Federal Acquisition Regulation; Removal of Fair Pay and Safe Workplaces Rule, 51527-51531 [2017-23590]

Agencies

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

[Federal Register Volume 82, Number 213 (Monday, November 6, 2017)]
[Rules and Regulations]
[Pages 51527-51531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23590]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 9, 17, 22, 42, and 52

[FAC 2005-96; FAR Case 2017-015; Docket No. 2017-0002; Sequence No. 1]
RIN 9000-AN52


Federal Acquisition Regulation; Removal of Fair Pay and Safe 
Workplaces Rule

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 implement a public law that 
disapproved the final rule, Fair Pay and Safe Workplaces (FAR Case 
2014-025), and an Executive Order (E.O.) dated March 27, 2017, that 
rescinded the prior Executive orders authorizing that rule.

DATES: 
    Effective date: November 6, 2017.
    Applicability dates: See section I.F of the Supplementary 
Information.

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 2005-96, FAR Case 
2017-015.

SUPPLEMENTARY INFORMATION:

I. Background

A. The FAR Rule Implementing E.O. 13673

    FAR Case 2014-025 implemented E.O. 13673, Fair Pay and Safe 
Workplaces, dated July 31, 2014 (79 FR 45309, August 5, 2014), amended 
by section 3 of E.O. 13683, dated December 11, 2014 (79 FR 75041, 
December 16, 2014) and E.O. 13738, dated August 23, 2016 (81 FR 58807, 
August 26, 2016).
    The FAR Case final rule was published in the Federal Register on 
August 25, 2016, at 81 FR 58562. It was to be effective on October 25, 
2016. Certain aspects of the rule were to be phased in. For example, 
the clause at FAR 52.222-60, Paycheck Transparency (Executive Order 
13673), was to be inserted in solicitations starting January 1, 2017, 
if the estimated value of the resultant contract was to exceed 
$500,000.
    The Department of Labor (DOL) published ``Guidance for Executive 
Order 13673, `Fair Pay and Safe Workplaces''' on the same day as the 
FAR final rule was published (81 FR 58653).

B. Injunction and Federal Acquisition Regulatory Council Memorandum

    On October 7, 2016, the Associated Builders and Contractors of 
Southeast Texas, Inc., the Associated Builders and Contractors, Inc., 
and the National Association of Security Companies filed a lawsuit in 
the United States District Court for the Eastern District of Texas 
(Civil Action No. 1:16-CV-425) seeking to overturn the final rule. On 
October 13, 2016, the plaintiffs filed an ``Emergency Motion for 
Temporary Restraining Order and Preliminary Injunction.''
    On October 24, 2016, the District Court issued a ``Memorandum and 
Order Granting Preliminary Injunction.'' The Court Order (on page 31) 
stated: ``Defendants are enjoined [from] implementing any portion of 
the FAR Rule or the DOL Guidance relating to the new reporting and 
disclosure requirements regarding labor law violations as described in 
E.O. 13673 and implemented in the FAR Rule and DOL Guidance. Further, 
Defendants are enjoined from enforcing the restriction on arbitration 
agreements.''
    The Court Order did not enjoin the Paycheck Transparency clause, 
FAR 52.222-60. Starting January 1, 2017, this clause was prescribed for 
solicitations if the estimated value of the resultant contract would 
exceed $500,000.
    On October 25, 2016, the Federal Acquisition Regulatory Council 
issued a memorandum to the Chief Acquisition Officers, Senior 
Procurement

[[Page 51528]]

Executives, Defense Acquisition Regulations Council, and Civilian 
Agency Acquisition Council directing that all steps necessary be taken 
to ensure that the enjoined sections, provisions, and clauses of the 
final rule would not be implemented until such time as the injunction 
is terminated. The Council enumerated specific steps to be taken at a 
minimum, including the following:

    1. Ensure that new solicitations do not include representations 
or clauses that the enjoined coverage of the rule would have 
required--i.e., the representation at FAR 52.222-57 and its 
commercial items version at paragraph(s) of 52.212-3, 52.222-58 and 
52.222-59, which would have directed disclosure of labor law 
violation decisions by offerors or contractors, and 52.222-61, which 
would have required an offeror or contractor to agree to restrict 
the use of mandatory pre-dispute arbitration agreements.
    2. If a solicitation had been issued with representations or 
clauses listed in the previous paragraph 1, amend those 
solicitations immediately to remove those representations and 
clauses. Additionally, agencies were directed not to take any action 
on information, if any, submitted in response to those 
representations and clauses.
    3. Ensure that contracting officers do not implement the 
procedures in FAR 22.2004-2, 22.2004-3, 22.2004-4, or associated 
changes in FAR parts 9 and 42.

