Defense Federal Acquisition Regulation Supplement; Restrictions on the Use of Mandatory Arbitration Agreements (DFARS Case 2010-D004), 76295-76297 [2010-30669]
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Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Rules and Regulations
proposed information collection burden
‘‘for small business concerns with fewer
than 25 employees,’’ pursuant to the
Small Business Paperwork Relief Act of
2002, Public Law 107–198, see 44 U.S.C.
3506 (c)(4). The Commission will send
a copy of this Report and Order in a
report to be sent to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act, see U.S.C. 801(a)(1)(A).
List of Subjects in 47 CFR Part 73
Radio, Radio broadcasting.
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR Part 73 as
follows:
■
PART 73—RADIO BROADCAST
SERVICES
1. The authority citation for Part 73
continues to read as follows:
■
Authority: 47 U.S.C. 154, 303, 334, 336.
§ 73.202
[Amended]
2. Section 73.202(b), the Table of FM
Allotments under Alaska, is amended
by adding Fairbanks, Channels 224C2
and 232C2.
■
Federal Communications Commission.
John A. Karousos,
Assistant Chief, Audio Division, Media
Bureau.
[FR Doc. 2010–30851 Filed 12–7–10; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 222 and 252
RIN 0750–AG70
Defense Federal Acquisition
Regulation Supplement; Restrictions
on the Use of Mandatory Arbitration
Agreements (DFARS Case 2010–D004)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is converting an interim
rule to a final rule with changes. The
interim rule implemented section 8116
of the DoD Appropriations Act for Fiscal
Year 2010 to restrict the use of
mandatory arbitration agreements when
awarding contracts that exceed $1
million when using Fiscal Year 2010
funds appropriated or otherwise made
available by the DoD Appropriations
Act. It allows the Secretary of Defense
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SUMMARY:
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to waive applicability to a particular
contractor or subcontractor, if
determined necessary to avoid harm to
national security.
DATES: Effective date: December 8, 2010.
FOR FURTHER INFORMATION CONTACT: Mr.
Julian E. Thrash, 703–602–0310.
SUPPLEMENTARY INFORMATION:
I. Background
An interim rule was published in the
Federal Register at 75 FR 27946 on May
19, 2010, to implement section 8116 of
the DoD Appropriations Act for Fiscal
Year 2010 (Pub. L. 111–118). This
section prohibits the use of funds
appropriated or otherwise made
available by the DoD Appropriations
Act for Fiscal Year 2010 for any contract
(including task or delivery orders and
bilateral modifications adding new
work) in excess of $1 million, if the
contractor restricts its employees to
arbitration for claims under title VII of
the Civil Rights Act of 1964, or torts
related to or arising out of sexual assault
or harassment, including assault and
battery, intentional infliction of
emotional distress, false imprisonment,
or negligent hiring, supervision, or
retention (hereinafter the ‘‘covered
areas’’).
This rule does not apply to the
acquisition of commercial items,
including commercially available offthe-shelf items. After June 17, 2010,
section 8116(b) requires the contractor
to certify compliance by subcontractors.
Additionally, enforcement of this rule
does not affect the enforcement of other
aspects of an agreement that is not
related to the covered areas.
This rule allows the Secretary of
Defense to waive applicability to a
particular contract or subcontract, if
determined necessary to avoid harm to
national security.
The public comment period for the
interim rule closed July 19, 2010. Four
respondents submitted comments to the
interim rule. A discussion of the
comments and the changes made to the
rule as a result of those comments is
provided below.
1. Definition of a ‘‘contractor.’’ One
respondent objected to the interim rule’s
application of the term ‘‘contractor’’ only
to the entity that has the contract. In the
Federal Register Notice, the term
‘‘contractor’’ was used in one of several
examples provided to help determine
rule applicability. In the particular
example, the term ‘‘contractor’’ was
described as being narrowly applied
only to the entity that has the contract.
