Defense Federal Acquisition Regulation Supplement: Representation Relating to Compensation of Former DoD Officials (DFARS Case 2010-D020), 71826-71830 [2011-29421]
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Federal Register / Vol. 76, No. 223 / Friday, November 18, 2011 / Rules and Regulations
List of Subjects in 48 CFR Part 245
Government procurement.
DATES:
FOR FURTHER INFORMATION CONTACT:
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.
Meredith Murphy, 703–602–1302.
PART 245—GOVERNMENT PROPERTY
1. The authority citation for 48 CFR
part 245 continues to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
2. Add section 245.104 to read as
follows:
■
245.104 Responsibility and liability for
Government property.
In addition to the contract types listed
at FAR 45.104, contractors are not held
liable for loss of Government property
under negotiated fixed-price contracts
awarded on a basis other than
submission of certified cost or pricing
data.
■ 3. Amend section 245.107 by
redesignating paragraphs (a) through (e)
as paragraphs (1) through (5) and adding
paragraph (6) to read as follows:
Contract clauses.
*
*
*
*
*
(6) For negotiated fixed-price
contracts awarded on a basis other than
submission of certified cost or pricing
data for which Government property is
provided, use the clause at FAR 52.245–
1, Government Property, without its
Alternate I.
[FR Doc. 2011–29416 Filed 11–17–11; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 203 and 252
RIN 0750–AG99
Defense Federal Acquisition
Regulation Supplement:
Representation Relating to
Compensation of Former DoD Officials
(DFARS Case 2010–D020)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
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AGENCIES:
DoD is amending the DFARS
to require offerors to represent whether
former DoD officials who are employees
of the offeror are in compliance with
post-employment restrictions.
SUMMARY:
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Ms.
SUPPLEMENTARY INFORMATION:
Therefore, 48 CFR part 245 is
amended as follows:
245.107
Effective Date: November 18,
2011.
I. Background
DoD published a proposed rule at 76
FR 32846 on June 6, 2011, that proposed
adding a requirement for offerors
submitting proposals to DoD to
represent whether former DoD officials
employed by the offeror are in
compliance with post-employment
restrictions. Four respondents submitted
public comments on the proposed rule.
A. Post-Employment Statutory
Restrictions and Regulatory
Implementation
The principal statutory restrictions
concerning post-Government
employment for DoD officials after
leaving Government employment are at
18 U.S.C. 207 and 41 U.S.C. 2104
(formerly 41 U.S.C. 423) and 5 CFR
parts 2637 and 2641.
1. FAR 3.104 implements 41 U.S.C
2104 and 18 U.S.C. 207.
2. DFARS 203.104 implements the
Procurement Integrity Act for DoD.
3. DFARS 203.171–3 implements
section 847 of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2008.
B. General Accountability Office (GAO)
Study GAO–08–485
The Congress included a provision in
the NDAA for FY 2007 (section 851 of
Pub. L. 109–364) requiring the GAO to
report on recent employment of former
DoD officials by major defense
contractors. In May 2008, the GAO
issued its report, entitled ‘‘Defense
Contracting: Post-Government
Employment of Former DoD Officials
Needs Greater Transparency’’ (GAO–08–
485). The GAO found that contractors
significantly under-reported the
employment of former DoD officials and
concluded that defense contractors may
employ a substantial number of former
DoD officials on assignments related to
their former positions. GAO further
concluded that greater transparency is
needed by DoD with respect to former
senior and acquisition executives to
ensure compliance with applicable postemployment restrictions. The GAO
recommended that DoD ask potential
offerors to certify that the former DoD
officials employed by the offeror are in
compliance with post-employment
restrictions when contracts are being
awarded and that contracting officers
consider continuing certifications
throughout the performance of the
contract.
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C. DFARS Rule
This DFARS rule implements the
recommendation of the GAO by adding
a new representation for offerors to
complete and provide as part of each
proposal, including proposals for
commercial items. DoD elected to
employ a representation rather than a
certification and have the representation
submitted by offerors as part of the
proposal process. The representation
will be required only one time rather
than continuously throughout contract
performance. The provision will not be
included in the annual representations
and certifications.
The solicitation provision at DFARS
252.203–7005, entitled ‘‘Representation
Relating to Compensation of Former
DoD Officials,’’ is a representation that
all of the offeror’s employees who are
former DoD officials are in compliance
with the post-employment restrictions
at 18 U.S.C. 207, 41 U.S.C. 2101–2107,
and 5 CFR parts 2637 and 2641, as well
as FAR 3.104–2.
II. Discussion and Analysis of the
Public Comments
DoD reviewed the public comments
received in response to the proposed
rule in the formation of the final rule.
A discussion of the comments and the
changes made to the rule as a result of
those comments follows.
A. Contractor Compliance
Responsibility
Comment: Two respondents noted
that compliance with ethics rules is the
responsibility of the covered officials,
not the contractor employing them.
According to the respondents, although
contractors instruct and train employees
to observe all post-government
employment restrictions, contractors
have no official compliance
responsibility regarding employees’
post-government employment
restrictions.
Response: FAR subpart 3.10, entitled
‘‘Contractor Code of Business Ethics and
Conduct,’’ requires, among other things,
that contractors exercise due diligence
to prevent and detect criminal conduct
and otherwise promote an
organizational culture that encourages
ethical conduct and a commitment to
compliance with the law. Contractors
must also timely disclose to the
Government any credible evidence of a
violation of criminal law, which would
include, for example, a violation of 18
U.S.C. 207 (post-Government
employment restrictions). Accordingly,
contractors, as employers of covered
officials, have an affirmative compliance
responsibility regarding employees’
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post-Government employment
restrictions. Contractors must ensure
their employees avoid engaging in
criminal conduct while carrying out
duties on the contractor’s behalf. Stated
individuals’ resumes generally do not
include every particular matter on
which they worked. Hiring contractors
have a duty to interview their new hires
who formerly worked for DoD and
screen their work experiences for
relevant particular matters.
Comment: Two respondents asserted
that implementation of the proposed
rule would require contractors to
establish compliance systems to
identify, track, educate, and require
periodic certifications from employees
and consultants across their businesses
(rather than those specific to a contract)
to identify former DoD covered officials.