    The FAR Council requested that agencies share these instructions 
widely among their workforces and posted the Memorandum online. Also, 
the DOL re-posted the Memorandum at the top of its then-existing 
information page on the Fair Pay and Safe Workplaces E.O.
    In further compliance with the terms of the Court Order, as 
explained by the FAR Council in its October 25, 2016 Memorandum, GSA's 
Integrated Award Environment immediately ceased all actions to release 
the changes for the System for Award Management (SAM) that would have 
supported bidder and contractor submission of information on labor law 
violation decisions, as well as the changes that would have supported 
public disclosure of this information in the Federal Awardee 
Performance and Integrity Information System (FAPIIS).

C. FAR Rule Implementing the Injunction

    As an additional step to ensure full awareness of, and compliance 
with, the Court Order, DoD, GSA, and NASA, on behalf of the FAR 
Council, took a more comprehensive administrative action to amend the 
August 25, 2016, final rule to include caveats throughout the rule for 
each section, provision, and clause that was enjoined by the terms of 
the Court Order. On December 16, 2016, the rule implementing the 
injunction was published as a final rule (81 FR 91636).
    The Court Order did not enjoin implementation of the coverage on 
paycheck transparency; therefore, the December 16, 2016, amendments did 
not impact this aspect of the rule. Starting January 1, 2017, this 
clause was prescribed for solicitations if the estimated value of the 
resultant contract was to exceed $500,000.

D. H.J. Res. 37 (Pub. L. 115-11)

    In March 2017, under the Congressional Review Act (5 U.S.C. chapter 
8), Congress passed House Joint Resolution 37 (Pub. L. 115-11), which 
stated the following:

    Resolved by the Senate and House of Representatives of the 
United States of America in Congress assembled, That Congress 
disapproves the rule submitted by the Department of Defense, the 
General Services Administration, and the National Aeronautics and 
Space Administration relating to the Federal Acquisition Regulation 
(published at 81 FR 58562 (August 25, 2016)), and such rule shall 
have no force or effect.

    On March 27, 2017, House Joint Resolution 37 was signed into law 
and became Public Law 115-11.
    Under 5 U.S.C. 801(b)(1), a rule shall not take effect or continue 
if the Congress enacts a joint resolution of disapproval, described 
under 5 U.S.C. 802. Under 5 U.S.C. 801(f), any rule that takes effect 
and later is made of no force or effect by enactment of a joint 
resolution under section 802 shall be treated as though such rule had 
never taken effect.
    Congress disapproved the entire FAR rule that was published on 
August 25, 2016.
    As a result, the rule being published today removes that entire 
rule including the amendments published on December 16, 2016.
    By statute, the rule shall be treated as if it had never taken 
effect. Only FAR 52.222-60, Paycheck Transparency (Executive Order 
13673), had gone into effect; it was authorized to be included in 
solicitations starting on January 1, 2017, and may have been included 
in recently awarded contracts. This and all other Fair Pay and Safe 
Workplaces provisions and clauses are unenforceable. See the 
Applicability paragraph under Dates at the beginning of this preamble 
for instructions to contracting officers on removal of the clause.

E. Executive Order 13782

    On March 27, 2017, the same date on which H.J. Res 37 was signed, 
President Trump signed E.O. 13782 (82 FR 15607, March 30, 2017). This 
E.O. revoked E.O. 13673, section 3 of E.O. 13683, and E.O. 13738, which 
were the authority for the Fair Pay and Safe Workplaces rule. E.O. 
13782 also directed reconsideration of existing rules, regulations, 
guidance, guidelines, or policies implementing or enforcing E.O. 13673, 
section 3 of E.O. 13683, and E.O. 13738. The rule published today also 
implements E.O. 13782.
    Public Law 115-11 and E.O. 13782 did not specifically address the 
DOL Guidance. However, that Guidance has no legal effect in the absence 
of the FAR rule. Accordingly, the DOL is publishing its own notice 
rescinding the DOL Guidance pursuant to Public Law 115-11 and E.O. 
13782.

