Federal Acquisition Regulation; FAR Case 2005-012, Combating Trafficking in Persons (Revised Interim Rule), 46335-46342 [07-3796]

Agencies

• General Services Administration
• National Aeronautics and Space Administration
• DEPARTMENT OF DEFENSE

[Federal Register Volume 72, Number 159 (Friday, August 17, 2007)]
[Rules and Regulations]
[Pages 46335-46342]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-3796]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 22 and 52

[FAC 2005-19; FAR Case 2005-012; Item V; Docket 2006-0020; Sequence 1]
RIN 9000-AK31


Federal Acquisition Regulation; FAR Case 2005-012, Combating 
Trafficking in Persons (Revised Interim Rule)

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

ACTION:  Interim rule with request for comments.

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SUMMARY:  The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement 22 
U.S.C. 7104(g). This statute requires that contracts must include a 
provision that authorizes the department or agency to terminate the 
contract, if the contractor or any subcontractor engages in trafficking 
in persons. This interim rule contains a clause to be used in all 
contracts.

DATES: Effective Date: August 17, 2007.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before October 16, 2007 to be considered in 
the formulation of a final rule.

ADDRESSES:  Submit comments identified by FAC 2005-19, FAR case 2005-
012, by any of the following methods:
     Federal eRulemaking Portal:https://www.regulations.gov. 
Search for any document by first selecting the proper document types 
and selecting ``Federal Acquisition Regulation'' as the agency of 
choice. At the ``Keyword'' prompt, type in the FAR case number (for 
example, FAR Case 2006-001) and click on the ``Submit'' button. Please 
include your name and company name (if any) inside the document.
    You may also search for any document by clicking on the ``Advanced 
search/document search'' tab at the top of the screen, selecting from 
the agency field ``Federal Acquisition Regulation'', and typing the FAR 
case number in the keyword field. Select the ``Submit'' button.
     Fax: 202-501-4067.

[[Page 46336]]

     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 FAC 2005-19, FAR 
case 2005-012, in all correspondence related to this case. All comments 
received will be posted without change to https://www.regulations.gov, 
including any personal and/or business confidential information 
provided.

FOR FURTHER INFORMATION CONTACT:  Mr. Ernest Woodson, Procurement 
Analyst, at (202) 501-3775 for clarification of content. Please cite 
FAC 2005-19, FAR case 2005-012. For information pertaining to status or 
publication schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

    The Trafficking Victims Protection Reauthorization Act of 2003, as 
amended by the Trafficking Victims Protection Reauthorization Act of 
2005, addresses the victimization of countless men, women, and children 
in the United States and abroad. In order to implement the law, DoD, 
GSA, and NASA published an interim rule in the Federal Register at 71 
FR 20301, April 19, 2006 with request for comments by June 19, 2006. 
The interim rule implemented 22 U.S.C. 7104(g) by adding FAR Subpart 
22.17 with an associated clause at 52.222-50 which address combating 
trafficking in persons. The interim rule applied to all contracts for 
services, other than commercial service contracts under FAR Part 12. 
The interim rule prohibited the contractor and contractor employees 
from engaging in or supporting severe forms of trafficking in persons, 
procurement of commercial sex acts, or use of forced labor during the 
performance of the contract.
    The Councils have determined to issue a revised interim rule with 
request for comments. Changes implemented in this revised interim rule, 
which are being made as a result of the public comments and further 
discussions by the Councils, are summarized as follows:
    Applicability of the rule. In revising the interim rule, the 
Councils noted that the statutory language at 22 U.S.C. 7104(g) 
contained no exceptions or limitations with regard to its application 
to Federal contracts. Therefore, while the interim rule only applied to 
contracts for services (other than commercial), this revised interim 
rule applies to all contracts, including contracts for supplies, and 
all contracts for commercial items as defined at 2.101. Although the 
Federal Acquisition Streamlining Act (FASA) governs and limits the 
applicability of laws to commercial items, it also provides that if a 
provision of law contains criminal or civil penalties, or if the 
Federal Acquisition Regulatory Council determines that it is not in the 
best interest of the Federal Government to exempt commercial item 
contracts, then the provision of law will apply to contracts for 
commercial items.
    Section 112 of the Trafficking Victims Protection Act of 2000 
amended 18 U.S.C. Part 1 to provide for civil and criminal penalties 
for severe forms of trafficking in persons and use of forced labor. 
Therefore, consistent with FASA, the Councils have determined that the 
statutory requirements prohibiting such activities apply to contracts 
for commercial items.
    Prohibited Activities. To accurately reflect the statutory 
language, the revised interim rule provides for contract termination 
for engaging in severe forms of trafficking in persons or procurement 
of a commercial sex act during the period of performance of the 
contract, and provides for contract termination for use of forced labor 
in the performance of the contract.
    Employee Notification. The requirements for the contractor to 
establish policies and procedures and develop an awareness program have 
been replaced with the requirement to notify employees of the U.S. 
policy and actions that will be taken against them for violations. 
Additionally, the requirement to obtain written agreement from 
employees has been deleted.

