Federal Acquisition Regulation; Uniform Suspension and Debarment Requirement, 39236-39238 [2011-16674]
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39236
Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Rules and Regulations
solicitations, identify a supplementary
PIID, in conjunction with the PIID for
the solicitation.
(2) Contracts and purchase orders.
Identify the PIID for contracts and
purchase orders.
(3) Delivery and task orders. For
delivery and task orders placed by an
agency under a contract (e.g., indefinite
delivery indefinite quantity (IDIQ)
contracts, multi-agency contracts
(MAC), Governmentwide acquisition
contracts (GWACs), or Multiple Award
Schedule (MAS) contracts), identify the
PIID for the delivery and task order and
the PIID for the contract.
(4) Blanket purchase agreements and
basic ordering agreements. Identify the
PIID for blanket purchase agreements
issued in accordance with 13.303, and
for basic agreements and basic ordering
agreements issued in accordance with
subpart 16.7. For blanket purchase
agreements issued in accordance with
subpart 8.4 under a MAS contract,
identify the PIID for the blanket
purchase agreement and the PIID for the
MAS contract.
(i) Orders. For orders against basic
ordering agreements or blanket purchase
agreements issued in accordance with
13.303, identify the PIID for the order
and the PIID for the blanket purchase
agreement or basic ordering agreement.
(ii) Orders under subpart 8.4. For
orders against a blanket purchase
agreement established under a MAS
contract, identify the PIID for the order,
the PIID for the blanket purchase
agreement, and the PIID for the MAS
contract.
(5) Modifications. For modifications
to actions described in paragraphs (a)(2)
through (4) of this section, and in
accordance with agency procedures,
identify a supplementary PIID for the
modification in conjunction with the
PIID for the contract, order, or
agreement being modified.
(b) Placement of the PIID on forms.
When the form (including electronic
generated format) does not provide
spaces or fields for the PIID or
supplementary PIID required in
paragraph (a) of this section, identify the
PIID in accordance with agency
procedures.
(c) Additional agency specific
identification information. If agency
procedures require additional
identification information in
solicitations, contracts, or other related
procurement instruments for
administrative purposes, identify it in
such a manner so as to separate it
clearly from the PIID.
[FR Doc. 2011–16673 Filed 7–1–11; 8:45 am]
BILLING CODE 6820–EP–P
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DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 9 and 52
[FAC 2005–53; FAR Case 2009–036; Item
III; Docket 2010–0109, Sequence 1]
RIN 9000–AL75
Federal Acquisition Regulation;
Uniform Suspension and Debarment
Requirement
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
DoD, GSA, and NASA have
adopted as final, with changes, the
interim rule amending the Federal
Acquisition Regulation (FAR) to
implement section 815 of the National
Defense Authorization Act for Fiscal
Year 2010. Section 815 extends the flow
down of limitations on subcontracting
with entities that have been debarred,
suspended, or proposed for debarment.
DATES: Effective Date: August 4, 2011.
FOR FURTHER INFORMATION CONTACT: Mr.
Michael O. Jackson, Procurement
Analyst, at (202) 208–4949 for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat at (202) 501–4755. Please
cite FAC 2005–53, FAR Case 2009–036.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
DoD, GSA, and NASA published an
interim rule in the Federal Register at
75 FR 77739 on December 13, 2010, to
implement section 815 of the National
Defense Authorization Act for Fiscal
Year 2010 (Pub. L. 111–84). Section 815
amends section 2455(c)(1) of the Federal
Acquisition Streamlining Act of 1994
(FASA) (31 U.S.C. 6101 note) by
amending the definition of
‘‘procurement activities’’ to include
subcontracts at any tier, except—
• It does not include subcontracts for
commercially available off-the-shelf
items (COTS); and
• In the case of commercial items,
such term includes only the first-tier
subcontracts.
This has the effect, except for
commercial items and COTS items, of
expanding the requirement of section
2455(a), which states that ‘‘No agency
shall allow a party to participate in any
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procurement * * * activity if any
agency has debarred, suspended, or
otherwise excluded * * * that party
from participation in a procurement
* * * activity.’’
