Homeland Security Acquisition Regulation (HSAR); United States Coast Guard Contract Termination Policy (HSAR Case 2020-001), 54663-54669 [2022-18814]
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Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 / Proposed Rules
disclosure to third parties or the public,
of facts or opinions by or for an agency,
regardless of form or format.’’ 44 U.S.C.
3502(3)(A). The PRA only applies when
such collections are ‘‘conducted or
sponsored by those agencies.’’ 5 CFR
1320.4(a).
The proposed rule does not involve a
collection of information within the
meaning of the PRA; rather, it adopts a
judicially approved standard for
determining joint-employer status under
the Act. Outside of administrative
proceedings (discussed below), the
proposed rule does not require any
entity to disclose information to the
NLRB, other government agencies, third
parties, or the public.
The only circumstance in which the
proposed rule could be construed to
involve disclosures of information to the
Agency, third parties, or the public is
when an entity’s status as a joint
employer has been alleged in the course
of the Board’s administrative
proceedings. However, the PRA
provides that collections of information
related to ‘‘an administrative action or
investigation involving an agency
against specific individuals or entities’’
are exempt from coverage. 44 U.S.C.
3518(c)(1)(B)(ii). A representation
proceeding under section 9 of the Act,
as well as an investigation into an unfair
labor practice under section 10 of the
Act, are administrative actions covered
by this exemption.127 The Board’s
decisions in these proceedings are
binding on and thereby alter the legal
rights of the parties to the proceedings
and thus are sufficiently ‘‘against’’ the
specific parties to trigger this
exemption.128
For the foregoing reasons, the
proposed rule does not contain
information collection requirements that
require approval by the Office of
Management and Budget under the
PRA.
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List of Subjects in 29 CFR Part 103
Colleges and universities, Election
procedures, Health facilities,
Jurisdictional standards, Labor
management relations, Music, Remedial
orders, Sports.
127 See Representation—Case Procedures, 79 FR
74307, 74468–74469 (Dec. 15, 2014).
128 Legislative history indicates Congress wrote
this exception to broadly cover many types of
administrative action, not just those involving
‘‘agency proceedings of a prosecutorial nature.’’ See
S. REP. 96–930 at 56, as reprinted in 1980
U.S.C.C.A.N. 6241, 6296. For the reasons more fully
explained by the Board in prior rulemaking, 79 FR
74307, 74468–69 (2015), representation
proceedings, although not qualifying as
adjudications governed by the Administrative
Procedure Act, 5 U.S.C. 552b(c)(1), are nonetheless
exempt from the PRA under 44 U.S.C.
3518(c)(1)(B)(ii).
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The Proposed Rule
For the reasons discussed in the
preamble, the Board proposes to amend
29 CFR part 103 as follows:
PART 103—OTHER RULES
1. The authority citation for part 103
continues to read as follows:
■
Authority: 29 U.S.C. 156, in accordance
with the procedure set forth in 5 U.S.C. 553.
Subpart D—Joint Employers
■
2. Revise § 103.40 to read as follows:
§ 103.40
Joint Employers.
(a) An employer, as defined by section
2(2) of the National Labor Relations Act
(the Act), is an employer of particular
employees, as defined by section 2(3) of
the Act, if the employer has an
employment relationship with those
employees under common-law agency
principles.
(b) For all purposes under the Act,
two or more employers of the same
particular employees are joint
employers of those employees if the
employers share or codetermine those
matters governing employees’ essential
terms and conditions of employment.
(c) To ‘‘share or codetermine those
matters governing employees’ essential
terms and conditions of employment’’
means for an employer to possess the
authority to control (whether directly,
indirectly, or both), or to exercise the
power to control (whether directly,
indirectly, or both), one or more of the
employees’ essential terms and
conditions of employment.
(d) ‘‘Essential terms and conditions of
employment’’ will generally include,
but are not limited to: wages, benefits,
and other compensation; hours of work
and scheduling; hiring and discharge;
discipline; workplace health and safety;
supervision; assignment; and work rules
and directions governing the manner,
means, or methods of work
performance.
(e) Whether an employer possesses
the authority to control or exercises the
power to control one or more of the
employees’ terms and conditions of
employment is determined under
common-law agency principles.
Possessing the authority to control is
sufficient to establish status as a joint
employer, regardless of whether control
is exercised. Exercising the power to
control indirectly is sufficient to
establish status as a joint employer,
regardless of whether the power is
exercised directly. Control exercised
through an intermediary person or
entity is sufficient to establish status as
a joint employer.
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(f) Evidence of an employer’s control
over matters that are immaterial to the
existence of an employment
relationship under common-law agency
principles or control over matters that
do not bear on the employees’ essential
terms and conditions of employment is
not relevant to the determination of
whether the employer is a joint
employer.
(g) A party asserting that an employer
is a joint employer of particular
employees has the burden of
establishing, by a preponderance of the
evidence, that the entity meets the
requirements set forth in paragraphs (a)
through (f) of this section.
(h) The provisions of this section are
intended to be severable. If any
paragraph of this section is held to be
unlawful, the remaining paragraphs of
this section not deemed unlawful shall
remain in effect to the fullest extent
permitted by law.
Dated: August 31, 2022.
Roxanne L. Rothschild,
Executive Secretary.
[FR Doc. 2022–19181 Filed 9–6–22; 8:45 am]
BILLING CODE 7545–01–P
DEPARTMENT OF HOMELAND
SECURITY
48 CFR Parts 3049 and 3052
[Docket No. DHS–2022–0046]
RIN 1601–AB08
Homeland Security Acquisition
Regulation (HSAR); United States
Coast Guard Contract Termination
Policy (HSAR Case 2020–001)
Office of the Chief Procurement
Officer, Department of Homeland
Security (DHS).
ACTION: Proposed rule.
AGENCY:
DHS is proposing to amend
the Homeland Security Acquisition
Regulation (HSAR) to add a new subpart
and new contract clause to establish
contract termination policy for the
United States Coast Guard (USCG) and
amend a clause to address the
applicability of USCG’s contract
termination policy to commercial items.
DATES: Interested parties should submit
written comments to one of the
addresses shown below on or before
November 7, 2022, to be considered in
the formation of the final rule.
ADDRESSES: Submit comments
identified by HSAR Case 2020–001,
Contract Termination Policy for the
United States Coast Guard, using any of
the following methods:
SUMMARY:
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Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 / Proposed Rules
• Regulations.gov: https://
www.regulations.gov.
Submit comments via the Federal
eRulemaking portal by entering ‘‘HSAR
Case 2020–001’’ under the heading
‘‘Enter Keyword or ID’’ and selecting
‘‘Search.’’ Select the link ‘‘Submit a
Comment’’ that corresponds with
‘‘HSAR Case 2020–001.’’ Follow the
instructions provided at the ‘‘Submit a
Comment’’ screen. Please include your
name, company name (if any), and
‘‘HSAR Case 2020–001’’ on your
attached document.
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. The
Department is not accepting mailed
comments at this time.
FOR FURTHER INFORMATION CONTACT: Ms.
Linda Stivaletti-Petty, Procurement
Analyst, DHS, Office of the Chief
Procurement Officer, Acquisition Policy
and Legislation at (202) 447–5639 or
email HSAR@hq.dhs.gov. When using
email, include HSAR Case 2020–001 in
the ‘‘Subject’’ line.
SUPPLEMENTARY INFORMATION:
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I. Background
The Federal Acquisition Regulations
(FAR), found in 48 CFR part 1, is a
uniform regulation regarding the
acquisition of goods and services for
Federal Government agencies. 48 CFR
part 12, ‘‘Acquisition of Commercial
Products and Commercial Services,’’
deals with the acquisition of
commercial items, while part 49
discusses the termination of contracts or
solicitations. Under 48 CFR 49.101
contracts or solicitations may be
terminated, either for convenience or
default, only when it is in the
government’s interest. The use of a
termination provision depends on the
contract type such as a supply contract,
service contract, construction contract,
research and development contract and
the method of payment, i.e., fixed price
or cost type.1
Section 3523 of the John S. McCain
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2019 (Pub.
L. 115–232)(14 U.S.C. 1155(a)) requires
that before terminating a procurement or
acquisition contract with a total value of
more than $1,000,000, the Commandant
of the Coast Guard shall notify each
vendor under such contract and require
the vendor to maintain all work product
1 See
48 CFR 49.5.
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related to the contract until the earlier
of— (A) not less than 1 year after the
date of the notification; or (B) the date
the Commandant notifies the vendor
that maintenance of such work product
is no longer required.2
Specifically, 14 U.S.C. 1155(b) defines
‘‘work product’’ to mean: (1) tangible
and intangible items and information
produced or possessed as a result of a
contract and (2) includes—(A) any
completed end items; (B) any
uncompleted end items; and (C) any
property in the contractor’s possession
in which the United States Government
has an interest. Section 1155(c)
establishes a penalty such that any
vendor that fails to maintain the work
product is liable to the United States for
a civil penalty of not more than $25,000
for each day on which the work product
is unavailable.
Department of Homeland Security
(DHS) is proposing to add a new subpart
regarding contract termination policy
for the United States Coast Guard
(USCG) in the Homeland Security
Acquisition Regulation (HSAR) 3 to
ensure all USCG contractors and
subcontractors comply with contract
termination policy.
II. Proposed Changes
This rule proposes to amend the
HSAR to:
Add new subpart 3049.90 Contract
Termination (USCG) to part 3049
Termination of Contracts. This new
subpart would consist of two sections,
section 3049.9001 Policy (USCG) and
section 3049.9002 Contract Clause
(USCG). The proposed addition of this
subpart and sections would align the
USCG’s contract termination regulatory
requirements with 14 U.S.C. 1155.
