Federal Acquisition Regulation; Prohibition on Contracting With Inverted Domestic Corporations-Representation and Notification, 38306-38307 [2015-16208]
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Federal Register / Vol. 80, No. 127 / Thursday, July 2, 2015 / Rules and Regulations
contracting officer if the contractor
becomes an inverted domestic
corporation, or a subsidiary of an
inverted domestic corporation, during
performance of the contract.
One respondent submitted a comment
in response to the proposed rule.
[FR Doc. 2015–16206 Filed 7–1–15; 8:45 am]
BILLING CODE 6820–EP–C
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 1 and 52
[FAC 2005–83; FAR Case 2015–006; Item
II; Docket No. 2015–0006, Sequence No. 1]
RIN 9000–AM85
A. Summary of Significant Changes
There is no change from the proposed
rule in response to the public comment
received.
Federal Acquisition Regulation;
Prohibition on Contracting With
Inverted Domestic Corporations—
Representation and Notification
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCIES:
DoD, GSA, and NASA are
issuing a final rule amending the
Federal Acquisition Regulation (FAR) to
require additional actions by contractors
to assist contracting officers in ensuring
compliance with the Governmentwide
statutory prohibition on the use of
appropriated (or otherwise made
available) funds for contracts with any
foreign incorporated entity that is an
inverted domestic corporation or to any
subsidiary of such entity.
DATES: Effective: November 1, 2015.
FOR FURTHER INFORMATION CONTACT: Mr.
Michael O. Jackson, Procurement
Analyst, at 202–208–4949, for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat at 202–501–4755. Please cite
FAC 2005–83, FAR Case 2015–006.
SUPPLEMENTARY INFORMATION:
SUMMARY:
asabaliauskas on DSK5VPTVN1PROD with RULES
I. Background
DoD, GSA, and NASA published a
proposed rule in the Federal Register at
79 FR 74558 on December 15, 2014, to
revise the provisions of the FAR that
address the continuing
Governmentwide statutory prohibition
(in effect since fiscal year 2008) on the
use of appropriated (or otherwise made
available) funds for contracts with any
foreign incorporated entity that is an
inverted domestic corporation (under
section 835 of the Homeland Security
Act of 2002, codified at 6 U.S.C. 395) or
any subsidiary of such entity. The rule
modifies the existing representation and
adds a requirement to notify the
VerDate Sep<11>2014
21:24 Jul 01, 2015
Jkt 235001
II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the comments in the
development of the final rule. A
discussion of the comments is provided
as follows:
B. Analysis of Public Comments
Comment: The respondent stated that
a particular contract is in violation of
Federal law, because the contractor
merged with a corporation outside the
United States.
Response: The Councils are not
enforcement agencies, and are not in a
position to assess whether the merger of
two companies resulted in an entity that
meets all the criteria in the applicable
definition of ‘‘inverted domestic
corporation.’’ This comment does not
address the substance of the proposed
rule, which proposed to require
additional actions by contractors to
assist contracting officers in ensuring
compliance with the Governmentwide
statutory prohibition on the use of
appropriated (or otherwise made
available) funds for contracts with any
foreign incorporated entity that is an
inverted domestic corporation (under 6
U.S.C. 395) or to any subsidiary of such
entity. Contractors with the modified
clause in their contracts will be required
to make a positive representation with
the offer as to their status as an inverted
domestic corporation, and notify the
contracting officer if they become an
inverted domestic corporation during
contract performance, as defined in the
statute. The contracting activity will
take appropriate action if the contractor
notifies the Government in accordance
with the clause that it has become an
inverted domestic corporation, or if
investigation by the appropriate
Government agency determines that the
contractor became an inverted domestic
corporation during contract
performance and failed to notify the
Government of its change in status.
III. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
PO 00000
Frm 00016
Fmt 4701
Sfmt 4700
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 certify that this
rule will not have a significant
economic impact on a substantial
number of small entities within the
meaning of the Regulatory Flexibility
Act, 5 U.S.C. 601, et seq., because this
rule will only impact an offeror that is
an inverted domestic corporation or a
subsidiary of an inverted domestic
corporation and wants to do business
with the Government. It is expected that
the number of small entities impacted
by this rule will be minimal. Small
business concerns are unlikely to have
been incorporated in the United States
(or, if a partnership, established in the
United States) and then subsequently
incorporated in a foreign country; the
major participants in these transactions
are reportedly large multinational
corporations. For the definition of
‘‘small business’’, the Regulatory
Flexibility Act refers to the Small
Business Act, which in turn allows the
U.S. Small Business Administration
(SBA) Administrator to specify detailed
definitions or standards (5 U.S.C. 601(3)
and 15 U.S.C. 632(a)). The SBA
regulations at 13 CFR 121.105 discuss
who is a small business: ‘‘(a)(1) Except
for small agricultural cooperatives, a
business concern eligible for assistance
from SBA as a small business is a
business entity organized for profit,
with a place of business located in the
United States, and which operates
primarily within the United States or
which makes a significant contribution
to the U.S. economy through payment of
taxes or use of American products,
materials or labor’’.
V. Paperwork Reduction Act
The Paperwork Reduction Act (44
U.S.C. Chapter 35) applies. The rule
contains information collection
requirements. OMB has cleared this
information collection requirement
under OMB Control Number 9000–0190,
E:\FR\FM\02JYR3.SGM
02JYR3
Federal Register / Vol. 80, No. 127 / Thursday, July 2, 2015 / Rules and Regulations
titled: Prohibition on Contracting with
Inverted Domestic Corporations—
Representation and Notification.
corporation during contract performance, the
Contractor shall give written notice to the
Contracting Officer within five business days
from the date of the inversion event.
List of Subjects in 48 CFR Parts 1 and
52
(End of clause)
5. Amend section 52.212–3 by
revising the date of the provision and
paragraph (n)(2) to read as follows:
■
Government procurement.
Dated: June 18, 2015.
William F. Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
52.212–3 Offeror Representations and
Certifications—Commercial Items.
*
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 1 and 52 as set
forth below:
■ 1. The authority citation for 48 CFR
parts 1 and 52 continues to read as
follows:
2. Amend section 1.106 in the table
following the introductory text, by
adding in numerical sequence, ‘‘52.209–
10’’ and its corresponding OMB Control
Number ‘‘9000–0190’’.
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
3. Amend section 52.209–2 by
revising the date of provision and
paragraph (c) to read as follows:
■
52.209–2 Prohibition on Contracting With
Inverted Domestic Corporations—
Representation.
*
*
*
*
SUPPLEMENTARY INFORMATION:
*
*
*
*
*
*
*
*
6. Amend section 52.212–5 by
revising the date of the clause and
paragraph (a)(1) to read as follows:
■
52.212–5 Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items.
*
*
*
*
*
Contract Terms and Conditions
Required to Implement Statutes or
Executive Orders—Commercial Items
(Nov 2015)
*
*
*
*
*
*
*
*
BILLING CODE 6820–EP–P
*
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
4. Amend section 52.209–10 by
revising the date of the clause; and
adding paragraph (d) to read as follows:
48 CFR Parts 5 and 22
■
asabaliauskas on DSK5VPTVN1PROD with RULES
52.209–10 Prohibition on Contracting with
Inverted Domestic Corporations.
[FAC 2005–83; FAR Case 2015–008; Item
III; Docket No. 2015–0008, Sequence No.
1]
*
RIN 9000–AN08
*
Prohibition on Contracting With
Inverted Domestic Corporations (Nov
2015)
Federal Acquisition Regulation:
Update to Product and Service Codes
*
AGENCIES:
*
*
*
*
(d) In the event the Contractor becomes
either an inverted domestic corporation, or a
subsidiary of an inverted domestic
VerDate Sep<11>2014
21:24 Jul 01, 2015
Jkt 235001
DoD, GSA, and NASA are revising the
FAR to amend 5.207 and 22.1003–4 to
correct the terminology and update the
descriptions of the Federal product and
service codes to conform to the Federal
Procurement Data System Product and
Service Codes Manual, August 2011
Edition. There is no change to the
groups covered, and the new
descriptions better reflect product
coverage.
‘‘Publication of proposed
regulations’’, 41 U.S.C. 1707, is the
statute which applies to the publication
of the Federal Acquisition Regulation.
Paragraph (a)(1) of the statute requires
that a procurement policy, regulation,
procedure, or form (including an
amendment or modification thereof)
must be published for public comment
if it relates to the expenditure of
appropriated funds, and has either a
significant effect beyond the internal
operating procedures of the agency
issuing the policy, regulation,
procedure, or form, or has a significant
cost or administrative impact on
contractors or offerors. This final rule is
not required to be published for public
comment, because it does not change
the Federal Supply Groups covered. It
only updates the descriptions of the
listed product service groups to reflect
the current Product and Service Codes
Manual. It does not impact which
products are subject to the service
contract labor standards.
