Defense Federal Acquisition Regulation Supplement: Prohibition on Award to Contractors That Require Certain Nondisclosure Agreements (DFARS Case 2021-D018), 65510-65512 [2022-23281]
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Federal Register / Vol. 87, No. 208 / Friday, October 28, 2022 / Rules and Regulations
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 203 and 212
[Docket DARS–2022–0013]
RIN 0750–AL36
Defense Federal Acquisition
Regulation Supplement: Prohibition on
Award to Contractors That Require
Certain Nondisclosure Agreements
(DFARS Case 2021–D018)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement a section of the
National Defense Authorization Act for
Fiscal Year 2021 that prohibits the
award of any DoD contracts to an entity
that requires its employees to sign
internal confidentiality agreements or
statements that would prohibit or
otherwise restrict its employees from
lawfully reporting waste, fraud, or abuse
related to the performance of a DoD
contract to a designated investigative or
law enforcement representative of DoD
authorized to receive such information.
DATES: Effective October 28, 2022.
FOR FURTHER INFORMATION CONTACT: Ms.
Kimberly R. Ziegler, telephone 703–
901–3176.
SUPPLEMENTARY INFORMATION:
SUMMARY:
lotter on DSK11XQN23PROD with RULES4
I. Background
DoD published a proposed rule in the
Federal Register at 87 FR 37470 on June
23, 2022, to implement section 883 of
the National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2021 (Pub.
L. 116–283). Section 883 prohibits the
award of a DoD contract to an entity that
requires its employees to sign internal
confidentiality agreements or statements
that would prohibit or otherwise restrict
such employees from lawfully reporting
waste, fraud, or abuse related to the
performance of a DoD contract to a
designated investigative or law
enforcement representative within DoD
authorized to receive such information.
The statute also requires entities to
inform its employees of the limitations
on confidentiality agreements or other
statements. Offerors are required to
represent compliance with the statutory
restrictions in the System for Award
Management prior to submitting an offer
or quote.
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The requirements of section 883
closely resemble those provided in
section 743 of Division E, Title VII, of
the Consolidated and Further
Continuing Appropriations Act, 2015
(Pub. L. 113–235), which was
implemented at Federal Acquisition
Regulation (FAR) 3.909, Prohibition on
providing funds to an entity that
requires certain internal confidentiality
agreements or statements (82 FR 4717,
dated January 13, 2017). Since the
prohibition at section 743 applies
Governmentwide, DoD is currently
complying with section 883 based on
the FAR application of section 743 to
employees and contractors.
One respondent submitted a comment
in response to the proposed rule.
II. Discussion and Analysis
DoD reviewed the public comment in
the development of the final rule. The
respondent provided a comment about
the definition of the term ‘‘entity’’ as it
pertains to the application of the rule,
which is outside of the scope of this
rule. No changes were made in the final
rule.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold (SAT), for Commercial
Products (Including Commercially
Available Off-the-Shelf (COTS) Items),
and for Commercial Services
This rule implements section 883 of
the NDAA for FY 2021 (Pub. L. 116–
283) but does not create any new
solicitation provisions or contract
clauses. The rule does apply DFARS
clause 252.203–7002, Requirement to
Inform Employees of Whistleblower
Rights, to contracts valued at or below
the SAT and for commercial services
and products, including COTS items.
The rule, at DFARS 203.909–3, also
prescribes use of Federal Acquisition
Regulation (FAR) provision 52.203–18,
Prohibition on Contracting with Entities
that Require Certain Internal
Confidentiality Agreements or
Statements-Representation, and FAR
clause 52.203–19, Prohibition on
Requiring Certain Internal
Confidentiality Agreements or
Statements. The FAR clause and
provision, except for personal services
contracts, are already prescribed for use
in acquisitions at or below the SAT; and
the FAR clause 52.203–19 is also
prescribed for use in commercial
acquisitions.
