Department of Energy Acquisition Regulation (DEAR), 73644-73749 [2023-16875]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 88, Number 206 (Thursday, October 26, 2023)]
[Proposed Rules]
[Pages 73644-73749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16875]



[[Page 73643]]

Vol. 88

Thursday,

No. 206

October 26, 2023

Part II





Department of Energy





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48 CFR Chapter 9





Department of Energy Acquisition Regulation (DEAR); Proposed Rule

Federal Register / Vol. 88 , No. 206 / Thursday, October 26, 2023 / 
Proposed Rules

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DEPARTMENT OF ENERGY

48 CFR Chapter 9

RIN 1991-AC17


Department of Energy Acquisition Regulation (DEAR)

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking (NOPR) and request for comments.

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SUMMARY: The Department of Energy (DOE) proposes a comprehensive 
revision of its Acquisition Regulation in order to update and 
streamline the policies, procedures, provisions and clauses that are 
applicable to its contracts. This rulemaking proposes to update or 
eliminate coverage that is obsolete or that unnecessarily duplicates 
the Federal Acquisition Regulation (FAR) and retain only that coverage 
which either implements or supplements the FAR for the award and 
administration of the DOE's contracts. The rule proposes the addition 
of several new clauses as well as amendments to several existing 
clauses, which will promote more uniform application of the DOE's 
contract award and administration policies.

DATES: DOE will accept written comments regarding this notice of 
proposed rulemaking no later than December 26, 2023.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at www.regulations.gov. Follow the 
instructions for submitting comments. Alternatively, interested persons 
may submit comments, identified by ``DEAR Rewrite and RIN 1991-AC17'', 
by any of the following methods:
    [ssquf] Email to: [email protected]. Include DEAR Rewrite 
and RIN 1991-AC17 in the subject line of the message.
    [ssquf] Mail to: U.S. Department of Energy, Office of Acquisition 
Management, MA-611, 1000 Independence Avenue SW, Washington, DC 20585. 
However, comments by email are encouraged.

Docket

    The docket, which includes Federal Register notices, comments, and 
other supporting documents/materials, is available for review at 
www.regulations.gov. All documents in the docket are listed in the 
www.regulations.gov index. However, some documents listed in the index, 
such as those containing information that is exempt from public 
disclosure, may not be publicly available.
    The docket web page can be found at the www.regulations.gov web 
page associated with RIN 1991-AC17. The docket web page contains simple 
instructions on how to access all documents, including public comments, 
in the docket. See section III, Public Participation, for information 
on how to submit comments through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Jason Taylor, U.S. Department of 
Energy, Office of Management, Office of Acquisition Management at (202) 
287-1560 or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Section-by-Section Analysis
III. Public Participation
IV. Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
V. Approval of the Office of the Secretary

I. Background

    The FAR (48 CFR chapter 1) is the primary regulation for use by all 
executive agencies in their acquisition of supplies and services with 
appropriated funds. The Office of Federal Procurement Policy Act (OFPP 
Act), 41 U.S.C. 1702, authorizes the issuance of agency-specific 
acquisition regulations that implement or supplement the FAR. Pursuant 
to this authority, DOE and the National Nuclear Security Administration 
(NNSA) promulgated the Department of Energy Acquisition Regulation 
(DEAR), set forth at 48 CFR chapter 9, to provide uniform acquisition 
policies and procedures for DOE and NNSA. This proposed rule to update 
the DEAR is issued under that same authority.
    Over the past decade, DOE has worked to improve the way it conducts 
business with its contractors by strengthening contract management 
policies and practices and implementing new processes throughout the 
Department complex. In the spirit of alleviating unnecessary regulatory 
burdens while remaining prudent stewards of taxpayer resources, DOE 
undertook a review of its acquisition framework, including the DEAR.
    As a result of that process, DOE has determined that the proposed 
amendments are necessary to update or remove obsolete provisions, 
incorporate class deviations, streamline policies and procedures where 
appropriate, and implement ten new clauses which will standardize 
clause language and eliminate the need for various local clauses in 
current use. Through this proposed rule, DOE aims to amend the DEAR to 
correct inconsistencies, remove provisions which unnecessarily 
duplicate coverage contained in the FAR, delete outdated information, 
and renumber DEAR provisions where required, in order to comport with 
the FAR numbering. The proposed rule includes revisions to 48 CFR parts 
901, 902, 903, 904, 908, 909, 912, 915, 916, 917, 919, 922, 923, 925, 
926, 927, 931, 932, 933, 935, 936, 941, 942, 945, 951, 952, and 970.

II. Section-by-Section Analysis

     Section 901.103: Currently this section provides that the 
DEAR is issued and amended by the Senior Procurement Executive (SPE) 
and the National Nuclear Security Administration (NNSA). DOE proposes 
to amend this section to clarify that (1) references throughout the 
DEAR to the SPE refers to both the DOE SPE and the NNSA SPE, unless 
otherwise indicated; (2) the SPEs may approve deviations to the DEAR 
both together and individually; and (3) except for those authorities 
designated as non-delegable, the SPEs are delegated those authorities 
assigned to the Agency Head in the FAR.
     Section 901.301-70: This section states that DOE will 
maintain an Acquisition Guide. DOE proposes to redesignate this section 
as 901.301-70 and remove the paragraph designation to conform to 
standard CFR formatting. DOE proposes to revise the newly redesignated 
section to update the website address to access the Acquisition Guide.
     Subpart 901.4: DOE proposes to add this new subpart to 
address deviations from the DEAR. The new subpart consists of section 
901.401, which provides a definition for what constitutes a deviation 
from the DEAR; and sections 901.403 and 901.404, which provide 
instructions to acquisition personnel for preparing and submitting 
requests for individual deviations and class deviations respectively.

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     Section 901.602-3: DOE proposes to amend this section to 
increase the threshold for the ratification authority delegated to 
heads of contracting activity (HCAs) for unauthorized commitments of 
$250,000 or less. A threshold of $25,000 has been in the DEAR for 
decades and needs to be updated to account for inflation and associated 
increases in the Simplified Acquisition Threshold (SAT), which was the 
original basis for the $25,000 threshold.
     Sections 901.603-1 and 901.603-70: DOE proposes to amend 
these sections to update references to two DOE orders.
     Section 902.101: DOE proposes to amend the definition of 
Senior Procurement Executive to reflect a change in the name of the 
office held by the DOE SPE and the NNSA SPE.
     Section 903.104-7: DOE proposes to amend this section to 
allow reviews to be conducted by the individual one level above the 
contracting officer. The regulations at FAR 3.104-7 provide for higher-
level review and concurrence within DOE by an individual designated in 
accordance with agency procedures. For violations or possible 
violations, the Department decided that this review and concurrence was 
better undertaken by those with procurement authority and not legal 
counsel whose role is better aligned with providing advice to those 
conducting the review and concurrence. Nothing in these changes 
prevents access to counsel by those with procurement authority.
     Section 903.1003: DOE proposes to add this new section in 
order to supplement the FAR subpart 3.10 coverage of Contractor Code of 
Business Ethics and Conduct. The amendatory language articulates the 
need for contractors to identify themselves, particularly when 
communicating on behalf of DOE, to ensure that all parties know the 
status of individuals as contractor personnel.
     Section 903.1004: DOE proposes to amend this section to 
prescribe a new clause at 48 CFR 952.203-1, Identification of 
Contractor Employees, for all solicitations and contracts for services 
over the micro-purchase threshold. This clause requires contractors to 
use standard measures to ensure that contractors and their employees 
properly identify themselves as contractors in all DOE internal and 
external communications so that all parties are aware of their status 
as contractor personnel. The proposed rule also makes minor editorial 
changes to the content of the section for the purpose of improving 
clarity and readability and updates the website address.
     Section 904.401: DOE proposes to amend this section to (1) 
revise the definition of ``access authorization'' by including the 
citation to special nuclear material under the Atomic Energy Act, 
Executive Order 12968, and 10 CFR part 710 for more specificity; (2) 
add a definition of ``Counterintelligence'' previously located in part 
970 but proposed to be relocated here because the term is included in 
revisions to other sections in this part; and (3) amend the definition 
of ``Classified Information'' for clarity to also include ``Classified 
National Security Information'' and ``Transclassified Foreign Nuclear 
Information'', and to update the reference to Executive Order 12958 
with Executive Order 13526 which revoked and replaced Executive Order 
12958.
     Section 904.402: DOE proposes to amend this section to 
reorganize content to conform to the FAR numbering and to add a 
reference to the DOE Organization Act of 1977, as amended and update 
the reference to Executive Order 12958 with Executive Order 13526 which 
revoked and replaced Executive Order 12958. DOE also proposes to 
relocate text about DOE's counterintelligence program from section 
970.0404-2(b). Part 970 primarily concerns management and operating 
(M&O) contracts, but counterintelligence issues are equally applicable 
to M&O and non-M&O contracts. Additionally, revisions are proposed to 
the paragraph on conditional payment of fee in order to align with 
other changes proposed to the conditional payment of fee clauses in 
parts 952 and 970 which are discussed in the appropriate places below. 
Finally, DOE proposes to add a paragraph that points to part 927 for 
policies and procedures for safeguarding classified information in 
patent applications and patents.
     Section 904.404: DOE proposes to amend this section to: 
(1) revise the prescription for the ``Security'' clause at section 
952.204-2 to clarify that it is also required to be included in 
contracts awarded under simplified acquisition procedures, as well as 
National Security Program contracts under which access to proscribed 
information is required; (2) make minor editorial changes and add the 
title to DOE Order 142.3 to the paragraph that discusses the 
``Sensitive Foreign Nation Controls'' clause at section 952.204-71; (3) 
delete the prescription for the clause at section 952.204-76, 
``Conditional Payment of Fee or Profit--Safeguarding Restricted Data 
and Other Classified Information and Protection of Worker Safety and 
Health,'' because that clause, along with the clauses at sections 
952.223-76 and 952.223-77, is proposed for removal with the content of 
those three clauses consolidated into a single new clause at section 
952.242-71, which is prescribed elsewhere; and (4) add a prescription 
for the counterintelligence clause proposed to be located at section 
952.204-74 (and previously at section 970.5204-1) because DOE has 
determined that counterintelligence policy is appropriate for both M&O 
and non-M&O contracts.
     Section 904.7004: DOE proposes to amend this section in 
paragraph (a) to update the name of the office that the Contracting 
Officer must consult in connection with ``Foreign Ownership, Control or 
Influence (FOCI)'' reviews prior to determining that award or continued 
performance of a contract by a contractor will not pose an undue risk 
to the common defense and security. The reference to the DOE Office of 
Safeguards and Security is proposed to be changed to the DOE Office of 
Environment, Health, Safety and Security.
     Section 904.7102: DOE proposes editorial revisions to 
streamline this section, in paragraph (e), by removing the following 
extraneous text: ``that has been developed by the Safeguards and 
Security Lead Responsible Office at the contracting activity.''
     Subpart 904.74: DOE proposes to add this new subpart on 
DOE Directives. The proposed subpart consists of section 904.7400, 
which provides general requirements and information, and section 
904.7401, which prescribes a new DOE Directives clause at 48 CFR 
952.204-78, along with background. Although contractor requirements 
documents (CRDs) have been integrated into non-M&O contracts for a long 
time, adding the general information section, the new clause 
prescription, and the new clause will clarify the process of 
integrating the requirements of DOE Directives into non-M&O contracts 
on a bilateral basis.
     Subpart 908.71: DOE proposes to amend subpart 908.71 in 
order to remove some out-of-date procedures for handling special items. 
Specifically, sections 908.7103, Office machines; 908.7115, Forms; 
908.7116, Electronic data processing tape; and 908.7117, Tabulating 
machine cards, are proposed for removal.
     Section 909.403: DOE proposes to revise this section to 
reflect a change in the name of the offices held by the individuals 
designated as the DOE and NNSA Debarring Official and Suspending 
Official.

