Modernizing Suspension and Debarment, 2078-2101 [2019-28490]
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Federal Register / Vol. 85, No. 9 / Tuesday, January 14, 2020 / Proposed Rules
§§ 100.717, 100.718, 100.720, 100.722,
100.728, 100.734, 100.735, 100.736 and
100.740 [Removed]
4. Remove §§ 100.717, 100.718,
100.720, 100.722, 100.728, 100.734,
100.735, 100.736 and 100.740.
■
Dated: January 8, 2020.
Matthew A. Thompson,
Captain, U.S. Coast Guard, Captain of the
Port Sector St. Petersburg.
[FR Doc. 2020–00330 Filed 1–13–20; 8:45 am]
BILLING CODE 9110–04–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 16
[GN Docket No. 19–309; FCC 19–120]
Modernizing Suspension and
Debarment
Federal Communications
Commission.
ACTION: Proposed rule.
AGENCY:
In this document, the Federal
Communications Commission (the FCC
or Commission) proposes to adopt new
rules consistent with Office of
Management and Budget Guidelines to
Agencies on Government Debarment
and Suspension (Nonprocurement)(the
Guidelines). The Commission proposes
that such new rules be applied to
transactions under the Universal Service
Fund (USF) and Telecommunications
Relay Services (TRS) programs and the
National Deaf-Blind Equipment
Distribution Program (NDBEDP). The
Commission also proposes certain
modifications to the Guidelines,
including as appropriate transitional
mechanisms for situations in which the
suspended or debarred entity may be
the sole source for the service involved.
The Commission proposes that any new
rules for suspension and debarment be
put into a new Part 16 in title 47 of the
Code of Federal Regulations.
DATES:
Comments Due: February 13, 2020.
Reply Comments Due: March 16,
2020.
ADDRESSES: Electronic Filers: Comments
may be filed electronically using the
internet by accessing the ECFS: https://
www.fcc.gov/ecfs/. Paper Filers: All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission. All hand-delivered or
messenger-delivered paper filings for
the Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St. SW, Room TW–A325,
Washington, DC 20554. The filing hours
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SUMMARY:
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are 8:00 a.m. to 7:00 p.m. Commercial
overnight mail (other than U.S. Postal
Service Express Mail and Priority Mail)
must be sent to 9050 Junction Drive,
Annapolis Junction, MD 20701. U.S.
Postal Service first-class, Express, and
Priority mail must be addressed to 445
12th Street SW, Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT:
Paula Silberthau, Attorney-Advisor,
Administrative Law Division, Office of
General Counsel, (202) 418–1874 or
Paula.Silberthau@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Proposed Rulemaking, FCC 19–102,
adopted on November 22, 2019 and
released on November 25, 2019. The
complete text of this document is
available for inspection and copying
during normal business hours in the
FCC Reference Information Center,
Portals II, 445 12th Street SW, Room
CY–A257, Washington, DC 20554. To
request materials in accessible formats
for people with disabilities (Braille,
large print, electronic files, audio
format), send an email to FCC504@
fcc.gov or call the Consumer &
Governmental Affairs Bureau at (202)
418–0530 (voice), (202) 418–0432
(TTY). The complete text of the order
also is available on the Commission’s
website at https://www.fcc.gov.
Synopsis
I. Introduction
1. The Commission oversees a number
of critical support programs, including
the Universal Service Fund (USF)
programs, the Telecommunications
Relay Services (TRS) programs, and the
National Deaf-Blind Equipment
Distribution Program (NDBEDP). Part of
the Commission’s role in overseeing
these programs is protecting them from
fraud, waste, and abuse. One important
way the Commission does this is by
identifying and barring from
participation those who have abused or
are likely to abuse these programs. This
is why the Commission has, for its USF
programs, implemented rules that
suspend or debar those convicted of or
found civilly liable for certain
misconduct related to these programs.
2. While these rules have positive
effects, this proceeding explores
whether there is more that the
Commission can do. Specifically, we
propose to adopt new rules consistent
with the Office of Management and
Budget Guidelines to Agencies on
Government Debarment and Suspension
(Nonprocurement) (the Guidelines). The
Guidelines provide additional tools—
adopted by a number of other federal
agencies across the government—that
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could enhance the Commission’s ability
to root out bad actors from participation
in its support programs. If adopted,
these measures could not only help the
Commission to fulfill its responsibility
of ensuring that the USF and TRS funds
are well managed, efficient, and fiscally
responsible, but may also assist us in
bridging the digital divide by ensuring
that fund expenditures, including
support for expanded broadband
deployment, are directed in the first
instance to good actors who will use
them only for their intended purpose.
For these reasons, this document
proposes to adopt new rules consistent
with the Guidelines in lieu of the
Commission’s current rules, and to
apply these new rules to the four USF
programs, as well as to the
Commission’s TRS programs 1 and to
the NDBEDP.2
II. Background
3. Most federal agencies have
implemented the Guidelines—either
wholesale or with modifications. The
Commission stands apart from these
agencies with its own rules for reasons
that are largely historical. In 2003, when
the Commission adopted its own
suspension and debarment rules for
certain USF programs, independent
regulatory agencies like the Commission
were expressly excluded from coverage
under the Guidelines for
Nonprocurement Debarment and
Suspension that preceded the current
Guidelines.3 But when OMB adopted in
2005 the interim final changes to what
have become known as the Guidelines,
OMB modified this long-standing
definition to remove the exclusion for
independent agencies. As a result,
independent regulatory agencies such as
the Commission may participate in the
1 For purposes of this document, the term ‘‘TRS
programs’’ means all programs described in Chapter
64, subpt. F, of the Commission’s rules, including
without limitation telecommunications relay
services, speech-to-speech relay services, and video
relay services. TRS enables an individual who is
deaf, hard of hearing, deaf-blind, or who has a
speech disability to communicate by telephone or
other device through the telephone system. TRS is
provided in a variety of ways. Currently, interstate
TRS calls and all internet Protocol (IP) based TRS
calls, both intrastate and intrastate, are supported
by the Fund.
2 The NDBEDP provides equipment needed to
make telecommunications, advanced
communications, and the internet accessible to lowincome individuals who are deaf-blind. For
purposes of this document, we refer to the TRS
program and the NDBEDP separately because they
are certified and operated in different ways.
3 These earlier guidelines, typically referred to as
the ‘‘Common Rules,’’ were implemented through
rules promulgated by executive agencies other than
independent agencies. The Commission’s exclusion
was echoed in the subsequent OMB Notice of
Proposed Rulemaking proposing revisions to those
earlier guidelines.
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government-wide suspension and
debarment system by adopting the
Guidelines. With that history in mind,
we here briefly summarize these two
debarment mechanisms and explain
some of the key differences between
them.
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A. The Commission’s Current
Suspension and Debarment Rules
4. The Commission’s current rules
addressing suspension and debarment
apply only to the USF programs.4 In
general, these rules cover a relatively
narrow range of conduct and are clearcut, mandatory, and virtually selfexecuting. The rules are nondiscretionary and require the
Commission to suspend or disbar any
‘‘person’’ 5 convicted (by plea or
judgment) of, or found civilly liable for,
the ‘‘attempt or commission of criminal
fraud, theft, embezzlement, forgery,
bribery, falsification or destruction of
records, making false statements,
receiving stolen property, making false
claims, obstruction of justice and other
fraud or criminal offense arising out of
activities associated with or related to
the schools and libraries support
mechanism, the high-cost support
mechanism, the rural health care
support mechanism, and the lowincome support mechanism.’’ A
suspension or debarment of an entity
applies to all organizational units of the
entity unless the order specifies
otherwise. A suspension immediately
excludes a person from activities related
to the USF programs, but only for a
temporary period pending completion
of the debarment proceedings. The
debarment runs for the period specified
by Commission order, generally three
years.
5. Proceedings begin with a notice of
suspension and proposed debarment
issued by the Commission. The person
subject to the suspension and proposed
debarment has 30 days from the earlier
of receipt of notice or publication in the
Federal Register to challenge the
Commission’s action. The Commission
must make a final ruling, overturning
the original decision only in light of
‘‘extraordinary circumstances,’’ no later
4 We note that a few Commission rules also
mention ‘‘disqualification’’ from program
participation as a possible remedy for unlawful
conduct. The TRS program and NDBEDP provide
for ‘‘suspension’’ or ‘‘revocation’’ of certification
under sections 64.606(e) and 64.6207(h) of the
Commission’s rules. However, section 54.8 of the
Commission’s rules is the only provision that
expressly provides for ‘‘suspension’’ and
‘‘debarment.’’
5 Under section 54.8, a ‘‘person’’ is ‘‘[a]ny
individual, group of individuals, corporation,
partnership, association, unit of government or legal
entity, however organized.’’
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than 90 days after receipt of a
petitioner’s arguments. While a
suspension or debarment is in effect, the
Commission may, on motion by the
affected party or sua sponte, reverse
such a finding or limit its effect in light
of extraordinary evidence. The default
period for debarment is three years,
though the Commission may, if it serves
the public interest, set a longer period
at the beginning or extend the period
during which it is in effect.
B. The OMB Guidelines
6. The Guidelines establish the
framework for a government-wide
debarment and suspension system for
nonprocurement programs.6 The
Guidelines generally provide for
suspension or debarment based on a
range of misconduct. This range
includes not only convictions of or civil
judgments for fraud or certain criminal
offenses, but also violations of the
requirements of public transactions ‘‘so
serious as to affect the integrity of an
agency program’’ (including willful or
repeated violations).7 In addition, the
Guidelines provide that suspension or
debarment could be warranted for
‘‘[f]ailure to pay a single substantial
debt, or a number of outstanding debts
. . . owed to any Federal agency. . . .’’
Finally, the Guidelines provide the
discretion to suspend or debar for ‘‘[a]ny
other cause of so serious or compelling
a nature that it affects [the party’s]
present responsibility.’’
7. Suspensions under the Guidelines
have prospective but immediate effect,
and debarments are effective following
a 30-day opportunity for a party to
respond to a debarment notice. Once
effective, an action to suspend or debar
serves to automatically exclude the
suspended or debarred party from new
covered transactions government-wide,
whether in procurement or
nonprocurement programs or activities.
For ongoing activities, ‘‘a participant
may continue to use the services of an
6 Section 180.970 of the Guidelines defines ‘‘nonprocurement transaction’’ as ‘‘any transaction,
regardless of type (except procurement contracts),’’
including but not limited to grants, cooperative
agreements, scholarships, fellowships, contracts of
assistance, loans, loan guarantees, subsidies,
insurances, payments for specified uses, and
donation agreements.’’ Suspension and debarment
rules for federal procurement contracts are
contained in part 9 of the Federal Acquisition
Regulation (FAR).
7 The Guidelines also provide that the suspending
officer may impose suspension only when
immediate action is necessary to protect the public
interest, and that official determines either that (1)
the participant has been indicted for, or there is
adequate evidence to suspect, an offense listed in
section 180.800(a) of the Guidelines; or (2) there is
adequate evidence to suspect the existence of any
other cause for debarment listed in sections
180.800(b)–(d)) of the Guidelines.
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excluded person as a principal’’ if the
participant was ‘‘using the services of
that person in the transaction before the
person was excluded.’’ The participant
also has the option of discontinuing the
excluded person’s services and finding
an alternative provider.
C. Differences Between the Guidelines
and the Commission’s Rules
8. The Commission’s rules differ from
the Guidelines in several key respects.
The Commission’s rules are clear-cut
and mandatory, with little room for
discretion and a targeted focus on a
narrow set of misconduct; the
Guidelines, by contrast, address a
broader range of misconduct and
provide federal agencies with
substantial discretion to suspend and
debar entities based on consideration of
numerous factors. Here, we briefly
review some of the key differences
between these two debarment
mechanisms.
9. First, the rules differ in scope and
reach. While the Commission’s rules
apply only to its four USF programs, the
Guidelines broadly cover all
nonprocurement transactions (unless
otherwise modified by agency-specific
rules) including subsidies, grants, loans,
or other ‘‘payments for specified uses.’’
The Guidelines also reach further down
the supply chain, requiring that, before
a primary tier participant enters into a
covered transaction with another person
at the next lower tier—for example, a
subcontractor—the participant must
verify that the person with whom it
intends to do business is not excluded
or disqualified.8
10. Second, the Guidelines provide
greater discretion to agencies in
determining which entity to debar and
for what misconduct. As described
above, the Guidelines consider a
broader range of misconduct than the
Commission’s rules. They also do not
require a prior court judgment or
conviction. Thus, in contrast to the
FCC’s current rules, suspension or
8 ‘‘Exclusion’’ generally refers to being suspended
or debarred, as discussed in this Notice.
‘‘Disqualification’’ means that a person is
prohibited from participating in specified Federal
procurement or nonprocurement transactions as
required under a statute, Executive order (other
than Executive Orders 12549 and 12689) or other
authority. The Guidelines allow for the inclusion of
disqualified persons in the System for Award
Management Exclusions and state the
responsibilities of federal agencies and participants
to check for disqualified persons before entering
into covered transactions. The Guidelines do not,
however, specify the transactions for which a
disqualified person is ineligible, the entities to
which a disqualification applies, or the process that
a federal agency uses to disqualify a person, as
those factors are dependent on the underlying
statute, Executive order or regulation that caused
the disqualification.
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debarment actions under the Guidelines
do not have to await completion of
criminal or civil proceedings.9 The
Guidelines also allow an agency to
impute conduct from an individual to
an organization; from an organization to
an individual or between individuals; or
from one organization to another. Thus,
action could be taken against an
organization, not just a principal, or the
reverse, in appropriate circumstances.
11. Third, the Guidelines provide
greater flexibility in fashioning the
terms of a suspension or debarment. The
Guidelines afford a federal agency
substantial discretion to suspend, based
on adequate evidence, or debar, based
on a preponderance of evidence, as
determined in the discretion of the
designated suspending or debarring
official. The Guidelines also give a
suspending official ‘‘wide discretion’’ to
determine whether immediate action is
necessary to protect the public interest.’’
As a result, an agency may immediately
prevent the suspended party from
entering into additional transactions
under its programs. The Guidelines also
allow an agency head to grant an
‘‘exception’’ to allow an excluded
person to participate in a particular
transaction.
12. Fourth, the Guidelines establish a
government-wide debarment system.
While determinations under the
Commission’s rules apply only to the
Commission, the Guidelines provide for
a government-wide system with
reciprocity among federal agencies that
adopt rules consistent with the
Guidelines. This means that a party that
has been suspended or debarred by
another agency and placed on the
government-wide System for Award
Management Exclusions (commonly
known as the ‘‘SAM Exclusions’’)
maintained by the General Services
Administration (GSA) 10 would be
9 Under the Guidelines the suspending official
must (1) have adequate evidence that there may be
a cause for debarment of a person and (2) conclude
that immediate action is necessary to protect the
federal interest. The Guidelines also provide that
‘‘[i]n deciding whether immediate action is needed
to protect the public interest, the suspending
official has wide discretion.’’ If legal or debarment
proceedings are initiated at the time of, or during
suspension, the suspension may continue until the
conclusion of those proceedings. Otherwise, a
suspension may not exceed 12 months. The
Guidelines define ‘‘legal proceedings’’ to mean ‘‘any
criminal proceeding or any civil judicial
proceeding, including a proceeding under the
Program Fraud Civil Remedies Act, to which the
Federal Government or a State or local government
or quasigovernmental authority is a party. The term
also includes appeals from those proceedings.’’ In
addition, if the legal standard is satisfied, the
agency may suspend a party during an
investigation.
10 The System for Award Management records for
an entity, including its exclusion status, can be
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barred from participation in covered
transactions unless an exception were
granted for good cause by the agency
head.11 To effect this reciprocity, the
Guidelines impose affirmative
disclosure requirements on
‘‘participants’’ in government programs
or other covered transactions.12 Before
entering into a covered transaction,
participants must notify the agency if
they are presently excluded or
disqualified. Those who are excluded
from government programs will be
listed on the System for Award
Management Exclusions. In addition,
primary tier participants (i.e., generally
those participants who transact business
directly with a federal agency) must
advise the agency whether they have
been convicted of certain offenses
within three years, indicted, or
terminated from public transactions.
Further, under the Guidelines, a federal
agency must check to see whether a
person is excluded or disqualified
before entering directly into a covered
transaction or approving a principal in
that transaction, and before approving
any lower tier participant or principal
thereof (if agency approval is required).
13. This is not an exhaustive list of
the differences between the Guidelines
and the Commission’s rules. We
strongly encourage interested parties to
review the OMB Guidelines, which can
be found at 2 CFR part 180, in addition
to this document.
III. Discussion
14. We propose to adopt new rules
consistent with the Guidelines. Doing so
would impose the following new
mechanisms and obligations, among
others: (1) New procedural requirements
that would allow the agency to respond
quickly to evidence of misconduct
through a suspension mechanism prior
to any debarment, while providing for a
later evidentiary proceeding that will
permit the Commission to consider a
broader range of wrongful conduct than
searched at https://www.sam.gov/SAM/pages/
public/searchRecords/search.jsf.
11 As proposed in this Notice, covered
transactions would be those under the USF or TRS
programs or the NDBEDP.
12 A participant is broadly defined as ‘‘any person
who submits a proposal for or who enters into a
covered transaction, including an agent or
representative of a participant.’’ The Guidelines
refer to two categories of ‘‘covered transactions’’—
those which are in the ‘‘primary tier, between a
Federal agency and a person’’ and those in a ‘‘lower
tier, between a participant in a covered transaction
and another person.’’ Obligations under the
Guidelines may vary depending upon whether a
party is a primary tier participant or lower tier
participant. Therefore, we propose below
clarifications for several Commission programs to
identify which persons would be considered
‘‘primary tier’’ participants within the meaning of
any new rules.
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is now considered; (2) requirements that
program participants confirm that those
with whom they do business are not
already excluded or disqualified from
government activities; and (3)
reciprocity within the Government-wide
system preventing a party that is
suspended or debarred by another
agency from participation in covered
Commission transactions unless the
Commission grants an exception for
good cause. We seek comment on this
proposal.
15. We propose to adopt new
debarment and suspension rules for
several reasons. First, adopting the
Guidelines would allow the
Commission to take remedial action
before the issuance of a judgment or
conviction, based on a broader range of
factors. As explained above, under our
current rules suspension and debarment
are triggered only by a final conviction
or civil judgment showing malfeasance
arising from or related to USF programs.
The Commission’s current rules allow
an entity to be subject to a Notice of
Apparent Liability (NAL) supported by
substantial evidence, or to enter into an
executed Consent Decree with an
admission of liability. However, even
undisputed evidence supporting an
NAL or Consent Decree, no matter how
egregious, would not constitute
sufficient grounds for a suspension or
debarment under our rules, which
require a judgment or conviction related
to USF programs. In addition, many
False Claims Act lawsuits arising from
alleged wrongdoing in USF programs
settle before final judgment, removing
those cases from the reach of the
Commission’s suspension and
debarment rules. Even if a conviction or
civil judgment is pursued for
malfeasance in a USF program, the
litigation typically takes many years,
and our current rules preclude a
suspension or debarment while
litigation is pending. Thus, while the
Commission anticipated that the
mandatory nature of the current
debarment rules would be a strong tool
to prevent fraud in the USF programs,
the narrow trigger for suspension and
debarment appears to be a significant
constraint on the Commission’s
authority to protect the USF through
those rules, in contrast to the more
flexible approach under the
Guidelines.13 Finally, as noted above,
13 After the adoption of our current suspension
and debarment rules in 2003, the Commission to
date has debarred 49 persons or entities, with only
one remaining currently debarred. Of those
debarred, 46 have been debarred for activities
pertaining to the E-rate program and 3 for activities
under the Lifeline program. Despite numerous
active investigations of wrongdoing in Commission
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malfeasance in other government
programs or even criminal convictions
outside the realm of the USF are not
factors that the Commission may
consider under the current rules. These
and other limitations on our suspension
and debarment procedures would be
eliminated by adopting new rules
consistent with the Guidelines.
16. Second, the Guidelines require
that persons make advance disclosures
regarding their exclusion or
disqualification status prior to entering
into covered transactions with federal
agencies and participants in federal
programs. More specifically, a person
who enters into a covered transaction
with a federal agency must disclose:
Whether they are presently excluded or
disqualified; recent convictions, civil
judgments, indictments, or civil charges;
and recent defaults on public
transactions. Lower tier transactions
(e.g., between a program participant and
a consultant) require only a disclosure
of exclusion or disqualification status.
These disclosures afford participants in
transactions more information by which
to evaluate whether it is appropriate or
prudent to do business with the person
making the unfavorable disclosures.
17. Third, under the Guidelines, the
Commission would have authority, like
other government agencies, to evaluate
the wrongful or fraudulent conduct of
companies or individuals in other
dealings with the government, and to
use the possibility of government-wide,
rather than program-specific,
suspension or debarment as a deterrent
to bad actors. In contrast, under the
Commission’s current rules, even a
company or individual debarred
government-wide for criminal or other
unlawful conduct currently could not be
barred from participation in the
Commission’s USF programs without a
prior judgment or conviction related to
a USF program. Furthermore, a party
suspended or debarred from the USF
programs under our current rules could
still participate in other Commission
programs such as TRS or NDBEDP; bid
for procurement contracts with the
Commission; and participate in both
procurement and nonprocurement
programs with other government
agencies.
18. We seek comment on the analysis
above. Would adopting suspension and
debarment rules consistent with the
Guidelines offer the benefits described?
Are there costs associated with adopting
programs, including several cases implicating the
False Claims Act, there have been no debarments
since 2015, in large measure due to the constraints
imposed by our current rules requiring a judgment
or conviction as a prerequisite to a Commission
suspension or debarment.
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such rules—for example, that broader
rules allowing for more agency greater
discretion might be create regulatory
uncertainty or be more difficult to
administer—that might outweigh these
benefits? Would adopting these rules
result in unintended consequences not
discussed here? We seek comment on
these questions, as well as our proposal
to adopt suspension and debarment
rules consistent with the Guidelines.
19. Following the practice of other
agencies, we propose to adopt rules
consistent with the Guidelines by
reference to the codified Guidelines,
and to supplement the Guidelines
through FCC-specific regulations,
including rules addressing those matters
for which the Guidelines give each
agency discretion. We note that other
federal agencies have adopted the bulk
of the Guidelines with limited changes,
and we propose to do the same here. In
the remainder of this document, we
propose supplemental rules and seek
comment on how to implement the
Guidelines in a manner that
accommodates concerns that may be
unique to the Commission’s programs.
A. Overview of Supplemental Rules
20. Our supplemental proposals fall
into three areas. First, we propose to
apply the suspension and debarment
rules to a broader category of entities
than are now covered, by defining
‘‘covered transactions’’ as including
conduct taken by participants in the
USF and TRS programs and the
NDBEDP, and by including as covered
transactions additional tiers of contracts
involving contractors, subcontractors,
suppliers, consultants, or their agents or
representatives that are participating in
these programs. For the reasons
discussed below, we propose that all
other agency programs or transactions
be exempted from the rules at this time.
21. Second, we propose to adopt
requirements that program participants
confirm that those with whom they do
business are not already excluded or
disqualified from government activities.
We note that such confirmation is
consistent with the Guidelines and
many entities who participate in federal
grant programs or seek federal contracts
should already be familiar with the
process. We also seek comment on
possible exceptions and how to
implement the principle of reciprocity,
which would prevent a party that is
suspended or debarred by another
agency from participation in covered
Commission transactions.
22. Third, again consistent with the
Guidelines, we propose new procedural
requirements that would allow the
agency to respond quickly to evidence
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2081
of misconduct through a suspension
mechanism, while providing for an
evidentiary proceeding, evaluating a
broader range of wrongful conduct than
is now considered,14 prior to any
disbarment.
23. We seek comment on these
supplemental proposals. We also seek
comment generally on any policies or
procedures that we should adopt if we
were to implement the Guidelines, and
in particular what procedures would be
‘‘consistent with the [OMB] guidance.’’
We seek comments about any other
changes to our rules that might be
appropriate should we choose to adopt
rules consistent with the Guidelines,
including our proposed supplemental
rules, particularly any conforming
changes that may be necessary,
including modifications of forms for
Commission programs, inclusion of
additional certifications, and such other
changes that may be necessary or
helpful in implementing any new
suspension and debarment rules. In
particular, we seek comment on any
changes required with respect to our
rules for the contents of applications to
participate in competitive bidding to
receive auctioned support through
covered transactions.
24. We also invite comment on the
experiences of other agencies
responsible for overseeing large
programs that have applied the
Guidelines. Have other agencies
adopted the Guidelines largely intact, or
are modifications commonly adopted so
that suspension and debarment
processes reflect the unique nature of
the programs and missions the agencies
oversee? Are there lessons learned by
other agencies that could inform the
Commission’s adoption of expanded
suspension and debarment rules
consistent with the Guidelines?
25. While this document focuses on
areas where we propose to supplement
or deviate from the Guidelines,
interested parties who believe the
Commission should consider other
changes to the Guidelines in its
supplemental regulations should set
forth their proposals, and the rationales
supporting the proposed change, with
specificity.
14 The Guidelines provide federal agencies with
substantial discretion to suspend and debar
participants based on consideration of numerous
factors. Moreover, through imputation rules, action
could be taken against an organization, not just a
principal, or the reverse, in appropriate
circumstances. The imputation rules too would
plug a gap in the Commission’s current suspension
and debarment mechanism.
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B. Covered Transactions and Disclosure
Requirements
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26. Generally. The Guidelines define
‘‘non-procurement transactions’’ as ‘‘any
transaction, regardless of type (except
procurement contracts),’’ including but
not limited to grants, cooperative
agreements, scholarships, fellowships,
contracts of assistance, loans, loan
guarantees, subsidies, insurances,
payments for specified uses, and
donation agreements. Notwithstanding
this definition, the Guidelines provide
flexibility to agencies to determine
which non-procurement transactions
should be covered by their suspension
and debarment rules. For example, the
Guidelines specifically exclude from
their scope any non-procurement
transaction that is exempted by a federal
agency’s regulation. The Guidelines also
exclude by default any ‘‘permit, license,
certificate, or similar instrument issued
as a means to regulate public health,
safety, or the environment,’’ unless a
federal agency specifically designates it
to be a covered transaction.
27. If the Commission implements the
Guidelines, should all transactions
covered by the OMB definitions be
included within the suspension and
debarment regime? Are there additional
types of transactions that should be
included in addition to the examples
provided in the Guidelines? Are there
additional program-specific
clarifications that should be made—for
example, should the Commission clarify
that Lifeline enrollment representatives
who enroll individuals in the Lifeline
program are executing covered
transactions because enrollment is
required before the service provider can
claim a subsidy, or is that sufficiently
clear from the Guidelines? Conversely,
are there specific Commission
nonprocurement transactions or
programs that should be exempted from
coverage? 15 For example, are there
some programs or activities that should
be exempted because remedies other
than suspension or debarment (e.g.,
license revocation) may be more
appropriate? Commenters should
identify specific transactions that
should be included as covered
transactions or exempted from the
proposed suspension and debarment
15 We
note that procurement contracts awarded
directly by a federal agency would not be
considered ‘‘covered transactions’’ under the
nonprocurement government-wide guidance for
suspension and debarment. However, where nonfederal participants in nonprocurement transactions
award contracts for goods or services, such
contracts would be deemed to be covered
transactions if the amount of the contract equals or
exceeds $25,000.
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rules and provide the rationale for that
recommendation.
28. USF, TRS, and NBDEDP as
covered transactions. The Commission’s
primary permanent nonprocurement
programs are the USF and TRS
programs. In 2018, disbursements
totaled $8.33 billion for USF programs
and $1.4 billion 16 for TRS. We propose
that all transactions under the USF and
TRS programs be considered covered
transactions under any new rules, as
well as transactions under the NDBEDP,
and that all other Commission
transactions be exempt from those
rules.17 We tentatively conclude that
application of the suspension and
debarment rules to these programs will
improve the sustainability of their
funding for the benefit of those whom
the programs serve. We seek comment
on this proposal, as well as this
tentative conclusion. More specifically,
under the TRS programs and NDBEDP,
the Commission grants TRS and
NDBEDP participants authorization to
provide services and equipment
pursuant to certifications and
reimburses TRS providers and NDBEDP
certified programs for services and
equipment provided to beneficiaries.
We invite comment on the benefits of
applying the suspension and debarment
rules to the TRS programs and to the
NDBEDP.
29. General exemption for all other
transactions, including authorizations
and licenses. The Guidelines primarily,
but not exclusively, focus on
transactions that involve a transfer of
Federal funds to a non-Federal entity.18
The Guidelines also exclude by default
from the definition of ‘‘covered
transaction’’ any ‘‘permit, license,
certificate, or similar instrument issued
as a means to regulate public health,
safety, or the environment,’’ unless a
federal agency specifically designates it
16 Total disbursements for the NDBEDP, which
come from the interstate TRS Fund, are limited to
$10 million annually.
17 In its most recent audit of the Commission’s
compliance with the Improper Payments
Elimination and Recovery Improvement Act, the
FCC’s Inspector General listed nine programs that
make disbursements under the direction of the
Commission and its administrators: The four USF
programs; the administrative costs of the Universal
Service Administrative Company (USAC), the USF
administrator; TRS; the North American Numbering
Plan; payments related to the broadcast incentive
auction (the TV Broadcaster Relocation Fund); and
FCC operating expenses generally. In the report,
OIG noted that the Commission had identified three
of the USF programs and the TRS program as being
susceptible to the risk of significant improper
payments.
18 The guidelines define ‘‘nonprocurement
transaction’’ to include, among other things, grants,
loans, loan guarantees, and subsidies. However, it
is not necessary that a nonprocurement transaction
include a transfer of Federal funds.
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to be a covered transaction. Consistent
with the framework in the Guidelines,
we propose to exclude all transactions
other than those involving the USF,
TRS, and NDBEDP from the scope of our
proposed rules, such as applications for
section 214 authorizations, equipment
authorizations, and broadcast and
spectrum licenses issued by the
Commission. The Communications Act
of 1934, as amended (Communications
Act) and the Commission’s
implementing regulations govern the
qualifications of applicants for such
licenses and authorizations and the
standards for revocation of the same.
Similarly, we propose to exclude all
transactions to or from licensees and
those with spectrum usage rights
(excluding, of course, those USF, TRS,
and NDBEDP transactions where such
an entity happens to be a participant),
such as incentive auction payments or
repacking payments.19 Such payments
should not be ‘‘covered transactions’’
that might be stopped by suspension or
debarment rules as the public interest is
best served by facilitating spectrum
usage right relinquishments or
repacking in such circumstances—and
the statutes and rules regarding the
collection of any outstanding debts still
apply and provide more appropriate
remedies to protect these payments.20
We seek comment on this proposal.
30. The Guidelines, unless otherwise
expanded by agency rule, apply to two
categories of transactions: A ‘‘primary
tier between a federal agency and a
person’’; and a ‘‘lower tier, between a
participant in a covered transaction and
another person.’’ Both primary tier and
lower tier participants must disclose
whether they, or any of their principals,
are excluded or disqualified. Primary
tier participants, however, must also
disclose to the federal agency certain
convictions, civil judgments,
indictments, other criminal or civil
charges, or defaults on public
transactions of the participant or any of
their principals.
31. Agencies have some discretion
within the parameters of the Guidelines
to designate primary versus lower tier
participants, and to expand the tiers that
would be considered to be ‘‘lower
tier.’’ 21 In this section, we propose to
19 As noted, this exclusion, of course, would not
apply to those USF, TRS, and NDBEDP transactions
where such an entity is a participant.
20 Thus, other provisions protect against
payments to parties with existing debts to the
Commission and other federal government entities.
21 More specifically, the Guidelines also include
as ‘‘covered transactions’’ any contract for goods
and services awarded by a participant in a
nonprocurement transaction covered under
§ 180.210 that is expected to equal or exceed
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designate certain actors in the USF and
TRS programs and the NDBEDP as
primary tier participants, and others as
lower tier participants. We also propose,
consistent with the Guidelines, to
designate certain entities who do not
directly contract with the primary tier
participant (for example,
subcontractors) as lower tier
participants if they meet certain
criteria.22 Before we do so, however, we
set forth our proposals on what would
constitute a ‘‘principal.’’
32. Definition of ‘‘principal.’’ The
Guidelines define ‘‘principal’’ to mean
(a) an ‘‘officer, director, owner, partner,
principal, investigator, or other person
. . . with management or supervisory
responsibilities’’ or (b) a ‘‘consultant or
other person, whether or not employed
by the participant or paid with Federal
funds, who (1) [i]s in a position to
handle Federal funds; (2) [i]s in a
position to influence or control the use
of those funds; or (3) [o]ccupies a
technical or professional position
capable of substantially influence the
under an FCC program.23 We propose
this expansion of the definition to
ensure that all persons who have
substantial influence on or control over
a covered transaction may be considered
‘‘principals’’ even if they do not satisfy
any of the three prongs in the
Guidelines. For example, a person that
causes violations of rules applicable to
a party’s competitive bidding evaluation
might not be ‘‘influenc[ing] the
development or outcome of an activity
required to perform the covered
transaction’’, yet that person could merit
a debarment. This broadened definition
of ‘‘principal’’ would afford the
Commission the authority to consider
such conduct. Commenters should
identify any other categories of persons
who should be considered ‘‘principals’’
in addition to those discussed above.
