Federal Acquisition Regulation; Contractor Comment Period, Past Performance Evaluations, 31197-31201 [2014-12407]

Agencies

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

[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]
[Rules and Regulations]
[Pages 31197-31201]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12407]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 42

[FAC 2005-74; FAR Case 2012-028; Item IV; Docket No. 2012-0028, 
Sequence No. 1]
RIN 9000-AM40


Federal Acquisition Regulation; Contractor Comment Period, Past 
Performance Evaluations

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to implement provisions of law 
that change the period allowed for contractor comments on past 
performance evaluations and require that past performance evaluations 
be made available to source selection officials sooner.

DATES: Effective: July 1, 2014.

FOR FURTHER INFORMATION CONTACT: Mr. Curtis E. Glover, Sr., Procurement 
Analyst, at 202-501-1448 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2012-
028.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 78 FR 48123 on August 7, 2013, under FAR Case 2012-028, to 
implement section 853 of the National Defense Authorization Act (NDAA) 
for Fiscal Year (FY) 2013 (Pub. L. 112-239, enacted January 2, 2013) 
and section 806 of the NDAA for FY 2012 (Pub. L. 112-81, enacted 
December 31, 2011; 10 U.S.C. 2302 Note). Section 853, entitled 
``Inclusion of Data on Contractor Performance in Past Performance 
Databases for Executive Agency Source Selection Decisions,'' and 
section 806, entitled ``Inclusion of Data on Contractor Performance in 
Past Performance Databases for Source Selection Decisions,'' require 
revisions to the acquisition regulations on past performance 
evaluations at FAR subpart 42.15 so that contractors are provided ``up 
to 14 calendar days . . . from the date of delivery'' of past 
performance evaluations ``to submit comments, rebuttals, or additional 
information pertaining to past performance'' for inclusion in the 
database. In addition, paragraph (c) of both sections 853 and 806 
requires that agency evaluations of contractor performance, including 
any information submitted by contractors, be ``included in the relevant 
past performance database not later than the date that is 14 days after 
the date of delivery of the information'' to the contractor.
    Ten respondents submitted comments on the proposed rule.

II. Discussion and Analysis

    The Civilian Agency Acquisition Council and the Defense Acquisition 
Regulation Council (the Councils) reviewed the public comments in the 
development of the final rule. A discussion of the comments is provided 
in the following sections.

A. Analysis of Changes

    No changes were made from the proposed rule as a result of the 
public comments.

B. Analysis of Public Comments

 1. Contractor Response Time of Fourteen Days
    Comments: Almost all respondents commented on the burden imposed on 
contractors to submit comments in a maximum of 14 days, especially 
given that FAR 42.1503 provides ``a minimum of 30 days'' for 
contractors to provide comments, rebuttals, or additional information. 
One respondent cited statistics from the Contractor Performance 
Assessment Rating System (CPARS) Program Office for DoD past 
performance evaluations completed in FY 2010-2012:

------------------------------------------------------------------------
             Percentage                    Contractor response times
------------------------------------------------------------------------
19..................................  No comments provided.
43..................................  Comments provided within 14 days.
30..................................  Comments provided between 14-30
                                       days.
9...................................  Comments provided after 30 days.
------------------------------------------------------------------------

    Two other respondents noted that, when the contractor disagrees 
with any given Government evaluation or comment, it takes time for the 
contractor