Disposition of Comments received on the interim rule.

    The Council received six responses with multiple comments on the 
interim rule (available at https://www.regulations.gov). The responses 
were from Government personnel and industry and are grouped into six 
categories. A summary of the comments and their respective dispositions 
are as follows:

Applicability of the Rule

    Five comments were received concerning the rule's applicability:
    Comment: One respondent questioned the rule's applicability to 
noncommercial purchases below the micro-purchase threshold.
    Response: Because micro-purchases do not require provisions or 
clauses, except as provided at 4.1104 and 32.1110, the rule will not 
apply to noncommercial purchases below the micro-purchase threshold.
    Comment: One respondent suggested that the clause at 52.213-4, 
Terms and Conditions - Simplified Acquisitions (Other Than Commercial 
Items), be amended to include the new 52.222-50, Combating Trafficking 
in Persons.
    Response: The Councils concur with the respondent's suggestion. The 
clause has been listed at 52.213-4(b)(vii), and provides for 
application to all contracts.
    Comment: One respondent questioned the rule's applicability to all 
service contracts.
    Response: The revised interim rule applies to all contracts, 
including all service contracts.
    Comment: One respondent indicated that the Trafficking Victims 
Protection Reauthorization Act of 2003, the Trafficking Victims 
Protection Reauthorization Act of 2005, and 22 U.S.C. 7104 all state 
that the provisions apply to grants, contracts, and cooperative 
agreements to carry out activities abroad; and that the public laws and 
U.S. Code state that these provisions apply only to activities funded 
by budget category 150 regarding international affairs.
    Response: The Trafficking Victims Protection Reauthorization Act of 
2005 amended 22 U.S.C. 7104(g) to remove the language speaking to 
budget category 150 funds and activities performed abroad. Therefore, 
the statutory language is no longer limited by type of funds or 
location of performance.
    Comment: One respondent strongly supported the exclusion for 
acquisitions of commercial services under FAR Part 12.
    Response: Although the interim rule did not apply to commercial 
services, this revised interim rule applies to all contracts, including 
contracts for commercial items. The language in the statute does not 
indicate exceptions to the termination authority for engaging in the 
prohibited activities. The Councils note the criminal and civil 
penalties in Title 18 that apply to severe forms of trafficking in 
persons and the use of forced labor, and FASA does not provide an 
exception for commercial items in such a case.

Statutory Requirements

    Several comments were received suggesting that the rule exceeds the 
statutory requirements of the Act and that the rule was overly broad 
and burdensome.
    Comment: One respondent suggested that the rule goes beyond the 
statutory requirements and is overly broad and burdensome. In 
questioning the

[[Page 46337]]