34. Primary and lower tier
participants for the USF and TRS
programs and the NDBEDP—summary.
Our proposed designations for the
programs are summarized in the chart
below.
Primary tier participants
Lower tier participants
High-Cost .............................
Carriers ...............................
Lifeline ..................................
Carriers ...............................
Contractors, subcontractors,24 suppliers, consultants or their agents or representatives for High-Cost-supported transactions, if:
(1) such person has a material role relating to, or significantly affecting, claims for
disbursements related to the program;
(2) such party is considered a ‘‘principal’’; or
(3) the amount of the transaction is expected to be at least $25,000.
Any participant in the Lifeline program (except for the primary tier carrier), regardless of tier or dollar value, that is reimbursed based on the number of Lifeline
subscribers enrolled, commissions, or any combination thereof. Contractors, subcontractors, suppliers, consultants, or their agents or representatives and thirdparty marketing organizations for Lifeline-supported transactions, if
(1) such person has a material role relating to, or significantly affecting, claims for
disbursements related to the program;
E-Rate ..................................
Schools and Libraries Form
471 Service Providers.
RHC .....................................
Health Care Providers
Form 462/466 Service
Providers.
TRS ......................................
NDBEDP ..............................
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development or outcome of an activity
[in a transaction].’’ The Guidelines
further state that an agency may
‘‘[i]dentify specific examples of types of
individuals who would be ‘principals’
under the Federal agency’s
nonprocurement programs and
transactions, in addition to the types of
individuals specifically identified
above.’’
33. We propose that in addition to
those persons defined as principals
under the Guidelines, the term
‘‘principal’’ shall also mean ‘‘any person
who has a critical influence on, or
substantive control over, a covered
transaction, whether or not employed by
the participant.’’ Persons who may have
a critical influence on, or substantive
control over, a covered transaction
could include without limitation:
management and marketing agents,
accountants, consultants, investment
bankers, engineers, attorneys, and other
professionals who are in a business
relationship with participants in
connection with a covered transaction
2083
Service Providers ...............
$25,000, or any contract requiring the consent of an
official of a federal agency.
22 Sections 180.25(b)(2) and 180.220(c) of the
Guidelines provide agencies with the option to
include as ‘‘covered transactions an additional tier
of contracts awarded under covered
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(2) such party is considered a ‘‘principal’’; or
(3) the amount of the transaction is expected to be at least $25,000.
Contractors, subcontractors, suppliers, consultants, or their agents or representatives for E-Rate-supported transactions, if
(1) such person has a material role relating to, or significantly affecting, claims for
disbursements related to the program;
(2) such person is considered a ‘‘principal’’; or
(3) the amount of the transaction is expected to be at least $25,000.
Contractors, subcontractors, suppliers, consultants, or their agents or representatives for RHC-supported transactions, if
(1) such person has a material role relating to, or significantly affecting, claims for
disbursements related to the program;
(2) if such party is considered a ‘‘principal’’; or
(3) the amount of the transaction is expected to be at least $25,000.
Contractors, subcontractors, suppliers, consultants, or their agents or representatives for TRS- or NDBEDP-supported transactions, if:
(1) such person has a material role relating to, or significantly affecting, claims for
disbursements related to the program;
(2) such person is considered a ‘‘principal’’; or
(3) the amount of the transaction is expected to be at least $25,000.
nonprocurement transactions.’’ The Guidelines also
contain an Appendix-Covered Transactions, with
diagrams illustrating tiers of covered transactions.
23 This expanded definition of the term
‘‘Principal’’ draws upon a supplement to the
government-wide definition adopted by the
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Department of Housing and Urban Development
(HUD).
24 Under the Guidelines, subcontractors include
suppliers of goods and services.
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35. Primary and lower tiers—HighCost Programs. For the High-Cost
programs, we propose that the primary
tier participant will be the carrier
receiving support. We propose that
lower tier participants include
contractors, subcontractors, suppliers,
consultants, or their agents or
representatives for High-Cost-supported
transactions, regardless of the dollar
value of the contract or agreement, if (1)
such person has a material role relating
to, or significantly affecting, claims for
disbursements related to the High-Cost
program, or (2) such person is
considered a ‘‘principal.’’ 25 We also
propose that contractors, subcontractors,
suppliers, consultants, or their agents or
representatives be treated as lower tier
participants for all USF-supported
transactions, including High-Costsupported transactions, if the amount of
the transaction is expected to be at least
$25,000.
36. Primary and lower tiers—Lifeline
Program. Under the Lifeline program,
carriers can submit consumer Lifeline
applications to the National Verifier and
are in the best position to have up-todate information on customer activation
and use of their Lifeline service. In
addition, the carrier submits requests for
payment to the USF Administrator and
is in the best position to carry out the
obligations of primary tier participants
under the Guidelines. In contrast, the
direct interaction of low-income
consumers with the Commission or the
USF Administrator is incidental. We
propose that these beneficiaries not be
considered primary or lower tier
participants. Therefore, in the Lifeline
program, we propose that the primary
tier participant will be the carrier
receiving support.
37. We propose three categories of
lower tier participants in the Lifeline
program. First, we propose to include
parties (except for the primary tier
Lifeline carrier) to any contract or award
in which a person is reimbursed based
on the number of Lifeline subscribers
enrolled, by commission, or any
combination thereof, regardless of tier or
dollar value. Second, we propose that
lower tier participants would include
25 Our proposed new rules would provide: ‘‘The
term ‘Principal’ means, in addition to those
individuals described at 2 CFR 180.995, any person
who has a critical influence on, or substantive
control over, a covered transaction, whether or not
employed by the participant or paid with federal
funds. Persons who have a critical influence on, or
substantive control over, a covered transaction may
include, but are not limited to: Management and
marketing agents, accountants, consultants,
investment bankers, engineers, attorneys, and other
professionals who are in a business relationship
with participants in connection with a covered
transaction under an FCC program’’).
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contractors, subcontractors, suppliers,
consultants, or their agents or
representatives and third-party
marketing organizations for Lifelinesupported transactions, regardless of the
dollar value of the contract or
agreement, if (1) such person has a
material role relating to, or significantly
affecting, claims for disbursements
related to the Lifeline program, or (2)
such person is considered a ‘‘principal.’’
Finally, we propose that contractors,
subcontractors, suppliers, consultants,
or their agents or representatives and
third-party marketing organizations be
treated as lower tier participants for
Lifeline-supported transactions, if the
amount of the transaction is expected to
be at least $25,000.
38. Primary and lower tiers—E-Rate
Program. In the E-Rate program, after a
school, library, or consortium enters
into a signed contract or other legally
binding agreement for services eligible
for E-Rate discounts, the school, library,
or consortium will identify the selected
service provider using FCC Form 471.
For the E-Rate program, we propose that
both the program applicant (the school,
library, or consortium) and the service
provider(s) selected by the applicant (as
indicated on FCC Form 471) be
designated as primary tier participants.
Extending the primary tier designation
to applicants will allow us to obtain the
more extensive primary tier disclosures
from the applicants themselves, while
also ensuring that the applicants will
verify during their selection process that
a service provider is not excluded or
disqualified. We also propose that the
service providers selected by the
applicant schools, libraries, and
consortia also be considered primary
tier participants, regardless of whether
they submit invoices directly to USAC.
The experience of the Commission is
that service providers may often be
responsible for waste, fraud, and abuse,
and therefore the imposition of the more
substantial primary tier obligations
(particularly disclosure requirements)
on these entities would best achieve the
Commission’s goals of protecting federal
funds. We seek comment on this
proposal.
39. Under the E-Rate programs,
schools and libraries may create
‘‘consortia’’ that can seek competitive
bids or E-rate funding on behalf of all
their members. When schools and
libraries act through consortia, we
propose that the consortium itself,
acting through its lead member, would
be a primary tier participant, along with
the member schools or libraries.
However, in considering any proposed
suspension or debarment action, we
anticipate that the suspension and
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debarring officer should evaluate which
particular school or library consortium
member was responsible for the bad
conduct (in many cases, this may be the
lead member) and direct the suspension
and debarment orders to those
responsible for the bad acts, rather than
to all consortium members. We seek
comment on this proposal and how best
to implement the Guidelines in this
context.
40. Finally, we propose that lower tier
participants for the E-Rate program
include contractors, subcontractors,
suppliers, consultants, or their agents or
representatives (with the exception of
the service provider(s) designated on
FCC Form 471, which would be treated
as a primary tier participant) for USFsupported E-Rate transactions. We
propose that all such persons be treated
as lower tier participants, regardless of
the dollar value of their contract or
agreement, if (1) they have a material
role relating to, or significantly
affecting, claims for disbursements
related to the E-Rate program, or (2) they
are considered a ‘‘principal.’’ We also
propose that such persons be treated as
lower tier participants for all other ERate-supported transactions if the
amount of the transaction is expected to
be at least $25,000.
41. Primary and lower tiers—Rural
Health Care Program. We propose a
structure for the RHC program that is
substantially similar to the E-Rate
program. After an individual health care
provider (HCP) or a consortium enters
into a signed contract or other legally
binding agreement for services eligible
for RHC support, the HCP or consortium
will identify the selected service
provider using FCC Form 462 or 466. As
with the E-Rate program, we propose
that both the program applicant and the
service provider(s) selected by the
applicant (as indicated on FCC Form
462 or 466) be designated as primary
tier participants, for the reasons
discussed above.
42. Similarly, we propose that a
consortium applicant, acting through its
lead entity, would be the primary tier
participant, along with its member
HCPs, but that the suspension and
debarring officer should evaluate which
particular consortium member (for
example, the lead entity) was
responsible for the bad conduct and
direct the suspension and debarment
orders to those responsible for the bad
acts, rather than to all consortium
members.
43. Finally, as with the E-Rate
program, we propose that lower tier
participants for the RHC program
include contractors, subcontractors,
suppliers, consultants, or their agents or
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representatives (with the exception of
the service provider(s) designated on
FCC Forms 462 or 466, which would be
treated as a primary tier participant) for
USF-supported RHC program
transactions. We propose that all such
persons be treated as lower tier
participants, regardless of the dollar
value of their contract or agreement, if
(1) they have a material role relating to,
or significantly affecting, claims for
disbursements related to the RHC
program, or (2) they are considered a
‘‘principal.’’ We also propose that
contractors (except for the service
provider designated on FCC Forms 462
or 466), subcontractors, suppliers,
consultants, or their agents or
representatives be treated as lower tier
participants for all other RHC-supported
transactions if the amount of the
transaction is expected to be at least
$25,000. We seek comment on this
proposal and how best to implement the
Guidelines in this context.
44. Primary and lower tiers—TRS
programs and NDBEDP. We propose
that in the TRS programs and the
NDBEDP, the service and equipment
providers receiving payments shall be
deemed the primary tier participants. In
these programs, the service and
equipment providers evaluate the
qualifications of customers to
participate in the programs. In addition,
the service (or equipment) providers
submit requests for payment to the
program administrators and are in the
best position to carry out the obligations
of primary tier participants under the
Guidelines. For the TRS programs (other
than TRS that is provided through state
programs) and the NDBEDP, the primary
tier participants would be the
certificated entities that are reimbursed
by the Commission and the TRS Fund
administrator for providing services and
equipment under the covered
transactions. For TRS that is provided
through state TRS programs, the
primary tier participants would be the
TRS providers that are authorized by
each state to provide intrastate TRS
under the state program and that,
accordingly, are compensated by the
TRS Fund for the provision of interstate
TRS. For these programs, are there
certain types of participants that the
rules should treat differently? We note
that, for the NDBEDP, some participants
are state or local governments, and
others are non-profits. Are there reasons
why participants that are state or local
governments or non-profit entities
would require different treatment under
the Guidelines and the rules we propose
in this document? In contrast to the
service providers, the direct interaction
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of TRS and NDBEDP beneficiaries (i.e.,
individuals with disabilities) with the
FCC or the administrators is incidental.
Moreover, because beneficiaries (i.e.,
individuals with disabilities) in the TRS
program and NDBEDP do not directly
submit applications to the program
administrators, we propose that these
beneficiaries not be considered either
primary or lower tier participants, and
not be subject to the debarment rules.
We also note that the burden of
imposing lower tier obligations on these
individual beneficiaries would be
substantial and their obligations under
the rules, if they were considered
participants, could well be beyond their
ability or resources to carry out.
45. Consistent with the USF
programs, we propose that lower tier
participants for the TRS programs and
the NDBEDP include contractors,
subcontractors, suppliers, consultants,
or their agents or representatives for
TRS- or NDBEDP-supported
transactions. We propose that all such
persons be treated as lower tier
participants, regardless of the dollar
value of their contract or agreement
with the service provider, if (1) they
have a material role relating to, or
significantly affecting, claims for
disbursements related to the TRS or
NDBEDP programs, or (2) they are
considered a ‘‘principal.’’ We also
propose that contractors, subcontractors,
suppliers, consultants, or their agents or
representatives be treated as lower tier
participants for all other TRS- or
NDBEDP-supported transactions if the
amount of the transaction is expected to
be at least $25,000. We seek comment
on this proposal.
46. Transactions with the USF, TRS
Fund, and NDBEDP Administrators. We
also propose adoption of a clarification
to section 180.200 of the Guidelines
explaining that covered transactions
include not only transactions between a
person and the Commission, but also
any transactions between a person and
the administrators of the USF and TRS
programs and the NDBEDP, when those
entities are acting as agents of the
Commission for purposes of
administering the programs. We seek
comment on this proposal.
47. As noted, the Guidelines impose
important disclosure requirements on
both primary and lower tier
participants. In addition to the
discussion in this section, we refer
interested parties to the Guidelines in 2
CFR part 180, subpart C
(Responsibilities of Participants
Regarding Transactions Doing Business
with Other Persons). We note that
entities who participate in federal grant
programs (e.g., schools, libraries, or
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2085
rural health care providers) or seek
federal contracts (e.g., service providers)
should already be familiar with similar
requirements. As noted above, we
propose to exclude individual
beneficiaries in the Lifeline and TRS
programs and the NDBEDP (i.e., lowincome individuals and individuals
with disabilities) from these
requirements.
48. Primary tier participants.
Disclosures required of primary tier
participants (i.e., those who deal
directly with the agency or its agents by
submitting a proposal for, or entering
into, a covered transaction) are
extensive. They must not only advise
the agency if they are presently
excluded or disqualified, but must also
state whether the participant or any of
its principals for the transaction ‘‘have
been convicted within the preceding
three years of any of the offenses listed
in § 180.800(a) or had a civil judgment
rendered against [them] for one of those
offenses within that time period,’’ ‘‘are
presently indicted for or otherwise
criminally or civilly charged by a
governmental entity (Federal, State or
local) with commission of any of the
offenses listed in § 180.800(a),’’ or
‘‘[h]ave had one or more public
transactions . . . terminated within the
preceding three years for cause or
default.’’
49. We anticipate that disclosure
requirements could be implemented
through changes to existing program
forms and certification rules and seek
comment on how to implement such
requirements in a manner that
minimizes burdens on primary tier
participants. We also seek comment on
what changes to our rules and form
instructions may be required to further
communicate disclosure requirements
to primary tier participants. Finally, we
propose clarifying the disclosure rules
to require that such disclosures by
primary tier participants be made not
only to the USF, TRS, and NDBEDP
administrators, as the Commission’s
agents for the covered transactions, but
also to the Commission (with
disclosures to be submitted to the
attention of the applicable bureaus). We
seek comment on these proposals.
50. Lower tier participants. The
Guidelines disclosure requirements for
lower tier participants are less
extensive; these parties need only
disclose whether they are excluded or
disqualified from participating in
covered transactions. As a further
protection for agency transactions,
should any implementing rules adopted
by the Commission require that
participants at all or some of the lower
tiers also disclose the information
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applicable to primary tier participants to
both the Commission and to the higher
tier participant with which they seek to
conduct business? For example, in the
E-Rate program, a service provider
would be required to disclose the
primary tier information to the
Commission, but the program
beneficiaries (the schools and libraries)
might also find that information useful
in evaluating the services offered by
their potential service providers.
51. We note that under the
Guidelines, a disclosure of unfavorable
information by a primary tier
participant would not necessarily cause
the federal agency to deny participation
(except for instances of exclusion or
disqualification), and our proposal
would extend this protection to
disclosures by lower tier participants.
However, it would allow the agency and
the higher tier participant to whom the
disclosure was made the opportunity to
consider this information to better
determine whether participation seems
appropriate under the circumstances
presented. The requirement to notify
lower tier participants of such
additional disclosure obligations could
be an additional duty for both primary
and lower tier program participants
under any new rules. We seek comment
on this proposal and any alternatives.
52. Subpart C of the Guidelines
describes the responsibilities of
participants in lower tier transactions,
and specifically requires such
participants to pass down the
requirements to persons at lower tiers
with whom they intend to do business.
We propose that primary and lower tier
participants include a term or condition
in their transactions with the next lower
tier participants requiring compliance
with 2 CFR part 180, subpart C, as
supplemented by any Commission
rules.
53. Lifeline and other participant
disclosures. As proposed in this
document, under the Lifeline program,
eligible telecommunications carriers
(ETCs), their agents, and subagents
would be subject to disclosure
obligations. We seek comment on how
those disclosure obligations should be
accomplished. Should the disclosure
rules require all primary and lower tier
participants in the Lifeline program to
file disclosure statements, upon penalty
of perjury, reporting all required
disclosures or certifying that they have
no reportable disclosures to make? For
eligible telecommunications carriers, are
there existing forms or submissions to
which this disclosure should be
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added? 26 How often should such
disclosure statements be required to be
filed? For individuals who have
registered with USAC for access to the
Lifeline National Verifier or National
Lifeline Accountability Database
systems, should we require such
disclosure statements to be filed upon
registration and every subsequent
recertification? Should ETCs be required
to maintain such disclosure statements
as part of their record retention
requirements? What remedies should be
available if participants fail to disclose
the required information? We seek
comment on these matters and on
similar issues related to the
implementation of disclosures for the
other programs that may be made
subject to the suspension and
debarment rules, as proposed in this
document.
54. USF competitive bidding short
forms. In some instances, the
Commission conducts competitive
bidding to determine recipients of
universal service support, as in the
Connect America Fund auctions. We
consider here the Commission’s own
processes for auctioning support, rather
than the competitive bidding that
schools, libraries, and health care
providers must conduct prior to
selecting a service provider in the ERate and RHC programs. In the
Commission’s competitive bidding
process, an applicant for support first
files a ‘‘short-form’’ application to
participate in bidding. Having a simpler
standard for ‘‘short-form’’ applications
as opposed to ‘‘long-form’’ applications
streamlines the competitive bidding
process and encourages participation by
keeping participation as simple as
possible. Thus, at the short-form stage
an applicant to participate in bidding
for universal service support is only
required to certify ‘‘that the applicant is
in compliance with all statutory and
regulatory requirements for receiving
the universal service support that the
applicant seeks, or, if expressly allowed
by the rules specific to a high-cost
support mechanism, . . . that the
applicant . . . must be in compliance
with such requirements before being
authorized to seek support,’’ and is not
required to demonstrate fully its
qualifications and compliance. Only
after becoming a winning bidder must
an applicant file a ‘‘long-form’’
application demonstrating in detail the
applicant’s qualification to receive the
support. For example, auction
26 For example, in the case of Lifeline, this could
be effected through Form 555, reimbursement
claims, or registration in the Representative
Accountability Database.
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participants need not demonstrate
eligible telecommunications carrier
(ETC) qualifications until the long-form
stage.
55. Primary tier participants would at
a minimum provide all required
disclosures with their long-form
applications. As discussed above, the
Guidelines require primary tier
participants not only to disclose
whether they are presently excluded or
disqualified, but to make several
additional disclosures that could assist
the agency in evaluating whether to
enter into the transaction with that
person. The Guidelines give the agency
discretion to consider the disclosed
information before determining whether
or not to enter into the covered
transaction. We recognize that requiring
all of the disclosures and evaluations at
the short-form stage could slow the
auction process. On the other hand, a
problem would be created in situations
where an entity participates in an
auction, wins, and then is disqualified
from receiving support. This problem
may weigh in favor of more requiring
more disclosure in the short-form
application. Accordingly, we seek
comment on the appropriate balance at
the short-form stage between requiring
helpful disclosures while preserving the
simplicity and speed of applying to
participate in the competitive bidding
process, and more specifically on the
three options discussed below or any
other alternatives that commenters want
to propose.
56. At the short-form application
stage, the Commission could limit the
application of the Guidelines to a
review of the status of the applicant and
wait until a winning bidder files a longform application to have the applicant
disclose additional parties and conduct
further review. As noted, in a short-form
application in connection with
universal service support, an applicant
must certify that it is ‘‘in compliance
with all . . . regulatory requirements for
receiving the universal service support.’’
Therefore, a presently excluded
applicant could not make the required
certification and could not successfully
submit a complete short-form
application. This approach permits the
Commission to process applications to
participate in competitive bidding more
quickly and minimizes the disclosures
required of potential participants. The
applicant would bear the risk that
required disclosures in its long-form
application could result in its
disqualification from support and a
default on its application.
57. Alternatively, a second approach
would be to require at the short-form
stage that applicants disclose just
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whether the applicant or any of its
principals are presently excluded or
disqualified.27 As under the first
approach, a presently excluded or
disqualified applicant could not make
the required certification and would be
unable to submit successfully a
complete short-form application. In
addition, under this second approach,
an applicant with a principal that is
presently excluded or disqualified
would have to address those
circumstances and come into
compliance in the event it should
become a winning bidder. If it failed to
do so adequately, it could not
successfully submit a complete shortform application. This approach seeks
to balance requiring the most critical
disclosures at this stage and maintaining
an expeditious competitive bidding
process.
58. Finally, a third approach would be
to require applicants to make all
disclosures required of a primary tier
participant at the short-form stage, as
well as the long-form stage. This would
allow the Commission to review the
disclosures and resolve any issues prior
to the bidding. However, it also would
significantly delay the competitive
bidding process and the ultimate award
of support. Furthermore, it would not
eliminate the need for considering
additional disclosures and assessments
at the long-form stage, as an applicant
might have additional disclosures to
make due to developments during the
course of competitive bidding. We seek
comment on all these options and any
other alternatives commenters may feel
are appropriate at the short-form stage.
59. Primary tier participants. If a
primary tier participant discloses
unfavorable information (other than an
exclusion or disqualification) to the
Commission (or the Administrators)
before it enters into a transaction (such
as an E-Rate funding commitment), one
possible way for the Commission to
prevent the transaction is to institute
and complete a suspension and/or
debarment proceeding before the
transaction is approved or concluded.
60. We seek comment on whether our
rules should include less drastic
remedies. For example, should the
Commission adopt specific rules to
afford itself (in consultation with the
Administrators) the discretion to merely
preclude the participant from entering
into the transaction at hand, prior to or
in lieu of suspending or debarring the
participant? Or should rules permit the
27 Thus, the applicant to participate in
competitive bidding would be required to disclose
the same information required of lower tier
participants under the Guidelines.
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agency to choose to not enter into
covered transactions with that party (for
example, a service provider who is a
primary tier participant) for some
specified period, akin to the ‘‘limited
denial of participation’’ process
described further below? Should our
rules be modified to permit the
Commission to consider this
unfavorable information in TRS or
NDBEDP certification proceedings and,
if so what modification to our
certification rules would be appropriate
to ensure that the Commission could
take appropriate action to reflect such
information? 28 If the agency should be
afforded discretion not to enter into the
covered transaction based on the
unfavorable information without using a
suspension or debarment mechanism,
what procedures should be provided to
ensure due process for the party or
parties affected by that decision?
61. Lower tier participants. If the
Commission adopts rules requiring
lower tier participants, such as an ERate or Rural Health Care consultant or
a TRS subcontractor, to disclose
unfavorable information currently only
required to be disclosed by primary tier
participants (i.e., convictions, etc.), the
current Guidelines would not provide a
mechanism for the Commission or the
Administrators to reject a related
primary tier participant’s application
solely because of that lower tier
participant’s disclosure. For example, if
a school is utilizing an E-Rate
consultant who has been convicted of
fraud in another government program
but has not yet been debarred, the
Guidelines do not provide a mechanism
for the rejection of the school’s E-Rate
application. However, requiring
disclosure of additional information (in
this example, the conviction) would
give the Commission the opportunity to
advise the program administrators to
closely monitor the lower tier
participant and, if appropriate, would
enable the agency to initiate a
suspension/debarment proceeding
against the lower tier participant (if the
disclosures are so significant that
suspension or debarment is warranted).
62. We seek comment on whether the
Commission should adopt rules that
would allow the Commission, or the
Administrators, to reject a
nonprocurement transaction (e.g., an
application for USF funding, or a
request for TRS compensation) where
the Commission or the Administrators
consider the disclosure of unfavorable
information relating to the lower tier
participant so significant that the
28 The TRS certification rules are quite specific on
what constitutes grounds for granting certification.
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transaction should be denied, even
without initiation of a suspension or
debarment proceeding. What factors
should be considered in such a
determination? For example, should the
primary tier participant first be given
the opportunity to terminate its
relationship with the lower tier
participant? We believe that providing
the Commission, or the Administrators
as its agents, the discretion to reject
such primary participant transactions
based on unfavorable information
disclosed by lower tier participants
would provide the Commission with
maximum flexibility to protect the USF
and TRS funds, and seek comment on
this proposal.
63. Under the Guidelines, an agency
head may grant an ‘‘exception’’ to allow
an excluded person to participate in a
transaction.29 Should any Commission
rules implementing the Guidelines spell
out factors for invoking such an
‘‘exception’’ or should that
determination be left solely to the
discretion of the full Commission or the
Chairman? If any factors are
enumerated, we tentatively propose that
one consideration be whether the
provider of services—whether primary
tier or lower tier—may be the sole
source of services in the area, such that
its exclusion could place consumers
and-or beneficiaries at risk of losing
service and more broadly the extent to
which the exclusion would
substantially impair delivery of services
to customers and beneficiaries. Are
there additional factors that should be
identified as relevant to this
determination? In addition, should the
agency head alone be given authority to
grant exceptions, or should the
Commission consider a delegation of
authority to the bureaus overseeing the
programs (or perhaps to those bureaus
in combination with the Enforcement
Bureau) to grant such exceptions where
the sole provider question is raised?
64. At least one other federal agency,
the Department of Housing and Urban
Development (HUD), specifically
provides for a ‘‘limited denial of
participation’’ for up to twelve months
under its rules as a parallel mechanism
to debarment. Many of the procedures
under this mechanism resemble those
under the Guidelines, including due
process protections. However, HUD’s
limited denial of participation process
does not trigger inter-agency reciprocity
29 Section 180.135 provides that an agency head
‘‘may grant an exception permitting an excluded
person to participate in a particular covered
transaction.’’ Such an exception ‘‘must be in writing
and state the reason(s) for deviating from the
government-wide policy in Executive Order
12549.’’
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because that process is deemed to be
outside the government-wide
suspension and debarment system.
Therefore, invoking a limited denial of
participation would prevent a bad actor
from continuing to participate in the
particular agency program that triggered
the limited debarment, but would not
result in the party’s exclusion on the
System for Award Management
exclusion list so as to trigger reciprocal
exclusions government-wide.
65. Under the HUD rules, if at any
time after invoking the limited
debarment process the agency
determines that a suspension and
debarment is the more appropriate
mechanism, the agency may initiate
either suspension or debarment
proceedings. Adopting such a
mechanism as part of the Commission’s
rules would allow the agency to protect
its programs from conduct of bad actors
for a shorter period than a suspension
or debarment, while affording the party
the opportunity to come into
compliance expeditiously, without
causing the wrongdoer to be
automatically excluded across all
agency programs or government-wide.
We seek comment on whether adopting
this mechanism could be a useful tool
for the Commission to employ and, if so,
what standards might be appropriate for
triggering this remedy. Should such a
mechanism be employed primarily to
ensure that a program participant
responds to information requests and
other Commission directives, but not be
employed where there is evidence of
fraud or other substantial wrongdoing
that would warrant debarment? Or
would a limited denial of participation
be appropriate where a bureau or the
Commission wanted to recommend
exclusion of a party from one agency
program due to malfeasance, but not
from all covered agency transactions? In
what other circumstances might such a
mechanism be appropriate or
inappropriate?
C. Suspension and Debarment Process
66. The default procedural
requirements applicable to suspension
and debarment actions are set forth in
subparts F, G, and H of the Guidelines.
We seek comment on Commissionspecific modifications to those
procedures. We also invite comment on
any other changes that parties believe
should be made to the default
procedures. Commenters should set
forth their proposals, and the rationales
supporting the proposed change, with
specificity.
67. Under the Guidelines, agencies
look to individual circumstances and
factors in rendering suspension and
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debarment determinations. Some of the
grounds for suspension or debarment
are described in the Guidelines, but
each agency can modify that list.30 If the
Commission adopts rules consistent
with the Guidelines, are there specific
additional suspension and/or debarment
factors that should be expressly taken
into consideration? We tentatively
propose that additional factors that
would militate in favor of suspension or
debarment should include: Repeat
offenders of Commission rules; habitual
non-payment or under-payment of
Commission regulatory fees and/or
contributions to the USF and TRS
programs and NDBEDP; willful
violation of USF, TRS, and NDBEDP
rules; the willful submission of FCC
forms or statements made to the FCC or
to the Administrators that result in or
could result in overpayments of federal
funds to the recipients, including the
willful submission of false
documentation to obtain USF or TRS
funds; and the failure to respond to
requests made by the FCC or the
Administrators for additional
information to justify payment or
continued operation under their
certifications.
68. We also tentatively propose as an
additional factor the willful violation of
a statutory or regulatory provision
applicable or related to any submission
made to obtain USF or TRS funds, or
such a violation caused by gross
negligence. For example, within the
High-Cost program, we seek comment
on whether the following should
constitute grounds for debarment:
Willful (or grossly negligent) violation:
Improper cost accounting, including
putting expenses not supported by the
universal service fund in the carrier’s
revenue requirement; using high-cost
support for non-supported expenses;
and allocating non-regulated expenses
to the regulated entity. Further, we
tentatively propose to define the term
‘‘public agreement or transaction,’’ as
used in section 180.800(b) of the
Guidelines relating to causes for
debarment, as encompassing contracts
between USF applicants and their
30 Grounds for suspension or debarment are set
forth in section 180.800 of the Guidelines, and
include not only convictions of or civil judgments
for fraud or certain criminal offenses, including any
‘‘offense indicating a lack of business integrity,’’ but
also violations of the requirements of public
transactions ‘‘so serious as to affect the integrity of
an agency program’’ (including willful or repeated
violations). In addition, the Guidelines provide that
suspension or debarment could be warranted for
‘‘[f]ailure to pay a single substantial debt, or a
number of outstanding debts . . . owed to any
Federal agency.’’ Finally, the Guidelines provide
the discretion to suspend or debar for ‘‘[a]ny other
cause of so serious or compelling a nature that it
affects [the party’s] present responsibility.’’
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selected service providers and/or
consultants.
69. The Guidelines also list numerous
mitigating and aggravating factors that
may influence the debarring official’s
decision.31 We have sought comment on
whether the Commission should
consider granting an exception to an
excluded service provider if that
provider is the sole source of services in
an area. More generally, during a
debarment proceeding, should the
Commission consider the impact that
debarment would have on the provision
of services to customers under agency
programs, whether the TRS program, the
NDBEDP, or the various USF programs?
How would the Commission determine
whether the person subject to
suspension and/or debarment
proceedings would be the sole provider
of services, and to what extent should
that influence the outcome of a
suspension and debarment proceeding?
Should debarment of an entity that
appears to be the sole provider of
services in an area be subject to a more
extended transition period to permit
customers or the agency to search for
alternative sources of services? Where
an entity is the sole source provider,
should the Commission’s rules provide
for a remedy other than debarment,
perhaps in the form of either a
settlement agreement or a ‘‘consent
decree’’ permitting continued service
but subject to an appropriate
compliance plan and strict oversight?
What other vehicles or regulations
might best accomplish the goal of
protecting the USF and TRS programs
and the NDBEDP from fraud or abuse
without disrupting service to
customers?
70. Finally, we note that a program
participant may choose to continue with
an excluded entity ‘‘if the transactions
were in existence when the agency
excluded the person.’’ 32 To what extent
should continuation be permitted under
those programs in which beneficiaries
are receiving services on a month to
month (or similarly short term) basis?
For example, if a school or library
receives E-Rate services by tariff on a
month-to-month basis, should the
school or library be required to
transition to a different provider if the
initial service provider is suspended or
31 The list of factors is extensive and includes, by
way of example, the actual or potential harm or
impact that results or may result from the
wrongdoing, and the frequency of incidents and/or
duration of the wrongdoing.
32 We recognize that adoption of this provision
would constitute a change of course from policies
currently in effect for the E-Rate program that now
preclude the distribution of any USF funds to
debarred entities and would require appropriate
changes to our rules.
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debarred since the school or library is
not under a binding long-term contract
with that carrier? Or should we construe
the term ‘‘transactions . . . in
existence’’ to cover these monthly
purchases? Should those beneficiaries
receiving services for an indefinite term
be required to seek a different service
provider and, if so, what length of
transition period would be appropriate?