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     Section 909.405: DOE proposes to revise this section to 
replace references to the now defunct Excluded Parties List System 
(EPLS) with the new System for Award Management (SAM).
     Section 909.407-3: DOE proposes to amend this section in 
paragraph (e)(1)(vii) to replace a reference to the now defunct EPLS 
with the new SAM.
     Section 909.507-2: DOE proposes to amend this section to: 
(1) revise the clause prescription for section 952.209-72, 
``Organizational Conflicts of Interest,'' and its Alternate I in 
paragraph (a) to limit application of the clause to non-M&O contracts 
since the addition of an M&O specific clause is proposed in part 970; 
and (2) revise paragraph (b) to reference section 970.0906 where the 
prescription for the new M&O specific clause is proposed to be located.
     Section 912.301: DOE proposes to add a new section 912.301 
to clarify those DEAR clauses that are also required to be included in 
solicitations and contracts for the acquisition of commercial items, in 
accordance with 48 CFR 12.301(f).
     Section 915.404-4-70: DOE proposes to revise this section 
to clarify that DOE's structured profit and fee system for non-
management and operating contracts comprises two approaches.
     Section 915.404-4-70-2: DOE proposes to revise this 
section to correct the errors throughout the table in paragraph (d) by 
replacing ``items 4.a. thru 4.e.'' with ``items I.a. thru I.e.''.
     Section 915.404-4-72: DOE proposes to revise paragraph (a) 
of this section to update the reference to fee policy for management 
and operating contracts from ``970.15404-4-8'' to ``970.1504-1-1 
through 970.1504-3.''
     Section 915.408-70: DOE proposes to amend this section to 
simplify the clause prescription for section 952.215-70, ``Key 
Personnel,'' and make minor editorial changes.
     Section 916.307: DOE proposes to revise this section to: 
(1) simplify the prescription for the DEAR ``Allowable Cost and 
Payment'' clause at section 952.216-7 in paragraph (a); and (2) remove 
the prescription for section 952.216-15, ``Predetermined Indirect Cost 
Rates,'' because the FAR clause at 48 CFR 52.216-15 is now considered 
to be adequate.
     Section 916.504: DOE proposes to revise this section to 
redesignate paragraph (c) as paragraph (a)(1) to conform with the FAR 
coverage at 48 CFR 16.504(a)(1) that this language supplements.
     Section 916.505: DOE proposes to revise this section to: 
(1) redesignate paragraph (b)(6) as paragraph (b)(8) to conform with 
the FAR coverage at 48 CFR 16.505(b)(8) that this language supplements 
and update the corresponding FAR citation accordingly; and (2) update 
the office name from ``Office of Procurement and Assistance 
Management'' to ``Office of Acquisition Management''.
     Subpart 917.6: DOE proposes several changes to this 
subpart. Editorial changes are proposed in sections 917.600(b) and 
917.602(b) to remove obsolete references to ``performance-based 
management contracts''. Likewise, section 917.601, which defines 
``performance-based management contract'' and ``performance-based 
contracting'' is also proposed to be removed. Those terms and those 
references to performance-based management contracts are considered to 
be unnecessary since all management and operating contracts employ, to 
the maximum extent practicable, performance-based contracting concepts 
and methodologies. Editorial changes are also proposed in section 
917.602(c) to streamline the content of that paragraph.
     Section 917.7402: DOE proposes to revise paragraphs (b) 
and (c)(4) of this section to update the referenced DOE order from DOE 
Order 430.1B to the current DOE Order 430.1C.
     Subpart 919.70: DOE proposes to amend this subpart to 
streamline the coverage of DOE's Mentor-Protege program. To that end, 
sections 919.7001 and 919.7002 are proposed to be removed as 
unnecessary. Section 919.7002 is unnecessary as these terms are 
adequately defined in the FAR. Section 919.7003 is revised to: (1) add 
a new paragraph (a) with content taken from the removed section 
919.7001; (2) redesignate existing paragraphs (a), (b), and (c) as 
paragraphs (b), (c), and (d), respectively; and (3) make minor 
editorial changes. Sections 919.7004 and 919.7005 are proposed to be 
removed as their contents are purely administrative. DOE intends to 
issue guidance on the process in lieu of regulations. Section 919.7006 
is revised to make minor editorial changes to paragraphs (a) and (b) 
and add a new paragraph (c) to clarify that mentor firms may be 
reimbursed for allowable developmental assistance costs for protege 
firms under the contract costs. Sections 919.7007 through 919.7013 are 
proposed to be removed as their contents are purely administrative. DOE 
intends to issue guidance on the process in lieu of regulations. 
Section 919.7014 is revised to change the prescription for the 
provision at section 952.219-70 to require insertion in all 
solicitations that include the clause at 48 CFR 52.219-9, ``Small 
Business Subcontracting Plan,'' rather than insertion in all 
solicitations with an estimated value in excess of the simplified 
acquisition threshold. DOE considers this change to be appropriate 
since the mentor prot[eacute]g[eacute] program is geared towards 
subcontracting as a development tool.
     Section 922.101-70: DOE proposes to add this new section 
to describe situations where labor policies applicable to M&O contracts 
may also apply to non-M&O contracts. DOE labor policies for M&O 
contracts are located at 48 CFR part 970, subpart 970.22. The policies 
therein are applicable to non-M&O contracts where the contract work had 
been previously performed under a DOE Management and Operating 
contract; and/or the Contractor is required to employ all or part of 
the former Contractor's workforce; or contracts designated by the 
Senior Procurement Executive. The labor policies at 48 CFR part 970, 
subpart 970.22, are reiterated here to highlight their application to 
certain non-M&O contracts.
     Subpart 922.4: DOE proposes to add this new subpart with 
content previously located in section 970.2204-1-1, but better placed 
in part 922 since it is applicable to both non-M&O and M&O contracts. 
The existing content is revised to update references to the Davis-Bacon 
Act with the Construction Wage Rate Requirements Statute (40 U.S.C. 
chapter 31, subchapter IV, Wage Rate Requirements (Construction)) as 
currently referenced in 48 CFR 22.403-1 and to remove information that 
unnecessarily duplicates content already set forth in 48 CFR 22.404 
through 22.404-12.
     Section 923.002: DOE proposes to remove this section. 
Paragraph (a) is removed because it conveys policy from revoked 
Executive Order 13423 and duplicates coverage in the FAR. The 
prescription at paragraph (b) is removed because revoked Executive 
Order 13423 was the basis for that prescription and for the clause at 
section 970.5223-6.
     Section 923.101: DOE proposes to redesignate this section 
as section 923.170 to maintain consistency with FAR numbering and 
revise the content to align with current statutory, regulatory, and 
executive order requirements and to remove an out-of-date hyperlink.
     Section 923.102: DOE proposes to redesignate this section 
as section 923.171 to maintain consistency with FAR numbering.
     Section 923.103: DOE proposes to redesignate this section 
as section 923.172 to maintain consistency with