Unless a parent or subsidiary
corporation is a party to the contract,
they are not affected. The respondent
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76295
stated that there was no justification for
using such a narrow definition of a
‘‘contractor’’ and there is good reason to
use a broader definition. The
respondent suggested that the narrow
definition of ‘‘contractor’’ heightens the
potential for contractors to establish
shell companies to circumvent the law.
The respondent stated that in past
regulations, different contexts have led
to different definitions of ‘‘contractor’’—
sometimes broader, sometimes
narrower, and that the definition used
in the Federal Register is not absolutely
determined by fixed precedent or other
controlling authority.
Response: Expanding the definition of
‘‘contractor’’ to include parents and
subsidiaries would require a change to
the language of section 8116, which by
its terms, is limited to employees of the
contractor who was awarded the
contract. The text of the statute does not
provide a basis for making a broader
application. With respect to the concern
regarding the potential for the
establishment of shell companies as a
means of circumventing the
requirement, such practices would be
noted in responsibility determinations.
In addition, guidance will be included
in Procedures Guidance and
Information which cautions contracting
officers that, if they believe that, in fact,
there is evidence that a contractor has
created a shell company for the purpose
of obviating section 8116, the
contracting officer shall not award the
contract and shall report such a
condition to the Director, Defense
Procurement and Acquisition Policy.
2. Definition of a ‘‘covered contract.’’
One respondent recommended that
252.222–7006, Restrictions on the Use
of Mandatory Arbitration Agreements,
be amended to include a definition of a
‘‘covered contract.’’
Response: DoD does not agree. DFARS
222.7401, Policy, and 222.7404,
Contract Clause, provide sufficient
detail on the use of 252.222–7006,
Restrictions on the Use of Mandatory
Arbitration Agreements, and make it
clear what constitutes a ‘‘covered
contract.’’ There is no additional benefit
to be derived from repeating the
language set forth at either 222.7401 or
222.7404 in a separate definition of a
‘‘covered contract.’’
3. Definition of ‘‘subcontract.’’ One
respondent recommended that the final
rule should delete the definition of
‘‘subcontract’’ at 222.7401, Policy. The
respondent stated that since FAR 44.101
already defines the term ‘‘subcontract,’’
an additional definition is unnecessary.
Response: DoD does not agree. It
appears that the respondent incorrectly
referenced 222.7401, Policy. The
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Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Rules and Regulations
interim rule at 222.7401 does not
include a definition of a ‘‘subcontract.’’
It may be that the respondent was
referring to the definition of
‘‘subcontract’’ included in 252.222–
7006(a), Restrictions on the Use of
Mandatory Arbitration Agreements. DoD
has determined that the definition
included therein is appropriate because
it makes clear that subcontracts are
limited to those contracts placed by the
contractor or higher-tier subcontractors
that are specifically for the furnishing of
supplies or services for the performance
of the contract, not supplies or services
a contractor or higher-tier subcontractor
might purchase for other purposes.
4. Secretary of Defense waiver
process. Two respondents
recommended that the final rule explain
how the Secretary of Defense’s waiver
authority is to be exercised.
Response: DoD agrees. The waiver
process and the conditions under which
it is to be exercised and reported to
Congress as set forth in section 8116(d)
are set out in the final rule at 222.7403.
In the waiver process, a waiver
determination must set forth the
grounds for the waiver with specificity,
state any alternatives considered, and
explain why each of the alternatives
would not avoid harm to national
security interests. DFARS 222.7403,
Waiver, was revised to incorporate text
on the particular requirements for the
waiver determination previously
reserved for the DFARS companion
resource, Procedures, Guidance, and
Information. The text was reordered and
clarified by adding paragraph numbers.
5. Applicability to task or delivery
orders. One respondent recommended
that the language at 222.7401(a), Policy,
delete the reference to task or delivery
orders and bilateral modifications
adding new work.
Response: DoD does not agree. In
accordance with FAR 2.101, a contract
includes all types of commitments that
obligate the Government to an
expenditure of appropriated funds. Task
orders and delivery orders obligate
funding, and if they utilize funds
appropriated or otherwise made
available by the DoD Appropriations
Act for Fiscal Year 2010 that are in
excess of $1 million, the section 8116
restriction would apply.
