Federal Acquisition Regulation; FAR Case 2009-011, American Recovery and Reinvestment Act of 2009 (the Recovery Act)-GAO/IG Access, 14646-14649 [E9-7029]
Download as PDF
<![CDATA[
14646
Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations
(iii) Amount of the subcontract award.
(iv) Date of the subcontract award.
(v) The applicable North American
Industry Classification System (NAICS) code.
(vi) Funding agency.
(vii) A description of the products or
services (including construction) being
provided under the subcontract, including
the overall purpose and expected outcomes
or results of the subcontract.
(viii) Subcontract number (the contract
number assigned by the prime contractor).
(ix) Subcontractor’s physical address
including street address, city, state, and
country. Also include the nine-digit zip code
and congressional district if applicable.
(x) Subcontract primary performance
location including street address, city, state,
and country. Also include the nine-digit zip
code and congressional district if applicable.
(xi) Names and total compensation of each
of the subcontractor’s five most highly
compensated officers, for the calendar year in
which the subcontract is awarded if—
(A) In the subcontractor’s preceding fiscal
year, the subcontractor received—
(l) 80 percent or more of its annual gross
revenues in Federal contracts (and
subcontracts), loans, grants (and subgrants),
and cooperative agreements; and
(2) $25,000,000 or more in annual gross
revenues from Federal contracts (and
subcontracts), loans, grants (and subgrants),
and cooperative agreements; and
(B) The public does not have access to
information about the compensation of the
senior executives through periodic reports
filed under section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C.
78m(a), 78o(d)) or section 6104 of the
Internal Revenue Code of 1986.
(End of clause)
4. Amend section 52.212–5 by
revising the date of the clause; and
redesignating paragraphs (b)(4) through
(b)(42) as (b)(5) through (b)(43),
respectively, and adding a new
paragraph (b)(4) to read as follows:
■
52.212–5 Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items.
Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items
(MAR 2009)
*
*
*
*
*
sroberts on PROD1PC70 with RULES
(b) * * *
_ (4) 52.204–11, American Recovery and
Reinvestment Act—Reporting Requirements
(MAR 2009) (Pub. L. 111–5).
*
*
*
*
*
[FR Doc. E9–7025 Filed 3–30–09; 8:45 am]
BILLING CODE 6820–EP–P
VerDate Nov<24>2008
13:57 Mar 30, 2009
Jkt 217001
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 12, 13, 14, 15, and 52
[FAC 2005–32; FAR Case 2009–011; Item
V; Docket 2009–0012, Sequence 1]
RIN 9000–AL20
Federal Acquisition Regulation; FAR
Case 2009–011, American Recovery
and Reinvestment Act of 2009 (the
Recovery Act)—GAO/IG Access
AGENCIES: Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule with request for
comments.
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 the
American Recovery and Reinvestment
Act of 2009 (Recovery Act) with respect
to Sections 902, 1514, and 1515 of
Division A.
DATES: Effective Date: March 31, 2009.
Applicability Date: The rule applies to
solicitations issued and contracts
awarded on or after the effective date of
this rule. Contracting officers shall
modify, on a bilateral basis, in
accordance with FAR 1.108(d)(3),
existing contracts to include the FAR
clauses (Alternates) for future orders, if
Recovery Act funds will be used. In the
event that a contractor refuses to accept
such a modification, the contractor will
not be eligible for receipt of Recovery
Act funds.
Comment Date: Interested parties
should submit written comments to the
FAR Secretariat on or before June 1,
2009 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments
identified by FAC 2005–32, FAR case
2009–011, by any of the following
methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
inputting ‘‘FAR Case 2009–011’’ under
the heading ‘‘Comment or Submission’’.
Select the link ‘‘Send a Comment or
Submission’’ that corresponds with FAR
Case 2009–011. Follow the instructions
provided to complete the ‘‘Public
Comment and Submission Form’’.
PO 00000
Frm 00026
Fmt 4701
Sfmt 4700
Please include your name, company
name (if any), and ‘‘FAR Case 2009–
011’’ on your attached document.
• Fax: 202–501–4067.
• Mail: General Services
Administration, FAR Secretariat (VPR),
1800 F Street, NW., Room 4041, ATTN:
Hada Flowers, Washington, DC 20405.
Instructions: Please submit comments
only and cite FAC 2005–32, FAR case
2009–011, 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.
Edward N. Chambers, Procurement
Analyst, at (202) 501–3221 for
clarification of content. Please cite FAC
2005–32, FAR case 2009–011. For
information pertaining to status or
publication schedules, contact the FAR
Secretariat at (202) 501–4755.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule implements the
American Recovery and Reinvestment
Act of 2009 (Recovery Act) with respect
to Sections 902, 1514, and 1515, by
adding alternate clauses to 52.214–26,
‘‘Audit and Records–Sealed Bidding,’’
52.212–5, ‘‘Contract Terms and
Conditions Required to Implement
Statutes or Executive Orders–
Commercial Items,’’ and FAR 52.215–2,
‘‘Audit and Records-Negotiation.’’
Further, FAR 12.504(a)(7) is amended
for contracts using Recovery Act funds
to apply 41 U.S.C. 254d(c) and 10 U.S.C.
2313(c), Examination of Records of
Contractor, to commercial item
subcontracts that are otherwise exempt
when subcontractors are not required to
provide cost or pricing data.
