Federal Acquisition Regulation: Non-Retaliation for Disclosure of Compensation Information, 67732-67735 [2016-23196]

Download as PDF 67732 Federal Register / Vol. 81, No. 190 / Friday, September 30, 2016 / Rules and Regulations Dated: September 19, 2016. William F. Clark, Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy. Interim Rule Adopted as Final Without Change Accordingly, the interim rule amending 48 CFR parts 1, 22, and 52, which was published in the Federal Register at 80 FR 75908 on December 4, 2015, is adopted as a final rule without change. ■ [FR Doc. 2016–23195 Filed 9–29–16; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 48 CFR Parts 1, 22, and 52 [FAC 2005–91; FAR Case 2016–007; Item III; Docket No. 2016–0007; Sequence No. 1] RIN 9000–AN10 Federal Acquisition Regulation: NonRetaliation for Disclosure of Compensation Information Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA). ACTION: Interim rule. AGENCY: DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement Executive Order (E.O.), entitled ‘‘Non-Retaliation for Disclosure of Compensation Information,’’ and a final rule issued by the Department of Labor. DATES: Effective: September 30, 2016. Applicability Date: This rule applies to solicitations and contracts issued on or after the effective date of the FAR rule. Contracting officers are expected to work with their existing contractors and bilaterally modify their contracts, to the extent feasible, to include the amended clause at FAR 52.222–26, Equal Opportunity. See FAR 1.108(d). Comment Date: Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown below on or before November 29, 2016 to be considered in the formation of the final rule. ADDRESSES: Submit comments identified by FAC 2005–91, FAR Case asabaliauskas on DSK3SPTVN1PROD with RULES SUMMARY: VerDate Sep<11>2014 22:05 Sep 29, 2016 Jkt 238001 2016–007, by any of the following methods: • Regulations.gov: http:// www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ‘‘FAR Case 2016–007’’. Select the link ‘‘Comment Now’’ that corresponds with ‘‘FAR Case 2016– 007’’. Follow the instructions provided on the screen. Please include your name, company name (if any), and ‘‘FAR Case 2016–007’’ on your attached document. • Mail: General Services Administration, Regulatory Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405–0001. Instructions: Please submit comments only and cite ‘‘FAR Case 2016–007’’ in all correspondence related to this case. Comments received generally will be posted without change to http:// regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail). FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement Analyst, at 202–969–7207 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– 91, FAR Case 2016–007. SUPPLEMENTARY INFORMATION: I. Background DoD, GSA, and NASA are issuing an interim rule amending the FAR to implement Executive Order (E.O.) 13665, entitled ‘‘Non-Retaliation for Disclosure of Compensation Information.’’ The E.O. was signed April 8, 2014, and was published in the Federal Register at 79 FR 20749, on April 11, 2014. This interim rule is also implementing the final rule issued by the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor (DOL) to implement E.O. 13665. The DOL final rule was published in the Federal Register at 80 FR 54934, on September 11, 2015, entitled ‘‘Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions.’’ The DOL rule revises 41 CFR part 60–1. E.O. 11246, originally issued September 24, 1965, establishes nondiscrimination and affirmative action obligations in employment for Federal contractors and subcontractors. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 It prohibits employment discrimination because of race, color, religion, sex, sexual orientation, gender identity, or national origin. E.O. 13665 amends E.O. 11246 to provide for a uniform policy for the Federal Government to prohibit Federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants. Also, the E.O. indicates that it promotes economy and efficiency in Federal Government procurement and supports enforcement of nondiscrimination and equal employment opportunity. II. Discussion and Analysis A. The DOL regulation implements E.O. 13665 by revising the equal opportunity clause to prohibit contractors from discharging, or in any manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. B. The FAR implements E.O. 11246 in FAR subpart 22.8, FAR clause 52.222– 26, Equal Opportunity, and related clauses. This interim rule adds the new discrimination prohibition and incorporates the definitions ‘‘compensation,’’ ‘‘compensation information,’’ and ‘‘essential job functions’’ from the DOL final rule (41 CFR 60–1.3) within FAR subpart 22.8 and the clauses that are prescribed in FAR subpart 22.8 as follows: 1. 22.802, General. Inserts the new discrimination prohibition. 2. 