Therefore, the interim rule amended
the FAR clause at 52.209–6, Protecting
the Government’s Interest When
Subcontracting with Contractors
Debarred, Suspended, or Proposed for
Debarment, by flowing down the
requirements for the contractor or
higher-tier subcontractor to check
whether a subcontractor beyond the first
tier is debarred, suspended, or proposed
for debarment, with the stated dollar
threshold and exceptions for
commercial items and COTS items. As
in the current clause, the contractor and
higher-tier subcontractors must also
notify the contracting officer in writing
before entering into a subcontract with
a party that is debarred, suspended, or
proposed for debarment, providing the
contractor’s knowledge of the reasons
for the subcontractor being on the
Excluded Parties Systems List, and the
compelling reasons for doing business
with the subcontractor, as well as the
systems and procedures the contractor
has established to ensure that it is fully
protecting the Government’s interests.
The contracting officer will now have
more visibility into whether lower- tier
subcontractors have been debarred,
suspended, or proposed for debarment.
Because commercial contracts must now
flow the requirement down to the first
tier, the clause was added to FAR
52.212–5, Contract Terms and
Conditions Required to Implement
Statutes or Executive Orders—
Commercial Items.
The comment period closed on
February 11, 2011. Three respondents
submitted comments on the interim
rule.
II. Discussion/Analysis of the Public
Comments
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the public comments in the
development of the final rule. A
discussion of the comments and the
changes made to the rule as a result of
those comments are provided as
follows:
A. Dollar Threshold in FAR 9.405–2
Comment: One respondent
recommended a rewrite of FAR 9.405–
2 to clarify that the notification
requirement does not apply to
subcontracts under $30,000.
Response: The Councils agree and
have incorporated the requested change.
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B. Definition of COTS Item
Comment: One respondent
recommended deletion of the definition
of COTS item from paragraph (a) of the
FAR clause 52.209–6. The rationale is
that the term is defined in FAR 2.101
and is therefore unnecessary in the
clause.
Response: The Councils have retained
the definition of COTS item in the
clause. Although the clause at FAR
52.202–1, Definitions, provides for the
applicability of definitions in FAR 2.101
to words or terms used in a solicitation
provision or contract clause, unless the
solicitation provides a different
definition, or certain other exceptions
apply, it is common practice to include
the definition of important terms in
solicitation provisions and contract
clauses, for clarity and ease of use.
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C. Applicability to Commercial Items
Comment: Two respondents
supported the interim rule but hoped
that the Councils will eliminate the
exceptions for commercial item and
COTS item acquisition contracts.
Response: The statute specifically
stated that contracts for COTS items are
exempt and that for contracts for
commercial items, the requirements
only flow to the first-tier subcontracts.
The rule implements the statutory
requirements.
Comment: One respondent suggested
that the following rewording of the
clause flowdown in FAR 52.209–6(e) to
‘‘make the exceptions clearer’’:
• ‘‘Subcontracts. The Contractor shall
include the requirements of this clause,
including this paragraph (e)
(appropriately modified for the
identification of the parties), in each
subcontract that—
Æ Exceeds $30,000 in value; and
Æ Is not a subcontract for
commercially available off-the-shelf
items or commercial items.’’
According to the respondent, if the
subcontract is for COTS or commercial
items, the clause will not flow down to
any subcontractor, because the prime
contractor is responsible for
determining the suspension and
debarment status of only first-tier
commercial item subcontractors and the
prime contractor is not responsible for
determining the suspension and
debarment status for COTS
subcontractors.
Response: According to the statute,
the prohibition on subcontracting with
entities that have been debarred,
suspended, or proposed for debarment
applies to subcontractors at any tier,
other than subcontractors for COTS
items, except that in the case of a
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contract for commercial items, such
term includes only first-tier
subcontracts.
The difference between the revised
language proposed by the respondent
and the language that was proposed in
the Federal Register is in the treatment
of a subcontract for a commercial item.
Both versions will arrive at the same
result with regard to a prime contract for
a commercial item and the first-tier
subcontracts under that commercial
contract. In such case, each first-tier
subcontract (over $30,000 and not a
COTS item) will have to disclose
whether at time of subcontract award it,
or its principals, is debarred,
suspended, or proposed for debarment.