6. Modification to the contract for
latest version of clause. One respondent
recommended that contractors may
request, and the contracting officers
provide, a modification to the contract
that incorporates the latest version of
the clause with no consideration to be
given to the contractor.
Response: DoD does not agree. The
contracting officer can agree to a
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bilateral modification of the contract in
accordance with FAR 1.108(d), which
requires consideration. However, the
contracting officer has flexibility in
determining what would represent
adequate consideration.
7. First-tier certification. One
respondent recommended that the final
rule should provide that prime
contractors are required to certify only
their first-tier subcontractors’
compliance with the rule.
Response: DoD does not agree. DoD
did not find language in the DoD
Appropriations Act for Fiscal Year 2010
that restricts coverage to subcontracts at
the first-tier. The prohibition extends to
‘‘covered subcontracts’’ at all tiers.
8. Clause prescription. Two
respondents recommended the addition
of language to the prescription at
222.7404 (now 222.7405) that would
specify the applicability dates for the
use of the clause.
Response: DoD does not agree, since
these dates are already set forth at
222.7402(b).
9. Certification. One respondent
recommended that 252.222–7006,
Restrictions on the Use of Mandatory
Arbitration Agreements, be revised at
paragraph (b)(2) by replacing the
existing language ‘‘by signature of the
contract, for contracts awarded after
June 17, 2010’’ with the text ‘‘by
signature of any covered contract
awarded after June 17, 2010.’’
Response: DoD does not agree. The
contracting officer will only include the
clause in a covered contract, in
accordance with the clause prescription
at 222.7404. It is the signature of the
particular contract in which the clause
is included that binds the contractor.
10. Scope of section 8116. Two
respondents submitted comments
requesting that the final rule clearly
define the scope of section 8116’s
applicability to how narrowly (or
broadly) the anti-arbitration prohibition
is intended to apply to employees and
independent contractors of covered
contractors and subcontractors.
Response: DoD does not agree. The
Federal Register Notice published at 75
FR 27946 on May 19, 2010, made it
clear that an entity or firm that does not
have a contract in excess of $1 million
appropriated or otherwise made
available by the DoD Appropriations
Act for Fiscal Year 2010 is not affected
by the clause. The term ‘‘contractor’’ is
narrowly applied only to the entity that
has the contract. Unless a parent or
subsidiary corporation is a party to the
contract, the entity is not affected.
Therefore, the anti-arbitration bar
applies to any contractor employee of
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the entity, with respect to any covered
claim.
II. Executive Order 12866
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.
III. Regulatory Flexibility Act
DoD has prepared a final regulatory
flexibility analysis consistent with 5
U.S.C. 604. A copy of the analysis may
be obtained from the point of contact
specified herein. The analysis is
summarized as follows:
The objective of this rule is to
implement section 8116 of the DoD
Appropriations Act for Fiscal Year 2010
(Pub. L. 111–118). The clause at
252.222–7006, Restrictions on the Use
of Mandatory Arbitration Agreements,
prohibits the use of funds appropriated
or otherwise made available by the DoD
Appropriations Act for Fiscal Year 2010
for any contract (including task or
delivery orders and bilateral
modifications adding new work) in
excess of $1 million, if the contractor
restricts its employees to arbitration for
claims under title VII of the Civil Rights
Act of 1964, or torts related to or arising
out of sexual assault or harassment,
including assault and battery,
intentional infliction of emotional
distress, false imprisonment, or
negligent hiring, supervision, or
retention. This rule does not apply to a
contract for the acquisition of
commercial items, including
commercially available off-the-shelf
items. It was published as an interim
rule in the Federal Register at 75 FR
27946 on May 19, 2010. No comments
were received from small entities on the
affected DFARS subpart with regard to
small businesses.
