Acquisition Regulation: Nondisplacement of Qualified Workers Under Service Contracts and Other Changes to the Contractor Purchasing System Clause, 24550-24553 [2016-09688]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 81, Number 80 (Tuesday, April 26, 2016)]
[Proposed Rules]
[Pages 24550-24553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09688]


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DEPARTMENT OF ENERGY

48 CFR Part 970

RIN 1991-AC03


Acquisition Regulation: Nondisplacement of Qualified Workers 
Under Service Contracts and Other Changes to the Contractor Purchasing 
System Clause

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking and opportunity for comment.

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[[Page 24551]]

SUMMARY: The Department of Energy (DOE) is proposing to amend the 
Department of Energy Acquisition Regulation (DEAR) to address the 
applicability of Executive Order 13495 as implemented by Federal 
Acquisition Regulation (FAR) subpart 22.12 to its management and 
operating contracts and subcontracts under such contracts. DOE is also 
proposing to increase dollar thresholds in its contractor purchasing 
system clause for management and operating contracts to conform to FAR 
subpart 28.1. Finally, DOE is revising the DEAR in accordance with a 
class deviation addressing Buy American Act non-availability 
determinations.

DATES: Written comments on the proposed rulemaking must be received on 
or before close of business May 26, 2016.

ADDRESSES: You may submit comments, identified by DEAR: Nondisplacement 
of Qualified Workers and RIN 1991-AC03, by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email to: DEARrulemaking@hq.doe.gov Include DEAR: 
Nondisplacement of Qualified Workers and RIN 1991-AC03 in the subject 
line of the message.
     Mail to: U.S. Department of Energy, Office of Acquisition 
Management, MA-611, 1000 Independence Avenue SW., Washington, DC 20585. 
Comments by email are encouraged.

FOR FURTHER INFORMATION CONTACT: Lawrence Butler at (202) 287-1945 or 
by email lawrence.butler@hq.doe.gov.

SUPPLEMENTARY INFORMATION: 
I. Background
II. Section-by-Section Analysis
III. Procedural Requirements
    A. Review Under Executive Orders 12866 and 13563.
    B. Review Under Executive Order 12988.
    C. Review Under the Regulatory Flexibility Act.
    D. Review Under the Paperwork Reduction Act.
    E. Review Under the National Environmental Policy Act.
    F. Review Under Executive Order 13132.
    G. Review Under the Unfunded Mandates Reform Act of 1995.
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999.
    I. Review Under Executive Order 13211.
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001.
    K. Approval by the Office of the Secretary of Energy.

I. Background

    The Department of Energy Acquisition Regulation (DEAR) does not 
presently address the applicability of the new FAR subpart 22.12, 
Nondisplacement of Qualified Workers Under Service Contracts, and the 
associated Department of Labor regulations at title 29 of the Code of 
Federal Regulations, to subcontracts under DOE's management and 
operating contracts. This proposed rule clarifies that FAR subpart 
22.12 applies to subcontracts under the Department's management and 
operating contracts. A management and operating contract requires a 
contractor to operate, maintain, and support a Government-owned or -
controlled research, development, special production, or testing 
establishment which is devoted to a major program(s) of the contracting 
agency. Service subcontracts awarded by management and operating 
contractors, e.g., contracts for routine, recurring maintenance, are 
subject to various labor laws implemented by FAR part 22.
    Additionally, DEAR section 970.5244-1, Contractor purchasing 
system, paragraphs (f)(1) through (f)(3) do not presently reflect the 
applicable dollar threshold in FAR 28.102-2(b) and (c), so this 
proposed rule replaces the dollar amount in these paragraphs with 
reference to title 48 of the Code of Federal Regulations, sections 
28.102-2(b) and (c), as appropriate.
    Section 970.5244-1, paragraph (g) requires contractor purchasing 
systems on management and operating contracts to comply with the Buy 
American Act. Pursuant to a DEAR class deviation dated August 29, 2011, 
the proposed rule increases the dollar threshold in this paragraph from 
$100,000 to $500,000 for: (1) Determinations of individual item non-
availability requiring the prior concurrence of the Head of Contracting 
Activity (HCA); and (2) HCA authorization of management and operating 
contractors with approved purchasing systems to make determinations of 
non-availability for individual items.

II. Section-by-Section Analysis

    DOE proposes to amend the DEAR as follows:
    1. Section 970.2212 is added to clarify that FAR subpart 22.12 is 
applicable to subcontracts of management and operation contractors.
    2. Section 970.5244-1, paragraph (f) is revised to replace all 
dollar amounts with references to title 48 of the Code of Federal 
Regulations, sections 28.102-2(b) and (c), as appropriate.
    3. Section 970.5244-1, paragraph (g) is revised to increase the 
dollar threshold from $100,000 to $500,000.
    4. Section 970.5244-1, paragraph (x) is revised to add the clause 
prescribed in FAR 22.1207 as item (7).