HSAR 3049.9001 Policy (USCG) would
incorporate the provisions laid out in 14
U.S.C. 1155(a), regarding the
termination of contracts and
maintenance of all work product related
to contracts. The proposed policy would
require that before terminating a
contract with a value of more than
$1,000,000, the Commandant of the
Coast Guard shall notify the contractor
and the contractor shall be required to
maintain all work product related to the
2 This section of the NDAA was originally
codified at 14 U.S.C. 657. However, section 108(b)
of the Frank LoBiondo Coast Guard Authorization
Act of 2018 (Pub. L. 115–282) subsequently
redesignated § 657 as 14 U.S.C. 1155.
3 The HSAR is issued for Departmental guidance
according to the policy cited in the FAR at 48 CFR
1.301. The HSAR establishes uniform DHS policies
and procedures for all acquisition activities within
the DHS and is issued by the Chief Procurement
Officer who is the DHS Senior Procurement
Executive. The HSAR is located at 48 CFR Chapter
30.
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contract until the earlier of—(1) not less
than 1 year after the date of the
notification; or (2) the date the
Commandant notifies the vendor that
maintenance of such work product is no
longer required. The proposed
definition of ‘‘Work Product’’ is also
taken from 14 U.S.C. 1155. This
proposed new subpart would state that
a contractor that fails to maintain a work
product is liable to the United States for
a civil penalty of not more than $25,000
for each day on which such work
product is unavailable. This subpart
would require the USCG to insert this
contract termination policy in all
contracts, including contracts for
commercial items, with a total value of
more than $1,000,000. These proposed
revisions to the HSAR are necessary to
ensure USCG contractors understand
their roles and responsibilities to
maintain work product in the event of
a termination, as required by 14 U.S.C.
1155.
This proposal would add a new HSAR
clause, ‘‘3052.249–90 Contract
Termination (USCG),’’ that would
implement 3049.9001 Policy (USCG).
This clause would be required in all
USCG solicitations and contracts,
including contracts for commercial
items, with a total value of more than
$1,000,000.
This proposed rule would also amend
HSAR clause 3052.212–70 ‘‘Contract
Terms and Conditions Applicable to
DHS Acquisition of Commercial Items’’
to add HSAR clause 3052.249–90
‘‘Contract Termination (USCG) that
would implement 3049.9–9001 Policy
(USCG)’’. This clause would be required
in all USCG solicitations and contracts,
including contracts for commercial
items, with a total value of more than
$1,000,000.
III. Applicability to Commercial Item
Acquisitions, Including Commercially
Available Off-the-Shelf (COTS) Items,
and Acquisitions Below the Simplified
Acquisition Threshold (SAT)
Section 3523 of the NDAA also
provides for a civil penalty and does not
limit the application of the requirements
of the statute to non-commercial
contracts. Consistent with 41 U.S.C.
1905, 1906, and 1907, the DHS Chief
Procurement Officer has determined
that section 3523 of the NDAA does
apply to the acquisition of commercial
items, including COTS items. Because
41 U.S.C. 3523 states it applies to
contracts with a total value of more than
$1,000,000, the requirements of the
statute do not apply to contracts below
the SAT.
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IV. Executive Orders 12866 and 13563
Executive Orders 12866 (Regulatory
Planning and Review) and 13563
(Improving Regulation and Regulatory
Review) direct agencies to assess the
costs and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying costs and benefits, reducing
costs, harmonizing rules, and promoting
flexibility.
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The Office of Management and Budget
(OMB) has not designated this proposed
rule a significant regulatory action
under section 3(f) of Executive Order
12866. Accordingly, OMB has not
reviewed it. A regulatory analysis (RA)
follows.
Table 1 presents a summary of
impacts of the proposed rule.
TABLE 1—SUMMARY OF IMPACTS OF THE NPRM
Category
Summary
Applicability .....................................
Addition of contract termination and notification requirements for the Coast Guard in Chapter 30 of the
HSAR for contracts that are terminated by the Coast Guard, this would apply to new contracts, including
contracts for commercial items of more than $1 million.
Contractors and subcontractors whose contracts are terminated by the Coast Guard. Approximately 2 contracts annually.
There are no new costs of the proposed rule as its proposed requirements already exist in other regulations and statutes.
The proposed rule would provide consistency between existing statutes and regulations for contractors and
subcontractors whose contracts are terminated by the Coast Guard.
Affected Population .........................
Costs ...............................................
Unquantified Benefits ......................
The Federal Government seeks
contractual work with the general
public when it wishes to purchase, rent,
lease, or otherwise obtain supplies or
services from non-Federal sources. The
FAR defines this process as
‘‘contracting.’’ 4 This proposed rule
would revise the HSAR to require Coast
Guard to insert termination and
notification requirements into its new
contracts (this rulemaking would not
apply to existing Coast Guard contracts),
including contracts for commercial
items, with a total value of more than
$1 million.
The Coast Guard incorporates contract
termination clauses in accordance with
the FAR, the HSAR, the Homeland
Security Acquisition Manual (HSAM),
and the Coast Guard Acquisition
Procedures (CGAP) into contracts as
applicable and using this clause when
deemed necessary for the Coast Guard to
exercise its right to do so.
Based on our analysis, we do not
estimate that this proposed rule would
impose any new requirements or
regulatory costs on contractors and
subcontractors who perform contractual
work, with a total value of more than $1
million, for the Federal Government.
Our analysis also shows that the Federal
Government would not incur any new
regulatory costs as a result of this
proposed rule. We present a summary of
the estimated impacts of the proposed
rule in Table 2.
TABLE 2—PROPOSED CHANGES AND THE ESTIMATED IMPACTS
HSAR part or
subpart affected
Description of proposed change
Basis for no cost impact
3049 ...................
Removes the term ‘‘Reserved’’ in the Homeland Security Acquisition Regulation (HSAR).
Adds terms to the HSAR:
—‘‘Part 3049’’ to Termination of Contracts.
—‘‘Subpart 3049.90 Contract Termination (USCG)’’.
—‘‘3049.9001 Policy (USCG)’’.
—‘‘3049.9002 Contract Clause (USCG)’’, part and
subpart titles.
Adds term ‘‘Contract Termination (USCG)’’—subpart
title, to the HSAR.
Administrative,5 we do not estimate a cost for this item because it
contains the insertion of the text, with no requirements, in part 3049
of the HSAR.
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3049.90 ..............
3049.9001 ..........
Adds term ‘‘Policy (USCG)’’—title, to the HSAR .......
3049.9001(a) .....
Adds paragraph (a) to the HSAR and would implement requirements of 14 U.S.C. 1155, which provides contract termination policy for procurement
or acquisition contracts, including commercial contracts greater than $1 million.
Administrative, we do not estimate a cost for this item because it contains the insertion of text, with no requirements, in part 3049 of the
HSAR.
Administrative, we do not estimate a cost for this item because it contains the insertion of text, with no requirements, in part 3049 of the
HSAR.
We do not estimate a cost for this regulatory provision because the
FAR, Title 48 of the CFR, currently requires the Federal Government to include similar language in applicable Federal contracts.
Termination and notification requirements are addressed in subpart
49.1 of the FAR. The statutory language for contract termination is
currently in 14 U.S.C. 1155(a)(1) for all contracts, including commercial contracts, with a total value of more than $1 million.
4 Readers should reference the FAR for a full
definition of the term ‘‘contracting’’.
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Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 / Proposed Rules
TABLE 2—PROPOSED CHANGES AND THE ESTIMATED IMPACTS—Continued
HSAR part or
subpart affected
Description of proposed change
Basis for no cost impact
3049.9001(b) .....
Adds paragraph (b) to the HSAR, ‘‘Notification’’—
title.
Paragraph would implement requirements of 14
U.S.C. 1155, which states the Commandant of the
Coast Guard must notify the contractor before terminating a procurement or acquisition contract of
greater than $1 million and the contractor must
maintain work product as specified in the Code.
3049.9001(c) .....
Adds paragraph (c) ‘‘Work Product Defined’’—title,
to the HSAR.
3049.9001(d) .....
Adds paragraph (d) ‘‘Penalty’’—title, to the HSAR ....
3049.9001(e) .....
Adds paragraph (e) to the HSAR, which states the
substance of the clause shall be inserted by the
contractor in contracts and subcontracts and for
commercial items with a total value of more than
$1 million.
Adds the term ‘‘Contract Clause (USCG)’’-title, to
the HSAR; states Coast Guard contracting officers
shall insert the clause at 3052.249–90 in all solicitations and contracts, including commercial items
with a total value of more than $1 million.
We do not estimate a cost for this regulatory provision because subpart 49.1 of the FAR currently contains notification requirements for
the Federal Government. The statutory language for notification of
contract termination is currently in 14 U.S.C. 1155(a)(1) for procurement or acquisition contracts of more than $1 million (14 U.S.C.
1155(b) defines work product).
Maintaining of records is required by section 4.7 of the FAR. The Federal Government is currently required to include similar language in
applicable Federal contracts.
Administrative—we do not estimate a cost for the addition of this regulatory provision because there is no requirement, 14 U.S.C. 1155
currently contains the definition of the term ‘‘work product’’.
We do not estimate a cost for this provision because 14 U.S.C. 1155
currently contains the statutory language for ‘‘penalty’’. This item
has not been levied for past Coast Guard contracts since the statute was enacted in 2019.
We do not estimate a cost for this provision because subpart 49.5 of
the FAR requires the contracting officer to insert similar language in
applicable contracts. The relevant clauses are in subpart 52.249–1
through 10 of the FAR.
3049.9002 ..........
3052 ...................
3052.249–90 ......
3052.212–70 ......
In subpart 3052.2 of the HSAR, ‘‘Texts of Provisions
and Clauses’’, adds term ‘‘3052.249–90 Contract
Termination (USCG)’’.
—Adds text ‘‘Contract Termination (USCG)’’—title,
to part 3052 of the HSAR.
—Adds sentence to part 3052 of the HSAR, ‘‘As
prescribed in the USCG guidance at (HSAR) 48
CFR 3049.9002, insert the following clause:’’.