We seek comment on all these
considerations and proposals, in
addition to the other factors set forth in
the Guidelines.
71. The Guidelines for suspension
require ‘‘adequate evidence,’’ defined as
‘‘information sufficient to support the
reasonable belief that a particular act or
omission has occurred.’’ Under the
Guidelines the suspending official first
imposes the suspension, and then
promptly notifies the suspended person,
who is then afforded an opportunity to
contest the suspension. Debarment in
contrast requires a ‘‘preponderance of
the evidence’’ and an opportunity for
the target entity to respond before it
goes into effect.
72. We seek comment on whether the
Commission should adopt these
evidentiary standards. Should the
Commission adopt any suspension and
debarment rules that include additional
factors relating to the evidentiary
standards (with particular attention as
to what constitutes ‘‘adequate
evidence’’)?
73. The typical debarment period is
not more than three years, but that
period may be adjusted based on the
‘‘seriousness of the causes’’ for
debarment and evaluation of the factors
listed in the Guidelines. Further, a
debarred person may ask the debarring
official to reconsider the decision or to
reduce the time period or scope of the
debarment. Are there additional
mitigating factors beyond those set forth
in the Guidelines that may warrant a
reduction in the debarment period in
response to a request for
reconsideration?
74. Should the absence of an
alternative service provider be a
mitigating factor? Should the
Commission adopt a mechanism that
would permit a debarred person that is
the sole provider of services to request,
after the first year of debarment, a
reduction in the debarment period?
Should other participants have an
opportunity to petition for a reduction
of their debarment period by
demonstrating that they have instituted
compliance measures with training and
oversight that will facilitate program
compliance? In the context of the E-Rate
and Rural Health Care programs, should
the Commission treat applicant schools,
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libraries, and health care providers
differently than other parties (either for
determining the period of debarment, or
in the review of applicable factors) and,
if so, under what circumstances? Should
the Commission provide for an
additional requirement that
supplements the Guidelines to require
debarred parties to petition for
readmission into FCC programs after the
debarment period? If so, should the
burden be on the petitioner to
demonstrate that it has taken remedial
actions to avoid future violations?
Should any such petition be resolved by
the bureau responsible for program
oversight, by the debarring official, or by
the Chairman or full Commission?
75. Should the debarring official have
authority to tailor debarments for
particular circumstances or propose
remedies in lieu of suspension and
debarment? 33 Should any such
determinations be made only after input
from appropriate bureau staff who are
likely to have the best knowledge of
how entities are certified (in the case of
TRS or NDBEDP) or how alternative
remedies might impact delivery of
services to beneficiaries? What types of
alternative remedies might be
appropriate for the USF and TRS
programs and the NDBEDP? Should
alternative remedies be fashioned in a
different way from consent decrees in
Enforcement Bureau enforcement
actions? For example, should the official
be afforded authority to negotiate a
settlement under which the respondent
would agree to the repayment of funds
or a reduction in program support,
rather than suspension or debarment?
Under what circumstances would such
a resolution be appropriate? Are there
other alternative remedies that the
agency should consider?
76. We seek comment on several
significant process questions to ensure
that implementation of any new rules be
efficient and fair.
77. One issue is who should present
the evidence supporting suspension or
debarment to the suspending or
debarring official. If the Office of the
Inspector General (OIG) has conducted
the underlying investigation supporting
the suspension and debarment, we
would propose that the OIG have
primary responsibility for presenting the
evidence to the suspending or debarring
official because it would be the entity
most familiar with the underlying facts.
In other situations, however, it may be
appropriate for the presentation to be
made by the other units within the
33 One possibility is to allow the debarring official
to issue a limited denial of participation similar to
that utilized by HUD.
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Commission that may have conducted
the investigation, such as the
Enforcement Bureau. In addition, the
Commission may want to develop
coordination procedures to permit the
bureaus most responsible for the
implementation of its USF and TRS
programs and the NDBEDP to make
presentations in the proceedings
because they are likely to have insights
on ways to implement suspension or
debarment without adversely impacting
the persons or entities the programs are
designed to assist. We seek comment on
these options.
78. A second consideration is the
mechanisms for appeal and review of
any suspending or debarring action. We
propose that a determination by the
suspending or debarring official would
be an action on which reconsideration
could be sought under section 405 of the
Communications Act or an application
for review filed under section 155(c)(4)
of the Communications Act. Would it be
appropriate or necessary to adopt any
supplemental rules applicable to
applications for review or petitions for
reconsideration of such actions, or are
existing rules and procedures sufficient
and appropriate to handle such
petitions? If reconsideration could be
sought or an application for review
filed, as proposed, would it be
appropriate for the Commission to adopt
rules providing that the suspending or
debarring official or Commission, as the
case may be, would make every effort to
act on such motions or applications
within 180 days? Would some other
time frame be more reasonable? Should
we consider supplemental rules
providing guidance for what constitutes
‘‘good cause’’ under section 1.106(n) of
our rules for granting a stay of any
suspension or debarment action taken
by the Commission en banc, pending a
decision on a petition for
reconsideration? If a stay of a
suspension or debarment is granted, we
propose that any such stay not exceed
120 days to ensure that expedited
review of the suspending or debarring
action is provided. We also seek
comment on whether the initial
suspending or debarring actions, taken
pursuant to delegated authority, should
be subject to the procedures under
section 1.102(a) or section 1.102(b) of
our rules. If such actions would
otherwise subject to section 1.102(a),
which provides for automatic stays of
hearing orders pending an application
for review, we propose that suspension
or debarment orders be exempt from
such stays. We seek comment on all
these proposals and on any other
procedures governing the appeal and
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review of determinations by the
suspending or debarring official. If an
interested party proposes such
procedures, it should set forth that
proposal and any supporting rationales
with specificity.
79. A third procedural consideration
is the designation of the ‘‘suspending
official’’ and the ‘‘debarring official’’
who shall conduct fact finding for FCC
suspensions and debarments. Currently,
the Enforcement Bureau has authority to
resolve universal service suspension
and debarment proceedings.34 We seek
comment on whether we should revisit
that determination given our proposal to
significantly expand the scope of the
Commission’s suspension and
debarment rules beyond the current
non-discretionary USF suspensions and
debarments.
80. We recognize that officials who
conduct suspension and debarment
proceedings should be neutral.
Although suspension and debarment
proceedings are not formal
adjudications subject to APA formal
hearing provisions that prohibit agency
staff from performing both prosecutorial
and decisional activities, we believe that
the agency’s appointment of suspending
and debarring officials should reflect the
‘‘separation of functions’’ principle that
shields agency decisionmakers from offrecord presentations by staff who have
presented evidence or argument on
behalf of or against a party to a
proceeding and prohibits such staff from
participating in the decision. The
separation of functions requirement in
section 409(c)(1) of the Communications
Act, which applies to both formal and
informal adjudications that have been
designated for hearing, prevents a
person who has participated in the
presentation of a case at a hearing or
upon review from making any
additional presentation respecting such
case to the presiding officer or to any
authority within the Commission
performing a review function, absent
notice and opportunity for all parties to
participate.35
81. Consistent with these principles,
if the Commission found that the Chief,
Enforcement Bureau (or his or her
designee) would be the most
appropriate person to serve as the
suspending official and debarring
official, would it be appropriate for that
person to conduct proceedings in which
staff of the Enforcement Bureau
34 Section 54.8 was originally adopted as 54.521
and redesignated in 2007.
35 Consistent with this, the Administrative
Conference recommends that agencies require
internal separation of decisional and adversarial
personnel in adjudications that are not subject to
formal APA hearing requirements.
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identified the alleged misconduct that
forms the basis for the proceeding,
participated in the investigation or
prosecution of the case, or are expected
to be involved in any capacity in any
appeal or review of the suspending or
debarring official’s determination? If
not, should the Commission designate
more than one suspending or debarring
official to ensure that cases involving
the Enforcement Bureau are resolved by
a person not associated with that
Bureau? Or would it be sufficient that
any suspending or debarring official
within the Enforcement Bureau not be
involved in any way with the case
presented by the Enforcement Bureau to
the official? We seek comments on these
questions. Should persons other than
Enforcement Bureau personnel be
considered for appointment as the
suspending or debarring official, and, if
so, what should be their qualifications?
Would, for example, the Managing
Director be a more appropriate person
for this authority, since the Office of
Managing Director is responsible for
oversight of the USF and TRS funds and
for the agency’s financial management?
Should the suspending and debarring
official be subject to appointment for a
specific term, or may that person be
subject to removal by the Commission at
will? What is the relevance to these
questions, if any, of the Appointments
Clause to the U.S. Constitution and the
Supreme Court’s decision in Lucia v.
SEC? We seek comment on these and all
other issues related to the designation of
such officials.
82. We seek comment on whether any
persons or entities that currently
participate in the Commission’s
programs would be debarred through
the application of reciprocity and, if so,
seek comment on whether they seek any
modifications to the Guidelines to allow
them to continue to participate in
Commission programs.36 Should
Commission rules further provide that
when an entity or person is excluded by
another agency, that entity or person
should immediately advise the
Commission’s debarring officer
whenever it believes it is the sole
provider of services for particular
consumers under covered transactions?
This would afford the agency head (or
other official with delegated authority)
an opportunity to grant a temporary
exception for good cause while the
agency evaluates the effect of the
exclusion on program beneficiaries. If
36 Under the Guidelines, a program participant
may continue receiving services from an excluded
person under an existing contract, but may not
renew or extend the contract (other than no-cost
time extensions) without an exception from the
agency.
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we adopt such a provision, should the
Commission be required to act within a
certain period, such as 90 days? Should
the rules further specify that in
appropriate cases, the agency head, full
Commission, or other official with
delegated authority could ‘‘except’’ the
excluded party from reciprocity
affecting participation in one or more
FCC covered transactions subject, if
appropriate, through a negotiated
agreement that would include
provisions such as mandatory
independent audits, additional
reporting requirements, or similar forms
of oversight? We seek comment on these
options, as well as other mechanism
that might afford flexibility in protecting
program funds while also ensuring that
consumers are not without program
services.
83. We note that suspension and
debarment could present a particularly
difficult situation if a TRS provider
were excluded based on the action of
another agency, through reciprocity,
causing potential immediate adverse
consequences to consumers who rely on
TRS to meet their communications
needs. Because TRS providers do not
have contracts with their TRS
customers, each service provided to
customers could be viewed as a new
‘‘covered transaction.’’ Without an
exception, an excluded TRS provider
could be barred from receiving
payments for any services provided after
the date it was suspended or debarred.
We propose that any excluded TRS
provider would be required to
immediately notify the TRS Fund
administrator when it is placed on the
System for Award Management
exclusion list, and that it could request
and obtain a temporary exception for
the 30-day period following its
suspension or debarment to allow for a
smooth transition for consumers. We
propose further that the excluded TRS
provider may file with the Commission
a request for a longer exception within
30 days after the date of its suspension
or debarment by another government
agency. Such a request, if timely filed,
would serve as a stay of the governmentwide suspension and debarment for
purposes of the TRS program for not
more than 6 months or until issuance of
a decision on the exception request,
whichever occurs first. Such a grace
period would permit the Commission to
determine whether a longer exception
would be appropriate and would afford
customers (as well as agencies running
the certified state programs) the
opportunity to transition to a new
provider. We seek comment on this
proposal. We also seek comment about
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whether for the NDBEDP special
exceptions to any suspension and
debarment might be fashioned to
address similar service disruption
concerns.
84. Finally, we seek comment on what
steps we would need to take to provide
information regarding entities
suspended or debarred by the
Commission to the government-wide
System for Award Management. While
the Commission already uses this
system for purposes of its agency
procurements, and many participants in
the USF and TRS programs and the
NDBEDP are registered in the System for
Award Management for other purposes,
the Commission does not currently
require persons to register before
participating in its USF and other
programs. Should the Commission
require a party that is not already
registered to do so when it initiates a
suspension or debarment proceeding, or
when it makes a final decision to
suspend or debar the entity? How can
we best implement our goal of reflecting
future suspensions or debarments in the
System for Award Management?
85. The rules under several USFrelated programs, Mobility Fund I and
II, and Rural Broadband Experiments
under the Connect America Fund,
already provide for the remedy of
disqualification for recipients of support
who fail to meet their obligations.37 The
Guidelines allow agencies to consider
whether persons ‘‘disqualified’’ from
specified nonprocurement transactions
pursuant to a specific statute, executive
order or legal authority other than the
suspension and debarment process
should be listed as excluded in the
System for Award Management
Exclusions (effectively debarring the
disqualified person government-wide).
Under our USF rules, disqualification
only applies to participation in the USF
program. Therefore, we propose that a
disqualified person should be referred
to the suspending and debarring official
for a full suspension and/or debarment
proceeding and would be listed by the
Commission as excluded in the
government-wide system only after an
adverse determination in that
proceeding. Alternatively, should we
provide for automatic suspension or
debarment of any entity disqualified
under our USF rules?
37 In addition, under section 54.320(c) of our
rules, eligible telecommunication carriers in the
High-Cost program that fail to comply with public
interest obligations or any other terms and
conditions may be subject to reductions in support
amounts, potential revocation of ETC designation,
and suspension or debarment pursuant to current
section 54.8 of our rules.
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86. In the case of the TRS program, a
certification can be suspended or
revoked for failure to meet any number
of mandatory minimum standards, only
some of which relate to fraudulent
practices. In the case of the NDBEDP,
many of the qualifications for
certification of a state program relate to
factors unrelated to fraudulent practices,
and such certification can be suspended
or revoked for failure to meet such
qualifications. In other words, for both
of these programs, it appears that causes
for suspension and revocation under the
existing procedures overlap with, but
are not the same as, the proposed new
suspension and debarment rules. We
therefore propose that the procedures
proposed in this document, if adopted,
would be in addition to the existing
program procedures, and seek comment
on these proposals.
D. Application of Revised Rules To
Conduct Occurring Prior to Their
Effective Date
87. We propose, in appropriate cases,
to authorize the suspending or debarring
officer to apply any revised suspension
and debarment rules to conduct in
Commission programs that occurred
before the effective date of such rules
where expeditious suspension or
debarment would be in the public
interest to prevent or deter further harm
to Commission programs. However,
where that conduct has already resulted
in settlements with the Commission by
a party responsible for the alleged
misconduct, no suspension or
debarment of that party based on such
antecedent conduct would be
authorized if such party has and
continues to comply with the settlement
terms. We seek comment on this
proposal.
88. We further seek comment on
whether the ineligibility to participate
in Commission programs based on
inclusion on the System for Award
Management exclusion list should be
applicable to those exclusions made by
another federal agency (whether for
nonprocurement transactions or
procurement transactions) only on or
after the effective date of any revised
Commission rules. If such a rule were
adopted, would program participants
who are required to check the System
for Award Management exclusion list
before entering into contracts be able to
determine the date an exclusion was
made and, if that information were not
readily ascertainable, what alternative
mechanisms would afford participants
(or the Commission) the ability to
distinguish whether an exclusion by
another agency would trigger reciprocity
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or not by the Commission, based on
when it went into effect?
89. Alternatively, if such exclusions
were made by another federal agency
before the effective date of revised
Commission rules, should the
Commission provide for ineligibility for
Commission programs as a default,
subject to review? For example, the
Commission could provide for a
transitional mechanism for three years
or less 38 that would allow persons
debarred by other federal agencies
before the effective date of the
Commission’s revised rules to seek
expeditious review to determine
whether an exception to the exclusion is
warranted. We seek comment on this
approach. Under this approach, if the
Commission authorized exceptions to
suspension and debarment, should it
attach (where appropriate) conditions
such as a compliance plan or audit
mechanisms, at the discretion of the
suspending or debarring officer? What
special standards, if any, should be
applied during such any transitional
period to evaluate whether an exception
to reciprocal suspension or debarment
would be warranted?
90. Conversely, after any revised
suspension and debarment rules become
effective, would it be appropriate for the
Commission to refer any entities
suspended or debarred under current
section 54.8 to GSA for inclusion on the
government-wide System for Award
Management exclusion list? We seek
comment on this question. If the
Commission determines that such
referrals would be inappropriate, in
whole or in part, then we propose that
the Commission maintain its current
separate listing of suspensions and
debarments that predate any new rules
(at least until such time as the
applicable suspension and debarment
periods have terminated), and propose
that the term ‘‘excluded or exclusion’’ in
the Guidelines shall include those
individuals and entities previously
suspended or debarred by the
Commission, in addition to those
included on the System for Award
Management exclusion list. We would
also propose to modify the obligations
of participants to ensure that before
entering into a covered transaction with
persons at the next lower tier, the
participant check both the
Commission’s listings of suspensions
and debarments and the System for
Award Management exclusions. We
seek comment on this proposal. We also
seek comments on any additional
modifications that would be required to
38 The standard debarment period under the
Guidelines is three years.
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ensure that persons debarred or
suspended by the Commission before
the effective date of any new rules be
deemed to be excluded persons.
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E. Preclusion of Excluded Persons From
Serving on Commission Advisory
Committees
91. The appointment of members to
federal advisory committees rests within
the discretion of the Commission as the
appointing authority. We propose that
any persons or entities that are debarred
or suspended be barred (during their
period of debarment or suspension, as
shown by inclusion on the governmentwide exclusion list) from serving on the
Commission’s advisory committees or
comparable Commission groups or task
forces established by the Commission. If
a person or entity that is already a
member of such an advisory group is
suspended or debarred after an initial
appointment to a Commission advisory
group, we propose that such person or
entity be removed from that position.
We seek comment on these proposals.
IV. Procedural Matters
92. Ex Parte Rules—Permit-butDisclose. This proceeding shall be
treated as a ‘‘permit-but-disclose’’
proceeding in accordance with the
Commission’s ex parte rules. Persons
making ex parte presentations must file
a copy of any written presentation or a
memorandum summarizing any oral
presentation within two business days
after the presentation (unless a different
deadline applicable to the Sunshine
period applies). Persons making oral ex
parte presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with rule
1.1206(b). In proceedings governed by
rule 1.49(f) or for which the
Commission has made available a
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method of electronic filing, written ex
parte presentations and memoranda
summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
93. Comment Period and Filing
Procedures. Pursuant to sections 1.415
and 1.419 of the Commission’s rules, 47
CFR §§ 1.415, 1.419, interested parties
may file comments and reply comments
on or before the dates indicated on the
first page of this document. Comments
may be filed using the Commission’s
Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
• Electronic Filers: Comments may be
filed electronically using the internet by
accessing the ECFS: https://
www.fcc.gov/ecfs/.
• Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. If more than one
active docket or rulemaking number
appears in the caption of this
proceeding, filers must submit two
additional copies for each additional
docket or rulemaking number.
94. Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St. SW, Room TW–A325,
Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with
rubber bands or fasteners. Any
envelopes and boxes must be disposed
of before entering the building.
• Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9050
Junction Drive, Annapolis Junction, MD
20701.
• U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW,
Washington, DC 20554.
People with Disabilities: To request
materials in accessible formats for
people with disabilities (Braille, large
print, electronic files, audio format),
send an email to fcc504@fcc.gov or call
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the Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
95. Availability of Documents.
Comments, reply comments, and ex
parte submissions will be available for
public inspection during regular
business hours in the FCC Reference
Center, Federal Communications
Commission, 445 12th Street SW, Room
CY–A257, Washington, DC These
documents will also be available via
ECFS. Documents will be available
electronically in ASCII, Microsoft Word,
and/or Adobe Acrobat.
96. Initial Regulatory Flexibility
Analysis. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), the Commission has prepared an
Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant
economic impact on small entities of the
policies and rules addressed in this
document. The IRFA is set forth in
Appendix B of the NPRM and is
summarized in Part V below. Written
public comments are requested on the
IRFA. These comments must be filed in
accordance with the same filing
deadlines for comments on the NPRM,
and should have a separate and distinct
heading designating them as responses
to the IRFA. The Commission will send
a copy of the Notice of Proposed
Rulemaking, including the IRFA, to the
Chief Counsel for Advocacy of the Small
Business Administration (SBA).
97. Paperwork Reduction Act
Analysis. This document contains
proposed new or modified information
collection requirements. The
Commission, as part of its continuing
effort to reduce paperwork burdens,
invites the general public and the Office
of Management and Budget (OMB) to
comment on the information collection
requirements contained in this
document, as required by the Paperwork
Reduction Act of 1995, Public Law 104–
13. In addition, pursuant to the Small
Business Paperwork Relief Act of 2002,
Public Law 107–198, see 44 U.S.C.
3506(c)(4), we seek specific comment on
how we might further reduce the
information collection burden for small
business concerns with fewer than 25
employees.
98. Further Information. For
additional information on this
proceeding, contact Paula Silberthau of
the Office of General Counsel at
paula.silberthau@fcc.gov or (202) 418–
1874.
99. Statement of Authority: This
NPRM is authorized by sections 4(i),
4(j), 225, 254, and 719 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 225,
254, 620.
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V. Initial Regulatory Flexibility
Analysis
100. As required by the Regulatory
Flexibility Act of 1980, as amended
(RFA), the Commission has prepared an
Initial Regulatory Flexibility Analysis
(IRFA) of the possible significant
economic impact on a substantial
number of small entities by the policies
and rules proposed in the Notice of
Proposed Rulemaking (Notice). Written
comments are requested on this IRFA.
Comments must be identified as
responses to the IRFA.
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A. Need for, and Objectives of, the
Proposed Rules
101. The Commission oversees a
number of critical support programs
such as the Universal Service Fund
(USF) programs, the
Telecommunications Relay Services
(TRS) programs, and the National DeafBlind Equipment Distribution Program
(NDBEDP). As part of its oversight role,
the Commission seeks to protect these
programs from waste, fraud, and abuse
to ensure that government funds are
efficiently used for their intended
purposes. To date, in the USF context,
the Commission’s rules allows it to
suspend and debar those against whom
there has been a conviction or civil
judgment arising from or related to USF
programs.
102. In the Notice, the Commission
has proposed to expand its arsenal of
tools to root out bad actors more
effectively and expeditiously by
adopting new rules consistent with the
Office of Management and Budget
Guidelines to Agencies on Government
Debarment and Suspension
(Nonprocurement), 2 CFR part 180
(OMB Guidelines). The Commission
proposes to apply any new suspension
and debarment rules to transactions
under the USF and TRS programs,
which are its primary permanent
nonprocurement programs, as well as to
transactions under the NDBEDP. Other
Commission nonprocurement programs
would be exempt. Significantly, under
the OMB Guidelines, the Commission
would have authority, like other
government agencies, to evaluate the
wrongful or fraudulent conduct of
companies or individuals in other
dealings with the government and to
take remedial action before the issuance
of a judgment or conviction. The
Commission believes that adopting rules
consistent with the OMB Guidelines
will provide a more advantageous
mechanism for deterring and stopping
wrongdoing affecting agency programs.
103. The Commission’s proposals in
the Notice fall into three areas. First, the
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Commission proposes to apply the
suspension and debarment rules to a
broader category of entities than are
now covered, by defining ‘‘covered
transactions’’ as including conduct
taken by participants in the USF, TRS,
and NDBEDP programs, and by defining
covered ‘‘tiers’’ of transactions,
including those involving contractors of
service providers in these programs.
Second, the Commission proposes to
adopt requirements that program
participants confirm that those with
whom they do business are not already
excluded or disqualified from
government activities. Such
confirmation is consistent with the
OMB Guidelines and many entities who
participate in federal grant programs or
seek federal contracts should already be
familiar with the process. We seek
comment on possible exceptions and
how to implement the principle of
reciprocity, which would prevent a
party that is suspended or debarred by
another agency from participation in
covered Commission transactions.
Third, again consistent with the OMB
Guidelines, the Commission proposes
new procedural requirements that
would allow the agency to respond
quickly to evidence of misconduct
through a suspension mechanism, while
providing for an evidentiary proceeding,
evaluating a broader range of wrongful
conduct than is now considered,39 prior
to any disbarment.
B. Description of the Small Entities to
Which Proposed Rules Would Apply
104. The RFA directs agencies to
provide a description of, and where
feasible, an estimate of the number of
small entities that may be affected by
the rule changes. The RFA generally
defines the term ‘‘small entity’’ as
having the same meaning as the terms
‘‘small business,’’ ‘‘small organization,’’
and ‘‘small governmental jurisdiction.’’
In addition, the term ‘‘small business’’
has the same meaning as the term
‘‘small business concern’’ under the
Small Business Act. A ‘‘small business
concern’’ is one that: (1) Is
independently owned and operated; (2)
is not dominant in its field of operation;
and (3) satisfies any additional criteria
established by the SBA.
105. Small Businesses, Small
Organizations, Small Governmental
39 The OMB Guidelines provide federal agencies
with substantial discretion to suspend and debar
participants based on consideration of numerous
factors. Moreover, through imputation rules, action
could be taken against an organization, not just a
principal, or the reverse, in appropriate
circumstances. The imputation rules too would
plug a gap in the Commission’s current suspension
and debarment mechanism.
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Jurisdictions. The Commission’s actions,
over time, may affect small entities that
are not easily categorized at present. We
therefore describe here, at the outset,
three broad groups of small entities that
could be directly affected herein. First,
while there are industry specific size
standards for small businesses that are
used in the regulatory flexibility
analysis, according to data from the
SBA’s Office of Advocacy, in general a
small business is an independent
business having fewer than 500
employees. These types of small
businesses represent 99.9% of all
businesses in the United States which
translates to 28.8 million businesses.
106. Next, the type of small entity
described as a ‘‘small organization’’ is
generally ‘‘any not-for-profit enterprise
which is independently owned and
operated and is not dominant in its
field.’’ Nationwide, as of August 2016,
there were approximately 356,494 small
organizations based on registration and
tax data filed by nonprofits with the
Internal Revenue Service (IRS).
107. Finally, the small entity
described as a ‘‘small governmental
jurisdiction’’ is defined generally as
‘‘governments of cities, counties, towns,
townships, villages, school districts, or
special districts, with a population of
less than fifty thousand.’’ 40 U.S. Census
Bureau data from the 2012 Census of
Governments 41 indicates that there
were 90,056 local governmental
jurisdictions consisting of general
purpose governments and special
purpose governments in the United
States. Of this number there were 37,132
general purpose governments (county,
municipal, and town, or township) with
populations of less than 50,000 and
12,184 special purpose governments
(independent school districts and
special districts) with populations of
less than 50,000. The 2012 U.S. Census
Bureau data for most types of
governments in the local government
category show that the majority of these
governments have populations of less
than 50,000. Based on this data we
estimate that at least 49,316 local
government jurisdictions fall in the
category of ‘‘small governmental
jurisdictions.’’
108. Small entities potentially
affected by the proposals herein include
eligible schools and libraries, eligible
rural non-profit and public health care
40 5
U.S.C. 601(5).
13 U.S.C. 161. The Census of Government
is conducted every five (5) years compiling data for
years ending with ‘‘2’’ and ‘‘7’’. See also Program
Description, Census of Governments, https://
factfinder.census.gov/faces/affhelp/jsf/pages/
metadata.xhtml?lang=en&type=program&id=
program.en.COG#.
41 See
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providers, and the eligible service
providers offering them services,
including telecommunications service
providers, internet Service Providers
(ISPs), and vendors of the services and
equipment used for telecommunications
and broadband networks.
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1. Schools and Libraries
109. As noted, ‘‘small entity’’ includes
non-profit and small government
entities. Under the schools and libraries
universal service support mechanism,
which provides support for elementary
and secondary schools and libraries, an
elementary school is generally ‘‘a nonprofit institutional day or residential
school, that provides elementary
education, as determined under state
law.’’ A secondary school is generally
defined as ‘‘a non-profit institutional
day or residential school, that provides
secondary education, as determined
under state law,’’ and not offering
education beyond grade 12. A library
includes ‘‘(1) a public library, (2) a
public elementary school or secondary
school library, (3) an academic library,
(4) a research library . . . , and (5) a
private library, but only if the state in
which such private library is located
determines that the library should be
considered a library for the purposes of
this definition.’’ For-profit schools and
libraries, and schools and libraries with
endowments in excess of $50,000,000,
are not eligible to receive discounts
under the program, nor are libraries
whose budgets are not completely
separate from any schools. Certain other
statutory definitions apply as well. The
SBA has defined for-profit, elementary
and secondary schools and libraries
having $6 million or less in annual
receipts as small entities. In funding
year 2007, approximately 105,500
schools and 10,950 libraries received
funding under the schools and libraries
universal service mechanism. Although
we are unable to estimate with precision
the number of these entities that would
qualify as small entities under SBA’s
size standard, we estimate that fewer
than 105,500 schools and 10,950
libraries might be affected annually by
our action, under current operation of
the program.
2. Healthcare Providers
110. The healthcare providers that
could be affected by the proposed rules
in the NPRM include the following:
Office of Physicians (except Mental
Health Specialists); Offices of
Physicians, Mental Health specialists;
Offices of Dentists; Offices of
Chiropractors; Offices of Optometrists;
Offices of Mental Health Practitioners
(except physicians); Offices of Physical,
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Occupational and Speech Therapists
and Audiologists; Offices of Podiatrists;
Office of all Other Miscellaneous Health
Practitioners; Family Planning Centers;
Outpatient Mental Health and
Substance Abuse Centers; HMO Medical
Centers; Freestanding Ambulatory
Surgical and Emergency Centers; All
other Outpatient Care Centers; Blood
and Organ Banks; All Other
Miscellaneous Ambulatory Health Care
Services; Medical Laboratories;
Diagnostic Imaging Centers; Home
Health Care Services; Ambulance
Services; Kidney Dialysis Centers;
General Medical and Surgical Hospitals;
Psychiatric and Substances Abuse
Hospitals; Specialty (Except Psychiatric
and Substances Abuse) Hospitals; and
Emergency and Other Relief Services.
3. Providers of Telecommunications and
Other Services
111. The telecommunications service
providers that could be affected by the
proposed rules include the following
categories: Incumbent Local Exchange
Carriers (LECs); Interexchange Carriers
(IXCs); Competitive Access Providers;
Operator Service Providers (OSPs);Local
Resellers; Toll Resellers;
Telecommunications Resellers; Wired
Telecommunications Carriers; Wireless
Telecommunications Carriers (except
Satellite); Common Carrier Paging;
Wireless Telephony (for which the
closest applicable SBA category is
Wireless Telecommunications Carriers
(except Satellite); Satellite
Telecommunications; All Other
Telecommunications.
112. The internet Service Providers
that could be affected by the proposed
rules including the following categories:
Internet Service Providers (Broadband);
and internet Service Providers (NonBroadband).
113. The Vendors and Equipment
Manufacturers that could be affected by
the proposed rules include the
following categories: Vendors of
Infrastructure Development or ‘‘Network
Buildout’’; Telephone Apparatus
Manufacturing; Radio and Television
Broadcasting and Wireless
Communications Equipment
Manufacturing; Other Communications
Equipment Manufacturing;
Administrative Management and
General Management Consulting
Services; Marketing Consulting
Services; and Other Management
Consulting Services.
C. Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements for Small Entities
114. The Notice proposes to adopt
new rules consistent with the OMB
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Guidelines in 2 CFR part 180 in order
to obtain additional tools to prevent
fraud, waste, and abuse. The
Commission proposes to apply any new
suspension and debarment rules to
transactions under the USF and TRS
programs, its primary permanent
nonprocurement programs, as well as
transactions under the NDBEDP.
Adopting such rules would impose
certain new obligations on program
participants, including: (1)
Requirements that program participants
confirm that those with whom they do
business are not already excluded or
disqualified from government activities
(which can be accomplished by
checking the Government wide System
for Award Management Exclusions
(SAM exclusion list), by a certification,
or by addition of terms to the applicable
transaction); and (2) mandatory
disclosures for participants that may
include (i) notification to the
Commission and its program agents of
whether any of the participants’
principals have been either convicted,
indicted or civilly charged by any
government entity for certain offenses
during the past three years, and (ii)
notification of whether the participants
are excluded or disqualified from
participating in covered transactions.
Any person suspended or debarred by a
Commission order would be excluded
from participation in any Commission
programs (not just the program in which
the bad actions occurred) and would be
placed on the Government wide System
for Award Management Exclusions,
triggering reciprocity barring that person
from participating in other government
programs (including procurement
transactions) unless the person were
granted an exemption by another
agency.
115. At this time, the Commission is
not in a position to determine whether,
if adopted, the potential rule changes
raised in the Notice will require small
entities to hire attorneys, engineers,
consultants, or other professionals and
cannot quantify the cost of compliance
with the potential rule changes raised
herein. The Notice seeks comment on
these proposals, including the benefits
and any adverse effects from joining the
government-wide nonprocurement
suspension and debarment system, as
well as on alternative approaches and
any other steps we should consider
taking. The Notice also seeks comment
on how broadly this proposed rule
should apply in terms of program
transactions and persons covered, and
how it should be implemented. We
expect the information we receive in
comments on our proposals to help the
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Commission identify and evaluate
relevant matters for small entities,
including compliance costs and other
burdens that may result from the
matters raised in the Notice.