III. Procedural Requirements

A. Review Under Executive Orders 12866 and 13563

    Today's regulatory action has been determined to be a ``significant 
regulatory action'' under Executive Order 12866, ``Regulatory Planning 
and Review,'' (58 FR 51735, October 4, 1993). Accordingly, this 
proposed rule was reviewed under that Executive Order by the Office of 
Information and Regulatory Affairs (OIRA) of the Office of Management 
and Budget (OMB).
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, January 21, 2011). 
Executive Order 13563 is supplemental to and explicitly reaffirms the 
principles, structures, and definitions governing regulatory review 
established in Executive Order 12866. To the extent permitted by law, 
agencies are required by Executive Order 13563 to: (1) Propose or adopt 
a regulation only upon a reasoned determination that its benefits 
justify its costs (recognizing that some benefits and costs are 
difficult to quantify); (2) tailor regulations to impose the least 
burden on society, consistent with obtaining regulatory objectives, 
taking into account, among other things, and to the extent practicable, 
the costs of cumulative regulations; (3) select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity); 
(4) to the extent feasible, specify performance objectives, rather than 
specifying the behavior or manner of compliance that regulated entities 
must adopt; and (5) identify and assess available alternatives to 
direct regulation, including providing economic incentives to encourage 
the desired behavior, such as user fees or marketable permits, or 
providing information upon which choices can be made by the public.
    DOE emphasizes as well that Executive Order 13563 requires agencies 
to use the best available techniques to quantify anticipated present 
and future benefits and costs as accurately as possible. In its 
guidance, the Office of Information and Regulatory Affairs has 
emphasized that such techniques may include identifying changing future 
compliance costs that might result from technological innovation or 
anticipated behavioral changes. DOE believes that today's proposed rule 
is consistent with these principles, including the requirement that, to 
the extent permitted by law, agencies adopt a

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regulation only upon a reasoned determination that its benefits justify 
its costs and, in choosing among alternative regulatory approaches, 
those approaches maximize net benefits.

B. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' (61 FR 4729, February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct, rather than a general standard, and 
promote simplification and burden reduction. With regard to the review 
required by section 3(a), section 3(b) of Executive Order 12988 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, if any; (5) adequately defines 
key terms; and (6) addresses other important issues affecting clarity 
and general draftsmanship under any guidelines issued by the United 
States Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or if it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that this proposed rule 
meets the relevant standards of Executive Order 12988.

C. Review Under the Regulatory Flexibility Act

    This proposed rule has been reviewed under the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., which requires preparation of an 
initial regulatory flexibility analysis for any rule that must be 
proposed for public comment and which is likely to have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' (67 FR 53461, August 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process (68 FR 7990). DOE has made its 
procedures and policies available on the Office of General Counsel's 
Web site at https://www.gc.doe.gov.
    This proposed rule would not have a significant economic impact on 
small entities because it imposes no significant burdens. The proposed 
rule clarifies that FAR subpart 22.12 applies to subcontracts under the 
Department's management and operating (M&O) contracts. M&O 
subcontractors, including any small entities, who perform service 
contracts are currently required to follow the policies and procedures 
of FAR subpart 22.12. The proposed rule merely clarifies that M&O 
subcontractors are not exempt from the pre-existing policy. The other 
changes contained in the proposed rule update dollar thresholds to 
conform to the FAR or a DEAR class deviation. Those changes will result 
in fewer burdens to small entities because they raise the thresholds at 
which certain Buy American, bonds, and other financial protection 
requirements become applicable.
    Accordingly, DOE certifies that this proposed rule would not have a 
significant economic impact on a substantial number of small entities, 
and, therefore, no regulatory flexibility analysis is required and none 
has been prepared.

D. Review Under the Paperwork Reduction Act

    This proposed rule does not impose a collection of information 
requirement subject to the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq. Existing burdens associated with the collection of certain 
contractor data under the DEAR have been cleared under OMB control 
number 1910-4100.

E. Review Under the National Environmental Policy Act

    DOE has concluded that promulgation of this proposed rule falls 
into a class of actions which would not individually or cumulatively 
have significant impact on the human environment, as determined by 
DOE's regulations (10 CFR part 1021, subpart D) implementing the 
National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et 
seq.). Specifically, this proposed rule is categorically excluded from 
NEPA review because the amendments to the DEAR are strictly procedural 
(categorical exclusion A6). Therefore, this proposed rule does not 
require an environmental impact statement or environmental assessment 
pursuant to NEPA.

F. Review Under Executive Order 13132

    Executive Order 13132, 64 FR 43255 (August 4, 1999), imposes 
certain requirements on agencies formulating and implementing policies 
or regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. The Executive Order requires agencies to 
have an accountability process to ensure meaningful and timely input by 
state and local officials in the development of regulatory policies 
that have federalism implications. On March 14, 2000, DOE published a 
statement of policy describing the intergovernmental consultation 
process it will follow in the development of such regulations (65 FR 
13735). DOE has examined the proposed rule and has determined that it 
does not preempt State law and does not have a substantial direct 
effect on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

G. Review Under the Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally 
requires a Federal agency to perform a written assessment of costs and 
benefits of any rule imposing a Federal mandate with costs to State, 
local or tribal governments, or to the private sector, of $100 million 
or more. This rulemaking proposes changes that do not alter any 
substantive rights or obligations. This proposed rule does not impose 
any mandates.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a 
Family Policymaking Assessment for any rulemaking or policy that may 
affect family well-being. This proposed rulemaking will have no impact 
on the autonomy or integrity of the family as an institution. 
Accordingly, DOE has concluded that it is not necessary to prepare a 
Family Policymaking Assessment.