According to the respondents, such
systems would require additional
compliance mechanisms and personnel
to design, implement, execute, test, and
evaluate, thereby raising overhead costs
for contractors, which could ultimately
increase costs to the Government.
Response: Contractors should know
on what particular matters covered
officials worked and already ensure
employees are not assigned to work on
those matters because there are current
requirements to maintain and track this
information. FAR subpart 3.10 requires
contractors to be aware of employees
who are covered officials and any
existing prohibitions and requirements
relating to their employment. In
addition, when contractors hire covered
DoD officials, DFARS 252.203–7000(b)
requires them to determine whether the
covered officials sought and received
advice regarding post-employment
restrictions on behalf of the contractor.
This rule does not require the creation
of new compliance systems, and
additional costs should not be incurred.
Comment: Two respondents asserted
that the proposed rule would require
contractors to certify compliance
involving matters unrelated and
unknown to the offeror, because the
proposed regulation provides no
limitation related to the contractors’
business and the covered officials’ other
activities or employment. Respondents
suggested limiting the proposed
representation to ‘‘work related to this
offer’’ or ‘‘activities that the official is
expected to undertake on behalf of the
contractor.’’
Response: DFARS 252.203–7000(b)
provides ‘‘(t)he Contractor shall not
knowingly provide compensation to a
covered DoD official within 2 years after
the official leaves DoD service, without
first determining that the official has
sought and received, or has not received
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after 30 days of seeking, a written
opinion from the appropriate DoD ethics
counselor regarding the applicability of
post-employment restrictions to the
activities that the official is expected to
undertake on behalf of the Contractor.’’
It would be reasonable to include a
similar limitation in the representation,
e.g., ‘‘that all covered DoD officials
employed by, or otherwise receiving
compensation from the offeror, and who
are expected to undertake activities on
behalf of the offeror for any resulting
contract, are presently in compliance
with—* * *.’’ Appropriate revision has
been made in the final rule to the
DFARS provision at 252.203–7005(b).
B. Contractor Identification of ‘‘Covered
Officials’’ and ‘‘Particular Matters’’
Comment: One respondent stated that
‘‘identifying which job applicants are
‘covered officials’ is not trivial.’’ This
respondent explained that ‘‘resumes are
often tailored to the job being sought:
Certain items are highlighted, others
omitted entirely. Consequently, while it
is usually simple to tell if a potential
candidate was a ‘senior official,’ it is
often difficult to identify if he or she
was an ‘acquisition executive’.’’
Response: The term ‘‘covered DoD
official’’ is defined in DFARS 252.203–
7000(a) as an individual who ‘‘left DoD
service on or after January 28, 2008,’’
and either ‘‘participated personally and
substantially in an acquisition as
defined in 41 U.S.C. 131 with a value
in excess of $10 million’’ and who
served in specifically highlighted
positions or served within DoD as
‘‘program manager, deputy program
manager, procuring contracting officer,
administrative contracting officer,
source selection authority, member of
the source selection evaluation board, or
chief of a financial or technical
evaluation team for a contract in an
amount in excess of $10 million.’’
Contractors need to seek clarification
with job applicants and employees as to
whether the applicant meets the DFARS
definition in order to ensure employees
are in compliance with DoD postemployment restrictions.
Comment: A respondent highlighted
potential difficulties in identifying
‘‘particular matters’’ on which the job
applicant worked. The respondent
stated that ethics opinions rarely
identify the ‘‘particular matters’’ upon
which the former DoD official worked
and to which post-employment
restrictions apply. The respondent
concluded that failure to identify
‘‘particular matters’’ is ‘‘a significant
problem for individuals (and their
employers) whose government portfolio
was substantially broader’’ than simply
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working on one program during their
Government career.
Response: It is not feasible or
practicable to expect that a Government
ethics official list all ‘‘particular
matters’’ for a Government employee.
The most likely, and probably only,
source for this type of information is the
Government official requesting the postemployment restrictions opinion from
the ethics official. Failure of the
Government employee to provide a
comprehensive list would
inappropriately limit the scope of the
ethics opinion to those items listed. The
former Government official is in the best
position to (1) recall the particular
matters that he or she worked during his
or her Government tenure and (2) advise
future employers of his or her
involvement in ‘‘particular matters’’
when the employer provides work
assignments. The Code of Federal
Regulations contains a definition of
‘‘particular matter,’’ as well as examples
of what a ‘‘particular matter’’ is. The
examples provide guidance for the types
of situations and circumstances covered
by the term. It is unrealistic to expect a
finite set of examples listed in the
regulations to cover all possible
circumstances and situations that could
arise regarding what constitutes a
‘‘particular matter’’.
C. Contractor Certification ‘‘to the Best
of Its Knowledge and Belief’’
Comment: A respondent stated that
there is no generally accepted definition
of ‘‘to the best of its knowledge or
belief.’’ This respondent explained that
‘‘(s)ometimes it means simply that the
person making the representation has no
information to the contrary and is not
willfully refusing to see a problem. At
other times, it has been held to imply a
duty to investigate before making the
representation.’’
Response: The standard, ‘‘to the best
of its knowledge and belief,’’ is a
recognized legal term of art, and one
that has been used in numerous statutes
over decades, e.g., The Truth in
Negotiations Act has been in effect since
1963. (‘‘A person required, as an offeror,
contractor, or subcontractor, to submit
cost or pricing data under paragraph (1)
* * * shall be required to certify that,
to the best of the person’s knowledge
and belief, the cost or pricing data
submitted are accurate, complete, and
current.’’ (10 U.S.C. 2306a, paragraph
(a)(2)).
D. Consequences of the Rule
Comment: Two respondents suggested
that the rule may have several adverse
effects, including deterring: (1) Small
companies from competing for
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Government contracts; (2) contractors
from hiring ‘‘covered DoD officials;’’
and (3) Federal employees who would
be subject to the rule from seeking
employment with DoD.
Response: This rule requires offerors
to verify compliance with existing laws
and regulations and, therefore, is
unlikely to have the suggested deterrent
effects unless the business was not
otherwise ensuring compliance and/or
did not intend to comply in the future.