However, with regard to subcontracts
for the acquisition of a commercial item
(which were not specifically addressed
by the statute), the proposed rule
implemented the statute to also apply to
the subcontract one tier below a
commercial subcontract for the
acquisition of a commercial item,
whereas the proposed revision does not
apply the requirements of the statute to
a subcontract under a commercial
subcontract. The Councils consider the
language of the proposed rule to be a
reasonable interpretation of the
statutory intent, by requiring all
commercial contractors (whether a
prime contractor or a higher-tier
subcontractor), to get the reports of the
next-tier subcontractors, but not be
required to flow the requirement down
to the next tier. To adopt the
interpretation of the respondent would
narrow the ability of agencies to
determine if a subcontractor has been
debarred, suspended, or proposed for
debarment because agencies would have
no visibility into the debarment/
suspension status of any subcontract
that was one level below a subcontract
for the acquisition of a commercial item.
This appears to be contrary to the intent
of the statute.
D. Compelling Reason
Comment: One respondent believes
that the Councils should provide a
clarification of the term ‘‘compelling
reason’’ as it appears in FAR 9.405–2(b)
and 52.209–6(b). FAR 9.405–2(b) and
the clause at 52.209–6(b) state that
contractors shall not enter into
subcontracts in excess of $30,000, other
than a subcontract for a COTS item,
with a contractor that has been
debarred, suspended, or proposed for
debarment, unless there is a compelling
reason to do so.
Response: The Councils believe this
request is outside the scope of this case.
The term ‘‘compelling reason’’ was not
instituted with the current FAR case,
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39237
which simply removed applicability to
COTS items and extended flowdown of
the requirement to lower-tier
subcontracts.
E. Applicability in FAR 52.212–5 and
FAR 52.213–4
Comment: One respondent requested
that both parentheticals indicating
applicability be removed from the
listing of the clause 52.209–6 in FAR
52.212–5 (commercial items) and
52.213–4 (simplified acquisition). The
rationale of the respondent is that the
directives are not complete and are not
used in most clauses contained in these
clauses. In addition, the respondent
states that FAR 52.209–6 already states
when the clause is applicable and
applicability to subcontracts is covered
in FAR 52.209–6(e).
Response: With regard to FAR
52.212–5, the contracting officer
indicates if the clause applies to the
acquisition of commercial items. The
respondent is correct that no
parenthetical indication of applicability
is appropriate, unless the clause is
applicable to the acquisition of
commercial items, but is not applicable
to the acquisition of COTS items (e.g.,
FAR 52.223–9, Estimate of Percentage of
Recovered Material). However,
indication of inapplicability to
subcontracts for COTS items is not
appropriate. That is covered in the FAR
clause itself, once it is decided that the
clause is applicable to the prime
contract. The Councils have removed
both parentheticals from the listing of
FAR 52.209–6 in the FAR clause
52.212–5 in the final rule.
However, with regard to the FAR
clause 52.213–4, the Councils do not
agree that there should be no
parenthetical indication of applicability
for the listed clauses. Unless the clause
is required in all contracts, each of the
clauses listed in paragraph (b) of FAR
52.213–4 indicates applicability
parenthetically. However, this
indication of applicability should be to
the prime contract, not the subcontract.
Therefore, the statement of
inapplicability to subcontracts for the
acquisition of COTS items has been
deleted from the final rule.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
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Federal Register / Vol. 76, No. 128 / Tuesday, July 5, 2011 / Rules and Regulations
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
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IV. Regulatory Flexibility Act
The Department of Defense, the
General Services Administration, and
the National Aeronautics and Space
Administration certify that this final
rule will not 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. The interim
rule removed requirements relating to
subcontracts for COTS items. In the case
of commercial items, the requirement
extends only to the first-tier
subcontracts. This rule will impact
small entities that are awarded a lowertier subcontract for a non-COTS item
that exceeds $30,000, in that these
entities must now disclose to the highertier subcontractor whether they are
debarred, suspended, or proposed for
debarment. Although a substantial
number of small entities may be
impacted by this rule, the impact is not
significant. It will probably take only
minimal time to include the required
information with an offer. For the other
impact of the rule, which will require
the higher-tier subcontractor to provide
an explanation if desiring to subcontract
with an entity that has been debarred,
suspended, or proposed for debarment,
DoD, GSA, and NASA have determined
that this will not impact a substantial
number of small entities, because it
should be a rare occurrence that a
subcontractor would potentially
jeopardize performance or integrity by
knowingly contracting with an entity
that is debarred, suspended, or
proposed for debarment. No public
comments were received with regard to
the impact of this rule on small entities.
