Federal Acquisition Regulation; FAR Case 2007-017; Service Contractor Employee Personal Conflicts of Interest, 15961-15962 [E8-6100]

Download as PDF Federal Register / Vol. 73, No. 59 / Wednesday, March 26, 2008 / Proposed Rules authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane. Issued in Renton, Washington, on March 19, 2008. Dionne Palermo, Acting Manager, Transport Airplane Directorate, Aircraft Certification Service. [FR Doc. E8–6106 Filed 3–25–08; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 3, 9, and 52 [FAR Case 2007–017; Docket 2008–0002; Sequence 2] RIN: 9000–AK97 Federal Acquisition Regulation; FAR Case 2007–017; Service Contractor Employee Personal Conflicts of Interest A. Background Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Advance notice of proposed rulemaking. mstockstill on PROD1PC66 with PROPOSALS AGENCIES: SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) are interested in determining if, when, and how service contractor employees’ personal conflicts of interest (PCI) need to be addressed and whether greater disclosure of contractor practices, specific prohibitions, or reliance on specified principles would be most effective and efficient in promoting ethical behavior. DATES: Comment Date: Interested parties should submit written comments to the FAR Secretariat on or before May 27, 2008 to be considered in the formulation of any proposed or interim rule. ADDRESSES: Submit comments identified by FAR case 2007–017, by any of the following methods: • Regulations.gov: https:// www.regulations.gov.Submit comments via the Federal eRulemaking portal by inputting ‘‘FAR Case 2007–017’’ under the heading ‘‘Comment or Submission’’. Select the link ‘‘Send a Comment or Submission’’ that corresponds with FAR Case 2007–017. Follow the instructions provided to complete the ‘‘Public VerDate Aug<31>2005 17:09 Mar 25, 2008 Jkt 214001 Comment and Submission Form’’. Please include your name, company name (if any), and ‘‘FAR Case 2007– 017’’ on your attached document. • Fax: 202–501–4067. • Mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4035, ATTN: Diedra Wingate, Washington, DC 20405. Instructions: Please submit comments only and cite FAR case 2007–017, in all correspondence related to this case. All comments received will be posted without change to https:// www.regulations.gov. Please include your name and company name (if any) inside the document. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Meredith Murphy, Procurement Analyst, at (202) 208–6925. For information pertaining to status or publication schedules, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, (202) 501–4755. Please cite FAR Case 2007–017. SUPPLEMENTARY INFORMATION: 1. The Councils are considering the need for standard PCI clauses or a set of standard PCI clauses, if appropriate, for inclusion in solicitations and contracts as recommended by the Acquisition Advisory Panel’s Final Report. The Councils are publishing a related advance notice of proposed rulemaking on the subject of Organizational Conflicts of Interest. 2. The Federal Government is increasingly turning to private contractors to perform a wide array of its work. As a result, contractor employees are increasingly working side-by-side with Federal employees, but are not subject to the same ethical safeguards that have been put in place for Federal employees to ensure the integrity of Government operations. Issues such as financial conflicts of interest, impartiality concerns, misuse of information, misuse of apparent or actual authority, and misuse of property are all areas of potential personal conflicts of interest for contractor employees that could result in harm to the public fisc and loss of public confidence in Government. For an introduction to the potential problems resulting from contractor employees’ personal conflicts of interest, see the speech given by the Director of the Office of Government Ethics to the Defense Industry Initiative entitled ‘‘Who Are Government Workers and How Can Management Improve Worker Ethical Sensitivity?’’ at: https:// PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 15961 www.usoge.gov/pages/ formslpubslotherdocs/fpolfiles/ reportslplans/ cusicklspeech061407.pdf. 3. The Government Accountability Office (GAO) released, on March 7, 2008, GAO–08–169, Defense Contracting: Additional Personal Conflict of Interest Safeguards Needed for Certain DOD Contractor Employees. GAO’s reporting objectives, in part, were to assess (1) what safeguards exist to prevent personal conflicts of interest for contractor employees when performing DOD’s tasks and (2) whether Government and defense contractor officials believe additional safeguards are necessary. To conduct this review, GAO reviewed conflicts-of-interest laws and policies and interviewed ethics officials and senior DoD leaders regarding applicability to DOD Federal and contractor employees. The public may wish to consider GAO’s findings, conclusions, and recommendations regarding additional safeguards for personal conflicts of interest pertaining to contractor employees in providing comments in response to this Notice. 4. The Acquisition Advisory Panel (AAP) was chartered by the Congress at Section 1423 of the Services Acquisition Reform Act (SARA). Relevant portions of the final report of the AAP are located on the Web at https://acquisition.gov/ comp/aap/documents/Chapter6.pdf. The Panel found that ‘‘(t)here is a need to assure that the increase in contractor involvement in agency activities does not undermine the integrity of the Government’s decision-making processes’’ (AAP Final Report, Chapter 6, Finding 7, page 417). The AAP also found that ‘‘(m)ost of the statutory and regulatory provisions [addressing PCI] that apply to Federal employees do not apply to contractor employees, even where contractor employees are colocated and work side-by-side with Federal employees and are performing similar functions’’ (AAP Final Report, Chapter 6, Finding 7, page 418). 5. The AAP concluded that, ‘‘in view of the tremendous amount of Federal contracting for services, and particularly in the context of the multisector workforce, additional measures to protect against PCIs by contractor personnel [are] needed’’(AAP Final Report, Chapter 6, Recommendation 5– 2, page 423). While it concluded that it is not necessary to adopt any new Federal statutes, the AAP was concerned that certain types of contracts, primarily service contracts, might present greater problems than others, and it recommended that the FAR Council should identify those types of contracts where the potential E:\FR\FM\26MRP1.SGM 26MRP1 mstockstill on PROD1PC66 with PROPOSALS 15962 Federal Register / Vol. 73, No. 59 / Wednesday, March 26, 2008 / Proposed Rules for PCIs raises a concern. However, the AAP also expressed concern that a blanket application of Government ethics provisions to contractor employees might result in overregulation with its attendant costs to industry, particularly small businesses. 6. Two recent FAR cases, 2006–007 and 2007–006, have expanded, or propose to expand, general business ethics coverage and requirements in the FAR with respect to contractor entities. The former case was published as a final rule at 72 FR 65873, November 23, 2007, with an effective date of December 24, 2007. It requires employers to post Inspector General (IG) Hotline posters in their places of business, to have a written code of business ethics, and, with the exception of small businesses, to have a formal business ethics training program and internal control system. The latter case was published as a proposed rule at 72 FR 64019, November 14, 2007. The comment period closed on January 14, 2008. The Councils are now reviewing the comments received. FAR Case 2007–006 proposes more mandatory requirements for the business ethics programs. For example, contractors that do not timely report violations of law in connection with a Government contract or subcontract may be subject to suspension or debarment. Neither of these FAR cases specifically addressed personal conflicts of interest for contractor employees working in the Federal workplace. 