In that event, deterring non-compliance
is consistent with the purposes
underlying the rule. Further, to the
extent one of the respondents was
suggesting that small business concerns
be exempted from the rule, such an
exemption would substantially
undermine its purpose of improving
compliance, as available data indicates
that small business concerns are likely
to hire a large majority of ‘‘covered DoD
officials’’ (see Regulatory Flexibility Act
section).
E. Relationship to Existing Statutes and
Regulations, Including the Clinger/
Cohen Act Ban on New Certifications
That Are Not Required by Law
Comment: Two respondents
concluded that there was no need for
this rule because (1) the Congress
already addressed the concerns
underlying the GAO report by enacting
section 847 of the NDAA for FY 2009
(Pub. L. 110–417, enacted October 14,
2008); (2) FAR subpart 3.10, Contractor
Code of Business Ethics and Conduct,
already requires contractors to monitor
post-employment compliance with 18
U.S.C. 207; and (3) the responsibility for
post-employment compliance should
rest primarily with former DoD
employees. One of these respondents
stated that the representation violates
the Clinger/Cohen Act ban on new
contractor certifications that are not
required by law.
Response: (1) Section 847 of the
NDAA for FY 2008 is entitled
‘‘Requirements for Senior Department of
Defense Officials Seeking Employment
with Defense Contractors.’’ The
provision applies to defense contractors
by prohibiting such contractors from
knowingly providing compensation to a
former DoD official ‘‘within two years
after such former official leaves (DoD),
without first determining that the
former official has sought and received
(or has not received after 30 days of
seeking) a written opinion from the
appropriate ethics counselor regarding
the applicability of post-employment
restrictions to the activities that the
former official is expected to undertake
on behalf of the contractor.’’ While there
is some relationship to section 847, the
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representation in the rule addresses the
broader arena of post-employment
restrictions (see paragraph A in the
Background section of this notice for the
listing). Further, the prohibition against
providing compensation (section 847)
was implemented by adding the clause
at DFARS 252.203–7000, Requirements
Relating to Compensation of Former
DoD Officials (see the interim rule at 74
FR 2408, dated January 15, 2009, and
the final rule at 74 FR 59913, dated
November 19, 2009; DFARS Case 2008–
D007).
(2) There is some relationship to FAR
subpart 3.10. However, the FAR policy
(FAR 3.1002(b)) states that contractors
‘‘should have a written code of business
ethics and conduct’’ and ‘‘should have
an internal control system.’’ (A
contractor is not required to have an
internal control system unless the
procurement is over $5 million and it is
not a small business concern (see FAR
3.1004(a) and 52.203–13(c)(2)). Further,
the proposed rule is applicable
exclusively to DoD procurements, and it
is narrower than FAR subpart 3.10, in
that it is concerned exclusively with
post-employment restrictions for former
DoD officials.
(3) The former DoD employee should
be primarily responsible for his or her
compliance with post-employment
restrictions. However, businesses
should support the highest ethical
standards (see FAR 3.1002(a)) and
should not hire former DoD officials
who have not complied with the law or
assign them to work on projects that are
barred to them by the nature of their
DoD assignments. The representation at
DFARS 252.203–7005 in the final rule is
intended to ensure that DoD does
business with companies that are
committed to the highest ethical
standards.
(4) The Clinger/Cohen Act prohibited
the creation of contractor certifications
that are not required by law. The FAR
and DFARS regularly employ the
distinction between a representation
and a certification, and representations
have regularly been deemed not subject
to the Clinger/Cohen Act ban.
F. Strengthen the Rule by Adding Five
Requirements
Comment: One respondent expressed
support for the proposed rule, but
suggested that it be strengthened by
adding the following five requirements
for—
(1) The offeror to expressly state,
when true, that it is compensating
former DoD employees who have not
received a written ethics opinion within
the 30-day timeframe;
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(2) The DoD IG to audit annually a
stratified random sample of contracts
and the contractor’s list of former
employees to determine whether
contractors are in full compliance with
post-employment restrictions asserted,
whether former Government employees
are in full compliance with postemployment restrictions, and whether
DoD ethics officers have issued said
written opinions within 30 days of
being sought;
(3) DoD to sanction contractors and
former DoD employees identified by the
DoD IG as having violated the
requirements;
(4) DoD to take appropriate action to
ensure ethics opinions are issued within
the 30-day timeframe; and
(5) DoD to make public the following
information: (a) The database of ethics
opinions required pursuant to section
847(b)(1); (b) the names of contractors
and former DoD officials identified by
the DoD IG as not being in compliance
with the requirements of the proposed
rule; (c) the actions taken by DoD to
seek sanctions for each non-compliant
contractor and former DoD official; and
(d) what, if any, sanctions were actually
imposed on the identified contractors
and former DoD officials.
Response: All of the above
recommendations are outside the scope
of the GAO study and this rule.
G. Scope
Comment: A respondent stated that
‘‘due to its broad scope’’,
implementation of substantial
compliance programs is required.
Response: Contractors should already
have programs in place that comply
with standards of conduct and ethics
program requirements as described in
FAR 3.10 and more specifically, in
DFARS clause 252.203–7000, included
in all DoD solicitations and contracts.
All companies, whether large or small,
should have knowledge of the former
defense employees that are proposed to
work on specific solicitations.
H. Application to New Task or Delivery
Orders
Comment: One respondent stated that
the proposed rule does not specify
whether contracts would need to
include the post-employment
representation in task and delivery
orders and proposed the rule ‘‘be
amended to clarify that such
representation would only be required
at the time the umbrella indefinitedelivery, indefinite-quantity contract is
awarded, and not for each task or
delivery order.’’
Response: The final rule clarifies the
requirement. The prescription, at
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DFARS 203.171–4, requires the
provision at DFARS 252.203–7005,
Representation Relating to
Compensation of Former DoD Officials,
‘‘in all solicitations, including
solicitations for task and delivery
orders.’’