Likewise, 13.006(d) is amended for
contracts using Recovery Act funds to
apply 52.215–2, ‘‘Audit and RecordsNegotiation’’ to contracts and
subcontracts which are otherwise
exempt because they are under the
simplified acquisition threshold. This
requirement provides further
transparency into Federal contracting
whose contracts are funded with
Recovery Act funds.
B. Discussion
On February 17, 2009, the President
signed Public Law 111–5, the American
Recovery and Reinvestment Act of 2009,
which includes a number of provisions
to be implemented in Federal
Government contracts. Among these
provisions are sections 902, 1514, and
1515 which serve to ‘‘prevent the fraud,
waste, and abuse’’ of Recovery Act
E:\FR\FM\31MRR2.SGM
31MRR2
sroberts on PROD1PC70 with RULES
Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations
funds through the review and audit of
contracts using such funds. The interim
rule is necessary to implement these
measures to both protect, and provide
transparency in the use of, Recovery Act
funds.
Section 1514 provides for agency
inspector general review of concerns
raised by the public regarding
investments of funds under the
Recovery Act. Sections 902 and 1515
provide for respectively, Comptroller
General and agency inspector general
reviews of any records of the contractor
or subcontractor regarding transactions
using Recovery Act funds, and the
interview of contractor officers or
employees concerning such
transactions. Section 902 also provides
for the Comptroller General to interview
subcontractor employees, while
nowhere in the Recovery Act is
corresponding authority provided to the
agency inspector generals. The authority
for Comptroller General audits of prime
contractors already exists for Part 12
contracts under FAR 52.212–5,
‘‘Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders–Commercial Items’’
and for Part 15 contracts under FAR
52.215–2, ‘‘Audit and Records–
Negotiation.’’ FAR 52.215–2 also
provides authority to audit subcontracts,
while 52.212–5 does not provide
corresponding authority. In the case of
Part 13 contracts there are no authorities
for the audit of either prime contracts or
subcontracts. Likewise, except in the
case of modifications involving cost or
pricing data, for Part 14 contracts there
are no authorities for the audit of either
prime contracts or subcontracts.
In the matter of interviewing
contractor or subcontractor employees
concerning contracting transactions
there are no current authorities under
the FAR (but see changes under Item VI
of this FAC 2005–32, FAR Case 2008–
026).
Consequently, for contracts using
Recovery Act funds this interim rule
provides the following authorities to the
Comptroller General:
• For Part 12 contracts the authority
to audit subcontracts, and to interview
contractor and subcontractor personnel,
including contracts below the simplified
acquisition threshold.
• For Part 15 contracts the authority
to interview contractor and
subcontractor personnel, including
contracts below the simplified
acquisition threshold.
• For Part 14 contracts the authority
to audit both contracts and subcontracts,
and to interview contractor and
subcontractor personnel, including
VerDate Nov<24>2008
13:57 Mar 30, 2009
Jkt 217001
contracts below the simplified
acquisition threshold.
The interim rule provides the same
authorities in the preceding paragraph
to agency inspector generals, with the
exception of interviewing subcontractor
employees.
C. Applicability to Commercial Item
Contracts
Section 8003 of Public Law 103–355,
the Federal Acquisition Streamlining
Act (FASA) (41 U.S.C. 430), governs the
applicability of laws to commercial
items, and is intended to limit the
applicability of laws to commercial
items. FASA provides if a provision of
law contains criminal or civil penalties,
or if the Federal Acquisition Regulatory
Council makes a written determination
it is not in the best interest of the
Federal Government to exempt
commercial item contracts, the
provision of law will apply to contracts
for commercial items. The same applies
for subcontracts for commercial items.
Therefore, given Sections 902 and
1515 of the American Recovery and
Reinvestment Act of 2009 (Recovery
Act), which require Comptroller General
and agency inspector general access to
contractor and subcontractor records
and contractor personnel, the FAR
Council has determined this rule should
apply to commercial items, as defined at
2.101, both at the prime and subcontract
levels.
D. Applicability to Commercially
Available Off-The-Shelf (COTS) Item
Contracts
Section 4203 of Public Law 104–106,
the Clinger-Cohen Act of 1996 (41
U.S.C. 431), governs the applicability of
laws to the procurement of
commercially available off-the-shelf
(COTS) items, and is intended to limit
the applicability of laws to them.
Clinger-Cohen provides that if a
provision of law contains criminal or
civil penalties, or if the Administrator
for Federal Procurement Policy makes a
written determination it is not in the
best interest of the Federal Government
to exempt COTS item contracts, the
provision of law will apply.
Therefore, given Sections 902 and
1515 of the American Recovery and
Reinvestment Act of 2009 (Recovery
Act), which require Comptroller General
and agency inspector general access to
contractor and subcontractor records
and contractor personnel, the
Administrator, Office of the Federal
Procurement Policy, has determined the
rule should apply to Commercially
Available Off-The-Shelf (COTS) item
contracts, as defined at FAR 2.101.
PO 00000
Frm 00027
Fmt 4701
Sfmt 4700
14647
E. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold
Section 4101 of Public Law 103–355,
the Federal Acquisition Streamlining
Act (FASA) (41 U.S.C. 429), governs the
applicability of laws to contracts or
subcontracts in amounts not greater
than the simplified acquisition
threshold. It is intended to limit the
applicability of laws to them. FASA
provides that if a provision of law
contains criminal or civil penalties, or if
the Federal Acquisition Regulatory
Council makes a written determination
it is not in the best interest of the
Federal Government to exempt contracts
or subcontracts at or below the
simplified acquisition threshold, the
law will apply to them. Therefore, given
Sections 902 and 1515 of the American
Recovery and Reinvestment Act of 2009
(Recovery Act), which require
Comptroller General and agency
inspector general access to contractor
and subcontractor records and
contractor personnel, the FAR Council
has determined this rule should apply
to contracts or subcontracts at or below
the simplified acquisition threshold, as
defined at 2.101.