—Adds text ‘‘Contract Termination (USCG) (Month
2022)’’ and paragraphs (a) through (e) to part
3052 of the HSAR.
Adds term ‘‘3052.249–90 Contract Termination
(USCG)’’ to the HSAR.
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Affected Population
The affected population of this
proposed rule is a contractor (if a
contractor enters into a contract with a
subcontractor, the subcontractor would
be counted as part of the main or
primary contract) whose contract is
terminated by the Coast Guard; this
would apply only to a contract,
including a commercial contract, with a
total value of more than $1 million.
DHS and the Coast Guard worked
collaboratively to provide the
information for this regulatory analysis.
The Coast Guard collected acquisition
data from the Coast Guard’s Office of
5 We use the term ‘‘administrative’’ to mean
proposed editorial changes or proposed changes to
the regulatory text that contain no regulatory
requirements or impacts to the affected population
of the proposed rule. The provisions we identified
as ‘‘administrative’’ in Table 2 do not have
quantifiable costs, cost savings, or benefits
associated with them. See Table 1 for the
unquantified benefits of the proposed rule.
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Administrative—we do not estimate a cost for the addition of the title
to this subpart of the HSAR. We do not estimate a cost for this regulatory provision itself because the contracting officer of the Coast
Guard currently inserts similar language in applicable contracts, including contracts for commercial items, with a total value of more
than $1 million.
Administrative—we do not estimate a cost for this item because it includes the insertion of the regulatory text, with no requirements, in
part 3052 of the HSAR.
Administrative—we do not estimate a cost for the insertion of the regulatory text that would be added to part 3052 of the HSAR. We do
not estimate costs for the regulatory text in paragraphs (a) through
(e) of this subpart because the requirements are currently contained
in 49.5 of the FAR. The statutory language currently exists in 14
U.S.C. 1155. The requirements are also in 3049.9001(a) through
(e).
Administrative—we do not estimate a cost for this item because it
contains the insertion of the regulatory text, with no requirements, in
part 3052 of the HSAR.
Procurement Policy and Oversight to
obtain the population or the number of
contracts it has acquired over the past
11 years. We used the Federal
Procurement Data System-Next
Generation (FPDS–NG) database to
collect the acquisition data.6 The Coast
Guard acquired a total of 7,228
contracts, including commercial items,
with a total value of more than $1
million, from fiscal year 2010 (FY 2010)
through fiscal year 2020 (FY 2020),
which ended on September 30, 2020.
Included in this number are an
unknown number of subcontracts. For
accounting purposes, the Coast Guard
counts the main contract or the contract
it awards as the primary contract, along
6 The Federal Government retains data on Federal
procurements through the FPDS–NG. Readers can
reference the FPDS–NG website for information on
the procurement of Federal contracts at: https://
www.gsa.gov/tools-overview/buying-and-sellingtools/federal-procurement-data-system.
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with subcontracts, if applicable, as 1
contract.7 During this period of time, the
Coast Guard terminated 25 contracts
with a value of more than $1 million, or
an average of about 2.3 contracts a year.
Of the 7,228 total contracts, the Coast
Guard awarded contracts to 3,947 small
businesses.8 Out of the 25 contracts,
7 A fiscal year in the Federal Government is the
period of time from October 1 in one calendar year
to September 30 of the following calendar year. It
is the accounting period when Federal agencies
submit budget requests to the Office of Management
and Budget (OMB) for planning and operational
purposes. The data we collected are through fiscal
year 2020; the Coast Guard generally awards
contracts, through its budget and acquisition
process, in the preceding fiscal year for the
following fiscal year.
8 When a small business wishes to obtain a
Federal contract, it can do so by ‘‘self-certification’’
on the Small Business Administration’s (SBA)
website before it registers for contract opportunities
with the Federal Government. Readers can learn
more about this process using the General Services
Administration’s (GSA) website at: https://
www.gsa.gov/small-business#gsa-now. A small
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including commercial contracts, with a
value of more than $1 million, that the
Coast Guard terminated during this
period of time, 8 of them were
associated with small businesses. This
is an average of less than 1 small
business contract termination a year (we
discuss the impacts to small entities in
Section IV, ‘‘Regulatory Flexibility Act’’,
of this ‘‘Regulatory Analysis’’).
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Cost Analysis of the Proposed Rule
This proposed rule would not impose
any new regulatory costs on contractors,
subcontractor, and the Federal
Government because the requirements
of this proposed rule currently exist in
the FAR and in the statute (see 48 CFR
chapter 1). We explain our reasoning
below for each regulatory provision of
this proposed rule. However, the FAR
does not contain the penalty clause that
exists in 14 U.S.C. 1155 that we would
implement in section 3049.9001,
paragraph (d).
We do not estimate a cost for the
items we identified as ‘‘administrative’’
in Table 2 because they would contain
the addition of the regulatory text in the
HSAR. This includes adding part,
subpart, and section titles to the HSAR.
This would cover part 3049, subpart
3049.90 (with sections 3049.9001 and
3049.9002), part 3052, and 3052.212–70
of the HSAR (see Table 2).
Subpart 3049.90 of the HSAR would
contain the contract termination policy
and notification of termination
requirements for the Coast Guard.
Section 3049.9001 would implement
the requirements of the NDAA.
Paragraph (a) would implement the
current statutory language in 14 U.S.C.
1155(a)(1), which provides the contract
termination policy for Coast Guard
contracts, including contracts for
commercial items, with a total value of
more than $1 million. Additionally,
subpart 49.1 (49.101) of the FAR
currently provides the authority for
Federal agencies and more specifically
contracting officers to terminate
contracts ‘‘. . . for the convenience of
the Government, or for default . . .’’.
Because the proposed rule would add
the statutory language, which
business is one that meets SBA’s size standards
based upon the North American Industry
Classification System (NAICS). Readers can
reference SBA’s table of size standards and the
NAICS codes at: https://www.sba.gov/document/
support-table-size-standards. For more information
on NAICS codes, readers should reference the U.S.
Census Bureau’s website at: https://
www.census.gov/naics/. Small businesses may also
obtain Federal contracts through GSA’s ‘‘One
Acquisition Solution for Integrated Services’’
(OASIS) Small Business (OASIS SB) contracts, see:
https://www.gsa.gov/buying-selling/productsservices/professional-services/buy-services/oasisand-oasis-small-business.
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supplements the existing regulatory
requirement for contract termination of
subpart 49.1 of the FAR, we do not
estimate a cost for this proposed change.
Paragraph (b) of section 3049.9001
would contain the notification
requirement for the Commandant of the
Coast Guard to notify the contractor
before terminating a contract, including
contracts for commercial items, with a
total value of more than $1 million, and
for the contractor to maintain all work
product related to the contract until the
earlier of—
(1) Not less than 1 year after the date
of notification; or
(2) The date the Commandant notifies
the vendor that maintenance of such
work product is no longer required.
Title 14 U.S.C. 1155(a)(1), currently
provides the statutory authority for the
Commandant of the Coast Guard to
notify the contractor before terminating
a procurement or acquisition contract
with a total value of more than $1
million. It also states the contractor
must maintain all work product related
to the contract as we previously
mentioned. Subpart 49.1, specifically
section 49.102 of the FAR currently
contains the regulatory requirement that
Federal contracting officers notify the
contractor before terminating a contract
for convenience or default. Title 14
U.S.C. 1155 does not specify the method
of notification; however, the FAR states
it must be by written notice or it ‘‘may
be expedited by means of electronic
communication capable of providing
confirmation of receipt by the
contractor’’. It has been the past (and
current) practice of the Coast Guard to
notify contractors of contract
termination by electronic means and for
the contractor to reply by electronic
means; therefore, this is not a new
requirement and it would not impose
any new costs on the contractor and the
Coast Guard for this method of
notification. Because the proposed rule
would add the statutory language for the
notification of contract termination,
which section 49.102 of the FAR allows
by electronic means, we do not estimate
a cost for this proposed change (the
statutory language for this provision
also exists in 14 U.S.C. 1155).
We also do not estimate a cost for the
requirement of the contractor to
maintain all work product related to the
contract because 14 U.S.C. 1155(b)
statutorily requires the contractor to
perform this function for the timeframe
specified in the statute. Furthermore,
subpart 4.7 [specifically sections
4.703(a) through (d)] of the FAR requires
a contractor to retain records for the
time specified in these regulations
(readers should refer to subpart 4.7 of
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Fmt 4702
Sfmt 4702
54667
the FAR for contractor records
retention).
Additionally, this is not a new
Information Collection Request (ICR)
nor would it amend an existing ICR
under the Paperwork Reduction Act of
1995 (44 U.S.C. 3501).9 The proposed
rule would add the statutory language,
codified in 14 U.S.C. 1155, to this
subpart and paragraph of the HSAR and
would ensure the contractor maintains
the work product for the timeframes
specified in the statute. Lastly, because
the Coast Guard terminated an average
of about 2 contracts a year over the past
11 years, this number does not exceed
the threshold of 10 or more persons for
a collection of information as defined in
Title 5 part 1320 of the CFR.10
Paragraph (c) of 3049.9001 would
contain the definition of the term ‘‘work
product’’ and would be titled ‘‘Work
Product Defined.’’ We classify this as an
administrative provision without a
regulatory requirement. We do not
estimate a cost for this provision
because this proposed rule would add
this definition to the HSAR, which is
codified in the statute in 14 U.S.C. 1155.
Paragraph (d) of 3049.9001 would add
the penalty a contractor would incur if
it fails to maintain the work product
defined in paragraph (c) of this section.
The Coast Guard does not believe it is
likely it will levy this penalty in the
future because for the contracts that it
has terminated, the Coast Guard has
generally been able to access the
maintained work product when
necessary. Because this regulatory
language is codified in the statute in 14
U.S.C. 1155, we do not estimate a cost
for this proposed change to the HSAR.