[[Page 31198]]

to gather input from multiple employees and subcontractors and draft an 
objective response, i.e., more than 14 days in their opinion. A 
respondent noted that DoD had more than doubled the number of 
contracting officials trained on contract past performance from FY 2010 
to 2012, but that, as of April 2013, more than half of Federal agencies 
had no required contractor assessments in Past Performance Information 
Retrieval System (PPIRS). Given that, the respondent suggested that the 
focus should remain on improving agency performance rather than 
curtailing the time allotted for contractor review and comment.
    Another respondent stated that, after receipt of the past 
performance evaluation, the contractor ``has the opportunity to request 
a meeting with the assessment official to discuss differences and 
possible modifications to the ratings and the comments.'' These 
meetings, according to the respondent, often result in a better 
assessment for the Government.
    One respondent noted that the statutory action of providing up to 
14 days from the date of delivery is beneficial in that it sets a 
generally applicable fixed period.
    One respondent requested that the current 30-day period be retained 
and not reduced because the shortened time may lead many contractors to 
seek additional business opportunities in the private-rather than 
Federal-market.
    One respondent stated that, because the 14-day time period is 
statutory, the Councils should consider guidelines to ensure that 
requirements for the content of past performance evaluations are clear, 
concise, and contain sufficient detail to allow a contractor to 
promptly begin its assessment of any negative findings.
    Last, a respondent quoted paragraph (d) of section 853, which reads 
as follows:

    Nothing in this section shall be construed to prohibit a 
contractor from submitting comments, rebuttals, or additional 
information pertaining to past performance after the period 
described in subsection (c)(2) has elapsed or to prohibit a 
contractor from challenging a past performance evaluation in 
accordance with applicable laws, regulations, or procedures.

    Response: The FAR is incorporating section 853 of the NDAA for FY 
2013. Paragraph (c) of section 853 provides, at (c)(2) and (3), that 
``contractors are afforded up to 14 calendar days, from the date of 
delivery of the information provided in accordance with paragraph (1), 
to submit comments, rebuttals, or additional information pertaining to 
past performance for inclusion in such databases;'' and that ``agency 
evaluations of contractor past performance, including any comments, 
rebuttals, or additional information submitted under paragraph (2), are 
included in the relevant past performance database not later than the 
date that is 14 days after the date of delivery of the information 
provided in accordance with paragraph (1).'' The information provided 
in accordance with paragraph (c)(1) is the notice that a past 
performance evaluation has been submitted to CPARS. CPARS will generate 
a notice to the contractor automatically, so the 14 calendar day period 
for contractor comments begins at that point in time. The law 
specifically states that the 14 days allotted for contractor comments 
are calendar days, not business days or any other method of counting 
days. The Councils are aware of the effort and coordination involved in 
gathering, summarizing, and vetting possible responses but were 
provided no latitude under the terms of the law.
    There is no requirement in the law for the Government assessing 
official to meet with the contractor. However, if the contractor 
requests such a meeting, the assessing official may accept the request. 
In this case, the statute is clear and does not allow for alterations 
to the 14 calendar day time frame and requires that the past 
performance evaluation must be made available for the use of source 
selection officials 14 days after its initial submission, and it will 
be made available at that time with any contractor comments that have 
been received. Delaying the availability of the contractor's comments 
until after a meeting with the assessing official would only result in 
the past performance evaluation being seen by source selection 
officials without them having the benefit of any contractor comments. 
The CPARS and PPIRS systems have been revised so that transfers between 
CPARS and PPIRS occur automatically, thus eliminating delays in 
availability. The assessing official, who may also be the contracting 
officer, has a responsibility to review the contractor's comments when, 
and if, they are submitted by the contractor, but that review should 
not be allowed to delay or prevent source selection officials from 
seeing the contractor's comments as soon as they are provided.
    The Councils are mindful of the terms of section 853, including 
paragraph (d), and have structured this rule so that contractor 
comments, rebuttals, or additional information can be submitted at any 
point in time between the initial notification of availability of a 
past performance evaluation until the evaluation is removed from PPIRS 
and archived (see FAR 42.1503(g)). The other element of section 853(d), 
the ability for a contractor to appeal a past performance evaluation 
and have a review at a level above the contracting officer, is 
retained, without change, in the FAR at 42.1503(d).
    The intent of the statute is to make timely, relevant past 
performance information available to source selection officials without 
delay. The statute ensures that past performance information moves 
forward without allowing for delays caused by agencies or contractors. 
Any information or changes from such meetings or reviews will be added 
to the past performance information as it becomes available, but its 
absence will no longer lengthen the process.
 2. Accuracy of Information Available to Source Selection Officials
    Comments: Nine respondents submitted comments concerning the 
proposed rule requirement that past performance evaluations be 
available to source selection officials not later than 14 days after 
the evaluation was provided to the contractor, whether or not the 
contractor comments have been received. Four respondents stated this 
requirement may result in agencies relying upon potentially inaccurate 
or erroneous information in source selection decisions and may increase 
the number of disputes. One respondent stated past performance 
evaluations which do not have the benefit of either the contractor's 
comments or the more senior official's review could be obtained by 
source selection officials but would impact these source selections 
officials since they would have to take the time to address contractor 
reactions to the evaluations. One respondent stated that the reductions 
in the contractor comment period places the integrity of the past 
performance system at significant risk due to the likelihood that it 
will result in incorrect information passing through the system and on 
to procurement offices. Another respondent strongly objects to halving 
the time allotted for contractor comment because it would ``sacrifice 
the quality (of past performance evaluations) for quantity.'' One 
respondent commented on the mechanism to make changes to incomplete or 
inaccurate reports after they have been provided to PPIRS. The 
respondent is concerned that, although the mechanism is in place to 
correct mistakes, the inaccurate information would be available for 
release before the information is corrected.