52.222–26, Equal Opportunity. Inserts definitions for the terms ‘‘compensation,’’ ‘‘compensation information,’’ and ‘‘essential job functions,’’ and 52.222–26(c)(5), which prohibits contractors from discharging, or in any manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. FAR 52.222– 26(c)(5) also requires the contractor to incorporate the new discrimination prohibition into existing employee manuals or handbooks and to post it. C. Conforming changes were made in the FAR clauses 52.212–5, 52.213–4, and 52.244–6. III. Executive Orders 12866 and 13563 E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if E:\FR\FM\30SER4.SGM 30SER4 Federal Register / Vol. 81, No. 190 / Friday, September 30, 2016 / Rules and Regulations 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 subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This interim rule is not a major rule under 5 U.S.C. 804. asabaliauskas on DSK3SPTVN1PROD with RULES IV. Regulatory Flexibility Act DoD, GSA, and NASA do not expect this interim rule to 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. However, an initial regulatory flexibility analysis (IRFA) has been prepared consistent with 5 U.S.C. 603. The analysis is summarized as follows: This interim rule is necessary to implement E.O. 13665, Non-Retaliation for Disclosure of Compensation Information (amending E.O. 11246, Equal Opportunity in Federal Employment) as implemented by the final rule issued by the DoL at 41 CFR part 60–1, published in the Federal Register at 80 FR 54934, on September 11, 2015. The objective of this rule is to provide for a uniform policy for the Federal Government to prohibit Federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants. The rule will apply to all entities, both small and other than small. Based on the most current data available in the System for Award Management (SAM), there are 328,552 small contractor firms with fewer than 500 employees and 315,902 small contractor firms with less than $35.5 million in revenue. Thus, the total number of small contractor firms that may be impacted by the rule range from 315,902 to 328,552. Recordkeeping and reporting requirements of the rule involve regulatory familiarization and administrative costs associated with incorporating revised language into policies, instructions, notices to employees, and subcontracts. In implementing the additional prohibition, the rule requires that contractors and subcontractors disseminate the nondiscrimination provision, using language prescribed by the Director of the Office of Federal Contract Compliance Programs (OFCCP), including incorporating the nondiscrimination provision into existing employee manuals and handbooks and posting it electronically or in conspicuous places available to employees and applicants. An analysis of estimated costs of the regulatory changes was performed in the DOL final rule published in the Federal VerDate Sep<11>2014 22:05 Sep 29, 2016 Jkt 238001 Register at 80 FR 54934, on September 11, 2015. DoL estimated the total cost of their final rule at $85.00 per company. The rule does not duplicate, overlap, or conflict with any other Federal rules. DoD, GSA, and NASA are not aware of any significant alternatives to the rule that would accomplish the stated objectives of the E.O. and the DOL implementing regulations. It is necessary for the rule to apply to small entities, because E.O. 11246, as amended, applies when a contractor has contracts or subcontracts with the Government in any 12month period which have an aggregate total value (or can reasonably be expected to have an aggregate total value) exceeding $10,000 that are not completely exempted. Every effort has been made to minimize the burdens imposed on small entities. The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities. DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C 610 (FAR Case 2016–007), in correspondence. V. Paperwork Reduction Act The Paperwork Reduction Act (44 U.S.C chapter 35) does apply; however, the information collection authorization is under the DOL final rule issued by the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor (DOL), which was published in the Federal Register at 80 FR 54934, on September 11, 2015, entitled ‘‘Government Contractors, Prohibitions Against Pay Secrecy Policies and Actions,’’ and is assigned OMB Control Number 1250–0008, Prohibitions Against Pay Secrecy Policies and Actions. This information collection expires December 31, 2018. The other information collection requirements cited at 1.106 that apply to FAR clause 52.225–26, assigned OMB control numbers 1250–0001 and 1250– 0003, cover the general recordkeeping provisions of the laws administered by OFCCP. VI. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 67733 of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. It is important that the FAR is immediately revised to include the requirements of E.O. 13665, entitled ‘‘Non-Retaliation for Disclosure of Compensation Information’’ and the Department of Labor implementing regulation published in the Federal Register at 80 FR 54934, on September 11, 2015 that requires the Federal Government to establish a uniform policy that prohibits Federal contractors from discriminating against employees and job applicants who inquire about, discuss, or disclose their own compensation or the compensation of other employees or applicants. This action is necessary because DOL’s final rule became effective on January 11, 2016, and section 6 of the E.O. expressly states that the order ‘‘shall apply to contracts entered into on or after the effective date of rules promulgated by the Department of Labor.’’ Issuance of an interim rule allows for the requirements to be included in solicitations and contracts immediately and puts contractors on clear notice of legal responsibilities that are already in effect. If the FAR rule is not issued as an interim rule, this new requirement will not be incorporated into contracts, and contractors will be put at unnecessary risk of noncompliance with the E.O. and labor rule. More importantly, this may unnecessarily delay action by contractors in providing the important protections for contractor employees that the E.O. and labor rule are designed to provide. However, pursuant to 41 U.S.C. 1707 and FAR 1.501–3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule. List of Subjects in 48 CFR Parts 1, 22, and 52 Government procurement. Dated: September 19, 2016. 