Paragraph (e) of 3049.9001 would
contain the requirement for the
contractor to insert the substance of the
clause into contracts and subcontracts,
including contracts and for commercial
items with a total value of more than $1
million. Subpart 49.5 (‘‘Contract
Termination Clauses’’) of the FAR
requires contracting officers to insert the
substance of the clause into solicitations
and contracts as specified in the statute.
As a result, we classify this regulatory
language and addition to the HSAR as
an administrative item; therefore, we do
not estimate a cost for this proposed
change.
9 Readers should reference the PRA for further
information at: https://www.govinfo.gov/content/
pkg/PLAW-104publ13/html/PLAW-104publ13.htm.
10 Readers should reference the CFR for a full
definition of the term ‘‘collection of information’’
and for further information on controlling
paperwork burdens on the public at: https://
www.govinfo.gov/content/pkg/CFR-2010-title5-vol3/
xml/CFR-2010-title5-vol3-part1320.xml.
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Federal Register / Vol. 87, No. 172 / Wednesday, September 7, 2022 / Proposed Rules
The proposed rule would add section
3049.9002, ‘‘Contract Clause (USCG’’),
to subpart 3049.90 of the HSAR. It states
Coast Guard contracting officers shall
insert the clause at 3052.249–90,
‘‘Contract Termination (USCG)’’, in all
solicitations and contracts, including
contracts for commercial items, with a
total value of more than $1 million.
Similar to the proposed paragraph (e) of
subpart 3049.9001, the contracting
officer of the Coast Guard is required in
subpart 49.5 of the FAR to insert this
language into all solicitations and
contracts.11 As a result, we classify this
regulatory language and addition to the
HSAR as an administrative item;
therefore, we do not estimate a cost for
this proposed change.
Lastly, the proposed rule would add
section 3052.249–90, ‘‘Contract
Termination (USCG)’’, to the HSAR. We
classify this proposed change as an
administrative item, which would add
the regulatory language with the same
requirements that would be contained
in section 3049.9001, paragraphs (a)
through (e) of HSAR. As a result, we do
not estimate a cost for this proposed
change.
Benefit Analysis of the Proposed Rule
The primary benefit of this proposed
rule is to provide contractors and
subcontractors, a consistent regulatory
environment between the U.S.C., the
FAR, and the HSAR, in the event the
Federal Government terminates a
contract, including contracts for
commercial items, with a total value of
more than $1 million. The regulatory
consistency also includes the
notification of termination to a
contractor by the Commandant of the
Coast Guard. The HSAR would contain
the requirement of the U.S.C. for the
contractor to maintain the work product
specified and the penalty to be levied
against a contractor for not maintaining
the work product as defined in the
statute.
lotter on DSK11XQN23PROD with PROPOSALS1
Alternatives of the Proposed Rule
DHS considered two alternatives to
this proposed rule. Neither alternative
would align the HSAR with the
statutory requirements of 14 U.S.C.
1155, nor would they provide the
11 The proposed rule includes all Coast Guard
contracts. The Coast Guard, however, issues
primarily fixed-price contracts or firm fixed-price
contracts. The FAR defines fixed-price contracts as
types of contracts that ‘‘. . . provide for a firm price
or, in appropriate cases, an adjustable price . . . the
contracting officer shall use firm fixed-price or
fixed price with economic price adjustment
contracts when acquiring commercial items, except
as provided in 12.207(b)’’. Readers should refer to
the FAR for information about other types of
contracts.
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consistent regulatory environment of the
chosen alternative.
1. No Action Alternative. We rejected
this alternative because the HSAR
would not align with the relevant
statute, which contain the statutory
requirements for contract termination
and notification for the Coast Guard,
specifically, the National Defense
Authorization Act (NDAA) for Fiscal
Year 2019 (Pub. L. 115–232), 14 U.S.C.
1155, and subpart 49.5 of the FAR.12
The statutory requirements are
applicable to contracts, including
contracts for commercial items, with a
total value of more than $1 million. The
HSAR would also not contain the
requirement for the contractor to
maintain the work product as defined in
the U.S.C. Lastly, the HSAR would not
contain the penalty specified in the
U.S.C. levied against a contractor for not
maintaining the work product.
2. Issue a policy letter referencing the
FAR and the U.S.C. for contract
termination policy and notification for
the Coast Guard. We rejected this
alternative because the a policy letter
would not revise the HSAR and thus it
would not contain the requirements
found in 14 U.S.C. 1155. A policy letter
would merely provide guidance for
contractors regarding the Coast Guard’s
contract termination policy, including
the penalty clause, and notification
procedures for requirements that
currently exist in the relevant statutes
and regulations. There would be no
costs associated with this alternative.
V. Regulatory Flexibility Act
Under the Regulatory Flexibility Act,
5 U.S.C. 601 612, we have considered
whether this proposed rule would have
a significant economic impact on a
substantial number of small entities.
The term ‘‘small entities’’ comprises
small businesses, not-for-profit
organizations that are independently
owned and operated and are not
dominant in their fields, and
governmental jurisdictions with
populations of less than 50,000.
This proposed rule would not impose
any new requirements or costs on small
entities. This proposed rule would
insert the Coast Guard’s termination
policy and the notification of
termination procedures for contracts,
including contracts for commercial
items, with a total value of more than
$1 million, into DHS’ HSAR. The
requirements for contract termination
and notification are currently in subpart
49.5 of the FAR and 14 U.S.C. 1155.
12 For further information, readers should
reference the NDAA for fiscal year 2019 at: https://
www.congress.gov/115/bills/hr5515/BILLS-115hr
5515enr.pdf.
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Fmt 4702
Sfmt 4702
The Coast Guard collected data on
contracts it terminated over the past 11
years, including contracts for
commercial items, with a total value of
more than $1 million. Over this period
of time, the Coast Guard terminated 8
contracts (or less than 1 a year on
average) awarded to small businesses
that met this total dollar value.
Although these 8 companies registered
as a ‘‘small business’’ with the SBA in
order to obtain a contract with the
Federal Government as a small business,
we researched these companies to
determine the type of small entity that
they are in order to correctly classify
them in this Regulatory Flexibility Act
(RFA) analysis. This is necessary
because a ‘‘small business’’ is one type
of small entity as stated previously in
this section.
We obtained the NAICS codes from
the FPDS–NG for all 8 companies. We
found company-specific information on
6 of the 8 companies by using the
publicly-available online database of
businesses in the United States,
ReferenceUSAgov (we did not find
revenue or employee information for 2
companies, and assumed they were
small).13 Nevertheless, based on each
company’s NAICS code, and using
SBA’s table of size standards for each
NAICS code, we found all of the 8
companies, who had contracts with a
total value of more than $1 million that
were terminated by the Coast Guard, to
be small businesses, and not
governmental jurisdictions or not-forprofit organizations that are
independently owned and operated and
are not dominant in their fields.
As noted above, that the Coast Guard
terminated an average of less than 1
contract a year (over the past 11 years)
that was associated with a small entity
and that the proposed rule would not
impose any new requirements or costs
on small entities. Therefore, DHS
certifies under 5 U.S.C. 605(b) that this
proposed rule would not have a
significant economic impact on a
substantial number of small entities.
If you think that your business,
organization, or governmental
jurisdiction qualifies as a small entity
and that this proposed rule would have
a significant economic impact on it,
please submit a comment to the docket
at the address listed in the ADDRESSES
section of this preamble. In your
comment, explain why you think it
qualifies and how and to what degree
this proposed rule would economically
affect it.
13 Readers can access the database at: https://
www.referenceusagov.com/Home/Home.
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3049.9001
VI. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501 3520) requires agencies
to consider the impact of paperwork and
other information collection burdens
imposed on the public. According to the
1995 amendments to the Paperwork
Reduction Act, an agency may not
collect or sponsor the collection of
information, nor may it impose an
information collection requirement
unless it displays a currently valid
Office of Management and Budget
(OMB) control number. As defined in 5
CFR 1320.3(c), ‘‘collection of
information’’ comprises reporting,
recordkeeping, monitoring, posting,
labeling, and other similar actions.
DHS has determined that there would
be no new requirement for information
collection associated with this proposed
rule. This proposed rule would not
change the burden in the collections
currently approved by OMB under OMB
Control Numbers, 1600–0002, ‘‘Various
Contract Related Forms that will be
Included in the Homeland Security
Acquisition Regulation’’, 1600–0003,
‘‘Post-Contract Award Information’’, and
1600–0005, ‘‘Solicitation of Proposal
Information for Award of Public
Contracts’’. There are no Coast Guard
Information Collection Requests (ICRs)
associated with non-Federal contracts.
List of Subjects in 48 CFR Parts 3049
and 3052
Government procurement.
Paul Courtney,
Chief Procurement Officer, Department of
Homeland Security.
Therefore, DHS proposes to amend 48
CFR parts 3049 and 3052 as follows:
PART 3049—TERMINATION OF
CONTRACTS
1. The authority citation for part 3049
is revised to read as follows:
■
Authority: 14 U.S.C. 1155.
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Subpart 3049.90 Contract Termination
(USCG)
Policy (USCG).
Contract clause (USCG).
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3049.9002
Contract clause (USCG).
USCG contracting officers shall insert
the clause at 3052.249–90, Contract
Termination (USCG), in all solicitations
and contracts, including contracts for
commercial items, with a total value of
more than $1,000,000.
3. The authority citation for part 3052
is revised to read as follows:
■
Authority: 5 U.S.C. 301–302, 14 U.S.C.
1155, 41 U.S.C. 1303, 41 U.S.C. 1707, 41
U.S.C. 1702, and 48 CFR subpart 1.3.
PO 00000
Frm 00037
Fmt 4702
Sfmt 9990
4. Add § 3052.249–90 to read as
follows:
■
(a) This section implements 14 U.S.C.