[[Page 31199]]

    Response: The FAR is incorporating section 853 of the NDAA for FY 
2013 and section 806 of the NDAA for FY 2012. These laws require that 
past performance evaluations be made available to source selection 
officials not later than 14 days after the evaluation was provided to 
the contractor, whether or not contractor comments have been received. 
The purpose of the 14 calendar day deadline is to make timely, relevant 
past performance information available to source selection officials 
without delay so that award decisions can be better informed and made 
in a more timely manner. Having a past performance evaluation, with the 
contractor's comments and explanations included, available to source 
selection officials in 14-days will be advantageous, not detrimental, 
to most contractors. These timely evaluations will allow contractors 
that are meeting their contractual obligations to be more competitive 
for future awards. Therefore, it is anticipated that the deadline for 
comments will serve as a greater impetus to contractors to meet the new 
14 calendar day deadline for comments. When a contractor is unable to 
provide comments within 14 days, however, the changes to CPARS and 
PPIRS will enable the contractor's comments to be added to the past 
performance evaluation after the evaluation has been moved into PPIRS. 
Currently, if a contractor does not submit comments, rebuttals, or 
additional information with regard to a past performance evaluation, 
the evaluation remains in CPARS indefinitely and will not move to PPIRS 
so as to become available to source selection officials.
    In addition, the system changes to CPARS and PPIRS will allow the 
Government to revise the evaluation after it has moved to PPIRS, if the 
Government determines that such revisions are appropriate. OFPP issued 
guidance in its memoranda dated March 6, 2013, January 21, 2011, and 
July 29, 2009, encouraging agencies to improve the quality and 
timeliness of reporting past performance information. The FAR was also 
recently updated at FAR 42.1501(b) and 42.1503(b)(1) to require the 
Government to provide past performance evaluations that are clear, 
concise, and contain sufficient detail to allow a contractor to begin 
its assessment promptly.
3. Posting of the Evaluation
    Comment: One respondent found FAR 42.1503(f) of the proposed rule 
ambiguous ``as to whether the rule permits the agency to post its 
evaluation before receiving the contractor comments within this 14-day 
period.'' This respondent requested a clarification in the final rule 
to the effect that ``the agency will not post the evaluation until it 
affords the contractor the opportunity to submit its comments with in 
this 14-day period, or if no contractor comments are forthcoming, at 
the end of the 14-day period.''
    Response: If a contractor has submitted comments to the Government 
and the Government has not closed the evaluation (i.e., reconciled the 
comments), the evaluation as well as any contractor comment will be 
posted to the database automatically 14 days after the evaluations are 
provided to the contractor. In this case, the database will apply a 
``Contractor Comment Pending Government Review'' notification to the 
evaluation. Once the Government completes the evaluation, the database 
will be updated the following day and remove this notification. Also, 
CPARS and PPIRS software will not allow a past performance evaluation 
to be released into PPIRS until the end of the 14th day, unless the 
evaluation has been completed by the Government (i.e., the contractor 
has commented and the Government has reconciled the comments).
4. Further Updates to a Past Performance Evaluation
    Comments: Three respondents stated the proposed rule does not 
require the Government to timely revise a past performance evaluation 
in PPIRS if the Government determines, after the 14-day period expired, 
that it was in error, and these respondents recommend that the final 
rule include a deadline by which the Government shall update PPIRS to 
include any contractor comments provided after the initial comment 
period as well as any subsequent agency review of comments received, 
within 14 days of receipt of such additional comments. The respondents 
suggest a 14-day deadline be established for agency updates to PPIRS or 
require the Government to update PPIRS to include the current status of 
the evaluation review process and include the submissions and final 
evaluations ``promptly'' or ``within a reasonable time''. Another 
respondent recommended that the agency senior reviewer be given a 
deadline of 5 working days to resolve any differences. One respondent 
commented that one of its member companies had a CPARS assessment done 
with which it did not concur, and that the company submitted its 
response in a timely manner; however, the respondent stated that the 
assessing officer did not respond in a reasonable amount of time to the 
response.
    Response: Agencies are required to have internal management and 
technical controls for past performance evaluations. Agency compliance 
delays should be addressed with the office that issued the assessment 
and its management. A specific past performance evaluation should be 
discussed with the assessing official responsible for the past 
performance evaluation.
5. Contractors' Interim Response
    Comment: The respondent proposed allowing contractors to submit an 
interim response; the interim response would be to the effect that the 
contractor is in the process of reviewing the evaluation and will 
provide final comments.
    Response: Contractors can submit an interim response but any 
interim response received will be posted and may be evaluated as if it 
were the final response.
6. System Changes
    Comments: A respondent stated that the Government should provide a 
timeline when CPARS and PPIRS system changes/updates will be started, 
completed, tested, and verified. Another respondent stated that the 
rule should not be made effective until these critical systems 
(software) changes have been put into effect.
    Response: The effective date for the FAR change is aligned with the 
effective date for the system changes. The systems changes are expected 
to be fully operational on July 1, 2014.
7. Other
    Comment: One respondent commented that, given the severely 
truncated timeline, more than one contractor focal point per contract 
should be allowed to receive draft CPARS reports.
    Response: The FAR does not prevent contractors from assigning more 
than one contractor focal point per contract. Although each contractor 
has one primary focal point, the CPARS Program Office recommends that 
the same contractor could have multiple back-up focal points, all of 
whom would receive an email notification that a past performance 
evaluation had been submitted to CPARS.
    Comment: One respondent commented that automatic notification to 
the contractor when a past performance evaluation is available should 
be specified with a standardized cover sheet and a label warning the 
contractor about the 14-day deadline;

[[Page 31200]]