V. Paperwork Reduction Act
This rule affects the certification and
information collection requirements in
the provisions at FAR case 2009–036
currently approved under OMB Control
Number 9000–0094 in accordance with
the Paperwork Reduction Act (44 U.S.C.
chapter 35). The impact, however, is
negligible because the change in burden
hours is so slight.
List of Subjects in 48 CFR Parts 9 and
52
Government procurement.
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Dated: June 28, 2011.
Laura Auletta,
Acting Director, Office of Governmentwide
Acquisition Policy, Office of Acquisition
Policy.
Accordingly, the interim rule
amending 48 CFR parts 9 and 52, which
was published in the Federal Register at
75 FR 77739, December 13, 2010, is
adopted as final with the following
changes:
■ 1. The authority citation for 48 CFR
parts 9 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 9—CONTRACTOR
QUALIFICATIONS
9.405–2
[Amended]
2. Amend section 9.405–2 by
removing from paragraph (b)
introductory text, in the third sentence,
‘‘to subcontract’’ and adding ‘‘to enter
into a subcontract in excess of $30,000’’
in its place.
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
3. Amend section 52.212–5 by
revising the date of the clause and
paragraph (b)(6) 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
(AUG 2011)
*
*
*
*
*
(b) * * *
(6) 52.209–6, Protecting the Government’s
Interest When Subcontracting with
Contractors Debarred, Suspended, or
Proposed for Debarment. (Dec 2010) (31
U.S.C. 6101 note).
*
*
*
*
*
4. Amend section 52.213–4 by
revising the date of the clause and
paragraph (b)(2)(i) to read as follows:
■
52.213–4 Terms and Conditions—
Simplified Acquisitions (Other Than
Commercial Items).
*
*
*
*
*
Terms and Conditions—Simplified
Acquisitions (Other Than Commercial
Items) (AUG 2011)
*
*
*
*
*
(b) * * *
(2) * * *
(i) 52.209–6, Protecting the Government’s
Interest When Subcontracting with
Contractors Debarred, Suspended, or
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*
*
*
*
*
[FR Doc. 2011–16674 Filed 7–1–11; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Part 16
[FAC 2005–53; FAR Case 2011–015; Item
IV; Docket 2011–0015, Sequence 1]
RIN 9000–AM08
■
*
Proposed for Debarment (Dec 2010) (Applies
to contracts over $30,000).
Federal Acquisition Regulation;
Extension of Sunset Date for Protests
of Task and Delivery Orders
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Interim rule.
AGENCIES:
DoD, GSA, and NASA are
issuing an interim rule amending the
Federal Acquisition Regulation (FAR) to
implement section 825 of the Ike
Skelton National Defense Authorization
Act for Fiscal Year 2011. The statute
extends the sunset date for protests
against the award of task or delivery
orders by DoD, NASA, and the Coast
Guard from May 27, 2011, to September
30, 2016.
DATES: Effective Date: July 5, 2011.
Comment Date: Interested parties
should submit written comments to the
Regulatory Secretariat on or before
September 6, 2011 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments
identified by FAC 2005–53, FAR Case
2011–015, by any of the following
methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
inputting ‘‘FAR Case 2011–015’’ under
the heading ‘‘Enter Keyword or ID’’ and
selecting ‘‘Search.’’ Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘FAR Case 2011–015.’’ Follow the
instructions provided at the ‘‘Submit a
Comment’’ screen. Please include your
name, company name (if any), and
‘‘FAR Case 2011–015’’ on your attached
document.