Most contractors should not be
impacted unless they have a covered
claim. A significant number of small
businesses provide only commercial
items to the Government, and this rule
does not apply to that portion of the
business community. We anticipate that
there will be limited, if any, additional
costs imposed on small businesses
unless there is a covered claim filed
against a particular contractor.
IV. Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because the rule does not
impose any information collection
requirements that require the approval
of the Office of Management and Budget
under 44 U.S.C. 3501, et seq.
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Federal Register / Vol. 75, No. 235 / Wednesday, December 8, 2010 / Rules and Regulations
List of Subjects in 48 CFR Parts 222 and
252
Government procurement.
Clare M. Zebrowski,
Editor, Defense Acquisition Regulations
System.
Accordingly, the interim rule
amending 48 CFR parts 222 and 252,
which was published in the Federal
Register at 75 FR 27946 on May 19,
2010, is adopted as final with the
following changes:
■ 1. The authority citation for 48 CFR
parts 222, and 252 continues to read as
follows:
■
Authority: 41 U.S.C. 421 and 48 CFR
chapter 1.
PART 222—APPLICATION OF LABOR
LAWS TO GOVERNMENT
ACQUISITIONS
[Sections 222.7401 through 222.7404
redesignated as sections 222.7402
through 222.7405]
■ 2. Redesignate sections 222.7401
through 222.7404 as section 222.7402
through 222.7405 respectively.
■ 3. Add a new section 222.7401 to read
as follows:
222.7401
Definition.
Covered subcontractor, as used in this
subpart, is defined in the clause at
252.222–7006, Restrictions on the Use
of Mandatory Arbitration Agreements.
■ 4. Revise newly designated sections
222.7403 through 222.7405 to read as
follows:
222.7403
Applicability.
This requirement does not apply to
the acquisition of commercial items
(including commercially available offthe-shelf items).
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222.7404
Waiver.
(a) The Secretary of Defense may
waive, in accordance with paragraphs
(b) through (d) of this section, the
applicability of paragraphs (a) or (b) of
222.7402 to a particular contract or
subcontract, if the Secretary or the
Deputy Secretary personally determines
that the waiver is necessary to avoid
harm to national security interests of the
United States, and that the term of the
contract or subcontract is not longer
than necessary to avoid such harm.
(b) The waiver determination shall set
forth the grounds for the waiver with
specificity, stating any alternatives
considered, and explain why each of the
alternatives would not avoid harm to
national security interests.
(c) The contracting officer shall
submit requests for waivers in
accordance with agency procedures.
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76297
(d) The Secretary of Defense will
transmit the determination to Congress
and simultaneously publish it in the
Federal Register, not less than 15
business days before the contract or
subcontract addressed in the
determination may be awarded.
DEPARTMENT OF DEFENSE
222.7405
Defense Federal Acquisition
Regulation Supplement; Restriction on
Ball and Roller Bearings (DFARS Case
2006–D029)
Contract clause.
Use the clause at 252.222–7006,
Restrictions on the Use of Mandatory
Arbitration Agreements, in all
solicitations and contracts (including
task or delivery orders and bilateral
modifications adding new work) valued
in excess of $1 million utilizing funds
appropriated or otherwise made
available by the Defense Appropriations
Act for Fiscal Year 2010 (Pub. L. 111–
118), except in contracts for the
acquisition of commercial items,
including commercially available offthe-shelf items.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
5. Amend section 252.222–7006 by:
■ a. Revising the introductory text;
■ b. Revising the clause date; and
■ c. Revising paragraphs (b)(2) and (d) to
read as follows:
■
252.222–7006 Restrictions on the Use of
Mandatory Arbitration Agreements.
As prescribed in 222.7405, use the
following clause:
RESTRICTIONS ON THE USE OF
MANDATORY ARBITRATION
AGREEMENTS (DEC 2010)
*
*
*
*
*
(b) * * *
(2) Certifies, by signature of the contract,
that it requires each covered subcontractor to
agree not to enter into, and not to take any
action to enforce, any provision of any
existing agreements, as described in
paragraph (b)(1) of this clause, with respect
to any employee or independent contractor
performing work related to such subcontract.