*
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
*
I. Background
II. Publication of This Final Rule for
Public Comment Is Not Required by
Statute
(End of provision)
*
FOR FURTHER INFORMATION CONTACT:
(a) * * *
(1) 52.209–10, Prohibition on Contracting
with Inverted Domestic Corporations (Nov
2015).
[FR Doc. 2015–16208 Filed 7–1–15; 8:45 am]
(c) Representation. The Offeror represents
that—
(1) It b is, b is not an inverted domestic
corporation; and
(2) It b is, b is not a subsidiary of an
inverted domestic corporation.
*
Effective: August 3, 2015.
*
*
Prohibition on Contracting with
Inverted Domestic Corporations—
Representation (Nov 2015)
*
DATES:
*
■
*
*
DoD, GSA, and NASA are
issuing a final rule amending the
Federal Acquisition Regulation (FAR) to
correct the terminology relating to
preparation and transmittal of synopses
and update the descriptions of Federal
product and service codes related to
exemptions from service contract labor
standards, to conform to the current
Federal Procurement Data System
Product and Service Codes Manual.
SUMMARY:
(n) * * *
(2) Representation. The Offeror represents
that—
(i) It b is, b is not an inverted domestic
corporation; and
(ii) It b is, b is not a subsidiary of an
inverted domestic corporation.
[Amended]
*
*
Final rule.
Mr.
Michael O. Jackson, Procurement
Analyst, at 202–208–4949 for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat Division at 202–501–4755.
Please cite FAC 2005–83, FAR Case
2015–008.
*
PART 1—FEDERAL ACQUISITION
REGULATIONS SYSTEM
*
*
Offeror Representations and
Certifications—Commercial Items (Nov
2015)
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 51 U.S.C. 20113.
1.106
*
ACTION:
38307
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
PO 00000
Frm 00017
Fmt 4701
Sfmt 4700
E:\FR\FM\02JYR3.SGM
02JYR3
]]>Agencies
[Federal Register Volume 80, Number 127 (Thursday, July 2, 2015)]
[Rules and Regulations]
[Pages 38306-38307]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16208]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1 and 52
[FAC 2005-83; FAR Case 2015-006; Item II; Docket No. 2015-0006,
Sequence No. 1]
RIN 9000-AM85
Federal Acquisition Regulation; Prohibition on Contracting With
Inverted Domestic Corporations--Representation and Notification
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to require additional actions by
contractors to assist contracting officers in ensuring compliance with
the Governmentwide statutory prohibition on the use of appropriated (or
otherwise made available) funds for contracts with any foreign
incorporated entity that is an inverted domestic corporation or to any
subsidiary of such entity.
DATES: Effective: November 1, 2015.
FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement
Analyst, at 202-208-4949, for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at 202-501-4755. Please cite FAC 2005-83, FAR Case 2015-
006.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule in the Federal
Register at 79 FR 74558 on December 15, 2014, to revise the provisions
of the FAR that address the continuing Governmentwide statutory
prohibition (in effect since fiscal year 2008) on the use of
appropriated (or otherwise made available) funds for contracts with any
foreign incorporated entity that is an inverted domestic corporation
(under section 835 of the Homeland Security Act of 2002, codified at 6
U.S.C. 395) or any subsidiary of such entity. The rule modifies the
existing representation and adds a requirement to notify the
contracting officer if the contractor becomes an inverted domestic
corporation, or a subsidiary of an inverted domestic corporation,
during performance of the contract.
One respondent submitted a comment in response to the proposed
rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the comments in the
development of the final rule. A discussion of the comments is provided
as follows:
A. Summary of Significant Changes
There is no change from the proposed rule in response to the public
comment received.
B. Analysis of Public Comments
Comment: The respondent stated that a particular contract is in
violation of Federal law, because the contractor merged with a
corporation outside the United States.