• Fax: (202) 501–4067.
• Mail: General Services
Administration, Regulatory Secretariat
(MVCB), Attn: Hada Flowers, 1275 First
SUMMARY:
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]]>Agencies
[Federal Register Volume 76, Number 128 (Tuesday, July 5, 2011)]
[Rules and Regulations]
[Pages 39236-39238]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16674]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 9 and 52
[FAC 2005-53; FAR Case 2009-036; Item III; Docket 2010-0109, Sequence
1]
RIN 9000-AL75
Federal Acquisition Regulation; Uniform Suspension and Debarment
Requirement
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA have adopted as final, with changes, the
interim rule amending the Federal Acquisition Regulation (FAR) to
implement section 815 of the National Defense Authorization Act for
Fiscal Year 2010. Section 815 extends the flow down of limitations on
subcontracting with entities that have been debarred, suspended, or
proposed for debarment.
DATES: Effective Date: August 4, 2011.
FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement
Analyst, at (202) 208-4949 for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-53, FAR
Case 2009-036.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published an interim rule in the Federal
Register at 75 FR 77739 on December 13, 2010, to implement section 815
of the National Defense Authorization Act for Fiscal Year 2010 (Pub. L.
111-84). Section 815 amends section 2455(c)(1) of the Federal
Acquisition Streamlining Act of 1994 (FASA) (31 U.S.C. 6101 note) by
amending the definition of ``procurement activities'' to include
subcontracts at any tier, except--
It does not include subcontracts for commercially
available off-the-shelf items (COTS); and
In the case of commercial items, such term includes only
the first-tier subcontracts.
This has the effect, except for commercial items and COTS items, of
expanding the requirement of section 2455(a), which states that ``No
agency shall allow a party to participate in any procurement * * *
activity if any agency has debarred, suspended, or otherwise excluded *
* * that party from participation in a procurement * * * activity.''
Therefore, the interim rule amended the FAR clause at 52.209-6,
Protecting the Government's Interest When Subcontracting with
Contractors Debarred, Suspended, or Proposed for Debarment, by flowing
down the requirements for the contractor or higher-tier subcontractor
to check whether a subcontractor beyond the first tier is debarred,
suspended, or proposed for debarment, with the stated dollar threshold
and exceptions for commercial items and COTS items. As in the current
clause, the contractor and higher-tier subcontractors must also notify
the contracting officer in writing before entering into a subcontract
with a party that is debarred, suspended, or proposed for debarment,
providing the contractor's knowledge of the reasons for the
subcontractor being on the Excluded Parties Systems List, and the
compelling reasons for doing business with the subcontractor, as well
as the systems and procedures the contractor has established to ensure
that it is fully protecting the Government's interests. The contracting
officer will now have more visibility into whether lower- tier
subcontractors have been debarred, suspended, or proposed for
debarment. Because commercial contracts must now flow the requirement
down to the first tier, the clause was added to FAR 52.212-5, Contract
Terms and Conditions Required to Implement Statutes or Executive
Orders--Commercial Items.
The comment period closed on February 11, 2011. Three respondents
submitted comments on the interim rule.
II. Discussion/Analysis of the Public Comments
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the public comments in the
development of the final rule. A discussion of the comments and the
changes made to the rule as a result of those comments are provided as
follows:
A. Dollar Threshold in FAR 9.405-2
Comment: One respondent recommended a rewrite of FAR 9.405-2 to
clarify that the notification requirement does not apply to
subcontracts under $30,000.
Response: The Councils agree and have incorporated the requested
change.
[[Page 39237]]
B. Definition of COTS Item
Comment: One respondent recommended deletion of the definition of
COTS item from paragraph (a) of the FAR clause 52.209-6. The rationale
is that the term is defined in FAR 2.101 and is therefore unnecessary
in the clause.
Response: The Councils have retained the definition of COTS item in
the clause. Although the clause at FAR 52.202-1, Definitions, provides
for the applicability of definitions in FAR 2.101 to words or terms
used in a solicitation provision or contract clause, unless the
solicitation provides a different definition, or certain other
exceptions apply, it is common practice to include the definition of
important terms in solicitation provisions and contract clauses, for
clarity and ease of use.