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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
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
A final regulatory flexibility analysis
has been prepared consistent with the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq., and is summarized as follows:
This rule is being issued in response
to a study by the General Accountability
Office (GAO), entitled ‘‘Defense
Contracting: Post-Government
Employment of Former DoD Officials
Needs Greater Transparency’’ (GAO–08–
485), issued in May 2008. The GAO
found that contractors under-reported
the employment of former DoD officials
to the extent that the contractors
employed almost twice as many former
DoD officials as had been reported. The
GAO report showed that major defense
contractors are not currently ensuring
that former DoD senior officials and
acquisition executives working on
contracts are complying with postemployment restrictions.
The final rule requires offerors to
submit, as part of the proposal, a
representation that all former DoD
officials who will be working on any
resultant contract are in compliance
with post-employment restrictions at 18
U.S.C. 207, 41 U.S.C. 2101–2107, and 5
CFR parts 2637 and 2641, as well as
FAR 3.104–2.
The rule requires a representation
from all offerors responding to a DoD
solicitation, including commercial item
acquisitions. A ‘‘covered DoD official’’
is already defined in the clause at
DFARS 252.203–7000, Requirements
Relating to Compensation of Former
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DoD Employees. That same clause also
implements section 847 of the National
Defense Authorization Act for Fiscal
Year 2008 by prohibiting any DoD
contractor from knowingly providing
compensation to a covered DoD official
within two years after the official leaves
DoD service. There is no impact on an
offeror from this new representation
unless the contractor has not been
monitoring its employees who are
former covered DoD officials to ensure
compliance with DFARS 252.203–7000.
No comments from small entities
were received in response to the Federal
Register Notice of the proposed rule,
published June 6, 2011, at 76 FR 32846.
However, a ‘‘think tank’’ requested the
‘‘addition of language making it clear
that the offeror has no duty to establish
systems and procedures to police and
define compliance * * *’’ No language
has been added in response to this
request. Companies are prohibited,
pursuant to subsection 3 of DFARS
203.171, entitled ‘‘Senior DoD officials
seeking employment with defense
contractors,’’ from ‘‘knowingly
provid(ing) compensation to a covered
DoD official within two years after the
official leaves DoD service unless the
contractor first determines that the
official has received * * * the postemployment ethics opinion’’ pursuant
to section 847 of the National Defense
Authorization Act for Fiscal Year 2008
(Pub. L. 110–181).
In the period of 2001–2006, 1.85
million former military and civilian
personnel left DoD service. A ‘‘covered
DoD official’’ is defined to include
former DoD officials who held certain
positions and who left DoD within the
past two years (see DFARS 203.171–3(a)
and 252.203–7000). The GAO found that
the 1.85 million personnel who had left
DoD service over a six-year period
included only 35,192 who had served in
the type of senior or acquisition official
positions that made them subject to
post-Government employment
restrictions, if they were subsequently
hired by defense contractors. Dividing
35,192 by three (to reduce the six-year
period to a two-year period), we
estimate that 11,730 of those officials
would have left within the last two
years. We estimate that 7,635 of these
former officials may accept employment
with a defense contractor (about 65
percent). The GAO study found that
2,435 of these covered officials were
employed by 52 major defense
contractors. Of the remaining 5,200
former officials covered by the
Procurement Integrity Act, we estimate
that 3,900 (75 percent) of them may
work for small business concerns.
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There were no comments filed by the
Chief Counsel for Advocacy of the Small
Business Administration in response to
the rule.
There is no reporting, recordkeeping,
or other compliance requirement
associated with this rule. Offerors make
the representation by submission of an
offer. By the terms of the representation,
an offeror is prohibited from submitting
an offer if it cannot make the
representation. In order to submit an
offer, small entities that hire a former
DoD official covered by the Procurement
Integrity Act will have to check the
compliance of such employees with
various applicable post-employment
restrictions. DFARS clause 252.203–
7000, Requirements Relating to
Compensation of Former DoD Officials,
already requires contractors to
determine that a covered DoD official
has sought and received, or has not
received after 30 days of seeking, a
written opinion from the appropriate
DoD ethics counselor, regarding the
applicability of post-employment
restrictions to the activities that the
official is expected to undertake on
behalf of the contractor. This
representation of compliance does not
impose an additional burden on the
offeror.
There were no known significant
alternatives identified that would
achieve the objectives of the rule.
V. Paperwork Reduction Act
The rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
List of Subjects in 48 CFR Parts 203 and
252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.
Therefore, 48 CFR parts 203 and 252
are amended as follows:
1. The authority citation for 48 CFR
parts 203 and 252 continues to read as
follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 203—IMPROPER BUSINESS
PRACTICES AND PERSONAL
CONFLICTS OF INTEREST
2. Revise section 203.171–4 to read as
follows:
■
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203.171–4 Solicitation provision and
contract clause.
(a) Use the clause at 252.203–7000,
Requirements Relating to Compensation
of Former DoD Officials, in all
solicitations and contracts.
(b) Use the provision at 252.203–7005,
Representation Relating to
Compensation of Former DoD Officials,
in all solicitations, including
solicitations for task and delivery
orders.
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
3. Add section 252.203–7005 to read
as follows:
■
252.203–7005 Representation Relating to
Compensation of Former DoD Officials.
As prescribed in 203.171–4(b), insert
the following provision:
REPRESENTATION RELATING TO
COMPENSATION OF FORMER DOD
OFFICIALS (NOV 2011)
(a) Definition. Covered DoD official is
defined in the clause at 252.203–7000,
Requirements Relating to Compensation of
Former DoD Officials.
(b) By submission of this offer, the offeror
represents, to the best of its knowledge and
belief, that all covered DoD officials
employed by or otherwise receiving
compensation from the offeror, and who are
expected to undertake activities on behalf of
the offeror for any resulting contract, are
presently in compliance with all postemployment restrictions covered by 18
U.S.C. 207, 41 U.S.C. 2101–2107, and 5 CFR
parts 2637 and 2641, including Federal
Acquisition Regulation 3.104–2.
(End of provision)
[FR Doc. 2011–29421 Filed 11–17–11; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 242
RIN 0750–AH41
Defense Federal Acquisition
Regulation Supplement: Administering
Trafficking in Persons Regulations
(DFARS Case 2011–D051)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
jlentini on DSK4TPTVN1PROD with RULES3
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to add to the list of contract
administration functions a requirement
SUMMARY:
VerDate Mar<15>2010
19:02 Nov 17, 2011
Jkt 226001
to maintain surveillance over contractor
compliance with duties and
responsibilities pertaining to trafficking
in persons when they are incorporated
in contracts.