A. Applicability to Contracts at or Below
the SAT
41 U.S.C. 1905 governs the
applicability of laws to contracts or
subcontracts in amounts not greater
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Fmt 4701
Sfmt 4700
than the SAT. It is intended to limit the
applicability of laws to such contracts or
subcontracts. 41 U.S.C. 1905 provides
that if a provision of law contains
criminal or civil penalties, or if the
Federal Acquisition Regulatory Council
(FAR Council) makes a determination
that it is not in the best interest of the
Federal Government to exempt contracts
or subcontracts at or below the SAT, the
law will apply to them. The Principal
Director, Defense Pricing and
Contracting (DPC), is the appropriate
authority to make comparable
determinations for regulations to be
published in the DFARS, which is part
of the FAR system of regulations.
B. Applicability to Contracts for the
Acquisition of Commercial Services and
Commercial Products, Including COTS
Items
10 U.S.C. 2375 (redesignated as 10
U.S.C. 3452) governs the applicability of
laws to DoD contracts and subcontracts
for the acquisition of commercial
services and commercial products,
including COTS items, and is intended
to limit the applicability of laws to
contracts for the acquisition of
commercial services and commercial
products, including COTS items. 10
U.S.C. 2375 provides that if a provision
of law contains criminal or civil
penalties, or if the Under Secretary of
Defense for Acquisition and
Sustainment (USD(A&S)) makes a
written determination that it is not in
the best interest of the Federal
Government to exempt commercial
product and commercial service
contracts, the provision of law will
apply to contracts for the acquisition of
commercial products and commercial
services. Due to delegations of authority,
the Principal Director, DPC is the
appropriate authority to make this
determination. DoD intends to apply
this rule and the corresponding statutes
(10 U.S.C. 2409 and section 883 of the
NDAA for FY 2021) to acquisitions at or
below the SAT and for commercial
services and commercial products,
including COTS items.
C. Determination
DoD intends to apply the
requirements of 10 U.S.C. 2409 and
section 883 of the NDAA for FY 2021 to
contracts at or below the SAT and those
awarded under FAR part 12 procedures
because the statutory protections are
intended to apply to any employee of a
contractor or subcontractor who
discloses or may be restricted from
disclosing evidence of waste, fraud, and
abuse. The statutes only exempt the
application to elements of the
intelligence community.
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Federal Register / Vol. 87, No. 208 / Friday, October 28, 2022 / Rules and Regulations
10 U.S.C. 2409 provides contractor
employees protection from reprisal for
disclosure of waste, fraud, and abuse to
designated persons and bodies
identified in the statute. An employee of
a contractor or subcontractor may not be
discharged, demoted, or otherwise
discriminated against as a reprisal for
such a disclosure. The statute does not
apply to elements of the intelligence
committee.
Section 883 prohibits the award of
any DoD contract to an entity that
requires its employees to sign internal
confidentiality agreements or statements
that would prohibit or otherwise restrict
its employees from lawfully reporting
waste, fraud, or abuse related to the
performance of a DoD contract to a
designated investigative or law
enforcement representative of DoD
authorized to receive such information.
It is not in the best interest of the
Federal Government to exempt
application of this rule to actions at or
below the SAT or to commercial
services and commercial products
(including COTS items). An exception
for contracts at or below the SAT and
those for commercial services and
commercial products (including COTS
items) would exclude the majority of the
contracts and individuals intended to be
protected under the laws, thereby
undermining the overarching public
policy purpose of the laws.
lotter on DSK11XQN23PROD with RULES4
IV. Expected Impact of the Rule
This proposed rule is not expected to
have a significant impact on the public
or Government agencies because the
requirements of section 883 have
already been implemented
Governmentwide at FAR 3.909. DoDspecific implementation of section 883
would duplicate the previous
implementation of section 743 of
Division E, Title VII, of the Consolidated
and Further Continuing Appropriations
Act, 2015 (Pub. L. 113–235) as
implemented Governmentwide in the
FAR.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
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65511
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993.
There are no practical alternatives
that will accomplish the objectives of
the statute.
VI. Congressional Review Act
As required by the Congressional
Review Act (5 U.S.C. 801–808) before an
interim or final rule takes effect, DoD
will submit a copy of the interim or
final rule with the form, Submission of
Federal Rules Under the Congressional
Review Act, to the U.S. Senate, the U.S.