the respondent suggested that FAR 53.302-17 (Offer Label) provides a 
useful model.
    Response: A standardized PPIRS notification email will be sent to 
the contractor's stated contact point via email once a past performance 
evaluation is available for review by the contractor.
    Comment: One respondent urged public access to contractor 
performance information relating to late or nonpayment of 
subcontractors.
    Response: The public access to contractor performance information 
is currently prohibited per FAR 9.105-2(b)(2)(iii) as required by 
section 3010 of the Supplemental Appropriations Act, 2010 (Pub. L. 111-
212).
    Comment: One respondent requested the creation of a new FAR clause 
mandating timely submission of past performance evaluations and stating 
the contractor's right to dispute untimely past performance 
evaluations.
    Response: The FAR requires the Government to submit timely past 
performance evaluations. FAR 42.1503(d) requires agencies to evaluate a 
contractor's performance after the end of the period of performance as 
soon as practicable. Once the evaluation is completed and submitted to 
CPARS, CPARS will automatically send it to the contractor. After the 
14-day period, the Government's evaluation and the contractor's 
response, if any, will be posted in PPIRS. A FAR clause is not 
necessary because contractors have the right to dispute past 
performance evaluations, regardless of when the evaluations are 
submitted for the contractor's review.
    Comment: One respondent suggested assigning a regional ``overseer'' 
or ``ombudsman'' for the evaluation process.
    Response: FAR 42.1503, Agency procedures, requires agencies to 
establish roles and responsibilities for ensuring past performance 
information is timely reported in CPARS and PPIRS. OFPP's January 21, 
2011, memorandum required agencies to assign an agency point of contact 
accountable for updating agency guidance, workforce training, oversight 
mechanisms, and identification of improvements to CPARS and PPIRS. 
OFPP's March 6, 2012, memorandum required agencies to report the 
designated agency point of contact to OMB.
    Comment: One respondent commented that some agencies overuse past 
performance questionnaires, and this should be considered for 
correction in the FAR, to streamline the past performance evaluation 
process.
    Response: Per FAR 15.305(a)(2)(ii), offerors are provided an 
opportunity to identify past or current contracts (including Federal, 
State, and local government and private) for efforts similar to the 
Government requirement. However, this rule is not intended to set 
standards for use of past performance questionnaires across the Federal 
Government.
    Comment: One respondent commented that the Government should 
consider assessing the actual impact of the rule 12 to 18 months after 
implementation.
    Response: FAR regulations are periodically reviewed for continuous 
improvement and industry is always invited to submit regulatory change 
proposals. For the past several years, OFPP has issued memoranda to 
improve agencies use and reporting of past performance information and 
is also exploring ways to enhance the evaluation process and systems. 
Further, the law, at paragraph (e) of section 853 of the NDAA for FY 
2013, requires a review and report by the Comptroller General on the 
actions taken by the FAR Council pursuant to the law.

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

    DoD, GSA, and NASA have prepared a final regulatory flexibility 
analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq. The FRFA is summarized as follows:

    Section 806 of the National Defense Authorization Act (NDAA) for 
Fiscal Year 2012 (Public Law 112-81, enacted December 31, 2011) is 
entitled ``Inclusion of Data on Contractor Performance in Past 
Performance Databases for Source Selection Decisions.'' Paragraph 
(c) of section 806 mandates DFARS revisions so that contractors are 
provided ``up to 14 calendar days from the date of delivery'' to 
them of past performance evaluations ``to submit comments, 
rebuttals, or additional information pertaining to past 
performance'' for inclusion in the database. In addition, section 
806(c) requires that DoD agency evaluations of contractor 
performance, including any information submitted by contractors, be 
``included in the relevant past performance database not later than 
14 days after the date of delivery of the information'' to the 
contractor. Section 853 of the NDAA for FY 2013 (Public Law 112-239, 
enacted January 2, 2013) is entitled ``Inclusion of Data on 
Contractor Performance in Past Performance Databases for Executive 
Agency Source Selection Decisions,'' and it extends the requirements 
of section 806 to all Executive agencies.
    Two respondents expressed concern about the reduced comment 
period and the hardship it would create for small businesses. The 
respondents said that the 14-day comment period would negatively 
impact the limited human resources of small businesses, affect the 
accuracy of evaluations, and have an overall negative effect on 
small entities. One erroneous evaluation affects a small business 
more than a large business. However, the 14-day comment period is 
mandated by law, and it will be advantageous to the Government and 
all its contractors to standardize past performance evaluation 
practices. Further, the statute does not prohibit, and the CPARS and 
PPIRS systems allow, submission by businesses of their comments, 
rebuttals, and additional information after the 14-day comment 
period has expired. The Chief Counsel for Advocacy of the Small 
Business Administration did not submit comments in response to the 
initial regulatory flexibility analysis.
    The final rule applies to all small businesses for which past 
performance evaluations are completed. The information collection 
for past performance evaluations, OMB Control Number 9000-0142, 
published in the Federal Register at 77 FR 6799, on February 9, 
2012, is the source for the data used in the FRFA. It indicates that 
an estimated 150,000 respondents submit an average four responses 
annually, for a total of 600,000 responses. Data from the Federal 
Procurement Data System (FPDS) for FY 2011 show that approximately 
32 percent of the relevant actions of the responses are from small 
businesses; the rule applies to approximately 48,000 small entities.
    There are no new reporting, recordkeeping, or other compliance 
requirements created by the rule. The difference between the current 
FAR past performance evaluation requirements (see FAR subpart 42.15) 
and this final rule is that sections 806 and 853 reduce the time 
allowed for a contractor to submit comments, rebuttals, or 
additional information pertaining to past performance for inclusion 
in the past performance database from ``a minimum of 30 days'' (FAR 
42.1503(b)) to ``up to 14 calendar days'' and the law now requires 
that past performance evaluations be available to source selection 
officials not later than 14 days after the evaluation was provided 
to the contractor, whether or not contractor comments have been 
received.