DATES: Effective Date: November 18,
2011.
FOR FURTHER INFORMATION CONTACT:
Meredith Murphy, telephone (703) 602–
1302.
SUPPLEMENTARY INFORMATION:
I. Background
The current FAR, at section 22.1705,
entitled ‘‘Contract clause,’’ prescribes
use of the clause at FAR 52.222–50,
Combating Trafficking in Persons, in all
solicitations and contracts. When the
contract will be performed outside the
United States, the clause must be used
with its Alternate I, as prescribed in
FAR 22.1705(b). The clause requires
contractors to inform employees of the
Government’s zero-tolerance policy and
the actions that will be taken against
them for violations of the policy. In
addition, contractors are required to
notify the contracting officer
immediately of any information
received about an employee’s conduct
that violates this policy and also of
actions taken against an employee as a
result of the violation.
While the clause at FAR 52.222–50,
Combating Trafficking in Persons, has
been in effect since February 2009, the
listing of Government contract
administration functions was not
modified at that time to add
surveillance of a contractor’s
compliance with the clause
requirements. Because the addition of
this contract administration function is
internal to DoD and will not impact
current contract requirements or
contract clauses, this is not a significant
revision as defined at FAR 1.501–1.
Therefore, under the authority at FAR
1.501–3(a), this rule can be published as
a final rule without first obtaining
public comment.
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
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is a significant
regulatory action and, therefore, was
PO 00000
Frm 00008
Fmt 4701
Sfmt 4700
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 Regulatory Flexibility Act does
not apply to this rule because an initial
regulatory flexibility analysis is only
required for proposed or interim rules
that require publication for public
comment (5 U.S.C. 603) and a final
regulatory flexibility analysis is only
required for final rules that were
previously published for public
comment, and for which an initial
regulatory flexibility analysis was
prepared (5 U.S.C. 604).
This final rule does not constitute a
significant DFARS revision as defined at
FAR 1.501–1 because this rule will not
have a significant cost or administrative
impact on contractors or offerors, or a
significant effect beyond the internal
operating procedures of the
Government. Therefore, publication for
public comment under 41 U.S.C. 1707 is
not required.
V. Paperwork Reduction Act
The rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
List of Subjects in 48 CFR Part 242
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.
Therefore, 48 CFR part 242 is
amended as follows:
PART 242—CONTRACT
ADMINISTRATION AND AUDIT
SERVICES
1. The authority citation for 48 CFR
part 242 continues to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
2. Amend section 242.302 by adding
paragraph (a)(S–73) to read as follows:
■
242.302
Contract administration functions.
(a) * * *
(S–73) Maintain surveillance over
contractor compliance with trafficking
in persons requirements for all DoD
contracts for services incorporating the
clause at FAR 52.222–50, Combating
Trafficking in Persons, and, when
necessary, its Alternate I, as identified
E:\FR\FM\18NOR3.SGM
18NOR3
]]>Agencies
[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]
[Rules and Regulations]
[Pages 71826-71830]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29421]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 203 and 252
RIN 0750-AG99
Defense Federal Acquisition Regulation Supplement: Representation
Relating to Compensation of Former DoD Officials (DFARS Case 2010-D020)
AGENCIES: Defense Acquisition Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is amending the DFARS to require offerors to represent
whether former DoD officials who are employees of the offeror are in
compliance with post-employment restrictions.
DATES: Effective Date: November 18, 2011.
FOR FURTHER INFORMATION CONTACT: Ms. Meredith Murphy, 703-602-1302.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule at 76 FR 32846 on June 6, 2011, that
proposed adding a requirement for offerors submitting proposals to DoD
to represent whether former DoD officials employed by the offeror are
in compliance with post-employment restrictions. Four respondents
submitted public comments on the proposed rule.
A. Post-Employment Statutory Restrictions and Regulatory Implementation
The principal statutory restrictions concerning post-Government
employment for DoD officials after leaving Government employment are at
18 U.S.C. 207 and 41 U.S.C. 2104 (formerly 41 U.S.C. 423) and 5 CFR
parts 2637 and 2641.
1. FAR 3.104 implements 41 U.S.C 2104 and 18 U.S.C. 207.
2. DFARS 203.104 implements the Procurement Integrity Act for DoD.
3. DFARS 203.171-3 implements section 847 of the National Defense
Authorization Act (NDAA) for Fiscal Year (FY) 2008.
B. General Accountability Office (GAO) Study GAO-08-485
The Congress included a provision in the NDAA for FY 2007 (section
851 of Pub. L. 109-364) requiring the GAO to report on recent
employment of former DoD officials by major defense contractors. In May
2008, the GAO issued its report, entitled ``Defense Contracting: Post-
Government Employment of Former DoD Officials Needs Greater
Transparency'' (GAO-08-485). The GAO found that contractors
significantly under-reported the employment of former DoD officials and
concluded that defense contractors may employ a substantial number of
former DoD officials on assignments related to their former positions.
GAO further concluded that greater transparency is needed by DoD with
respect to former senior and acquisition executives to ensure
compliance with applicable post-employment restrictions. The GAO
recommended that DoD ask potential offerors to certify that the former
DoD officials employed by the offeror are in compliance with post-
employment restrictions when contracts are being awarded and that
contracting officers consider continuing certifications throughout the
performance of the contract.
C. DFARS Rule
This DFARS rule implements the recommendation of the GAO by adding
a new representation for offerors to complete and provide as part of
each proposal, including proposals for commercial items. DoD elected to
employ a representation rather than a certification and have the
representation submitted by offerors as part of the proposal process.
The representation will be required only one time rather than
continuously throughout contract performance. The provision will not be
included in the annual representations and certifications.
The solicitation provision at DFARS 252.203-7005, entitled
``Representation Relating to Compensation of Former DoD Officials,'' is
a representation that all of the offeror's employees who are former DoD
officials are in compliance with the post-employment restrictions at 18
U.S.C. 207, 41 U.S.C. 2101-2107, and 5 CFR parts 2637 and 2641, as well
as FAR 3.104-2.