House of Representatives, and the
Comptroller General of the United
States. A major rule under the
Congressional Review Act cannot take
effect until 60 days after it is published
in the Federal Register. The Office of
Information and Regulatory Affairs has
determined that this rule is not a major
rule as defined by 5 U.S.C. 804.
VIII. Paperwork Reduction Act
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis
has been prepared consistent with the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq. and is summarized as follows:
This rule amends the DFARS to
implement section 883 of the National
Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2021 (Pub. L. 116–283).
Section 883 prohibits the award of a
DoD contract to an entity that requires
its employees to sign internal
confidentiality agreements or statements
that would prohibit or otherwise restrict
such employees from lawfully reporting
waste, fraud, or abuse related to the
performance of a DoD contract to a
designated investigative or law
enforcement representative within DoD
authorized to receive such information.
The objective of the rule is to
implement the DoD-specific statute that
removes restrictions on the ability of
employees to report waste, fraud, or
abuse to the appropriate DoD
authorities.
There were no significant issues
raised by the public in response to the
initial regulatory flexibility analysis.
This rule will apply to all small
entities that are eligible to receive DoD
contracts; however, the requirements of
section 883 are already met through the
Governmentwide implementation of a
previously published prohibition at
FAR 3.909 and in the System for Award
Management (SAM) representations and
certifications. As a result, the 361,000
unique small entities registered in SAM
as of January 12, 2021, are already
compliant with these requirements and
will not be required to take any
additional action to comply with the
DoD-specific prohibition in section 883.
The rule does not impose any new
reporting, recordkeeping, or compliance
requirements.
PO 00000
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This rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act (44 U.S.C.
chapter 35).
List of Subjects in 48 CFR Parts 203 and
212
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition
Regulations System.
Therefore, 48 CFR parts 203 and 212
are amended as follows:
■ 1. The authority citation for parts 203
and 212 continues to read as follows:
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
PART 203—IMPROPER BUSINESS
PRACTICES AND PERSONAL
CONFLICTS OF INTEREST
2. Revise section 203.900 to read as
follows:
■
203.900
Scope of subpart.
This subpart implements 10 U.S.C.
2409 and section 883 of the National
Defense Authorization Act for Fiscal
Year 2021 (Pub. L. 116–283).
(a)(i) 10 U.S.C. 2409 provides DoD
whistleblower protection policies and
procedures for contractor employees.
Use sections 203.901 through 203.906 of
this subpart in lieu of FAR sections
3.901 through 3.906 to implement 10
U.S.C. 2409.
(ii) 10 U.S.C. 2409 does not apply to
any element of the intelligence
community, as defined in 50 U.S.C.
3003(4). Sections 203.901 through
203.906 do not apply to any disclosure
made by an employee of a contractor or
subcontractor of an element of the
intelligence community if such
disclosure—
(A) Relates to an activity or an
element of the intelligence community;
or
(B) Was discovered during contract or
subcontract services provided to an
element of the intelligence community.
(c) Section 883 of the National
Defense Authorization Act for Fiscal
Year 2021 (Pub. L. 116–283) prohibits
the award of a DoD contract to
contractors that require their employees
to sign internal confidentiality
agreements or statements that would
prohibit or otherwise restrict such
employees from lawfully reporting
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Federal Register / Vol. 87, No. 208 / Friday, October 28, 2022 / Rules and Regulations
waste, fraud, or abuse related to the
performance of a DoD contract to a
designated investigative or law
enforcement representative within DoD
authorized to receive such information.
3. Add sections 203.909 and 203.909–
3 to read as follows:
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Parts 216 and 235
■
203.909 Prohibition on providing funds to
an entity that requires certain internal
confidentiality agreements or statements.
203.909–3 Solicitation provision and
contract clause.
Use the provision at FAR 52.203–18,
Prohibition on Contracting with Entities
That Require Certain Internal
Confidentiality Agreements or
Statements—Representation, and the
clause at FAR 52.203–19, Prohibition on
Requiring Certain Internal
Confidentiality Agreements or
Statements, prescribed at FAR 3.909–3
to implement section 883 of the
National Defense Authorization Act for
Fiscal Year 2021.
4. Revise section 203.970 to read as
follows:
■
203.970
Contract clause.
