Federal Acquisition Regulation; FAR Case 2010-008, Recovery Act Subcontract Reporting Procedures, 38684-38687 [2010-15908]

Agencies

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

[Federal Register Volume 75, Number 127 (Friday, July 2, 2010)]
[Rules and Regulations]
[Pages 38684-38687]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-15908]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4 and 52

[FAC 2005-43; FAR Case 2010-008; Item III; Docket 2010-0008, Sequence 
1]
RIN 9000-AL63


Federal Acquisition Regulation; FAR Case 2010-008, Recovery Act 
Subcontract Reporting Procedures

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 revise the 
clause at FAR 52.204-11. This interim rule does not require 
renegotiation of existing Recovery Act contracts that include the 
clause dated March 2009. This change will require first-tier 
subcontractors with Recovery Act funded awards of $25,000 or more, to 
report jobs information to the prime contractor for reporting into 
https://FederalReporting.gov. It also will require the prime contractor 
to submit its first report on or before the 10th day after the end of 
the calendar quarter in which the prime contractor received the award, 
and quarterly thereafter.

DATES: Effective Date: July 2, 2010.
    Applicability Date: The changes to the original clause will be used 
for all new solicitations and contracts issued on or after the 
effective date of this interim rule. This change is not required for 
task and delivery orders where the original clause dated March 2009 is 
already in the underlying task and delivery order contract. This change 
is not required when modifying existing contracts that contain the 
clause dated March 2009. Therefore, this interim rule does not require 
renegotiation of existing Recovery Act contracts that include the 
clause dated March 2009.
    Comment Date: Interested parties should submit written comments to 
the Regulatory Secretariat on or before August 31, 2010 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-43, FAR case 2010-
008, by any of the following methods:
     Regulations.gov: https://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by inputting ``FAR Case 
2010-008'' under the heading ``Enter Keyword or ID'' and selecting 
``Search.'' Select the link ``Submit a Comment'' that corresponds with 
``FAR Case 2010-008.'' Follow the instructions provided at the ``Submit 
a Comment'' screen. Please include your name, company name (if any), 
and ``FAR Case 2010-008'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, Regulatory 
Secretariat (MVCB), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers, 
Washington, DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-43, FAR 
case 2010-008, 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. Karlos Morgan, Procurement 
Analyst, at (202) 501-2364 for clarification of content. Please cite 
FAC 2005-43, FAR case 2010-008. For information pertaining to status or 
publication schedules, contact the Regulatory Secretariat at (202) 501-
4755.

SUPPLEMENTARY INFORMATION:

A. Background

    On February 17, 2009, the President signed Public Law 111-5, the 
American Recovery and Reinvestment Act of 2009 (the ``Recovery Act''), 
including a number of provisions to be implemented in Federal 
Government contracts. On March 31, 2009, the Councils published FAR 
Case 2009-009 in the Federal Register, (74 FR 14639) as an interim rule 
amending the FAR to implement section 1512 of the Recovery Act, which 
requires contractors to report on their use of Recovery Act funds. A 
correction was published May 14, 2009 (74 FR 22810). The FAR interim 
rule added a new subpart 4.15, and a new clause, 52.204-11, requiring 
contracting officers to include the clause in solicitations and 
contracts funded in whole or in part with Recovery Act funds, except 
classified solicitations and contracts.
    This new interim rule revises the clause and instructs contracting 
officers to include the clause in all new solicitations and contracts 
issued on or after the effective date of this interim rule. This 
revised clause is not required for any existing contracts, or task and 
delivery orders issued under a contract, that contain the original 
clause FAR clause 52.204-11 dated March 2009. Therefore, no 
renegotiation is required. However, the revised clause will be required 
for any new Recovery Act funded task or delivery orders if the 
underlying task or delivery order contract does not contain FAR clause 
52.204-11, dated March 2009.
    The revised clause requires first-tier subcontractors to report 
jobs information to the prime contractor for reporting into https://FederalReporting.gov. It also requires prime contractors to submit 
their first quarterly report into https://FederalReporting.gov on or 
before the 10th day following the end of the calendar quarter in which 
the prime contractor received its award and submit quarterly 
thereafter. The revised clause also refers contractors and their first-
tier subcontractors to a set of Frequently Asked Questions (FAQs) 
available online. Contractors subject to 52.204-11 were initially 
notified of the FAQs through a Federal Register notice (74 FR 48971), 
published on September 25, 2009.
    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