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FAR numbering and revise the content to: (1) make minor editorial 
changes; (2) remove the reference to Alternate I to section 952.223-78, 
as that alternate is proposed to be removed as unnecessary as a result 
of proposed revision to the base clause; and (3) remove prescriptions 
to FAR clauses that are already prescribed in 48 CFR chapter 1, and are 
not necessary to be prescribed here.
     Section 923.903: DOE proposes to revise this section to 
correctly state the clause number for the FAR Environmental Management 
Systems clause as ``52.223-19'', whereas the current text has ``52.223-
XX''.
     Section 923.7002: DOE proposes to revise this section to: 
while retaining the current policy, state it more clearly and 
succinctly; update references to reflect new locations of clauses; add 
references to clause prescriptions; and update office titles.
     Section 923.7003: DOE proposes to revise this section to: 
(1) in paragraph (a), update the name of the office which the 
Contracting Officer is required to consult with in making a decision to 
include or not include environmental, safety, and health clauses and 
insert a reference to the appropriate coverage for M&O contracts; (2) 
consolidate paragraphs (f) and (g) into one paragraph (f) and revise it 
to state the prescription for the Conditional payment of fee clause 
more clearly and succinctly and update the reference to the clause; and 
(3) redesignate paragraph (h) as paragraph (g).
     Section 925.1001: DOE proposes to revise this section to 
update the name of the ``Office of Procurement and Assistance 
Management'' to ``Office of Acquisition Management'' and the office 
name of the NNSA Deputy Associate Administrator from ``Acquisition and 
Project Management'' to ``Office of Partnership and Acquisition 
Services''.
     Section 926.7001: DOE proposes to revise this section to 
reflect the addition of Qualified HUBZone small business concerns to 
the list of Energy Policy Act 1992 target groups by the Small Business 
Reauthorization Act of 1997 (Pub. L. 105-135).
     Section 926.7004: DOE proposes to revise this section to 
remove the outdated reference to Standard Industrial Classification 
(SIC) 8711 and add in its place a reference to the North American 
Industry Classification System code 541330.
     Section 926.7005: DOE proposes to revise this section to 
reorganize the content to remove the separate paragraph on subcontracts 
as this content is unnecessarily duplicative of the prescriptions for 
solicitation provisions and contract clauses in section 926.7007.
     Section 926.7006: DOE proposes to revise this section to 
reorganize and streamline content to remove obsolete and unnecessary 
reporting requirements.
     Section 926.7007: DOE proposes to revise this section in 
the prescription for the clause at 952.226-72, ``Energy Policy Act 
Subcontracting Goals and Reporting Requirements'' to update the dollar 
threshold from $500,000 ($1M for construction) to $750,000 and ($1.5M 
for construction) to conform to the FAR threshold for requiring a 
subcontracting plan at 48 CFR 19.702.
     Subpart 926.71: DOE proposes to amend this subpart to: (1) 
revise section 926.7101 to update the citation in the first sentence 
from 42 U.S.C. 7474h to 50 U.S.C. 2704(c)(2); (2) revise section 
926.7103 to make the same update to the citation in the first sentence 
of paragraph (a); and (3) revise section 926.7104 to change the clause 
title to add the words ``Workforce Restructuring and'' before '' 
Displaced Employee Hiring Preference'' (in order to distinguish this 
from hiring preferences tied to the Service Contract Act) and revise 
the clause prescription to add a parenthetical that makes clear that 
the clause is for both M&O and non-M&O contracts.
     Sections 927.200 and 927.201-1: The proposed rule removes 
section 927.200 and adds the content of that section to section 
927.201-1 to better conform with FAR numbering and section headings. 
Additionally, the proposed rule broadens the requirement in section 
927.201-1 to consult with Patent Counsel regarding the use of the 
Patent and Copyright Infringement Liability clause, which includes the 
Authorization and Consent clause referenced currently, to fully address 
indemnity in contracts based on the work being performed. but instead 
requires consultation regarding the use of the Patent and Copyright 
Infringement Liability clause in certain situations.
     Sections 927.202, 927.202-5, and 927.206: The proposed 
rule removes section 927.206, ``Refund of Royalties,'' and redesignates 
sections 927.206-1, ``General,'' and 927.206-2, ``Clause for refund of 
royalties,'' as new sections 927.202, ``Royalties,'' and 927.202-5, 
``Solicitation provisions and contract clause,'' respectively. These 
changes are proposed in order to conform to the FAR numbering and 
section headings which this coverage supplements.
     Sections 927.203 and 927.203-1: The proposed rule 
redesignates sections 927.207 and 927.207-1 as new sections 927.203 and 
927.203-1 respectively and revises the section heading for section 
927.203 (formerly section 927.207). These changes are proposed in order 
to correspond with the FAR numbering and section headings which this 
coverage supplements.
     Section 927.302: The proposed rule redesignates section 
927.300 as section 927.302 and revises the section heading to 
correspond with the FAR numbering and section headings which this 
coverage supplements. The proposed rule also makes minor reorganization 
and editorial changes to the content of new section 927.302 for the 
purpose of improving clarity and readability.
     Section 927.302-70: The proposed rule redesignates current 
section 927.302 as section 927.302-70 and revises the section heading 
in order to accommodate the changes to current section 927.300 
described above. In addition, a new paragraph (a) is added to include a 
definition of ``background patent'' similar to the definition found in 
the new Alternate I of section 952.227-13 for the purpose of improving 
clarity of the regulation. Current paragraphs (b) and (c) are replaced 
with a new paragraph (c) to reflect DOE's determination that the 
requirement of licensing background patents should only be permitted in 
certain situations approved by DOE Patent Counsel with concurrence of a 
DOE program official. This policy is implemented in new section 
927.303(d)(5) by moving the paragraph regarding background patents from 
the clause at section 952.227-13 to an Alternate I so that it only 
applies to certain contracts.
     Section 927.303: The proposed rule revises section 927.303 
to correspond with the FAR numbering and to make additions to 
instructions located in 48 CFR 27.303. The proposed rule adds paragraph 
(a)(4) to direct the Contracting Officer to subpart 970.27 for certain 
decontamination and decommissioning activities and the building and/or 
operations of other DOE facilities. Additionally, 48 CFR 27.303(d) 
provides that DOE will insert its specific patent rights clauses 
according to agency procedures. Therefore, section 927.303(d) outlines 
the use of the various patent clauses such as the clause at 48 CFR 
952.227-13 or 37 CFR 401.14 depending on whether the contractor is a 
large or small business or university.
    [cir] DOE proposes in paragraph (d)(2) that contracts with domestic 
small business firms or nonprofit organizations use the clause at 37 
CFR 401.14 instead of the clause at 48 CFR 952.227-11 because DOE has 
not

[[Page 73648]]

modified 48 CFR 48.952.227-11 to keep up with changes in the standard 
patent clause for these entities, while 37 CFR 401.14 is regularly 
updated. However, 37 CFR 401.14 has certain provisions requiring agency 
implementing regulations, which DOE addresses in a prescription for new 
Alternate I.
    [cir] The most significant update is necessary to implement DOE's 
Declaration of Exceptional Circumstance that requires contractors, at 
any tier, to substantially manufacture any subject inventions in the 
United States. Alternate II for domestic small business firms or 
nonprofit organizations adds both the agency implementing regulations 
from Alternate I and the U.S. substantial manufacturing requirements. 
For 952.227-13, an Alternate II is used to implement the U.S. 
manufacturing requirement, as addressed in section 927.303(d)(6).
     Section 927.304: The proposed rule revises section 927.304 
to make minor editorial changes and to replace the reference to the 
clause at section 952.227-11, which is proposed for revision, with the 
clause at 37 CFR 401.14. The clause at section 952.227-11 is not 
regularly updated while the clause at 37 CFR 401.14 does receive 
regular updates.
     Subpart 927.4: The proposed rule revises the heading of 
subpart 927.4 to read ``Rights in Data and Copyrights'' to conform to 
the FAR heading at 48 CFR part 27, subpart 27.4, which this subpart 
supplements.
     Section 927.401: The proposed rule adds section 927.401 to 
provide a definition of ``technical data''. The regulations at 48 CFR 
27.401 define ``data'' to include ``technical data'' and ``computer 
software''. DOE wants to have a clear definition of what technical data 
encompasses since it relates directly to information sent to DOE's 
Office of Scientific and Technical Information.
     Sections 927.402, 927.402-1, and 927.402-2: The proposed 
rule removes sections 927.402 and 927.402-1, and redesignates section 
927.402-2 as section 927.402 to conform to FAR numbering, which these 
sections supplement. The content of section 927.402-1 is added to new 
section 927.406 and revised for clarity. Finally, DOE also proposes to 
revise the introductory language of the newly redesignated section 
927.402 to add a reference to scientific and technical information 
(STI) because this is the term used at the Office of Scientific and 
Technical Information (OSTI) where DOE's publicly available technical 
data is stored.
     Section 927.403: The proposed rule removes section 
927.403, which outlines when DOE Contracting Officers and Patent 
Counsel make determinations as part of the acquisition and use of 
technical data, and adds its content to newly added section 927.406-4 
for organizational purposes.
     Sections 927.404 and 927.404-70: The proposed rule:
    [cir] Redesignates section 927.404-70 as section 927.404-71 for 
organizational purposes and revises the newly redesignated section to 
replace the reference to 48 CFR 927.409(a) with 48 CFR 52.227-14 to 
reflect changes to the prescription at 48 CFR 927.409(a);
    [cir] Redesignates section 927.404 as section 927.404-70 for 
organizational purposes;
    [cir] Revises the newly redesignated section 927.404-70 to update 
the instructions on when to use 48 CFR 52.227-14 as supplemented by 
this subpart, as well as the use of 48 CFR 52.227-16; and
    [cir] Relocates paragraphs (g)(4), (l), and (m) of section 927.404-
70 to portions of new section 927.406-4 and revised section 927.409.
     Sections 927.406 and 927.406-4: FAR 27.406 is for 
Acquisition of data with sections 27.406-1 through 27.406-3. The 
proposed rule adds section 927.406, Acquisition of data, and section 
927.406-4, Acquisition and use of technical data, to conform with the 
numbering and headings of the FAR, which these sections supplement. 
Section 927.406-4(a) and (b) in the proposed rule address several 
statutory changes that have been enacted, such as EPAct 2005 and the 
DOE Energy Research and Innovation Act. EPACT mandates that DOE 
maintain publicly available collection of Scientific Technical 
Information funded by the agency which is achieved by the Office of 
Scientific and Technical Information. DOE Energy Research and 
Innovation Act has a similar mandate for DOE to maintain a public 
database populated with information on unclassified research and 
development projects as well as relevant literature and patents. 
Additionally, the proposed rule relocates content formerly located at 
section 927.402-1(b) to new section 927.406-4(c) for organizational 
purposes and revises the text for clarity and to update references. 
Likewise, the proposed rule relocates content formerly located at 
section 927.403 to new section 927.406-4(d) for organizational 
purposes. And finally, the proposed rule relocates content formerly 
located at section 927.404(g)(4) and (l) to new section 927.406-4(e) 
and (f), respectively, for organizational purposes and revises the text 
for clarity and to update references.
     Section 927.409: The proposed rule revises section 927.409 
by removing the contract clause at paragraph (a)(1), which permitted 
the DOE Patent Counsel to only approve copyright of software. In lieu 
of that clause, new paragraph (a) instructs the contracting officer to 
use the definitions at Alternate I of 52.227-14 and a new Alternate 
VIII of 48 CFR 952.227-14, Rights in Data-General, which allows DOE 
Patent Counsel to approve copyright of all technical data (including 
software) of a subcontractor. In addition, the proposed rule 
reorganizes the section so that paragraph (a)(2) is now a new paragraph 
(b) that outlines special treatment of certain data. Paragraph 
(b)(1)(i) requires Patent Counsel to insert a new Alternate I of 48 CFR 
952.227-17 to change paragraph (c)(1)(ii) of 48 CFR 52.227-17, Rights 
in Data-Special Works, such that DOE Patent Counsel can approve the 
subcontractor to assert copyright in all technical data of 
subcontractor and transfer to the Government or other entity. 
Paragraphs (b)(1)(ii) through (vii) of the proposed section remain the 
same as current paragraphs (a)(2)(ii) through (vii) with some minor 
changes to streamline content and update references. However, Paragraph 
(b)(1)(viii) is added to contain an instruction located in current 
subcontract paragraph (a)(1) regarding the use of Alternate IV of 48 
CFR 52.227-14, Rights in Data-General, to be used with educational 
institutions. The prohibition for use of Alternate IV for any software 
has been changed to allow for copyright assertion when creating open 
source software. Paragraph (b)(1)(ix) describes the use of Alternate 
VI, as provided at 48 CFR 952.227-14, Rights in Data--General. These 
instructions are being relocated from current section 927.404 (l) to 
section 927.409(b)(1)(ix) for organizational purposes and revised 
accordingly to give further guidance on when to require limited 
licensing of Limited Rights Data and Restricted Computer Software of 
the subcontractor. Finally, paragraph (b)(1)(x) contains instructions 
for using Alternate VII as provided at 48 CFR 952.227-14, Rights in 
Data--General, which are currently located at 927.404(m) to limit the 
contractor's use of DOE restricted data. Section 927.409(d) is an 
expansion of the instructions located in current section 927.409(h) and 
48 CFR 27.409(d). Lastly, the current paragraphs (s) and (t) of section 
927.409 are relocated to paragraphs (m) and (n), respectively, to