D. Steps Taken To Minimize the
Significant Economic Impact on Small
Entities, and Significant Alternatives
Considered
116. The RFA requires an agency to
describe any significant, specifically
small business, alternatives that it has
considered in reaching its proposed
approach, which may include the
following four alternatives (among
others): ‘‘(1) the establishment of
differing compliance or reporting
requirements or timetables that take into
account the resources available to small
entities; (2) the clarification,
consolidation, or simplification of
compliance and reporting requirements
under the rule for such small entities;
(3) the use of performance rather than
design standards; and (4) an exemption
from coverage of the rule, or any part
thereof, for such small entities.’’
117. The Commission has taken
several steps that may minimize the
economic impact for small entities if the
proposals in the Notice are adopted. We
ask whether short-form applications to
participate in competitive bidding for
USF support should be excluded from
the scope of covered transactions for
purposes of suspension and debarment
rules or possibly be subject to different
participant disclosure rules. We also
propose to exempt incentive auction
payments associated with the auction of
new spectrum licenses from the scope of
‘‘covered transactions’’ subject to
suspension and debarment rules.
Similarly, the Commission proposes to
exempt payments related to the
broadcast incentive auctions, including
reimbursement payments from any
suspension and debarment rules that are
adopted. With regard to the disclosure
requirements that would be applicable if
the OMB Guidelines are adopted, we
anticipate that these requirements can
be implemented with modifications to
existing program forms and certification
rules rather than fashioning new and
additional forms which could increase
the administrative burden for small
entities.
118. The economic impact for small
entities may also be minimized as a
result of the Commission’s proposal to
adopt a minimum dollar value threshold
for certain transactions in order for
suspension and debarment rules to
apply. More specifically, the NPRM
proposes that the suspension and
debarment rules should apply to all
contractors, subcontractors, suppliers,
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consultants or any agent or
representative thereof for USF, TRS, or
NDBEDP transactions only where those
transactions are expected to equal or
exceed $25,000, subject to certain
exceptions. Therefore, small entities
that do not meet the transaction
threshold amount may be able to avoid
application of any adopted suspension
and debarment requirements provided
they do not fall into one of the threshold
exceptions. The Notice proposes that
the $25,000 threshold not be applicable
where a party to the transaction would
have a material role affecting claims for
reimbursement under the Commission
programs or if the party is a ‘‘principal’’
to the transaction. An exception to the
threshold amount is also proposed for
contracts or awards under the Lifeline
program for those transactions in which
a person is reimbursed based on
commission or by Lifeline subscribers
enrolled. The Notice seeks comment on
these proposals.
119. To assist in the Commission’s
evaluation of the economic impact on
small entities, and to better explore
options and alternatives, the
Commission has sought comment from
the parties on the above proposals and
other matters discussed in the Notice.
We expect to more fully consider the
economic impact on small entities
following our review of comments filed
in response to the Notice in reaching
our final conclusions and promulgating
rules in this proceeding.
E. Federal Rules That May Duplicate,
Overlap, or Conflict With the Proposed
Rules
120. If the Commission adopts rules
consistent with the OMB Guidelines,
such rules would replace those
Commission rules that currently provide
for different suspension and debarment
procedures. At present, the Commission
rules addressing suspension and
debarment are codified in 47 CFR 54.8
and apply only to USF programs. If the
Commission adopts new rules as
proposed in the Notice, we anticipate
that the Commission would repeal the
existing suspension and debarment
rules in section 54.8. If commenters
suggest that any other rules now in
effect duplicate, overlap, or conflict
with the rules proposed in the Notice,
the Commission will closely review and
consider those situations.
List of Subjects in 47 CFR Part 16
Administrative practice and
procedure, Common carriers,
Communications, Communications
common carriers, Communications
equipment, Subsidies,
Telecommunications, Telephone.
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2095
For the reasons discussed in the
preamble, the Federal Communications
Commission proposes to add a new part
16 to chapter I, subchapter A of title 47
of the Code of Federal Regulations:
PART 16—NONPROCUREMENT
DEBARMENT AND SUSPENSION
■
1. Add part 16 to read as follows:
Subpart A—General
Sec.
16.1 Supplemental definitions.
16.105 What does this part do?
16.110 Does this part apply to me?
16.115 What policies and procedures must
I follow?
16.120 Who in the Commission may grant
an exception to let an excluded person
participate in a covered transaction? And
what considerations should be relevant?
16.125 What are exempted Commission
transactions?
Subpart B—Covered Transactions
16.200 What additional transactions are
covered transactions?
16.220 What contracts and subcontracts, in
addition to those listed in 2 CFR
180.220, are covered transactions?
Subpart C—Responsibilities of Participants
Regarding Transactions Doing Business
With Other Persons
16.300 What must I do before I enter into
a covered transaction with another
person at the next lower tier? (FCC
supplement to 2 CFR 180.300)
16.330 What methods must I use to pass
requirements down to participants at
lower tiers with whom I intend to do
business?
16.335 Additional information disclosures
for lower tier participants
16.340 Clarification of tiers related to
Commission programs
Subpart D—Responsibilities of Federal
Agency Officials Regarding Transactions
16.435 What method should the
Commission or participants use to
implement the requirements described in
the Guidelines at 2 CFR 180.435?
16.440 Who conducts fact finding for FCC
suspensions?
16.445 Who conducts fact finding for FCC
debarments?
16.450 What additional factors should the
Commission consider for suspension or
debarment determinations?
16.455 What Commission alternatives to
suspension or debarment may be
appropriate?
16.460 What must I do to be reinstated after
my period of debarment is over?
Subpart E—Limited Denial of Participation
16.501 What is a limited denial of
participation?
16.503 Who may issue a limited denial of
participation?
16.505 When may a Commission official
issue a limited denial of participation?
16.507 When does a limited denial of
participation take effect?
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16.509 How long may a limited denial of
participation last?
16.511 How does a limited denial of
participation start?
16.513 How may I contest my limited
denial of participation?
16.515 Do Federal agencies coordinate
limited denial of participation actions?
16.517 What is the scope of a limited denial
of participation?
16.519 May the FCC impute the conduct of
one person to another in a limited denial
of participation?
16.521 What is the effect of a suspension or
debarment on a limited denial of
participation?
16.523 What is the effect of a limited denial
of participation on a suspension or a
debarment?
16.525 May a limited denial of participation
be terminated before the term of the
limited denial of participation expires?
16.527 How is a limited denial of
participation reported?
Authority: 47 U.S.C. 154, 225, 254, 620;
Sec. 2455, Pub. L. 103–355, 108 Stat. 3327
(31 U.S.C. 6101 note); E.O. 11738 (3 CFR,
1973 Comp., p. 799); E.O. 12549 (3 CFR, 1986
Comp., p. 189); E.O. 12689 (3 CFR, 1989
Comp., p. 235)
Subpart A—General
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§ 16.100
Supplemental definitions.
In addition to the definitions set forth
in subpart I of 2 CFR part 180, for
purposes of this part,
(a) The term ‘‘E-Rate Program’’ means
the program providing universal service
support for schools and libraries, as set
forth in part 54, subparts A and F of the
Commission’s rules.
(b) The term ‘‘Eligible
Telecommunications Carrier’’ means an
Eligible Telecommunications Carrier as
defined in section 54.5 of the
Commission’s rules.
(c) The term ‘‘Guidelines’’ means the
OMB Guidelines to Agencies on
Governmentwide Debarment and
Suspension (Nonprocurement), as set
forth in 2 CFR part 180.
(d) The term ‘‘High-Cost Program’’
means the programs providing universal
service support for rural, insular, and
high cost areas, as set forth in part 54,
subparts A, B, C, D, J, K, L, M, and O
of the Commission’s rules.
(e) The term ‘‘Lifeline Program’’
means the program providing universal
service support for low-income
consumers set forth in part 54, subparts
A, B, C and E of the Commission’s rules.
(f) The term ‘‘NDBEDP’’ means the
National Deaf-Blind Equipment
Distribution Program, under which
payments from the TRS Fund are made
to support programs distributing
communications equipment to lowincome individuals who are deaf-blind,
pursuant to Chapter 64, subpart GG of
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the Commission’s rules, 47 CFR 64.6201
et seq.
(g) The term ‘‘NDBEDP
Administrator’’ means the administrator
of the NDBEDP.
(h) The term ‘‘Principal’’ means, in
addition to those individuals described
at 2 CFR 180.995, any person who has
a critical influence on, or substantive
control over, a covered transaction,
whether or not employed by the
participant or paid with federal funds.
Persons who have a critical influence
on, or substantive control over, a
covered transaction may include, but
are not limited to: Management and
marketing agents, accountants,
consultants, investment bankers,
engineers, attorneys, and other
professionals who are in a business
relationship with participants in
connection with a covered transaction
under an FCC program.
(i) The term ‘‘Rural Health Care
Program’’ means the program providing
universal service support for health care
providers set forth in part 54, subparts
A and G of the Commission’s rules.
(j) The term ‘‘SAM Exclusions’’ means
the System for Award Management
Exclusions, which is a widely available
source of the most current information
about persons who are excluded or
disqualified from covered transactions,
as further described in subpart E of 2
CFR part 180.
(k) The term ‘‘TRS Programs’’ means
all programs described in Chapter 64,
subpart F of the Commission’s rules.
(l) The term ‘‘TRS Fund
Administrator’’ means the entity
selected as the administrator of the
Telecommunications Relay Services
Fund pursuant to 47 CFR
64.604(c)(5)(iii).
(m) The term ‘‘USF Programs’’ means
the programs implementing the
Universal Service Fund pursuant to
section 254 of the Communications Act
of 1934, as amended, 47 U.S.C. 254.
(n) The term ‘‘USF Administrator’’
means the administrator of the universal
service mechanisms appointed pursuant
to section 54.701 of the Commission’s
rules, 47 CFR 54.701.
§ 16.105
What does this part do?
In this part, the Federal
Communications Commission (‘‘FCC’’
or ‘‘Commission’’) adopts, as
Commission policies, procedures, and
requirements for nonprocurement
debarment and suspension, the
Guidelines in subparts A through I of 2
CFR part 180, as supplemented by this
part. This adoption thereby gives
regulatory effect for the FCC to the
Guidelines, as supplemented by this
part. All persons affected by these rules
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should consult the Guidelines in
subparts A through I of 2 CFR part 180
in order to be informed of all the
provisions of the suspension and
debarment rules (as supplemented by
this part).
§ 16.110
Does this part apply to me?
This part and, through this part,
pertinent portions of subparts A through
I of 2 CFR part 180 (see table at 2 CFR
180.100(b)), apply to you if you are a—
(a) ‘‘Participant’’ or ‘‘principal’’ in a
‘‘covered transaction’’ under subpart B
of 2 CFR part 180, as supplemented by
this part;
(b) Respondent in a Commission
suspension or debarment action;
(c) Commission debarment or
suspension official; or
(d) Commission official, or agent,
authorized to enter into any type of
nonprocurement transaction that is a
covered transaction.
§ 16.115 What policies and procedures
must I follow?
The Commission policies and
procedures that you must follow are the
policies and procedures specified in
each applicable section of the
Guidelines in subparts A through I of 2
CFR part 180, as that section is
supplemented by this part. The
transactions that are covered
transactions, for example, are specified
by section 220 of the Guidelines (i.e., 2
CFR 180.220), as supplemented by
section 16.220 in this part. For any
section of Guidelines in subparts A
through I of 2 CFR 180.5 that has no
corresponding section in this part,
Commission policies and procedures are
those in the Guidelines.
§ 16.120 Who in the Commission may
grant an exception to let an excluded
person participate in a covered
transaction? And what considerations
should be relevant?
(a) The Chairman of the Commission
or designee may grant an exception
permitting an excluded person to
participate in a particular covered
transaction. If the Chairman or a
designee grants an exception, the
exception must be in writing and state
the reason(s) for deviating from the
governmentwide policy in Executive
Order 12549.
(b) In evaluating whether to grant an
exception, the Chairman or designee
shall consider whether the excluded
person, if a provider of services under
any Commission program, may be the
sole source of services in any affected
areas and whether, as a result, the
exclusion of that person could put
consumers and/or program beneficiaries
at risk of losing services. The Chairman
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or designee may exercise their
discretion in considering any other
factors that may be relevant to the
exception determination, and if an
exception is granted, shall explain those
considerations in any exception
decision.
(c) When a person is excluded by
another agency, the Chairman or
designee may also grant an exception for
a limited time period to afford the
Commission an opportunity to evaluate
the effect of the exclusion on program
beneficiaries.
(d) Any exception granted under this
section may also be subject to
appropriate conditions, such as the
agreement by the excepted person to
mandatory audits, additional reporting
requirements, compliance plans or
monitoring, or similar forms of oversight
in addition to those otherwise provided
by the FCC programs.
§ 16.125 What are exempted Commission
transactions?
Any transactions involving the
Commission that are not related to or do
not arise in connection with the USF
Programs, the TRS Programs, or the
NDBEDP shall be exempted transactions
under this part.
Subpart B—Covered Transactions
§ 16.200 What additional transactions are
covered transactions?
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For purposes of determining what is
a covered transaction under 2 CFR
180.200 of the Guidelines, this part
applies to any transaction at the primary
tier between a person and the
Commission or any agents of the
Commission, including the USF
Administrator, which administers the
USF programs as agent for the
Commission, the TRS Fund
Administrator, which administers the
TRS programs as agent for the
Commission, and the NDBEDP
Administrator, which administers the
NDBEDP, as agent for the Commission.
For purposes of 2 CFR 180.200, any
transactions between two primary tier
participants (as clarified by section
16.340 in this part), other than the
Commission, shall be considered to be
a transaction at a lower tier within the
meaning of subsection (b) of 2 CFR
180.200.
§ 16.220 What contracts and subcontracts,
in addition to those listed in 2 CFR 180.220,
are covered transactions?
In addition to the contracts covered
under 2 CFR 180.220 of the Guidelines,
this part applies to additional lower
tiers of transactions supported by the
Commission’s programs involving the
participants described below. This rule
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extends the coverage of the Commission
nonprocurement suspension and
debarment requirements to all lower
tiers of contracts or subcontracts
(regardless of tier) awarded under
covered nonprocurement transactions,
as permitted under the Guidelines at 2
CFR 180.220(c) (see optional lower tier
coverage in the figure in the appendix
to 2 CFR part 180).
(a) For the High-Cost Program,
contractors, subcontractors, suppliers,
consultants, or their agents or
representatives for High-Cost supported
transactions, if:
(1) Such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) Such person is considered a
‘‘principal’’; or
(3) The amount of the transaction is
expected to be at least $25,000.
(b) For the Lifeline Program:
(1) Any participant in the Lifeline
program (except for the primary tier
carrier), regardless of tier or dollar
value, that is reimbursed based on the
number of Lifeline subscribers enrolled,
commissions, or any combination
thereof; and
(2) Contractors, subcontractors,
suppliers, consultants, or their agents or
representatives and third-party
marketing organizations for Lifelinesupported transactions, if
(i) Such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(ii) Such person is considered a
‘‘principal’’; or
(iii) The amount of the transaction is
expected to be at least $25,000.
(c) For the E-Rate Program,
contractors, subcontractors, suppliers,
consultants, or their agents or
representatives for E-Rate-supported
transactions if:
(1) Such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) Such person is considered a
‘‘principal’’; or
(3) The amount of the transaction is
expected to be at least $25,000.
(d) For the RHC Program, contractors,
subcontractors, suppliers, consultants,
or their agents or representatives for
RHC-supported transactions if:
(1) Such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) Such person is considered a
‘‘principal’’; or
(3) The amount of the transaction is
expected to be at least $25,000.
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2097
(e) For the TRS Programs and the
NDBEDP, contractors, subcontractors,
suppliers, consultants, or their agents or
representatives for TRS- or NDBEDPsupported transactions, if:
(1) Such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) Such person is considered a
‘‘principal’’; or
(3) The amount of the transaction is
expected to be at least $25,000. For the
TRS programs (other than TRS that is
provided through state programs) and
the NDBEDP, the service providers are
the certificated entities that are
reimbursed by the Commission and the
TRS Fund administrator for providing
services and equipment under the
covered transactions. For TRS that is
provided through state TRS programs,
the service providers are the TRS
providers that are authorized by each
state to provide intrastate TRS under the
state program and that, accordingly, are
compensated by the TRS Fund for the
provision of interstate TRS.
Subpart C—Responsibilities of
Participants Regarding Transactions
Doing Business With Other Persons
§ 16.300 What must I do before I enter into
a covered transaction with another person
at the next lower tier? (FCC supplement to
2 CFR 180.300)
(a) You, as a participant, are
responsible for determining whether
you are entering into a covered
transaction with an excluded or
disqualified person. You may decide the
method by which you do so using any
of the methods described in 2 CFR
180.300.
(b) In the case of an employment
contract, the FCC does not require
employers to check the SAM Exclusions
before making salary payments pursuant
to that contract.
§ 16.330 What methods must I use to pass
requirements down to participants at lower
tiers with whom I intend to do business?
To communicate the requirements to
lower tier participants, you must
include a term or condition in the
transaction requiring compliance with
subpart C of the Guidelines in 2 CFR
part 180, as supplemented by this
subpart.
§ 16.335 Additional information
disclosures for lower tier participants.
(a) Before entering into a covered
transaction at any lower tier, all lower
tier participants shall be obligated to
notify and disclose to the higher tier
participant with whom it is doing
business the information described in 2
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CFR 180.335 (pertaining to disclosures
by primary tier participants). If the
lower tier participant is participating in
competitive bidding to provide services
to the higher tier participant, such
information must be disclosed at the
time the bid is submitted. Any such
disclosures must be simultaneously
submitted to the USF Administrator (for
transactions related to or arising in
connection with USF programs), to the
TRS Fund Administrator (for
transactions relating to TRS programs),
to the NDBEDP Administrator (for
transactions relating to the NDBEDP)
and to the FCC (at the addresses
identified in paragraph (b) of this
section). Any disclosures made under
this rule will not necessarily cause other
participants to deny your participation
in the covered transaction, but will be
considered a relevant factor in
evaluating the transaction. The
provisions of 2 CFR 180.345 shall be
applicable to any failures to disclose
under this rule and, in addition, any
such failure to disclose shall permit the
higher tier participant (with whom the
lower tier participant is doing business)
to terminate the transaction for failure to
comply with its terms and condition, or
to pursue any other available remedies.
Participants subject to this rule shall
also comply with 2 CFR 180.350,
requiring notifications upon learning
new information, and such notifications
shall be provided not only to the USF
Administrator, the TRS Fund
Administrator, the NDBEDP
Administrator, and to the FCC, but also
to the higher tier participant (with
whom the lower tier participant is doing
business).
(b) The disclosures required by 2 CFR
180.335 through 180.350 of the
Guidelines shall be made not only to the
Commission, but also to the USF
Administrator (for transactions related
to or arising in connection with USF
Programs), to the TRS Fund
Administrator (for transactions relating
to TRS Programs), and to the NDBEDP
Administrator (for transactions relating
to the NDBEDP). Disclosures to the
Commission regarding the USF Program
shall be submitted via email to [address]
or via mail to the Federal
Communications Commission,
Telecommunications Access Policy
Division, Wireline Competition Bureau,
at the Commission’s address specified
in 47 CFR 0.401(a). Disclosures to the
USF Administrator shall be submitted
via email to [address] or via mail to:
Universal Service Administrative Co.,
700 12th Street NW, Suite 900,
Washington, DC 20005. Disclosures to
the TRS Fund Administrator shall be
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submitted via email to [address] or to:
TRS Fund Administrator, 4450 Crums
Mill Road, Suite 303, Harrisburg, PA
17110. Disclosures to the NDBEDP
Administrator shall be submitted via
email to [address] or to: NDBEDP
Administrator, Federal Communications
Commission, Disability Rights Office, at
the Commission’s address specified in
47 CFR 0.401(a).
§ 16.440 Who conducts fact finding for
FCC suspensions?
§ 16.340 Clarification of tiers related to
Commission programs.
§ 16.445 Who conducts fact finding for
FCC debarments?
(a) For the E-Rate Program and the
Rural Health Care Program, the primary
tier participants shall be both the
schools or libraries (or consortia) that
submit applications to the USF
Administrator (for the E-Rate program)
or the health care providers (including
consortia) that submit applications to
the USF Administrator (for the Rural
Health Care Program), as well as the
service providers selected by these
applicants.
(b) For the High-Cost Program, the
Lifeline Program, and the TRS
Programs, the primary tier participants
shall be the service providers that
request and receive support from the
USF Administrator and TRS Fund
Administrator, respectively.
(c) For the NDBEDP, the primary tier
participants shall be the certified
programs that request and receive
reimbursements from the NDBEDP
Administrator.
Subpart D—Responsibilities of Federal
Agency Officials Regarding
Transactions
§ 16.435 What method should the
Commission or participants use to
implement the requirements described in
the Guidelines at 2 CFR 180.435?
To implement the requirements
described in 2 CFR 180.435, the
Commission may require as a condition
of participation in the USF or TRS
programs or the NDBEDP that
participants:
(a) Comply with subpart C of 2 CFR
part 180, as supplemented by this part,
and
(b) Communicate the requirement to
comply with subpart C of 2 CFR part
180, as supplemented by this part, to
persons at the next lower tier with
whom the participant enters into
covered transactions. The Commission,
or the USF, TRS Fund, or NDBEDP
Administrators, may also obtain an
assurance or certification of compliance
at the time of application for approval
of the covered transaction or upon
submission of an invoice for payment.
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In all FCC suspensions, the official
designated as the Suspending Official
shall be responsible for conducting
additional proceedings where disputed
material facts are challenged unless
another person is designated to serve as
fact finder by the Chairman of the
Commission.
In all FCC debarments, the official
designated as the Debarring Official
shall be responsible for conducting
additional proceedings where disputed
material facts are challenged unless
another person is designated to serve as
fact finder by the Chairman of the
Commission.
§ 16.450 What additional factors should
the Commission consider for suspension or
debarment determinations?
(a) In addition to the causes for
debarment described under the
Guidelines at 2 CFR 180.800 (which are
also applicable to suspension
determinations under 2 CFR 180.700),
the suspending or debarment official
may also take the following factors into
consideration: Whether the person is a
repeat offender of Commission rules;
habitual non-payment or underpayment of Commission regulatory fees
or of required contributions to FCC
programs such as USF or TRS; the
willful or grossly negligent submission
of FCC forms or statements or other
documentation to the FCC or to the USF
Administrator, TRS Fund
Administrator, or NDBEDP
Administrator that result in or could
result in overpayments of federal funds
to the recipients; the willful or grossly
negligent violation of a statutory or
regulatory provision applicable to the
USF programs, TRS program or the
NDBEDP; and the willful or habitual
failure to respond to requests made by
the FCC or the USF, TRS Fund, or
NDBEDP administrators for additional
information to justify payment or
continued operation under their
certifications.
(b) As used in the Guidelines at 2 CFR
180.800(b), the term ‘‘public agreement
or transaction’’ shall encompass
contracts between USF program
applicants and their selected service
providers and/or consultants or other
principals.
§ 16.455 What Commission alternatives to
suspension or debarment may be
appropriate?
If the suspending or debarment
official determines that circumstances
justify an alternative to suspension or
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The Chairperson designates FCC
officials who are authorized to impose
a limited denial of participation
affecting any participant, or their
affiliates, or both. A limited denial of
participation is normally issued by the
chief of a bureau responsible for
administering an FCC program.
against a person, based upon adequate
evidence of any of the following causes:
(1) Approval of an applicant for a USF
Program, a TRS Program, or the
NDBEDP would constitute an
unsatisfactory risk;
(2) There are irregularities in a
person’s current and/or past
performance in an FCC program;
(3) The person has failed to honor
contractual obligations or abide by FCC
regulations associated with an FCC
program;
(4) The person has documented
deficiencies in ongoing FCC programs;
(5) The person has made a false
certification in connection with any
FCC program, whether or not the
certification was made directly to the
FCC;
(6) The person has committed any act
or omission that would be cause for
debarment under 2 CFR 180.800;
(7) The person has violated any law,
regulation, or procedure relating to an
FCC program; or
(8) The person has made or procured
to be made any false statement for the
purpose of influencing in any way an
action of the Commission.
(b) Filing of a criminal indictment or
information shall constitute adequate
evidence for the purpose of limited
denial of participation actions. The
indictment or information need not be
based on offenses against the
Commission.
(c) Imposition of a limited denial of
participation related to any other FCC
program shall constitute adequate
evidence for a concurrent limited denial
of participation for another FCC
program. Where such a concurrent
limited denial of participation is
imposed, participation may be restricted
on the same basis without the need for
an additional conference or further
hearing.
(d) An affiliate or organizational
element may be included in a limited
denial of participation solely on the
basis of its affiliation, and regardless of
its knowledge of or participation in the
acts providing cause for the sanction.
The burden of proving that a particular
affiliate or organizational element is not
controlled by the primary sanctioned
party (or by an entity that itself is
controlled by the primary sanctioned
party) is on the affiliate or
organizational element. For purposes of
this subsection, the term ‘‘affiliate’’ shall
have the same meaning as provided by
2 CFR 180.905.
§ 16.505 When may a Commission official
issue a limited denial of participation?
§ 16.507 When does a limited denial of
participation take effect?
(a) An authorized FCC official may
issue a limited denial of participation
A limited denial of participation is
effective immediately upon issuance of
debarment, such as when a participant’s
suspension or debarment could have a
substantial detrimental impact on the
provision of services under a
Commission program, then the official,
in his or her discretion, may temporarily
suspend the suspension or debarment
proceedings and refer the case to [the
Chief, Enforcement Bureau]. The [Chief]
shall have discretion to evaluate and
decide whether, in lieu of suspension or
debarment, the [Enforcement Bureau] or
Commission should condition the
participant’s continued participation
upon agreement to additional
requirements on the transaction that
may include, among other things,
transitioning beneficiaries to other
providers, replacing principals, or
agreeing to an appropriate compliance
plan (with strict oversight and audits).
§ 16.460 What must I do to be reinstated
after my period of debarment is over?
A debarment official may determine
that a person’s conduct is so egregious
that the debarred party must petition for
readmission into FCC programs after the
debarment period is over. In that case,
the debarred party as petitioner must
demonstrate that it has taken sufficient
remedial actions to avoid future
program violations. In the absence of
such a determination in the debarment
decision, reinstatement will be
automatic once the debarment period is
over.
Subpart E—Limited Denial of
Participation
§ 16.501 What is a limited denial of
participation?
A limited denial of participation
excludes a specific person from
participating in a specific FCC program
or programs for a specific period of
time. The decision to impose a limited
denial of participation is discretionary
and based on the best interests of the
federal government. For purposes of this
subpart, the term ‘‘person’’ shall have
the same meaning as set forth in 2 CFR
180.985.
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§ 16.503 Who may issue a limited denial of
participation?
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2099
the notice unless the notice otherwise
specifies.
§ 16.509 How long may a limited denial of
participation last?
A limited denial of participation may
remain in effect up to 12 months.
§ 16.511 How does a limited denial of
participation start?
A limited denial of participation is
made effective by providing the person,
and any specifically named affiliate,
with notice:
(a) That the limited denial of
participation is being imposed;
(b) Of the cause(s) under § 16.505 of
this part for the sanction;
(c) Of the potential effect of the
sanction, including the length of the
sanction and the FCC program(s) and
geographic area (if relevant) affected by
the sanction;
(d) Of the right to request, in writing,
within 30 days of receipt of the notice,
a conference under § 16.513(a) of this
part; and
(e) Of the right to contest the limited
denial of participation under § 16.513 of
this part.
§ 16.513 How may I contest my limited
denial of participation?
(a) Within 30 days after receiving a
notice of limited denial of participation,
you may request a conference with the
official who issued such notice. The
conference shall be held within 15 days
after the Commission’s receipt of the
request for a conference, unless you
waive this time limit. The official or
designee who imposed the sanction
shall preside. At the conference, you
may appear with a representative and
may present all relevant information
and materials to the official or designee.
Within 20 days after the conference, or
within 20 days after any agreed-upon
extension of time for submission of
additional materials, the official or
designee shall, in writing, advise you of
the decision to terminate, modify, or
affirm the limited denial of
participation. If all or a portion of the
remaining period of exclusion is
affirmed, the notice of affirmation shall
advise you of the opportunity to contest
the notice and to request a hearing
before an attorney within the
Enforcement Bureau so designated for
this function by the Chairman of the
Commission. You have 30 days after
receipt of the notice of affirmation to
request this hearing.
(b) You may skip the conference with
the official and you may request a
hearing before an attorney within the
Enforcement Bureau so designated for
this function by the Chairman of the
Commission. This must also be done
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within 30 days after receiving a notice
of limited denial of participation. If you
opt to have a hearing before an attorney
within the Enforcement Bureau, you
must submit your request to [address].
The designated attorney within the
Enforcement Bureau will issue findings
of fact and make a recommended
decision. The sanctioning official who
issued the initial notice will then make
a final decision, as promptly as possible,
after the recommended decision is
issued. The sanctioning official may
reject the recommended decision or any
findings of fact, only after specifically
determining that the decision or any of
the facts are arbitrary, capricious, or
clearly erroneous.
(c) In deciding whether to terminate,
modify, or affirm a limited denial of
participation, the Commission official or
designee may consider the factors listed
at 2 CFR 180.860. The designated
attorney within the Enforcement Bureau
may also consider the factors listed at 2
CFR 180.860 in making any
recommended decision.
§ 16.515 Do Federal agencies coordinate
limited denial of participation actions?
Federal agencies do not coordinate
limited denial of participation actions.
As stated in § 16.501 of this part, a
limited denial of participation is an
FCC-specific action and applies only to
FCC activities.
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§ 16.517 What is the scope of a limited
denial of participation?
The scope of a limited denial of
participation is as follows:
(a) A limited denial of participation
generally extends only to participation
in the program(s) under which the cause
arose. A limited denial of participation
may, at the discretion of the authorized
official, extend to other programs,
initiatives, or functions within the
jurisdiction of the FCC. The authorized
official, however, may determine that
where the sanction is based on an
indictment or conviction, the sanction
shall apply to all programs throughout
the FCC.
(b) For purposes of this subpart,
participation includes receipt of any
benefit or financial assistance through
subsidies, grants, or contractual
arrangements; benefits or assistance in
the form of any loan guarantees or
insurance; awards of procurement
contracts; or any other arrangements
that benefit a participant in a covered
transaction.
(c) The sanction may be imposed for
a period not to exceed 12 months, and
may be imposed on either a nationwide
or a more restricted basis.
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§ 16.519 May the FCC impute the conduct
of one person to another in a limited denial
of participation?
For purposes of determining a limited
denial of participation, the Commission
may impute conduct as follows:
(a) Conduct imputed from an
individual to an organization. The
Commission may impute the fraudulent,
criminal, or other improper conduct of
any officer, director, shareholder,
partner, employee, or other individual
associated with an organization, to that
organization when the improper
conduct occurred in connection with
the individual’s performance of duties
for or on behalf of that organization, or
with the organization’s knowledge,
approval, or acquiescence. The
organization’s acceptance of the benefits
derived from the conduct is evidence of
knowledge, approval, or acquiescence.
(b) Conduct imputed from an
organization to an individual or
between individuals. The Commission
may impute the fraudulent, criminal, or
other improper conduct of any
organization to an individual, or from
one individual to another individual, if
the individual to whom the improper
conduct is imputed participated in, had
knowledge of, or had reason to know of
the improper conduct.
(c) Conduct imputed from one
organization to another organization.
The Commission may impute the
fraudulent, criminal, or other improper
conduct of one organization to another
organization when the improper
conduct occurred in connection with a
partnership, joint venture, joint
application, association, or similar
arrangement, or when the organization
to whom the improper conduct is
imputed has the power to direct,
manage, control, or influence the
activities of the organization responsible
for the improper conduct. Acceptance of
the benefits derived from the conduct is
evidence of knowledge, approval, or
acquiescence.
§ 16.521 What is the effect of a suspension
or debarment on a limited denial of
participation?
If you have submitted a request for a
hearing pursuant to § 16.513(b) of this
part, and you also receive, pursuant to
subpart A of this part, a notice of
proposed debarment or suspension that
is based on the same transaction(s) or
the same conduct as the limited denial
of participation, as determined by the
debarring or suspending official, the
following rules shall apply:
(a) During the 30-day period after you
receive a notice of proposed debarment
or suspension, during which you may
elect to contest the debarment under 2
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Frm 00060
Fmt 4702
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CFR 180.815, or the suspension
pursuant to 2 CFR 180.720, all
proceedings in the limited denial of
participation, including discovery, are
automatically stayed.
(b) If you do not contest the proposed
debarment pursuant to 2 CFR 180.815,
or the suspension pursuant to 2 CFR
180.720, the final imposition of the
debarment or suspension shall also
constitute a final decision with respect
to the limited denial of participation, to
the extent that the debarment or
suspension is based on the same
transaction(s) or conduct as the limited
denial of participation.
(c) If you contest the proposed
debarment pursuant to 2 CFR 180.815,
or the suspension pursuant to 2 CFR
180.720, then:
(1) Those parts of the limited denial
of participation and the debarment or
suspension based on the same
transaction(s) or conduct, as determined
by the debarring or suspending official,
shall be immediately consolidated
before the debarring or suspending
official.