    This interim rule may 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 
quarterly reporting on subcontractor jobs under newly awarded Recovery 
Act funded contracts.
    An Initial Regulatory Flexibility Analysis (IRFA) has been 
prepared. The analysis is summarized as follows:

    1. Reasons for the action.

[[Page 38685]]

    This action is being implemented to obtain jobs information on 
first-tier subcontracts of $25,000 or more funded by the Recovery 
Act.
    2. Objectives of, and legal basis for, the rule.
    The FAR Council has authority to promulgate regulations it 
believes are necessary. OMB has determined that obtaining publicly 
reported jobs information at the subcontractor level on new 
contracts is desirable. This interim rule also requires that prime 
contractors begin to report in the calendar quarter in which the 
contract was awarded, even if no invoice has been submitted.
    3. Description and estimate of the number of small entities to 
which the rule will apply.
    The rule revises the clause requiring quarterly reporting of 
direct jobs for prime contractors and all first-tier subcontracts of 
$25,000 or more, funded by the Recovery Act. The clause also 
requires the first quarterly report to be submitted on or before the 
10th day following the end of the calendar quarter in which the 
prime contractor was awarded the Recovery Act funded contract. This 
revised clause will only be required in new solicitations and 
contracts issued on or after the effective date of the interim rule. 
The revised clause is not required for task and delivery orders 
where the underlying task or delivery order contract already 
contains the original clause FAR 52.204-11 dated March 2009. This 
clause is not required for any existing contracts, or task and 
delivery orders issued under a contract, that contain the original 
clause FAR 52.204-11 (March 2009). Therefore, the interim rule does 
not require renegotiation of any existing awards that already 
contain the original clause. The original clause imposed a public 
reporting burden on prime contractors and, in a more limited way, on 
their first-tier subcontractors. This interim rule will increase the 
burden on both prime contractors and first-tier subcontractors who 
receive new awards. However, because the Federal Government 
estimates it has already obligated the majority of the Recovery Act 
funded contracts (80 percent), the impact is more limited. According 
to the Federal Procurement Data System (FPDS), there are currently 
23,346 Recovery Act-funded contract awards. If that number 
represents 80 percent of all awards, then there are an estimated 
5,833 Recovery Act-funded actions left to be awarded. FPDS further 
shows that of the 23,346 awards already made, 41 percent of them 
have been to small businesses (this reflects the percentage of 
awards, not dollars obligated which is currently 29 percent). 
Therefore, of the 5,833 contracts remaining to be awarded, 2,392 
will be awarded to small business.
    The number of first-tier subcontractors estimated to participate 
in Recovery Act awards is estimated at 7,874. This is based on an 
assumption that there will be more first-tier subcontractors for 
higher dollar awards. It is estimated that there will be three 
first-tier subcontractors for each award of $550,000 or more; two 
first-tier subcontractors for each award between $100,000 and 
$449,999; and one first-tier subcontractor for each award between 
$25,000 and $100,000. By analyzing FPDS data, we determined that the 
highest dollar range represents 21 percent of all Recovery awards 
with the middle and lowest ranges representing 25 percent and 22 
percent, respectively. The remaining 32 percent is made up of awards 
of $25,000 or below. Of the 7,874 first-tier subcontractors it is 
estimated that 25 percent, or 1,969, will be small businesses.
    Based on the above, including the assumption that awards under 
$25,000 will have no subcontractors, the total number of small 
businesses, prime and subcontractors, to which this interim rule 
will apply is estimated at 3,595 and the total number of other than 
small businesses to which this rule will apply is estimated at 
8,245.
    4. Description of projected reporting, recordkeeping, and other 
compliance requirements of the rule, including an estimate of the 
classes of small entities which will be subject to the requirement 
and the type of professional skills necessary for preparation of the 
report or record.
    This interim rule applies to all Federal contractors regardless 
of size or business ownership. It is in addition to what was 
previously required of all Federal contractors and first-tier 
subcontractors, requiring the quarterly reporting of jobs 
information for all first-tier subcontracts of $25,000 or more. Such 
reporting would probably be prepared by a company contract 
administrator or contract manager or a company subcontract 
administrator. The information necessary to calculate the jobs is 
primarily information that companies would maintain for their own 
business purposes. The reporting burden is quarterly.
    5. Relevant Federal rules which may duplicate, overlap, or 
conflict with the rule.
    FAR Case 2009-009, American Recovery and Reinvestment Act of 
2009 (Recovery Act)--Reporting Requirements, is related to this rule 
(see 74 FR 16469, published on March 31, 2009).
    6. Description of any significant alternatives to the rule which 
accomplish the stated objectives of applicable statutes and which 
minimize any significant economic impact of the rule on small 
entities.
    The interim rule does not require that first-tier subcontractors 
enter their jobs information directly into https://FederalReporting.gov, which eliminates the burden associated with 
Central Contractor Registration (CCR). CCR is required in order to 
use https://FederalReporting.gov. It also eliminates the burdens 
associated with registering in https://FederalReporting.gov and other 
burdens associated with the use of that system. The prime contractor 
will input the first-tier subcontractor's jobs information into 
https://www.FederalReporting.gov. However, the first-tier 
subcontractor will have to calculate the number of jobs that are 
funded by the Recovery Act each calendar quarter and report that 
information to the prime contractor in sufficient time that the 
prime contractor can submit the report. To help alleviate some of 
the burden, a set of Frequently Asked Questions is available at 
https://www.whitehouse.gov/omb/recovery--faqs--contractors. One of 
these FAQs provides a detailed example on how to calculate the jobs 
funded by the Recovery Act.