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, 22, and 52 as set forth below: 1. The authority citation for 48 CFR parts 1, 22, 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. E:\FR\FM\30SER4.SGM 30SER4 67734 Federal Register / Vol. 81, No. 190 / Friday, September 30, 2016 / Rules and Regulations PART 1—FEDERAL ACQUISITION REGULATIONS SYSTEM 1.106 [Amended] 2. Amend section 1.106 in the table by removing from FAR segment ‘‘52.222– 26’’ the OMB control number ‘‘1250– 0003’’ and adding ‘‘1250–0001, 1250– 0003, and 1250–0008’’ in its place. ■ PART 22—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 3. Amend section 22.802 by revising paragraph (a) to read as follows: ■ asabaliauskas on DSK3SPTVN1PROD with RULES 22.802 General. (a) Executive Order 11246, as amended, sets forth the Equal Opportunity clause and requires that all agencies— (1) Include this clause in all nonexempt contracts and subcontracts (see 22.807); and (2) Act to ensure compliance with the clause and the regulations of the Secretary of Labor— (i) To promote the full realization of equal employment opportunity for all persons, regardless of race, color, religion, sex, sexual orientation, gender identity, or national origin; and (ii) To prohibit contractors from discharging, or in any other manner discriminating against, any employee or applicant for employment because the employee or applicant inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor’s legal duty to furnish information. * * * * * ■ 4. Amend section 22.809 by revising the introductory text to read as follows: 22.809 Enforcement. Upon written notification to the contracting officer, the Deputy Assistant Secretary may direct one or more of the following actions, as well as administrative sanctions and penalties, VerDate Sep<11>2014 22:05 Sep 29, 2016 Jkt 238001 be taken against contractors found to be in violation of E.O. 11246, the regulations of the Secretary of Labor, or the applicable contract clauses: * * * * * PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 5. Amend section 52.212–5 by— a. Revising the date of the clause and paragraphs (b)(28) and (e)(1)(v); and ■ b. In Alternate II, revising the date of the alternate and paragraph (e)(1)(ii)(E). The revisions 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 (Sept 2016) * * * * * (b) * * * ll(28) 52.222–26, Equal Opportunity (Sept 2016) (E.O. 11246). * * * * * (e)(1) * * * (v) 52.222–26, Equal Opportunity (Sept 2016) (E.O. 11246). * * * * * Alternate II (Sept 2016). * * * * * * * * (e)(1) * * * (ii) * * * (E) 52.222–26, Equal Opportunity (Sept 2016) (E.O. 11246). * * * * * 6. Amend section 52.213–4 by revising the date of the clause and paragraphs (a)(1)(iii) and (a)(2)(viii) to read as follows: ■ 52.213–4 Terms and Conditions— Simplified Acquisitions (Other Than Commercial Items). * * * * * Terms and Conditions–Simplified Acquisitions (Other than Commercial Items) (Sept 2016) (a) * * * (1) * * * (iii) 52.222–26, Equal Opportunity (Sept 2016) (E.O. 11246). * * * * * (2) * * * (viii) 52.244–6, Subcontracts for Commercial Items (Sept 2016). * * * * * ■ 7. Amend section 52.222–26 by— ■ a. Revising the date of the clause; ■ b. Adding to paragraph (a), in alphabetical order, the definitions ‘‘Compensation’’, ‘‘Compensation information’’, and ‘‘Essential job functions’’; PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 c. Redesignating paragraphs (c)(5) through (11) as paragraphs (c)(6) through (12), respectively; ■ d. Adding new paragraph (c)(5); ■ e. Removing from newly designated paragraph (c)(12) ‘‘contracting officer’’ and adding ‘‘Director of OFCCP’’ in its place; and ■ f. Removing from paragraph (d) ‘‘41 CFR 60–1.1.’’ and adding ‘‘41 CFR part 60–1.’’ in its place. The revision and additions read as follows: ■ 52.222–26 Equal Opportunity. * * * * * Equal Opportunity (Sept 2016) (a) * * * Compensation means any payments made to, or on behalf of, an employee or offered to an applicant as remuneration for employment, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and retirement. Compensation information means the amount and type of compensation provided to employees or offered to applicants, including, but not limited to, the desire of the Contractor to attract and retain a particular employee for the value the employee is perceived to add to the Contractor’s profit or productivity; the availability of employees with like skills in the marketplace; market research about the worth of similar jobs in the relevant marketplace; job analysis, descriptions, and evaluations; salary and pay structures; salary surveys; labor union agreements; and Contractor decisions, statements and policies related to setting or altering employee compensation. Essential job functions means the fundamental job duties of the employment position an individual holds. A job function may be considered essential if— (1) The access to compensation information is necessary in order to perform that function or another routinely assigned business task; or (2) The function or duties of the position include protecting and maintaining the privacy of employee personnel records, including compensation information. * * * * * (c) * * * (5)(i) The Contractor