I. Review Under Executive Order 13211

    Executive Order 13211, Actions Concerning Regulations That

[[Page 24553]]

Significantly Affect Energy Supply, Distribution, or Use, (66 FR 28355, 
May 22, 2001) requires Federal agencies to prepare and submit to Office 
of Information and Regulatory Affairs (OIRA) of the Office of 
Management and Budget, a Statement of Energy Effects for any proposed 
significant energy action. A ``significant energy action'' is defined 
as any action by an agency that promulgates or is expected to lead to 
promulgation of a final rule, and that: (1) Is a significant regulatory 
action under Executive Order 12866, or any successor order; (2) is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, or (3) is designated by the 
Administrator of OIRA as a significant energy action. For any proposed 
significant energy action, the agency must give a detailed statement of 
any adverse effects on energy supply, distribution, or use should the 
proposal be implemented, and of reasonable alternatives to the action 
and their expected benefits on energy supply, distribution, and use. 
This proposed rule is not a significant energy action. Accordingly, DOE 
has not prepared a Statement of Energy Effects.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516, note) provides for agencies to review most disseminations 
of information to the public under guidelines established by each 
agency pursuant to general guidelines issued by OMB. OMB's guidelines 
were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines 
were published at 67 FR 62446 (October 7, 2002). DOE has reviewed this 
proposed rule under the OMB and DOE guidelines and has concluded that 
it is consistent with applicable policies in those guidelines.

K. Approval by the Office of the Secretary of Energy

    Issuance of this proposed rule has been approved by the Office of 
the Secretary of Energy.

List of Subjects in 48 CFR Part 970

    Government procurement.

    Issued in Washington, DC on April 19, 2016.
Berta Schreiber,
Acting Senior Procurement Executive, Office of Acquisition Management, 
Department of Energy.

Joseph Waddell,
Senior Procurement Executive and Deputy Associate Administrator, 
National Nuclear Security Administration, Office of Acquisition 
Management.

    For the reasons set out in the preamble, the Department of Energy 
is proposing to amend chapter 9 of title 48 of the Code of Federal 
Regulations as set forth below.

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

0
1. The authority citation for part 970 continues to read as follows:

    Authority:  42 U.S.C. 2201; 2282a; 2282b; 2282c; 42 U.S.C. 7101 
et seq.; 50 U.S.C. 2401 et seq.

0
2. Add section 970.2212 to subpart 970.22 to read as follows:


970.2212  Nondisplacement of qualified workers.

    48 CFR subpart 22.12 is applicable to subcontracts under the 
Department's management and operating contracts (see 970.5244-1(x)).
0
3. Section 970.5244-1 is amended by:
0
a. Revising the clause date;
0
b. Revising the first sentence of paragraph (f)(1);
0
c. Revising paragraphs (f)(2) and (3) and (g); and
0
d. Adding paragraph (x)(7).
    The revisions and additions read as follows:


970.5244-1  Contractor purchasing system.

* * * * *

Contractor Purchasing System (XXX 20xx)

* * * * *
    (f) * * * (1) The Contractor shall require performance bonds in 
penal amounts as set forth in 48 CFR 28.102-2(b)(1) for all fixed-price 
and unit-priced construction subcontracts in excess of the amount set 
forth in 48 CFR 28.102-2(b). * * *
    (2) For fixed-price, unit-priced and cost-reimbursement 
construction subcontracts in excess of the amount set forth in 48 CFR 
28.102-2(b), a payment bond shall be obtained on Standard Form 25A 
modified to name the Contractor as well as the United States of America 
as obligees. The penal amounts shall be determined in accordance with 
48 CFR 28.102-2(b)(2).
    (3) For fixed-price, unit-priced and cost-reimbursement 
construction subcontracts in an amount falling within the range in 48 
CFR 28.102-2(c), the Contractor shall select two or more of the payment 
protections in 48 CFR 28.102-1(b), giving particular consideration to 
the inclusion of an irrevocable letter of credit as one of the selected 
alternatives.
* * * * *
    (g) Buy American. The Contractor shall comply with the provisions 
of the Buy American Act as reflected in 48 CFR 52.225-1 and 48 CFR 
52.225-9. The Contractor shall forward determinations of non-
availability of individual items to the DOE Contracting Officer for 
approval. Items in excess of $500,000 require the prior concurrence of 
the Head of Contracting Activity. If the Contractor has an approved 
purchasing system, the Head of the Contracting Activity may authorize 
the Contractor to make determinations of non-availability for 
individual items valued at $500,000 or less.
* * * * *
    (x) * * *
* * * * *
    (7) Nondisplacement of Qualified Workers clause prescribed in 48 
CFR 22.1207.
* * * * *
[FR Doc. 2016-09688 Filed 4-25-16; 8:45 am]
 BILLING CODE 6450-01-P