * *
    (1) Part 1125 (2 CFR part 1125) on nonprocurement debarment and 
suspension, which applies because it covers nonprocurement instruments 
in general;
* * * * *

0
29. Appendix D to part 37 is amended by revising the introductory text 
and paragraphs A, B, B.1, B.3, and B.5 to read as follows:

Appendix D to Part 37--What Common National Policy Requirements May 
Apply and Need To Be Included in TIAs?

    Whether your TIA is a cooperative agreement or another type of 
assistance transaction, as discussed in Appendix B to this part, the 
terms and conditions of the agreement must provide for recipients' 
compliance with applicable Federal statutes and regulations. This 
appendix lists some of the more common requirements to aid you in 
identifying ones that apply to your TIA. The list is not intended to 
be all-inclusive, however, and you may need to consult legal counsel 
to verify whether there are others that apply in your situation 
(e.g., due to a provision in the appropriations act for the specific 
funds that you are using or due to a statute or rule that applies to 
a particular program or type of activity).

A. Certifications

    One requirement that applies to all TIAs currently requires you 
to obtain a certification at the time of proposal. That requirement 
is in a Governmentwide common rule about lobbying prohibitions, 
which is implemented by the DoD at 32 CFR part 28. The prohibitions 
apply to all financial assistance. Appendix A to 32 CFR part 22 
includes a sample provision that you may use, to have proposers 
incorporate the certification by reference into their proposals.

B. Assurances That Apply to All TIAs

    DoD policy is to use a certification, as described in the 
preceding paragraph, only for a national policy requirement that 
specifically requires one. The usual approach to communicating other 
national policy requirements to recipients is to incorporate them as 
award terms or conditions, or assurances. Appendix B to 32 CFR part 
22 lists national policy requirements that commonly apply to grants 
and cooperative agreements. It also has suggested language for 
assurances to incorporate the requirements in award documents. Of 
those requirements, the following six apply to all TIAs:
    1. Requirements concerning debarment and suspension in the OMB 
guidance in 2 CFR part 180, as implemented by the DoD at 2 CFR part 
1125. The requirements apply to all nonprocurement transactions.
* * * * *
    3. Prohibitions on discrimination on the basis of race, color, 
or national origin in Title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d, et seq.). These apply to all financial assistance. 
They require recipients to flow down the prohibitions to any 
subrecipients performing a part of the substantive research program 
(as opposed to suppliers from whom recipients purchase goods or 
services). For further information, see item a. under the heading 
``Nondiscrimination'' in Appendix B to 32 CFR part 22.
* * * * *
    5. Prohibitions on discrimination on the basis of handicap, in 
section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). They 
apply to all financial assistance and require flow down to 
subrecipients. For further information, see item e.1. under the 
heading ``Nondiscrimination'' in Appendix B to 32 CFR part 22.
* * * * *

0
30. Appendix E to part 37 is amended by revising paragraph B.2 to read 
as follows:

Appendix E to Part 37--What Provisions May a Participant Need To 
Include When Purchasing Goods or Services Under a TIA?

* * * * *
    B. * * *
    2. Debarment and suspension. A contract award with an amount 
expected to equal or exceed $25,000 and certain other contract 
awards (see 2 CFR 1125.220, which implements OMB guidance in 2 CFR 
180.220) shall not be made to parties listed on the Governmentwide 
Excluded Parties List System, in accordance with the DoD adoption at 
2 CFR part 1125 of the OMB guidance implementing E.O.s 12549 (3 CFR, 
1986 Comp., p. 189) and 12689 (3 CFR, 1989 Comp., p. 235), 
``Debarment and Suspension.'' The Excluded Parties List System 
accessible on the Internet at www.epls.gov contains the names of 
parties debarred, suspended, or otherwise excluded by agencies, as 
well as parties declared ineligible under statutory or regulatory 
authority other than E.O. 12549.
* * * * *

    Dated: June 18, 2007.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 07-3086 Filed 6-25-07; 8:45 am]
BILLING CODE 5001-06-P