This is a significant regulatory action
and, therefore, was subject to Office of
Management and Budget (OMB) review
under Section 6 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.
F. Regulatory Flexibility Act
The Councils do not expect this
interim rule to have a significant
economic impact on a substantial
number of small entities within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601, et seq., because it
requires contractors to make available
existing records of transactions covered
by the Act. Contractors are not obligated
to create additional records. Therefore,
an Initial Regulatory Flexibility
Analysis has not been performed. The
Councils will consider comments from
small entities concerning the affected
FAR Parts 12, 13, 14, 15, 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 2005–32, FAR Case 2009–
011) in correspondence.
G. Paperwork Reduction Act
The Paperwork Reduction Act (Pub.
L. 96–511) applies to this interim rule.
However, the information collection
requirements imposed by the changes to
52.214–26 and 52.215–2 are currently
covered by the approved collection
E:\FR\FM\31MRR2.SGM
31MRR2
14648
Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations
under OMB Control number 9000–0034
entitled, Examination of Records by
Comptroller General and Contract
Audit: Sections Affected 52.215–2;
52.212–5; 52.214–26, for these existing
provisions. The Councils believe
changes due to the use of these
provisions will not result in a
substantial increase in either the burden
or the number of entities. However, the
Council welcomes comments on both of
these items as part of the 60-day
comment period.
H. 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
American Recovery and Reinvestment
Act of 2009 became effective upon
enactment, and contracts using funds
appropriated by the Recovery Act will
soon be ready to award. 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.
15.209 Solicitation provisions and
contract clauses.
2. Amend section 12.301 by revising
paragraph (b)(4) to read as follows:
■
12.301 Solicitation provisions and
contract clauses for the acquisition of
commercial items.
*
*
*
*
(b) * * *
(4) The clause at 52.212–5, Contract
Terms and Conditions Required to
Implement Statutes or Executive
Orders—Commercial Items. This clause
incorporates by reference only those
clauses required to implement
*
*
*
*
(b)(1) Except as provided in paragraph
(b)(2) of this section, the contracting
officer shall insert the clause at 52.215–
2, Audit and Records-Negotiation (10
U.S.C. 2313, 41 U.S.C. 254d, and OMB
Circular No. A–133), in solicitations and
contracts except those for—
*
*
*
*
*
(2) When using funds appropriated or
otherwise made available by the
American Recovery and Reinvestment
Act of 2009 (Pub. L. 111–5)—
(i) The exceptions in paragraphs
(b)(1)(i) through (b)(1)(iii) are not
applicable; and
(ii) Use the clause with its Alternate
I.
*
*
*
*
*
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
■
*
PART 12—ACQUISITION OF
COMMERCIAL ITEMS
sroberts on PROD1PC70 with RULES
Contract Clauses.
(a) When contracting by sealed
bidding, the contracting officer shall
insert the clause at 52.214–26, Audit
and Records-Sealed Bidding, in
solicitations and contracts as follows:
(1) Use the basic clause if—
(i) The acquisition will not use funds
appropriated or otherwise made
available by the American Recovery and
Reinvestment Act of 2009 (Pub. L. 111–
5); and
(ii) The contract amount is expected
to exceed the threshold at 15.403–4(a)(1)
for submission of cost or pricing data.
(2) If the acquisition will use funds
appropriated or otherwise made
available by the American Recovery and
Reinvestment Act of 2009, use the
clause with its Alternate I in all
solicitations and contracts.
*
*
*
*
*
■ 6. Amend section 15.209 by revising
the introductory text of paragraph (b)(1)
and adding paragraph (b)(2) to read as
follows:
13.006 Inapplicable provisions and
clauses.
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 42 U.S.C. 2473(c).
Jkt 217001
14.201–7
4. Amend section 13.006 by revising
paragraph (d) to read as follows:
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 12, 13, 14, 15, and
52 as set forth below:
■ 1. The authority citation for 48 CFR
parts 12, 13, 14, 15, and 52 continues to
read as follows:
■
17:27 Mar 30, 2009
5. Amend section 14.201–7 by
revising paragraph (a) to read as follows:
■
■
Dated: March 25, 2009.
Al Matera,
Director,Office of Acquisition Policy.
VerDate Nov<24>2008
PART 14—SEALED BIDDING
PART 13—SIMPLIFIED ACQUISITION
PROCEDURES
List of Subjects in 48 CFR Parts 12, 13,
14, 15, and 52
Government procurement.
*
provisions of law or Executive orders
applicable to the acquisition of
commercial items. The contracting
officer shall attach this clause to the
solicitation and contract and, using the
appropriate clause prescriptions,
indicate which, if any, of the additional
clauses cited in 52.212–5(b) or (c) are
applicable to the specific acquisition.
Some of the clauses require fill-in; the
fill-in language should be inserted as
directed by 52.104(d). When cost
information is obtained pursuant to Part
15 to establish the reasonableness of
prices for commercial items, the
contracting officer shall insert the
clauses prescribed for this purpose in an
addendum to the solicitation and
contract. This clause may not be
tailored.
(i) Use the clause with its Alternate I
when the head of the agency has waived
the examination of records by the
Comptroller General in accordance with
25.1001.