C. Applicability to Commercial Items
Comment: Two respondents supported the interim rule but hoped that
the Councils will eliminate the exceptions for commercial item and COTS
item acquisition contracts.
Response: The statute specifically stated that contracts for COTS
items are exempt and that for contracts for commercial items, the
requirements only flow to the first-tier subcontracts. The rule
implements the statutory requirements.
Comment: One respondent suggested that the following rewording of
the clause flowdown in FAR 52.209-6(e) to ``make the exceptions
clearer'':
``Subcontracts. The Contractor shall include the
requirements of this clause, including this paragraph (e)
(appropriately modified for the identification of the parties), in each
subcontract that--
[cir] Exceeds $30,000 in value; and
[cir] Is not a subcontract for commercially available off-the-
shelf items or commercial items.''
According to the respondent, if the subcontract is for COTS or
commercial items, the clause will not flow down to any subcontractor,
because the prime contractor is responsible for determining the
suspension and debarment status of only first-tier commercial item
subcontractors and the prime contractor is not responsible for
determining the suspension and debarment status for COTS
subcontractors.
Response: According to the statute, the prohibition on
subcontracting with entities that have been debarred, suspended, or
proposed for debarment applies to subcontractors at any tier, other
than subcontractors for COTS items, except that in the case of a
contract for commercial items, such term includes only first-tier
subcontracts.
The difference between the revised language proposed by the
respondent and the language that was proposed in the Federal Register
is in the treatment of a subcontract for a commercial item. Both
versions will arrive at the same result with regard to a prime contract
for a commercial item and the first-tier subcontracts under that
commercial contract. In such case, each first-tier subcontract (over
$30,000 and not a COTS item) will have to disclose whether at time of
subcontract award it, or its principals, is debarred, suspended, or
proposed for debarment.
However, with regard to subcontracts for the acquisition of a
commercial item (which were not specifically addressed by the statute),
the proposed rule implemented the statute to also apply to the
subcontract one tier below a commercial subcontract for the acquisition
of a commercial item, whereas the proposed revision does not apply the
requirements of the statute to a subcontract under a commercial
subcontract. The Councils consider the language of the proposed rule to
be a reasonable interpretation of the statutory intent, by requiring
all commercial contractors (whether a prime contractor or a higher-tier
subcontractor), to get the reports of the next-tier subcontractors, but
not be required to flow the requirement down to the next tier. To adopt
the interpretation of the respondent would narrow the ability of
agencies to determine if a subcontractor has been debarred, suspended,
or proposed for debarment because agencies would have no visibility
into the debarment/suspension status of any subcontract that was one
level below a subcontract for the acquisition of a commercial item.
This appears to be contrary to the intent of the statute.
D. Compelling Reason
Comment: One respondent believes that the Councils should provide a
clarification of the term ``compelling reason'' as it appears in FAR
9.405-2(b) and 52.209-6(b). FAR 9.405-2(b) and the clause at 52.209-
6(b) state that contractors shall not enter into subcontracts in excess
of $30,000, other than a subcontract for a COTS item, with a contractor
that has been debarred, suspended, or proposed for debarment, unless
there is a compelling reason to do so.
Response: The Councils believe this request is outside the scope of
this case. The term ``compelling reason'' was not instituted with the
current FAR case, which simply removed applicability to COTS items and
extended flowdown of the requirement to lower-tier subcontracts.
E. Applicability in FAR 52.212-5 and FAR 52.213-4
Comment: One respondent requested that both parentheticals
indicating applicability be removed from the listing of the clause
52.209-6 in FAR 52.212-5 (commercial items) and 52.213-4 (simplified
acquisition). The rationale of the respondent is that the directives
are not complete and are not used in most clauses contained in these
clauses. In addition, the respondent states that FAR 52.209-6 already
states when the clause is applicable and applicability to subcontracts
is covered in FAR 52.209-6(e).
Response: With regard to FAR 52.212-5, the contracting officer
indicates if the clause applies to the acquisition of commercial items.