II. Discussion and Analysis of the Public Comments
DoD reviewed the public comments received in response to the
proposed rule in the formation of the final rule. A discussion of the
comments and the changes made to the rule as a result of those comments
follows.
A. Contractor Compliance Responsibility
Comment: Two respondents noted that compliance with ethics rules is
the responsibility of the covered officials, not the contractor
employing them. According to the respondents, although contractors
instruct and train employees to observe all post-government employment
restrictions, contractors have no official compliance responsibility
regarding employees' post-government employment restrictions.
Response: FAR subpart 3.10, entitled ``Contractor Code of Business
Ethics and Conduct,'' requires, among other things, that contractors
exercise due diligence to prevent and detect criminal conduct and
otherwise promote an organizational culture that encourages ethical
conduct and a commitment to compliance with the law. Contractors must
also timely disclose to the Government any credible evidence of a
violation of criminal law, which would include, for example, a
violation of 18 U.S.C. 207 (post-Government employment restrictions).
Accordingly, contractors, as employers of covered officials, have an
affirmative compliance responsibility regarding employees'
[[Page 71827]]
post-Government employment restrictions. Contractors must ensure their
employees avoid engaging in criminal conduct while carrying out duties
on the contractor's behalf. Stated individuals' resumes generally do
not include every particular matter on which they worked. Hiring
contractors have a duty to interview their new hires who formerly
worked for DoD and screen their work experiences for relevant
particular matters.
Comment: Two respondents asserted that implementation of the
proposed rule would require contractors to establish compliance systems
to identify, track, educate, and require periodic certifications from
employees and consultants across their businesses (rather than those
specific to a contract) to identify former DoD covered officials.
According to the respondents, such systems would require additional
compliance mechanisms and personnel to design, implement, execute,
test, and evaluate, thereby raising overhead costs for contractors,
which could ultimately increase costs to the Government.
Response: Contractors should know on what particular matters
covered officials worked and already ensure employees are not assigned
to work on those matters because there are current requirements to
maintain and track this information. FAR subpart 3.10 requires
contractors to be aware of employees who are covered officials and any
existing prohibitions and requirements relating to their employment. In
addition, when contractors hire covered DoD officials, DFARS 252.203-
7000(b) requires them to determine whether the covered officials sought
and received advice regarding post-employment restrictions on behalf of
the contractor. This rule does not require the creation of new
compliance systems, and additional costs should not be incurred.
Comment: Two respondents asserted that the proposed rule would
require contractors to certify compliance involving matters unrelated
and unknown to the offeror, because the proposed regulation provides no
limitation related to the contractors' business and the covered
officials' other activities or employment. Respondents suggested
limiting the proposed representation to ``work related to this offer''
or ``activities that the official is expected to undertake on behalf of
the contractor.''
Response: DFARS 252.203-7000(b) provides ``(t)he Contractor shall
not knowingly provide compensation to a covered DoD official within 2
years after the official leaves DoD service, without first determining
that the official has sought and received, or has not received after 30
days of seeking, a written opinion from the appropriate DoD ethics
counselor regarding the applicability of post-employment restrictions
to the activities that the official is expected to undertake on behalf
of the Contractor.'' It would be reasonable to include a similar
limitation in the representation, e.g., ``that all covered DoD
officials employed by, or otherwise receiving compensation from the
offeror, and who are expected to undertake activities on behalf of the
offeror for any resulting contract, are presently in compliance with--*
* *.'' Appropriate revision has been made in the final rule to the
DFARS provision at 252.203-7005(b).
B. Contractor Identification of ``Covered Officials'' and ``Particular
Matters''
Comment: One respondent stated that ``identifying which job
applicants are `covered officials' is not trivial.'' This respondent
explained that ``resumes are often tailored to the job being sought:
Certain items are highlighted, others omitted entirely. Consequently,
while it is usually simple to tell if a potential candidate was a
`senior official,' it is often difficult to identify if he or she was
an `acquisition executive'.''
Response: The term ``covered DoD official'' is defined in DFARS
252.203-7000(a) as an individual who ``left DoD service on or after
January 28, 2008,'' and either ``participated personally and
substantially in an acquisition as defined in 41 U.S.C. 131 with a
value in excess of $10 million'' and who served in specifically
highlighted positions or served within DoD as ``program manager, deputy
program manager, procuring contracting officer, administrative
contracting officer, source selection authority, member of the source
selection evaluation board, or chief of a financial or technical
evaluation team for a contract in an amount in excess of $10 million.''
Contractors need to seek clarification with job applicants and
employees as to whether the applicant meets the DFARS definition in
order to ensure employees are in compliance with DoD post-employment
restrictions.
Comment: A respondent highlighted potential difficulties in
identifying ``particular matters'' on which the job applicant worked.
The respondent stated that ethics opinions rarely identify the
``particular matters'' upon which the former DoD official worked and to
which post-employment restrictions apply. The respondent concluded that
failure to identify ``particular matters'' is ``a significant problem
for individuals (and their employers) whose government portfolio was
substantially broader'' than simply working on one program during their
Government career.
Response: It is not feasible or practicable to expect that a
Government ethics official list all ``particular matters'' for a
Government employee. The most likely, and probably only, source for
this type of information is the Government official requesting the
post-employment restrictions opinion from the ethics official. Failure
of the Government employee to provide a comprehensive list would
inappropriately limit the scope of the ethics opinion to those items
listed. The former Government official is in the best position to (1)
recall the particular matters that he or she worked during his or her
Government tenure and (2) advise future employers of his or her
involvement in ``particular matters'' when the employer provides work
assignments. The Code of Federal Regulations contains a definition of
``particular matter,'' as well as examples of what a ``particular
matter'' is. The examples provide guidance for the types of situations
and circumstances covered by the term. It is unrealistic to expect a
finite set of examples listed in the regulations to cover all possible
circumstances and situations that could arise regarding what
constitutes a ``particular matter''.
C. Contractor Certification ``to the Best of Its Knowledge and Belief''
Comment: A respondent stated that there is no generally accepted
definition of ``to the best of its knowledge or belief.'' This
respondent explained that ``(s)ometimes it means simply that the person
making the representation has no information to the contrary and is not
willfully refusing to see a problem. At other times, it has been held
to imply a duty to investigate before making the representation.''