(ii) If the acquisition will use funds
appropriated or otherwise made
available by the American Recovery and
Reinvestment Act of 2009 (Pub. L. 111–
5), the contracting officer shall use the
clause with its Alternate II, and may not
use Alternate I.
*
*
*
*
*
■ 3. Amend section 12.504 by revising
paragraph (a)(7) to read as follows:
52.212–5 Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items.
12.504 Applicability of certain laws to
subcontracts for the acquisition of
commercial items.
(a) * * *
(7) 41 U.S.C. 254d(c) and 10 U.S.C.
2313(c), Examination of Records of
Contractor, when a subcontractor is not
required to provide cost or pricing data
(see 15.209(b)), unless using funds
appropriated or otherwise made
available by the American Recovery and
Reinvestment Act of 2009 (Pub. L. 111–
5).
*
*
*
*
*
*
*
*
*
(d) 52.215–2, Audits and Records—
Negotiation, except as used with its
Alternate I, when using funds
appropriated or otherwise made
available by the American Recovery and
Reinvestment Act of 2009 (Pub. L. 111–
5).
*
*
*
*
*
PO 00000
Frm 00028
Fmt 4701
Sfmt 4700
*
7. Amend section 52.212–5 by adding
Alternate II to read as follows:
*
*
*
*
*
Alternate II (MAR 2009). As
prescribed in 12.301(b)(4)(ii), substitute
the following paragraphs (d)(1) and
(e)(1) for paragraphs (d)(1) and (e)(1) of
the basic clause as follows:
E:\FR\FM\31MRR2.SGM
31MRR2
sroberts on PROD1PC70 with RULES
Federal Register / Vol. 74, No. 60 / Tuesday, March 31, 2009 / Rules and Regulations
(d)(1) The Comptroller General of the
United States, an appropriate Inspector
General appointed under section 3 or 8G
of the Inspector General Act of 1978 (5
U.S.C. App.), or an authorized
representative of either of the foregoing
officials shall have access to and right
to—
(i) Examine any of the Contractor’s or
any subcontractors’ records that pertain
to, and involve transactions relating to,
this contract; and
(ii) Interview any officer or employee
regarding such transactions.
(e)(1) Notwithstanding the
requirements of the clauses in
paragraphs (a), (b), and (c), of this
clause, the Contractor is not required to
flow down any FAR clause in a
subcontract for commercial items, other
than—
(i) Paragraph (d) of this clause. This
paragraph flows down to all
subcontracts, except the authority of the
Inspector General under paragraph
(d)(1)(ii) does not flow down; and
(ii) Those clauses listed in this
paragraph (e)(1). Unless otherwise
indicated below, the extent of the flow
down shall be as required by the
clause—
(A) 52.203–13, Contractor Code of
Business Ethics and Conduct (Dec 2008)
(Pub. L. 110–252, Title VI, Chapter 1 (41
U.S.C. 251 note)).
(B) 52.219–8, Utilization of Small
Business Concerns (May 2004) (15
U.S.C. 637(d)(2) and (3)), in all
subcontracts that offer further
subcontracting opportunities. If the
subcontract (except subcontracts to
small business concerns) exceeds
$550,000 ($1,000,000 for construction of
any public facility), the subcontractor
must include 52.219–8 in lower tier
subcontracts that offer subcontracting
opportunities.
(C) 52.222–26, Equal Opportunity
(Mar 2007) (E.O. 11246).
(D) 52.222–35, Equal Opportunity for
Special Disabled Veterans, Veterans of
the Vietnam Era, and Other Eligible
Veterans (Sept 2006) (38 U.S.C. 4212).
(E) 52.222–36, Affirmative Action for
Workers with Disabilities (June 1998)
(29 U.S.C. 793).
(F) 52.222–39, Notification of
Employee Rights Concerning Payment
of Union Dues or Fees (Dec 2004) (E.O.
13201).
(G) 52.222–41, Service Contract Act of
1965 (Nov 2007) (41 U.S.C. 351, et seq.).
(H) 52.222–50, Combating Trafficking
in Persons (Feb 2009) (22 U.S.C.
7104(g)).
(I) 2.222–51, Exemption from
Application of the Service Contract Act
to Contracts for Maintenance,
Calibration, or Repair of Certain
VerDate Nov<24>2008
13:57 Mar 30, 2009
Jkt 217001
Equipment-Requirements (Nov 2007)
(41 U.S.C. 351, et seq.).
(J) 52.222–53, Exemption from
Application of the Service Contract Act
to Contracts for Certain ServicesRequirements (Feb 2009) (41 U.S.C. 351,
et seq.).
(K) 52.222–54, Employment Eligibility
Verification (Jan 2009).
(L) 52.226–6, Promoting Excess Food
Donation to Nonprofit Organizations.
(Mar 2009) (Pub. L. 110–247). Flow
down required in accordance with
paragraph (e) of FAR clause 52.226–6.
(M) 52.247–64, Preference for
Privately Owned U.S.-Flag Commercial
Vessels (Feb 2006) (46 U.S.C. Appx.
1241(b) and 10 U.S.C. 2631). Flow down
required in accordance with paragraph
(d) of FAR clause 52.247–64.
■ 8. Amend section 52.214–26 by
adding Alternate I to read as follows:
52.214–26
Bidding.