(2) Proceedings under the
consolidated portions of the limited
denial of participation shall be stayed
before the hearing officer until the
suspending or debarring official makes
a determination as to whether the
consolidated matters should be referred
to a hearing officer. Such a
determination must be made within 90
days of the date of the issuance of the
suspension or proposed debarment,
unless the suspending/debarring official
extends the period for good cause.
(3) If the suspending or debarring
official determines that there is a
genuine dispute as to material facts
regarding the consolidated matter, the
entire consolidated matter will be
referred to the designated hearing
official within the Enforcement Bureau
hearing the limited denial of
participation, for additional proceedings
pursuant to 2 CFR 180.750 or 180.845.
(4) If the suspending or debarring
official determines that there is no
dispute as to material facts regarding the
consolidated matter, jurisdiction of the
designated attorney within the
Enforcement Bureau to hear those parts
of the limited denial of participation
based on the same transaction[s] or
conduct as the debarment or
suspension, as determined by the
debarring or suspending official, will be
transferred to the debarring or
suspending official, and the hearing
officer responsible for hearing the
limited denial of participation shall
transfer the administrative record to the
debarring or suspending official.
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Federal Register / Vol. 85, No. 9 / Tuesday, January 14, 2020 / Proposed Rules
2101
revision to the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement a section of the
National Defense Authorization Act for
Fiscal Year 2018, which establishes
considerations for the acquisition of all
noncommercial computer software,
related data and documentation, and
associated license rights. In addition to
the request for written comments on this
advance notice of proposed rulemaking,
DoD will hold a public meeting to hear
the views of interested parties.
DATES: Comment Date: Interested parties
should submit written comments to the
address shown below on or before
March 16, 2020, to be considered in the
formation of any proposed rule.
Public Meeting Date: The public
meeting will be held on February 18,
2020, from 10:00 a.m. to 1:00 p.m.,
Eastern time. The public meeting will
end at the stated time, or when the
discussion ends, whichever comes first.
Further information for the public
meeting may be found under the
heading SUPPLEMENTARY INFORMATION.
Registration Date: Registration to
attend the public meeting must be
received no later than close of business
on February 11, 2020.
ADDRESSES: Public Meeting: The public
meeting will be held in the Pentagon
Library and Conference Center (PLCC),
Conference Room B6, 1155 Defense
Pentagon, Washington, DC 20301.
Conference Room B6 is located on the
lower level of the PLCC.
Submission of Comments: Submit
written comments identified by DFARS
Case 2018–D018, using any of the
following methods:
Æ Federal eRulemaking Portal: https://
www.regulations.gov. Search for
‘‘DFARS Case 2018–D018.’’ Select
‘‘Comment Now’’ and follow the
instructions provided to submit a
comment. Please include ‘‘DFARS Case
2018–D018’’ on any attached
documents.
Æ Email: osd.dfars@mail.mil. Include
DFARS Case 2018–D018 in the subject
line of the message.
Æ Fax: 571–372–6094.
Æ Mail: Defense Acquisition
Regulations System, Attn: Ms. Jennifer
D. Johnson, OUSD(A&S)DPC/DARS,
Room 3B941, 3060 Defense Pentagon,
Washington, DC 20301–3060.
Comments received generally will be
posted without change to https://
www.regulations.gov, including any
personal 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).
Ms.
(5) The suspending or debarring
official shall hear the entire
consolidated case under the procedures
governing suspensions and debarments,
and shall issue a final decision as to
both the limited denial of participation
and the suspension or debarment.
§ 16.523 What is the effect of a limited
denial of participation on a suspension or
a debarment?
The imposition of a limited denial of
participation does not affect the right of
the Commission to suspend or debar
any person under this part.
§ 16.525 May a limited denial of
participation be terminated before the term
of the limited denial of participation
expires?
If the cause for the limited denial of
participation is resolved before the
expiration of the 12–month period, the
official who imposed the sanction may
terminate it.
§ 16.527 How is a limited denial of
participation reported?
When a limited denial of participation
has been made final, or the period for
requesting a conference pursuant to
section 16.513(a) has expired without
receipt of such a request, the official
imposing the limited denial of
participation shall notify the
Enforcement Bureau and the USF
Administrator, the TRS Fund
Administrator and the NDBEDP
Administrator of the scope of the
limited denial of participation.
Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.
[FR Doc. 2019–28490 Filed 1–13–20; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 227, 239, and 252
[Docket DARS–2019–0067]
RIN 0750–AK87
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Defense Federal Acquisition
Regulation Supplement:
Noncommercial Computer Software
(DFARS Case 2018–D018)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Advance notice of proposed
rulemaking; notification of meeting.
AGENCY:
DoD is seeking information
that will assist in the development of a
SUMMARY:
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FOR FURTHER INFORMATION CONTACT:
Jennifer D. Johnson, telephone 571–
372–6100.
SUPPLEMENTARY INFORMATION:
I. Background
DoD is seeking information from
experts and interested parties in
Government and the private sector that
will assist in the development of a
revision to the DFARS to implement 10
U.S.C. 2322a, which was added by
section 871 of the National Defense
Authorization Act (NDAA) for Fiscal
Year (FY) 2018 (Pub. L. 115–91). Section
10 U.S.C. 2322a requires that, as part of
any negotiation for an acquisition of
noncommercial computer software, the
Secretary of Defense consider to the
maximum extent practicable during the
appropriate time in the life cycle, all the
noncommercial and related materials
necessary to meet the needs of the
agency. As a result, any noncommercial
computer software or related materials
identified should be acquired to the
extent appropriate.
II. Public Meeting
DoD is hosting a public meeting to
obtain the views of experts and
interested parties in Government and
the private sector regarding amending
the DFARS to implement statutory
amendments and revise policies and
procedures for acquisition of all
noncommercial computer software,
related data and documentation, and
associated license rights. DoD also seeks
to obtain information on the potential
increase or decrease in public costs or
savings that would result from such
amendments to the DFARS.
Registration: To facilitate security
screening and entry to the PLCC,
individuals wishing to attend the public
meeting must register by close of
business on the date listed in the DATES
section of this document, by sending the
following information via email to
osd.dfars@mail.mil:
(1) Full name.
(2) Valid email address.
(3) Valid telephone number.
(4) Company or organization name.
(5) Whether the individual is a U.S.
citizen.
(6) The date of the public meeting the
individual wishes to attend.
(7) Whether the individual intends to
make a presentation, and, if so, the
individual’s title.
Building Entry: Upon receipt of an
email requesting registration, the
Defense Acquisition Regulations System
will provide notification to the Pentagon
Force Protection Agency (PFPA) that the
individual is requesting approval for
entry to the PLCC on the date provided.
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Agencies
[Federal Register Volume 85, Number 9 (Tuesday, January 14, 2020)]
[Proposed Rules]
[Pages 2078-2101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28490]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 16
[GN Docket No. 19-309; FCC 19-120]
Modernizing Suspension and Debarment
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission (the
FCC or Commission) proposes to adopt new rules consistent with Office
of Management and Budget Guidelines to Agencies on Government Debarment
and Suspension (Nonprocurement)(the Guidelines). The Commission
proposes that such new rules be applied to transactions under the
Universal Service Fund (USF) and Telecommunications Relay Services
(TRS) programs and the National Deaf-Blind Equipment Distribution
Program (NDBEDP). The Commission also proposes certain modifications to
the Guidelines, including as appropriate transitional mechanisms for
situations in which the suspended or debarred entity may be the sole
source for the service involved. The Commission proposes that any new
rules for suspension and debarment be put into a new Part 16 in title
47 of the Code of Federal Regulations.
DATES:
Comments Due: February 13, 2020.
Reply Comments Due: March 16, 2020.
ADDRESSES: Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
Paper Filers: All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings for the
Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours are
8:00 a.m. to 7:00 p.m. Commercial overnight mail (other than U.S.
Postal Service Express Mail and Priority Mail) must be sent to 9050
Junction Drive, Annapolis Junction, MD 20701. U.S. Postal Service
first-class, Express, and Priority mail must be addressed to 445 12th
Street SW, Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Paula Silberthau, Attorney-Advisor,
Administrative Law Division, Office of General Counsel, (202) 418-1874
or [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking, FCC 19-102, adopted on November 22, 2019 and
released on November 25, 2019. The complete text of this document is
available for inspection and copying during normal business hours in
the FCC Reference Information Center, Portals II, 445 12th Street SW,
Room CY-A257, Washington, DC 20554. To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to [email protected] or call the
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202)
418-0432 (TTY). The complete text of the order also is available on the
Commission's website at https://www.fcc.gov.
Synopsis
I. Introduction
1. The Commission oversees a number of critical support programs,
including the Universal Service Fund (USF) programs, the
Telecommunications Relay Services (TRS) programs, and the National
Deaf-Blind Equipment Distribution Program (NDBEDP). Part of the
Commission's role in overseeing these programs is protecting them from
fraud, waste, and abuse. One important way the Commission does this is
by identifying and barring from participation those who have abused or
are likely to abuse these programs. This is why the Commission has, for
its USF programs, implemented rules that suspend or debar those
convicted of or found civilly liable for certain misconduct related to
these programs.
2. While these rules have positive effects, this proceeding
explores whether there is more that the Commission can do.
Specifically, we propose to adopt new rules consistent with the Office
of Management and Budget Guidelines to Agencies on Government Debarment
and Suspension (Nonprocurement) (the Guidelines). The Guidelines
provide additional tools--adopted by a number of other federal agencies
across the government--that could enhance the Commission's ability to
root out bad actors from participation in its support programs. If
adopted, these measures could not only help the Commission to fulfill
its responsibility of ensuring that the USF and TRS funds are well
managed, efficient, and fiscally responsible, but may also assist us in
bridging the digital divide by ensuring that fund expenditures,
including support for expanded broadband deployment, are directed in
the first instance to good actors who will use them only for their
intended purpose. For these reasons, this document proposes to adopt
new rules consistent with the Guidelines in lieu of the Commission's
current rules, and to apply these new rules to the four USF programs,
as well as to the Commission's TRS programs \1\ and to the NDBEDP.\2\
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\1\ For purposes of this document, the term ``TRS programs''
means all programs described in Chapter 64, subpt. F, of the
Commission's rules, including without limitation telecommunications
relay services, speech-to-speech relay services, and video relay
services. TRS enables an individual who is deaf, hard of hearing,
deaf-blind, or who has a speech disability to communicate by
telephone or other device through the telephone system. TRS is
provided in a variety of ways. Currently, interstate TRS calls and
all internet Protocol (IP) based TRS calls, both intrastate and
intrastate, are supported by the Fund.
\2\ The NDBEDP provides equipment needed to make
telecommunications, advanced communications, and the internet
accessible to low-income individuals who are deaf-blind. For
purposes of this document, we refer to the TRS program and the
NDBEDP separately because they are certified and operated in
different ways.
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II. Background
3. Most federal agencies have implemented the Guidelines--either
wholesale or with modifications. The Commission stands apart from these
agencies with its own rules for reasons that are largely historical. In
2003, when the Commission adopted its own suspension and debarment
rules for certain USF programs, independent regulatory agencies like
the Commission were expressly excluded from coverage under the
Guidelines for Nonprocurement Debarment and Suspension that preceded
the current Guidelines.\3\ But when OMB adopted in 2005 the interim
final changes to what have become known as the Guidelines, OMB modified
this long-standing definition to remove the exclusion for independent
agencies. As a result, independent regulatory agencies such as the
Commission may participate in the
[[Page 2079]]
government-wide suspension and debarment system by adopting the
Guidelines. With that history in mind, we here briefly summarize these
two debarment mechanisms and explain some of the key differences
between them.
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\3\ These earlier guidelines, typically referred to as the
``Common Rules,'' were implemented through rules promulgated by
executive agencies other than independent agencies. The Commission's
exclusion was echoed in the subsequent OMB Notice of Proposed
Rulemaking proposing revisions to those earlier guidelines.
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A. The Commission's Current Suspension and Debarment Rules
4. The Commission's current rules addressing suspension and
debarment apply only to the USF programs.\4\ In general, these rules
cover a relatively narrow range of conduct and are clear-cut,
mandatory, and virtually self-executing. The rules are non-
discretionary and require the Commission to suspend or disbar any
``person'' \5\ convicted (by plea or judgment) of, or found civilly
liable for, the ``attempt or commission of criminal fraud, theft,
embezzlement, forgery, bribery, falsification or destruction of
records, making false statements, receiving stolen property, making
false claims, obstruction of justice and other fraud or criminal
offense arising out of activities associated with or related to the
schools and libraries support mechanism, the high-cost support
mechanism, the rural health care support mechanism, and the low-income
support mechanism.'' A suspension or debarment of an entity applies to
all organizational units of the entity unless the order specifies
otherwise. A suspension immediately excludes a person from activities
related to the USF programs, but only for a temporary period pending
completion of the debarment proceedings. The debarment runs for the
period specified by Commission order, generally three years.
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\4\ We note that a few Commission rules also mention
``disqualification'' from program participation as a possible remedy
for unlawful conduct. The TRS program and NDBEDP provide for
``suspension'' or ``revocation'' of certification under sections
64.606(e) and 64.6207(h) of the Commission's rules. However, section
54.8 of the Commission's rules is the only provision that expressly
provides for ``suspension'' and ``debarment.''
\5\ Under section 54.8, a ``person'' is ``[a]ny individual,
group of individuals, corporation, partnership, association, unit of
government or legal entity, however organized.''
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5. Proceedings begin with a notice of suspension and proposed
debarment issued by the Commission. The person subject to the
suspension and proposed debarment has 30 days from the earlier of
receipt of notice or publication in the Federal Register to challenge
the Commission's action. The Commission must make a final ruling,
overturning the original decision only in light of ``extraordinary
circumstances,'' no later than 90 days after receipt of a petitioner's
arguments. While a suspension or debarment is in effect, the Commission
may, on motion by the affected party or sua sponte, reverse such a
finding or limit its effect in light of extraordinary evidence. The
default period for debarment is three years, though the Commission may,
if it serves the public interest, set a longer period at the beginning
or extend the period during which it is in effect.
B. The OMB Guidelines
6. The Guidelines establish the framework for a government-wide
debarment and suspension system for nonprocurement programs.\6\ The
Guidelines generally provide for suspension or debarment based on a
range of misconduct. This range includes not only convictions of or
civil judgments for fraud or certain criminal offenses, but also
violations of the requirements of public transactions ``so serious as
to affect the integrity of an agency program'' (including willful or
repeated violations).\7\ In addition, the Guidelines provide that
suspension or debarment could be warranted for ``[f]ailure to pay a
single substantial debt, or a number of outstanding debts . . . owed to
any Federal agency. . . .'' Finally, the Guidelines provide the
discretion to suspend or debar for ``[a]ny other cause of so serious or
compelling a nature that it affects [the party's] present
responsibility.''
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\6\ Section 180.970 of the Guidelines defines ``non-procurement
transaction'' as ``any transaction, regardless of type (except
procurement contracts),'' including but not limited to grants,
cooperative agreements, scholarships, fellowships, contracts of
assistance, loans, loan guarantees, subsidies, insurances, payments
for specified uses, and donation agreements.'' Suspension and
debarment rules for federal procurement contracts are contained in
part 9 of the Federal Acquisition Regulation (FAR).
\7\ The Guidelines also provide that the suspending officer may
impose suspension only when immediate action is necessary to protect
the public interest, and that official determines either that (1)
the participant has been indicted for, or there is adequate evidence
to suspect, an offense listed in section 180.800(a) of the
Guidelines; or (2) there is adequate evidence to suspect the
existence of any other cause for debarment listed in sections
180.800(b)-(d)) of the Guidelines.
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7. Suspensions under the Guidelines have prospective but immediate
effect, and debarments are effective following a 30-day opportunity for
a party to respond to a debarment notice. Once effective, an action to
suspend or debar serves to automatically exclude the suspended or
debarred party from new covered transactions government-wide, whether
in procurement or nonprocurement programs or activities. For ongoing
activities, ``a participant may continue to use the services of an
excluded person as a principal'' if the participant was ``using the
services of that person in the transaction before the person was
excluded.'' The participant also has the option of discontinuing the
excluded person's services and finding an alternative provider.
C. Differences Between the Guidelines and the Commission's Rules
8. The Commission's rules differ from the Guidelines in several key
respects. The Commission's rules are clear-cut and mandatory, with
little room for discretion and a targeted focus on a narrow set of
misconduct; the Guidelines, by contrast, address a broader range of
misconduct and provide federal agencies with substantial discretion to
suspend and debar entities based on consideration of numerous factors.
Here, we briefly review some of the key differences between these two
debarment mechanisms.
9. First, the rules differ in scope and reach. While the
Commission's rules apply only to its four USF programs, the Guidelines
broadly cover all nonprocurement transactions (unless otherwise
modified by agency-specific rules) including subsidies, grants, loans,
or other ``payments for specified uses.'' The Guidelines also reach
further down the supply chain, requiring that, before a primary tier
participant enters into a covered transaction with another person at
the next lower tier--for example, a subcontractor--the participant must
verify that the person with whom it intends to do business is not
excluded or disqualified.\8\
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\8\ ``Exclusion'' generally refers to being suspended or
debarred, as discussed in this Notice. ``Disqualification'' means
that a person is prohibited from participating in specified Federal
procurement or nonprocurement transactions as required under a
statute, Executive order (other than Executive Orders 12549 and
12689) or other authority. The Guidelines allow for the inclusion of
disqualified persons in the System for Award Management Exclusions
and state the responsibilities of federal agencies and participants
to check for disqualified persons before entering into covered
transactions. The Guidelines do not, however, specify the
transactions for which a disqualified person is ineligible, the
entities to which a disqualification applies, or the process that a
federal agency uses to disqualify a person, as those factors are
dependent on the underlying statute, Executive order or regulation
that caused the disqualification.
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10. Second, the Guidelines provide greater discretion to agencies
in determining which entity to debar and for what misconduct. As
described above, the Guidelines consider a broader range of misconduct
than the Commission's rules. They also do not require a prior court
judgment or conviction. Thus, in contrast to the FCC's current rules,
suspension or
[[Page 2080]]
debarment actions under the Guidelines do not have to await completion
of criminal or civil proceedings.\9\ The Guidelines also allow an
agency to impute conduct from an individual to an organization; from an
organization to an individual or between individuals; or from one
organization to another. Thus, action could be taken against an
organization, not just a principal, or the reverse, in appropriate
circumstances.
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\9\ Under the Guidelines the suspending official must (1) have
adequate evidence that there may be a cause for debarment of a
person and (2) conclude that immediate action is necessary to
protect the federal interest. The Guidelines also provide that
``[i]n deciding whether immediate action is needed to protect the
public interest, the suspending official has wide discretion.'' If
legal or debarment proceedings are initiated at the time of, or
during suspension, the suspension may continue until the conclusion
of those proceedings. Otherwise, a suspension may not exceed 12
months. The Guidelines define ``legal proceedings'' to mean ``any
criminal proceeding or any civil judicial proceeding, including a
proceeding under the Program Fraud Civil Remedies Act, to which the
Federal Government or a State or local government or
quasigovernmental authority is a party. The term also includes
appeals from those proceedings.'' In addition, if the legal standard
is satisfied, the agency may suspend a party during an
investigation.
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11. Third, the Guidelines provide greater flexibility in fashioning
the terms of a suspension or debarment. The Guidelines afford a federal
agency substantial discretion to suspend, based on adequate evidence,
or debar, based on a preponderance of evidence, as determined in the
discretion of the designated suspending or debarring official. The
Guidelines also give a suspending official ``wide discretion'' to
determine whether immediate action is necessary to protect the public
interest.'' As a result, an agency may immediately prevent the
suspended party from entering into additional transactions under its
programs. The Guidelines also allow an agency head to grant an
``exception'' to allow an excluded person to participate in a
particular transaction.
12. Fourth, the Guidelines establish a government-wide debarment
system. While determinations under the Commission's rules apply only to
the Commission, the Guidelines provide for a government-wide system
with reciprocity among federal agencies that adopt rules consistent
with the Guidelines. This means that a party that has been suspended or
debarred by another agency and placed on the government-wide System for
Award Management Exclusions (commonly known as the ``SAM Exclusions'')
maintained by the General Services Administration (GSA) \10\ would be
barred from participation in covered transactions unless an exception
were granted for good cause by the agency head.\11\ To effect this
reciprocity, the Guidelines impose affirmative disclosure requirements
on ``participants'' in government programs or other covered
transactions.\12\ Before entering into a covered transaction,
participants must notify the agency if they are presently excluded or
disqualified. Those who are excluded from government programs will be
listed on the System for Award Management Exclusions. In addition,
primary tier participants (i.e., generally those participants who
transact business directly with a federal agency) must advise the
agency whether they have been convicted of certain offenses within
three years, indicted, or terminated from public transactions. Further,
under the Guidelines, a federal agency must check to see whether a
person is excluded or disqualified before entering directly into a
covered transaction or approving a principal in that transaction, and
before approving any lower tier participant or principal thereof (if
agency approval is required).
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\10\ The System for Award Management records for an entity,
including its exclusion status, can be searched at https://www.sam.gov/SAM/pages/public/searchRecords/search.jsf.
\11\ As proposed in this Notice, covered transactions would be
those under the USF or TRS programs or the NDBEDP.
\12\ A participant is broadly defined as ``any person who
submits a proposal for or who enters into a covered transaction,
including an agent or representative of a participant.'' The
Guidelines refer to two categories of ``covered transactions''--
those which are in the ``primary tier, between a Federal agency and
a person'' and those in a ``lower tier, between a participant in a
covered transaction and another person.'' Obligations under the
Guidelines may vary depending upon whether a party is a primary tier
participant or lower tier participant. Therefore, we propose below
clarifications for several Commission programs to identify which
persons would be considered ``primary tier'' participants within the
meaning of any new rules.
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13. This is not an exhaustive list of the differences between the
Guidelines and the Commission's rules. We strongly encourage interested
parties to review the OMB Guidelines, which can be found at 2 CFR part
180, in addition to this document.
III. Discussion
14. We propose to adopt new rules consistent with the Guidelines.
Doing so would impose the following new mechanisms and obligations,
among others: (1) New procedural requirements that would allow the
agency to respond quickly to evidence of misconduct through a
suspension mechanism prior to any debarment, while providing for a
later evidentiary proceeding that will permit the Commission to
consider a broader range of wrongful conduct than is now considered;
(2) requirements that program participants confirm that those with whom
they do business are not already excluded or disqualified from
government activities; and (3) reciprocity within the Government-wide
system preventing a party that is suspended or debarred by another
agency from participation in covered Commission transactions unless the
Commission grants an exception for good cause. We seek comment on this
proposal.
15. We propose to adopt new debarment and suspension rules for
several reasons. First, adopting the Guidelines would allow the
Commission to take remedial action before the issuance of a judgment or
conviction, based on a broader range of factors. As explained above,
under our current rules suspension and debarment are triggered only by
a final conviction or civil judgment showing malfeasance arising from
or related to USF programs. The Commission's current rules allow an
entity to be subject to a Notice of Apparent Liability (NAL) supported
by substantial evidence, or to enter into an executed Consent Decree
with an admission of liability. However, even undisputed evidence
supporting an NAL or Consent Decree, no matter how egregious, would not
constitute sufficient grounds for a suspension or debarment under our
rules, which require a judgment or conviction related to USF programs.
In addition, many False Claims Act lawsuits arising from alleged
wrongdoing in USF programs settle before final judgment, removing those
cases from the reach of the Commission's suspension and debarment
rules. Even if a conviction or civil judgment is pursued for
malfeasance in a USF program, the litigation typically takes many
years, and our current rules preclude a suspension or debarment while
litigation is pending. Thus, while the Commission anticipated that the
mandatory nature of the current debarment rules would be a strong tool
to prevent fraud in the USF programs, the narrow trigger for suspension
and debarment appears to be a significant constraint on the
Commission's authority to protect the USF through those rules, in
contrast to the more flexible approach under the Guidelines.\13\
Finally, as noted above,
[[Page 2081]]
malfeasance in other government programs or even criminal convictions
outside the realm of the USF are not factors that the Commission may
consider under the current rules. These and other limitations on our
suspension and debarment procedures would be eliminated by adopting new
rules consistent with the Guidelines.
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\13\ After the adoption of our current suspension and debarment
rules in 2003, the Commission to date has debarred 49 persons or
entities, with only one remaining currently debarred. Of those
debarred, 46 have been debarred for activities pertaining to the E-
rate program and 3 for activities under the Lifeline program.
Despite numerous active investigations of wrongdoing in Commission
programs, including several cases implicating the False Claims Act,
there have been no debarments since 2015, in large measure due to
the constraints imposed by our current rules requiring a judgment or
conviction as a prerequisite to a Commission suspension or
debarment.
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16. Second, the Guidelines require that persons make advance
disclosures regarding their exclusion or disqualification status prior
to entering into covered transactions with federal agencies and
participants in federal programs. More specifically, a person who
enters into a covered transaction with a federal agency must disclose:
Whether they are presently excluded or disqualified; recent
convictions, civil judgments, indictments, or civil charges; and recent
defaults on public transactions. Lower tier transactions (e.g., between
a program participant and a consultant) require only a disclosure of
exclusion or disqualification status. These disclosures afford
participants in transactions more information by which to evaluate
whether it is appropriate or prudent to do business with the person
making the unfavorable disclosures.
17. Third, under the Guidelines, the Commission would have
authority, like other government agencies, to evaluate the wrongful or
fraudulent conduct of companies or individuals in other dealings with
the government, and to use the possibility of government-wide, rather
than program-specific, suspension or debarment as a deterrent to bad
actors. In contrast, under the Commission's current rules, even a
company or individual debarred government-wide for criminal or other
unlawful conduct currently could not be barred from participation in
the Commission's USF programs without a prior judgment or conviction
related to a USF program. Furthermore, a party suspended or debarred
from the USF programs under our current rules could still participate
in other Commission programs such as TRS or NDBEDP; bid for procurement
contracts with the Commission; and participate in both procurement and
nonprocurement programs with other government agencies.
18. We seek comment on the analysis above. Would adopting
suspension and debarment rules consistent with the Guidelines offer the
benefits described? Are there costs associated with adopting such
rules--for example, that broader rules allowing for more agency greater
discretion might be create regulatory uncertainty or be more difficult
to administer--that might outweigh these benefits? Would adopting these
rules result in unintended consequences not discussed here? We seek
comment on these questions, as well as our proposal to adopt suspension
and debarment rules consistent with the Guidelines.
19. Following the practice of other agencies, we propose to adopt
rules consistent with the Guidelines by reference to the codified
Guidelines, and to supplement the Guidelines through FCC-specific
regulations, including rules addressing those matters for which the
Guidelines give each agency discretion. We note that other federal
agencies have adopted the bulk of the Guidelines with limited changes,
and we propose to do the same here. In the remainder of this document,
we propose supplemental rules and seek comment on how to implement the
Guidelines in a manner that accommodates concerns that may be unique to
the Commission's programs.
A. Overview of Supplemental Rules
20. Our supplemental proposals fall into three areas. First, we
propose to apply the suspension and debarment rules to a broader
category of entities than are now covered, by defining ``covered
transactions'' as including conduct taken by participants in the USF
and TRS programs and the NDBEDP, and by including as covered
transactions additional tiers of contracts involving contractors,
subcontractors, suppliers, consultants, or their agents or
representatives that are participating in these programs. For the
reasons discussed below, we propose that all other agency programs or
transactions be exempted from the rules at this time.
21. Second, we propose to adopt requirements that program
participants confirm that those with whom they do business are not
already excluded or disqualified from government activities. We note
that such confirmation is consistent with the Guidelines and many
entities who participate in federal grant programs or seek federal
contracts should already be familiar with the process. We also seek
comment on possible exceptions and how to implement the principle of
reciprocity, which would prevent a party that is suspended or debarred
by another agency from participation in covered Commission
transactions.
22. Third, again consistent with the Guidelines, we propose new
procedural requirements that would allow the agency to respond quickly
to evidence of misconduct through a suspension mechanism, while
providing for an evidentiary proceeding, evaluating a broader range of
wrongful conduct than is now considered,\14\ prior to any disbarment.
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\14\ The Guidelines provide federal agencies with substantial
discretion to suspend and debar participants based on consideration
of numerous factors. Moreover, through imputation rules, action
could be taken against an organization, not just a principal, or the
reverse, in appropriate circumstances. The imputation rules too
would plug a gap in the Commission's current suspension and
debarment mechanism.
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23. We seek comment on these supplemental proposals. We also seek
comment generally on any policies or procedures that we should adopt if
we were to implement the Guidelines, and in particular what procedures
would be ``consistent with the [OMB] guidance.'' We seek comments about
any other changes to our rules that might be appropriate should we
choose to adopt rules consistent with the Guidelines, including our
proposed supplemental rules, particularly any conforming changes that
may be necessary, including modifications of forms for Commission
programs, inclusion of additional certifications, and such other
changes that may be necessary or helpful in implementing any new
suspension and debarment rules. In particular, we seek comment on any
changes required with respect to our rules for the contents of
applications to participate in competitive bidding to receive auctioned
support through covered transactions.
24. We also invite comment on the experiences of other agencies
responsible for overseeing large programs that have applied the
Guidelines. Have other agencies adopted the Guidelines largely intact,
or are modifications commonly adopted so that suspension and debarment
processes reflect the unique nature of the programs and missions the
agencies oversee? Are there lessons learned by other agencies that
could inform the Commission's adoption of expanded suspension and
debarment rules consistent with the Guidelines?
25. While this document focuses on areas where we propose to
supplement or deviate from the Guidelines, interested parties who
believe the Commission should consider other changes to the Guidelines
in its supplemental regulations should set forth their proposals, and
the rationales supporting the proposed change, with specificity.
[[Page 2082]]
B. Covered Transactions and Disclosure Requirements
26. Generally. The Guidelines define ``non-procurement
transactions'' as ``any transaction, regardless of type (except
procurement contracts),'' including but not limited to grants,
cooperative agreements, scholarships, fellowships, contracts of
assistance, loans, loan guarantees, subsidies, insurances, payments for
specified uses, and donation agreements. Notwithstanding this
definition, the Guidelines provide flexibility to agencies to determine
which non-procurement transactions should be covered by their
suspension and debarment rules. For example, the Guidelines
specifically exclude from their scope any non-procurement transaction
that is exempted by a federal agency's regulation. The Guidelines also
exclude by default any ``permit, license, certificate, or similar
instrument issued as a means to regulate public health, safety, or the
environment,'' unless a federal agency specifically designates it to be
a covered transaction.
27. If the Commission implements the Guidelines, should all
transactions covered by the OMB definitions be included within the
suspension and debarment regime? Are there additional types of
transactions that should be included in addition to the examples
provided in the Guidelines? Are there additional program-specific
clarifications that should be made--for example, should the Commission
clarify that Lifeline enrollment representatives who enroll individuals
in the Lifeline program are executing covered transactions because
enrollment is required before the service provider can claim a subsidy,
or is that sufficiently clear from the Guidelines? Conversely, are
there specific Commission nonprocurement transactions or programs that
should be exempted from coverage? \15\ For example, are there some
programs or activities that should be exempted because remedies other
than suspension or debarment (e.g., license revocation) may be more
appropriate? Commenters should identify specific transactions that
should be included as covered transactions or exempted from the
proposed suspension and debarment rules and provide the rationale for
that recommendation.
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\15\ We note that procurement contracts awarded directly by a
federal agency would not be considered ``covered transactions''
under the nonprocurement government-wide guidance for suspension and
debarment. However, where non-federal participants in nonprocurement
transactions award contracts for goods or services, such contracts
would be deemed to be covered transactions if the amount of the
contract equals or exceeds $25,000.
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28. USF, TRS, and NBDEDP as covered transactions. The Commission's
primary permanent nonprocurement programs are the USF and TRS programs.
In 2018, disbursements totaled $8.33 billion for USF programs and $1.4
billion \16\ for TRS. We propose that all transactions under the USF
and TRS programs be considered covered transactions under any new
rules, as well as transactions under the NDBEDP, and that all other
Commission transactions be exempt from those rules.\17\ We tentatively
conclude that application of the suspension and debarment rules to
these programs will improve the sustainability of their funding for the
benefit of those whom the programs serve. We seek comment on this
proposal, as well as this tentative conclusion. More specifically,
under the TRS programs and NDBEDP, the Commission grants TRS and NDBEDP
participants authorization to provide services and equipment pursuant
to certifications and reimburses TRS providers and NDBEDP certified
programs for services and equipment provided to beneficiaries. We
invite comment on the benefits of applying the suspension and debarment
rules to the TRS programs and to the NDBEDP.
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\16\ Total disbursements for the NDBEDP, which come from the
interstate TRS Fund, are limited to $10 million annually.
\17\ In its most recent audit of the Commission's compliance
with the Improper Payments Elimination and Recovery Improvement Act,
the FCC's Inspector General listed nine programs that make
disbursements under the direction of the Commission and its
administrators: The four USF programs; the administrative costs of
the Universal Service Administrative Company (USAC), the USF
administrator; TRS; the North American Numbering Plan; payments
related to the broadcast incentive auction (the TV Broadcaster
Relocation Fund); and FCC operating expenses generally. In the
report, OIG noted that the Commission had identified three of the
USF programs and the TRS program as being susceptible to the risk of
significant improper payments.