shall not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This prohibition against discrimination does not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee’s essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in E:\FR\FM\30SER4.SGM 30SER4 Federal Register / Vol. 81, No. 190 / Friday, September 30, 2016 / Rules and Regulations response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the Contractor’s legal duty to furnish information. (ii) The Contractor shall disseminate the prohibition on discrimination in paragraph (c)(5)(i) of this clause, using language prescribed by the Director of the Office of Federal Contract Compliance Programs (OFCCP), to employees and applicants by— (A) Incorporation into existing employee manuals or handbooks; and (B) Electronic posting or by posting a copy of the provision in conspicuous places available to employees and applicants for employment. * * * * * I. Background 8. Amend section 52.244–6 by revising the date of the clause and paragraph (c)(1)(vi) to read as follows: ■ 52.244–6 Items. * * * Subcontracts for Commercial Items (Sept 2016) * * * * * (c)(1) * * * (vi) 52.222–26, Equal Opportunity (Sept 2016) (E.O. 11246). * * * * * [FR Doc. 2016–23196 Filed 9–29–16; 8:45 am] BILLING CODE 6820–EP–P DEPARTMENT OF DEFENSE GENERAL SERVICES ADMINISTRATION NATIONAL AERONAUTICS AND SPACE ADMINISTRATION [FAC 2005–91; FAR Case 2015–032; Item IV; Docket No. 2015–0032; Sequence No. 1] RIN 9000–AN13 Federal Acquisition Regulation; Sole Source Contracts for Women-Owned Small Businesses Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA). ACTION: Final rule. asabaliauskas on DSK3SPTVN1PROD with RULES AGENCY: DoD, GSA, and NASA have adopted as final, with a minor edit, an interim rule amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration (SBA) that provide for authority to award sole source contracts to 22:05 Sep 29, 2016 Jkt 238001 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: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. All four respondents expressed support of the interim rule. Therefore, no further change to the interim rule is required as a result of the public comments, but there is a minor edit to 19.1505(a)(1). 48 CFR Parts 2, 4, 6, 18, 19, and 52 VerDate Sep<11>2014 IV. Executive Orders 12866 and 13563 II. Discussion and Analysis * SUMMARY: Women-Owned Small Business Program, in order to implement paragraph (a)(3) of section 825 of the NDAA for FY 2015. The Federal Acquisition Regulatory Council, pursuant to the authority granted in 41 U.S.C. 1905 and 1906, and the Administrator, Office of Federal Procurement Policy, pursuant to the authority granted in 41 U.S.C 1907, have determined that the application of this statutory authority to contracts at or below the simplified acquisition threshold and to contracts for commercial items and commercially available off-the-shelf items, is in the best interests of the Federal Government. DoD, GSA, and NASA published an interim rule in the Federal Register at 80 FR 81888 on December 31, 2015, to implement regulatory changes that the SBA has made in its final rule published in the Federal Register at 80 FR 55019, on September 14, 2015, concerning sole source award authority under the WOSB Program. SBA’s final rule implements the statutory requirements of paragraph (a)(3) of section 825 of the Carl Levin and Howard P. ‘‘Buck’’ McKeon National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2015, Public Law 113–291, granting contracting officers the authority to award sole source contracts to economically disadvantaged womenowned small business (EDWOSB) concerns and to WOSB concerns eligible under the WOSB Program. Four respondents submitted comments on the interim rule. Subcontracts for Commercial * economically disadvantaged womenowned small business concerns and to women-owned small business concerns eligible under the Women-Owned Small Business (WOSB) Program. DATES: Effective: September 30, 2016. FOR FURTHER INFORMATION CONTACT: Ms. Mahruba Uddowla, Procurement Analyst, at 703–605–2868 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202–501–4755. Please cite FAC 2005–91, FAR Case 2015–032. SUPPLEMENTARY INFORMATION: 67735 III. Applicability to Contracts at or Below the Simplified Acquisition Threshold and for Commercial Items, Including Commercially Available Offthe-Shelf Items This rule adopts as final the amendments to the FAR clauses at 52.219–29, Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-owned Small Business Concerns, and 52.219–30, Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 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. V. Regulatory Flexibility Act This rule implements paragraph (a)(3) of section 825 of the Carl Levin and Howard P. ‘Buck’ McKeon National Defense Authorization Act for Fiscal Year 2015, Public Law 113–291, (Fiscal Year 2015 NDAA). Section 825 of the Fiscal Year 2015 NDAA included language granting contracting officers the authority to award sole source contracts to Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) under the WOSB Program. The purpose of this rule is to finalize the procedures whereby Federal agencies may award sole source contracts to WOSBs and EDWOSBs eligible under the WOSB Program. The rule provides an additional tool for Federal agencies to ensure that WOSBs have an equal opportunity to participate in Federal contracting and ensures consistency among SBA’s socioeconomic small business contracting programs. E:\FR\FM\30SER4.SGM 30SER4