1155 and provides the policy for the
USCG to use for contract terminations.
This contract termination policy applies
to USCG contract terminations,
including contracts for commercial
items, with a total value of more than
$1,000,000.
(b) Notification. Before terminating a
contract with a total value of more than
$1,000,000, the Commandant of the
Coast Guard shall notify the contractor
and the contractor shall be required to
maintain all work product related to the
contract until the earlier of—
(1) not less than 1 year after the date
of the notification; or
(2) the date the Commandant notifies
the vendor that maintenance of such
work product is no longer required.
(c) Work Product Defined. The term
‘‘work product’’—
(1) means tangible and intangible
items and information produced or
possessed as a result of a contract
referred to in subsection (b); and
(2) includes—
(i) any completed end items;
(ii) any uncompleted end items; and
(iii) any property in the Contractor’s
possession in which the United States
Government has an interest.
(d) Penalty. A Contractor that fails to
maintain work product as required
under subsection (b) is liable to the
United States for a civil penalty of not
more than $25,000 for each day on
which such work product is
unavailable.
(e) The Contractor shall insert the
substance of this clause in contracts and
subcontracts, including contracts and
for commercial items, with a total value
of more than $1,000,000.
PART 3052—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
2. Add subpart 3049.90 to read as
follows:
■
3049.9001
3049.9002
Policy (USCG).
54669
§ 3052.249–90
(USCG).
Contract Termination
As prescribed in the USCG guidance
at (HSAR) 48 CFR 3049.9002, insert the
following clause:
Contract Termination (USCG) (Month
2022)
(a) This contract is subject to Section 3523
of the John S. McCain National Defense
Authorization Act for Fiscal Year 2019 (Pub.
L. 115–232), 14 U.S.C. 1155, pertaining to
contract terminations for the United States
Coast Guard (USCG).
(b) Notification. As required by 14 U.S.C.
1155(b), before terminating a contract with a
total value of more than $1,000,000, the
Commandant of the Coast Guard shall notify
the contractor and the contractor shall be
required to maintain all work product related
to the contract until the earlier of—
(1) not less than 1 year after the date of the
notification; or
(2) the date the Commandant notifies the
vendor that maintenance of such work
product is no longer required.
(c) Work Product Defined. In this clause
the term ‘‘work product’’—
(1) means tangible and intangible items
and information produced or possessed as a
result of a contract referred to in subsection
(b); and
(2) includes—
(i) any completed end items;
(ii) any uncompleted end items; and
(iii) any property in the Contractor’s
possession in which the United States
Government has an interest.
(d) Penalty. A Contractor that fails to
maintain work product as required under
subsection (b) is liable to the United States
for a civil penalty of not more than $25,000
for each day on which such work product is
unavailable.
(e) The Contractor shall insert the
substance of this clause in contracts and
subcontracts, including contracts for
commercial items, with a total value of more
than $1,000,000.
(End of clause)
§ 3052.212–70 Contract Terms and
Conditions Applicable to DHS Acquisition
of Commercial Items. [Amended]
5. In § 3052.212–70, add the text
‘‘_HSAR 3052.249–90 Contract
Termination (USCG)’’ at the end of the
section, after the text ‘‘_3052.247–72
F.o.B. Destination Only.’’ and before the
text ‘‘(End of clause)’’.
■
[FR Doc. 2022–18814 Filed 9–6–22; 8:45 am]
BILLING CODE 4410–10–P
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]]>Agencies
[Federal Register Volume 87, Number 172 (Wednesday, September 7, 2022)]
[Proposed Rules]
[Pages 54663-54669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18814]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HOMELAND SECURITY
48 CFR Parts 3049 and 3052
[Docket No. DHS-2022-0046]
RIN 1601-AB08
Homeland Security Acquisition Regulation (HSAR); United States
Coast Guard Contract Termination Policy (HSAR Case 2020-001)
AGENCY: Office of the Chief Procurement Officer, Department of Homeland
Security (DHS).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DHS is proposing to amend the Homeland Security Acquisition
Regulation (HSAR) to add a new subpart and new contract clause to
establish contract termination policy for the United States Coast Guard
(USCG) and amend a clause to address the applicability of USCG's
contract termination policy to commercial items.
DATES: Interested parties should submit written comments to one of the
addresses shown below on or before November 7, 2022, to be considered
in the formation of the final rule.
ADDRESSES: Submit comments identified by HSAR Case 2020-001, Contract
Termination Policy for the United States Coast Guard, using any of the
following methods:
[[Page 54664]]
Regulations.gov: https://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by entering
``HSAR Case 2020-001'' under the heading ``Enter Keyword or ID'' and
selecting ``Search.'' Select the link ``Submit a Comment'' that
corresponds with ``HSAR Case 2020-001.'' Follow the instructions
provided at the ``Submit a Comment'' screen. Please include your name,
company name (if any), and ``HSAR Case 2020-001'' on your attached
document.
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. The Department is not accepting mailed comments at
this time.
FOR FURTHER INFORMATION CONTACT: Ms. Linda Stivaletti-Petty,
Procurement Analyst, DHS, Office of the Chief Procurement Officer,
Acquisition Policy and Legislation at (202) 447-5639 or email
[email protected]. When using email, include HSAR Case 2020-001 in the
``Subject'' line.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Acquisition Regulations (FAR), found in 48 CFR part 1,
is a uniform regulation regarding the acquisition of goods and services
for Federal Government agencies. 48 CFR part 12, ``Acquisition of
Commercial Products and Commercial Services,'' deals with the
acquisition of commercial items, while part 49 discusses the
termination of contracts or solicitations. Under 48 CFR 49.101
contracts or solicitations may be terminated, either for convenience or
default, only when it is in the government's interest. The use of a
termination provision depends on the contract type such as a supply
contract, service contract, construction contract, research and
development contract and the method of payment, i.e., fixed price or
cost type.\1\
---------------------------------------------------------------------------
\1\ See 48 CFR 49.5.
---------------------------------------------------------------------------
Section 3523 of the John S. McCain National Defense Authorization
Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232)(14 U.S.C.
1155(a)) requires that before terminating a procurement or acquisition
contract with a total value of more than $1,000,000, the Commandant of
the Coast Guard shall notify each vendor under such contract and
require the vendor to maintain all work product related to the contract
until the earlier of-- (A) not less than 1 year after the date of the
notification; or (B) the date the Commandant notifies the vendor that
maintenance of such work product is no longer required.\2\
---------------------------------------------------------------------------
\2\ This section of the NDAA was originally codified at 14
U.S.C. 657. However, section 108(b) of the Frank LoBiondo Coast
Guard Authorization Act of 2018 (Pub. L. 115-282) subsequently
redesignated Sec. 657 as 14 U.S.C. 1155.
---------------------------------------------------------------------------
Specifically, 14 U.S.C. 1155(b) defines ``work product'' to mean:
(1) tangible and intangible items and information produced or possessed
as a result of a contract and (2) includes--(A) any completed end
items; (B) any uncompleted end items; and (C) any property in the
contractor's possession in which the United States Government has an
interest. Section 1155(c) establishes a penalty such that any vendor
that fails to maintain the work product is liable to the United States
for a civil penalty of not more than $25,000 for each day on which the
work product is unavailable.
Department of Homeland Security (DHS) is proposing to add a new
subpart regarding contract termination policy for the United States
Coast Guard (USCG) in the Homeland Security Acquisition Regulation
(HSAR) \3\ to ensure all USCG contractors and subcontractors comply
with contract termination policy.
---------------------------------------------------------------------------
\3\ The HSAR is issued for Departmental guidance according to
the policy cited in the FAR at 48 CFR 1.301. The HSAR establishes
uniform DHS policies and procedures for all acquisition activities
within the DHS and is issued by the Chief Procurement Officer who is
the DHS Senior Procurement Executive. The HSAR is located at 48 CFR
Chapter 30.
---------------------------------------------------------------------------
II. Proposed Changes
This rule proposes to amend the HSAR to:
Add new subpart 3049.90 Contract Termination (USCG) to part 3049
Termination of Contracts. This new subpart would consist of two
sections, section 3049.9001 Policy (USCG) and section 3049.9002
Contract Clause (USCG). The proposed addition of this subpart and
sections would align the USCG's contract termination regulatory
requirements with 14 U.S.C. 1155. HSAR 3049.9001 Policy (USCG) would
incorporate the provisions laid out in 14 U.S.C. 1155(a), regarding the
termination of contracts and maintenance of all work product related to
contracts. The proposed policy would require that before terminating a
contract with a value of more than $1,000,000, the Commandant of the
Coast Guard shall notify the contractor and the contractor shall be
required to maintain all work product related to the contract until the
earlier of--(1) not less than 1 year after the date of the
notification; or (2) the date the Commandant notifies the vendor that
maintenance of such work product is no longer required. The proposed
definition of ``Work Product'' is also taken from 14 U.S.C. 1155. This
proposed new subpart would state that a contractor that fails to
maintain a work product is liable to the United States for a civil
penalty of not more than $25,000 for each day on which such work
product is unavailable. This subpart would require the USCG to insert
this contract termination policy in all contracts, including contracts
for commercial items, with a total value of more than $1,000,000. These
proposed revisions to the HSAR are necessary to ensure USCG contractors
understand their roles and responsibilities to maintain work product in
the event of a termination, as required by 14 U.S.C. 1155.
This proposal would add a new HSAR clause, ``3052.249-90 Contract
Termination (USCG),'' that would implement 3049.9001 Policy (USCG).
This clause would be required in all USCG solicitations and contracts,
including contracts for commercial items, with a total value of more
than $1,000,000.
This proposed rule would also amend HSAR clause 3052.212-70
``Contract Terms and Conditions Applicable to DHS Acquisition of
Commercial Items'' to add HSAR clause 3052.249-90 ``Contract
Termination (USCG) that would implement 3049.9-9001 Policy (USCG)''.