Audit and Records—Sealed
*
*
*
*
*
Alternate I (MAR 2009). As prescribed
in 14.201–7(a)(2) substitute the
following paragraphs (c) and (e) for
paragraphs (c) and (e) of the basic
clause:
(c) The Comptroller General of the
United States, an appropriate Inspector
General appointed under section 3 or 8G
of the Inspector General Act of 1978 (5
U.S.C. App.), or an authorized
representative of either of the foregoing
officials, shall have access to and the
right to—
(1) Examine any of the Contractor’s or
any subcontractors’ records that pertain
to, and involve transactions relating to,
this contract or a subcontract hereunder;
and
(2) Interview any officer or employee
regarding such transactions.
(e)(1) Except as provided in paragraph
(e)(2), the Contractor shall insert a
clause containing the provisions of this
clause, including this paragraph (e), in
all subcontracts.
(2) The authority of the Inspector
General under paragraph (c)(2) of this
clause does not flow down to
subcontracts.
■ 9. Amend section 52.215–2 by adding
Alternate I to read as follows:
52.215–2
Audit and Records—Negotiation.
*
*
*
*
*
Alternate I (MAR 2009). As prescribed
in 15.209(b)(2), substitute the following
paragraphs (d)(1) and (g) for paragraphs
(d)(1) and (g) of the basic clause:
(d) Comptroller General or Inspector
General. (1) The Comptroller General of
the United States, an appropriate
Inspector General appointed under
section 3 or 8G of the Inspector General
PO 00000
Frm 00029
Fmt 4701
Sfmt 4700
14649
Act of 1978 (5 U.S.C. App.), or an
authorized representative of either of
the foregoing officials, shall have access
to and the right to—
(i) Examine any of the Contractor’s or
any subcontractor’s records that pertain
to and involve transactions relating to
this contract or a subcontract hereunder;
and
(ii) Interview any officer or employee
regarding such transactions.
(g)(1) Except as provided in paragraph
(g)(2) of this clause, the Contractor shall
insert a clause containing all the terms
of this clause, including this paragraph
(g), in all subcontracts under this
contract. The clause may be altered only
as necessary to identify properly the
contracting parties and the Contracting
Officer under the Government prime
contract.
(2) The authority of the Inspector
General under paragraph (d)(1)(ii) of
this clause does not flow down to
subcontracts.
[FR Doc. E9–7029 Filed 3–30–09; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 12 and 52
[FAC 2005–32; FAR Case 2008–026; Item
VI; Docket 2009–0013, Sequence 1]
RIN 9000–AL25
Federal Acquisition Regulation; FAR
Case 2008–026, GAO Access to
Contractor Employees
AGENCIES: Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule with request for
comments.
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 Section
871 of the Duncan Hunter National
Defense Authorization Act for Fiscal
Year 2009 (NDAA) (Pub. L. 110–417)
which allows the Government
Accountability Office to interview
current contractor employees during the
audit of the contractor’s records. FAR
52.215–2(d)(1), Audit and RecordsNegotiation, is revised to allow for the
E:\FR\FM\31MRR2.SGM
31MRR2
]]>Agencies
[Federal Register Volume 74, Number 60 (Tuesday, March 31, 2009)]
[Rules and Regulations]
[Pages 14646-14649]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7029]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 13, 14, 15, and 52
[FAC 2005-32; FAR Case 2009-011; Item V; Docket 2009-0012, Sequence 1]
RIN 9000-AL20
Federal Acquisition Regulation; FAR Case 2009-011, American
Recovery and Reinvestment Act of 2009 (the Recovery Act)--GAO/IG Access
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
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 the
American Recovery and Reinvestment Act of 2009 (Recovery Act) with
respect to Sections 902, 1514, and 1515 of Division A.
DATES: Effective Date: March 31, 2009.
Applicability Date: The rule applies to solicitations issued and
contracts awarded on or after the effective date of this rule.
Contracting officers shall modify, on a bilateral basis, in accordance
with FAR 1.108(d)(3), existing contracts to include the FAR clauses
(Alternates) for future orders, if Recovery Act funds will be used. In
the event that a contractor refuses to accept such a modification, the
contractor will not be eligible for receipt of Recovery Act funds.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before June 1, 2009 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-32, FAR case 2009-
011, by any of the following methods:
Regulations.gov: https://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2009-011'' under the heading ``Comment or Submission''. Select the link
``Send a Comment or Submission'' that corresponds with FAR Case 2009-
011. Follow the instructions provided to complete the ``Public Comment
and Submission Form''. Please include your name, company name (if any),
and ``FAR Case 2009-011'' on your attached document.
Fax: 202-501-4067.
Mail: General Services Administration, FAR Secretariat
(VPR), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers, Washington,
DC 20405.
Instructions: Please submit comments only and cite FAC 2005-32, FAR
case 2009-011, 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. Edward N. Chambers, Procurement
Analyst, at (202) 501-3221 for clarification of content. Please cite
FAC 2005-32, FAR case 2009-011. For information pertaining to status or
publication schedules, contact the FAR Secretariat at (202) 501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
This interim rule implements the American Recovery and Reinvestment
Act of 2009 (Recovery Act) with respect to Sections 902, 1514, and
1515, by adding alternate clauses to 52.214-26, ``Audit and Records-
Sealed Bidding,'' 52.212-5, ``Contract Terms and Conditions Required to
Implement Statutes or Executive Orders-Commercial Items,'' and FAR
52.215-2, ``Audit and Records-Negotiation.''
Further, FAR 12.504(a)(7) is amended for contracts using Recovery
Act funds to apply 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c), Examination
of Records of Contractor, to commercial item subcontracts that are
otherwise exempt when subcontractors are not required to provide cost
or pricing data.