*
*
*
*
*
(d) The Secretary of Defense may waive the
applicability of the restrictions of paragraph
(b) of this clause in accordance with Defense
Federal Acquisition Regulation Supplement
222.7404.
Defense Acquisition Regulations
System
48 CFR Parts 225 and 252
RIN 0750–AG57
Defense Acquisition
Regulations System, Department of
Defense (DoD)
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to revise the domestic source
restriction on acquisition of ball and
roller bearings. This final rule, which
implements the DoD annual
appropriations act domestic source
restrictions, requires that each ball or
roller bearing be manufactured in the
United States, its outlying areas, or
Canada, and that the cost of the bearing
components manufactured in the United
States, its outlying areas, or Canada,
shall exceed 50 percent of the total cost
of the bearing components of that ball
or roller bearing.
DATES: Effective Date: December 8, 2010.
FOR FURTHER INFORMATION CONTACT: Ms.
Amy Williams, 703–602–0328.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
The current DFARS restriction on ball
and roller bearings (225.7009)
implemented two statutory restrictions:
10 U.S.C. 2534(a)(5) and annual
appropriations act restrictions. 10 U.S.C.
2534(a)(5) required that all ball and
roller bearings and bearing components,
either as end items or components of
end items, be wholly manufactured in
the United States or Canada. The annual
defense appropriations act restrictions
require that all ball and roller bearings
be produced by a domestic source and
be of domestic origin. This restriction
does not apply to the acquisition of
commercial items, either as components
or end products, unless the commercial
bearings themselves are purchased as
the end products.
II. Discussion and Analysis
(End of clause)
[FR Doc. 2010–30669 Filed 12–7–10; 8:45 am]
A. Analysis of Public Comments
BILLING CODE 5001–08–P
DoD published a proposed rule in the
Federal Register on May 7, 2010 (75 FR
25167). The comment period closed on
July 6, 2010. Three respondents
submitted comments.
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]]>Agencies
[Federal Register Volume 75, Number 235 (Wednesday, December 8, 2010)]
[Rules and Regulations]
[Pages 76295-76297]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30669]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 222 and 252
RIN 0750-AG70
Defense Federal Acquisition Regulation Supplement; Restrictions
on the Use of Mandatory Arbitration Agreements (DFARS Case 2010-D004)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is converting an interim rule to a final rule with
changes. The interim rule implemented section 8116 of the DoD
Appropriations Act for Fiscal Year 2010 to restrict the use of
mandatory arbitration agreements when awarding contracts that exceed $1
million when using Fiscal Year 2010 funds appropriated or otherwise
made available by the DoD Appropriations Act. It allows the Secretary
of Defense to waive applicability to a particular contractor or
subcontractor, if determined necessary to avoid harm to national
security.
DATES: Effective date: December 8, 2010.
FOR FURTHER INFORMATION CONTACT: Mr. Julian E. Thrash, 703-602-0310.
SUPPLEMENTARY INFORMATION:
I. Background
An interim rule was published in the Federal Register at 75 FR
27946 on May 19, 2010, to implement section 8116 of the DoD
Appropriations Act for Fiscal Year 2010 (Pub. L. 111-118). This section
prohibits the use of funds appropriated or otherwise made available by
the DoD Appropriations Act for Fiscal Year 2010 for any contract
(including task or delivery orders and bilateral modifications adding
new work) in excess of $1 million, if the contractor restricts its
employees to arbitration for claims under title VII of the Civil Rights
Act of 1964, or torts related to or arising out of sexual assault or
harassment, including assault and battery, intentional infliction of
emotional distress, false imprisonment, or negligent hiring,
supervision, or retention (hereinafter the ``covered areas'').
This rule does not apply to the acquisition of commercial items,
including commercially available off-the-shelf items. After June 17,
2010, section 8116(b) requires the contractor to certify compliance by
subcontractors.
Additionally, enforcement of this rule does not affect the
enforcement of other aspects of an agreement that is not related to the
covered areas.