    The Regulatory Secretariat will be submitting a copy of the IRFA to 
the Chief Counsel for Advocacy of the Small Business Administration. 
Interested parties may obtain a copy from the Regulatory Secretariat. 
The Councils invite comments from small business concerns and other 
interested parties on the expected impact of this rule on small 
entities.
    The Councils will also consider comments from small entities 
concerning the existing regulations in parts affected by this rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C. 610 (FAC 2005-43, FAR Case 
2010-008) 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 Regulatory Secretariat forwarded an emergency information 
collection request for approval of a new information collection 
requirement to the Office of Management and Budget under 44 U.S.C. 
Chapter 35, et seq. OMB approved the new information collection 
requirement as OMB Control No. 9000-0176, Quarterly Reporting for 
First-tier Subcontractors. Comments on the interim rule as well as the 
information collection will be considered in the revisions to both the 
rule and the information collection.
    Any award funded by the Recovery Act that was awarded prior to the 
effective date of this interim rule contained the original clause at 
52.204-11, dated March 2009. Any award funded by the Recovery Act that 
is awarded on or after the effective date of this interim rule will 
contain the revised clause at 52.204-11. The revised clause imposes 
additional collection requirements not contained in the original clause 
at 52.204-11 dated March 2009. The revised clause requires first-tier 
subcontractors with Recovery Act funded awards of $25,000 or more, to 
report jobs to the prime contractor for reporting into https://FederalReporting.gov. It also requires the prime contractor to submit 
its first report on or before the 10th day after the end of the 
calendar quarter in which the prime contractor received the award, and 
quarterly thereafter.
    Because the Federal Government estimates it has already awarded the 
majority of the Recovery Act funded contracts (80 percent), the impact 
of this collection is limited. According to the Federal Procurement 
Data System (FPDS), there are currently 23,346

[[Page 38686]]