The respondent is correct that no parenthetical indication of
applicability is appropriate, unless the clause is applicable to the
acquisition of commercial items, but is not applicable to the
acquisition of COTS items (e.g., FAR 52.223-9, Estimate of Percentage
of Recovered Material). However, indication of inapplicability to
subcontracts for COTS items is not appropriate. That is covered in the
FAR clause itself, once it is decided that the clause is applicable to
the prime contract. The Councils have removed both parentheticals from
the listing of FAR 52.209-6 in the FAR clause 52.212-5 in the final
rule.
However, with regard to the FAR clause 52.213-4, the Councils do
not agree that there should be no parenthetical indication of
applicability for the listed clauses. Unless the clause is required in
all contracts, each of the clauses listed in paragraph (b) of FAR
52.213-4 indicates applicability parenthetically. However, this
indication of applicability should be to the prime contract, not the
subcontract. Therefore, the statement of inapplicability to
subcontracts for the acquisition of COTS items has been deleted from
the final rule.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the
[[Page 39238]]
importance of quantifying both costs and benefits, of reducing costs,
of harmonizing rules, and of promoting flexibility. This is not a
significant regulatory action and, therefore, was not subject to review
under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated
September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
IV. Regulatory Flexibility Act
The Department of Defense, the General Services Administration, and
the National Aeronautics and Space Administration certify that this
final rule will not 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. The interim rule removed
requirements relating to subcontracts for COTS items. In the case of
commercial items, the requirement extends only to the first-tier
subcontracts. This rule will impact small entities that are awarded a
lower-tier subcontract for a non-COTS item that exceeds $30,000, in
that these entities must now disclose to the higher-tier subcontractor
whether they are debarred, suspended, or proposed for debarment.
Although a substantial number of small entities may be impacted by this
rule, the impact is not significant. It will probably take only minimal
time to include the required information with an offer. For the other
impact of the rule, which will require the higher-tier subcontractor to
provide an explanation if desiring to subcontract with an entity that
has been debarred, suspended, or proposed for debarment, DoD, GSA, and
NASA have determined that this will not impact a substantial number of
small entities, because it should be a rare occurrence that a
subcontractor would potentially jeopardize performance or integrity by
knowingly contracting with an entity that is debarred, suspended, or
proposed for debarment. No public comments were received with regard to
the impact of this rule on small entities.
V. Paperwork Reduction Act
This rule affects the certification and information collection
requirements in the provisions at FAR case 2009-036 currently approved
under OMB Control Number 9000-0094 in accordance with the Paperwork
Reduction Act (44 U.S.C. chapter 35). The impact, however, is
negligible because the change in burden hours is so slight.
List of Subjects in 48 CFR Parts 9 and 52
Government procurement.
Dated: June 28, 2011.
Laura Auletta,
Acting Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy.
Accordingly, the interim rule amending 48 CFR parts 9 and 52, which
was published in the Federal Register at 75 FR 77739, December 13,
2010, is adopted as final with the following changes:
0
1. The authority citation for 48 CFR parts 9 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 9--CONTRACTOR QUALIFICATIONS
9.405-2 [Amended]
0
2. Amend section 9.405-2 by removing from paragraph (b) introductory
text, in the third sentence, ``to subcontract'' and adding ``to enter
into a subcontract in excess of $30,000'' in its place.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend section 52.212-5 by revising the date of the clause and
paragraph (b)(6) 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 (AUG 2011)
* * * * *
(b) * * *
(6) 52.209-6, Protecting the Government's Interest When
Subcontracting with Contractors Debarred, Suspended, or Proposed for
Debarment. (Dec 2010) (31 U.S.C. 6101 note).
* * * * *
0
4. Amend section 52.213-4 by revising the date of the clause and
paragraph (b)(2)(i) to read as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items) (AUG 2011)
* * * * *
(b) * * *
(2) * * *
(i) 52.209-6, Protecting the Government's Interest When
Subcontracting with Contractors Debarred, Suspended, or Proposed for
Debarment (Dec 2010) (Applies to contracts over $30,000).
* * * * *
[FR Doc. 2011-16674 Filed 7-1-11; 8:45 am]
BILLING CODE 6820-EP-P