Agencies

[Federal Register Volume 81, Number 190 (Friday, September 30, 2016)]
[Rules and Regulations]
[Pages 67732-67735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23196]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 22, and 52

[FAC 2005-91; FAR Case 2016-007; Item III; Docket No. 2016-0007; 
Sequence No. 1]
RIN 9000-AN10


Federal Acquisition Regulation: Non-Retaliation for Disclosure of 
Compensation Information

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

ACTION: Interim rule.

-----------------------------------------------------------------------

SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the 
Federal Acquisition Regulation (FAR) to implement Executive Order 
(E.O.), entitled ``Non-Retaliation for Disclosure of Compensation 
Information,'' and a final rule issued by the Department of Labor.

DATES: Effective: September 30, 2016.
    Applicability Date: This rule applies to solicitations and 
contracts issued on or after the effective date of the FAR rule. 
Contracting officers are expected to work with their existing 
contractors and bilaterally modify their contracts, to the extent 
feasible, to include the amended clause at FAR 52.222-26, Equal 
Opportunity. See FAR 1.108(d).
    Comment Date: Interested parties should submit written comments to 
the Regulatory Secretariat Division at one of the addresses shown below 
on or before November 29, 2016 to be considered in the formation of the 
final rule.

ADDRESSES: Submit comments identified by FAC 2005-91, FAR Case 2016-
007, by any of the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by entering ``FAR Case 
2016-007''. Select the link ``Comment Now'' that corresponds with ``FAR 
Case 2016-007''. Follow the instructions provided on the screen. Please 
include your name, company name (if any), and ``FAR Case 2016-007'' on 
your attached document.
     Mail: General Services Administration, Regulatory 
Secretariat Division (MVCB), ATTN: Ms. Flowers, 1800 F Street NW., 2nd 
Floor, Washington, DC 20405-0001.
    Instructions: Please submit comments only and cite ``FAR Case 2016-
007'' in all correspondence related to this case. Comments received 
generally will be posted without change to http://regulations.gov, 
including any personal and/or business confidential information 
provided. To confirm receipt of your comment(s), please check 
www.regulations.gov, approximately two to three days after submission 
to verify posting (except allow 30 days for posting of comments 
submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement 
Analyst, at 202-969-7207 for clarification of content. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 
2016-007.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA are issuing an interim rule amending the FAR to 
implement Executive Order (E.O.) 13665, entitled ``Non-Retaliation for 
Disclosure of Compensation Information.'' The E.O. was signed April 8, 
2014, and was published in the Federal Register at 79 FR 20749, on 
April 11, 2014. This interim rule is also implementing the final rule 
issued by the Office of Federal Contract Compliance Programs (OFCCP) of 
the Department of Labor (DOL) to implement E.O. 13665. The DOL final 
rule was published in the Federal Register at 80 FR 54934, on September 
11, 2015, entitled ``Government Contractors, Prohibitions Against Pay 
Secrecy Policies and Actions.'' The DOL rule revises 41 CFR part 60-1.
    E.O. 11246, originally issued September 24, 1965, establishes 
nondiscrimination and affirmative action obligations in employment for 
Federal contractors and subcontractors. It prohibits employment 
discrimination because of race, color, religion, sex, sexual 
orientation, gender identity, or national origin. E.O. 13665 amends 
E.O. 11246 to provide for a uniform policy for the Federal Government 
to prohibit Federal contractors from discriminating against employees 
and job applicants who inquire about, discuss, or disclose their own 
compensation or the compensation of other employees or applicants. 
Also, the E.O. indicates that it promotes economy and efficiency in 
Federal Government procurement and supports enforcement of 
nondiscrimination and equal employment opportunity.