Likewise, 13.006(d) is amended for contracts using Recovery Act
funds to apply 52.215-2, ``Audit and Records-Negotiation'' to contracts
and subcontracts which are otherwise exempt because they are under the
simplified acquisition threshold. This requirement provides further
transparency into Federal contracting whose contracts are funded with
Recovery Act funds.
B. Discussion
On February 17, 2009, the President signed Public Law 111-5, the
American Recovery and Reinvestment Act of 2009, which includes a number
of provisions to be implemented in Federal Government contracts. Among
these provisions are sections 902, 1514, and 1515 which serve to
``prevent the fraud, waste, and abuse'' of Recovery Act
[[Page 14647]]
funds through the review and audit of contracts using such funds. The
interim rule is necessary to implement these measures to both protect,
and provide transparency in the use of, Recovery Act funds.
Section 1514 provides for agency inspector general review of
concerns raised by the public regarding investments of funds under the
Recovery Act. Sections 902 and 1515 provide for respectively,
Comptroller General and agency inspector general reviews of any records
of the contractor or subcontractor regarding transactions using
Recovery Act funds, and the interview of contractor officers or
employees concerning such transactions. Section 902 also provides for
the Comptroller General to interview subcontractor employees, while
nowhere in the Recovery Act is corresponding authority provided to the
agency inspector generals. The authority for Comptroller General audits
of prime contractors already exists for Part 12 contracts under FAR
52.212-5, ``Contract Terms and Conditions Required to Implement
Statutes or Executive Orders-Commercial Items'' and for Part 15
contracts under FAR 52.215-2, ``Audit and Records-Negotiation.'' FAR
52.215-2 also provides authority to audit subcontracts, while 52.212-5
does not provide corresponding authority. In the case of Part 13
contracts there are no authorities for the audit of either prime
contracts or subcontracts. Likewise, except in the case of
modifications involving cost or pricing data, for Part 14 contracts
there are no authorities for the audit of either prime contracts or
subcontracts.
In the matter of interviewing contractor or subcontractor employees
concerning contracting transactions there are no current authorities
under the FAR (but see changes under Item VI of this FAC 2005-32, FAR
Case 2008-026).
Consequently, for contracts using Recovery Act funds this interim
rule provides the following authorities to the Comptroller General:
For Part 12 contracts the authority to audit subcontracts,
and to interview contractor and subcontractor personnel, including
contracts below the simplified acquisition threshold.
For Part 15 contracts the authority to interview
contractor and subcontractor personnel, including contracts below the
simplified acquisition threshold.
For Part 14 contracts the authority to audit both
contracts and subcontracts, and to interview contractor and
subcontractor personnel, including contracts below the simplified
acquisition threshold.
The interim rule provides the same authorities in the preceding
paragraph to agency inspector generals, with the exception of
interviewing subcontractor employees.
C. Applicability to Commercial Item Contracts
Section 8003 of Public Law 103-355, the Federal Acquisition
Streamlining Act (FASA) (41 U.S.C. 430), governs the applicability of
laws to commercial items, and is intended to limit the applicability of
laws to commercial items. FASA provides if a provision of law contains
criminal or civil penalties, or if the Federal Acquisition Regulatory
Council makes a written determination it is not in the best interest of
the Federal Government to exempt commercial item contracts, the
provision of law will apply to contracts for commercial items. The same
applies for subcontracts for commercial items.
Therefore, given Sections 902 and 1515 of the American Recovery and
Reinvestment Act of 2009 (Recovery Act), which require Comptroller
General and agency inspector general access to contractor and
subcontractor records and contractor personnel, the FAR Council has
determined this rule should apply to commercial items, as defined at
2.101, both at the prime and subcontract levels.
D. Applicability to Commercially Available Off-The-Shelf (COTS) Item
Contracts
Section 4203 of Public Law 104-106, the Clinger-Cohen Act of 1996
(41 U.S.C. 431), governs the applicability of laws to the procurement
of commercially available off-the-shelf (COTS) items, and is intended
to limit the applicability of laws to them. Clinger-Cohen provides that
if a provision of law contains criminal or civil penalties, or if the
Administrator for Federal Procurement Policy makes a written
determination it is not in the best interest of the Federal Government
to exempt COTS item contracts, the provision of law will apply.
Therefore, given Sections 902 and 1515 of the American Recovery and
Reinvestment Act of 2009 (Recovery Act), which require Comptroller
General and agency inspector general access to contractor and
subcontractor records and contractor personnel, the Administrator,
Office of the Federal Procurement Policy, has determined the rule
should apply to Commercially Available Off-The-Shelf (COTS) item
contracts, as defined at FAR 2.101.
E. Applicability to Contracts at or Below the Simplified Acquisition
Threshold
Section 4101 of Public Law 103-355, the Federal Acquisition
Streamlining Act (FASA) (41 U.S.C. 429), governs the applicability of
laws to contracts or subcontracts in amounts not greater than the
simplified acquisition threshold. It is intended to limit the
applicability of laws to them. FASA provides that if a provision of law
contains criminal or civil penalties, or if the Federal Acquisition
Regulatory Council makes a written determination it is not in the best
interest of the Federal Government to exempt contracts or subcontracts
at or below the simplified acquisition threshold, the law will apply to
them. Therefore, given Sections 902 and 1515 of the American Recovery
and Reinvestment Act of 2009 (Recovery Act), which require Comptroller
General and agency inspector general access to contractor and
subcontractor records and contractor personnel, the FAR Council has
determined this rule should apply to contracts or subcontracts at or
below the simplified acquisition threshold, as defined at 2.101.