This clause would be required in all USCG solicitations and contracts,
including contracts for commercial items, with a total value of more
than $1,000,000.
III. Applicability to Commercial Item Acquisitions, Including
Commercially Available Off-the-Shelf (COTS) Items, and Acquisitions
Below the Simplified Acquisition Threshold (SAT)
Section 3523 of the NDAA also provides for a civil penalty and does
not limit the application of the requirements of the statute to non-
commercial contracts. Consistent with 41 U.S.C. 1905, 1906, and 1907,
the DHS Chief Procurement Officer has determined that section 3523 of
the NDAA does apply to the acquisition of commercial items, including
COTS items. Because 41 U.S.C. 3523 states it applies to contracts with
a total value of more than $1,000,000, the requirements of the statute
do not apply to contracts below the SAT.
[[Page 54665]]
IV. Executive Orders 12866 and 13563
Executive Orders 12866 (Regulatory Planning and Review) and 13563
(Improving Regulation and Regulatory Review) direct agencies to assess
the costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Office of Management and Budget (OMB) has not designated this
proposed rule a significant regulatory action under section 3(f) of
Executive Order 12866. Accordingly, OMB has not reviewed it. A
regulatory analysis (RA) follows.
Table 1 presents a summary of impacts of the proposed rule.
Table 1--Summary of Impacts of the NPRM
------------------------------------------------------------------------
Category Summary
------------------------------------------------------------------------
Applicability..................... Addition of contract termination and
notification requirements for the
Coast Guard in Chapter 30 of the
HSAR for contracts that are
terminated by the Coast Guard, this
would apply to new contracts,
including contracts for commercial
items of more than $1 million.
Affected Population............... Contractors and subcontractors whose
contracts are terminated by the
Coast Guard. Approximately 2
contracts annually.
Costs............................. There are no new costs of the
proposed rule as its proposed
requirements already exist in other
regulations and statutes.
Unquantified Benefits............. The proposed rule would provide
consistency between existing
statutes and regulations for
contractors and subcontractors
whose contracts are terminated by
the Coast Guard.
------------------------------------------------------------------------
The Federal Government seeks contractual work with the general
public when it wishes to purchase, rent, lease, or otherwise obtain
supplies or services from non-Federal sources. The FAR defines this
process as ``contracting.'' \4\ This proposed rule would revise the
HSAR to require Coast Guard to insert termination and notification
requirements into its new contracts (this rulemaking would not apply to
existing Coast Guard contracts), including contracts for commercial
items, with a total value of more than $1 million.
---------------------------------------------------------------------------
\4\ Readers should reference the FAR for a full definition of
the term ``contracting''.
---------------------------------------------------------------------------
The Coast Guard incorporates contract termination clauses in
accordance with the FAR, the HSAR, the Homeland Security Acquisition
Manual (HSAM), and the Coast Guard Acquisition Procedures (CGAP) into
contracts as applicable and using this clause when deemed necessary for
the Coast Guard to exercise its right to do so.
Based on our analysis, we do not estimate that this proposed rule
would impose any new requirements or regulatory costs on contractors
and subcontractors who perform contractual work, with a total value of
more than $1 million, for the Federal Government. Our analysis also
shows that the Federal Government would not incur any new regulatory
costs as a result of this proposed rule. We present a summary of the
estimated impacts of the proposed rule in Table 2.
Table 2--Proposed Changes and the Estimated Impacts
------------------------------------------------------------------------
HSAR part or subpart Description of
affected proposed change Basis for no cost impact
------------------------------------------------------------------------
3049..................... Removes the term Administrative,\5\ we do
``Reserved'' in not estimate a cost for
the Homeland this item because it
Security contains the insertion
Acquisition of the text, with no
Regulation (HSAR). requirements, in part
Adds terms to the 3049 of the HSAR.
HSAR:.
--``Part 3049'' to
Termination of
Contracts.
--``Subpart 3049.90
Contract
Termination
(USCG)''.
--``3049.9001
Policy (USCG)''.
--``3049.9002
Contract Clause
(USCG)'', part and
subpart titles.
3049.90.................. Adds term Administrative, we do
``Contract not estimate a cost for
Termination this item because it
(USCG)''--subpart contains the insertion
title, to the HSAR. of text, with no
requirements, in part
3049 of the HSAR.
3049.9001................ Adds term ``Policy Administrative, we do
(USCG)''--title, not estimate a cost for
to the HSAR. this item because it
contains the insertion
of text, with no
requirements, in part
3049 of the HSAR.
3049.9001(a)............. Adds paragraph (a) We do not estimate a
to the HSAR and cost for this
would implement regulatory provision
requirements of 14 because the FAR, Title
U.S.C. 1155, which 48 of the CFR,
provides contract currently requires the
termination policy Federal Government to
for procurement or include similar
acquisition language in applicable
contracts, Federal contracts.
including Termination and
commercial notification
contracts greater requirements are
than $1 million. addressed in subpart
49.1 of the FAR. The
statutory language for
contract termination is
currently in 14 U.S.C.
1155(a)(1) for all
contracts, including
commercial contracts,
with a total value of
more than $1 million.
[[Page 54666]]
3049.9001(b)............. Adds paragraph (b) We do not estimate a
to the HSAR, cost for this
``Notification''-- regulatory provision
title. because subpart 49.1 of
Paragraph would the FAR currently
implement contains notification
requirements of 14 requirements for the
U.S.C. 1155, which Federal Government. The
states the statutory language for
Commandant of the notification of
Coast Guard must contract termination is
notify the currently in 14 U.S.C.
contractor before 1155(a)(1) for
terminating a procurement or
procurement or acquisition contracts
acquisition of more than $1 million
contract of (14 U.S.C. 1155(b)
greater than $1 defines work product).
million and the Maintaining of records
contractor must is required by section
maintain work 4.7 of the FAR. The
product as Federal Government is
specified in the currently required to
Code. include similar
language in applicable
Federal contracts.
3049.9001(c)............. Adds paragraph (c) Administrative--we do
``Work Product not estimate a cost for
Defined''--title, the addition of this
to the HSAR. regulatory provision
because there is no
requirement, 14 U.S.C.
1155 currently contains
the definition of the
term ``work product''.
3049.9001(d)............. Adds paragraph (d) We do not estimate a
``Penalty''--title cost for this provision
, to the HSAR. because 14 U.S.C. 1155
currently contains the
statutory language for
``penalty''. This item
has not been levied for
past Coast Guard
contracts since the
statute was enacted in
2019.
3049.9001(e)............. Adds paragraph (e) We do not estimate a
to the HSAR, which cost for this provision
states the because subpart 49.5 of
substance of the the FAR requires the
clause shall be contracting officer to
inserted by the insert similar language
contractor in in applicable
contracts and contracts. The relevant
subcontracts and clauses are in subpart
for commercial 52.249-1 through 10 of
items with a total the FAR.
value of more than
$1 million.
3049.9002................ Adds the term Administrative--we do
``Contract Clause not estimate a cost for
(USCG)''-title, to the addition of the
the HSAR; states title to this subpart
Coast Guard of the HSAR. We do not
contracting estimate a cost for
officers shall this regulatory
insert the clause provision itself
at 3052.249-90 in because the contracting
all solicitations officer of the Coast
and contracts, Guard currently inserts
including similar language in
commercial items applicable contracts,
with a total value including contracts for
of more than $1 commercial items, with
million. a total value of more
than $1 million.
3052..................... In subpart 3052.2 Administrative--we do
of the HSAR, not estimate a cost for
``Texts of this item because it
Provisions and includes the insertion
Clauses'', adds of the regulatory text,
term ``3052.249-90 with no requirements,
Contract in part 3052 of the
Termination HSAR.
(USCG)''.
3052.249-90.............. --Adds text Administrative--we do
``Contract not estimate a cost for
Termination the insertion of the
(USCG)''--title, regulatory text that
to part 3052 of would be added to part
the HSAR. 3052 of the HSAR. We do
--Adds sentence to not estimate costs for
part 3052 of the the regulatory text in
HSAR, ``As paragraphs (a) through
prescribed in the (e) of this subpart
USCG guidance at because the
(HSAR) 48 CFR requirements are
3049.9002, insert currently contained in
the following 49.5 of the FAR. The
clause:''. statutory language
--Adds text currently exists in 14
``Contract U.S.C. 1155. The
Termination (USCG) requirements are also
(Month 2022)'' and in 3049.9001(a) through
paragraphs (a) (e).
through (e) to
part 3052 of the
HSAR.
3052.212-70.............. Adds term Administrative--we do
``3052.249-90 not estimate a cost for
Contract this item because it
Termination contains the insertion
(USCG)'' to the of the regulatory text,
HSAR. with no requirements,
in part 3052 of the
HSAR.
------------------------------------------------------------------------
Affected Population
---------------------------------------------------------------------------
\5\ We use the term ``administrative'' to mean proposed
editorial changes or proposed changes to the regulatory text that
contain no regulatory requirements or impacts to the affected
population of the proposed rule. The provisions we identified as
``administrative'' in Table 2 do not have quantifiable costs, cost
savings, or benefits associated with them. See Table 1 for the
unquantified benefits of the proposed rule.
---------------------------------------------------------------------------
The affected population of this proposed rule is a contractor (if a
contractor enters into a contract with a subcontractor, the
subcontractor would be counted as part of the main or primary contract)
whose contract is terminated by the Coast Guard; this would apply only
to a contract, including a commercial contract, with a total value of
more than $1 million.