statutory requirements, the respondent questioned why FAR Part 12 
services are exempt.
    Response: The Councils have made various revisions to the rule as a 
result of comments on the breadth of the rule and specific requirements 
of the rule. Such revisions include deletion of the requirement in the 
clause to obtain written agreement from the employee, deletion of the 
requirement in FAR Part 22 to monitor employees, replacement of the 
awareness program with a notification requirement to employees, and 
deletion of the requirement to identify all related U.S. and host 
country laws and regulations. The Councils have addressed the rule's 
application to FAR Part 12 services in the response provided above 
concerning the applicability of the rule.
    Comment: One respondent suggested eliminating the condition of 
``supporting'' or ``promoting'' trafficking, noting that the 
restriction does not appear in the statute and may interfere with 
scholarly social and behavioral research on such topics as the 
incidence or prevalence of sexually transmitted diseases among 
prostitutes.
    Response: The Councils note the respondent's concerns as they 
relate to behavioral and scholarly research. The terms ``supporting or 
promoting'' have not been included in the revised interim rule. The 
revised interim rule reflects the terms used in the statute.
    Comment: One respondent suggested revising the policy requirement 
at 22.1703(b) to prohibit engaging in the prescribed activities rather 
than expecting the institution to proactively combat trafficking.
    Response: The policy in 22.1703(b) has been revised to reflect the 
requirements in the clause at 52.222-50(c). The revised interim rule 
requires that contractors notify employees of the U.S. policy and the 
actions that may be taken against them for violating the policy.
    Comment: One respondent suggested that any and all references to 
contractor requirements and violations and the Government's remedies 
should clearly relate to the specific award. The problem is exacerbated 
by the current definition of employee which implies a broader 
application than the specific contract.
    Response: The rule has been revised to align with the statutory 
language. The revised interim rule provides that requirements and 
remedies associated with engaging in severe forms of trafficking in 
persons and the procurement of commercial sex acts apply during the 
period of performance of the contract. The revised interim rule 
provides that requirements and remedies associated with the use of 
forced labor apply in the performance of the contract. In regard to the 
definition of employee, the Councils note the respondent's concerns and 
have amended the definition to mean ``an employee of the contractor 
directly engaged in performance of work under the contract who has 
other than a minimal impact or involvement in contract performance.''
    Comment: One respondent suggested adding the phrase ``in the 
performance of this contract'' at FAR 22.1703(b) and (c), and at FAR 
52.222-50, at the prohibition on forced labor.
    Response: The rule has been revised to reflect the statutory 
language prohibiting the use of forced labor in the performance of the 
contract.
    Comment: One respondent suggested that FAR 22.1703(a)(2) and (a)(3) 
are not necessary in the rule as they are already included in the 
definition of ``severe forms of trafficking in persons'' in FAR 
22.1702.
    Response: The Councils believe the separate references are 
necessary in that the rule reflects the statutory prohibitions, which 
are listed separately at 22 U.S.C. 7104(g). Furthermore, the Councils 
note that the prohibited behavior in 22.1703(a)(2) and (a)(3) are not 
included in the definition of ``severe forms of trafficking in 
persons.'' For example, the procurement of a commercial sex act 
(prohibited by 22.1703(a)(2)) for which the commercial sex act is not 
induced by force, fraud, or coercion, is not included within the 
definition of severe forms of trafficking in persons.
    Comment: One respondent was concerned that certain types of sex 
acts are legal in several jurisdictions of the U.S. and in some foreign 
countries and urge that careful attention be given to how the remedies 
in this rule intersect with otherwise lawful conduct.
    Response: The Trafficking Victims Protection Reauthorization Act of 
2005 speaks to both ``unlawful commercial sex acts'' and ``commercial 
sex acts.'' The section of the Act implemented by this rule, 22 U.S.C. 
7104(g), speaks to ``commercial sex acts,'' and is not qualified by the 
words ``illegal'' or ``unlawful.'' Furthermore, the National Security 
Presidential Directive (NSPD) 22, which espouses the United States 
``zero tolerance policy'' regarding trafficking in persons, states that 
``the United States Government opposes prostitution and related 
activities, including pimping, pandering, or maintaining brothels, as 
contributing to the phenomenon of trafficking in persons.'' The 
Councils believe that Congress' intent is to reduce the demand for 
commercial sex acts, both lawful and unlawful, as such activities have 
contributed to the worldwide problem of trafficking in persons. 
Commercial sex venues are one of the prime areas in which trafficking 
victims are exploited, and customers are very often unable to tell the 
difference between an individual who has been trafficked and one who 
has not. Thus, Congress has made reducing the demand for commercial sex 
acts-both lawful and unlawful-a key component in the fight against 
human trafficking, not only in the statutory provision at issue here, 
but also in other provisions of the Trafficking Victims Protection Act 
(for example, 22 U.S.C. Sec.  7106(b)(3) lists ``measures to reduce the 
demand for commercial sex acts'' as an indicator of a serious and 
sustained effort to eliminate trafficking; 22 U.S.C. Sec.  7110(g) 
prohibits any U.S. anti-trafficking funds from going to an organization 
that ``promotes, supports, or advocates the legalization or practice of 
prostitution.''). Application of this aspect of the Trafficking Victims 
Protection Act to commercial items corresponds to the Government's zero 
tolerance policy. Therefore, neither the interim nor the revised 
interim rule differentiates between lawful and unlawful commercial sex 
acts.

Definitions in the Rule

    Four comments were received concerning the definitions in the rule:
    Comment: One respondent suggested that the definition of employee 
be revised to limit it only to the person's activities performing work 
under the award.
    Response: The Councils believe that limiting the definition of 
employee in this manner would inadequately implement the statute since 
employee violations are more likely to occur after working hours. 
Furthermore, contractor employees are often perceived as representing 
the Government, and their actions reflect upon the Government's 
integrity and ethics. Therefore, to ensure that U.S. Government 
contracts do not contribute to trafficking in persons, the rule 
requires the contractor to notify its employees (as defined in the 
clause) of the U.S. zero tolerance policy, and take action against 
those employees who violate the U.S. policy.
    Comment: One respondent suggested revising the definition of 
commercial sex act to add ``in a manner that violates any applicable 
state or Federal law.''
    Response: The rule reflects the definition of commercial sex act at 
22 U.S.C. 7102. As previously stated in the response to a comment 
concerning the

[[Page 46338]]

statutory requirements of the rule, 22 U.S.C. 7104(g) does not provide 
for limiting application of the rule to only unlawful commercial sex 
acts.
    Comment: One respondent recommended revising ``direct cost'' to 
``direct charge'' or alternatively delete the phrase ``including all 
direct cost employees,'' in the definition of employee at FAR 22.1702 
and 52.222-50(b).
    Response: The Councils concur with the respondent's alternative 
recommendation and have revised the definition of employee by deleting 
the phrase ``including all direct cost employees.''
    Comment: One respondent was concerned that Section 22.1702 does not 
include a definition of ``individual'' although the term is defined in 
the clause at 52.222-50(a). The respondent recommends adding this as a 
defined term at the appropriate place.
    Response: Revisions to the interim rule have eliminated the need to 
use the term ``individual.'' Therefore, the definition has been removed 
from the clause.