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29. General exemption for all other transactions, including
authorizations and licenses. The Guidelines primarily, but not
exclusively, focus on transactions that involve a transfer of Federal
funds to a non-Federal entity.\18\ The Guidelines also exclude by
default from the definition of ``covered transaction'' any ``permit,
license, certificate, or similar instrument issued as a means to
regulate public health, safety, or the environment,'' unless a federal
agency specifically designates it to be a covered transaction.
Consistent with the framework in the Guidelines, we propose to exclude
all transactions other than those involving the USF, TRS, and NDBEDP
from the scope of our proposed rules, such as applications for section
214 authorizations, equipment authorizations, and broadcast and
spectrum licenses issued by the Commission. The Communications Act of
1934, as amended (Communications Act) and the Commission's implementing
regulations govern the qualifications of applicants for such licenses
and authorizations and the standards for revocation of the same.
Similarly, we propose to exclude all transactions to or from licensees
and those with spectrum usage rights (excluding, of course, those USF,
TRS, and NDBEDP transactions where such an entity happens to be a
participant), such as incentive auction payments or repacking
payments.\19\ Such payments should not be ``covered transactions'' that
might be stopped by suspension or debarment rules as the public
interest is best served by facilitating spectrum usage right
relinquishments or repacking in such circumstances--and the statutes
and rules regarding the collection of any outstanding debts still apply
and provide more appropriate remedies to protect these payments.\20\ We
seek comment on this proposal.
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\18\ The guidelines define ``nonprocurement transaction'' to
include, among other things, grants, loans, loan guarantees, and
subsidies. However, it is not necessary that a nonprocurement
transaction include a transfer of Federal funds.
\19\ As noted, this exclusion, of course, would not apply to
those USF, TRS, and NDBEDP transactions where such an entity is a
participant.
\20\ Thus, other provisions protect against payments to parties
with existing debts to the Commission and other federal government
entities.
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30. The Guidelines, unless otherwise expanded by agency rule, apply
to two categories of transactions: A ``primary tier between a federal
agency and a person''; and a ``lower tier, between a participant in a
covered transaction and another person.'' Both primary tier and lower
tier participants must disclose whether they, or any of their
principals, are excluded or disqualified. Primary tier participants,
however, must also disclose to the federal agency certain convictions,
civil judgments, indictments, other criminal or civil charges, or
defaults on public transactions of the participant or any of their
principals.
31. Agencies have some discretion within the parameters of the
Guidelines to designate primary versus lower tier participants, and to
expand the tiers that would be considered to be ``lower tier.'' \21\ In
this section, we propose to
[[Page 2083]]
designate certain actors in the USF and TRS programs and the NDBEDP as
primary tier participants, and others as lower tier participants. We
also propose, consistent with the Guidelines, to designate certain
entities who do not directly contract with the primary tier participant
(for example, subcontractors) as lower tier participants if they meet
certain criteria.\22\ Before we do so, however, we set forth our
proposals on what would constitute a ``principal.''
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\21\ More specifically, the Guidelines also include as ``covered
transactions'' any contract for goods and services awarded by a
participant in a nonprocurement transaction covered under Sec.
180.210 that is expected to equal or exceed $25,000, or any contract
requiring the consent of an official of a federal agency.
\22\ Sections 180.25(b)(2) and 180.220(c) of the Guidelines
provide agencies with the option to include as ``covered
transactions an additional tier of contracts awarded under covered
nonprocurement transactions.'' The Guidelines also contain an
Appendix-Covered Transactions, with diagrams illustrating tiers of
covered transactions.
---------------------------------------------------------------------------
32. Definition of ``principal.'' The Guidelines define
``principal'' to mean (a) an ``officer, director, owner, partner,
principal, investigator, or other person . . . with management or
supervisory responsibilities'' or (b) a ``consultant or other person,
whether or not employed by the participant or paid with Federal funds,
who (1) [i]s in a position to handle Federal funds; (2) [i]s in a
position to influence or control the use of those funds; or (3)
[o]ccupies a technical or professional position capable of
substantially influence the development or outcome of an activity [in a
transaction].'' The Guidelines further state that an agency may
``[i]dentify specific examples of types of individuals who would be
`principals' under the Federal agency's nonprocurement programs and
transactions, in addition to the types of individuals specifically
identified above.''
33. We propose that in addition to those persons defined as
principals under the Guidelines, the term ``principal'' shall also mean
``any person who has a critical influence on, or substantive control
over, a covered transaction, whether or not employed by the
participant.'' Persons who may have a critical influence on, or
substantive control over, a covered transaction could include without
limitation: management and marketing agents, accountants, consultants,
investment bankers, engineers, attorneys, and other professionals who
are in a business relationship with participants in connection with a
covered transaction under an FCC program.\23\ We propose this expansion
of the definition to ensure that all persons who have substantial
influence on or control over a covered transaction may be considered
``principals'' even if they do not satisfy any of the three prongs in
the Guidelines. For example, a person that causes violations of rules
applicable to a party's competitive bidding evaluation might not be
``influenc[ing] the development or outcome of an activity required to
perform the covered transaction'', yet that person could merit a
debarment. This broadened definition of ``principal'' would afford the
Commission the authority to consider such conduct. Commenters should
identify any other categories of persons who should be considered
``principals'' in addition to those discussed above.
---------------------------------------------------------------------------
\23\ This expanded definition of the term ``Principal'' draws
upon a supplement to the government-wide definition adopted by the
Department of Housing and Urban Development (HUD).
---------------------------------------------------------------------------
34. Primary and lower tier participants for the USF and TRS
programs and the NDBEDP--summary. Our proposed designations for the
programs are summarized in the chart below.
----------------------------------------------------------------------------------------------------------------
Primary tier participants Lower tier participants
----------------------------------------------------------------------------------------------------------------
High-Cost............................... Carriers................... Contractors, subcontractors,\24\
suppliers, consultants or their agents
or representatives for High-Cost-
supported transactions, if:
(1) such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) such party is considered a
``principal''; or
(3) the amount of the transaction is
expected to be at least $25,000.
Lifeline................................ Carriers................... Any participant in the Lifeline program
(except for the primary tier carrier),
regardless of tier or dollar value, that
is reimbursed based on the number of
Lifeline subscribers enrolled,
commissions, or any combination thereof.
Contractors, subcontractors, suppliers,
consultants, or their agents or
representatives and third-party
marketing organizations for Lifeline-
supported transactions, if
(1) such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
.........................................
(2) such party is considered a
``principal''; or
(3) the amount of the transaction is
expected to be at least $25,000.
E-Rate.................................. Schools and Libraries Form Contractors, subcontractors, suppliers,
471 Service Providers. consultants, or their agents or
representatives for E-Rate-supported
transactions, if
(1) such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) such person is considered a
``principal''; or
(3) the amount of the transaction is
expected to be at least $25,000.
RHC..................................... Health Care Providers Form Contractors, subcontractors, suppliers,
462/466 Service Providers. consultants, or their agents or
representatives for RHC-supported
transactions, if
(1) such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) if such party is considered a
``principal''; or
(3) the amount of the transaction is
expected to be at least $25,000.
TRS..................................... Service Providers.......... Contractors, subcontractors, suppliers,
NDBEDP.................................. consultants, or their agents or
representatives for TRS- or NDBEDP-
supported transactions, if:
(1) such person has a material role
relating to, or significantly affecting,
claims for disbursements related to the
program;
(2) such person is considered a
``principal''; or
(3) the amount of the transaction is
expected to be at least $25,000.
----------------------------------------------------------------------------------------------------------------
[[Page 2084]]
35. Primary and lower tiers--High-Cost Programs. For the High-Cost
programs, we propose that the primary tier participant will be the
carrier receiving support. We propose that lower tier participants
include contractors, subcontractors, suppliers, consultants, or their
agents or representatives for High-Cost-supported transactions,
regardless of the dollar value of the contract or agreement, if (1)
such person has a material role relating to, or significantly
affecting, claims for disbursements related to the High-Cost program,
or (2) such person is considered a ``principal.'' \25\ We also propose
that contractors, subcontractors, suppliers, consultants, or their
agents or representatives be treated as lower tier participants for all
USF-supported transactions, including High-Cost-supported transactions,
if the amount of the transaction is expected to be at least $25,000.
---------------------------------------------------------------------------
\24\ Under the Guidelines, subcontractors include suppliers of
goods and services.
\25\ Our proposed new rules would provide: ``The term
`Principal' means, in addition to those individuals described at 2
CFR 180.995, any person who has a critical influence on, or
substantive control over, a covered transaction, whether or not
employed by the participant or paid with federal funds. Persons who
have a critical influence on, or substantive control over, a covered
transaction may include, but are not limited to: Management and
marketing agents, accountants, consultants, investment bankers,
engineers, attorneys, and other professionals who are in a business
relationship with participants in connection with a covered
transaction under an FCC program'').
---------------------------------------------------------------------------
36. Primary and lower tiers--Lifeline Program. Under the Lifeline
program, carriers can submit consumer Lifeline applications to the
National Verifier and are in the best position to have up-to-date
information on customer activation and use of their Lifeline service.
In addition, the carrier submits requests for payment to the USF
Administrator and is in the best position to carry out the obligations
of primary tier participants under the Guidelines. In contrast, the
direct interaction of low-income consumers with the Commission or the
USF Administrator is incidental. We propose that these beneficiaries
not be considered primary or lower tier participants. Therefore, in the
Lifeline program, we propose that the primary tier participant will be
the carrier receiving support.
37. We propose three categories of lower tier participants in the
Lifeline program. First, we propose to include parties (except for the
primary tier Lifeline carrier) to any contract or award in which a
person is reimbursed based on the number of Lifeline subscribers
enrolled, by commission, or any combination thereof, regardless of tier
or dollar value. Second, we propose that lower tier participants would
include contractors, subcontractors, suppliers, consultants, or their
agents or representatives and third-party marketing organizations for
Lifeline-supported transactions, regardless of the dollar value of the
contract or agreement, if (1) such person has a material role relating
to, or significantly affecting, claims for disbursements related to the
Lifeline program, or (2) such person is considered a ``principal.''
Finally, we propose that contractors, subcontractors, suppliers,
consultants, or their agents or representatives and third-party
marketing organizations be treated as lower tier participants for
Lifeline-supported transactions, if the amount of the transaction is
expected to be at least $25,000.
38. Primary and lower tiers--E-Rate Program. In the E-Rate program,
after a school, library, or consortium enters into a signed contract or
other legally binding agreement for services eligible for E-Rate
discounts, the school, library, or consortium will identify the
selected service provider using FCC Form 471. For the E-Rate program,
we propose that both the program applicant (the school, library, or
consortium) and the service provider(s) selected by the applicant (as
indicated on FCC Form 471) be designated as primary tier participants.
Extending the primary tier designation to applicants will allow us to
obtain the more extensive primary tier disclosures from the applicants
themselves, while also ensuring that the applicants will verify during
their selection process that a service provider is not excluded or
disqualified. We also propose that the service providers selected by
the applicant schools, libraries, and consortia also be considered
primary tier participants, regardless of whether they submit invoices
directly to USAC. The experience of the Commission is that service
providers may often be responsible for waste, fraud, and abuse, and
therefore the imposition of the more substantial primary tier
obligations (particularly disclosure requirements) on these entities
would best achieve the Commission's goals of protecting federal funds.
We seek comment on this proposal.
39. Under the E-Rate programs, schools and libraries may create
``consortia'' that can seek competitive bids or E-rate funding on
behalf of all their members. When schools and libraries act through
consortia, we propose that the consortium itself, acting through its
lead member, would be a primary tier participant, along with the member
schools or libraries. However, in considering any proposed suspension
or debarment action, we anticipate that the suspension and debarring
officer should evaluate which particular school or library consortium
member was responsible for the bad conduct (in many cases, this may be
the lead member) and direct the suspension and debarment orders to
those responsible for the bad acts, rather than to all consortium
members. We seek comment on this proposal and how best to implement the
Guidelines in this context.
40. Finally, we propose that lower tier participants for the E-Rate
program include contractors, subcontractors, suppliers, consultants, or
their agents or representatives (with the exception of the service
provider(s) designated on FCC Form 471, which would be treated as a
primary tier participant) for USF-supported E-Rate transactions. We
propose that all such persons be treated as lower tier participants,
regardless of the dollar value of their contract or agreement, if (1)
they have a material role relating to, or significantly affecting,
claims for disbursements related to the E-Rate program, or (2) they are
considered a ``principal.'' We also propose that such persons be
treated as lower tier participants for all other E-Rate-supported
transactions if the amount of the transaction is expected to be at
least $25,000.
41. Primary and lower tiers--Rural Health Care Program. We propose
a structure for the RHC program that is substantially similar to the E-
Rate program. After an individual health care provider (HCP) or a
consortium enters into a signed contract or other legally binding
agreement for services eligible for RHC support, the HCP or consortium
will identify the selected service provider using FCC Form 462 or 466.
As with the E-Rate program, we propose that both the program applicant
and the service provider(s) selected by the applicant (as indicated on
FCC Form 462 or 466) be designated as primary tier participants, for
the reasons discussed above.
42. Similarly, we propose that a consortium applicant, acting
through its lead entity, would be the primary tier participant, along
with its member HCPs, but that the suspension and debarring officer
should evaluate which particular consortium member (for example, the
lead entity) was responsible for the bad conduct and direct the
suspension and debarment orders to those responsible for the bad acts,
rather than to all consortium members.
43. Finally, as with the E-Rate program, we propose that lower tier
participants for the RHC program include contractors, subcontractors,
suppliers, consultants, or their agents or
[[Page 2085]]
representatives (with the exception of the service provider(s)
designated on FCC Forms 462 or 466, which would be treated as a primary
tier participant) for USF-supported RHC program transactions. We
propose that all such persons be treated as lower tier participants,
regardless of the dollar value of their contract or agreement, if (1)
they have a material role relating to, or significantly affecting,
claims for disbursements related to the RHC program, or (2) they are
considered a ``principal.'' We also propose that contractors (except
for the service provider designated on FCC Forms 462 or 466),
subcontractors, suppliers, consultants, or their agents or
representatives be treated as lower tier participants for all other
RHC-supported transactions if the amount of the transaction is expected
to be at least $25,000. We seek comment on this proposal and how best
to implement the Guidelines in this context.
44. Primary and lower tiers--TRS programs and NDBEDP. We propose
that in the TRS programs and the NDBEDP, the service and equipment
providers receiving payments shall be deemed the primary tier
participants. In these programs, the service and equipment providers
evaluate the qualifications of customers to participate in the
programs. In addition, the service (or equipment) providers submit
requests for payment to the program administrators and are in the best
position to carry out the obligations of primary tier participants
under the Guidelines. For the TRS programs (other than TRS that is
provided through state programs) and the NDBEDP, the primary tier
participants would be the certificated entities that are reimbursed by
the Commission and the TRS Fund administrator for providing services
and equipment under the covered transactions. For TRS that is provided
through state TRS programs, the primary tier participants would be the
TRS providers that are authorized by each state to provide intrastate
TRS under the state program and that, accordingly, are compensated by
the TRS Fund for the provision of interstate TRS. For these programs,
are there certain types of participants that the rules should treat
differently? We note that, for the NDBEDP, some participants are state
or local governments, and others are non-profits. Are there reasons why
participants that are state or local governments or non-profit entities
would require different treatment under the Guidelines and the rules we
propose in this document? In contrast to the service providers, the
direct interaction of TRS and NDBEDP beneficiaries (i.e., individuals
with disabilities) with the FCC or the administrators is incidental.
Moreover, because beneficiaries (i.e., individuals with disabilities)
in the TRS program and NDBEDP do not directly submit applications to
the program administrators, we propose that these beneficiaries not be
considered either primary or lower tier participants, and not be
subject to the debarment rules. We also note that the burden of
imposing lower tier obligations on these individual beneficiaries would
be substantial and their obligations under the rules, if they were
considered participants, could well be beyond their ability or
resources to carry out.
45. Consistent with the USF programs, we propose that lower tier
participants for the TRS programs and the NDBEDP include contractors,
subcontractors, suppliers, consultants, or their agents or
representatives for TRS- or NDBEDP-supported transactions. We propose
that all such persons be treated as lower tier participants, regardless
of the dollar value of their contract or agreement with the service
provider, if (1) they have a material role relating to, or
significantly affecting, claims for disbursements related to the TRS or
NDBEDP programs, or (2) they are considered a ``principal.'' We also
propose that contractors, subcontractors, suppliers, consultants, or
their agents or representatives be treated as lower tier participants
for all other TRS- or NDBEDP-supported transactions if the amount of
the transaction is expected to be at least $25,000. We seek comment on
this proposal.
46. Transactions with the USF, TRS Fund, and NDBEDP Administrators.
We also propose adoption of a clarification to section 180.200 of the
Guidelines explaining that covered transactions include not only
transactions between a person and the Commission, but also any
transactions between a person and the administrators of the USF and TRS
programs and the NDBEDP, when those entities are acting as agents of
the Commission for purposes of administering the programs. We seek
comment on this proposal.
47. As noted, the Guidelines impose important disclosure
requirements on both primary and lower tier participants. In addition
to the discussion in this section, we refer interested parties to the
Guidelines in 2 CFR part 180, subpart C (Responsibilities of
Participants Regarding Transactions Doing Business with Other Persons).
We note that entities who participate in federal grant programs (e.g.,
schools, libraries, or rural health care providers) or seek federal
contracts (e.g., service providers) should already be familiar with
similar requirements. As noted above, we propose to exclude individual
beneficiaries in the Lifeline and TRS programs and the NDBEDP (i.e.,
low-income individuals and individuals with disabilities) from these
requirements.
48. Primary tier participants. Disclosures required of primary tier
participants (i.e., those who deal directly with the agency or its
agents by submitting a proposal for, or entering into, a covered
transaction) are extensive. They must not only advise the agency if
they are presently excluded or disqualified, but must also state
whether the participant or any of its principals for the transaction
``have been convicted within the preceding three years of any of the
offenses listed in Sec. 180.800(a) or had a civil judgment rendered
against [them] for one of those offenses within that time period,''
``are presently indicted for or otherwise criminally or civilly charged
by a governmental entity (Federal, State or local) with commission of
any of the offenses listed in Sec. 180.800(a),'' or ``[h]ave had one
or more public transactions . . . terminated within the preceding three
years for cause or default.''
49. We anticipate that disclosure requirements could be implemented
through changes to existing program forms and certification rules and
seek comment on how to implement such requirements in a manner that
minimizes burdens on primary tier participants. We also seek comment on
what changes to our rules and form instructions may be required to
further communicate disclosure requirements to primary tier
participants. Finally, we propose clarifying the disclosure rules to
require that such disclosures by primary tier participants be made not
only to the USF, TRS, and NDBEDP administrators, as the Commission's
agents for the covered transactions, but also to the Commission (with
disclosures to be submitted to the attention of the applicable
bureaus). We seek comment on these proposals.
50. Lower tier participants. The Guidelines disclosure requirements
for lower tier participants are less extensive; these parties need only
disclose whether they are excluded or disqualified from participating
in covered transactions. As a further protection for agency
transactions, should any implementing rules adopted by the Commission
require that participants at all or some of the lower tiers also
disclose the information
[[Page 2086]]
applicable to primary tier participants to both the Commission and to
the higher tier participant with which they seek to conduct business?
For example, in the E-Rate program, a service provider would be
required to disclose the primary tier information to the Commission,
but the program beneficiaries (the schools and libraries) might also
find that information useful in evaluating the services offered by
their potential service providers.
51. We note that under the Guidelines, a disclosure of unfavorable
information by a primary tier participant would not necessarily cause
the federal agency to deny participation (except for instances of
exclusion or disqualification), and our proposal would extend this
protection to disclosures by lower tier participants. However, it would
allow the agency and the higher tier participant to whom the disclosure
was made the opportunity to consider this information to better
determine whether participation seems appropriate under the
circumstances presented. The requirement to notify lower tier
participants of such additional disclosure obligations could be an
additional duty for both primary and lower tier program participants
under any new rules. We seek comment on this proposal and any
alternatives.
52. Subpart C of the Guidelines describes the responsibilities of
participants in lower tier transactions, and specifically requires such
participants to pass down the requirements to persons at lower tiers
with whom they intend to do business. We propose that primary and lower
tier participants include a term or condition in their transactions
with the next lower tier participants requiring compliance with 2 CFR
part 180, subpart C, as supplemented by any Commission rules.
53. Lifeline and other participant disclosures. As proposed in this
document, under the Lifeline program, eligible telecommunications
carriers (ETCs), their agents, and subagents would be subject to
disclosure obligations. We seek comment on how those disclosure
obligations should be accomplished. Should the disclosure rules require
all primary and lower tier participants in the Lifeline program to file
disclosure statements, upon penalty of perjury, reporting all required
disclosures or certifying that they have no reportable disclosures to
make? For eligible telecommunications carriers, are there existing
forms or submissions to which this disclosure should be added? \26\ How
often should such disclosure statements be required to be filed? For
individuals who have registered with USAC for access to the Lifeline
National Verifier or National Lifeline Accountability Database systems,
should we require such disclosure statements to be filed upon
registration and every subsequent recertification? Should ETCs be
required to maintain such disclosure statements as part of their record
retention requirements? What remedies should be available if
participants fail to disclose the required information? We seek comment
on these matters and on similar issues related to the implementation of
disclosures for the other programs that may be made subject to the
suspension and debarment rules, as proposed in this document.
---------------------------------------------------------------------------
\26\ For example, in the case of Lifeline, this could be
effected through Form 555, reimbursement claims, or registration in
the Representative Accountability Database.
---------------------------------------------------------------------------
54. USF competitive bidding short forms. In some instances, the
Commission conducts competitive bidding to determine recipients of
universal service support, as in the Connect America Fund auctions. We
consider here the Commission's own processes for auctioning support,
rather than the competitive bidding that schools, libraries, and health
care providers must conduct prior to selecting a service provider in
the E-Rate and RHC programs. In the Commission's competitive bidding
process, an applicant for support first files a ``short-form''
application to participate in bidding. Having a simpler standard for
``short-form'' applications as opposed to ``long-form'' applications
streamlines the competitive bidding process and encourages
participation by keeping participation as simple as possible. Thus, at
the short-form stage an applicant to participate in bidding for
universal service support is only required to certify ``that the
applicant is in compliance with all statutory and regulatory
requirements for receiving the universal service support that the
applicant seeks, or, if expressly allowed by the rules specific to a
high-cost support mechanism, . . . that the applicant . . . must be in
compliance with such requirements before being authorized to seek
support,'' and is not required to demonstrate fully its qualifications
and compliance. Only after becoming a winning bidder must an applicant
file a ``long-form'' application demonstrating in detail the
applicant's qualification to receive the support. For example, auction
participants need not demonstrate eligible telecommunications carrier
(ETC) qualifications until the long-form stage.
55. Primary tier participants would at a minimum provide all
required disclosures with their long-form applications. As discussed
above, the Guidelines require primary tier participants not only to
disclose whether they are presently excluded or disqualified, but to
make several additional disclosures that could assist the agency in
evaluating whether to enter into the transaction with that person. The
Guidelines give the agency discretion to consider the disclosed
information before determining whether or not to enter into the covered
transaction. We recognize that requiring all of the disclosures and
evaluations at the short-form stage could slow the auction process. On
the other hand, a problem would be created in situations where an
entity participates in an auction, wins, and then is disqualified from
receiving support. This problem may weigh in favor of more requiring
more disclosure in the short-form application. Accordingly, we seek
comment on the appropriate balance at the short-form stage between
requiring helpful disclosures while preserving the simplicity and speed
of applying to participate in the competitive bidding process, and more
specifically on the three options discussed below or any other
alternatives that commenters want to propose.
56. At the short-form application stage, the Commission could limit
the application of the Guidelines to a review of the status of the
applicant and wait until a winning bidder files a long-form application
to have the applicant disclose additional parties and conduct further
review. As noted, in a short-form application in connection with
universal service support, an applicant must certify that it is ``in
compliance with all . . . regulatory requirements for receiving the
universal service support.'' Therefore, a presently excluded applicant
could not make the required certification and could not successfully
submit a complete short-form application. This approach permits the
Commission to process applications to participate in competitive
bidding more quickly and minimizes the disclosures required of
potential participants. The applicant would bear the risk that required
disclosures in its long-form application could result in its
disqualification from support and a default on its application.
57. Alternatively, a second approach would be to require at the
short-form stage that applicants disclose just
[[Page 2087]]
whether the applicant or any of its principals are presently excluded
or disqualified.\27\ As under the first approach, a presently excluded
or disqualified applicant could not make the required certification and
would be unable to submit successfully a complete short-form
application. In addition, under this second approach, an applicant with
a principal that is presently excluded or disqualified would have to
address those circumstances and come into compliance in the event it
should become a winning bidder. If it failed to do so adequately, it
could not successfully submit a complete short-form application. This
approach seeks to balance requiring the most critical disclosures at
this stage and maintaining an expeditious competitive bidding process.
---------------------------------------------------------------------------
\27\ Thus, the applicant to participate in competitive bidding
would be required to disclose the same information required of lower
tier participants under the Guidelines.
---------------------------------------------------------------------------
58. Finally, a third approach would be to require applicants to
make all disclosures required of a primary tier participant at the
short-form stage, as well as the long-form stage. This would allow the
Commission to review the disclosures and resolve any issues prior to
the bidding. However, it also would significantly delay the competitive
bidding process and the ultimate award of support. Furthermore, it
would not eliminate the need for considering additional disclosures and
assessments at the long-form stage, as an applicant might have
additional disclosures to make due to developments during the course of
competitive bidding. We seek comment on all these options and any other
alternatives commenters may feel are appropriate at the short-form
stage.
59. Primary tier participants. If a primary tier participant
discloses unfavorable information (other than an exclusion or
disqualification) to the Commission (or the Administrators) before it
enters into a transaction (such as an E-Rate funding commitment), one
possible way for the Commission to prevent the transaction is to
institute and complete a suspension and/or debarment proceeding before
the transaction is approved or concluded.
60. We seek comment on whether our rules should include less
drastic remedies. For example, should the Commission adopt specific
rules to afford itself (in consultation with the Administrators) the
discretion to merely preclude the participant from entering into the
transaction at hand, prior to or in lieu of suspending or debarring the
participant? Or should rules permit the agency to choose to not enter
into covered transactions with that party (for example, a service
provider who is a primary tier participant) for some specified period,
akin to the ``limited denial of participation'' process described
further below? Should our rules be modified to permit the Commission to
consider this unfavorable information in TRS or NDBEDP certification
proceedings and, if so what modification to our certification rules
would be appropriate to ensure that the Commission could take
appropriate action to reflect such information? \28\ If the agency
should be afforded discretion not to enter into the covered transaction
based on the unfavorable information without using a suspension or
debarment mechanism, what procedures should be provided to ensure due
process for the party or parties affected by that decision?
---------------------------------------------------------------------------
\28\ The TRS certification rules are quite specific on what
constitutes grounds for granting certification.
---------------------------------------------------------------------------
61. Lower tier participants. If the Commission adopts rules
requiring lower tier participants, such as an E-Rate or Rural Health
Care consultant or a TRS subcontractor, to disclose unfavorable
information currently only required to be disclosed by primary tier
participants (i.e., convictions, etc.), the current Guidelines would
not provide a mechanism for the Commission or the Administrators to
reject a related primary tier participant's application solely because
of that lower tier participant's disclosure. For example, if a school
is utilizing an E-Rate consultant who has been convicted of fraud in
another government program but has not yet been debarred, the
Guidelines do not provide a mechanism for the rejection of the school's
E-Rate application. However, requiring disclosure of additional
information (in this example, the conviction) would give the Commission
the opportunity to advise the program administrators to closely monitor
the lower tier participant and, if appropriate, would enable the agency
to initiate a suspension/debarment proceeding against the lower tier
participant (if the disclosures are so significant that suspension or
debarment is warranted).
62. We seek comment on whether the Commission should adopt rules
that would allow the Commission, or the Administrators, to reject a
nonprocurement transaction (e.g., an application for USF funding, or a
request for TRS compensation) where the Commission or the
Administrators consider the disclosure of unfavorable information
relating to the lower tier participant so significant that the
transaction should be denied, even without initiation of a suspension
or debarment proceeding. What factors should be considered in such a
determination? For example, should the primary tier participant first
be given the opportunity to terminate its relationship with the lower
tier participant? We believe that providing the Commission, or the
Administrators as its agents, the discretion to reject such primary
participant transactions based on unfavorable information disclosed by
lower tier participants would provide the Commission with maximum
flexibility to protect the USF and TRS funds, and seek comment on this
proposal.
63. Under the Guidelines, an agency head may grant an ``exception''
to allow an excluded person to participate in a transaction.\29\ Should
any Commission rules implementing the Guidelines spell out factors for
invoking such an ``exception'' or should that determination be left
solely to the discretion of the full Commission or the Chairman? If any
factors are enumerated, we tentatively propose that one consideration
be whether the provider of services--whether primary tier or lower
tier--may be the sole source of services in the area, such that its
exclusion could place consumers and-or beneficiaries at risk of losing
service and more broadly the extent to which the exclusion would
substantially impair delivery of services to customers and
beneficiaries. Are there additional factors that should be identified
as relevant to this determination? In addition, should the agency head
alone be given authority to grant exceptions, or should the Commission
consider a delegation of authority to the bureaus overseeing the
programs (or perhaps to those bureaus in combination with the
Enforcement Bureau) to grant such exceptions where the sole provider
question is raised?
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\29\ Section 180.135 provides that an agency head ``may grant an
exception permitting an excluded person to participate in a
particular covered transaction.'' Such an exception ``must be in
writing and state the reason(s) for deviating from the government-
wide policy in Executive Order 12549.''
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64. At least one other federal agency, the Department of Housing
and Urban Development (HUD), specifically provides for a ``limited
denial of participation'' for up to twelve months under its rules as a
parallel mechanism to debarment. Many of the procedures under this
mechanism resemble those under the Guidelines, including due process
protections. However, HUD's limited denial of participation process
does not trigger inter-agency reciprocity
[[Page 2088]]
because that process is deemed to be outside the government-wide
suspension and debarment system. Therefore, invoking a limited denial
of participation would prevent a bad actor from continuing to
participate in the particular agency program that triggered the limited
debarment, but would not result in the party's exclusion on the System
for Award Management exclusion list so as to trigger reciprocal
exclusions government-wide.
65. Under the HUD rules, if at any time after invoking the limited
debarment process the agency determines that a suspension and debarment
is the more appropriate mechanism, the agency may initiate either
suspension or debarment proceedings. Adopting such a mechanism as part
of the Commission's rules would allow the agency to protect its
programs from conduct of bad actors for a shorter period than a
suspension or debarment, while affording the party the opportunity to
come into compliance expeditiously, without causing the wrongdoer to be
automatically excluded across all agency programs or government-wide.
We seek comment on whether adopting this mechanism could be a useful
tool for the Commission to employ and, if so, what standards might be
appropriate for triggering this remedy. Should such a mechanism be
employed primarily to ensure that a program participant responds to
information requests and other Commission directives, but not be
employed where there is evidence of fraud or other substantial
wrongdoing that would warrant debarment? Or would a limited denial of
participation be appropriate where a bureau or the Commission wanted to
recommend exclusion of a party from one agency program due to
malfeasance, but not from all covered agency transactions? In what
other circumstances might such a mechanism be appropriate or
inappropriate?
C. Suspension and Debarment Process
66. The default procedural requirements applicable to suspension
and debarment actions are set forth in subparts F, G, and H of the
Guidelines. We seek comment on Commission-specific modifications to
those procedures. We also invite comment on any other changes that
parties believe should be made to the default procedures. Commenters
should set forth their proposals, and the rationales supporting the
proposed change, with specificity.
67. Under the Guidelines, agencies look to individual circumstances
and factors in rendering suspension and debarment determinations. Some
of the grounds for suspension or debarment are described in the
Guidelines, but each agency can modify that list.\30\ If the Commission
adopts rules consistent with the Guidelines, are there specific
additional suspension and/or debarment factors that should be expressly
taken into consideration? We tentatively propose that additional
factors that would militate in favor of suspension or debarment should
include: Repeat offenders of Commission rules; habitual non-payment or
under-payment of Commission regulatory fees and/or contributions to the
USF and TRS programs and NDBEDP; willful violation of USF, TRS, and
NDBEDP rules; the willful submission of FCC forms or statements made to
the FCC or to the Administrators that result in or could result in
overpayments of federal funds to the recipients, including the willful
submission of false documentation to obtain USF or TRS funds; and the
failure to respond to requests made by the FCC or the Administrators
for additional information to justify payment or continued operation
under their certifications.
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\30\ Grounds for suspension or debarment are set forth in
section 180.800 of the Guidelines, and include not only convictions
of or civil judgments for fraud or certain criminal offenses,
including any ``offense indicating a lack of business integrity,''
but also violations of the requirements of public transactions ``so
serious as to affect the integrity of an agency program'' (including
willful or repeated violations). In addition, the Guidelines provide
that suspension or debarment could be warranted for ``[f]ailure to
pay a single substantial debt, or a number of outstanding debts . .
. owed to any Federal agency.'' Finally, the Guidelines provide the
discretion to suspend or debar for ``[a]ny other cause of so serious
or compelling a nature that it affects [the party's] present
responsibility.''