Recovery Act-funded contract awards. If that number represents 80 
percent of all awards, then there are an estimated 5,833 Recovery Act-
funded actions left to be awarded. FPDS further shows that of the 
23,346 awards already made, 41 percent of them have been to small 
businesses (this reflects the percentage of awards, not dollars 
obligated which is currently 29 percent). Therefore, of the 5,833 
contracts remaining to be awarded, an estimated 2,392 will be awarded 
to small business.
    The number of first-tier subcontractors estimated to participate in 
Recovery Act awards is estimated at 7,874. This is based on an 
assumption that there will be more first-tier subcontractors for higher 
dollar awards. It is estimated that there will be three first-tier 
subcontractors for each award of $550,000 or more; two first-tier 
subcontractors for each award between $100,000 and $449,999; and one 
first-tier subcontractor for each award between $25,000 and $100,000. 
By analyzing FPDS data, we determined that the highest dollar range 
represents 21 percent of all Recovery awards with the middle and lowest 
ranges representing 25 percent and 22 percent, respectively. The 
remaining 32 percent is made up of awards of $25,000 or below. Of the 
7,874 first-tier subcontractors, it is estimated that 25 percent, or 
1,969, will be small businesses.
    Based on the above, including the assumption that awards under 
$25,000 will have no subcontractors, the total number of small 
businesses, prime and subcontractors, to which this interim rule will 
apply is estimated at 3,595 and the total number of other than small 
businesses to which this rule will apply is estimated at 8,245.
    Though Section 1512 requires that the reports be completed by the 
prime contractor for all data elements, for practical purposes, the 
prime contractor will have to obtain certain information from their 
first-tier subcontractors, hence the need for the revised flow-down 
requirements in paragraph (d)(10). In addition to the burden of first-
tier subcontractors having to collect and report jobs information to 
the prime contractor, there is also the burden on the prime contractor 
for preparing and monitoring subcontractors who will have to collect 
and report this information to the prime.

Annual Reporting Burden

    We estimate the total annual public cost burden for these elements 
to be $2,950,792, 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:
    First-tier Subcontract Respondents: 7,874.
    Responses per respondent: 4 (reflects quarterly reports).
    Total annual responses: 31,496.
    Preparation hours per response: 1.0.
    Total response burden hours: 31,496.
    Average hourly wages ($50.00 + 36.35 percent overhead): $68.00.
    Estimated cost to the public: $2,141,728.
    Prime Contract Respondents: 3,966.
    Responses per respondent: 4 (reflects quarterly reports).
    Total annual responses: 15,864.
    Preparation hours per response: .75.
    Total response burden hours: 11,898.
    Average hourly wages ($50.00 + 36.35 percent overhead): $68.00.
    Estimated cost to the public: $809,064.

D. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than August 31, 2010 to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, Regulatory Secretariat (MVCB), 1800 F Street, NW., Room 
4041, Washington, DC 20405. Please cite the applicable OMB Control No.: 
9000-0176 and FAR Case 2010-008, Recovery Act Subcontract Reporting 
Procedures, 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, Regulatory Secretariat (MVCB), Room 4041, 
Washington, DC 20405, telephone (202) 501-4755. Please cite the 
applicable OMB Control No.: 9000-0176 and FAR Case 2010-008, Recovery 
Act Subcontract Reporting Procedures, 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 most of the funds provided under the American 
Recovery and Reinvestment Act of 2009 for obligation on Federal 
contracts, must be obligated by September 2010. In order to obtain the 
additional information on jobs prior to the statutory requirement to 
obligate most Recovery funds on contracts by September 2010, the 
requirements must be implemented immediately. However, pursuant to 41 
U.S.C 418b and FAR 1.501-3(b), 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 4 and 52

    Government procurement.

    Dated: June 25, 2010.
Edward Loeb,
Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 4 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 4--ADMINISTRATIVE MATTERS

0
2. Revise section 4.1502 to read as follows:


4.1502   Contract clause.

    Insert the clause at 52.204-11, American Recovery and Reinvestment 
Act--Reporting Requirements in all solicitations and contracts funded 
in whole or in part with Recovery Act funds, except classified 
solicitations and contracts. This includes, but is not limited to, 
Governmentwide Acquisition Contracts (GWACs), multi-agency contracts 
(MACs), Federal Supply Schedule (FSS) contracts, or agency indefinite-
delivery/indefinite-quantity (ID/IQ) contracts that will be funded with 
Recovery Act funds. Contracting officers shall include this clause in 
any existing contract or order that will be funded with Recovery Act 
funds. Contracting officers may not use Recovery Act funds on existing

[[Page 38687]]

contracts and orders if the clause at 52.204-11 is not incorporated. 
This clause is not required for any existing contracts, or task and 
delivery orders issued under a contract, that contains the original 
clause FAR 52.204-11 (March 2009).