Awareness Program

    Several respondents raised concerns that the rule's requirements 
for an awareness program, certification of contractor's employees and 
for the contractor to identify, interpret, analyze, and explain every 
host country law and regulation in which it may do business exceed the 
statutory requirements of 22 U.S.C. 7104(g).
    Comment: One respondent questioned what constitutes a suitable 
awareness program, and recommended that the FAR establish program 
guidelines to meet the ``suitable'' definition.
    Response: The Councils have replaced the requirement for an 
awareness program with a requirement to notify employees of the 
Government policy and actions that may be taken in response to 
violations.
    Comment: One respondent was concerned that the requirements at FAR 
22.17 and 52.222-50 to develop a policy, communicate the policy to 
employees, require certification of compliance from employees, and 
monitor and report violations to the Federal Government exceed the 
statutory requirements of 22 U.S.C. 7104(g).
    Response: The Councils have replaced the requirement for the 
contractor to develop a policy and an awareness program with a 
requirement to notify employees of the Government's policy and actions 
that may be taken in response to violations. Although the interim rule 
did not require ``certification of compliance from employees,'' as 
stated by the respondent, it did require the contractor to obtain the 
employee's written agreement. Based on the respondent's comment and 
further discussion, the Councils determined that this requirement is 
overly burdensome and have therefore deleted the language from 
paragraph (c) of the clause. Additionally, the Councils recognize the 
respondent's concerns related to monitoring employees and also noted 
that the requirement to monitor was stated in 22.1703(c), but not in 
the clause. Therefore, the requirement for monitoring that was included 
at 22.1703(c) has been removed from the revised interim rule.
    Comment: One respondent recommended that the rule and clause be 
revised to simply prohibit the awardee and any sub-awardee and their 
respective employees from engaging in severe forms of trafficking in 
persons, procuring commercial sex acts, or using forced labor in the 
performance of the award.
    Response: The Councils have made revisions to the rule as a result 
of this and other comments on the breadth of the rule and specific 
requirements. The revised interim rule prohibits engaging in severe 
forms of trafficking in persons and procurement of commercial sex acts 
during the performance period of the contract, and prohibits the use of 
forced labor in the performance of the contract. However, the Councils 
do not believe it is sufficient to simply state the prohibited behavior 
in the clause. As such, the revised interim rule replaces the 
requirement for an awareness program with a notification requirement to 
employees of the U.S. policy and actions that may be taken against 
employees for violating the U.S. policy.
    Comment: One respondent was concerned that FAR 52.222-
50(c)(2)(iii)(A) and (B) place an unrealistic burden on the contractor 
to correctly identify and actually obtain copies of every host country 
law and regulation in which it may do business and then interpret, 
analyze, and explain any and every such law or regulation.
    Response: The Councils have considered this concern and deleted the 
requirement for the contractor to identify and inform employees of all 
host country laws and regulations, and all U.S. laws and regulations 
which may apply to its employees in the host country. The contractor is 
required to notify employees of the U.S. policy and the actions that 
may be taken against them for violation of the policy. The Councils 
have added an Alternate I to the clause for use in contracts performed 
outside the U.S. when the contracting officer has been advised of 
specific directives or notices regarding combating trafficking in 
persons (such as lists of off-limits establishments) that are 
applicable to contractor employees performing at the contract place of 
performance.
    Comment: One respondent suggested that if the awareness program 
continues to include applicable international laws, the Government 
should compile and provide the list of laws to the contractor. 
Presumably the U.S. Government will compile such information to inform 
and provide direction to U.S. Government employees working outside the 
U.S.
    Response: In response to comments and concerns received about the 
burden involved in identifying host country laws and regulations, the 
Councils have deleted the requirement. The Councils have added an 
Alternate I to the clause as described in the response to the preceding 
comment.
    Comment: One respondent suggested asking employees to enter into a 
separate contract with their employers respecting their obligations not 
to traffic in humans and not to procure commercial sex acts is 
unnecessary and overly intrusive in the employer-employee relationship.
    Response: As discussed in the response to prior concern on the 
subject, this revised interim rule removes the requirement for the 
contractor to obtain the employee's written agreement to abide by the 
U.S. zero tolerance policy. However, the contractor remains responsible 
for notifying its employees of the U.S. zero tolerance policy, as well 
as the actions that may be taken against them as a result of a 
violation.
    Comment: One respondent suggested that a program of education and 
certification by direct cost employees increases administrative burden, 
is unnecessary, and represents a questionable intrusion by the 
Government in how institutions manage their employees' conduct. The 
requirements in the clause are sufficient to educate employees.
    Response: As discussed in the responses to a prior question in this 
category and another concerning definitions, the definition of employee 
has been revised and the requirement to obtain the employee's signature 
is not included in the revised interim rule. Additionally, the 
requirement for an awareness program has been replaced by a requirement 
to notify employees of the U.S. policy, including the actions that may 
be taken against them as a result of violating the policy.