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68. We also tentatively propose as an additional factor the willful
violation of a statutory or regulatory provision applicable or related
to any submission made to obtain USF or TRS funds, or such a violation
caused by gross negligence. For example, within the High-Cost program,
we seek comment on whether the following should constitute grounds for
debarment: Willful (or grossly negligent) violation: Improper cost
accounting, including putting expenses not supported by the universal
service fund in the carrier's revenue requirement; using high-cost
support for non-supported expenses; and allocating non-regulated
expenses to the regulated entity. Further, we tentatively propose to
define the term ``public agreement or transaction,'' as used in section
180.800(b) of the Guidelines relating to causes for debarment, as
encompassing contracts between USF applicants and their selected
service providers and/or consultants.
69. The Guidelines also list numerous mitigating and aggravating
factors that may influence the debarring official's decision.\31\ We
have sought comment on whether the Commission should consider granting
an exception to an excluded service provider if that provider is the
sole source of services in an area. More generally, during a debarment
proceeding, should the Commission consider the impact that debarment
would have on the provision of services to customers under agency
programs, whether the TRS program, the NDBEDP, or the various USF
programs? How would the Commission determine whether the person subject
to suspension and/or debarment proceedings would be the sole provider
of services, and to what extent should that influence the outcome of a
suspension and debarment proceeding? Should debarment of an entity that
appears to be the sole provider of services in an area be subject to a
more extended transition period to permit customers or the agency to
search for alternative sources of services? Where an entity is the sole
source provider, should the Commission's rules provide for a remedy
other than debarment, perhaps in the form of either a settlement
agreement or a ``consent decree'' permitting continued service but
subject to an appropriate compliance plan and strict oversight? What
other vehicles or regulations might best accomplish the goal of
protecting the USF and TRS programs and the NDBEDP from fraud or abuse
without disrupting service to customers?
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\31\ The list of factors is extensive and includes, by way of
example, the actual or potential harm or impact that results or may
result from the wrongdoing, and the frequency of incidents and/or
duration of the wrongdoing.
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70. Finally, we note that a program participant may choose to
continue with an excluded entity ``if the transactions were in
existence when the agency excluded the person.'' \32\ To what extent
should continuation be permitted under those programs in which
beneficiaries are receiving services on a month to month (or similarly
short term) basis? For example, if a school or library receives E-Rate
services by tariff on a month-to-month basis, should the school or
library be required to transition to a different provider if the
initial service provider is suspended or
[[Page 2089]]
debarred since the school or library is not under a binding long-term
contract with that carrier? Or should we construe the term
``transactions . . . in existence'' to cover these monthly purchases?
Should those beneficiaries receiving services for an indefinite term be
required to seek a different service provider and, if so, what length
of transition period would be appropriate? We seek comment on all these
considerations and proposals, in addition to the other factors set
forth in the Guidelines.
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\32\ We recognize that adoption of this provision would
constitute a change of course from policies currently in effect for
the E-Rate program that now preclude the distribution of any USF
funds to debarred entities and would require appropriate changes to
our rules.
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71. The Guidelines for suspension require ``adequate evidence,''
defined as ``information sufficient to support the reasonable belief
that a particular act or omission has occurred.'' Under the Guidelines
the suspending official first imposes the suspension, and then promptly
notifies the suspended person, who is then afforded an opportunity to
contest the suspension. Debarment in contrast requires a
``preponderance of the evidence'' and an opportunity for the target
entity to respond before it goes into effect.
72. We seek comment on whether the Commission should adopt these
evidentiary standards. Should the Commission adopt any suspension and
debarment rules that include additional factors relating to the
evidentiary standards (with particular attention as to what constitutes
``adequate evidence'')?
73. The typical debarment period is not more than three years, but
that period may be adjusted based on the ``seriousness of the causes''
for debarment and evaluation of the factors listed in the Guidelines.
Further, a debarred person may ask the debarring official to reconsider
the decision or to reduce the time period or scope of the debarment.
Are there additional mitigating factors beyond those set forth in the
Guidelines that may warrant a reduction in the debarment period in
response to a request for reconsideration?
74. Should the absence of an alternative service provider be a
mitigating factor? Should the Commission adopt a mechanism that would
permit a debarred person that is the sole provider of services to
request, after the first year of debarment, a reduction in the
debarment period? Should other participants have an opportunity to
petition for a reduction of their debarment period by demonstrating
that they have instituted compliance measures with training and
oversight that will facilitate program compliance? In the context of
the E-Rate and Rural Health Care programs, should the Commission treat
applicant schools, libraries, and health care providers differently
than other parties (either for determining the period of debarment, or
in the review of applicable factors) and, if so, under what
circumstances? Should the Commission provide for an additional
requirement that supplements the Guidelines to require debarred parties
to petition for readmission into FCC programs after the debarment
period? If so, should the burden be on the petitioner to demonstrate
that it has taken remedial actions to avoid future violations? Should
any such petition be resolved by the bureau responsible for program
oversight, by the debarring official, or by the Chairman or full
Commission?
75. Should the debarring official have authority to tailor
debarments for particular circumstances or propose remedies in lieu of
suspension and debarment? \33\ Should any such determinations be made
only after input from appropriate bureau staff who are likely to have
the best knowledge of how entities are certified (in the case of TRS or
NDBEDP) or how alternative remedies might impact delivery of services
to beneficiaries? What types of alternative remedies might be
appropriate for the USF and TRS programs and the NDBEDP? Should
alternative remedies be fashioned in a different way from consent
decrees in Enforcement Bureau enforcement actions? For example, should
the official be afforded authority to negotiate a settlement under
which the respondent would agree to the repayment of funds or a
reduction in program support, rather than suspension or debarment?
Under what circumstances would such a resolution be appropriate? Are
there other alternative remedies that the agency should consider?
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\33\ One possibility is to allow the debarring official to issue
a limited denial of participation similar to that utilized by HUD.
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76. We seek comment on several significant process questions to
ensure that implementation of any new rules be efficient and fair.
77. One issue is who should present the evidence supporting
suspension or debarment to the suspending or debarring official. If the
Office of the Inspector General (OIG) has conducted the underlying
investigation supporting the suspension and debarment, we would propose
that the OIG have primary responsibility for presenting the evidence to
the suspending or debarring official because it would be the entity
most familiar with the underlying facts. In other situations, however,
it may be appropriate for the presentation to be made by the other
units within the Commission that may have conducted the investigation,
such as the Enforcement Bureau. In addition, the Commission may want to
develop coordination procedures to permit the bureaus most responsible
for the implementation of its USF and TRS programs and the NDBEDP to
make presentations in the proceedings because they are likely to have
insights on ways to implement suspension or debarment without adversely
impacting the persons or entities the programs are designed to assist.
We seek comment on these options.
78. A second consideration is the mechanisms for appeal and review
of any suspending or debarring action. We propose that a determination
by the suspending or debarring official would be an action on which
reconsideration could be sought under section 405 of the Communications
Act or an application for review filed under section 155(c)(4) of the
Communications Act. Would it be appropriate or necessary to adopt any
supplemental rules applicable to applications for review or petitions
for reconsideration of such actions, or are existing rules and
procedures sufficient and appropriate to handle such petitions? If
reconsideration could be sought or an application for review filed, as
proposed, would it be appropriate for the Commission to adopt rules
providing that the suspending or debarring official or Commission, as
the case may be, would make every effort to act on such motions or
applications within 180 days? Would some other time frame be more
reasonable? Should we consider supplemental rules providing guidance
for what constitutes ``good cause'' under section 1.106(n) of our rules
for granting a stay of any suspension or debarment action taken by the
Commission en banc, pending a decision on a petition for
reconsideration? If a stay of a suspension or debarment is granted, we
propose that any such stay not exceed 120 days to ensure that expedited
review of the suspending or debarring action is provided. We also seek
comment on whether the initial suspending or debarring actions, taken
pursuant to delegated authority, should be subject to the procedures
under section 1.102(a) or section 1.102(b) of our rules. If such
actions would otherwise subject to section 1.102(a), which provides for
automatic stays of hearing orders pending an application for review, we
propose that suspension or debarment orders be exempt from such stays.
We seek comment on all these proposals and on any other procedures
governing the appeal and
[[Page 2090]]
review of determinations by the suspending or debarring official. If an
interested party proposes such procedures, it should set forth that
proposal and any supporting rationales with specificity.
79. A third procedural consideration is the designation of the
``suspending official'' and the ``debarring official'' who shall
conduct fact finding for FCC suspensions and debarments. Currently, the
Enforcement Bureau has authority to resolve universal service
suspension and debarment proceedings.\34\ We seek comment on whether we
should revisit that determination given our proposal to significantly
expand the scope of the Commission's suspension and debarment rules
beyond the current non-discretionary USF suspensions and debarments.
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\34\ Section 54.8 was originally adopted as 54.521 and
redesignated in 2007.
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80. We recognize that officials who conduct suspension and
debarment proceedings should be neutral. Although suspension and
debarment proceedings are not formal adjudications subject to APA
formal hearing provisions that prohibit agency staff from performing
both prosecutorial and decisional activities, we believe that the
agency's appointment of suspending and debarring officials should
reflect the ``separation of functions'' principle that shields agency
decisionmakers from off-record presentations by staff who have
presented evidence or argument on behalf of or against a party to a
proceeding and prohibits such staff from participating in the decision.
The separation of functions requirement in section 409(c)(1) of the
Communications Act, which applies to both formal and informal
adjudications that have been designated for hearing, prevents a person
who has participated in the presentation of a case at a hearing or upon
review from making any additional presentation respecting such case to
the presiding officer or to any authority within the Commission
performing a review function, absent notice and opportunity for all
parties to participate.\35\
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\35\ Consistent with this, the Administrative Conference
recommends that agencies require internal separation of decisional
and adversarial personnel in adjudications that are not subject to
formal APA hearing requirements.
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81. Consistent with these principles, if the Commission found that
the Chief, Enforcement Bureau (or his or her designee) would be the
most appropriate person to serve as the suspending official and
debarring official, would it be appropriate for that person to conduct
proceedings in which staff of the Enforcement Bureau identified the
alleged misconduct that forms the basis for the proceeding,
participated in the investigation or prosecution of the case, or are
expected to be involved in any capacity in any appeal or review of the
suspending or debarring official's determination? If not, should the
Commission designate more than one suspending or debarring official to
ensure that cases involving the Enforcement Bureau are resolved by a
person not associated with that Bureau? Or would it be sufficient that
any suspending or debarring official within the Enforcement Bureau not
be involved in any way with the case presented by the Enforcement
Bureau to the official? We seek comments on these questions. Should
persons other than Enforcement Bureau personnel be considered for
appointment as the suspending or debarring official, and, if so, what
should be their qualifications? Would, for example, the Managing
Director be a more appropriate person for this authority, since the
Office of Managing Director is responsible for oversight of the USF and
TRS funds and for the agency's financial management? Should the
suspending and debarring official be subject to appointment for a
specific term, or may that person be subject to removal by the
Commission at will? What is the relevance to these questions, if any,
of the Appointments Clause to the U.S. Constitution and the Supreme
Court's decision in Lucia v. SEC? We seek comment on these and all
other issues related to the designation of such officials.
82. We seek comment on whether any persons or entities that
currently participate in the Commission's programs would be debarred
through the application of reciprocity and, if so, seek comment on
whether they seek any modifications to the Guidelines to allow them to
continue to participate in Commission programs.\36\ Should Commission
rules further provide that when an entity or person is excluded by
another agency, that entity or person should immediately advise the
Commission's debarring officer whenever it believes it is the sole
provider of services for particular consumers under covered
transactions? This would afford the agency head (or other official with
delegated authority) an opportunity to grant a temporary exception for
good cause while the agency evaluates the effect of the exclusion on
program beneficiaries. If we adopt such a provision, should the
Commission be required to act within a certain period, such as 90 days?
Should the rules further specify that in appropriate cases, the agency
head, full Commission, or other official with delegated authority could
``except'' the excluded party from reciprocity affecting participation
in one or more FCC covered transactions subject, if appropriate,
through a negotiated agreement that would include provisions such as
mandatory independent audits, additional reporting requirements, or
similar forms of oversight? We seek comment on these options, as well
as other mechanism that might afford flexibility in protecting program
funds while also ensuring that consumers are not without program
services.
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\36\ Under the Guidelines, a program participant may continue
receiving services from an excluded person under an existing
contract, but may not renew or extend the contract (other than no-
cost time extensions) without an exception from the agency.
---------------------------------------------------------------------------
83. We note that suspension and debarment could present a
particularly difficult situation if a TRS provider were excluded based
on the action of another agency, through reciprocity, causing potential
immediate adverse consequences to consumers who rely on TRS to meet
their communications needs. Because TRS providers do not have contracts
with their TRS customers, each service provided to customers could be
viewed as a new ``covered transaction.'' Without an exception, an
excluded TRS provider could be barred from receiving payments for any
services provided after the date it was suspended or debarred. We
propose that any excluded TRS provider would be required to immediately
notify the TRS Fund administrator when it is placed on the System for
Award Management exclusion list, and that it could request and obtain a
temporary exception for the 30-day period following its suspension or
debarment to allow for a smooth transition for consumers. We propose
further that the excluded TRS provider may file with the Commission a
request for a longer exception within 30 days after the date of its
suspension or debarment by another government agency. Such a request,
if timely filed, would serve as a stay of the government-wide
suspension and debarment for purposes of the TRS program for not more
than 6 months or until issuance of a decision on the exception request,
whichever occurs first. Such a grace period would permit the Commission
to determine whether a longer exception would be appropriate and would
afford customers (as well as agencies running the certified state
programs) the opportunity to transition to a new provider. We seek
comment on this proposal. We also seek comment about
[[Page 2091]]
whether for the NDBEDP special exceptions to any suspension and
debarment might be fashioned to address similar service disruption
concerns.
84. Finally, we seek comment on what steps we would need to take to
provide information regarding entities suspended or debarred by the
Commission to the government-wide System for Award Management. While
the Commission already uses this system for purposes of its agency
procurements, and many participants in the USF and TRS programs and the
NDBEDP are registered in the System for Award Management for other
purposes, the Commission does not currently require persons to register
before participating in its USF and other programs. Should the
Commission require a party that is not already registered to do so when
it initiates a suspension or debarment proceeding, or when it makes a
final decision to suspend or debar the entity? How can we best
implement our goal of reflecting future suspensions or debarments in
the System for Award Management?
85. The rules under several USF-related programs, Mobility Fund I
and II, and Rural Broadband Experiments under the Connect America Fund,
already provide for the remedy of disqualification for recipients of
support who fail to meet their obligations.\37\ The Guidelines allow
agencies to consider whether persons ``disqualified'' from specified
nonprocurement transactions pursuant to a specific statute, executive
order or legal authority other than the suspension and debarment
process should be listed as excluded in the System for Award Management
Exclusions (effectively debarring the disqualified person government-
wide). Under our USF rules, disqualification only applies to
participation in the USF program. Therefore, we propose that a
disqualified person should be referred to the suspending and debarring
official for a full suspension and/or debarment proceeding and would be
listed by the Commission as excluded in the government-wide system only
after an adverse determination in that proceeding. Alternatively,
should we provide for automatic suspension or debarment of any entity
disqualified under our USF rules?
86. In the case of the TRS program, a certification can be
suspended or revoked for failure to meet any number of mandatory
minimum standards, only some of which relate to fraudulent practices.
In the case of the NDBEDP, many of the qualifications for certification
of a state program relate to factors unrelated to fraudulent practices,
and such certification can be suspended or revoked for failure to meet
such qualifications. In other words, for both of these programs, it
appears that causes for suspension and revocation under the existing
procedures overlap with, but are not the same as, the proposed new
suspension and debarment rules. We therefore propose that the
procedures proposed in this document, if adopted, would be in addition
to the existing program procedures, and seek comment on these
proposals.
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\37\ In addition, under section 54.320(c) of our rules, eligible
telecommunication carriers in the High-Cost program that fail to
comply with public interest obligations or any other terms and
conditions may be subject to reductions in support amounts,
potential revocation of ETC designation, and suspension or debarment
pursuant to current section 54.8 of our rules.
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D. Application of Revised Rules To Conduct Occurring Prior to Their
Effective Date
87. We propose, in appropriate cases, to authorize the suspending
or debarring officer to apply any revised suspension and debarment
rules to conduct in Commission programs that occurred before the
effective date of such rules where expeditious suspension or debarment
would be in the public interest to prevent or deter further harm to
Commission programs. However, where that conduct has already resulted
in settlements with the Commission by a party responsible for the
alleged misconduct, no suspension or debarment of that party based on
such antecedent conduct would be authorized if such party has and
continues to comply with the settlement terms. We seek comment on this
proposal.
88. We further seek comment on whether the ineligibility to
participate in Commission programs based on inclusion on the System for
Award Management exclusion list should be applicable to those
exclusions made by another federal agency (whether for nonprocurement
transactions or procurement transactions) only on or after the
effective date of any revised Commission rules. If such a rule were
adopted, would program participants who are required to check the
System for Award Management exclusion list before entering into
contracts be able to determine the date an exclusion was made and, if
that information were not readily ascertainable, what alternative
mechanisms would afford participants (or the Commission) the ability to
distinguish whether an exclusion by another agency would trigger
reciprocity or not by the Commission, based on when it went into
effect?
89. Alternatively, if such exclusions were made by another federal
agency before the effective date of revised Commission rules, should
the Commission provide for ineligibility for Commission programs as a
default, subject to review? For example, the Commission could provide
for a transitional mechanism for three years or less \38\ that would
allow persons debarred by other federal agencies before the effective
date of the Commission's revised rules to seek expeditious review to
determine whether an exception to the exclusion is warranted. We seek
comment on this approach. Under this approach, if the Commission
authorized exceptions to suspension and debarment, should it attach
(where appropriate) conditions such as a compliance plan or audit
mechanisms, at the discretion of the suspending or debarring officer?
What special standards, if any, should be applied during such any
transitional period to evaluate whether an exception to reciprocal
suspension or debarment would be warranted?
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\38\ The standard debarment period under the Guidelines is three
years.
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90. Conversely, after any revised suspension and debarment rules
become effective, would it be appropriate for the Commission to refer
any entities suspended or debarred under current section 54.8 to GSA
for inclusion on the government-wide System for Award Management
exclusion list? We seek comment on this question. If the Commission
determines that such referrals would be inappropriate, in whole or in
part, then we propose that the Commission maintain its current separate
listing of suspensions and debarments that predate any new rules (at
least until such time as the applicable suspension and debarment
periods have terminated), and propose that the term ``excluded or
exclusion'' in the Guidelines shall include those individuals and
entities previously suspended or debarred by the Commission, in
addition to those included on the System for Award Management exclusion
list. We would also propose to modify the obligations of participants
to ensure that before entering into a covered transaction with persons
at the next lower tier, the participant check both the Commission's
listings of suspensions and debarments and the System for Award
Management exclusions. We seek comment on this proposal. We also seek
comments on any additional modifications that would be required to
[[Page 2092]]
ensure that persons debarred or suspended by the Commission before the
effective date of any new rules be deemed to be excluded persons.
E. Preclusion of Excluded Persons From Serving on Commission Advisory
Committees
91. The appointment of members to federal advisory committees rests
within the discretion of the Commission as the appointing authority. We
propose that any persons or entities that are debarred or suspended be
barred (during their period of debarment or suspension, as shown by
inclusion on the government-wide exclusion list) from serving on the
Commission's advisory committees or comparable Commission groups or
task forces established by the Commission. If a person or entity that
is already a member of such an advisory group is suspended or debarred
after an initial appointment to a Commission advisory group, we propose
that such person or entity be removed from that position. We seek
comment on these proposals.
IV. Procedural Matters
92. Ex Parte Rules--Permit-but-Disclose. This proceeding shall be
treated as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. Persons making ex parte presentations must
file a copy of any written presentation or a memorandum summarizing any
oral presentation within two business days after the presentation
(unless a different deadline applicable to the Sunshine period
applies). Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentation must (1) list all persons
attending or otherwise participating in the meeting at which the ex
parte presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule 1.1206(b). In proceedings governed by
rule 1.49(f) or for which the Commission has made available a method of
electronic filing, written ex parte presentations and memoranda
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding
should familiarize themselves with the Commission's ex parte rules.
93. Comment Period and Filing Procedures. Pursuant to sections
1.415 and 1.419 of the Commission's rules, 47 CFR Sec. Sec. 1.415,
1.419, interested parties may file comments and reply comments on or
before the dates indicated on the first page of this document. Comments
may be filed using the Commission's Electronic Comment Filing System
(ECFS). See Electronic Filing of Documents in Rulemaking Proceedings,
63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing. If more than one active
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
94. Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together
with rubber bands or fasteners. Any envelopes and boxes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9050 Junction Drive,
Annapolis Junction, MD 20701.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW, Washington, DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
95. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection during
regular business hours in the FCC Reference Center, Federal
Communications Commission, 445 12th Street SW, Room CY-A257,
Washington, DC These documents will also be available via ECFS.
Documents will be available electronically in ASCII, Microsoft Word,
and/or Adobe Acrobat.
96. Initial Regulatory Flexibility Analysis. As required by the
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission
has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the
possible significant economic impact on small entities of the policies
and rules addressed in this document. The IRFA is set forth in Appendix
B of the NPRM and is summarized in Part V below. Written public
comments are requested on the IRFA. These comments must be filed in
accordance with the same filing deadlines for comments on the NPRM, and
should have a separate and distinct heading designating them as
responses to the IRFA. The Commission will send a copy of the Notice of
Proposed Rulemaking, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA).
97. Paperwork Reduction Act Analysis. This document contains
proposed new or modified information collection requirements. The
Commission, as part of its continuing effort to reduce paperwork
burdens, invites the general public and the Office of Management and
Budget (OMB) to comment on the information collection requirements
contained in this document, as required by the Paperwork Reduction Act
of 1995, Public Law 104-13. In addition, pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4), we seek specific comment on how we might further reduce the
information collection burden for small business concerns with fewer
than 25 employees.
98. Further Information. For additional information on this
proceeding, contact Paula Silberthau of the Office of General Counsel
at [email protected] or (202) 418-1874.
99. Statement of Authority: This NPRM is authorized by sections
4(i), 4(j), 225, 254, and 719 of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 225, 254, 620.
[[Page 2093]]
V. Initial Regulatory Flexibility Analysis
100. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared an Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the policies and rules
proposed in the Notice of Proposed Rulemaking (Notice). Written
comments are requested on this IRFA. Comments must be identified as
responses to the IRFA.
A. Need for, and Objectives of, the Proposed Rules
101. The Commission oversees a number of critical support programs
such as the Universal Service Fund (USF) programs, the
Telecommunications Relay Services (TRS) programs, and the National
Deaf-Blind Equipment Distribution Program (NDBEDP). As part of its
oversight role, the Commission seeks to protect these programs from
waste, fraud, and abuse to ensure that government funds are efficiently
used for their intended purposes. To date, in the USF context, the
Commission's rules allows it to suspend and debar those against whom
there has been a conviction or civil judgment arising from or related
to USF programs.
102. In the Notice, the Commission has proposed to expand its
arsenal of tools to root out bad actors more effectively and
expeditiously by adopting new rules consistent with the Office of
Management and Budget Guidelines to Agencies on Government Debarment
and Suspension (Nonprocurement), 2 CFR part 180 (OMB Guidelines). The
Commission proposes to apply any new suspension and debarment rules to
transactions under the USF and TRS programs, which are its primary
permanent nonprocurement programs, as well as to transactions under the
NDBEDP. Other Commission nonprocurement programs would be exempt.
Significantly, under the OMB Guidelines, the Commission would have
authority, like other government agencies, to evaluate the wrongful or
fraudulent conduct of companies or individuals in other dealings with
the government and to take remedial action before the issuance of a
judgment or conviction. The Commission believes that adopting rules
consistent with the OMB Guidelines will provide a more advantageous
mechanism for deterring and stopping wrongdoing affecting agency
programs.
103. The Commission's proposals in the Notice fall into three
areas. First, the Commission proposes to apply the suspension and
debarment rules to a broader category of entities than are now covered,
by defining ``covered transactions'' as including conduct taken by
participants in the USF, TRS, and NDBEDP programs, and by defining
covered ``tiers'' of transactions, including those involving
contractors of service providers in these programs. Second, the
Commission proposes to adopt requirements that program participants
confirm that those with whom they do business are not already excluded
or disqualified from government activities. Such confirmation is
consistent with the OMB Guidelines and many entities who participate in
federal grant programs or seek federal contracts should already be
familiar with the process. We seek comment on possible exceptions and
how to implement the principle of reciprocity, which would prevent a
party that is suspended or debarred by another agency from
participation in covered Commission transactions. Third, again
consistent with the OMB Guidelines, the Commission proposes new
procedural requirements that would allow the agency to respond quickly
to evidence of misconduct through a suspension mechanism, while
providing for an evidentiary proceeding, evaluating a broader range of
wrongful conduct than is now considered,\39\ prior to any disbarment.
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\39\ The OMB Guidelines provide federal agencies with
substantial discretion to suspend and debar participants based on
consideration of numerous factors. Moreover, through imputation
rules, action could be taken against an organization, not just a
principal, or the reverse, in appropriate circumstances. The
imputation rules too would plug a gap in the Commission's current
suspension and debarment mechanism.
---------------------------------------------------------------------------
B. Description of the Small Entities to Which Proposed Rules Would
Apply
104. The RFA directs agencies to provide a description of, and
where feasible, an estimate of the number of small entities that may be
affected by the rule changes. The RFA generally defines the term
``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A ``small business concern'' is one that: (1) Is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) satisfies any additional criteria established by the SBA.
105. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. The Commission's actions, over time, may affect small
entities that are not easily categorized at present. We therefore
describe here, at the outset, three broad groups of small entities that
could be directly affected herein. First, while there are industry
specific size standards for small businesses that are used in the
regulatory flexibility analysis, according to data from the SBA's
Office of Advocacy, in general a small business is an independent
business having fewer than 500 employees. These types of small
businesses represent 99.9% of all businesses in the United States which
translates to 28.8 million businesses.
106. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
Nationwide, as of August 2016, there were approximately 356,494 small
organizations based on registration and tax data filed by nonprofits
with the Internal Revenue Service (IRS).
107. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' \40\ U.S.
Census Bureau data from the 2012 Census of Governments \41\ indicates
that there were 90,056 local governmental jurisdictions consisting of
general purpose governments and special purpose governments in the
United States. Of this number there were 37,132 general purpose
governments (county, municipal, and town, or township) with populations
of less than 50,000 and 12,184 special purpose governments (independent
school districts and special districts) with populations of less than
50,000. The 2012 U.S. Census Bureau data for most types of governments
in the local government category show that the majority of these
governments have populations of less than 50,000. Based on this data we
estimate that at least 49,316 local government jurisdictions fall in
the category of ``small governmental jurisdictions.''
---------------------------------------------------------------------------
\40\ 5 U.S.C. 601(5).
\41\ See 13 U.S.C. 161. The Census of Government is conducted
every five (5) years compiling data for years ending with ``2'' and
``7''. See also Program Description, Census of Governments, https://factfinder.census.gov/faces/affhelp/jsf/pages/metadata.xhtml?lang=en&type=program&id=program.en.COG#.
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108. Small entities potentially affected by the proposals herein
include eligible schools and libraries, eligible rural non-profit and
public health care
[[Page 2094]]
providers, and the eligible service providers offering them services,
including telecommunications service providers, internet Service
Providers (ISPs), and vendors of the services and equipment used for
telecommunications and broadband networks.
1. Schools and Libraries
109. As noted, ``small entity'' includes non-profit and small
government entities. Under the schools and libraries universal service
support mechanism, which provides support for elementary and secondary
schools and libraries, an elementary school is generally ``a non-profit
institutional day or residential school, that provides elementary
education, as determined under state law.'' A secondary school is
generally defined as ``a non-profit institutional day or residential
school, that provides secondary education, as determined under state
law,'' and not offering education beyond grade 12. A library includes
``(1) a public library, (2) a public elementary school or secondary
school library, (3) an academic library, (4) a research library . . . ,
and (5) a private library, but only if the state in which such private
library is located determines that the library should be considered a
library for the purposes of this definition.'' For-profit schools and
libraries, and schools and libraries with endowments in excess of
$50,000,000, are not eligible to receive discounts under the program,
nor are libraries whose budgets are not completely separate from any
schools. Certain other statutory definitions apply as well. The SBA has
defined for-profit, elementary and secondary schools and libraries
having $6 million or less in annual receipts as small entities. In
funding year 2007, approximately 105,500 schools and 10,950 libraries
received funding under the schools and libraries universal service
mechanism. Although we are unable to estimate with precision the number
of these entities that would qualify as small entities under SBA's size
standard, we estimate that fewer than 105,500 schools and 10,950
libraries might be affected annually by our action, under current
operation of the program.
2. Healthcare Providers
110. The healthcare providers that could be affected by the
proposed rules in the NPRM include the following: Office of Physicians
(except Mental Health Specialists); Offices of Physicians, Mental
Health specialists; Offices of Dentists; Offices of Chiropractors;
Offices of Optometrists; Offices of Mental Health Practitioners (except
physicians); Offices of Physical, Occupational and Speech Therapists
and Audiologists; Offices of Podiatrists; Office of all Other
Miscellaneous Health Practitioners; Family Planning Centers; Outpatient
Mental Health and Substance Abuse Centers; HMO Medical Centers;
Freestanding Ambulatory Surgical and Emergency Centers; All other
Outpatient Care Centers; Blood and Organ Banks; All Other Miscellaneous
Ambulatory Health Care Services; Medical Laboratories; Diagnostic
Imaging Centers; Home Health Care Services; Ambulance Services; Kidney
Dialysis Centers; General Medical and Surgical Hospitals; Psychiatric
and Substances Abuse Hospitals; Specialty (Except Psychiatric and
Substances Abuse) Hospitals; and Emergency and Other Relief Services.
3. Providers of Telecommunications and Other Services
111. The telecommunications service providers that could be
affected by the proposed rules include the following categories:
Incumbent Local Exchange Carriers (LECs); Interexchange Carriers
(IXCs); Competitive Access Providers; Operator Service Providers
(OSPs);Local Resellers; Toll Resellers; Telecommunications Resellers;
Wired Telecommunications Carriers; Wireless Telecommunications Carriers
(except Satellite); Common Carrier Paging; Wireless Telephony (for
which the closest applicable SBA category is Wireless
Telecommunications Carriers (except Satellite); Satellite
Telecommunications; All Other Telecommunications.
112. The internet Service Providers that could be affected by the
proposed rules including the following categories: Internet Service
Providers (Broadband); and internet Service Providers (Non-Broadband).
113. The Vendors and Equipment Manufacturers that could be affected
by the proposed rules include the following categories: Vendors of
Infrastructure Development or ``Network Buildout''; Telephone Apparatus
Manufacturing; Radio and Television Broadcasting and Wireless
Communications Equipment Manufacturing; Other Communications Equipment
Manufacturing; Administrative Management and General Management
Consulting Services; Marketing Consulting Services; and Other
Management Consulting Services.
C. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
114. The Notice proposes to adopt new rules consistent with the OMB
Guidelines in 2 CFR part 180 in order to obtain additional tools to
prevent fraud, waste, and abuse. The Commission proposes to apply any
new suspension and debarment rules to transactions under the USF and
TRS programs, its primary permanent nonprocurement programs, as well as
transactions under the NDBEDP. Adopting such rules would impose certain
new obligations on program participants, including: (1) Requirements
that program participants confirm that those with whom they do business
are not already excluded or disqualified from government activities
(which can be accomplished by checking the Government wide System for
Award Management Exclusions (SAM exclusion list), by a certification,
or by addition of terms to the applicable transaction); and (2)
mandatory disclosures for participants that may include (i)
notification to the Commission and its program agents of whether any of
the participants' principals have been either convicted, indicted or
civilly charged by any government entity for certain offenses during
the past three years, and (ii) notification of whether the participants
are excluded or disqualified from participating in covered
transactions. Any person suspended or debarred by a Commission order
would be excluded from participation in any Commission programs (not
just the program in which the bad actions occurred) and would be placed
on the Government wide System for Award Management Exclusions,
triggering reciprocity barring that person from participating in other
government programs (including procurement transactions) unless the
person were granted an exemption by another agency.
115. At this time, the Commission is not in a position to determine
whether, if adopted, the potential rule changes raised in the Notice
will require small entities to hire attorneys, engineers, consultants,
or other professionals and cannot quantify the cost of compliance with
the potential rule changes raised herein. The Notice seeks comment on
these proposals, including the benefits and any adverse effects from
joining the government-wide nonprocurement suspension and debarment
system, as well as on alternative approaches and any other steps we
should consider taking. The Notice also seeks comment on how broadly
this proposed rule should apply in terms of program transactions and
persons covered, and how it should be implemented. We expect the
information we receive in comments on our proposals to help the
[[Page 2095]]
Commission identify and evaluate relevant matters for small entities,
including compliance costs and other burdens that may result from the
matters raised in the Notice.
D. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
116. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(1) the establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rule for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.''