Use the clause at 252.203–7002,
Requirement to Inform Employees of
Whistleblower Rights, in all
solicitations and contracts, including
solicitations and contracts using FAR
part 12 procedures for the acquisition of
commercial items.
PART 212—ACQUISITION OF
COMMERCIAL ITEMS
5. Amend section 212.301—
■ a. In paragraph (f)(i), by redesignating
paragraphs (f)(i)(C) and (D) as
paragraphs (f)(i)(D) and (E); and
■ b. By adding a new paragraph (f)(i)(C).
The addition reads as follows:
■
212.301 Solicitation provisions and
contract clauses for the acquisition of
commercial items.
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*
*
*
*
*
(f) * * *
(i) * * *
(C) Use the clause at 252.203–7002,
Requirement to Inform Employees of
Whistleblower Rights, as prescribed in
203.970, to comply with 10 U.S.C. 2409.
*
*
*
*
*
[FR Doc. 2022–23281 Filed 10–27–22; 8:45 am]
BILLING CODE 5001–06–P
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Jkt 256001
[Docket DARS–2022–0023]
RIN 0750–AL58
Defense Federal Acquisition
Regulation Supplement: Repeal of
Preference for Fixed-Price Contracts
(DFARS Case 2022–D007)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement a section of the
National Defense Authorization Act for
Fiscal Year 2022.
DATES: Effective October 28, 2022.
FOR FURTHER INFORMATION CONTACT: Ms.
Kimberly R. Ziegler, telephone 703–
901–3176.
SUPPLEMENTARY INFORMATION:
SUMMARY:
I. Background
DoD is issuing a final rule amending
the DFARS to implement section 817 of
the National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2022 (Pub.
L. 117–81), which repeals section 829 of
the NDAA for FY 2017 (Pub. L. 114–
328). This rule removes text that was
added to the DFARS associated with the
implementation of section 829.
DoD published a final rule in the
Federal Register at 84 FR 65304 on
November 27, 2019, to implement
section 829. Section 829 required
contracting officers to first consider
fixed-price contracts, including fixedprice incentive contracts, when
determining contract type and to obtain
approval from the head of the
contracting activity for certain costreimbursement contracts.
This final rule removes references,
policies, and limitations related to
section 829 at DFARS sections
216.102(1), 216.301–3(2), 216.401(d),
and 235.006(b)(i). Conforming changes
are made to revise two cross-references
at 235.006(b)(ii). At DFARS 216.102(3)
an obsolete reference to DFARS
225.7301–1 is removed, since the
requirement at 225.7301–1 was repealed
by section 888 of the NDAA for FY 2021
(Pub. L. 116–283); see the final rule for
DFARS Case 2021–D019 published in
the Federal Register at 86 FR 48339 on
August 30, 2021.
PO 00000
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Fmt 4701
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II. Publication of This Final Rule for
Public Comment Is Not Required by
Statute
The statute that applies to the
publication of the Federal Acquisition
Regulation (FAR) is 41 U.S.C. 1707,
Publication of Proposed Regulations.
Subsection (a)(1) of the statute requires
that a procurement policy, regulation,
procedure, or form (including an
amendment or modification thereof)
must be published for public comment
if it relates to the expenditure of
appropriated funds and has either a
significant effect beyond the internal
operating procedures of the agency
issuing the policy, regulation,
procedure, or form, or has a significant
cost or administrative impact on
contractors or offerors. This final rule is
not required to be published for public
comment, because this rule is updating
internal DoD operating procedures.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold, for Commercial Services,
and for Commercial Products,
Including Commercially Available Offthe-Shelf (COTS) Items
This rule does not create any new
solicitation provisions or contract
clauses. It does not impact any existing
solicitation provisions or contract
clauses or their applicability to
contracts at or below the simplified
acquisition threshold, for commercial
services, or for commercial products
including COTS items.
IV. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993.
V. Congressional Review Act
As required by the Congressional
Review Act (5 U.S.C. 801–808) before an
interim or final rule takes effect, DoD
will submit a copy of the interim or
final rule with the form, Submission of
Federal Rules under the Congressional
Review Act, to the U.S. Senate, the U.S.