DHS and the Coast Guard worked collaboratively to provide the
information for this regulatory analysis. The Coast Guard collected
acquisition data from the Coast Guard's Office of Procurement Policy
and Oversight to obtain the population or the number of contracts it
has acquired over the past 11 years. We used the Federal Procurement
Data System-Next Generation (FPDS-NG) database to collect the
acquisition data.\6\ The Coast Guard acquired a total of 7,228
contracts, including commercial items, with a total value of more than
$1 million, from fiscal year 2010 (FY 2010) through fiscal year 2020
(FY 2020), which ended on September 30, 2020. Included in this number
are an unknown number of subcontracts. For accounting purposes, the
Coast Guard counts the main contract or the contract it awards as the
primary contract, along with subcontracts, if applicable, as 1
contract.\7\ During this period of time, the Coast Guard terminated 25
contracts with a value of more than $1 million, or an average of about
2.3 contracts a year.
---------------------------------------------------------------------------
\6\ The Federal Government retains data on Federal procurements
through the FPDS-NG. Readers can reference the FPDS-NG website for
information on the procurement of Federal contracts at: https://www.gsa.gov/tools-overview/buying-and-selling-tools/federal-procurement-data-system.
\7\ A fiscal year in the Federal Government is the period of
time from October 1 in one calendar year to September 30 of the
following calendar year. It is the accounting period when Federal
agencies submit budget requests to the Office of Management and
Budget (OMB) for planning and operational purposes. The data we
collected are through fiscal year 2020; the Coast Guard generally
awards contracts, through its budget and acquisition process, in the
preceding fiscal year for the following fiscal year.
---------------------------------------------------------------------------
Of the 7,228 total contracts, the Coast Guard awarded contracts to
3,947 small businesses.\8\ Out of the 25 contracts,
[[Page 54667]]
including commercial contracts, with a value of more than $1 million,
that the Coast Guard terminated during this period of time, 8 of them
were associated with small businesses. This is an average of less than
1 small business contract termination a year (we discuss the impacts to
small entities in Section IV, ``Regulatory Flexibility Act'', of this
``Regulatory Analysis'').
---------------------------------------------------------------------------
\8\ When a small business wishes to obtain a Federal contract,
it can do so by ``self-certification'' on the Small Business
Administration's (SBA) website before it registers for contract
opportunities with the Federal Government. Readers can learn more
about this process using the General Services Administration's (GSA)
website at: https://www.gsa.gov/small-business#gsa-now. A small
business is one that meets SBA's size standards based upon the North
American Industry Classification System (NAICS). Readers can
reference SBA's table of size standards and the NAICS codes at:
https://www.sba.gov/document/support-table-size-standards. For more
information on NAICS codes, readers should reference the U.S. Census
Bureau's website at: https://www.census.gov/naics/. Small businesses
may also obtain Federal contracts through GSA's ``One Acquisition
Solution for Integrated Services'' (OASIS) Small Business (OASIS SB)
contracts, see: https://www.gsa.gov/buying-selling/products-services/professional-services/buy-services/oasis-and-oasis-small-business.
---------------------------------------------------------------------------
Cost Analysis of the Proposed Rule
This proposed rule would not impose any new regulatory costs on
contractors, subcontractor, and the Federal Government because the
requirements of this proposed rule currently exist in the FAR and in
the statute (see 48 CFR chapter 1). We explain our reasoning below for
each regulatory provision of this proposed rule. However, the FAR does
not contain the penalty clause that exists in 14 U.S.C. 1155 that we
would implement in section 3049.9001, paragraph (d).
We do not estimate a cost for the items we identified as
``administrative'' in Table 2 because they would contain the addition
of the regulatory text in the HSAR. This includes adding part, subpart,
and section titles to the HSAR. This would cover part 3049, subpart
3049.90 (with sections 3049.9001 and 3049.9002), part 3052, and
3052.212-70 of the HSAR (see Table 2).
Subpart 3049.90 of the HSAR would contain the contract termination
policy and notification of termination requirements for the Coast
Guard.
Section 3049.9001 would implement the requirements of the NDAA.
Paragraph (a) would implement the current statutory language in 14
U.S.C. 1155(a)(1), which provides the contract termination policy for
Coast Guard contracts, including contracts for commercial items, with a
total value of more than $1 million. Additionally, subpart 49.1
(49.101) of the FAR currently provides the authority for Federal
agencies and more specifically contracting officers to terminate
contracts ``. . . for the convenience of the Government, or for default
. . .''. Because the proposed rule would add the statutory language,
which supplements the existing regulatory requirement for contract
termination of subpart 49.1 of the FAR, we do not estimate a cost for
this proposed change.
Paragraph (b) of section 3049.9001 would contain the notification
requirement for the Commandant of the Coast Guard to notify the
contractor before terminating a contract, including contracts for
commercial items, with a total value of more than $1 million, and for
the contractor to maintain all work product related to the contract
until the earlier of--
(1) Not less than 1 year after the date of notification; or
(2) The date the Commandant notifies the vendor that maintenance of
such work product is no longer required.
Title 14 U.S.C. 1155(a)(1), currently provides the statutory
authority for the Commandant of the Coast Guard to notify the
contractor before terminating a procurement or acquisition contract
with a total value of more than $1 million. It also states the
contractor must maintain all work product related to the contract as we
previously mentioned. Subpart 49.1, specifically section 49.102 of the
FAR currently contains the regulatory requirement that Federal
contracting officers notify the contractor before terminating a
contract for convenience or default. Title 14 U.S.C. 1155 does not
specify the method of notification; however, the FAR states it must be
by written notice or it ``may be expedited by means of electronic
communication capable of providing confirmation of receipt by the
contractor''. It has been the past (and current) practice of the Coast
Guard to notify contractors of contract termination by electronic means
and for the contractor to reply by electronic means; therefore, this is
not a new requirement and it would not impose any new costs on the
contractor and the Coast Guard for this method of notification. Because
the proposed rule would add the statutory language for the notification
of contract termination, which section 49.102 of the FAR allows by
electronic means, we do not estimate a cost for this proposed change
(the statutory language for this provision also exists in 14 U.S.C.
1155).
We also do not estimate a cost for the requirement of the
contractor to maintain all work product related to the contract because
14 U.S.C. 1155(b) statutorily requires the contractor to perform this
function for the timeframe specified in the statute. Furthermore,
subpart 4.7 [specifically sections 4.703(a) through (d)] of the FAR
requires a contractor to retain records for the time specified in these
regulations (readers should refer to subpart 4.7 of the FAR for
contractor records retention).
Additionally, this is not a new Information Collection Request
(ICR) nor would it amend an existing ICR under the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501).\9\ The proposed rule would add the
statutory language, codified in 14 U.S.C. 1155, to this subpart and
paragraph of the HSAR and would ensure the contractor maintains the
work product for the timeframes specified in the statute. Lastly,
because the Coast Guard terminated an average of about 2 contracts a
year over the past 11 years, this number does not exceed the threshold
of 10 or more persons for a collection of information as defined in
Title 5 part 1320 of the CFR.\10\
---------------------------------------------------------------------------
\9\ Readers should reference the PRA for further information at:
https://www.govinfo.gov/content/pkg/PLAW-104publ13/html/PLAW-104publ13.htm.
\10\ Readers should reference the CFR for a full definition of
the term ``collection of information'' and for further information
on controlling paperwork burdens on the public at: https://www.govinfo.gov/content/pkg/CFR-2010-title5-vol3/xml/CFR-2010-title5-vol3-part1320.xml.
---------------------------------------------------------------------------
Paragraph (c) of 3049.9001 would contain the definition of the term
``work product'' and would be titled ``Work Product Defined.'' We
classify this as an administrative provision without a regulatory
requirement. We do not estimate a cost for this provision because this
proposed rule would add this definition to the HSAR, which is codified
in the statute in 14 U.S.C. 1155.
Paragraph (d) of 3049.9001 would add the penalty a contractor would
incur if it fails to maintain the work product defined in paragraph (c)
of this section. The Coast Guard does not believe it is likely it will
levy this penalty in the future because for the contracts that it has
terminated, the Coast Guard has generally been able to access the
maintained work product when necessary. Because this regulatory
language is codified in the statute in 14 U.S.C. 1155, we do not
estimate a cost for this proposed change to the HSAR.
Paragraph (e) of 3049.9001 would contain the requirement for the
contractor to insert the substance of the clause into contracts and
subcontracts, including contracts and for commercial items with a total
value of more than $1 million. Subpart 49.5 (``Contract Termination
Clauses'') of the FAR requires contracting officers to insert the
substance of the clause into solicitations and contracts as specified
in the statute. As a result, we classify this regulatory language and
addition to the HSAR as an administrative item; therefore, we do not
estimate a cost for this proposed change.
[[Page 54668]]
The proposed rule would add section 3049.9002, ``Contract Clause
(USCG''), to subpart 3049.90 of the HSAR. It states Coast Guard
contracting officers shall insert the clause at 3052.249-90, ``Contract
Termination (USCG)'', in all solicitations and contracts, including
contracts for commercial items, with a total value of more than $1
million. Similar to the proposed paragraph (e) of subpart 3049.9001,
the contracting officer of the Coast Guard is required in subpart 49.5
of the FAR to insert this language into all solicitations and
contracts.\11\ As a result, we classify this regulatory language and
addition to the HSAR as an administrative item; therefore, we do not
estimate a cost for this proposed change.
---------------------------------------------------------------------------
\11\ The proposed rule includes all Coast Guard contracts. The
Coast Guard, however, issues primarily fixed-price contracts or firm
fixed-price contracts. The FAR defines fixed-price contracts as
types of contracts that ``. . . provide for a firm price or, in
appropriate cases, an adjustable price . . . the contracting officer
shall use firm fixed-price or fixed price with economic price
adjustment contracts when acquiring commercial items, except as
provided in 12.207(b)''. Readers should refer to the FAR for
information about other types of contracts.
---------------------------------------------------------------------------
Lastly, the proposed rule would add section 3052.249-90, ``Contract
Termination (USCG)'', to the HSAR. We classify this proposed change as
an administrative item, which would add the regulatory language with
the same requirements that would be contained in section 3049.9001,
paragraphs (a) through (e) of HSAR. As a result, we do not estimate a
cost for this proposed change.