7. Some Government agencies’ approaches are located at the following Web sites: AGENCY FOR INTERNATIONAL DEVELOPMENT — Conduct of employees: Sections 752.7013 and 752.7027 located at https:// www.access.gpo.gov/nara/cfr/ waisidxl07/48cfr752l07.html. DEPARTMENT OF ENERGY — Personal conflicts of interest of management and operating contractors: Sections 970.0371–1 through 970.0371– 9, and 970.5203–3 located at https:// www.access.gpo.gov/nara/cfr/ waisidxl07/48cfr970l07.html. ENVIRONMENTAL PROTECTION AGENCY — Personal Conflicts of interest—contracts involving current or former EPA employees: Subpart 1503.6 located at https://www.access.gpo.gov/ nara/cfr/waisidxl07/ 48cfr1503l07.html; and section 1552.203–70 located at https:// www.access.gpo.gov/nara/cfr/ waisidxl07/48cfr1552l07.html. NUCLEAR REGULATORY COMMISSION — Personal conflicts of interest — current or former agency employee involvement: Section VerDate Aug<31>2005 17:09 Mar 25, 2008 Jkt 214001 2052.209–70 located at https:// www.access.gpo.gov/nara/cfr/ waisidxl07/48cfr2052l07.html. B. Solicitation of Public Comment The Councils are seeking comments and recommendations regarding whether additional regulatory coverage is needed, the suitability of applying other agencies’ approaches, or another alternative. The Councils are also interested in industry initiatives in this area, particularly standardized or model non-disclosure agreements. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. Dated: March 19, 2008. Al Matera, Director, Acquisition Policy Division. [FR Doc. E8–6100 Filed 3–25–08; 8:45 am] BILLING CODE 6820–EP–S DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 9 and 52 [FAR Case 2007–018; Docket 2008–0002; Sequence 1] RIN: 9000–AK98 Federal Acquisition Regulation; FAR Case 2007–018; Organizational Conflicts of Interest FAR Secretariat on or before May 27, 2008 to be considered in the formulation of any proposed or interim rule. ADDRESSES: Submit comments identified by FAR case 2007–018, by any of the following methods: • Regulations.gov: https:// www.regulations.gov.Submit comments via the Federal eRulemaking portal by inputting ‘‘FAR Case 2007–018’’ under the heading ‘‘Comment or Submission’’. Select the link ‘‘Send a Comment or Submission’’ that corresponds with FAR Case 2007–018. Follow the instructions provided to complete the ‘‘Public Comment and Submission Form’’. Please include your name, company name (if any), and ‘‘FAR Case 2007– 018’’ on your attached document. • Fax: 202–501–4067. • Mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4035, ATTN: Diedra Wingate, Washington, DC 20405. Instructions: Please submit comments only and cite FAR case 2007–018, in all correspondence related to this case. All comments received will be posted without change to https:// www.regulations.gov. Please include your name and company name (if any) inside the document. FOR FURTHER INFORMATION CONTACT: For clarification of content, contact Ms. Meredith Murphy, Procurement Analyst, at (202) 208–6925. For information pertaining to status or publication schedules, contact the FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, (202) 501–4755. Please cite FAR Case 2007–018. SUPPLEMENTARY INFORMATION: AGENCIES: A. Background SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) are seeking information that will assist in determining whether the Federal Acquisition Regulation System’s current guidance on organizational conflicts of interest (OCIs) adequately addresses the current needs of the acquisition community or whether providing standard provisions and/or clauses, or a set of such standard provisions and clauses, might be beneficial. DATES: Comment Date: Interested parties should submit written comments to the 1. The Councils are considering the need for standard OCI clauses, or a set of standard OCI clauses, if appropriate, for inclusion in solicitations and contracts. The Councils are publishing a related advance notice of proposed rulemaking on the subject of Service Contractor Employee Personal Conflicts of Interest. 2. Organizational and Consultant Conflicts of Interest are addressed in Subpart 9.5, as well as in some agencies’ supplements. 3. With the recent increase in the use of contractor employees to perform functions previously performed by Government employees (blended workforce) and the increased consolidation in many sectors of the contractor community, the Councils are seeking to determine if the FAR’s current guidance on OCIs adequately Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Advance notice of proposed rulemaking. PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 E:\FR\FM\26MRP1.SGM 26MRP1