II. Discussion and Analysis

    A. The DOL regulation implements E.O. 13665 by revising the equal 
opportunity clause to prohibit contractors from discharging, or in any 
manner discriminating against, any employee or applicant for employment 
because the employee or applicant inquired about, discussed, or 
disclosed the compensation of the employee or applicant or another 
employee or applicant.
    B. The FAR implements E.O. 11246 in FAR subpart 22.8, FAR clause 
52.222-26, Equal Opportunity, and related clauses. This interim rule 
adds the new discrimination prohibition and incorporates the 
definitions ``compensation,'' ``compensation information,'' and 
``essential job functions'' from the DOL final rule (41 CFR 60-1.3) 
within FAR subpart 22.8 and the clauses that are prescribed in FAR 
subpart 22.8 as follows:
    1. 22.802, General. Inserts the new discrimination prohibition.
    2. 52.222-26, Equal Opportunity. Inserts definitions for the terms 
``compensation,'' ``compensation information,'' and ``essential job 
functions,'' and 52.222-26(c)(5), which prohibits contractors from 
discharging, or in any manner discriminating against, any employee or 
applicant for employment because the employee or applicant inquired 
about, discussed, or disclosed the compensation of the employee or 
applicant or another employee or applicant. FAR 52.222-26(c)(5) also 
requires the contractor to incorporate the new discrimination 
prohibition into existing employee manuals or handbooks and to post it.
    C. Conforming changes were made in the FAR clauses 52.212-5, 
52.213-4, and 52.244-6.

III. Executive Orders 12866 and 13563

    E.O.s 12866 and 13563 direct agencies to assess all costs and 
benefits of available regulatory alternatives and, if

[[Page 67733]]

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 subject to 
review under Section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This interim rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    DoD, GSA, and NASA do not expect this interim rule to 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. However, an initial regulatory flexibility analysis (IRFA) has 
been prepared consistent with 5 U.S.C. 603. The analysis is summarized 
as follows:

    This interim rule is necessary to implement E.O. 13665, Non-
Retaliation for Disclosure of Compensation Information (amending 
E.O. 11246, Equal Opportunity in Federal Employment) as implemented 
by the final rule issued by the DoL at 41 CFR part 60-1, published 
in the Federal Register at 80 FR 54934, on September 11, 2015.
    The objective of this rule is to provide for a uniform policy 
for the Federal Government to prohibit Federal contractors from 
discriminating against employees and job applicants who inquire 
about, discuss, or disclose their own compensation or the 
compensation of other employees or applicants.
    The rule will apply to all entities, both small and other than 
small. Based on the most current data available in the System for 
Award Management (SAM), there are 328,552 small contractor firms 
with fewer than 500 employees and 315,902 small contractor firms 
with less than $35.5 million in revenue. Thus, the total number of 
small contractor firms that may be impacted by the rule range from 
315,902 to 328,552.
    Recordkeeping and reporting requirements of the rule involve 
regulatory familiarization and administrative costs associated with 
incorporating revised language into policies, instructions, notices 
to employees, and subcontracts. In implementing the additional 
prohibition, the rule requires that contractors and subcontractors 
disseminate the nondiscrimination provision, using language 
prescribed by the Director of the Office of Federal Contract 
Compliance Programs (OFCCP), including incorporating the 
nondiscrimination provision into existing employee manuals and 
handbooks and posting it electronically or in conspicuous places 
available to employees and applicants. An analysis of estimated 
costs of the regulatory changes was performed in the DOL final rule 
published in the Federal Register at 80 FR 54934, on September 11, 
2015. DoL estimated the total cost of their final rule at $85.00 per 
company.
    The rule does not duplicate, overlap, or conflict with any other 
Federal rules.
    DoD, GSA, and NASA are not aware of any significant alternatives 
to the rule that would accomplish the stated objectives of the E.O. 
and the DOL implementing regulations.
    It is necessary for the rule to apply to small entities, because 
E.O. 11246, as amended, applies when a contractor has contracts or 
subcontracts with the Government in any 12-month period which have 
an aggregate total value (or can reasonably be expected to have an 
aggregate total value) exceeding $10,000 that are not completely 
exempted. Every effort has been made to minimize the burdens imposed 
on small entities.