Response: The standard, ``to the best of its knowledge and
belief,'' is a recognized legal term of art, and one that has been used
in numerous statutes over decades, e.g., The Truth in Negotiations Act
has been in effect since 1963. (``A person required, as an offeror,
contractor, or subcontractor, to submit cost or pricing data under
paragraph (1) * * * shall be required to certify that, to the best of
the person's knowledge and belief, the cost or pricing data submitted
are accurate, complete, and current.'' (10 U.S.C. 2306a, paragraph
(a)(2)).
D. Consequences of the Rule
Comment: Two respondents suggested that the rule may have several
adverse effects, including deterring: (1) Small companies from
competing for
[[Page 71828]]
Government contracts; (2) contractors from hiring ``covered DoD
officials;'' and (3) Federal employees who would be subject to the rule
from seeking employment with DoD.
Response: This rule requires offerors to verify compliance with
existing laws and regulations and, therefore, is unlikely to have the
suggested deterrent effects unless the business was not otherwise
ensuring compliance and/or did not intend to comply in the future. In
that event, deterring non-compliance is consistent with the purposes
underlying the rule. Further, to the extent one of the respondents was
suggesting that small business concerns be exempted from the rule, such
an exemption would substantially undermine its purpose of improving
compliance, as available data indicates that small business concerns
are likely to hire a large majority of ``covered DoD officials'' (see
Regulatory Flexibility Act section).
E. Relationship to Existing Statutes and Regulations, Including the
Clinger/Cohen Act Ban on New Certifications That Are Not Required by
Law
Comment: Two respondents concluded that there was no need for this
rule because (1) the Congress already addressed the concerns underlying
the GAO report by enacting section 847 of the NDAA for FY 2009 (Pub. L.
110-417, enacted October 14, 2008); (2) FAR subpart 3.10, Contractor
Code of Business Ethics and Conduct, already requires contractors to
monitor post-employment compliance with 18 U.S.C. 207; and (3) the
responsibility for post-employment compliance should rest primarily
with former DoD employees. One of these respondents stated that the
representation violates the Clinger/Cohen Act ban on new contractor
certifications that are not required by law.
Response: (1) Section 847 of the NDAA for FY 2008 is entitled
``Requirements for Senior Department of Defense Officials Seeking
Employment with Defense Contractors.'' The provision applies to defense
contractors by prohibiting such contractors from knowingly providing
compensation to a former DoD official ``within two years after such
former official leaves (DoD), without first determining that the former
official has sought and received (or has not received after 30 days of
seeking) a written opinion from the appropriate ethics counselor
regarding the applicability of post-employment restrictions to the
activities that the former official is expected to undertake on behalf
of the contractor.'' While there is some relationship to section 847,
the representation in the rule addresses the broader arena of post-
employment restrictions (see paragraph A in the Background section of
this notice for the listing). Further, the prohibition against
providing compensation (section 847) was implemented by adding the
clause at DFARS 252.203-7000, Requirements Relating to Compensation of
Former DoD Officials (see the interim rule at 74 FR 2408, dated January
15, 2009, and the final rule at 74 FR 59913, dated November 19, 2009;
DFARS Case 2008-D007).
(2) There is some relationship to FAR subpart 3.10. However, the
FAR policy (FAR 3.1002(b)) states that contractors ``should have a
written code of business ethics and conduct'' and ``should have an
internal control system.'' (A contractor is not required to have an
internal control system unless the procurement is over $5 million and
it is not a small business concern (see FAR 3.1004(a) and 52.203-
13(c)(2)). Further, the proposed rule is applicable exclusively to DoD
procurements, and it is narrower than FAR subpart 3.10, in that it is
concerned exclusively with post-employment restrictions for former DoD
officials.
(3) The former DoD employee should be primarily responsible for his
or her compliance with post-employment restrictions. However,
businesses should support the highest ethical standards (see FAR
3.1002(a)) and should not hire former DoD officials who have not
complied with the law or assign them to work on projects that are
barred to them by the nature of their DoD assignments. The
representation at DFARS 252.203-7005 in the final rule is intended to
ensure that DoD does business with companies that are committed to the
highest ethical standards.
(4) The Clinger/Cohen Act prohibited the creation of contractor
certifications that are not required by law. The FAR and DFARS
regularly employ the distinction between a representation and a
certification, and representations have regularly been deemed not
subject to the Clinger/Cohen Act ban.
F. Strengthen the Rule by Adding Five Requirements
Comment: One respondent expressed support for the proposed rule,
but suggested that it be strengthened by adding the following five
requirements for--
(1) The offeror to expressly state, when true, that it is
compensating former DoD employees who have not received a written
ethics opinion within the 30-day timeframe;
(2) The DoD IG to audit annually a stratified random sample of
contracts and the contractor's list of former employees to determine
whether contractors are in full compliance with post-employment
restrictions asserted, whether former Government employees are in full
compliance with post-employment restrictions, and whether DoD ethics
officers have issued said written opinions within 30 days of being
sought;
(3) DoD to sanction contractors and former DoD employees identified
by the DoD IG as having violated the requirements;
(4) DoD to take appropriate action to ensure ethics opinions are
issued within the 30-day timeframe; and
(5) DoD to make public the following information: (a) The database
of ethics opinions required pursuant to section 847(b)(1); (b) the
names of contractors and former DoD officials identified by the DoD IG
as not being in compliance with the requirements of the proposed rule;
(c) the actions taken by DoD to seek sanctions for each non-compliant
contractor and former DoD official; and (d) what, if any, sanctions
were actually imposed on the identified contractors and former DoD
officials.
Response: All of the above recommendations are outside the scope of
the GAO study and this rule.
G. Scope
Comment: A respondent stated that ``due to its broad scope'',
implementation of substantial compliance programs is required.
Response: Contractors should already have programs in place that
comply with standards of conduct and ethics program requirements as
described in FAR 3.10 and more specifically, in DFARS clause 252.203-
7000, included in all DoD solicitations and contracts. All companies,
whether large or small, should have knowledge of the former defense
employees that are proposed to work on specific solicitations.