[[Page 46339]]

Enforcement Requirements

    Six comments were received regarding the rule's enforcement 
requirements.
    Comment: One respondent wanted to know what constitutes a violation 
of FAR 52.222-50, explaining that a company may not be aware of a 
violation unless it interferes with job performance and that a company 
should not be obligated to have knowledge of an incident nor be 
obligated to terminate the employee if the company does not deem 
termination appropriate.
    Response: Failure to comply with the requirements of the clause 
constitutes a violation. Contractors must inform employees of the 
prohibited activities, and the actions that will be taken against them 
if they participate in the prohibited activities. The contractor is 
obligated to take appropriate action when it becomes aware of an 
employee violation. The clause does not require termination, but 
provides that termination of employment should be considered when 
appropriate.
    Comment: One respondent indicated that the prime contractor cannot 
assure compliance by subcontractors and should not be held responsible 
or liable for the conduct of subcontractor employees.
    Response: The prime contractor is responsible for determining the 
responsibility of its prospective subcontractors (FAR 9.104-4(a)), 
which includes determining that the subcontractor has a satisfactory 
record of integrity and business ethics (FAR 9.104-1(d)). Therefore, 
prime contractors should be selecting subcontractors that comply with 
laws and regulations, and exercise care when selecting individuals for 
employment. Upon award, the prime contractor is required to flow down 
the clause and take appropriate action against subcontractors when the 
prime becomes aware that a subcontractor or subcontractor employee has 
a violated U.S. policy. The prime contractor is required to take action 
against those subcontractors that do not comply with the terms of the 
clause, including termination if the subcontractor fails to take 
corrective action. The prime contractor's failure to take action 
against a subcontractor that has violated U.S. policy, or evidence that 
the prime contractor failed to exercise due diligence in determining 
said subcontractor responsible prior to making the award, may result in 
the Government taking action against the prime contractor as a result 
of violations committed by the subcontractor. Although one respondent 
suggested that certifications of compliance and reports would be 
necessary to ``ensure'' compliance, the Councils do not believe that 
such measures would further compliance with U.S. policy, and believe 
that it is sufficient to flow down the clause and require appropriate 
action and notification when instances of noncompliance have occurred.
    Comment: One respondent suggested that the requirement in FAR 
52.222-50(d)(1), for the Government to expect the reporting of 
allegations before those allegations are thoroughly investigated by the 
institution and found to be true, is inappropriate.
    Response: Many allegations become a subject of interest outside the 
company or organization before they are thoroughly investigated. As a 
result, the contracting officer needs to be made aware of allegations 
of a violation of U.S. policy immediately after the contractor becomes 
aware.
    Comment: One respondent was concerned that the requirement in 
Section 22.1704, providing that the contracting officer initiate 
actions after determining that ``adequate evidence'' exists to suspect 
any violation of the policy, be revised to provide that the standard 
for initiating action be based on ``clear and convincing evidence.''
    Response: The Councils believe that receipt of ``adequate 
evidence'' is reasonable and sufficient for the contracting officer to 
take action. The phrase ``clear and convincing'' implies a much more 
stringent standard which the Councils believe would severely restrict 
the contracting officer's ability to take appropriate action within an 
appropriate timeframe.
    Comment: One respondent was concerned that the contractor cannot 
``ensure'' that no violation will occur, as required by FAR 52.222-
50(b). The contractor can establish clear rules of conduct and impose 
penalties for violations.
    Response: The Councils concur with the comment. The requirement has 
been removed and FAR 52.222-50(c) has been revised to require the 
contractor to notify employees of the U.S. policy and actions that may 
be taken against them for violation of the policy.