[[Page 73649]]

conform with the numbering of 48 CFR 27.409.
     Section 931.205-18: DOE proposes to make minor editorial 
revisions to this section in order to improve clarity.
     Section 931.205-47: DOE proposes to revise this section to 
update the citation in the definition of ``Employee whistleblower 
action'' from 42 U.S.C. 7239 to 50 U.S.C. 2702.
     Section 932.970: DOE proposes to revise this section in 
paragraph (b) to clarify that: (1) Contracting Officers can specify 
accelerated payment dates upon making a written determination (on a 
case-by-case basis) that a shorter contract financing payment cycle 
will be beneficial to the Government by reducing the contractor's 
working capital requirements; and (2) Whenever a contract specifies 
payment due dates that are sooner than those required under the 
relevant prompt payment requirements, the contract will permit the 
Contracting Officer to unilaterally authorize additional time for 
review of invoices if needed to perform an adequate review prior to 
payment. These changes are necessary to ensure that accelerated 
payments are only approved when doing so is determined to be beneficial 
to the Government, and adequate time for review of invoices is 
maintained.
     Section 932.971: DOE proposes to add this section 
concerning electronic submission of invoices/vouchers and to prescribe 
a new clause at 48 CFR 952.232-7. These changes are intended to 
establish DOE's strong preference for electronic submission of vendor 
invoices and to provide standardized instructions for such submissions. 
While electronic submission is preferred, other methods of submission 
can be approved after consultation with the Office of the Chief 
Financial Officer.
     Subpart 932.70: DOE proposes to remove this subpart in its 
entirety, as DOE Loan Guarantee Authority is regulated at 10 CFR part 
609.
     Section 933.103: DOE proposes to revise this section to: 
(1) reorganize and renumber the paragraphs to conform to the FAR 
numbering at 48 CFR 33.103 which this section supplements; (2) make 
minor editorial revisions for clarity; and (3) clarify that DOE does 
not accept or adjudicate protests from prospective subcontractors.
     Section 933.104: DOE proposes to revise this section to 
reorganize content to conform to the FAR numbering at 48 CFR 33.104 
which this section supplements, streamline content, and make minor 
editorial revisions for clarity.
     Section 933.106: DOE proposes to revise this section to 
simplify the prescription for the solicitation provision at section 
952.233-2 such that it is required to be inserted whenever the 
provision at 48 CFR 52.233-2 is included. In addition, the proposed 
rule removes the prescriptions for the provisions at sections 952.233-4 
and 952.233-5 because the content of those provisions is being added to 
the provision at section 952.233-2.
     Section 935.010: DOE proposes minor editorial revisions to 
this section to improve clarity, and to add a sentence at the end of 
paragraph (c) that clarifies that STI products identified in DOE Order 
241.1B are reportable to OSTI whether publicly releasable, controlled 
unclassified information or classified.
     Section 935.070: DOE proposes to simplify this section by 
making minor editorial revisions and removing the definition paragraph, 
since research misconduct is already defined in 10 CFR part 733.
     Section 936.202-71: DOE proposes to remove this section 
because its basis (Executive Order 13514) has been revoked.
     Section 941.201-70: DOE proposes to revise this section 
to: (1) revise the section heading to conform to 48 CFR 41.201 which 
this section supplements; (2) revise the text to add a reference to the 
Energy Policy Act of 2005 (25 U.S.C. 3502) and integrate new Office of 
Federal Energy Management Programs (FEMP) policy, given that DOE Order 
430.2B has been rescinded.
     Section 942.705-1: DOE proposes to revise this section to 
remove paragraph (a)(3) as its content is outdated.
     Section 942.705-3, 942.705-4, 942.705-5: DOE proposes to 
remove sections 942.705-3 through 942.705-5 as they only convey 
procedures internal to the agency that do not need to be covered in 
this regulation.
     Subpart 942.71: DOE proposes to add this new subpart to 
provide an explanation of the need for and the use of the new clause 
proposed at section 952.242-71, ``Conditional Payment of Fee, Profit, 
and Other Incentives,'' which is also discussed in sections 904.402, 
923.7002, and 923.7003. The new clause's prescription is also added.
     Section 945.000: DOE proposes to revise this section to 
account for situations where the personal property management policies 
in 41 CFR chapter 109 may also apply to certain non-M&O contracts.
     Section 945.101: DOE proposes to remove this section as 
the definitions are either unnecessary or are already defined in the 
FAR.
     Section 945.102-70: DOE proposes to remove this section as 
the FAR coverage is considered to be adequate.
     Section 945.102-71: DOE proposes to remove this section as 
the FAR coverage is considered to be adequate.
     Section 945.570-1: DOE proposes to revise this section to 
update the reference to the ``Personal Property Policy Division'' with 
the ``Office of Asset Management.''
     Sections 945.602, 945.602-3, and 945.602-70: DOE proposes 
to remove these sections as their content is adequately addressed in 41 
CFR chapters 102 and 109.
     Section 945.603: DOE proposes to remove this section as 
its content is adequately addressed in 41 CFR chapters 102 and 109.
     Section 945.670-1: DOE proposes to revise this section to 
update the currently incorrect reference (48 CFR 45.606-3) to 48 CFR 
2.101.
     Section 945.670-3: DOE proposes to remove this section 
because the content is adequately addressed in 41 CFR chapter 109.
     Section 945.671: DOE proposes to revise this section to 
add a reference to ``41 CFR chapter 109'' in place of an outdated 
reference to ``41 CFR 109-45.50 and 45.51 or its successor''.
     Section 951.102: DOE proposes to revise this section, in 
paragraph (c)(1), to remove the obsolete reference to the Federal 
Standard Requisitioning and Issue Procedures (FEDSTRIP) and update the 
reference to the ``Office of Resource Management within the 
Headquarters procurement organization'' to the ``Systems Division 
within the Office of Acquisition Management.''
     Section 952.203-1: DOE proposes to add this clause 
``Identification of Contractor Employees'' to require contractors to 
use standard measures to ensure that contractors and their employees 
properly identify themselves as contractors in all DOE internal and 
external communications so that all parties are aware of their status 
as contractor personnel.
     Section 952.204-2: DOE proposes several amendments to the 
``Security Requirements'' clause. Specifically, DOE proposes to: (1) 
consolidate definitions previously located in separate paragraphs (c) 
through (g) into a single paragraph (a), and add definitions of 
``contracting officer'', ``contract'', ``contractor'', ``cyber system'' 
and ``special access program''; (2) make minor editorial revisions and 
update references throughout; and (3) add a reference in the last 
paragraph to clarify that facility clearance may be granted prior to 
award or after award of

[[Page 73650]]