This is a significant regulatory action and, therefore, was subject
to Office of Management and Budget (OMB) review under Section 6 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.
F. Regulatory Flexibility Act
The Councils do not expect this interim rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because it requires contractors to make available existing records of
transactions covered by the Act. Contractors are not obligated to
create additional records. Therefore, an Initial Regulatory Flexibility
Analysis has not been performed. The Councils will consider comments
from small entities concerning the affected FAR Parts 12, 13, 14, 15,
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
2005-32, FAR Case 2009-011) in correspondence.
G. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 96-511) applies to this
interim rule. However, the information collection requirements imposed
by the changes to 52.214-26 and 52.215-2 are currently covered by the
approved collection
[[Page 14648]]
under OMB Control number 9000-0034 entitled, Examination of Records by
Comptroller General and Contract Audit: Sections Affected 52.215-2;
52.212-5; 52.214-26, for these existing provisions. The Councils
believe changes due to the use of these provisions will not result in a
substantial increase in either the burden or the number of entities.
However, the Council welcomes comments on both of these items as part
of the 60-day comment period.
H. 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 American Recovery and Reinvestment Act of 2009
became effective upon enactment, and contracts using funds appropriated
by the Recovery Act will soon be ready to award. 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, 13, 14, 15, and 52
Government procurement.
Dated: March 25, 2009.
Al Matera,
Director,Office of Acquisition Policy.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 12, 13, 14, 15, and 52
as set forth below:
0
1. The authority citation for 48 CFR parts 12, 13, 14, 15, and 52
continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 12--ACQUISITION OF COMMERCIAL ITEMS
0
2. Amend section 12.301 by revising paragraph (b)(4) to read as
follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(b) * * *
(4) The clause at 52.212-5, Contract Terms and Conditions Required
to Implement Statutes or Executive Orders--Commercial Items. This
clause incorporates by reference only those clauses required to
implement provisions of law or Executive orders applicable to the
acquisition of commercial items. The contracting officer shall attach
this clause to the solicitation and contract and, using the appropriate
clause prescriptions, indicate which, if any, of the additional clauses
cited in 52.212-5(b) or (c) are applicable to the specific acquisition.
Some of the clauses require fill-in; the fill-in language should be
inserted as directed by 52.104(d). When cost information is obtained
pursuant to Part 15 to establish the reasonableness of prices for
commercial items, the contracting officer shall insert the clauses
prescribed for this purpose in an addendum to the solicitation and
contract. This clause may not be tailored.
(i) Use the clause with its Alternate I when the head of the agency
has waived the examination of records by the Comptroller General in
accordance with 25.1001.
(ii) If the acquisition will use funds appropriated or otherwise
made available by the American Recovery and Reinvestment Act of 2009
(Pub. L. 111-5), the contracting officer shall use the clause with its
Alternate II, and may not use Alternate I.
* * * * *
0
3. Amend section 12.504 by revising paragraph (a)(7) to read as
follows:
12.504 Applicability of certain laws to subcontracts for the
acquisition of commercial items.
(a) * * *
(7) 41 U.S.C. 254d(c) and 10 U.S.C. 2313(c), Examination of Records
of Contractor, when a subcontractor is not required to provide cost or
pricing data (see 15.209(b)), unless using funds appropriated or
otherwise made available by the American Recovery and Reinvestment Act
of 2009 (Pub. L. 111-5).
* * * * *
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
4. Amend section 13.006 by revising paragraph (d) to read as follows:
13.006 Inapplicable provisions and clauses.
* * * * *
(d) 52.215-2, Audits and Records--Negotiation, except as used with
its Alternate I, when using funds appropriated or otherwise made
available by the American Recovery and Reinvestment Act of 2009 (Pub.
L. 111-5).
* * * * *
PART 14--SEALED BIDDING
0
5. Amend section 14.201-7 by revising paragraph (a) to read as follows:
14.201-7 Contract Clauses.
(a) When contracting by sealed bidding, the contracting officer
shall insert the clause at 52.214-26, Audit and Records-Sealed Bidding,
in solicitations and contracts as follows:
(1) Use the basic clause if--
(i) The acquisition will not use funds appropriated or otherwise
made available by the American Recovery and Reinvestment Act of 2009
(Pub. L. 111-5); and
(ii) The contract amount is expected to exceed the threshold at
15.403-4(a)(1) for submission of cost or pricing data.
(2) If the acquisition will use funds appropriated or otherwise
made available by the American Recovery and Reinvestment Act of 2009,
use the clause with its Alternate I in all solicitations and contracts.
* * * * *
0
6. Amend section 15.209 by revising the introductory text of paragraph
(b)(1) and adding paragraph (b)(2) to read as follows:
15.209 Solicitation provisions and contract clauses.
* * * * *
(b)(1) Except as provided in paragraph (b)(2) of this section, the
contracting officer shall insert the clause at 52.215-2, Audit and
Records-Negotiation (10 U.S.C. 2313, 41 U.S.C. 254d, and OMB Circular
No. A-133), in solicitations and contracts except those for--
* * * * *
(2) When using funds appropriated or otherwise made available by
the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5)--
(i) The exceptions in paragraphs (b)(1)(i) through (b)(1)(iii) are
not applicable; and
(ii) Use the clause with its Alternate I.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
7. Amend section 52.212-5 by adding Alternate II to read as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Alternate II (MAR 2009). As prescribed in 12.301(b)(4)(ii),
substitute the following paragraphs (d)(1) and (e)(1) for paragraphs
(d)(1) and (e)(1) of the basic clause as follows:
[[Page 14649]]
(d)(1) The Comptroller General of the United States, an appropriate
Inspector General appointed under section 3 or 8G of the Inspector
General Act of 1978 (5 U.S.C. App.), or an authorized representative of
either of the foregoing officials shall have access to and right to--
(i) Examine any of the Contractor's or any subcontractors' records
that pertain to, and involve transactions relating to, this contract;
and
(ii) Interview any officer or employee regarding such transactions.