Remedies

    Seven comments were received concerning the rule's requirement for 
remedies:
    Comment: One respondent indicated that the laws and the U.S. Code 
state that violators will not be subject to any penalty besides 
termination of the contract or grant. FAR 52.222-50, paragraph (e), 
Remedies, applies penalties such as loss of award fee, termination for 
default, suspension or debarment, suspension of contract payments, etc. 
These remedies are clearly penalties.
    Response: 22 U.S.C. Section 7104(g) states that the contract shall 
include a condition that authorizes the department or agency to 
terminate the contract without penalty if the contractor engages in the 
prohibited acts. The term ``without penalty'' means that the Government 
is able to terminate without the Government incurring breach of 
contract damages, but does not affect other actions the Government may 
take under the clause.
    Comment: One respondent suggested revising the language on remedies 
to state only that in addition to all other rights and remedies 
available, the Government may terminate the award, without penalty, if 
the awardee or any sub-awardee commits a violation during the period in 
which the award is in effect.
    Response: Whereas the statutory language uses the phrase ``period 
in which the award is in effect,'' the FAR rule uses the equivalent 
phrase currently used throughout the FAR, which is ``period of 
performance,'' and the term ``contract'' rather than ``award.'' This 
phrase is reflected in the final rule at 22.1703(a)(1), 22.1703(a)(2), 
22.1704(a)(1), 22.1704(a)(2) and at paragraphs (b)(1) and (b)(2) of the 
clause.
    Comment: One respondent suggested that the statute is directed 
toward the institution or organization as awardee and its sub-awardees. 
It is not appropriate to penalize the institution for activities of its 
employees outside of work under the Federal award or in their personal 
lives.
    Response: The Government seeks to ensure that contractor employees 
who traffic in persons or procure commercial sex acts do not work on 
Government contracts. The clause requires the contractor to notify 
employees of the U.S. policy and actions that can be taken against 
employees for violating the policy. Should the contractor become aware 
that the employee has violated these terms, the Government requires the 
contractor to take appropriate action against the employee. The clause 
provides for remedies when the contractor fails to take appropriate 
action against an employee who has violated the policy.
    Comment: One respondent was concerned that FAR 22.1703(c) should 
refer to remedies for violations of the statutory prohibitions, and 
should not refer to remedies for ``supporting or promoting'' the 
proscribed activities or for failing to ``monitor'' employees and

[[Page 46340]]

sub-awardees. The term ``monitor'' has a connotation of invading 
employee privacy, not merely supervising employees in the conduct of 
their work.
    Response: The Councils have considered the comment and revised the 
language to be consistent with statute. The terms ``supporting or 
promoting'' and ``monitor'' are not included in the revised interim 
rule.
    Comment: One respondent suggested that the FAR should not describe 
its expectations of remedies that the institution may pursue against 
employees who violate the policy. The respondent recommends deletion of 
the phrase ``up to and including termination'' from FAR 52.222-
50(c)(4).
    Response: The Councils believe it is important to provide examples 
of actions that are appropriate to be taken against employees who 
violate the policy. The clause provides the contractor discretion to 
determine the appropriate action based on the circumstances surrounding 
a violation.
    Comment: One respondent requested that paragraph (3), suspension of 
contract payments, be deleted from the remedies at FAR 52.222-50(e).
    Response: The Councils believe this is a suitable remedy for 
violations of U.S. policy on trafficking in persons. The authority to 
suspend payments is modeled after the remedies in paragraph (d) of the 
clause at FAR 52.223-6, Drug-Free Workplace. FAR 22.1704 requires that 
the contracting officer may pursue this remedy only after making a 
written determination that adequate evidence exists to suspect a 
violation of U.S. policy.
    Comment: One respondent requested that FAR 52.222-50(f) exclude the 
flow down to subcontracts for commercial items awarded pursuant to FAR 
Part 12 as well as to subcontracts to ``individuals'' as defined in 
52.222-50(a).
    Response: The revisions to the rule result in this suggestion no 
longer being applicable. In accordance with the statute, the revised 
rule applies to all subcontracts.
    This is a significant regulatory action and, therefore, was 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 revised interim rule is not expected 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 the impact will be minimal unless the contractor or its 
employees engage in forms of trafficking in persons, use forced labor, 
or procure commercial sex acts that are illegal within the U.S. 
Although not considered significant, additional impact may be 
associated with contract performance in counties/states and locations 
outside the U.S. where certain commercial sex acts are legal. However, 
the termination authorities at 22 U.S.C. 7104(g) apply to Government 
contracts performed in these areas. Therefore, an Initial Regulatory 
Flexibility Analysis has not been performed. The Councils will consider 
comments from small entities concerning the affected FAR Parts 12, 22, 
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. (FAC 
2005-19, FAR case 2005-012), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
interim rule contains information collection requirements. Accordingly, 
the FAR Secretariat will forward a request for approval of a new 
information collection requirement concerning OMB Number 9000-00XX to 
the Office of Management and Budget under 44 U.S.C. 3501, et seq.
    The clause at 52.222-50 requires the contractor to notify the 
contracting officer of any information alleging employee misconduct 
under the clause, and any actions taken against employees pursuant to 
the clause.
    Public reporting burden for this collection of information is 
estimated to average 1 hour per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    The annual reporting burden is estimated as follows:
    Respondents: 250
    Responses per respondent: 1
    Total annual responses: 250
    Preparation hours per response: 1
    Total response burden hours: 250