a subcontract in accordance with the clause at 48 CFR 952.204-73, 
``Facility Clearance''.
     Section 952.204-70: DOE proposes to revise the 
``Classification/Declassification'' clause by reorganizing its content, 
with definitions being brought together into a separate paragraph (a). 
Additionally, minor editorials changes were made to improve clarity.
     Section 952.204-73: DOE proposes to amend the ``Facility 
Clearance'' clause to make minor editorial revisions throughout and, in 
paragraph (d), to include both a pre-award facility clearance process 
and an alternative post-award process. The current 48 CFR 952.204-73 
requires a full Facility Clearance prior to the award of a contract 
requiring access to classified information, and prior to granting any 
Interim Access Authorizations to key management personnel. DOE proposes 
to revise the section to provide a process that permits contract award 
prior to granting a full Facility Clearance, and to permit contract 
award prior to granting Interim Access Authorizations to key management 
personnel. This alternate post-award process will enhance efficiencies 
in awarding contracts while ensuring security requirements are met.
     Section 952.204-74: DOE proposes to move the 
``Counterintelligence'' clause from section 970.5204-1 to this new 
section, as it is pertinent to both M&O and non-M&O contracts. Minor 
editorial revisions are also proposed.
     Section 952.204-76: DOE proposes to remove this clause, 
``Conditional Payment of Fee or Profit--Safeguarding Restricted Data 
and Other Classified Information,'' to reflect that section 952.242-71, 
Conditional Payment of Fee, Profit or Incentives, a new clause, is 
proposed to be added. The new clause replaces three existing clauses 
(952.204-76, Conditional Payment of Fee or Profit--Safeguarding 
Restricted Data and Other Classified Information, 952.223-76, 
Conditional Payment of Fee or Profit--Safeguarding Restricted Data and 
Other Classified Information and Protection of Worker Safety and 
Health, and 952.223-77, Conditional Payment of Fee or Profit--
Protection of Worker Safety and Health).
     Section 952.204-77: DOE proposes to revise this section, 
in the introductory text, to update the citation for the clause 
prescription and make minor editorial changes.
     Section 952.204-78: DOE proposes to add this new clause, 
``DOE Directives'' in order to clarify the policy and procedures for 
integrating directives into non-M&O contracts.
     Section 952.215-70: DOE proposes to revise the ``Key 
Personnel'' clause to make minor editorial changes to improve clarity.
     Section 952.216-15: DOE proposes to remove the 
``Predetermined Indirect Cost Rates'' clause as the corresponding FAR 
clause at 48 CFR 52.216-15 is considered to be adequate.
     Section 952.219-70: DOE proposes to revise the ``DOE 
Mentor-Prot[eacute]g[eacute] Program'' clause to reflect the fact that 
the program has been broadened to include all small business concerns, 
remove unnecessary procedural content and make minor editorial 
revisions for clarity.
     Section 952.223-71: DOE proposes to revise this section to 
add a non-M&O version of the ``Integration of Environment, Safety, and 
Health into Work Planning and Execution'' clause on the basis that the 
requirement is applicable to both non-M&Os and M&Os. The section 
language previously redirected the reader to a clause for M&O 
contracts.
     Section 952.223-75: DOE proposes to revise this section in 
the introductory text to update the location of the clause prescription 
from section 923.7003(h) to section 923.7003(g).
     Sections 952.223-76 and 952.223-77: DOE proposes to remove 
the ``Conditional Payment of Fee or Profit--Safeguarding Restricted 
Data and Other Classified Information and Protection of Worker Safety 
and Health'' clause and the ``Conditional Payment of Fee or Profit--
Protection of Worker Safety and Health'' clause to reflect that 
952.242-71, Conditional Payment of Fee, Profit or Incentives, a new 
clause, is added. The new clause replaces three existing clauses 
(952.204-76, Conditional Payment of Fee or Profit--Safeguarding 
Restricted Data and Other Classified Information, 952.223-76, 
Conditional Payment of Fee or Profit--Safeguarding Restricted Data and 
Other Classified Information and Protection of Worker Safety and 
Health, and 952.223-77, Conditional Payment of Fee or Profit--
Protection of Worker Safety and Health).
     Section 952.223-78: DOE proposes to revise the 
``Sustainable Acquisition Program'' clause to streamline requirements, 
to obviate the need for Alternate I to the clause, and to eliminate 
outdated references and areas of redundancy with FAR coverage.
     Section 952.226-70: DOE proposes to revise the 
``Subcontracting Goals Under Section 3021(a) of the Energy Policy Act 
of 1992'' clause to reflect the addition of a fourth target group by 
the Small Business Reauthorization Act of 1997 (Pub. L. 105-135) and to 
make minor editorial revisions.
     Section 952.226-71: DOE proposes to revise this clause by 
updating the citation for the clause prescription in the introductory 
text and replacing ``Energy Policy Act'' where it appears in the clause 
title and text with ``Energy Policy Act 1992'' or ``EPAct 1992'' in 
order to more clearly identify the source of these requirements. 
Additionally, minor editorial changes are proposed for paragraph (a) of 
the clause for streamlining purposes.
     Section 952.226-72: DOE proposes to amend the ``Energy 
Policy Act of 1992 Subcontracting Goals and Reporting Requirements'' 
clause to reflect the addition of a fourth target group by the Small 
Business Reauthorization Act of 1997 (Pub. L. 105-135) as well as to 
replace references to the outdated Standard Form (SF) 294 and SF 295 
with references to the Individual Subcontract Report and or Summary 
Subcontract Report in the Electronic Subcontracting Reporting System 
(ESRS).
     Section 952.226-73: DOE proposes to amend this section to 
revise the section heading and clause title and to reflect the addition 
of a fourth target group by the Small Business Reauthorization Act of 
1997 (Pub. L. 105-135).
     Section 952.226-74: DOE proposes to amend this section to 
revise the section heading and clause title by adding the words 
``Workforce Restructuring and'' before ``Displaced Hiring Preference.'' 
This proposed revision is intended to clearly tie this clause to 
workforce restructuring and distinguish it from other hiring 
preferences related to the Service Contract Act.
     Section 952.227-9: DOE proposes to revise the ``Refund of 
Royalties'' clause to require contractors with contracts greater than 
five years in duration to furnish a statement of royalties paid or 
required to be paid in connection with performing the contract every 
five years, and to make minor editorial revisions.
     Section 952.227-11: Since 37 CFR 401.14, Standard Patent 
Rights, is updated regularly, DOE has decided to use that clause in 
preference to 48 CFR 52.227-11. However, 37 CFR 401.14 has sections 
requiring agency implementing regulations. Therefore, DOE proposes to 
revise section 952.227-11 to replace the full clause text with two 
alternates. Alternate I is used to supplement the standard patent 
rights clause to include DOE's implementing regulations. For example, 
paragraph (g)(2) requires the Contracting Officer to direct whether to 
include this clause in certain subcontracts. Also, paragraph (l) 
requires reports to be uploaded into

[[Page 73651]]

iEdison invention management system. DOE has recently issued a 
Declaration of Exceptional Circumstance (DEC) to require substantial US 
manufacture of subject inventions funded by many DOE programs. 
Alternate II addresses the modifications and additions to 37 CFR 401.14 
to implement this DEC by adding paragraphs (m) and (n).
     Section 952.227-13: DOE proposes to amend the ``Patent 
Rights--Acquisition by the Government'' clause to update references and 
account for statutory changes. Paragraph (k) has been moved to a new 
alternate I to provide for a right to require licensing of third 
parties to background inventions only when deemed necessary. Also, a 
new Alternate II has been added to implement the U.S. Competitiveness 
requirement for DOE funding programs that require it.
     Section 952.227-14: DOE proposes to amend the ``Rights in 
Data--General'' clause to add a new Alternate VIII which addresses the 
approval by DOE Patent Counsel of all types of data by subcontractors 
of the M&O Contractor. Minor editorial revisions and revisions to 
update references are also proposed.
     Section 952.227-17: DOE proposes to add a new ``Rights in 
Data--Special Works'' clause which supplements the FAR clause at 48 CFR 
52.227-17 to permit Patent Counsel to direct the subcontractor to 
assert copyright and transfer to the Government or M&O Contractor.
     Section 952.227-82: DOE proposes to remove the ``Rights to 
proposal data'' clause on the basis that the corresponding FAR clause 
at 48 CFR 52.227-23 is considered to be adequate.
     Section 952.227-84: DOE proposes to amend this section to 
revise the introductory text to correctly specify the location of the 
clause prescription and to revise the clause text in the third sentence 
to replace the reference to ``DEAR 952.227-11'' which is proposed for 
removal, with ``37 CFR 401.14.''
     Section 952.231-71: DOE proposes to revise the 
``Insurance--Litigation and Claims'' clause, in paragraph (f)(2) to 
explicitly identify the property clause at 48 CFR 970.5245-1 that 
defines ``contractor's managerial personnel.''
     Section 952.232-7: As detailed in the description to 
section 932.971, DOE proposes to add this ``Electronic Submission of 
Invoices/Vouchers'' clause to ensure clarity on electronic invoicing 
and payment procedures.
     Sections 952.233-2, 952.233-4, and 952.233-5: DOE proposes 
to revise the ``Service of Protest'' clause to add the provisions 
previously located at sections 952.233-4 and 952.233-5, since all three 
provisions had the same prescription and interrelated subject matter. 
Sections 952.233-4 and 952.233-5 are proposed for removal.
     Section 952.242-71: DOE proposes to add this new 
``Conditional Payment of Fee, Profit or Incentives'' clause to replace 
three existing clauses (section 952.204-76, Conditional Payment of Fee 
or Profit--Safeguarding Restricted Data and Other Classified 
Information, section 952.223-76, Conditional Payment of Fee or Profit--
Safeguarding Restricted Data and Other Classified Information and 
Protection of Worker Safety and Health, and section 952.223-77, 
Conditional Payment of Fee or Profit--Protection of Worker Safety and 
Health). Like the previous clauses, the new clause provides for a 
reduction in payment to a contractor if the contractor fails to meet a 
performance requirement relating to environment, safety and health or 
security or safeguarding of restricted data and other classified 
information. However, the new clause also allows for a reduction in 
payment if the contractor fails to meet a performance requirement 
related to business and financial systems. This addition was included 
because DOE believes adding emphasis to the importance of strong 
business and financial systems to its fee policy will enhance the 
effectiveness of its contract administration and its mission 
accomplishment. The new clause also includes updated references and 
reflects revisions made for clarity.
     Section 952.245-2: DOE proposes to revise this section to 
update the clause prescription to conform with the current FAR.
     Section 952.245-5: DOE proposes to revise this section to 
update the clause prescription to conform with the current FAR.
     Section 952.250-70: DOE proposes to revise the ``Nuclear 
Hazards Indemnity Agreement'' clause to correctly reflect the current 
underlying statute and to eliminate ``effective date'' considerations 
not germane to contracts awarded in 2020 and beyond. DOE proposes to 
update 48 CFR 952.250-70 to delete Note 1 in accordance with 2005 
Public Law 109-58, sec. 610(b), which amended Atomic Energy Act (AEA) 
section 234A(d) to eliminate the exclusion from civil penalties for 
certain identified non-profit institutions. Prior to amendment, AEA 
section 234A(d) provided that the provisions of AEA section 234A on 
imposition of civil penalties would not apply to the University of 
Chicago for activities associated with Argonne National Laboratory; the 
University of California for activities associated with Los Alamos 
National Laboratory, Lawrence Livermore National Laboratory, and 
Lawrence Berkeley National Laboratory; American Telephone and Telegraph 
Company and its subsidiaries for activities associated with Sandia 
National Laboratories; Universities Research Association, Inc. for 
activities associated with FERMI National Laboratory; Princeton 
University for activities associated with Princeton Plasma Physics 
Laboratory; the Associated Universities, Inc. for activities associated 
with the Brookhaven National Laboratory; and Battelle Memorial 
Institute for activities associated with Pacific Northwest Laboratory
     Section 970.0100: Section 970.0100 indicates that part 970 
of the DEAR provides DOE policies, procedures, provisions, and clauses 
that implement and supplement the FAR and other parts of the DEAR for 
the award and administration of M&O contracts. DOE proposes to revise 
this section to clarify that part 970 does not apply to non-M&O 
contracts, except as approved by the cognizant SPE, or as otherwise 
prescribed in the DEAR.
     Section 970.0371-8: Section 970.0371-8 requires that 
certain information be included in a written disclosure statement made 
by an employee of an M&O contractor. In the proposed rule, DOE would 
require each disclosure statement to include an acknowledgement that 
the employee has read and is familiar with DOE Order 486.1, Department 
of Energy Foreign Government Sponsored or Affiliated Activities. 
Additionally, section 970.0371-8 already requires that each disclosure 
statement include an acknowledgement that the employee has read and is 
familiar with the DOE publication entitled ``Reporting Results of 
Scientific and Technical Work Funded by DOE''. In the proposed rule, 
DOE would update the title of that publication to reflect the 
publication's current title.
     Section 970.0371-9: Section 970.0371-9 requires a 
contracting officer to insert the clause at section 970.5203-3, 
Contractor's Organization, in all M&O contracts and provides that in 
paragraph (a) of that clause, the words ``and managerial personnel (see 
970.5245-1(j))'' may be inserted after ``(see 952.215-70)''. In the 
proposed rule, DOE would update the cross reference from ``970.5245-
1(j)'' to ``970.5245-1(k)'' to reflect the new location of that 
paragraph under the proposed rule.
     Section 970.0404-1: Section 970.0404-1 provides 
definitions of several terms. The proposed rule would remove that 
section because the