(e)(1) Notwithstanding the requirements of the clauses in
paragraphs (a), (b), and (c), of this clause, the Contractor is not
required to flow down any FAR clause in a subcontract for commercial
items, other than--
(i) Paragraph (d) of this clause. This paragraph flows down to all
subcontracts, except the authority of the Inspector General under
paragraph (d)(1)(ii) does not flow down; and
(ii) Those clauses listed in this paragraph (e)(1). Unless
otherwise indicated below, the extent of the flow down shall be as
required by the clause--
(A) 52.203-13, Contractor Code of Business Ethics and Conduct (Dec
2008) (Pub. L. 110-252, Title VI, Chapter 1 (41 U.S.C. 251 note)).
(B) 52.219-8, Utilization of Small Business Concerns (May 2004) (15
U.S.C. 637(d)(2) and (3)), in all subcontracts that offer further
subcontracting opportunities. If the subcontract (except subcontracts
to small business concerns) exceeds $550,000 ($1,000,000 for
construction of any public facility), the subcontractor must include
52.219-8 in lower tier subcontracts that offer subcontracting
opportunities.
(C) 52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246).
(D) 52.222-35, Equal Opportunity for Special Disabled Veterans,
Veterans of the Vietnam Era, and Other Eligible Veterans (Sept 2006)
(38 U.S.C. 4212).
(E) 52.222-36, Affirmative Action for Workers with Disabilities
(June 1998) (29 U.S.C. 793).
(F) 52.222-39, Notification of Employee Rights Concerning Payment
of Union Dues or Fees (Dec 2004) (E.O. 13201).
(G) 52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C.
351, et seq.).
(H) 52.222-50, Combating Trafficking in Persons (Feb 2009) (22
U.S.C. 7104(g)).
(I) 2.222-51, Exemption from Application of the Service Contract
Act to Contracts for Maintenance, Calibration, or Repair of Certain
Equipment-Requirements (Nov 2007) (41 U.S.C. 351, et seq.).
(J) 52.222-53, Exemption from Application of the Service Contract
Act to Contracts for Certain Services-Requirements (Feb 2009) (41
U.S.C. 351, et seq.).
(K) 52.222-54, Employment Eligibility Verification (Jan 2009).
(L) 52.226-6, Promoting Excess Food Donation to Nonprofit
Organizations. (Mar 2009) (Pub. L. 110-247). Flow down required in
accordance with paragraph (e) of FAR clause 52.226-6.
(M) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial
Vessels (Feb 2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631). Flow
down required in accordance with paragraph (d) of FAR clause 52.247-64.
0
8. Amend section 52.214-26 by adding Alternate I to read as follows:
52.214-26 Audit and Records--Sealed Bidding.
* * * * *
Alternate I (MAR 2009). As prescribed in 14.201-7(a)(2) substitute
the following paragraphs (c) and (e) for paragraphs (c) and (e) of the
basic clause:
(c) The Comptroller General of the United States, an appropriate
Inspector General appointed under section 3 or 8G of the Inspector
General Act of 1978 (5 U.S.C. App.), or an authorized representative of
either of the foregoing officials, shall have access to and the right
to--
(1) Examine any of the Contractor's or any subcontractors' records
that pertain to, and involve transactions relating to, this contract or
a subcontract hereunder; and
(2) Interview any officer or employee regarding such transactions.
(e)(1) Except as provided in paragraph (e)(2), the Contractor shall
insert a clause containing the provisions of this clause, including
this paragraph (e), in all subcontracts.
(2) The authority of the Inspector General under paragraph (c)(2)
of this clause does not flow down to subcontracts.
0
9. Amend section 52.215-2 by adding Alternate I to read as follows:
52.215-2 Audit and Records--Negotiation.
* * * * *
Alternate I (MAR 2009). As prescribed in 15.209(b)(2), substitute
the following paragraphs (d)(1) and (g) for paragraphs (d)(1) and (g)
of the basic clause:
(d) Comptroller General or Inspector General. (1) The Comptroller
General of the United States, an appropriate Inspector General
appointed under section 3 or 8G of the Inspector General Act of 1978 (5
U.S.C. App.), or an authorized representative of either of the
foregoing officials, shall have access to and the right to--
(i) Examine any of the Contractor's or any subcontractor's records
that pertain to and involve transactions relating to this contract or a
subcontract hereunder; and
(ii) Interview any officer or employee regarding such transactions.
(g)(1) Except as provided in paragraph (g)(2) of this clause, the
Contractor shall insert a clause containing all the terms of this
clause, including this paragraph (g), in all subcontracts under this
contract. The clause may be altered only as necessary to identify
properly the contracting parties and the Contracting Officer under the
Government prime contract.
(2) The authority of the Inspector General under paragraph
(d)(1)(ii) of this clause does not flow down to subcontracts.
[FR Doc. E9-7029 Filed 3-30-09; 8:45 am]
BILLING CODE 6820-EP-P