House of Representatives, and the
E:\FR\FM\28OCR4.SGM
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]]>Agencies
[Federal Register Volume 87, Number 208 (Friday, October 28, 2022)]
[Rules and Regulations]
[Pages 65510-65512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23281]
Federal Register / Vol. 87, No. 208 / Friday, October 28, 2022 /
Rules and Regulations
[[Page 65510]]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 203 and 212
[Docket DARS-2022-0013]
RIN 0750-AL36
Defense Federal Acquisition Regulation Supplement: Prohibition on
Award to Contractors That Require Certain Nondisclosure Agreements
(DFARS Case 2021-D018)
AGENCY: Defense Acquisition Regulations System, Department of Defense
(DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD is issuing a final rule amending the Defense Federal
Acquisition Regulation Supplement (DFARS) to implement a section of the
National Defense Authorization Act for Fiscal Year 2021 that prohibits
the award of any DoD contracts to an entity that requires its employees
to sign internal confidentiality agreements or statements that would
prohibit or otherwise restrict its employees from lawfully reporting
waste, fraud, or abuse related to the performance of a DoD contract to
a designated investigative or law enforcement representative of DoD
authorized to receive such information.
DATES: Effective October 28, 2022.
FOR FURTHER INFORMATION CONTACT: Ms. Kimberly R. Ziegler, telephone
703-901-3176.
SUPPLEMENTARY INFORMATION:
I. Background
DoD published a proposed rule in the Federal Register at 87 FR
37470 on June 23, 2022, to implement section 883 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L.
116-283). Section 883 prohibits the award of a DoD contract to an
entity that requires its employees to sign internal confidentiality
agreements or statements that would prohibit or otherwise restrict such
employees from lawfully reporting waste, fraud, or abuse related to the
performance of a DoD contract to a designated investigative or law
enforcement representative within DoD authorized to receive such
information. The statute also requires entities to inform its employees
of the limitations on confidentiality agreements or other statements.
Offerors are required to represent compliance with the statutory
restrictions in the System for Award Management prior to submitting an
offer or quote.
The requirements of section 883 closely resemble those provided in
section 743 of Division E, Title VII, of the Consolidated and Further
Continuing Appropriations Act, 2015 (Pub. L. 113-235), which was
implemented at Federal Acquisition Regulation (FAR) 3.909, Prohibition
on providing funds to an entity that requires certain internal
confidentiality agreements or statements (82 FR 4717, dated January 13,
2017). Since the prohibition at section 743 applies Governmentwide, DoD
is currently complying with section 883 based on the FAR application of
section 743 to employees and contractors.
One respondent submitted a comment in response to the proposed
rule.
II. Discussion and Analysis
DoD reviewed the public comment in the development of the final
rule. The respondent provided a comment about the definition of the
term ``entity'' as it pertains to the application of the rule, which is
outside of the scope of this rule. No changes were made in the final
rule.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT), for Commercial Products (Including Commercially
Available Off-the-Shelf (COTS) Items), and for Commercial Services
This rule implements section 883 of the NDAA for FY 2021 (Pub. L.
116-283) but does not create any new solicitation provisions or
contract clauses. The rule does apply DFARS clause 252.203-7002,
Requirement to Inform Employees of Whistleblower Rights, to contracts
valued at or below the SAT and for commercial services and products,
including COTS items. The rule, at DFARS 203.909-3, also prescribes use
of Federal Acquisition Regulation (FAR) provision 52.203-18,
Prohibition on Contracting with Entities that Require Certain Internal
Confidentiality Agreements or Statements-Representation, and FAR clause
52.203-19, Prohibition on Requiring Certain Internal Confidentiality
Agreements or Statements. The FAR clause and provision, except for
personal services contracts, are already prescribed for use in
acquisitions at or below the SAT; and the FAR clause 52.203-19 is also
prescribed for use in commercial acquisitions.