[[Page 73652]]

definitions of those terms are provided in section 904.401 and 
duplication in this subpart is unnecessary.
     Section 970.0404-2
    [cir] Paragraph (a) of section 970.0404-2 points to several places 
where the reader may find information about the National Industrial 
Security Program, information concerning contractor ownership when 
national security or atomic energy information is involved, and 
information regarding contractor ownership involving national security 
program contracts. Paragraph (b) of section 970.0404-2 provides that 
all DOE elements should undertake the necessary precautions to ensure 
that DOE and covered contractor personnel, programs and resources are 
properly protected from foreign intelligence threats and activities. 
The regulations in 48 CFR part 904 contain DOE policies, definitions, 
provisions, and clauses associated with the safeguarding and security 
of classified information. In order to avoid unnecessary duplication, 
the proposed rule replaces the content of paragraphs (a) and (b) with a 
new paragraph (a) that points the reader to that part.
    [cir] Paragraph (c) of section 970.0404-2 provides that for DOE M&O 
contracts and other contracts designated by the Senior Procurement 
Executive, or designee, the clause entitled ``Conditional Payment of 
Fee, Profit, and Other Incentives--Facility Management Contracts'' 
implements the requirements of section 234B of the Atomic Energy Act 
regarding the use of a contract clause that provides for an appropriate 
reduction in the fee or amount paid to the contractor in the event of a 
violation by the contractor or any contractor employee of any rule, 
regulation, or order relating to the safeguarding or security of 
restricted data or other classified information. The proposed rule 
makes minor editorial revisions to this text for streamlining purposes 
and redesignates the content as paragraph (b) of section 970.0404-2.
     Section 970.0404-4: Paragraph (a) of section 970.0404-4 
requires a contracting officer to include the clause located at 48 CFR 
5204-1 in certain contracts. Paragraph (b) of section 970.0404-4 points 
the contracting officer to sections 904.404 and 904.7103 for the 
prescription of solicitation provisions and contract clauses relating 
to safeguarding classified information and foreign ownership, control, 
or influence over contractors. The proposed rule would remove section 
970.0404-4 because (1) the proposed rule relocates the requirement in 
paragraph (a) of that section to paragraph (d)(7) of section 904.404 
and (2) the references to sections 904.404 and 904.7103 are unnecessary 
and duplicative of those sections.
     Section 970.0407-1-3: DOE proposes to amend this section 
to revise the prescription for the ``Access to and Ownership of 
Records'' clause to reflect the addition of a non-M&O version of the 
``Integration of Environment, Safety, and Health into Work Planning and 
Execution'' clause and to make minor editorial changes.
     Section 970.0801-2: DOE proposes to revise this section to 
replace the reference to the Federal Property Management Regulation at 
41 CFR part 101-43 with a reference to the Federal Management 
Regulation at 41 CFR chapter 102. This change is necessary because the 
General Services Administration (GSA) is phasing out the Federal 
Property Management Regulation and transitioning its sections to the 
Federal Management Regulation.
     Subpart 970.09: The proposed rule would amend this subpart 
to articulate a uniform policy on conflicts of interest for M&O 
contractors and prescribe a new M&O specific clause at section 
970.5209-70. Specifically, section 970.0905 would be revised to 
streamline content to more concisely articulate policy, and to reflect 
the addition of an M&O specific contract clause rather than the clause 
at section 952.209-72. Additionally, section 970.0906 would be added to 
prescribe the new M&O specific clause at section 970.5209-70.
     Section 970.1100-1: DOE proposes to amend this section to 
more concisely state DOE policy. Accordingly, paragraphs (a) and (b) 
are streamlined and combined into paragraph (a). Paragraph (c) is 
redesignated as new paragraph (b). Paragraph (d) is removed, as its 
content is limited to internal procedures and does not need to be 
included in the regulation.
     Section 970.1100-2: DOE proposes to remove this section as 
its content is limited to internal procedures and does not need to be 
included in the regulation.
     Subpart 970.15: DOE's guidance (both current and proposed) 
in subpart 970.15 covers DOE's fee policy for its Management and 
Operating contracts. DOE proposes to amend its current guidance found 
in sections 970.1504-1-1 through 970.1504-5 by revising and 
reorganizing it (into sections 970.1504-1 through 970.1504-3) to 
simplify and state explicitly its construct, sequence for calculating, 
and step-by-step process for determining the total available fee for an 
M&O contract. DOE's proposed amendments reflect its Contracting 
Officers' several decades of experience with the current articulation 
of the policy. They have found the policy satisfactory, have 
demonstrated a comprehensive understanding of its details, and have 
reflected their understanding in implementing the policy. Nonetheless, 
DOE's Contracting Officers have indicated it would be efficacious, for 
many reasons (training new procurement analysts, communicating with 
other offices, such as program, reviewing, and legal offices, etc.) if 
DOE's policy:
    [cir] were reorganized and restated in a more straightforward, more 
``plain English'' format;
    [cir] was pruned of what has become unnecessary guidance for a 
number of reasons (for example, guidance covered adequately in the FAR, 
or DOE's internal guidance, such as DOE Acquisition Guide chapters),
    [cir] reflected Contracting Offers' current practices in executing 
the policy;
    [cir] included a detailed example of a fee calculation; and
    [cir] conformed more tightly to the FAR's articulation of fee 
policy, fee constructs, fee definitions, and fee terms, to the extent 
appropriate.
    The proposed amendments provide a clearer articulation of the 
policy. DOE has: (1) deleted or revised entire sections and large 
portions of sections of the policy, sometimes without replacement, 
sometimes replacing the deleted or revised language with much more 
concise language; (2) reorganized the policy; and (3) added a detailed 
example. Often when replacing deleted or revised language with more 
concise language, different aspects of the topic addressed by the 
deleted or revised language appear more cogently stated in several 
sections of the proposed policy (sometimes more than once in several 
sections).
    In its proposed amending of its guidance, DOE retained the current 
fee policy for M&O contracts and clarified it. There are no changes of 
any significance to the current fee policy, with two exceptions. The 
two exceptions that DOE proposes are: eliminating the special 
considerations for determining fee for laboratory M&O contracts (which 
now appears in the current policy at section 970.1504-1-3); and raising 
the Classification Factor of for research and development at a 
laboratory (which now appears in the current policy at section 
970.1504-1-9(e)(4)) from 1.25 to 1.5.
    It is worth noting that one proposed minor change to the current 
fee policy is the proposed suggested order of the steps in determining 
the maximum total available fee for a one-year period and the proposed 
use of the ``significant factors'' (in one of the steps) in

[[Page 73653]]