H. Application to New Task or Delivery Orders
Comment: One respondent stated that the proposed rule does not
specify whether contracts would need to include the post-employment
representation in task and delivery orders and proposed the rule ``be
amended to clarify that such representation would only be required at
the time the umbrella indefinite-delivery, indefinite-quantity contract
is awarded, and not for each task or delivery order.''
Response: The final rule clarifies the requirement. The
prescription, at
[[Page 71829]]
DFARS 203.171-4, requires the provision at DFARS 252.203-7005,
Representation Relating to Compensation of Former DoD Officials, ``in
all solicitations, including solicitations for task and delivery
orders.''
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 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
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
and is summarized as follows:
This rule is being issued in response to a study by the General
Accountability Office (GAO), entitled ``Defense Contracting: Post-
Government Employment of Former DoD Officials Needs Greater
Transparency'' (GAO-08-485), issued in May 2008. The GAO found that
contractors under-reported the employment of former DoD officials to
the extent that the contractors employed almost twice as many former
DoD officials as had been reported. The GAO report showed that major
defense contractors are not currently ensuring that former DoD senior
officials and acquisition executives working on contracts are complying
with post-employment restrictions.
The final rule requires offerors to submit, as part of the
proposal, a representation that all former DoD officials who will be
working on any resultant contract are in compliance with post-
employment restrictions at 18 U.S.C. 207, 41 U.S.C. 2101-2107, and 5
CFR parts 2637 and 2641, as well as FAR 3.104-2.
The rule requires a representation from all offerors responding to
a DoD solicitation, including commercial item acquisitions. A ``covered
DoD official'' is already defined in the clause at DFARS 252.203-7000,
Requirements Relating to Compensation of Former DoD Employees. That
same clause also implements section 847 of the National Defense
Authorization Act for Fiscal Year 2008 by prohibiting any DoD
contractor from knowingly providing compensation to a covered DoD
official within two years after the official leaves DoD service. There
is no impact on an offeror from this new representation unless the
contractor has not been monitoring its employees who are former covered
DoD officials to ensure compliance with DFARS 252.203-7000.
No comments from small entities were received in response to the
Federal Register Notice of the proposed rule, published June 6, 2011,
at 76 FR 32846. However, a ``think tank'' requested the ``addition of
language making it clear that the offeror has no duty to establish
systems and procedures to police and define compliance * * *'' No
language has been added in response to this request. Companies are
prohibited, pursuant to subsection 3 of DFARS 203.171, entitled
``Senior DoD officials seeking employment with defense contractors,''
from ``knowingly provid(ing) compensation to a covered DoD official
within two years after the official leaves DoD service unless the
contractor first determines that the official has received * * * the
post-employment ethics opinion'' pursuant to section 847 of the
National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-
181).
In the period of 2001-2006, 1.85 million former military and
civilian personnel left DoD service. A ``covered DoD official'' is
defined to include former DoD officials who held certain positions and
who left DoD within the past two years (see DFARS 203.171-3(a) and
252.203-7000). The GAO found that the 1.85 million personnel who had
left DoD service over a six-year period included only 35,192 who had
served in the type of senior or acquisition official positions that
made them subject to post-Government employment restrictions, if they
were subsequently hired by defense contractors. Dividing 35,192 by
three (to reduce the six-year period to a two-year period), we estimate
that 11,730 of those officials would have left within the last two
years. We estimate that 7,635 of these former officials may accept
employment with a defense contractor (about 65 percent). The GAO study
found that 2,435 of these covered officials were employed by 52 major
defense contractors. Of the remaining 5,200 former officials covered by
the Procurement Integrity Act, we estimate that 3,900 (75 percent) of
them may work for small business concerns.
There were no comments filed by the Chief Counsel for Advocacy of
the Small Business Administration in response to the rule.
There is no reporting, recordkeeping, or other compliance
requirement associated with this rule. Offerors make the representation
by submission of an offer. By the terms of the representation, an
offeror is prohibited from submitting an offer if it cannot make the
representation. In order to submit an offer, small entities that hire a
former DoD official covered by the Procurement Integrity Act will have
to check the compliance of such employees with various applicable post-
employment restrictions. DFARS clause 252.203-7000, Requirements
Relating to Compensation of Former DoD Officials, already requires
contractors to determine that a covered DoD official has sought and
received, or has not received after 30 days of seeking, a written
opinion from the appropriate DoD ethics counselor, regarding the
applicability of post-employment restrictions to the activities that
the official is expected to undertake on behalf of the contractor. This
representation of compliance does not impose an additional burden on
the offeror.
There were no known significant alternatives identified that would
achieve the objectives of the rule.
V. Paperwork Reduction Act
The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Parts 203 and 252
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 203 and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 203 and 252 continues to
read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
0
2. Revise section 203.171-4 to read as follows:
[[Page 71830]]
203.171-4 Solicitation provision and contract clause.
(a) Use the clause at 252.203-7000, Requirements Relating to
Compensation of Former DoD Officials, in all solicitations and
contracts.
(b) Use the provision at 252.203-7005, Representation Relating to
Compensation of Former DoD Officials, in all solicitations, including
solicitations for task and delivery orders.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Add section 252.203-7005 to read as follows:
252.203-7005 Representation Relating to Compensation of Former DoD
Officials.
As prescribed in 203.171-4(b), insert the following provision:
REPRESENTATION RELATING TO COMPENSATION OF FORMER DOD OFFICIALS (NOV
2011)
(a) Definition. Covered DoD official is defined in the clause at
252.203-7000, Requirements Relating to Compensation of Former DoD
Officials.
(b) By submission of this offer, the offeror represents, to the
best of its knowledge and belief, that all covered DoD officials
employed by or otherwise receiving compensation from the offeror,
and who are expected to undertake activities on behalf of the
offeror for any resulting contract, are presently in compliance with
all post-employment restrictions covered by 18 U.S.C. 207, 41 U.S.C.
2101-2107, and 5 CFR parts 2637 and 2641, including Federal
Acquisition Regulation 3.104-2.
(End of provision)
[FR Doc. 2011-29421 Filed 11-17-11; 8:45 am]
BILLING CODE 5001-06-P