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than October 16, 2007 to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, FAR Secretariat (VIR), 1800 F Street, NW, Room 4035, 
Washington, DC 20405. Please cite OMB Control No. 9000-00XX, Combating 
Trafficking in Persons (FAR Case 2005-012), in all correspondence.
    Public comments are particularly invited on: whether this 
collection of information is necessary for the proper performance of 
functions of the FAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    Requester may obtain a copy of the justification from the General 
Services Administration, FAR Secretariat (VIR), Room 4035, Washington, 
DC 20405, telephone (202) 501-4755. Please cite OMB Control Number 
9000-00XX, Combating Trafficking in Persons (FAR Case 2005-012), in all 
correspondence.

E. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary because the Trafficking Victims Protection Reauthorization 
Act of 2003 (Pub. L. 108-193), and the Trafficking Victims Protection 
Reauthorization Act of 2005 (Pub. L. 109-164) were effective upon 
enactment.
    However, pursuant to Public Law 98-577 and FAR 1.501, the Councils 
will consider public comments received in response to this interim rule 
in the formation of the final rule.

List of Subjects in 48 CFR Parts 12, 22 and 52

    Government procurement.

    Dated: July 30, 2007.
Al Matera,
Acting Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 12, 22 and 52 as set 
forth below:
0
1. The authority citation for 48 CFR parts 12, 22 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).

[[Page 46341]]

PART 12--ACQUISITION OF COMMERCIAL ITEMS


12.503  [Amended]

0
2. Amend section 12.503 by removing paragraph (a)(6).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1700  [Amended]

0
3. Amend section 22.1700 by removing ``as amended by Pub. L. No. 108-
193 and 109-164''.
0
4. Amend section 22.1701 to read as follows:


22.1701  Applicability.

    This subpart applies to all acquisitions.
0
5. Amend section 22.1702 by revising the definition ``Employee'' to 
read as follows:


22.1702   Definitions.

* * * * *
    Employee means an employee of the Contractor directly engaged in 
the performance of work under the contract who has other than a minimal 
impact or involvement in contract performance.
* * * * *
0
6. Revise section 22.1703 to read as follows:


22.1703  Policy.

    The United States Government has adopted a zero tolerance policy 
regarding trafficking in persons. Government contracts shall--
    (a) Prohibit contractors, contractor employees, subcontractors, and 
subcontractor employees from--
    (1) Engaging in severe forms of trafficking in persons during the 
period of performance of the contract;
    (2) Procuring commercial sex acts during the period of performance 
of the contract; and
     (3) Using forced labor in the performance of the contract;
    (b) Require contractors and subcontractors to notify employees of 
the prohibited activities described in paragraph (a) of this section 
and the actions that may be taken against them for violations; and
    (c) Impose suitable remedies, including termination, on contractors 
that fail to comply with the requirements of paragraphs (a) and (b) of 
this section.
0
7. Revise section 22.1704 to read as follows:


22.1704   Violations and remedies.

    (a) Violations. The Government may impose the remedies set forth in 
paragraph (b) of this section if--
    (1) The contractor, contractor employee, subcontractor, or 
subcontractor employee engages in severe forms of trafficking in 
persons during the period of performance of the contract;
    (2) The contractor, contractor employee, subcontractor, or 
subcontractor employee procures a commercial sex act during the period 
of performance of the contract;
    (3) The contractor, contractor employee, subcontractor, or 
subcontractor employee uses forced labor in the performance of the 
contract; or
    (4) The contractor fails to comply with the requirements of the 
clause at 52.222-50, Combating Trafficking in Persons.
    (b) Remedies. After determining in writing that adequate evidence 
exists to suspect any of the violations at paragraph (a) of this 
section, the contracting officer may pursue any of the remedies 
specified in paragraph (e) of the clause at 52.222-50, Combating 
Trafficking in Persons. These remedies are in addition to any other 
remedies available to the United States Government.
0
8. Revise section 22.1705 to read as follows:


22.1705   Contract clause.

    (a) Insert the clause at 52.222-50, Combating Trafficking in 
Persons, in all solicitations and contracts.
    (b) Use the basic clause with its Alternate I when the contract 
will be performed outside the United States (as defined at 25.003) and 
the contracting officer has been notified of specific U.S. directives 
or notices regarding combating trafficking in persons (such as general 
orders or military listings of ``off-limits'' local establishments) 
that apply to contractor employees at the contract place of 
performance.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
9. Amend section 52.212-5 by--
0
a. Revising the date of the clause to read ``(AUG 2007)'';
0
b. Redesignating paragraphs (b)(24) through (b)(37) as (b)(25) through 
(b)(38), respectively, and adding a new paragraph (b)(24); and
0
c. Redesignating paragraph (e)(1)(vii) as paragraph (e)(1)(viii); and 
adding a new paragraph (e)(1)(vii).
    The revised text reads as follows:


52.212-5   Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *
    (b) * * *
    ---- (24)(i) 52.222-50, Combating Trafficking in Persons (AUG 2007) 
(Applies to all contracts).
    ---- (ii) Alternate I (AUG 2007) of 52.222-50.
* * * * *
    (e)(1) * * *
    (vii) 52.222-50, Combating Trafficking in Persons (AUG 2007) (22 
U.S.C. 7104(g)). Flow down required in accordance with paragraph (f) of 
FAR clause 52.222-50.
* * * * *
0
10. Amend section 52.213-4 by revising the clause date to read ``(AUG 
2007)''; redesignating paragraphs (a)(1)(iv) through (a)(1)(vi) as 
paragraphs (a)(1)(v) through (a)(1)(vii); and adding a new paragraph 
(a)(1)(iv) to read as follows:


52.213-4   Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *
    (a) * * *
    (1) * * *
    (iv) 52.222-50, Combating Trafficking in Persons (AUG 2007) (22 
U.S.C. 7104(g)).
* * * * *
0
11. Amend section 52.222-50 by
0
a. Amending the introductory text by removing ``22.1705'' and adding 
``22.1705(a)'' in its place; and revising the date of the clause to 
read ``(AUG 2007)'';
0
b. Amending paragraph (a) by revising the definition ``Employee'', and 
removing the definition ``Individual''; and
0
c. Revising paragraphs (b), (c), (d), (e), and (f), and adding 
Alternate I.
    The revised text reads as follows:


52.222-50   Combating Trafficking in Persons.

* * * * *
    Employee means an employee of the Contractor directly engaged in 
the performance of work under the contract who has other than a minimal 
impact or involvement in contract performance.
* * * * *
    (b) Policy. The United States Government has adopted a zero 
tolerance policy regarding trafficking in persons. Contractors and 
contractor employees shall not--
    (1) Engage in severe forms of trafficking in persons during the 
period of performance of the contract;
    (2) Procure commercial sex acts during the period of performance of 
the contract; or
    (3) Use forced labor in the performance of the contract.
    (c) Contractor requirements. The Contractor shall--

[[Page 46342]]

    (1) Notify its employees of--
    (i) The United States Government's zero tolerance policy described 
in paragraph (b) of this clause; and
    (ii) The actions that will be taken against employees for 
violations of this policy. Such actions may include, but are not 
limited to, removal from the contract, reduction in benefits, or 
termination of employment; and
    (2) Take appropriate action, up to and including termination, 
against employees or subcontractors that violate the policy in 
paragraph (b) of this clause.
    (d) Notification. The Contractor shall inform the Contracting 
Officer immediately of--
    (1) Any information it receives from any source (including host 
country law enforcement) that alleges a Contractor employee, 
subcontractor, or subcontractor employee has engaged in conduct that 
violates this policy; and
    (2) Any actions taken against Contractor employees, subcontractors, 
or subcontractor employees pursuant to this clause.
    (e) Remedies. In addition to other remedies available to the 
Government, the Contractor's failure to comply with the requirements of 
paragraphs (c), (d), or (f) of this clause may render the Contractor 
subject to--
    (1) Required removal of a Contractor employee or employees from the 
performance of the contract;
    (2) Required subcontractor termination;
    (3) Suspension of contract payments;
    (4) Loss of award fee, consistent with the award fee plan, for the 
performance period in which the Government determined Contractor non-
compliance;
    (5) Termination of the contract for default or cause, in accordance 
with the termination clause of this contract; or
    (6) Suspension or debarment.
    (f) Subcontracts. The Contractor shall include the substance of 
this clause, including this paragraph (f), in all subcontracts.
    (End of clause)
    Alternate I (AUG 2007). As prescribed in 22.1705(b), substitute the 
following paragraph in place of paragraph (c)(1)(i) of the basic 
clause:
    (i)(A) The United States Government's zero tolerance policy 
described in paragraph (b) of this clause; and
    (B) The following directive(s) or notice(s) applicable to employees 
performing work at the contract place(s) of performance as indicated 
below:

 
----------------------------------------------------------------------------------------------------------------
                                              Document may be
              Document Title                   obtained from:              Applies Performance to in/at:
----------------------------------------------------------------------------------------------------------------
----------------                           ----------------.....  ----------------
----------------                           ----------------.....  ----------------
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    [Contracting Officer shall insert title of directive/notice; 
indicate the document is attached or provide source (such as website 
link) for obtaining document; and, indicate the contract performance 
location outside the U.S. to which the document applies.]
[FR Doc. 07-3796 Filed 8-16-07; 8:45 am]
BILLING CODE 6820-EP-S