calculating the maximum total available fee amount for a one-year 
period. The proposed revisions--which reflect the current practice and 
DOE Contracting Officers' desire to formalize it--establish that 
suggested order and use. The proposed suggested order and use and the 
current suggested order and use both consider the fee base, fee 
schedules, classification factors, and significant factors, and both 
orders and uses produce the same result. The proposed suggested order 
and use require (for each type of effort) calculating an appropriate 
percentage derived from considering the significant factors (and 
applying it to the product of the maximum fixed fee and the 
classification factor). The current fee policy's suggested order and 
use--implied at sections 970.1504-1-5(c) and 970.1504-1-9(c)--require 
(for each type of effort) determining an appropriate fixed fee amount 
for each of the significant factors, summing those appropriate fixed 
fee amounts, and multiplying that sum by the classification factor.
    The proposed suggested order and process comprise considering the: 
magnitude of the effort (reflected by the total fee base for the year); 
type of effort (reflected by the allocation of the total fee base to 
the three fee schedules); nature, difficulty, complexity, and 
importance of the work (reflected by the choice of classification 
factors); and specific circumstances of the procurement (reflected by 
the appropriate percentages derived from considering significant 
factors). This order entails using (for each type of effort) the 
maximum amount of fixed fee from the fee schedule, multiplying it by 
the classification factor, and multiplying by the appropriate 
percentage (derived from considering the significant factors).
    The current fee policy's suggested order and process comprise 
considering the: magnitude of the effort (reflected by the total fee 
base for the year); type of effort (reflected by the allocation of the 
total fee base to the three fee schedules); specific circumstances of 
the procurement (reflected by the determining an appropriate fee 
amounts for each of the significant factors and summing those amounts); 
and nature, difficulty, complexity, and importance of the work 
(reflected by the choice of classification factors). This order entails 
using (for each type of effort) the fixed fee that would have been 
calculated for a cost-plus-fixed-fee contract action (using the fee 
schedules and considering the significant factors) and multiplying that 
fixed fee by the classification factor.
    A second proposed minor change to the current fee policy is 
deleting cost reduction incentives, which are discussed in the current 
policy at 970.1504-1-4(f), 970.1504-5(c), and 970.5215-4. DOE no longer 
uses cost reduction incentives, using instead value engineering, which 
is covered in the DOE Acquisition Guide and the FAR.
    Finally, a third proposed minor change to the current fee policy is 
adding (regarding conditional payment of fee, profit, and other 
incentives) contract performance requirements relating to business and 
financial systems to the performance requirements M&O contractors are 
subject to. Current fee policy (970.1504-1-2(i)) includes only 
performance requirements relating to: environment, safety, and health; 
and safeguarding of Restricted Data and other classified information.
    A detailed breakdown of the changes to subpart 970.15 is provided 
below.
     Section 970.1504-1-1: DOE proposes to amend this section 
for clarity.
     Section 970.1504-1-2: DOE proposes to amend this section 
to reorganize and clarify the agency's fee policy for M&O contracts. 
Additionally, in some cases, DOE proposes to revise and move its 
coverage from other sections to this section. In other cases, DOE 
proposes to revise its coverage in this section and move it to other 
sections. In its proposed amendments to this section, among other 
things, the current numbering of 970.1504-1-2(a) through (h) is 
proposed to become 970.1504-1-2(a) through (b).
    [cir] Paragraph (a)(1): DOE proposes adding this paragraph to 
clarify its policy on fee for M&O contracts. DOE's policy on types of 
contracts and fee arrangements suitable to M&O contracts that was 
originally located at 48 CFR 970.1504-1-4(a)(1) and 970.1504-1-2(h) is 
revised for clarity and moved to this paragraph.
    [cir] Paragraph (a)(2): DOE proposes to add this paragraph to 
reorganize and clarify DOE M&O contract fee policy to: (1) move the 
policy requiring that a cost-plus-fixed-fee contract only be used if 
approved in advance by the Senior Procurement Executive (SPE) or 
designee from current 48 CFR 970.1504-1-4(b) to this paragraph; and (2) 
add a mention of the limitation on the fee for a cost-plus-fixed-fee 
contract found at 48 CFR 15.404-4(c)(4)(i), which makes unnecessary the 
last sentence of current 970.1504-1-2(d), which is deleted.
    [cir] Paragraph (a)(3): DOE proposes to add this paragraph to 
reorganize and clarify DOE policy on the approval of base fee in a 
cost-plus-award-fee M&O contract. DOE proposes revising and moving the 
policy requiring that a base fee amount may only be used if approved in 
advance by the SPE or designee from 48 CFR 970.1504-1-4(c)(3) to this 
paragraph.
    [cir] Paragraph (a)(4): DOE proposes to add this paragraph to 
reorganize and clarify DOE policy that incentive fees allocated to 
evaluation periods under cost-reimbursement type contracts should, to 
the greatest extent appropriate, be tied to a specific portion of the 
maximum total available fee. DOE proposes to revise and move the policy 
described herein from 48 CFR 970.1504-1-2(b) to this paragraph.
    [cir] Paragraph (a)(5): DOE proposes to add this paragraph to 
reorganize and clarify DOE policy that: (1) the maximum total available 
fee amount may not exceed the fee derived from this section unless 
approved in advance by the SPE or designee; and (2) a request to allow 
a higher fee must be in writing and must clearly explain why the 
situation merits consideration. DOE proposes to revise and move the 
policy described herein from, in part, both 48 CFR 970.1504-1-2(d) and 
970.1504-1-10 to this paragraph.
    [cir] Paragraph (a)(5)(i): DOE proposes to add this paragraph to 
reorganize and clarify DOE policy that typically, only a situation 
where either unusually difficult objective performance incentives would 
be used or where successful performance would provide extraordinary 
value would merit consideration for allowing a higher fee. DOE proposes 
to revise and move the policy described herein from 48 CFR 970.1504-1-
10 to this paragraph.
    [cir] Paragraph (a)(5)(ii): DOE proposes to add this paragraph to 
reorganize and clarify DOE policy that when a contract requires a 
contractor to use its own facilities, equipment, or other resources for 
contract performance (e.g., when there is no letter-of-credit 
financing), consideration may be given, subject to approval by the SPE 
or designee, to allowing a maximum total available fee amount above the 
amount calculated by this section. DOE proposes to revise and move the 
policy described herein from 48 CFR 970.1504-1-2(g) to this paragraph.
    [cir] Paragraph (a)(6): DOE proposes to add this paragraph to 
reorganize and clarify DOE policy that each M&O contract must set forth 
in the contract (or in a Performance Evaluation and Measurement Plan 
(PEMP) or similar document) the methods that will be used to rate the 
contractor's performance and to determine the fee the contractor's 
performance will earn. The DOE Contracting Officer must ensure all 
important areas of contract

[[Page 73654]]

performance are specified in the contract or in a PEMP (or similar 
document), even if such areas are not assigned a specific portion of 
the maximum total available fee the contractor might earn. DOE proposes 
to revise and move the policy described herein from 48 CFR 970.1504-1-
9(h) and (j), in part, to this paragraph.
    [cir] Paragraph (a)(6)(i): DOE proposes to add this paragraph to 
reorganize and clarify that an M&O contract is an ``incentive 
contract'' as that term is used in 48 CFR part 16, subpart 16.4, and 
that subpart 16.4 prohibits the use in a contract of other than cost 
incentives without also providing a cost incentive (or constraint). DOE 
proposes to add this paragraph to better align with the cost-plus-
award-fee contract policy in subpart 16.4, particularly 48 CFR 
16.401(e).
    [cir] Paragraph (a)(6)(ii): DOE proposes to add this paragraph to 
clarify: (1) award fee not earned during the award fee cycle shall not 
be carried over to any future award fee cycle; (2) when the award fee 
cycle consists of one evaluation period, unearned award fee amounts may 
not be carried over from one evaluation period to the next; and (3) 
when the award fee cycle consists of two or more evaluation periods the 
Contracting Officer may make the decision that unearned award fee 
amounts may be carried over from one evaluation period to the next, if 
the periods are within the same award fee cycle. DOE proposes to add 
this paragraph to better align its cost-plus-award-fee contract policy 
with the cost-plus-award-fee contract policy in 48 CFR 16.401(e)(4).
    [cir] Paragraphs (b)(1) and (2): DOE proposes to reorganize, 
revise, and move the policy at 970.1504-1-2(f) to this section to 
clarify: (1) that before issuing a competitive solicitation, the Head 
of the Contracting Activity (HCA) must coordinate the maximum total 
available fee amount with the SPE or designee; (2) a competitive 
solicitation must identify the greatest maximum total available fee 
amount the Government will accept and may invite offerors to propose a 
lower fee amount; and (3) before beginning to negotiate an extension to 
an existing contract, the HCA must coordinate the greatest maximum 
total available fee amount the HCA will accept and the maximum total 
available fee amount targeted for negotiation with the SPE or designee.
     Section 970.1504-1-3: First, DOE proposes to delete the 
policy describing special considerations for determining fee for 
laboratory M&O contracts in current 970.1504-1-3(a) through (c)(7). 
That policy required determining whether any fee is appropriate for 
laboratory M&O contracts; DOE's new policy is that a fee is 
appropriate. DOE believes, based upon its experience with the current 
policy, the new policy will encourage a larger potential group of 
entities to compete for DOE's laboratory M&O contracts, which will 
result in better outcomes for DOE. (This deletion of the laboratory M&O 
contracts fee policy is one of the two proposed changes of any 
significance to the current M&O contracts fee policy mention earlier, 
the other being the Classification Factor for research and development 
at a laboratory was increased.)
    Second, a better articulation of DOE's general policy for fee 
determination for M&O contracts is now proposed to be found at 
970.1504-1-3(a) through (f). DOE's general policy for fee determination 
has been and remains that: all M&O contracts are ``incentive fee'' 
contracts as described in 48 CFR part 16, subpart 16.4; and DOE will 
evaluate (per a contract's performance measures) the contractor's 
performance to determine the fee the contractor's performance has 
earned it. This is a long-standing policy, which, in essence, is strewn 
across several sections of the current fee policy, not necessary in 
ideal sequential order, or covered by the Federal Acquisition 
Regulation and not reiterated in the DEAR. Stated in more detail, the 
long-standing construct of fee policy for M&O contracts has been and is 
proposed to remain:
    Objective performance measures are preferred to subjective ones and 
tying specific fee to specific outcomes should be accomplished whenever 
feasible. Consequently, fixed-price actions would be ideal (albeit the 
unlikelihood of their being feasible in M&O contracts) and cost-plus-
fixed-fee actions (such as base fee in a cost-plus-award-fee action) 
are to be avoided whenever practical (and their use requires high level 
approval). The formula to determine the maximum total available fee is 
based on annual fee determinations using fees bases, fee schedules, 
classification factors, and appropriate percentages. More specifically, 
the maximum total available fee amount for an M&O contract is the sum 
of the maximum total available fee amounts of the contract's one-year 
periods. The maximum total available fee amount in a one-year period is 
based on the fee base of the one-year period. Calculating the maximum 
total available fee amount for a one-year period requires considering 
the: magnitude of the effort (reflected by the total fee base for the 
year); type of effort (reflected by the allocation of the total fee 
base to the three fee schedules); nature, difficulty, complexity, and 
importance of the work (reflected by the choice of classification 
factors); and specific circumstances of the procurement (reflected by 
the appropriate percentages derived from considering significant 
factors).
    This better articulation of DOE's general policy for fee 
determination for M&O contracts reflects the construct of (and some 
pertinent details of) DOE's long-standing general policy for fee 
determination in more concise terms, in a more logical sequence, and in 
more congruence with the Federal Acquisition Regulation's articulation 
of the concept of contract types and fee arrangements. In essence, DOE 
is proposing pulling and revising (sometimes integrating constructs, 
sometimes integrating and revising specific language, sometimes 
deleting unnecessary language, sometimes revising necessary language) 
policy guidance from the following sections and placing it in section 
970.1504-1-3:
    [cir] 970.1504-7(a) through (e)--Fee base;
    [cir] 970.1504-1-6(a) and (b)--Calculating fixed fee;
    [cir] 970.1504-1-9(a) through (j)--Special considerations: Cost-
plus-award-fee;
    [cir] 970.1504-1-5--General considerations and techniques for 
determining fixed fees;
    [cir] 970.1504-1-2(i)--which addresses conditional payment of fee, 
profit, and other incentives;
    [cir] 970.1504-1-4(e)--which addresses requirements if using 
multiple contract types;
    [cir] 970.1504-1-4(f)--which addresses cost reduction incentives; 
this section is deleted without replacement because DOE determined its 
policy for value engineering (stated in its Acquisition Guide) was more 
appropriate;
    [cir] 970.1504-1-4(g)--which addresses the responsibilities of 
operations and field offices in establishing contract types and fee 
arrangements;
    [cir] 970.1504-1-2(c) and (d)--which discuss annual fee 
determination, maximum amount of annual fee, and the role of the Senior 
Procurement Executive;
    [cir] 970.1504-1-2(b)(3)--which discusses preferences for fixed 
price awards, objective measures, and tying fee to specific portions of 
the fee pool;
    [cir] 970.1504-1-4(c)(3) and (4)--which discuss risk, base fee, 
performance fee and its two components, and the preference for the 
objective fee component; and
    [cir] 970.1504-1-4(d)--which addresses performance fee, measures 
and objectives, the preference for tying fee to