This rule allows the Secretary of Defense to waive applicability to
a particular contract or subcontract, if determined necessary to avoid
harm to national security.
The public comment period for the interim rule closed July 19,
2010. Four respondents submitted comments to the interim rule. A
discussion of the comments and the changes made to the rule as a result
of those comments is provided below.
1. Definition of a ``contractor.'' One respondent objected to the
interim rule's application of the term ``contractor'' only to the
entity that has the contract. In the Federal Register Notice, the term
``contractor'' was used in one of several examples provided to help
determine rule applicability. In the particular example, the term
``contractor'' was described as being narrowly applied only to the
entity that has the contract. Unless a parent or subsidiary corporation
is a party to the contract, they are not affected. The respondent
stated that there was no justification for using such a narrow
definition of a ``contractor'' and there is good reason to use a
broader definition. The respondent suggested that the narrow definition
of ``contractor'' heightens the potential for contractors to establish
shell companies to circumvent the law. The respondent stated that in
past regulations, different contexts have led to different definitions
of ``contractor''--sometimes broader, sometimes narrower, and that the
definition used in the Federal Register is not absolutely determined by
fixed precedent or other controlling authority.
Response: Expanding the definition of ``contractor'' to include
parents and subsidiaries would require a change to the language of
section 8116, which by its terms, is limited to employees of the
contractor who was awarded the contract. The text of the statute does
not provide a basis for making a broader application. With respect to
the concern regarding the potential for the establishment of shell
companies as a means of circumventing the requirement, such practices
would be noted in responsibility determinations. In addition, guidance
will be included in Procedures Guidance and Information which cautions
contracting officers that, if they believe that, in fact, there is
evidence that a contractor has created a shell company for the purpose
of obviating section 8116, the contracting officer shall not award the
contract and shall report such a condition to the Director, Defense
Procurement and Acquisition Policy.
2. Definition of a ``covered contract.'' One respondent recommended
that 252.222-7006, Restrictions on the Use of Mandatory Arbitration
Agreements, be amended to include a definition of a ``covered
contract.''
Response: DoD does not agree. DFARS 222.7401, Policy, and 222.7404,
Contract Clause, provide sufficient detail on the use of 252.222-7006,
Restrictions on the Use of Mandatory Arbitration Agreements, and make
it clear what constitutes a ``covered contract.'' There is no
additional benefit to be derived from repeating the language set forth
at either 222.7401 or 222.7404 in a separate definition of a ``covered
contract.''
3. Definition of ``subcontract.'' One respondent recommended that
the final rule should delete the definition of ``subcontract'' at
222.7401, Policy. The respondent stated that since FAR 44.101 already
defines the term ``subcontract,'' an additional definition is
unnecessary.
Response: DoD does not agree. It appears that the respondent
incorrectly referenced 222.7401, Policy. The
[[Page 76296]]
interim rule at 222.7401 does not include a definition of a
``subcontract.'' It may be that the respondent was referring to the
definition of ``subcontract'' included in 252.222-7006(a), Restrictions
on the Use of Mandatory Arbitration Agreements. DoD has determined that
the definition included therein is appropriate because it makes clear
that subcontracts are limited to those contracts placed by the
contractor or higher-tier subcontractors that are specifically for the
furnishing of supplies or services for the performance of the contract,
not supplies or services a contractor or higher-tier subcontractor
might purchase for other purposes.
4. Secretary of Defense waiver process. Two respondents recommended
that the final rule explain how the Secretary of Defense's waiver
authority is to be exercised.
Response: DoD agrees. The waiver process and the conditions under
which it is to be exercised and reported to Congress as set forth in
section 8116(d) are set out in the final rule at 222.7403. In the
waiver process, a waiver determination must set forth the grounds for
the waiver with specificity, state any alternatives considered, and
explain why each of the alternatives would not avoid harm to national
security interests. DFARS 222.7403, Waiver, was revised to incorporate
text on the particular requirements for the waiver determination
previously reserved for the DFARS companion resource, Procedures,
Guidance, and Information. The text was reordered and clarified by
adding paragraph numbers.