117. The Commission has taken several steps that may minimize the
economic impact for small entities if the proposals in the Notice are
adopted. We ask whether short-form applications to participate in
competitive bidding for USF support should be excluded from the scope
of covered transactions for purposes of suspension and debarment rules
or possibly be subject to different participant disclosure rules. We
also propose to exempt incentive auction payments associated with the
auction of new spectrum licenses from the scope of ``covered
transactions'' subject to suspension and debarment rules. Similarly,
the Commission proposes to exempt payments related to the broadcast
incentive auctions, including reimbursement payments from any
suspension and debarment rules that are adopted. With regard to the
disclosure requirements that would be applicable if the OMB Guidelines
are adopted, we anticipate that these requirements can be implemented
with modifications to existing program forms and certification rules
rather than fashioning new and additional forms which could increase
the administrative burden for small entities.
118. The economic impact for small entities may also be minimized
as a result of the Commission's proposal to adopt a minimum dollar
value threshold for certain transactions in order for suspension and
debarment rules to apply. More specifically, the NPRM proposes that the
suspension and debarment rules should apply to all contractors,
subcontractors, suppliers, consultants or any agent or representative
thereof for USF, TRS, or NDBEDP transactions only where those
transactions are expected to equal or exceed $25,000, subject to
certain exceptions. Therefore, small entities that do not meet the
transaction threshold amount may be able to avoid application of any
adopted suspension and debarment requirements provided they do not fall
into one of the threshold exceptions. The Notice proposes that the
$25,000 threshold not be applicable where a party to the transaction
would have a material role affecting claims for reimbursement under the
Commission programs or if the party is a ``principal'' to the
transaction. An exception to the threshold amount is also proposed for
contracts or awards under the Lifeline program for those transactions
in which a person is reimbursed based on commission or by Lifeline
subscribers enrolled. The Notice seeks comment on these proposals.
119. To assist in the Commission's evaluation of the economic
impact on small entities, and to better explore options and
alternatives, the Commission has sought comment from the parties on the
above proposals and other matters discussed in the Notice. We expect to
more fully consider the economic impact on small entities following our
review of comments filed in response to the Notice in reaching our
final conclusions and promulgating rules in this proceeding.
E. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
120. If the Commission adopts rules consistent with the OMB
Guidelines, such rules would replace those Commission rules that
currently provide for different suspension and debarment procedures. At
present, the Commission rules addressing suspension and debarment are
codified in 47 CFR 54.8 and apply only to USF programs. If the
Commission adopts new rules as proposed in the Notice, we anticipate
that the Commission would repeal the existing suspension and debarment
rules in section 54.8. If commenters suggest that any other rules now
in effect duplicate, overlap, or conflict with the rules proposed in
the Notice, the Commission will closely review and consider those
situations.
List of Subjects in 47 CFR Part 16
Administrative practice and procedure, Common carriers,
Communications, Communications common carriers, Communications
equipment, Subsidies, Telecommunications, Telephone.
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to add a new part 16 to chapter I,
subchapter A of title 47 of the Code of Federal Regulations:
PART 16--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
1. Add part 16 to read as follows:
Subpart A--General
Sec.
16.1 Supplemental definitions.
16.105 What does this part do?
16.110 Does this part apply to me?
16.115 What policies and procedures must I follow?
16.120 Who in the Commission may grant an exception to let an
excluded person participate in a covered transaction? And what
considerations should be relevant?
16.125 What are exempted Commission transactions?
Subpart B--Covered Transactions
16.200 What additional transactions are covered transactions?
16.220 What contracts and subcontracts, in addition to those listed
in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
16.300 What must I do before I enter into a covered transaction with
another person at the next lower tier? (FCC supplement to 2 CFR
180.300)
16.330 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
16.335 Additional information disclosures for lower tier
participants
16.340 Clarification of tiers related to Commission programs
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
16.435 What method should the Commission or participants use to
implement the requirements described in the Guidelines at 2 CFR
180.435?
16.440 Who conducts fact finding for FCC suspensions?
16.445 Who conducts fact finding for FCC debarments?
16.450 What additional factors should the Commission consider for
suspension or debarment determinations?
16.455 What Commission alternatives to suspension or debarment may
be appropriate?
16.460 What must I do to be reinstated after my period of debarment
is over?
Subpart E--Limited Denial of Participation
16.501 What is a limited denial of participation?
16.503 Who may issue a limited denial of participation?
16.505 When may a Commission official issue a limited denial of
participation?
16.507 When does a limited denial of participation take effect?
[[Page 2096]]
16.509 How long may a limited denial of participation last?
16.511 How does a limited denial of participation start?
16.513 How may I contest my limited denial of participation?
16.515 Do Federal agencies coordinate limited denial of
participation actions?
16.517 What is the scope of a limited denial of participation?
16.519 May the FCC impute the conduct of one person to another in a
limited denial of participation?
16.521 What is the effect of a suspension or debarment on a limited
denial of participation?
16.523 What is the effect of a limited denial of participation on a
suspension or a debarment?
16.525 May a limited denial of participation be terminated before
the term of the limited denial of participation expires?
16.527 How is a limited denial of participation reported?
Authority: 47 U.S.C. 154, 225, 254, 620; Sec. 2455, Pub. L.
103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 11738 (3 CFR,
1973 Comp., p. 799); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O.
12689 (3 CFR, 1989 Comp., p. 235)
Subpart A--General
Sec. 16.100 Supplemental definitions.
In addition to the definitions set forth in subpart I of 2 CFR part
180, for purposes of this part,
(a) The term ``E-Rate Program'' means the program providing
universal service support for schools and libraries, as set forth in
part 54, subparts A and F of the Commission's rules.
(b) The term ``Eligible Telecommunications Carrier'' means an
Eligible Telecommunications Carrier as defined in section 54.5 of the
Commission's rules.
(c) The term ``Guidelines'' means the OMB Guidelines to Agencies on
Governmentwide Debarment and Suspension (Nonprocurement), as set forth
in 2 CFR part 180.
(d) The term ``High-Cost Program'' means the programs providing
universal service support for rural, insular, and high cost areas, as
set forth in part 54, subparts A, B, C, D, J, K, L, M, and O of the
Commission's rules.
(e) The term ``Lifeline Program'' means the program providing
universal service support for low-income consumers set forth in part
54, subparts A, B, C and E of the Commission's rules.
(f) The term ``NDBEDP'' means the National Deaf-Blind Equipment
Distribution Program, under which payments from the TRS Fund are made
to support programs distributing communications equipment to low-income
individuals who are deaf-blind, pursuant to Chapter 64, subpart GG of
the Commission's rules, 47 CFR 64.6201 et seq.
(g) The term ``NDBEDP Administrator'' means the administrator of
the NDBEDP.
(h) The term ``Principal'' means, in addition to those individuals
described at 2 CFR 180.995, any person who has a critical influence on,
or substantive control over, a covered transaction, whether or not
employed by the participant or paid with federal funds. Persons who
have a critical influence on, or substantive control over, a covered
transaction may include, but are not limited to: Management and
marketing agents, accountants, consultants, investment bankers,
engineers, attorneys, and other professionals who are in a business
relationship with participants in connection with a covered transaction
under an FCC program.
(i) The term ``Rural Health Care Program'' means the program
providing universal service support for health care providers set forth
in part 54, subparts A and G of the Commission's rules.
(j) The term ``SAM Exclusions'' means the System for Award
Management Exclusions, which is a widely available source of the most
current information about persons who are excluded or disqualified from
covered transactions, as further described in subpart E of 2 CFR part
180.
(k) The term ``TRS Programs'' means all programs described in
Chapter 64, subpart F of the Commission's rules.
(l) The term ``TRS Fund Administrator'' means the entity selected
as the administrator of the Telecommunications Relay Services Fund
pursuant to 47 CFR 64.604(c)(5)(iii).
(m) The term ``USF Programs'' means the programs implementing the
Universal Service Fund pursuant to section 254 of the Communications
Act of 1934, as amended, 47 U.S.C. 254.
(n) The term ``USF Administrator'' means the administrator of the
universal service mechanisms appointed pursuant to section 54.701 of
the Commission's rules, 47 CFR 54.701.
Sec. 16.105 What does this part do?
In this part, the Federal Communications Commission (``FCC'' or
``Commission'') adopts, as Commission policies, procedures, and
requirements for nonprocurement debarment and suspension, the
Guidelines in subparts A through I of 2 CFR part 180, as supplemented
by this part. This adoption thereby gives regulatory effect for the FCC
to the Guidelines, as supplemented by this part. All persons affected
by these rules should consult the Guidelines in subparts A through I of
2 CFR part 180 in order to be informed of all the provisions of the
suspension and debarment rules (as supplemented by this part).
Sec. 16.110 Does this part apply to me?
This part and, through this part, pertinent portions of subparts A
through I of 2 CFR part 180 (see table at 2 CFR 180.100(b)), apply to
you if you are a--
(a) ``Participant'' or ``principal'' in a ``covered transaction''
under subpart B of 2 CFR part 180, as supplemented by this part;
(b) Respondent in a Commission suspension or debarment action;
(c) Commission debarment or suspension official; or
(d) Commission official, or agent, authorized to enter into any
type of nonprocurement transaction that is a covered transaction.
Sec. 16.115 What policies and procedures must I follow?
The Commission policies and procedures that you must follow are the
policies and procedures specified in each applicable section of the
Guidelines in subparts A through I of 2 CFR part 180, as that section
is supplemented by this part. The transactions that are covered
transactions, for example, are specified by section 220 of the
Guidelines (i.e., 2 CFR 180.220), as supplemented by section 16.220 in
this part. For any section of Guidelines in subparts A through I of 2
CFR 180.5 that has no corresponding section in this part, Commission
policies and procedures are those in the Guidelines.
Sec. 16.120 Who in the Commission may grant an exception to let an
excluded person participate in a covered transaction? And what
considerations should be relevant?
(a) The Chairman of the Commission or designee may grant an
exception permitting an excluded person to participate in a particular
covered transaction. If the Chairman or a designee grants an exception,
the exception must be in writing and state the reason(s) for deviating
from the governmentwide policy in Executive Order 12549.
(b) In evaluating whether to grant an exception, the Chairman or
designee shall consider whether the excluded person, if a provider of
services under any Commission program, may be the sole source of
services in any affected areas and whether, as a result, the exclusion
of that person could put consumers and/or program beneficiaries at risk
of losing services. The Chairman
[[Page 2097]]
or designee may exercise their discretion in considering any other
factors that may be relevant to the exception determination, and if an
exception is granted, shall explain those considerations in any
exception decision.
(c) When a person is excluded by another agency, the Chairman or
designee may also grant an exception for a limited time period to
afford the Commission an opportunity to evaluate the effect of the
exclusion on program beneficiaries.
(d) Any exception granted under this section may also be subject to
appropriate conditions, such as the agreement by the excepted person to
mandatory audits, additional reporting requirements, compliance plans
or monitoring, or similar forms of oversight in addition to those
otherwise provided by the FCC programs.
Sec. 16.125 What are exempted Commission transactions?
Any transactions involving the Commission that are not related to
or do not arise in connection with the USF Programs, the TRS Programs,
or the NDBEDP shall be exempted transactions under this part.
Subpart B--Covered Transactions
Sec. 16.200 What additional transactions are covered transactions?
For purposes of determining what is a covered transaction under 2
CFR 180.200 of the Guidelines, this part applies to any transaction at
the primary tier between a person and the Commission or any agents of
the Commission, including the USF Administrator, which administers the
USF programs as agent for the Commission, the TRS Fund Administrator,
which administers the TRS programs as agent for the Commission, and the
NDBEDP Administrator, which administers the NDBEDP, as agent for the
Commission. For purposes of 2 CFR 180.200, any transactions between two
primary tier participants (as clarified by section 16.340 in this
part), other than the Commission, shall be considered to be a
transaction at a lower tier within the meaning of subsection (b) of 2
CFR 180.200.
Sec. 16.220 What contracts and subcontracts, in addition to those
listed in 2 CFR 180.220, are covered transactions?
In addition to the contracts covered under 2 CFR 180.220 of the
Guidelines, this part applies to additional lower tiers of transactions
supported by the Commission's programs involving the participants
described below. This rule extends the coverage of the Commission
nonprocurement suspension and debarment requirements to all lower tiers
of contracts or subcontracts (regardless of tier) awarded under covered
nonprocurement transactions, as permitted under the Guidelines at 2 CFR
180.220(c) (see optional lower tier coverage in the figure in the
appendix to 2 CFR part 180).
(a) For the High-Cost Program, contractors, subcontractors,
suppliers, consultants, or their agents or representatives for High-
Cost supported transactions, if:
(1) Such person has a material role relating to, or significantly
affecting, claims for disbursements related to the program;
(2) Such person is considered a ``principal''; or
(3) The amount of the transaction is expected to be at least
$25,000.
(b) For the Lifeline Program:
(1) Any participant in the Lifeline program (except for the primary
tier carrier), regardless of tier or dollar value, that is reimbursed
based on the number of Lifeline subscribers enrolled, commissions, or
any combination thereof; and
(2) Contractors, subcontractors, suppliers, consultants, or their
agents or representatives and third-party marketing organizations for
Lifeline-supported transactions, if
(i) Such person has a material role relating to, or significantly
affecting, claims for disbursements related to the program;
(ii) Such person is considered a ``principal''; or
(iii) The amount of the transaction is expected to be at least
$25,000.
(c) For the E-Rate Program, contractors, subcontractors, suppliers,
consultants, or their agents or representatives for E-Rate-supported
transactions if:
(1) Such person has a material role relating to, or significantly
affecting, claims for disbursements related to the program;
(2) Such person is considered a ``principal''; or
(3) The amount of the transaction is expected to be at least
$25,000.
(d) For the RHC Program, contractors, subcontractors, suppliers,
consultants, or their agents or representatives for RHC-supported
transactions if:
(1) Such person has a material role relating to, or significantly
affecting, claims for disbursements related to the program;
(2) Such person is considered a ``principal''; or
(3) The amount of the transaction is expected to be at least
$25,000.
(e) For the TRS Programs and the NDBEDP, contractors,
subcontractors, suppliers, consultants, or their agents or
representatives for TRS- or NDBEDP-supported transactions, if:
(1) Such person has a material role relating to, or significantly
affecting, claims for disbursements related to the program;
(2) Such person is considered a ``principal''; or
(3) The amount of the transaction is expected to be at least
$25,000. For the TRS programs (other than TRS that is provided through
state programs) and the NDBEDP, the service providers are the
certificated entities that are reimbursed by the Commission and the TRS
Fund administrator for providing services and equipment under the
covered transactions. For TRS that is provided through state TRS
programs, the service providers are the TRS providers that are
authorized by each state to provide intrastate TRS under the state
program and that, accordingly, are compensated by the TRS Fund for the
provision of interstate TRS.
Subpart C--Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
Sec. 16.300 What must I do before I enter into a covered transaction
with another person at the next lower tier? (FCC supplement to 2 CFR
180.300)
(a) You, as a participant, are responsible for determining whether
you are entering into a covered transaction with an excluded or
disqualified person. You may decide the method by which you do so using
any of the methods described in 2 CFR 180.300.
(b) In the case of an employment contract, the FCC does not require
employers to check the SAM Exclusions before making salary payments
pursuant to that contract.
Sec. 16.330 What methods must I use to pass requirements down to
participants at lower tiers with whom I intend to do business?
To communicate the requirements to lower tier participants, you
must include a term or condition in the transaction requiring
compliance with subpart C of the Guidelines in 2 CFR part 180, as
supplemented by this subpart.
Sec. 16.335 Additional information disclosures for lower tier
participants.
(a) Before entering into a covered transaction at any lower tier,
all lower tier participants shall be obligated to notify and disclose
to the higher tier participant with whom it is doing business the
information described in 2
[[Page 2098]]
CFR 180.335 (pertaining to disclosures by primary tier participants).
If the lower tier participant is participating in competitive bidding
to provide services to the higher tier participant, such information
must be disclosed at the time the bid is submitted. Any such
disclosures must be simultaneously submitted to the USF Administrator
(for transactions related to or arising in connection with USF
programs), to the TRS Fund Administrator (for transactions relating to
TRS programs), to the NDBEDP Administrator (for transactions relating
to the NDBEDP) and to the FCC (at the addresses identified in paragraph
(b) of this section). Any disclosures made under this rule will not
necessarily cause other participants to deny your participation in the
covered transaction, but will be considered a relevant factor in
evaluating the transaction. The provisions of 2 CFR 180.345 shall be
applicable to any failures to disclose under this rule and, in
addition, any such failure to disclose shall permit the higher tier
participant (with whom the lower tier participant is doing business) to
terminate the transaction for failure to comply with its terms and
condition, or to pursue any other available remedies. Participants
subject to this rule shall also comply with 2 CFR 180.350, requiring
notifications upon learning new information, and such notifications
shall be provided not only to the USF Administrator, the TRS Fund
Administrator, the NDBEDP Administrator, and to the FCC, but also to
the higher tier participant (with whom the lower tier participant is
doing business).
(b) The disclosures required by 2 CFR 180.335 through 180.350 of
the Guidelines shall be made not only to the Commission, but also to
the USF Administrator (for transactions related to or arising in
connection with USF Programs), to the TRS Fund Administrator (for
transactions relating to TRS Programs), and to the NDBEDP Administrator
(for transactions relating to the NDBEDP). Disclosures to the
Commission regarding the USF Program shall be submitted via email to
[address] or via mail to the Federal Communications Commission,
Telecommunications Access Policy Division, Wireline Competition Bureau,
at the Commission's address specified in 47 CFR 0.401(a). Disclosures
to the USF Administrator shall be submitted via email to [address] or
via mail to: Universal Service Administrative Co., 700 12th Street NW,
Suite 900, Washington, DC 20005. Disclosures to the TRS Fund
Administrator shall be submitted via email to [address] or to: TRS Fund
Administrator, 4450 Crums Mill Road, Suite 303, Harrisburg, PA 17110.
Disclosures to the NDBEDP Administrator shall be submitted via email to
[address] or to: NDBEDP Administrator, Federal Communications
Commission, Disability Rights Office, at the Commission's address
specified in 47 CFR 0.401(a).
Sec. 16.340 Clarification of tiers related to Commission programs.
(a) For the E-Rate Program and the Rural Health Care Program, the
primary tier participants shall be both the schools or libraries (or
consortia) that submit applications to the USF Administrator (for the
E-Rate program) or the health care providers (including consortia) that
submit applications to the USF Administrator (for the Rural Health Care
Program), as well as the service providers selected by these
applicants.
(b) For the High-Cost Program, the Lifeline Program, and the TRS
Programs, the primary tier participants shall be the service providers
that request and receive support from the USF Administrator and TRS
Fund Administrator, respectively.
(c) For the NDBEDP, the primary tier participants shall be the
certified programs that request and receive reimbursements from the
NDBEDP Administrator.
Subpart D--Responsibilities of Federal Agency Officials Regarding
Transactions
Sec. 16.435 What method should the Commission or participants use to
implement the requirements described in the Guidelines at 2 CFR
180.435?
To implement the requirements described in 2 CFR 180.435, the
Commission may require as a condition of participation in the USF or
TRS programs or the NDBEDP that participants:
(a) Comply with subpart C of 2 CFR part 180, as supplemented by
this part, and
(b) Communicate the requirement to comply with subpart C of 2 CFR
part 180, as supplemented by this part, to persons at the next lower
tier with whom the participant enters into covered transactions. The
Commission, or the USF, TRS Fund, or NDBEDP Administrators, may also
obtain an assurance or certification of compliance at the time of
application for approval of the covered transaction or upon submission
of an invoice for payment.
Sec. 16.440 Who conducts fact finding for FCC suspensions?
In all FCC suspensions, the official designated as the Suspending
Official shall be responsible for conducting additional proceedings
where disputed material facts are challenged unless another person is
designated to serve as fact finder by the Chairman of the Commission.
Sec. 16.445 Who conducts fact finding for FCC debarments?
In all FCC debarments, the official designated as the Debarring
Official shall be responsible for conducting additional proceedings
where disputed material facts are challenged unless another person is
designated to serve as fact finder by the Chairman of the Commission.
Sec. 16.450 What additional factors should the Commission consider
for suspension or debarment determinations?
(a) In addition to the causes for debarment described under the
Guidelines at 2 CFR 180.800 (which are also applicable to suspension
determinations under 2 CFR 180.700), the suspending or debarment
official may also take the following factors into consideration:
Whether the person is a repeat offender of Commission rules; habitual
non-payment or under-payment of Commission regulatory fees or of
required contributions to FCC programs such as USF or TRS; the willful
or grossly negligent submission of FCC forms or statements or other
documentation to the FCC or to the USF Administrator, TRS Fund
Administrator, or NDBEDP Administrator that result in or could result
in overpayments of federal funds to the recipients; the willful or
grossly negligent violation of a statutory or regulatory provision
applicable to the USF programs, TRS program or the NDBEDP; and the
willful or habitual failure to respond to requests made by the FCC or
the USF, TRS Fund, or NDBEDP administrators for additional information
to justify payment or continued operation under their certifications.
(b) As used in the Guidelines at 2 CFR 180.800(b), the term
``public agreement or transaction'' shall encompass contracts between
USF program applicants and their selected service providers and/or
consultants or other principals.
Sec. 16.455 What Commission alternatives to suspension or debarment
may be appropriate?
If the suspending or debarment official determines that
circumstances justify an alternative to suspension or
[[Page 2099]]
debarment, such as when a participant's suspension or debarment could
have a substantial detrimental impact on the provision of services
under a Commission program, then the official, in his or her
discretion, may temporarily suspend the suspension or debarment
proceedings and refer the case to [the Chief, Enforcement Bureau]. The
[Chief] shall have discretion to evaluate and decide whether, in lieu
of suspension or debarment, the [Enforcement Bureau] or Commission
should condition the participant's continued participation upon
agreement to additional requirements on the transaction that may
include, among other things, transitioning beneficiaries to other
providers, replacing principals, or agreeing to an appropriate
compliance plan (with strict oversight and audits).
Sec. 16.460 What must I do to be reinstated after my period of
debarment is over?
A debarment official may determine that a person's conduct is so
egregious that the debarred party must petition for readmission into
FCC programs after the debarment period is over. In that case, the
debarred party as petitioner must demonstrate that it has taken
sufficient remedial actions to avoid future program violations. In the
absence of such a determination in the debarment decision,
reinstatement will be automatic once the debarment period is over.
Subpart E--Limited Denial of Participation
Sec. 16.501 What is a limited denial of participation?
A limited denial of participation excludes a specific person from
participating in a specific FCC program or programs for a specific
period of time. The decision to impose a limited denial of
participation is discretionary and based on the best interests of the
federal government. For purposes of this subpart, the term ``person''
shall have the same meaning as set forth in 2 CFR 180.985.
Sec. 16.503 Who may issue a limited denial of participation?
The Chairperson designates FCC officials who are authorized to
impose a limited denial of participation affecting any participant, or
their affiliates, or both. A limited denial of participation is
normally issued by the chief of a bureau responsible for administering
an FCC program.
Sec. 16.505 When may a Commission official issue a limited denial of
participation?
(a) An authorized FCC official may issue a limited denial of
participation against a person, based upon adequate evidence of any of
the following causes:
(1) Approval of an applicant for a USF Program, a TRS Program, or
the NDBEDP would constitute an unsatisfactory risk;
(2) There are irregularities in a person's current and/or past
performance in an FCC program;
(3) The person has failed to honor contractual obligations or abide
by FCC regulations associated with an FCC program;
(4) The person has documented deficiencies in ongoing FCC programs;
(5) The person has made a false certification in connection with
any FCC program, whether or not the certification was made directly to
the FCC;
(6) The person has committed any act or omission that would be
cause for debarment under 2 CFR 180.800;
(7) The person has violated any law, regulation, or procedure
relating to an FCC program; or
(8) The person has made or procured to be made any false statement
for the purpose of influencing in any way an action of the Commission.
(b) Filing of a criminal indictment or information shall constitute
adequate evidence for the purpose of limited denial of participation
actions. The indictment or information need not be based on offenses
against the Commission.
(c) Imposition of a limited denial of participation related to any
other FCC program shall constitute adequate evidence for a concurrent
limited denial of participation for another FCC program. Where such a
concurrent limited denial of participation is imposed, participation
may be restricted on the same basis without the need for an additional
conference or further hearing.
(d) An affiliate or organizational element may be included in a
limited denial of participation solely on the basis of its affiliation,
and regardless of its knowledge of or participation in the acts
providing cause for the sanction. The burden of proving that a
particular affiliate or organizational element is not controlled by the
primary sanctioned party (or by an entity that itself is controlled by
the primary sanctioned party) is on the affiliate or organizational
element. For purposes of this subsection, the term ``affiliate'' shall
have the same meaning as provided by 2 CFR 180.905.
Sec. 16.507 When does a limited denial of participation take effect?
A limited denial of participation is effective immediately upon
issuance of the notice unless the notice otherwise specifies.
Sec. 16.509 How long may a limited denial of participation last?
A limited denial of participation may remain in effect up to 12
months.
Sec. 16.511 How does a limited denial of participation start?
A limited denial of participation is made effective by providing
the person, and any specifically named affiliate, with notice:
(a) That the limited denial of participation is being imposed;
(b) Of the cause(s) under Sec. 16.505 of this part for the
sanction;
(c) Of the potential effect of the sanction, including the length
of the sanction and the FCC program(s) and geographic area (if
relevant) affected by the sanction;
(d) Of the right to request, in writing, within 30 days of receipt
of the notice, a conference under Sec. 16.513(a) of this part; and
(e) Of the right to contest the limited denial of participation
under Sec. 16.513 of this part.
Sec. 16.513 How may I contest my limited denial of participation?
(a) Within 30 days after receiving a notice of limited denial of
participation, you may request a conference with the official who
issued such notice. The conference shall be held within 15 days after
the Commission's receipt of the request for a conference, unless you
waive this time limit. The official or designee who imposed the
sanction shall preside. At the conference, you may appear with a
representative and may present all relevant information and materials
to the official or designee. Within 20 days after the conference, or
within 20 days after any agreed-upon extension of time for submission
of additional materials, the official or designee shall, in writing,
advise you of the decision to terminate, modify, or affirm the limited
denial of participation. If all or a portion of the remaining period of
exclusion is affirmed, the notice of affirmation shall advise you of
the opportunity to contest the notice and to request a hearing before
an attorney within the Enforcement Bureau so designated for this
function by the Chairman of the Commission. You have 30 days after
receipt of the notice of affirmation to request this hearing.
(b) You may skip the conference with the official and you may
request a hearing before an attorney within the Enforcement Bureau so
designated for this function by the Chairman of the Commission. This
must also be done
[[Page 2100]]
within 30 days after receiving a notice of limited denial of
participation. If you opt to have a hearing before an attorney within
the Enforcement Bureau, you must submit your request to [address]. The
designated attorney within the Enforcement Bureau will issue findings
of fact and make a recommended decision. The sanctioning official who
issued the initial notice will then make a final decision, as promptly
as possible, after the recommended decision is issued. The sanctioning
official may reject the recommended decision or any findings of fact,
only after specifically determining that the decision or any of the
facts are arbitrary, capricious, or clearly erroneous.
(c) In deciding whether to terminate, modify, or affirm a limited
denial of participation, the Commission official or designee may
consider the factors listed at 2 CFR 180.860. The designated attorney
within the Enforcement Bureau may also consider the factors listed at 2
CFR 180.860 in making any recommended decision.
Sec. 16.515 Do Federal agencies coordinate limited denial of
participation actions?
Federal agencies do not coordinate limited denial of participation
actions. As stated in Sec. 16.501 of this part, a limited denial of
participation is an FCC-specific action and applies only to FCC
activities.
Sec. 16.517 What is the scope of a limited denial of participation?
The scope of a limited denial of participation is as follows:
(a) A limited denial of participation generally extends only to
participation in the program(s) under which the cause arose. A limited
denial of participation may, at the discretion of the authorized
official, extend to other programs, initiatives, or functions within
the jurisdiction of the FCC. The authorized official, however, may
determine that where the sanction is based on an indictment or
conviction, the sanction shall apply to all programs throughout the
FCC.
(b) For purposes of this subpart, participation includes receipt of
any benefit or financial assistance through subsidies, grants, or
contractual arrangements; benefits or assistance in the form of any
loan guarantees or insurance; awards of procurement contracts; or any
other arrangements that benefit a participant in a covered transaction.
(c) The sanction may be imposed for a period not to exceed 12
months, and may be imposed on either a nationwide or a more restricted
basis.
Sec. 16.519 May the FCC impute the conduct of one person to another
in a limited denial of participation?
For purposes of determining a limited denial of participation, the
Commission may impute conduct as follows:
(a) Conduct imputed from an individual to an organization. The
Commission may impute the fraudulent, criminal, or other improper
conduct of any officer, director, shareholder, partner, employee, or
other individual associated with an organization, to that organization
when the improper conduct occurred in connection with the individual's
performance of duties for or on behalf of that organization, or with
the organization's knowledge, approval, or acquiescence. The
organization's acceptance of the benefits derived from the conduct is
evidence of knowledge, approval, or acquiescence.
(b) Conduct imputed from an organization to an individual or
between individuals. The Commission may impute the fraudulent,
criminal, or other improper conduct of any organization to an
individual, or from one individual to another individual, if the
individual to whom the improper conduct is imputed participated in, had
knowledge of, or had reason to know of the improper conduct.
(c) Conduct imputed from one organization to another organization.
The Commission may impute the fraudulent, criminal, or other improper
conduct of one organization to another organization when the improper
conduct occurred in connection with a partnership, joint venture, joint
application, association, or similar arrangement, or when the
organization to whom the improper conduct is imputed has the power to
direct, manage, control, or influence the activities of the
organization responsible for the improper conduct. Acceptance of the
benefits derived from the conduct is evidence of knowledge, approval,
or acquiescence.
Sec. 16.521 What is the effect of a suspension or debarment on a
limited denial of participation?
If you have submitted a request for a hearing pursuant to Sec.
16.513(b) of this part, and you also receive, pursuant to subpart A of
this part, a notice of proposed debarment or suspension that is based
on the same transaction(s) or the same conduct as the limited denial of
participation, as determined by the debarring or suspending official,
the following rules shall apply:
(a) During the 30-day period after you receive a notice of proposed
debarment or suspension, during which you may elect to contest the
debarment under 2 CFR 180.815, or the suspension pursuant to 2 CFR
180.720, all proceedings in the limited denial of participation,
including discovery, are automatically stayed.
(b) If you do not contest the proposed debarment pursuant to 2 CFR
180.815, or the suspension pursuant to 2 CFR 180.720, the final
imposition of the debarment or suspension shall also constitute a final
decision with respect to the limited denial of participation, to the
extent that the debarment or suspension is based on the same
transaction(s) or conduct as the limited denial of participation.
(c) If you contest the proposed debarment pursuant to 2 CFR
180.815, or the suspension pursuant to 2 CFR 180.720, then:
(1) Those parts of the limited denial of participation and the
debarment or suspension based on the same transaction(s) or conduct, as
determined by the debarring or suspending official, shall be
immediately consolidated before the debarring or suspending official.
(2) Proceedings under the consolidated portions of the limited
denial of participation shall be stayed before the hearing officer
until the suspending or debarring official makes a determination as to
whether the consolidated matters should be referred to a hearing
officer. Such a determination must be made within 90 days of the date
of the issuance of the suspension or proposed debarment, unless the
suspending/debarring official extends the period for good cause.
(3) If the suspending or debarring official determines that there
is a genuine dispute as to material facts regarding the consolidated
matter, the entire consolidated matter will be referred to the
designated hearing official within the Enforcement Bureau hearing the
limited denial of participation, for additional proceedings pursuant to
2 CFR 180.750 or 180.845.
(4) If the suspending or debarring official determines that there
is no dispute as to material facts regarding the consolidated matter,
jurisdiction of the designated attorney within the Enforcement Bureau
to hear those parts of the limited denial of participation based on the
same transaction[s] or conduct as the debarment or suspension, as
determined by the debarring or suspending official, will be transferred
to the debarring or suspending official, and the hearing officer
responsible for hearing the limited denial of participation shall
transfer the administrative record to the debarring or suspending
official.
[[Page 2101]]
(5) The suspending or debarring official shall hear the entire
consolidated case under the procedures governing suspensions and
debarments, and shall issue a final decision as to both the limited
denial of participation and the suspension or debarment.
Sec. 16.523 What is the effect of a limited denial of participation
on a suspension or a debarment?
The imposition of a limited denial of participation does not affect
the right of the Commission to suspend or debar any person under this
part.
Sec. 16.525 May a limited denial of participation be terminated
before the term of the limited denial of participation expires?
If the cause for the limited denial of participation is resolved
before the expiration of the 12-month period, the official who imposed
the sanction may terminate it.
Sec. 16.527 How is a limited denial of participation reported?
When a limited denial of participation has been made final, or the
period for requesting a conference pursuant to section 16.513(a) has
expired without receipt of such a request, the official imposing the
limited denial of participation shall notify the Enforcement Bureau and
the USF Administrator, the TRS Fund Administrator and the NDBEDP
Administrator of the scope of the limited denial of participation.
Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.
[FR Doc. 2019-28490 Filed 1-13-20; 8:45 am]
BILLING CODE 6712-01-P