A. Applicability to Contracts at or Below the SAT
41 U.S.C. 1905 governs the applicability of laws to contracts or
subcontracts in amounts not greater than the SAT. It is intended to
limit the applicability of laws to such contracts or subcontracts. 41
U.S.C. 1905 provides that if a provision of law contains criminal or
civil penalties, or if the Federal Acquisition Regulatory Council (FAR
Council) makes a determination that it is not in the best interest of
the Federal Government to exempt contracts or subcontracts at or below
the SAT, the law will apply to them. The Principal Director, Defense
Pricing and Contracting (DPC), is the appropriate authority to make
comparable determinations for regulations to be published in the DFARS,
which is part of the FAR system of regulations.
B. Applicability to Contracts for the Acquisition of Commercial
Services and Commercial Products, Including COTS Items
10 U.S.C. 2375 (redesignated as 10 U.S.C. 3452) governs the
applicability of laws to DoD contracts and subcontracts for the
acquisition of commercial services and commercial products, including
COTS items, and is intended to limit the applicability of laws to
contracts for the acquisition of commercial services and commercial
products, including COTS items. 10 U.S.C. 2375 provides that if a
provision of law contains criminal or civil penalties, or if the Under
Secretary of Defense for Acquisition and Sustainment (USD(A&S)) makes a
written determination that it is not in the best interest of the
Federal Government to exempt commercial product and commercial service
contracts, the provision of law will apply to contracts for the
acquisition of commercial products and commercial services. Due to
delegations of authority, the Principal Director, DPC is the
appropriate authority to make this determination. DoD intends to apply
this rule and the corresponding statutes (10 U.S.C. 2409 and section
883 of the NDAA for FY 2021) to acquisitions at or below the SAT and
for commercial services and commercial products, including COTS items.
C. Determination
DoD intends to apply the requirements of 10 U.S.C. 2409 and section
883 of the NDAA for FY 2021 to contracts at or below the SAT and those
awarded under FAR part 12 procedures because the statutory protections
are intended to apply to any employee of a contractor or subcontractor
who discloses or may be restricted from disclosing evidence of waste,
fraud, and abuse. The statutes only exempt the application to elements
of the intelligence community.
[[Page 65511]]
10 U.S.C. 2409 provides contractor employees protection from
reprisal for disclosure of waste, fraud, and abuse to designated
persons and bodies identified in the statute. An employee of a
contractor or subcontractor may not be discharged, demoted, or
otherwise discriminated against as a reprisal for such a disclosure.
The statute does not apply to elements of the intelligence committee.
Section 883 prohibits the award of any DoD contract to an entity
that requires its employees to sign internal confidentiality agreements
or statements that would prohibit or otherwise restrict its employees
from lawfully reporting waste, fraud, or abuse related to the
performance of a DoD contract to a designated investigative or law
enforcement representative of DoD authorized to receive such
information.
It is not in the best interest of the Federal Government to exempt
application of this rule to actions at or below the SAT or to
commercial services and commercial products (including COTS items). An
exception for contracts at or below the SAT and those for commercial
services and commercial products (including COTS items) would exclude
the majority of the contracts and individuals intended to be protected
under the laws, thereby undermining the overarching public policy
purpose of the laws.
IV. Expected Impact of the Rule
This proposed rule is not expected to have a significant impact on
the public or Government agencies because the requirements of section
883 have already been implemented Governmentwide at FAR 3.909. DoD-
specific implementation of section 883 would duplicate the previous
implementation of section 743 of Division E, Title VII, of the
Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L.
113-235) as implemented Governmentwide in the FAR.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993.
VI. Congressional Review Act
As required by the Congressional Review Act (5 U.S.C. 801-808)
before an interim or final rule takes effect, DoD will submit a copy of
the interim or final rule with the form, Submission of Federal Rules
Under the Congressional Review Act, to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States. A
major rule under the Congressional Review Act cannot take effect until
60 days after it is published in the Federal Register. The Office of
Information and Regulatory Affairs has determined that this rule is not
a major rule as defined by 5 U.S.C. 804.
VII. Regulatory Flexibility Act
A final regulatory flexibility analysis has been prepared
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
and is summarized as follows:
This rule amends the DFARS to implement section 883 of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021 (Pub. L.
116-283). Section 883 prohibits the award of a DoD contract to an
entity that requires its employees to sign internal confidentiality
agreements or statements that would prohibit or otherwise restrict such
employees from lawfully reporting waste, fraud, or abuse related to the
performance of a DoD contract to a designated investigative or law
enforcement representative within DoD authorized to receive such
information.