5. Applicability to task or delivery orders. One respondent
recommended that the language at 222.7401(a), Policy, delete the
reference to task or delivery orders and bilateral modifications adding
new work.
Response: DoD does not agree. In accordance with FAR 2.101, a
contract includes all types of commitments that obligate the Government
to an expenditure of appropriated funds. Task orders and delivery
orders obligate funding, and if they utilize funds appropriated or
otherwise made available by the DoD Appropriations Act for Fiscal Year
2010 that are in excess of $1 million, the section 8116 restriction
would apply.
6. Modification to the contract for latest version of clause. One
respondent recommended that contractors may request, and the
contracting officers provide, a modification to the contract that
incorporates the latest version of the clause with no consideration to
be given to the contractor.
Response: DoD does not agree. The contracting officer can agree to
a bilateral modification of the contract in accordance with FAR
1.108(d), which requires consideration. However, the contracting
officer has flexibility in determining what would represent adequate
consideration.
7. First-tier certification. One respondent recommended that the
final rule should provide that prime contractors are required to
certify only their first-tier subcontractors' compliance with the rule.
Response: DoD does not agree. DoD did not find language in the DoD
Appropriations Act for Fiscal Year 2010 that restricts coverage to
subcontracts at the first-tier. The prohibition extends to ``covered
subcontracts'' at all tiers.
8. Clause prescription. Two respondents recommended the addition of
language to the prescription at 222.7404 (now 222.7405) that would
specify the applicability dates for the use of the clause.
Response: DoD does not agree, since these dates are already set
forth at 222.7402(b).
9. Certification. One respondent recommended that 252.222-7006,
Restrictions on the Use of Mandatory Arbitration Agreements, be revised
at paragraph (b)(2) by replacing the existing language ``by signature
of the contract, for contracts awarded after June 17, 2010'' with the
text ``by signature of any covered contract awarded after June 17,
2010.''
Response: DoD does not agree. The contracting officer will only
include the clause in a covered contract, in accordance with the clause
prescription at 222.7404. It is the signature of the particular
contract in which the clause is included that binds the contractor.
10. Scope of section 8116. Two respondents submitted comments
requesting that the final rule clearly define the scope of section
8116's applicability to how narrowly (or broadly) the anti-arbitration
prohibition is intended to apply to employees and independent
contractors of covered contractors and subcontractors.
Response: DoD does not agree. The Federal Register Notice published
at 75 FR 27946 on May 19, 2010, made it clear that an entity or firm
that does not have a contract in excess of $1 million appropriated or
otherwise made available by the DoD Appropriations Act for Fiscal Year
2010 is not affected by the clause. The term ``contractor'' is narrowly
applied only to the entity that has the contract. Unless a parent or
subsidiary corporation is a party to the contract, the entity is not
affected. Therefore, the anti-arbitration bar applies to any contractor
employee of the entity, with respect to any covered claim.
II. Executive Order 12866
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.
III. Regulatory Flexibility Act
DoD has prepared a final regulatory flexibility analysis consistent
with 5 U.S.C. 604. A copy of the analysis may be obtained from the
point of contact specified herein. The analysis is summarized as
follows:
The objective of this rule is to implement section 8116 of the DoD
Appropriations Act for Fiscal Year 2010 (Pub. L. 111-118). The clause
at 252.222-7006, Restrictions on the Use of Mandatory Arbitration
Agreements, prohibits the use of funds appropriated or otherwise made
available by the DoD Appropriations Act for Fiscal Year 2010 for any
contract (including task or delivery orders and bilateral modifications
adding new work) in excess of $1 million, if the contractor restricts
its employees to arbitration for claims under title VII of the Civil
Rights Act of 1964, or torts related to or arising out of sexual
assault or harassment, including assault and battery, intentional
infliction of emotional distress, false imprisonment, or negligent
hiring, supervision, or retention. This rule does not apply to a
contract for the acquisition of commercial items, including
commercially available off-the-shelf items. It was published as an
interim rule in the Federal Register at 75 FR 27946 on May 19, 2010. No
comments were received from small entities on the affected DFARS
subpart with regard to small businesses.