F. Applicability

    This rule applies to solicitations issued and contracts awarded 
before, on, or after October 25, 2016--i.e., the effective date of the 
final FAR rule published in the Federal Register at 81 FR 58562 on 
August 25, 2016. All clauses identified in the final FAR rule are 
unenforceable by law and considered to have never taken effect, even if 
they were included in a contract. Contracting officers are directed to 
modify, to the maximum extent practicable, existing contracts to remove 
any solicitation provisions and contract clauses related to the Fair 
Pay and Safe Workplaces rule because they are unenforceable by law. 
Since the FAR 52.222-60 clause, Paycheck Transparency (Executive Order 
13673), had gone into effect, starting on January 1, 2017, that clause 
will need to be removed if it was included. Other provisions, i.e., 
paragraph (s) of FAR 52.212-3, 52.222-57, 52.222-58, 52.222-59, and 
52.222-61, had been enjoined by a Court order prior to their effective 
date and should not have been incorporated into contracts.

II. 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. 
The rule being removed (FAR Case 2014-025) was 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. It was 
a major rule under 5 U.S.C. 804.

[[Page 51529]]

This rule being published today is a significant regulatory action and, 
therefore, was subject to review under Section 6(b) of E.O. 12866; it 
has been determined to be a major rule under 5 U.S.C. 804. This rule 
removes a prior rule that had been considered a major rule.
    The Regulatory Impact Analysis (RIA) that included a detailed 
discussion and explanation about the assumptions and methodology used 
to estimate the cost of the final rule under FAR Case 2014-025 is 
available at https://www.regulations.gov as a supporting document under 
FAR-2014-0025-0933. Exhibit 8 of the RIA presented a summary of the 
first-year, second-year, and annualized quantifiable costs of 
implementing the disclosure and paycheck transparency requirements of 
the final rule to contractors and subcontractors, as well as the 
estimated Government costs. The chart below shows the total monetized 
cost in the first and second year, and annualized costs with a 3 and 7 
percent discount to contractors and the Government.

----------------------------------------------------------------------------------------------------------------
                                                                                    Annualized      Annualized
                                                  Monetized year  Monetized year     costs, 3%       costs, 7%
                                                      1 costs         2 costs       discounting     discounting
----------------------------------------------------------------------------------------------------------------
Total employer costs............................    $458,352,949    $413,733,272    $398,541,816    $400,939,861
Government costs................................      15,772,150      10,129,299      10,944,157      11,091,474
                                                 ---------------------------------------------------------------
    Total.......................................     474,075,099     423,862,572     409,535,973     412,031,335
----------------------------------------------------------------------------------------------------------------

    Most of the 2016 final rule's provisions were preliminarily 
enjoined before compliance would have been required. (In addition, on 
March 27, 2017, under E.O. 13782, the President rescinded E.O. 13673, 
the Order that served as the underpinning of the rule. On the same day, 
the President signed the Joint Resolution that Congress passed under 
the Congressional Review Act disapproving the final rule.) Therefore, 
if the impacts of this final rule are assessed relative to current (and 
anticipated future) practice, the resulting impacts are negligible. If, 
on the other hand, this final rule's effects are assessed relative to a 
baseline in which regulated entities comply with the 2016 final rule, 
the costs summarized in the preceding table (minus the relatively small 
portion that may already have been incurred as entities prepared to 
comply with the regulatory provisions that were not enjoined) would be 
eliminated as a result of this rulemaking's removal of the 2016 final 
rule.

III. Executive Order 13771

    Consistent with E.O. 13771 (82 FR 9339, February 3, 2017), Reducing 
Regulation and Controlling Regulatory Costs, and the Office of 
Management and Budget (OMB) guidance on implementing E.O. 13771 (April 
5, 2017), the annualized cost savings of $412 million (with a 7 percent 
discount rate) associated with this final rule have been estimated, as 
shown in section II, above. (Of particular relevance is the statement 
in OMB's guidance that costs associated with ``regulatory actions 
overturned by subsequently enacted laws . . . such as disapprovals of 
rules under the Congressional Review Act'' qualify as cost savings 
under E.O. 13771.) This rulemaking constitutes a deregulatory action 
under E.O. 13771.

IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
this final rule does not constitute a significant FAR revision within 
the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require 
publication for public comment. However, the rule reduces the burden on 
small entities as it rescinds the August 25, 2016, Fair Pay and Safe 
Workplaces (FAR Case 2014-025), major rule.

V. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies to this 
rule, because this rule removes information collection requirements 
currently cleared by the Office of Management and Budget (OMB) under 
OMB clearance 9000-0195, Fair Pay and Safe Workplaces. The final rule, 
published August 25, 2016, contained the following summary table of the 
annual estimated cost to the public of the reporting burden:

Table 3--Summary of Table 1 Annual Estimated Total Cost to the Public of
                            Reporting Burden
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Number of respondents...................................          24,183
Responses per respondent................................            17.3
Total annual responses..................................         417,808
Hours per response......................................            5.19
Total hours.............................................       2,166,815
Rate per hour (average).................................          $61.43
Total annual cost to public.............................    $133,109,793
------------------------------------------------------------------------

    The requirements that would impose these burden hours are now 
removed from the FAR and OMB clearance 9000-0195 has been discontinued.

List of Subjects in 48 CFR Parts 1, 4, 9, 17, 22, 42, and 52

    Government procurement.

    Dated: October 11, 2017.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of 
Acquisition Policy, Office of Governmentwide Policy.

    Therefore DoD, GSA, and NASA amend 48 CFR parts 1, 4, 9, 17, 22, 
42, and 52 as set forth below:


0
1. The authority citation for 48 CFR parts 1, 4, 9, 17, 22, 42, 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, by removing FAR segments ``52.222-57'', 
``52.222-58'', ``52.222-59'' and ``52.222-60'' and their corresponding 
OMB Control Number ``9000-0195'', and the Note to 1.106.

PART 4--ADMINISTRATIVE MATTERS


4.1202   [Amended]

0
3. Amend section 4.1202 by removing paragraph (a)(22), and Note to 
paragraph (a)(22), and redesignating paragraphs (a)(23) through (34) as 
paragraphs (a)(22) through (33), respectively.

PART 9--CONTRACTOR QUALIFICATIONS


9.104-4   [Amended]

0
4. Amend section 9.104-4 by removing paragraph (b), and Note to 
paragraph (b), and redesignating paragraph (c) as paragraph (b).


9.104-5   [Amended]

0
5. Amend section 9.104-5 by removing paragraph (d), and Note to 
paragraph (d), and redesignating paragraph (e) as paragraph (d).

[[Page 51530]]


0
6. Amend section 9.104-6 by--
0
a. Revising paragraph (b)(4), and removing Note to paragraph (b)(4); 
and
0
b. Removing paragraph (b)(6), and Note to paragraph (b)(6).
    The revision reads as follows:


9.104-6  Federal Awardee Performance and Integrity Information System.

* * * * *
    (b) * * *
    (4) Since FAPIIS may contain information on any of the offeror's 
previous contracts and information covering a five-year period, some of 
that information may not be relevant to a determination of present 
responsibility, e.g., a prior administrative action such as debarment 
or suspension that has expired or otherwise been resolved, or 
information relating to contracts for completely different products or 
services.
* * * * *


9.105-1   [Amended]

0
7. Amend section 9.105-1 by removing paragraph (b)(4), and Note to 
paragraph (b)(4).


9.105-3   [Amended]

0
8. Amend section 9.105-3 by removing from paragraph (a) ``9.105-
2(b)(2)(iii) and''.

PART 17--SPECIAL CONTRACTING METHODS


17.207  [AMENDED]

0
9. Amend section 17.207 by--
0
a. Removing from paragraph (c)(6) ``considered;'' and adding 
``considered; and'' in its place;
0
b. Removing from paragraph (c)(7) ``ratings; and'' and adding 
``ratings.'' in its place; and
0
c. Removing paragraph (c)(8), and Note to paragraph (c)(8).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0
10. Revise section 22.000 to read as follows:


22.000  Scope of Part.

    This part--
    (a) Deals with general policies regarding contractor labor 
relations as they pertain to the acquisition process;
    (b) Prescribes contracting policy and procedures for implementing 
pertinent labor laws; and
    (c) Prescribes contract clauses with respect to each pertinent 
labor law.

0
11. Amend section 22.102-2 by--
0
a. Revising the section heading and paragraph (c)(1); and
0
b. Removing paragraph (c)(3), and Note to paragraph (c)(3).
    The revision reads as follows:


22.102-2  Administration.