    The Regulatory Secretariat Division has submitted a copy of the 
IRFA to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the IRFA may be obtained from the Regulatory 
Secretariat Division. DoD, GSA, and NASA invite comments from small 
business concerns and other interested parties on the expected impact 
of this rule on small entities.
    DoD, GSA, and NASA will also consider comments from small entities 
concerning the existing regulations in subparts affected by the rule in 
accordance with 5 U.S.C. 610. Interested parties must submit such 
comments separately and should cite 5 U.S.C 610 (FAR Case 2016-007), in 
correspondence.

V. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C chapter 35) does apply; 
however, the information collection authorization is under the DOL 
final rule issued by the Office of Federal Contract Compliance Programs 
(OFCCP) of the Department of Labor (DOL), which was published in the 
Federal Register at 80 FR 54934, on September 11, 2015, entitled 
``Government Contractors, Prohibitions Against Pay Secrecy Policies and 
Actions,'' and is assigned OMB Control Number 1250-0008, Prohibitions 
Against Pay Secrecy Policies and Actions. This information collection 
expires December 31, 2018. The other information collection 
requirements cited at 1.106 that apply to FAR clause 52.225-26, 
assigned OMB control numbers 1250-0001 and 1250-0003, cover the general 
recordkeeping provisions of the laws administered by OFCCP.

VI. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. It is 
important that the FAR is immediately revised to include the 
requirements of E.O. 13665, entitled ``Non-Retaliation for Disclosure 
of Compensation Information'' and the Department of Labor implementing 
regulation published in the Federal Register at 80 FR 54934, on 
September 11, 2015 that requires the Federal Government to establish a 
uniform policy that prohibits Federal contractors from discriminating 
against employees and job applicants who inquire about, discuss, or 
disclose their own compensation or the compensation of other employees 
or applicants. This action is necessary because DOL's final rule became 
effective on January 11, 2016, and section 6 of the E.O. expressly 
states that the order ``shall apply to contracts entered into on or 
after the effective date of rules promulgated by the Department of 
Labor.'' Issuance of an interim rule allows for the requirements to be 
included in solicitations and contracts immediately and puts 
contractors on clear notice of legal responsibilities that are already 
in effect. If the FAR rule is not issued as an interim rule, this new 
requirement will not be incorporated into contracts, and contractors 
will be put at unnecessary risk of non-compliance with the E.O. and 
labor rule. More importantly, this may unnecessarily delay action by 
contractors in providing the important protections for contractor 
employees that the E.O. and labor rule are designed to provide. 
However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and 
NASA will consider public comments received in response to this interim 
rule in the formation of the final rule.

List of Subjects in 48 CFR Parts 1, 22, and 52

    Government procurement.

    Dated: September 19, 2016.
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, 22, and 52 as 
set forth below:

0
1. The authority citation for 48 CFR parts 1, 22, 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.

[[Page 67734]]

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM


1.106   [Amended]

0
2. Amend section 1.106 in the table by removing from FAR segment 
``52.222-26'' the OMB control number ``1250-0003'' and adding ``1250-
0001, 1250-0003, and 1250-0008'' in its place.

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0
3. Amend section 22.802 by revising paragraph (a) to read as follows:


22.802   General.

    (a) Executive Order 11246, as amended, sets forth the Equal 
Opportunity clause and requires that all agencies--
    (1) Include this clause in all nonexempt contracts and subcontracts 
(see 22.807); and
    (2) Act to ensure compliance with the clause and the regulations of 
the Secretary of Labor--
    (i) To promote the full realization of equal employment opportunity 
for all persons, regardless of race, color, religion, sex, sexual 
orientation, gender identity, or national origin; and
    (ii) To prohibit contractors from discharging, or in any other 
manner discriminating against, any employee or applicant for employment 
because the employee or applicant inquired about, discussed, or 
disclosed the compensation of the employee or applicant or another 
employee or applicant. This prohibition against discrimination does not 
apply to instances in which an employee who has access to the 
compensation information of other employees or applicants as a part of 
such employee's essential job functions discloses the compensation of 
such other employees or applicants to individuals who do not otherwise 
have access to such information, unless such disclosure is in response 
to a formal complaint or charge, in furtherance of an investigation, 
proceeding, hearing, or action, including an investigation conducted by 
the employer, or is consistent with the contractor's legal duty to 
furnish information.
* * * * *

0
4. Amend section 22.809 by revising the introductory text to read as 
follows:


22.809   Enforcement.

    Upon written notification to the contracting officer, the Deputy 
Assistant Secretary may direct one or more of the following actions, as 
well as administrative sanctions and penalties, be taken against 
contractors found to be in violation of E.O. 11246, the regulations of 
the Secretary of Labor, or the applicable contract clauses:
* * * * *