The objective of the rule is to implement the DoD-specific statute
that removes restrictions on the ability of employees to report waste,
fraud, or abuse to the appropriate DoD authorities.
There were no significant issues raised by the public in response
to the initial regulatory flexibility analysis.
This rule will apply to all small entities that are eligible to
receive DoD contracts; however, the requirements of section 883 are
already met through the Governmentwide implementation of a previously
published prohibition at FAR 3.909 and in the System for Award
Management (SAM) representations and certifications. As a result, the
361,000 unique small entities registered in SAM as of January 12, 2021,
are already compliant with these requirements and will not be required
to take any additional action to comply with the DoD-specific
prohibition in section 883.
The rule does not impose any new reporting, recordkeeping, or
compliance requirements.
There are no practical alternatives that will accomplish the
objectives of the statute.
VIII. Paperwork Reduction Act
This rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget (OMB)
under the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Parts 203 and 212
Government procurement.
Jennifer D. Johnson,
Editor/Publisher, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 203 and 212 are amended as follows:
0
1. The authority citation for parts 203 and 212 continues to read as
follows:
Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.
PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
0
2. Revise section 203.900 to read as follows:
203.900 Scope of subpart.
This subpart implements 10 U.S.C. 2409 and section 883 of the
National Defense Authorization Act for Fiscal Year 2021 (Pub. L. 116-
283).
(a)(i) 10 U.S.C. 2409 provides DoD whistleblower protection
policies and procedures for contractor employees. Use sections 203.901
through 203.906 of this subpart in lieu of FAR sections 3.901 through
3.906 to implement 10 U.S.C. 2409.
(ii) 10 U.S.C. 2409 does not apply to any element of the
intelligence community, as defined in 50 U.S.C. 3003(4). Sections
203.901 through 203.906 do not apply to any disclosure made by an
employee of a contractor or subcontractor of an element of the
intelligence community if such disclosure--
(A) Relates to an activity or an element of the intelligence
community; or
(B) Was discovered during contract or subcontract services provided
to an element of the intelligence community.
(c) Section 883 of the National Defense Authorization Act for
Fiscal Year 2021 (Pub. L. 116-283) prohibits the award of a DoD
contract to contractors that require their employees to sign internal
confidentiality agreements or statements that would prohibit or
otherwise restrict such employees from lawfully reporting
[[Page 65512]]
waste, fraud, or abuse related to the performance of a DoD contract to
a designated investigative or law enforcement representative within DoD
authorized to receive such information.
0
3. Add sections 203.909 and 203.909-3 to read as follows:
203.909 Prohibition on providing funds to an entity that requires
certain internal confidentiality agreements or statements.
203.909-3 Solicitation provision and contract clause.
Use the provision at FAR 52.203-18, Prohibition on Contracting with
Entities That Require Certain Internal Confidentiality Agreements or
Statements--Representation, and the clause at FAR 52.203-19,
Prohibition on Requiring Certain Internal Confidentiality Agreements or
Statements, prescribed at FAR 3.909-3 to implement section 883 of the
National Defense Authorization Act for Fiscal Year 2021.
0
4. Revise section 203.970 to read as follows:
203.970 Contract clause.
Use the clause at 252.203-7002, Requirement to Inform Employees of
Whistleblower Rights, in all solicitations and contracts, including
solicitations and contracts using FAR part 12 procedures for the
acquisition of commercial items.
PART 212--ACQUISITION OF COMMERCIAL ITEMS
0
5. Amend section 212.301--
0
a. In paragraph (f)(i), by redesignating paragraphs (f)(i)(C) and (D)
as paragraphs (f)(i)(D) and (E); and
0
b. By adding a new paragraph (f)(i)(C).
The addition reads as follows:
212.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(f) * * *
(i) * * *
(C) Use the clause at 252.203-7002, Requirement to Inform Employees
of Whistleblower Rights, as prescribed in 203.970, to comply with 10
U.S.C. 2409.
* * * * *
[FR Doc. 2022-23281 Filed 10-27-22; 8:45 am]
BILLING CODE 5001-06-P