Response: The Councils are not enforcement agencies, and are not in
a position to assess whether the merger of two companies resulted in an
entity that meets all the criteria in the applicable definition of
``inverted domestic corporation.'' This comment does not address the
substance of the proposed rule, which proposed to require additional
actions by contractors to assist contracting officers in ensuring
compliance with the Governmentwide statutory prohibition on the use of
appropriated (or otherwise made available) funds for contracts with any
foreign incorporated entity that is an inverted domestic corporation
(under 6 U.S.C. 395) or to any subsidiary of such entity. Contractors
with the modified clause in their contracts will be required to make a
positive representation with the offer as to their status as an
inverted domestic corporation, and notify the contracting officer if
they become an inverted domestic corporation during contract
performance, as defined in the statute. The contracting activity will
take appropriate action if the contractor notifies the Government in
accordance with the clause that it has become an inverted domestic
corporation, or if investigation by the appropriate Government agency
determines that the contractor became an inverted domestic corporation
during contract performance and failed to notify the Government of its
change in status.
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 certify that this rule will not have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et
seq., because this rule will only impact an offeror that is an inverted
domestic corporation or a subsidiary of an inverted domestic
corporation and wants to do business with the Government. It is
expected that the number of small entities impacted by this rule will
be minimal. Small business concerns are unlikely to have been
incorporated in the United States (or, if a partnership, established in
the United States) and then subsequently incorporated in a foreign
country; the major participants in these transactions are reportedly
large multinational corporations. For the definition of ``small
business'', the Regulatory Flexibility Act refers to the Small Business
Act, which in turn allows the U.S. Small Business Administration (SBA)
Administrator to specify detailed definitions or standards (5 U.S.C.
601(3) and 15 U.S.C. 632(a)). The SBA regulations at 13 CFR 121.105
discuss who is a small business: ``(a)(1) Except for small agricultural
cooperatives, a business concern eligible for assistance from SBA as a
small business is a business entity organized for profit, with a place
of business located in the United States, and which operates primarily
within the United States or which makes a significant contribution to
the U.S. economy through payment of taxes or use of American products,
materials or labor''.
V. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies. The
rule contains information collection requirements. OMB has cleared this
information collection requirement under OMB Control Number 9000-0190,
[[Page 38307]]
titled: Prohibition on Contracting with Inverted Domestic
Corporations--Representation and Notification.
List of Subjects in 48 CFR Parts 1 and 52
Government procurement.
Dated: June 18, 2015.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 1 and 52 as set
forth below:
0
1. The authority citation for 48 CFR parts 1 and 52 continues to read
as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.106 [Amended]
0
2. Amend section 1.106 in the table following the introductory text, by
adding in numerical sequence, ``52.209-10'' and its corresponding OMB
Control Number ``9000-0190''.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend section 52.209-2 by revising the date of provision and
paragraph (c) to read as follows:
52.209-2 Prohibition on Contracting With Inverted Domestic
Corporations--Representation.
* * * * *
Prohibition on Contracting with Inverted Domestic Corporations--
Representation (Nov 2015)
* * * * *
(c) Representation. The Offeror represents that--
(1) It [squ] is, [squ] is not an inverted domestic corporation;
and
(2) It [squ] is, [squ] is not a subsidiary of an inverted
domestic corporation.
(End of provision)
0
4. Amend section 52.209-10 by revising the date of the clause; and
adding paragraph (d) to read as follows:
52.209-10 Prohibition on Contracting with Inverted Domestic
Corporations.
* * * * *
Prohibition on Contracting With Inverted Domestic Corporations (Nov
2015)
* * * * *
(d) In the event the Contractor becomes either an inverted
domestic corporation, or a subsidiary of an inverted domestic
corporation during contract performance, the Contractor shall give
written notice to the Contracting Officer within five business days
from the date of the inversion event.
(End of clause)
0
5. Amend section 52.212-3 by revising the date of the provision and
paragraph (n)(2) to read as follows:
52.212-3 Offeror Representations and Certifications--Commercial
Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (Nov 2015)
* * * * *
(n) * * *
(2) Representation. The Offeror represents that--
(i) It [squ] is, [squ] is not an inverted domestic corporation;
and
(ii) It [squ] is, [squ] is not a subsidiary of an inverted
domestic corporation.
* * * * *
0
6. Amend section 52.212-5 by revising the date of the clause and
paragraph (a)(1) to read as follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (Nov 2015)
* * * * *
(a) * * *
(1) 52.209-10, Prohibition on Contracting with Inverted Domestic
Corporations (Nov 2015).
* * * * *
[FR Doc. 2015-16208 Filed 7-1-15; 8:45 am]
BILLING CODE 6820-EP-P