[[Page 31201]]

    The specifics of the statutory requirement do not allow for 
alternative implementation strategies.

    Interested parties may obtain a copy of the FRFA from the 
Regulatory Secretariat. The Regulatory Secretariat has submitted a copy 
of the FRFA to the Chief Counsel for Advocacy of the Small Business 
Administration.

V. Paperwork Reduction Act

    This rule affects the information collection requirements in the 
provisions at FAR subpart 42.15, currently approved under OMB Control 
Number 9000-0142, entitled ``Past Performance Information,'' in the 
amount of 1,200,000 hours, in accordance with the Paperwork Reduction 
Act (44 U.S.C. chapter 35). This rule would shorten the contractors' 
response time, but it would not expand the reporting requirement. 
Therefore, the impact is considered negligible because contractors are 
already allowed to submit comments, rebutting statements, or additional 
information regarding agency evaluations of their performance. The 
number of contractors providing comments will be unaffected by this 
rule. Further, the type of information provided is not impacted by this 
proposed rule.

List of Subjects in 48 CFR Part 42

    Government procurement.

    Dated: May 22, 2014.
William Clark,
Acting Director, Office of Government-wide Acquisition Policy, Office 
of Government-wide Policy.

    Therefore, DoD, GSA, and NASA amend 48 CFR part 42 as set forth 
below:

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
1. The authority citation for 48 CFR part 42 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.


0
2. Amend section 42.1503 by revising the third sentence in paragraph 
(d); and paragraph (f) to read as follows:


42.1503  Procedures.

* * * * *
    (d) * * * Contractors shall be afforded up to 14 calendar days from 
the date of notification of availability of the past performance 
evaluation to submit comments, rebutting statements, or additional 
information. * * *
* * * * *
    (f) Agencies shall prepare and submit all past performance 
evaluations electronically in the CPARS at https://www.cpars.gov. These 
evaluations, including any contractor-submitted information (with 
indication whether agency review is pending), are automatically 
transmitted to PPIRS at https://www.ppirs.gov not later than 14 days 
after the date on which the contractor is notified of the evaluation's 
availability for comment. The Government shall update PPIRS with any 
contractor comments provided after 14 days, as well as any subsequent 
agency review of comments received. Past performance evaluations for 
classified contracts and special access programs shall not be reported 
in CPARS, but will be reported as stated in this subpart and in 
accordance with agency procedures. Agencies shall ensure that 
appropriate management and technical controls are in place to ensure 
that only authorized personnel have access to the data and the 
information safeguarded in accordance with 42.1503(d).
* * * * *
[FR Doc. 2014-12407 Filed 5-29-14; 8:45 am]
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