Most contractors should not be impacted unless they have a covered
claim. A significant number of small businesses provide only commercial
items to the Government, and this rule does not apply to that portion
of the business community. We anticipate that there will be limited, if
any, additional costs imposed on small businesses unless there is a
covered claim filed against a particular contractor.
IV. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the rule does
not impose any information collection requirements that require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
[[Page 76297]]
List of Subjects in 48 CFR Parts 222 and 252
Government procurement.
Clare M. Zebrowski,
Editor, Defense Acquisition Regulations System.
0
Accordingly, the interim rule amending 48 CFR parts 222 and 252, which
was published in the Federal Register at 75 FR 27946 on May 19, 2010,
is adopted as final with the following changes:
0
1. The authority citation for 48 CFR parts 222, and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
PART 222--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
[Sections 222.7401 through 222.7404 redesignated as sections
222.7402 through 222.7405]
0
2. Redesignate sections 222.7401 through 222.7404 as section 222.7402
through 222.7405 respectively.
0
3. Add a new section 222.7401 to read as follows:
222.7401 Definition.
Covered subcontractor, as used in this subpart, is defined in the
clause at 252.222-7006, Restrictions on the Use of Mandatory
Arbitration Agreements.
0
4. Revise newly designated sections 222.7403 through 222.7405 to read
as follows:
222.7403 Applicability.
This requirement does not apply to the acquisition of commercial
items (including commercially available off-the-shelf items).
222.7404 Waiver.
(a) The Secretary of Defense may waive, in accordance with
paragraphs (b) through (d) of this section, the applicability of
paragraphs (a) or (b) of 222.7402 to a particular contract or
subcontract, if the Secretary or the Deputy Secretary personally
determines that the waiver is necessary to avoid harm to national
security interests of the United States, and that the term of the
contract or subcontract is not longer than necessary to avoid such
harm.
(b) The waiver determination shall set forth the grounds for the
waiver with specificity, stating any alternatives considered, and
explain why each of the alternatives would not avoid harm to national
security interests.
(c) The contracting officer shall submit requests for waivers in
accordance with agency procedures.
(d) The Secretary of Defense will transmit the determination to
Congress and simultaneously publish it in the Federal Register, not
less than 15 business days before the contract or subcontract addressed
in the determination may be awarded.
222.7405 Contract clause.
Use the clause at 252.222-7006, Restrictions on the Use of
Mandatory Arbitration Agreements, in all solicitations and contracts
(including task or delivery orders and bilateral modifications adding
new work) valued in excess of $1 million utilizing funds appropriated
or otherwise made available by the Defense Appropriations Act for
Fiscal Year 2010 (Pub. L. 111-118), except in contracts for the
acquisition of commercial items, including commercially available off-
the-shelf items.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. Amend section 252.222-7006 by:
0
a. Revising the introductory text;
0
b. Revising the clause date; and
0
c. Revising paragraphs (b)(2) and (d) to read as follows:
252.222-7006 Restrictions on the Use of Mandatory Arbitration
Agreements.
As prescribed in 222.7405, use the following clause:
RESTRICTIONS ON THE USE OF MANDATORY ARBITRATION AGREEMENTS (DEC 2010)
* * * * *
(b) * * *
(2) Certifies, by signature of the contract, that it requires
each covered subcontractor to agree not to enter into, and not to
take any action to enforce, any provision of any existing
agreements, as described in paragraph (b)(1) of this clause, with
respect to any employee or independent contractor performing work
related to such subcontract.
* * * * *
(d) The Secretary of Defense may waive the applicability of the
restrictions of paragraph (b) of this clause in accordance with
Defense Federal Acquisition Regulation Supplement 222.7404.
(End of clause)
[FR Doc. 2010-30669 Filed 12-7-10; 8:45 am]
BILLING CODE 5001-08-P