Benefit Analysis of the Proposed Rule
The primary benefit of this proposed rule is to provide contractors
and subcontractors, a consistent regulatory environment between the
U.S.C., the FAR, and the HSAR, in the event the Federal Government
terminates a contract, including contracts for commercial items, with a
total value of more than $1 million. The regulatory consistency also
includes the notification of termination to a contractor by the
Commandant of the Coast Guard. The HSAR would contain the requirement
of the U.S.C. for the contractor to maintain the work product specified
and the penalty to be levied against a contractor for not maintaining
the work product as defined in the statute.
Alternatives of the Proposed Rule
DHS considered two alternatives to this proposed rule. Neither
alternative would align the HSAR with the statutory requirements of 14
U.S.C. 1155, nor would they provide the consistent regulatory
environment of the chosen alternative.
1. No Action Alternative. We rejected this alternative because the
HSAR would not align with the relevant statute, which contain the
statutory requirements for contract termination and notification for
the Coast Guard, specifically, the National Defense Authorization Act
(NDAA) for Fiscal Year 2019 (Pub. L. 115-232), 14 U.S.C. 1155, and
subpart 49.5 of the FAR.\12\ The statutory requirements are applicable
to contracts, including contracts for commercial items, with a total
value of more than $1 million. The HSAR would also not contain the
requirement for the contractor to maintain the work product as defined
in the U.S.C. Lastly, the HSAR would not contain the penalty specified
in the U.S.C. levied against a contractor for not maintaining the work
product.
---------------------------------------------------------------------------
\12\ For further information, readers should reference the NDAA
for fiscal year 2019 at: https://www.congress.gov/115/bills/hr5515/BILLS-115hr5515enr.pdf.
---------------------------------------------------------------------------
2. Issue a policy letter referencing the FAR and the U.S.C. for
contract termination policy and notification for the Coast Guard. We
rejected this alternative because the a policy letter would not revise
the HSAR and thus it would not contain the requirements found in 14
U.S.C. 1155. A policy letter would merely provide guidance for
contractors regarding the Coast Guard's contract termination policy,
including the penalty clause, and notification procedures for
requirements that currently exist in the relevant statutes and
regulations. There would be no costs associated with this alternative.
V. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 601 612, we have
considered whether this proposed rule would have a significant economic
impact on a substantial number of small entities. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
This proposed rule would not impose any new requirements or costs
on small entities. This proposed rule would insert the Coast Guard's
termination policy and the notification of termination procedures for
contracts, including contracts for commercial items, with a total value
of more than $1 million, into DHS' HSAR. The requirements for contract
termination and notification are currently in subpart 49.5 of the FAR
and 14 U.S.C. 1155.
The Coast Guard collected data on contracts it terminated over the
past 11 years, including contracts for commercial items, with a total
value of more than $1 million. Over this period of time, the Coast
Guard terminated 8 contracts (or less than 1 a year on average) awarded
to small businesses that met this total dollar value. Although these 8
companies registered as a ``small business'' with the SBA in order to
obtain a contract with the Federal Government as a small business, we
researched these companies to determine the type of small entity that
they are in order to correctly classify them in this Regulatory
Flexibility Act (RFA) analysis. This is necessary because a ``small
business'' is one type of small entity as stated previously in this
section.
We obtained the NAICS codes from the FPDS-NG for all 8 companies.
We found company-specific information on 6 of the 8 companies by using
the publicly-available online database of businesses in the United
States, ReferenceUSAgov (we did not find revenue or employee
information for 2 companies, and assumed they were small).\13\
Nevertheless, based on each company's NAICS code, and using SBA's table
of size standards for each NAICS code, we found all of the 8 companies,
who had contracts with a total value of more than $1 million that were
terminated by the Coast Guard, to be small businesses, and not
governmental jurisdictions or not-for-profit organizations that are
independently owned and operated and are not dominant in their fields.
---------------------------------------------------------------------------
\13\ Readers can access the database at: https://www.referenceusagov.com/Home/Home.
---------------------------------------------------------------------------
As noted above, that the Coast Guard terminated an average of less
than 1 contract a year (over the past 11 years) that was associated
with a small entity and that the proposed rule would not impose any new
requirements or costs on small entities. Therefore, DHS certifies under
5 U.S.C. 605(b) that this proposed rule would not have a significant
economic impact on a substantial number of small entities.
If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this proposed rule
would have a significant economic impact on it, please submit a comment
to the docket at the address listed in the ADDRESSES section of this
preamble. In your comment, explain why you think it qualifies and how
and to what degree this proposed rule would economically affect it.
[[Page 54669]]
VI. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 3520) requires
agencies to consider the impact of paperwork and other information
collection burdens imposed on the public. According to the 1995
amendments to the Paperwork Reduction Act, an agency may not collect or
sponsor the collection of information, nor may it impose an information
collection requirement unless it displays a currently valid Office of
Management and Budget (OMB) control number. As defined in 5 CFR
1320.3(c), ``collection of information'' comprises reporting,
recordkeeping, monitoring, posting, labeling, and other similar
actions.
DHS has determined that there would be no new requirement for
information collection associated with this proposed rule. This
proposed rule would not change the burden in the collections currently
approved by OMB under OMB Control Numbers, 1600-0002, ``Various
Contract Related Forms that will be Included in the Homeland Security
Acquisition Regulation'', 1600-0003, ``Post-Contract Award
Information'', and 1600-0005, ``Solicitation of Proposal Information
for Award of Public Contracts''. There are no Coast Guard Information
Collection Requests (ICRs) associated with non-Federal contracts.
List of Subjects in 48 CFR Parts 3049 and 3052
Government procurement.
Paul Courtney,
Chief Procurement Officer, Department of Homeland Security.
Therefore, DHS proposes to amend 48 CFR parts 3049 and 3052 as
follows:
PART 3049--TERMINATION OF CONTRACTS
0
1. The authority citation for part 3049 is revised to read as follows:
Authority: 14 U.S.C. 1155.
0
2. Add subpart 3049.90 to read as follows:
Subpart 3049.90 Contract Termination (USCG)
3049.9001 Policy (USCG).
3049.9002 Contract clause (USCG).
3049.9001 Policy (USCG).
(a) This section implements 14 U.S.C. 1155 and provides the policy
for the USCG to use for contract terminations. This contract
termination policy applies to USCG contract terminations, including
contracts for commercial items, with a total value of more than
$1,000,000.
(b) Notification. Before terminating a contract with a total value
of more than $1,000,000, the Commandant of the Coast Guard shall notify
the contractor and the contractor shall be required to maintain all
work product related to the contract until the earlier of--
(1) not less than 1 year after the date of the notification; or
(2) the date the Commandant notifies the vendor that maintenance of
such work product is no longer required.
(c) Work Product Defined. The term ``work product''--
(1) means tangible and intangible items and information produced or
possessed as a result of a contract referred to in subsection (b); and
(2) includes--
(i) any completed end items;
(ii) any uncompleted end items; and
(iii) any property in the Contractor's possession in which the
United States Government has an interest.
(d) Penalty. A Contractor that fails to maintain work product as
required under subsection (b) is liable to the United States for a
civil penalty of not more than $25,000 for each day on which such work
product is unavailable.
(e) The Contractor shall insert the substance of this clause in
contracts and subcontracts, including contracts and for commercial
items, with a total value of more than $1,000,000.
3049.9002 Contract clause (USCG).
USCG contracting officers shall insert the clause at 3052.249-90,
Contract Termination (USCG), in all solicitations and contracts,
including contracts for commercial items, with a total value of more
than $1,000,000.
PART 3052--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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3. The authority citation for part 3052 is revised to read as follows:
Authority: 5 U.S.C. 301-302, 14 U.S.C. 1155, 41 U.S.C. 1303, 41
U.S.C. 1707, 41 U.S.C. 1702, and 48 CFR subpart 1.3.
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4. Add Sec. 3052.249-90 to read as follows:
Sec. 3052.249-90 Contract Termination (USCG).
As prescribed in the USCG guidance at (HSAR) 48 CFR 3049.9002,
insert the following clause:
Contract Termination (USCG) (Month 2022)
(a) This contract is subject to Section 3523 of the John S.
McCain National Defense Authorization Act for Fiscal Year 2019 (Pub.
L. 115-232), 14 U.S.C. 1155, pertaining to contract terminations for
the United States Coast Guard (USCG).
(b) Notification. As required by 14 U.S.C. 1155(b), before
terminating a contract with a total value of more than $1,000,000,
the Commandant of the Coast Guard shall notify the contractor and
the contractor shall be required to maintain all work product
related to the contract until the earlier of--
(1) not less than 1 year after the date of the notification; or
(2) the date the Commandant notifies the vendor that maintenance
of such work product is no longer required.
(c) Work Product Defined. In this clause the term ``work
product''--
(1) means tangible and intangible items and information produced
or possessed as a result of a contract referred to in subsection
(b); and
(2) includes--
(i) any completed end items;
(ii) any uncompleted end items; and
(iii) any property in the Contractor's possession in which the
United States Government has an interest.
(d) Penalty. A Contractor that fails to maintain work product as
required under subsection (b) is liable to the United States for a
civil penalty of not more than $25,000 for each day on which such
work product is unavailable.
(e) The Contractor shall insert the substance of this clause in
contracts and subcontracts, including contracts for commercial
items, with a total value of more than $1,000,000.
(End of clause)
Sec. 3052.212-70 Contract Terms and Conditions Applicable to DHS
Acquisition of Commercial Items. [Amended]
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5. In Sec. 3052.212-70, add the text ``_HSAR 3052.249-90 Contract
Termination (USCG)'' at the end of the section, after the text
``_3052.247-72 F.o.B. Destination Only.'' and before the text ``(End of
clause)''.
[FR Doc. 2022-18814 Filed 9-6-22; 8:45 am]
BILLING CODE 4410-10-P