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Amend section 52.212-5 by--
0
a. Revising the date of the clause and paragraphs (b)(28) and 
(e)(1)(v); and
0
b. In Alternate II, revising the date of the alternate and paragraph 
(e)(1)(ii)(E).
    The revisions 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 (Sept 2016)

* * * * *
    (b) * * *
    __(28) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
    (e)(1) * * *
    (v) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
    Alternate II (Sept 2016). * * *
* * * * *
    (e)(1) * * *
    (ii) * * *
    (E) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *

0
6. Amend section 52.213-4 by revising the date of the clause and 
paragraphs (a)(1)(iii) and (a)(2)(viii) to read as follows:


52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions-Simplified Acquisitions (Other than Commercial 
Items) (Sept 2016)

    (a) * * *
    (1) * * *
    (iii) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
    (2) * * *
    (viii) 52.244-6, Subcontracts for Commercial Items (Sept 2016).
* * * * *

0
7. Amend section 52.222-26 by--
0
a. Revising the date of the clause;
0
b. Adding to paragraph (a), in alphabetical order, the definitions 
``Compensation'', ``Compensation information'', and ``Essential job 
functions'';
0
c. Redesignating paragraphs (c)(5) through (11) as paragraphs (c)(6) 
through (12), respectively;
0
d. Adding new paragraph (c)(5);
0
e. Removing from newly designated paragraph (c)(12) ``contracting 
officer'' and adding ``Director of OFCCP'' in its place; and
0
f. Removing from paragraph (d) ``41 CFR 60-1.1.'' and adding ``41 CFR 
part 60-1.'' in its place.
    The revision and additions read as follows:


52.222-26   Equal Opportunity.

* * * * *

Equal Opportunity (Sept 2016)

    (a) * * *
    Compensation means any payments made to, or on behalf of, an 
employee or offered to an applicant as remuneration for employment, 
including but not limited to salary, wages, overtime pay, shift 
differentials, bonuses, commissions, vacation and holiday pay, 
allowances, insurance and other benefits, stock options and awards, 
profit sharing, and retirement.
    Compensation information means the amount and type of 
compensation provided to employees or offered to applicants, 
including, but not limited to, the desire of the Contractor to 
attract and retain a particular employee for the value the employee 
is perceived to add to the Contractor's profit or productivity; the 
availability of employees with like skills in the marketplace; 
market research about the worth of similar jobs in the relevant 
marketplace; job analysis, descriptions, and evaluations; salary and 
pay structures; salary surveys; labor union agreements; and 
Contractor decisions, statements and policies related to setting or 
altering employee compensation.
    Essential job functions means the fundamental job duties of the 
employment position an individual holds. A job function may be 
considered essential if--
    (1) The access to compensation information is necessary in order 
to perform that function or another routinely assigned business 
task; or
    (2) The function or duties of the position include protecting 
and maintaining the privacy of employee personnel records, including 
compensation information.
* * * * *
    (c) * * *
    (5)(i) The Contractor shall not discharge or in any other manner 
discriminate against any employee or applicant for employment 
because such employee or applicant has inquired about, discussed, or 
disclosed the compensation of the employee or applicant or another 
employee or applicant. This prohibition against discrimination does 
not apply to instances in which an employee who has access to the 
compensation information of other employees or applicants as a part 
of such employee's essential job functions discloses the 
compensation of such other employees or applicants to individuals 
who do not otherwise have access to such information, unless such 
disclosure is in

[[Page 67735]]

response to a formal complaint or charge, in furtherance of an 
investigation, proceeding, hearing, or action, including an 
investigation conducted by the employer, or is consistent with the 
Contractor's legal duty to furnish information.
    (ii) The Contractor shall disseminate the prohibition on 
discrimination in paragraph (c)(5)(i) of this clause, using language 
prescribed by the Director of the Office of Federal Contract 
Compliance Programs (OFCCP), to employees and applicants by--
    (A) Incorporation into existing employee manuals or handbooks; 
and
    (B) Electronic posting or by posting a copy of the provision in 
conspicuous places available to employees and applicants for 
employment.
* * * * *


0
8. Amend section 52.244-6 by revising the date of the clause and 
paragraph (c)(1)(vi) to read as follows:


52.244-6  Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (Sept 2016)

* * * * *
    (c)(1) * * *
    (vi) 52.222-26, Equal Opportunity (Sept 2016) (E.O. 11246).
* * * * *
[FR Doc. 2016-23196 Filed 9-29-16; 8:45 am]
 BILLING CODE 6820-EP-P