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Amend section 52.204-11 by--
0
a. Removing from the clause heading ``(MAR 2009)'' and adding ``(JUL 
2010)''in its place;
0
b. Revising paragraphs (a) and (c);
0
c. Revising paragraph (d)(7) introductory text;
0
d. Removing from paragraph (d)(7)(i) the word ``contractor's'' and 
adding the word ``Contractor's'' in its place;
0
e. Revising paragraphs (d)(7)(ii) and (d)(10) introductory text; and
0
f. Adding paragraph (d)(10)(xii).
    The added and revised text reads as follows:


52.204-11  American Recovery and Reinvestment Act--Reporting 
Requirements.

* * * * *
    (a) Definitions. For definitions related to this clause (e.g., 
contract, first-tier subcontract, total compensation etc.) see the 
Frequently Asked Questions (FAQs) available at https://www.whitehouse.gov/omb/recovery--faqs--contractors. These FAQs are 
also linked under https://www.FederalReporting.gov.
* * * * *
    (c) Reports from the Contractor for all work funded, in whole or 
in part, by the Recovery Act, are due no later than the 10th day 
following the end of each calendar quarter. The Contractor shall 
review the Frequently Asked Questions (FAQs) for Federal Contractors 
before each reporting cycle and prior to submitting each quarterly 
report as the FAQs may be updated from time-to-time. The first 
report is due no later than the 10th day after the end of the 
calendar quarter in which the Contractor received the award. 
Thereafter, reports shall be submitted no later than the 10th day 
after the end of each calendar quarter. For information on when the 
Contractor shall submit its final report, see https://www.whitehouse.gov/omb/recovery--faqs--contractors.
    (d) * * *
    (7) A narrative description of the employment impact of work 
funded by the Recovery Act. This narrative should be cumulative for 
each calendar quarter and address the impact on the Contractor's and 
first-tier subcontractors' workforce for all first-tier subcontracts 
valued at $25,000 or more. At a minimum, the Contractor shall 
provide--
* * * * *
    (ii) An estimate of the number of jobs created and jobs retained 
by the prime Contractor and all first-tier subcontracts valued at 
$25,000 or more, in the United States and outlying areas. A job 
cannot be reported as both created and retained. See an example of 
how to calculate the number of jobs at https://www.whitehouse.gov/omb/recovery--faqs--contractors.
* * * * *
    (10) For any first-tier subcontract funded in whole or in part 
under the Recovery Act, that is valued at $25,000 or more and not 
subject to reporting under paragraph 9, the Contractor shall require 
the subcontractor to provide the information described in paragraphs 
(d)(1)(i), (ix), (x), (xi), and (xii) of this section to the 
Contractor for the purposes of the quarterly report. The Contractor 
shall advise the subcontractor that the information will be made 
available to the public as required by section 1512 of the Recovery 
Act. The Contractor shall provide detailed information on these 
first-tier subcontracts as follows:
* * * * *
    (xii) A narrative description of the employment impact of work 
funded by the Recovery Act. This narrative should be cumulative for 
each calendar quarter and address the impact on the subcontractor's 
workforce. At a minimum, the subcontractor shall provide--
    (A) A brief description of the types of jobs created and jobs 
retained in the United States and outlying areas (see definition in 
FAR 2.101). This description may rely on job titles, broader labor 
categories, or the subcontractor's existing practice for describing 
jobs as long as the terms used are widely understood and describe 
the general nature of the work; and
    (B) An estimate of the number of jobs created and jobs retained 
by the subcontractor in the United States and outlying areas. A job 
cannot be reported as both created and retained. See an example of 
how to calculate the number of jobs at https://www.whitehouse.gov/omb/recovery--faqs--contractors.
* * * * *


52.212-5  [Amended]

0
4. Amend section 52.212-5 by removing from the clause heading ``(June 
2010)'' and adding ``(JUL 2010)'' in its place; and removing from 
paragraph (b)(4) ``MAR 2009)'' and adding ``(JUL 2010)'' in its place.

[FR Doc. 2010-15908 Filed 7-1-10; 8:45 am]
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