Agencies

[Federal Register Volume 73, Number 59 (Wednesday, March 26, 2008)]
[Proposed Rules]
[Pages 15961-15962]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-6100]


=======================================================================
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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 3, 9, and 52

[FAR Case 2007-017; Docket 2008-0002; Sequence 2]
RIN: 9000-AK97


Federal Acquisition Regulation; FAR Case 2007-017; Service 
Contractor Employee Personal Conflicts of Interest

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

ACTION: Advance notice of proposed rulemaking.

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

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (the Councils) are interested in 
determining if, when, and how service contractor employees' personal 
conflicts of interest (PCI) need to be addressed and whether greater 
disclosure of contractor practices, specific prohibitions, or reliance 
on specified principles would be most effective and efficient in 
promoting ethical behavior.

DATES: Comment Date: Interested parties should submit written comments 
to the FAR Secretariat on or before May 27, 2008 to be considered in 
the formulation of any proposed or interim rule.

ADDRESSES: Submit comments identified by FAR case 2007-017, by any of 
the following methods:
     Regulations.gov: https://www.regulations.gov.Submit 
comments via the Federal eRulemaking portal by inputting ``FAR Case 
2007-017'' under the heading ``Comment or Submission''. Select the link 
``Send a Comment or Submission'' that corresponds with FAR Case 2007-
017. Follow the instructions provided to complete the ``Public Comment 
and Submission Form''. Please include your name, company name (if any), 
and ``FAR Case 2007-017'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (VPR), 1800 F Street, NW, Room 4035, ATTN: Diedra Wingate, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAR case 2007-
017, in all correspondence related to this case. All comments received 
will be posted without change to https://www.regulations.gov. Please 
include your name and company name (if any) inside the document.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Meredith Murphy, Procurement Analyst, at (202) 208-6925. For 
information pertaining to status or publication schedules, contact the 
FAR Secretariat, Room 4035, GS Building, Washington, DC 20405, (202) 
501-4755. Please cite FAR Case 2007-017.

SUPPLEMENTARY INFORMATION:

A. Background

    1. The Councils are considering the need for standard PCI clauses 
or a set of standard PCI clauses, if appropriate, for inclusion in 
solicitations and contracts as recommended by the Acquisition Advisory 
Panel's Final Report. The Councils are publishing a related advance 
notice of proposed rulemaking on the subject of Organizational 
Conflicts of Interest.
    2. The Federal Government is increasingly turning to private 
contractors to perform a wide array of its work. As a result, 
contractor employees are increasingly working side-by-side with Federal 
employees, but are not subject to the same ethical safeguards that have 
been put in place for Federal employees to ensure the integrity of 
Government operations. Issues such as financial conflicts of interest, 
impartiality concerns, misuse of information, misuse of apparent or 
actual authority, and misuse of property are all areas of potential 
personal conflicts of interest for contractor employees that could 
result in harm to the public fisc and loss of public confidence in 
Government. For an introduction to the potential problems resulting 
from contractor employees' personal conflicts of interest, see the 
speech given by the Director of the Office of Government Ethics to the 
Defense Industry Initiative entitled ``Who Are Government Workers and 
How Can Management Improve Worker Ethical Sensitivity?'' at: https://
www.usoge.gov/pages/forms_pubs_otherdocs/fpo_files/reports_plans/
cusick_speech061407.pdf.
    3. The Government Accountability Office (GAO) released, on March 7, 
2008, GAO-08-169, Defense Contracting: Additional Personal Conflict of 
Interest Safeguards Needed for Certain DOD Contractor Employees. GAO's 
reporting objectives, in part, were to assess (1) what safeguards exist 
to prevent personal conflicts of interest for contractor employees when 
performing DOD's tasks and (2) whether Government and defense 
contractor officials believe additional safeguards are necessary. To 
conduct this review, GAO reviewed conflicts-of-interest laws and 
policies and interviewed ethics officials and senior DoD leaders 
regarding applicability to DOD Federal and contractor employees. The 
public may wish to consider GAO's findings, conclusions, and 
recommendations regarding additional safeguards for personal conflicts 
of interest pertaining to contractor employees in providing comments in 
response to this Notice.
    4. The Acquisition Advisory Panel (AAP) was chartered by the 
Congress at Section 1423 of the Services Acquisition Reform Act (SARA). 
Relevant portions of the final report of the AAP are located on the Web 
at https://acquisition.gov/comp/aap/documents/Chapter6.pdf. The Panel 
found that ``(t)here is a need to assure that the increase in 
contractor involvement in agency activities does not undermine the 
integrity of the Government's decision-making processes'' (AAP Final 
Report, Chapter 6, Finding 7, page 417). The AAP also found that 
``(m)ost of the statutory and regulatory provisions [addressing PCI] 
that apply to Federal employees do not apply to contractor employees, 
even where contractor employees are co-located and work side-by-side 
with Federal employees and are performing similar functions'' (AAP 
Final Report, Chapter 6, Finding 7, page 418).
    5. The AAP concluded that, ``in view of the tremendous amount of 
Federal contracting for services, and particularly in the context of 
the multisector workforce, additional measures to protect against PCIs 
by contractor personnel [are] needed''(AAP Final Report, Chapter 6, 
Recommendation 5-2, page 423). While it concluded that it is not 
necessary to adopt any new Federal statutes, the AAP was concerned that 
certain types of contracts, primarily service contracts, might present 
greater problems than others, and it recommended that the FAR Council 
should identify those types of contracts where the potential