* * * * *
    (c)(1) The U.S. Department of Labor is responsible for the 
administration and enforcement of the Occupational Safety and Health 
Act. The Department of Labor's Wage and Hour Division is responsible 
for administration and enforcement of numerous wage and hour statutes 
including--
    (i) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements 
(Construction);
    (ii) 40 U.S.C. chapter 37, Contract Work Hours and Safety 
Standards;
    (iii) The Copeland Act (18 U.S.C. 874 and 40 U.S.C. 3145);
    (iv) 41 U.S.C. chapter 65, Contracts for Materials, Supplies, 
Articles, and Equipment Exceeding $15,000;
    (v) 41 U.S.C. chapter 67, Service Contract Labor Standards.
* * * * *


22.104   [Removed]

0
12. Remove section 22.104.

Subpart 22.20--[Removed and Reserved]

0
13. Remove and reserve Subpart 22.20.

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES


42.1502   [Amended]

0
14. Amend section 42.1502 by removing paragraph (j), and Note to 
paragraph (j).


42.1503   [Amended]

0
15. Amend section 42.1503 by--
0
a. Removing from paragraph (a)(1)(i) ``agency labor compliance advisor 
(ALCA) office (see subpart 22.20),'' and removing Note to paragraph 
(a)(1)(i);
0
b. Removing from paragraph (a)(1)(ii) ``ALCA,'' and removing Note to 
paragraph (a)(1)(ii); and
0
c. Removing paragraph (h)(5), and Note to paragraph (h)(5) introductory 
text.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
16. Amend section 52.204-8 by--
0
a. Revising the date of the provision;
0
b. Removing paragraph (c)(1)(xvi), and Note to Paragraph (c)(1)(xvi); 
and
0
c. Redesignating paragraphs (c)(1)(xvii) through (xxv) as (c)(1)(xvi) 
through (xxiv), respectively.
    The revision reads as follows:


52.204-8  Annual Representations and Certifications.

* * * * *
https://www.youtube.com/watch?v=B-OFXUaMIv8Annual Representations and 
Certifications (NOV 2017)
* * * * *

0
17. Amend section 52.212-3 by--
0
a. Revising the date of the provision;
0
b. Removing from paragraph (a), the following definitions 
``Administrative merits determination'', ``Arbitral award or 
decision'', ``Civil judgment'', ``DOL Guidance'', ``Enforcement 
agency'', ``Labor compliance agreement'', Labor laws'', and ``Labor law 
decision'';
0
c. Removing Note to paragraph (a); and
0
d. Removing and reserving paragraph (s), and removing the Note to 
paragraph (s).
    The revision reads as follows:


52.212-3  Offeror Representations and Certifications--Commercial Items.

* * * * *
Offeror Representations and Certifications--Commercial Items (NOV 2017)
* * * * *

0
18. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Removing paragraphs (b)(35), Note to paragraph (b)(35), and (b)(36), 
and redesignating paragraphs (b)(37) through (61) as (b)(35) through 
(59), respectively;
0
c. Removing paragraphs (e)(1)(xvii), Note to paragraph (e)(1)(xvii), 
and (e)(1)(xviii), and redesignating paragraphs (e)(1)(xix) through 
(xxii) as (e)(1)(xvii) through (xxi), respectively; and
0
d. Amending Alternate II by--
0
i. Revising the date of the Alternate; and
0
ii. Removing paragraphs (e)(1)(ii)(P), Note to paragraph (e)(1)(ii)(P), 
and (e)(1)(ii)(Q) of Alternate II, and redesignating paragraphs 
(e)(1)(ii)(R) through (U) as (e)(1)(ii)(P) through (S), respectively.
    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 (NOV 2017)
* * * * *
    Alternate II (NOV 2017). * * *
* * * * *

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

[[Page 51531]]

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

* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (NOV 2017)
* * * * *
    (a) * * *
    (2) * * *
    (viii) 52.244-6, Subcontracts for Commercial Items (NOV 2017)
* * * * *


52.222-57 through 52.222-61   [Removed and Reserved]

0
20. Remove and reserve sections 52.222-57 through 52.222-61.

0
21. Amend section 52.244-6 by--
0
a. Revising the date of the clause; and
0
b. Removing paragraphs (c)(1)(xiv), Note to paragraph (c)(1)(xiv), and 
(c)(1)(xv), and redesignating paragraphs (c)(1)(xvi) through (xx) as 
(c)(1)(xiv) through (xviii), respectively.
    The revision reads as follows:


52.244-6  Subcontracts for Commercial Items.

* * * * *
Subcontracts for Commercial Items (NOV 2017)
* * * * *
[FR Doc. 2017-23590 Filed 11-3-17; 8:45 am]
 BILLING CODE 6820-EP-P