[[Page 15962]]

for PCIs raises a concern. However, the AAP also expressed concern that 
a blanket application of Government ethics provisions to contractor 
employees might result in over-regulation with its attendant costs to 
industry, particularly small businesses.
    6. Two recent FAR cases, 2006-007 and 2007-006, have expanded, or 
propose to expand, general business ethics coverage and requirements in 
the FAR with respect to contractor entities. The former case was 
published as a final rule at 72 FR 65873, November 23, 2007, with an 
effective date of December 24, 2007. It requires employers to post 
Inspector General (IG) Hotline posters in their places of business, to 
have a written code of business ethics, and, with the exception of 
small businesses, to have a formal business ethics training program and 
internal control system. The latter case was published as a proposed 
rule at 72 FR 64019, November 14, 2007. The comment period closed on 
January 14, 2008. The Councils are now reviewing the comments received. 
FAR Case 2007-006 proposes more mandatory requirements for the business 
ethics programs. For example, contractors that do not timely report 
violations of law in connection with a Government contract or 
subcontract may be subject to suspension or debarment. Neither of these 
FAR cases specifically addressed personal conflicts of interest for 
contractor employees working in the Federal workplace.
    7. Some Government agencies' approaches are located at the 
following Web sites:
    AGENCY FOR INTERNATIONAL DEVELOPMENT -- Conduct of employees: 
Sections 752.7013 and 752.7027 located at https://www.access.gpo.gov/
nara/cfr/waisidx_07/48cfr752_07.html.
    DEPARTMENT OF ENERGY -- Personal conflicts of interest of 
management and operating contractors: Sections 970.0371-1 through 
970.0371-9, and 970.5203-3 located at https://www.access.gpo.gov/nara/
cfr/waisidx_07/48cfr970_07.html.
    ENVIRONMENTAL PROTECTION AGENCY -- Personal Conflicts of interest--
contracts involving current or former EPA employees: Subpart 1503.6 
located at https://www.access.gpo.gov/nara/cfr/waisidx_07/48cfr1503_
07.html; and section 1552.203-70 located at https://www.access.gpo.gov/
nara/cfr/waisidx_07/48cfr1552_07.html.
    NUCLEAR REGULATORY COMMISSION -- Personal conflicts of interest -- 
current or former agency employee involvement: Section 2052.209-70 
located at https://www.access.gpo.gov/nara/cfr/waisidx_07/48cfr2052_
07.html.

B. Solicitation of Public Comment

    The Councils are seeking comments and recommendations regarding 
whether additional regulatory coverage is needed, the suitability of 
applying other agencies' approaches, or another alternative. The 
Councils are also interested in industry initiatives in this area, 
particularly standardized or model non-disclosure agreements.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

    Dated: March 19, 2008.
Al Matera,
Director, Acquisition Policy Division.
[FR Doc. E8-6100 Filed 3-25-08; 8:45 am]
BILLING CODE 6820-EP-S

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