[[Page 73655]]

outcomes, and the allocation of fee to outcomes.
    (It should be noted that some of the pulled and revised language 
listed above appears more than once, that is, it appears not only in 
970.1504-1-3(a) through (f) but also--for the purpose of improving 
readability--in other sections of DOE's proposed fee policy.)
    [cir] Paragraphs (a) through (b)(6): DOE proposes to reorganize, 
revise, and move the policy currently located at 970.1504-7(a) through 
(e)--Fee base, 970.1504-1-6(a) and (b)--Calculating fixed fee, 
970.1504-1-9(a) through (j)--Special considerations: Cost-plus-award-
fee, and 970.1504-1-5--General considerations and techniques for 
determining fixed fees to section 970.1504-1-3(a) through (b)(6) to 
clarify the construct of DOE's long-standing general policy for fee 
determination for M&O contracts. The guidance in the portions of 
general policy moved to 970.1504-1-3 includes guidance regarding: 
magnitude of the effort; type of the effort; nature, difficulty, 
complexity, and importance of the work; specific circumstances of the 
procurement; maximum total available fee amount for the contract; 
annual fee bases; allocation of the maximum total available fee amount; 
the fee base in each of the one-year periods of the contract; 
allocating that total available fee to the evaluation periods of the 
contract based upon what best motivates the contractor's superior 
performance; allocating incentives in a manner that will result in 
reasonable contractor risk and provide the contractor with the greatest 
incentive; maximum total available fee amount equaling the sum of the 
maximum total available fee amounts in the contract's one-year periods; 
the maximum total available fee amount for a one-year period is based 
on the fee base for that one-year period; the fee base is an estimate 
of the allowable costs (with some exclusions) for that one-year period; 
the fee base is a basic component of the fee schedules, which link the 
fee base to fee; the amount of the fee base and the amount of fee in 
the fee schedules are annual amounts; calculating the maximum total 
available fee amount for a one-year period is based on the contract's 
one-year periods and their fee bases; usually the maximum total 
available fee amount for a one-year period is allocated to the same 
one-year period; when a maximum total available fee amount is 
established for longer than a year, it is subject to adjustment; the 
SPE's or designee's approval is required for evaluation periods other 
than one year; the Government's objective is to allocate incentives in 
a manner that will provide the contractor with the greatest incentive 
for efficient and economical performance; and occasions could occur 
where it would be appropriate to allocate the maximum total available 
fee amount for a year to a subsequent one-year evaluation period, an 
evaluation period of greater than a year, or to several evaluation 
periods.
    [cir] Paragraph (b)(7): To clarify the construct of DOE's long-
standing general policy for fee determination for M&O contracts, DOE 
proposes to: (1) reorganize and revise the policy currently located at 
970.1504-1-2(b)(3), (c), and (d), 970.1504-1-4(c)(2) through (d), and 
970.1504-1-9(b) and (h) and move it to paragraph (b)(7); (2) repeat 
some of the M&O contract Total Available Fee contract clause's language 
and add it to this paragraph, specifically the clause's language 
requiring the negotiations to establish the requirements for the year 
and the maximum total available fee that the contractor can earn for 
its performance must occur before the contract year begins, and the 
language requiring the maximum total available fee allocated to an 
evaluation period be apportioned among a base fee amount and a 
performance fee amount; and (3) rephase some of the Federal Acquisition 
Regulation's discussion at 48 CFR part 16, subpart 16.4, regarding 
incentives, objective performance requirements, and subjective 
performance requirements, and award fee and add it to this paragraph.
    [cir] Paragraph (b)(8): DOE proposes to reorganize, revise, and 
move the policy at currently located at 970.1504-1-2(b)(3) and (e) to 
this paragraph.
    [cir] Paragraph (c): DOE proposes to add this paragraph because it 
repeats and emphasizes the fee determining sequence mentioned earlier. 
Paragraph (a) addressed the general requirements for determining fee, 
and paragraph (b) addressed the maximum total fee amount for the 
contract, which necessarily mentioned total available fee for each one-
year period of the contract. Therefore, it adds to the readability of 
DOE's M&O contract fee policy to address determining the maximum total 
available fee for each one-year period of the contract at this point. 
(The next paragraph addresses conditional payment of fee, profit, and 
other incentives, which applies to paragraphs (a), (b), and (c).) 
Paragraph (c) alludes to base fee, fee schedules, classification 
factors, appropriate percentages derived from the significant factors, 
and the specific details for calculating the maximum total available 
fee one-year period and an example, subjects addressed comprehensively 
at 970.1504-1-5, 970.1504-1-6, 970.1504-1-7, 970.1504-1-8, and 
970.1504-1-4, respectively.
    [cir] Paragraph (d): DOE proposes to reorganize and revise the 
policy currently located at 970.1504-1-2(i) and move it to paragraph 
(d). DOE is taking this action to: (1) clarify the significance to the 
fee determining process of the performance requirements of the contract 
relating to environment, safety, and health (ES&H) and relating to 
safeguarding of Restricted Data and other classified information; and 
(2) add new performance requirements, those relating to business and 
financial systems, which also will be significant to the fee 
determining process. DOE proposes to add the new performance 
requirements because it believes adding emphasis to the importance of 
strong business and financial systems to its fee policy will enhance 
the effectiveness of its contract administration and its mission 
accomplishment.
    [cir] Paragraph (e): DOE proposes to reorganize and revise the 
policy on multiple contract types and fee arrangements at 970.1504-1-
4(e) and move it to paragraph (e). DOE proposes to remove the policy on 
cost reduction incentives at 970.1504-1-4(f) and the associated clause 
at 970.5215-4, which is prescribed at 970.1504-5(c). DOE no longer uses 
the types of cost reduction incentives at 970.1504-1-4(f), using 
instead value engineering, which is covered in the DOE Acquisition 
Guide and the Federal Acquisition Regulation.
    [cir] Paragraph (f): DOE proposes to reorganize and revise the 
policy at 970.1504-1-4(g) and move it to paragraph (f).
     Section 970.1504-1-4: DOE proposes to reorganize and 
revise this section to simplify and state explicitly the construct 
underlying, the sequence for calculating, and the step-by-step process 
for determining the total available fee for an M&O contract and include 
a numerical example for determining the total available fee for a one-
year period of an M&O contract. While this section articulates the gist 
of the current fee policy, there is neither an exact parallel to this 
section in the current fee policy nor a direct link to specific 
language in the current fee policy. This section is based in large part 
on the current fee policy's sections on fee base, fee schedules, 
classification factors, and significant factors, which are found at 
970.1504-1-7, 970.1504-1-6, 970.1504-1-9, 970.1504-1-5, respectively.
     Section 970.1504-1-5: DOE proposes to revise and 
reorganize the section to clarify DOE's policy on the calculation of 
fee base, which is the

[[Page 73656]]

estimate of necessary allowable costs, with some exclusions. DOE's 
policy on fee base is moved here from 48 CFR 970.1504-1-7. In addition, 
the section was revised to align with the proposed revised section 48 
CFR 970.1504-1-4.
     Section 970.1504-1-6: DOE proposes to revise and 
reorganize the section to clarify DOE policy on the calculation of the 
M&O maximum total available fee amount, for a one-year period once the 
total fee base for the year is determined, including the use of the DOE 
M&O fee schedules (970.1504-1-6), which list the maximum amount of 
fixed fee. The DOE fee schedules that are based on three types of 
efforts (Production, research and development (R&D), environmental 
management (EM)). The section was revised to align with the proposed 
revised section 48 CFR 970.1504-1-4. In addition, DOE proposes to 
revise the section to better align the section with DOE policy that 
that an M&O contract is an ``incentive contract'' unless otherwise 
approved by the SPE.
     Section 970.1504-1-7: DOE proposes to revise and 
reorganize the section to clarify DOE policy on application of the DOE 
facility classification factors in the calculation of the maximum total 
available fee, to increase the Classification Factor for research and 
development conducted at a laboratory from 1.25 to 1.5, to add a 
Classification Factor (of 1) for efforts performed using a fixed fee, 
and to relocate the policy on application of facility classification 
factors from current 48 CFR 970.1504-1-9 to this section. In addition, 
DOE proposes revising the section to align with the revisions to 48 CFR 
970.1504-1-4. DOE proposes to increase the Classification Factor for 
research and development conducted at a laboratory because of the 
increased importance DOE places on such efforts. DOE proposes to add 
the Classification Factor for efforts performed using a fixed fee 
because, despite the rare use of fixed fee, use of a fixed fee is 
permitted by DOE's fee policy.
     Section 970.1504-1-8: DOE proposes to revise and 
reorganize the section to clarify DOE policy on consideration of the 
specific circumstances of the procurement in the calculation of the 
maximum total available fee, the application of DOE significant factors 
for each type of effort, and to relocate the DOE policy on the 
consideration of significant factors from current 48 CFR 970.1504-1-5 
to this section.
     Section 970.1504-1-9: DOE proposes to revise the section 
to clarify the sequence for calculating, and the step-by-step process 
for determining, the maximum total available fee for an M&O contract. 
In addition, DOE proposes to revise the section to align with revisions 
to section 48 CFR 970.1504-1-4.
     Section 970.1504-1-10: DOE proposes to revise the section 
to reorganize and clarify the policy for calculating the maximum total 
available fee for an M&O contract, the policy for the length of 
evaluation periods, the policy for allocating the maximum total 
available fee amount for a one-year period, and the policy for the use 
of evaluation periods greater than one year. DOE proposes to relocate 
the policy on the length of evaluation periods and the use of 
evaluation periods greater than one year from current 48 CFR 970.1504-
1-2(c) and (d) to this section.
     Section 970.1504-1-11: DOE proposes to revise the section, 
which is simply a repetition of the last step in calculating the 
maximum total available fee for a contract. This section is aligned 
with the revisions in section 48 CFR 970.1504-1-4.
     Section 970.1504-2-1: DOE proposes to amend this section 
to maintain its current guidance on cost or pricing data (relocated 
from current 970.1504-3-1). DOE also proposes to delete its current 
guidance: on the documentation of the fee prenegotiation objective 
(970.1504-1-11); and on the price negotiation (970.1504-2). The 
language in the deleted sections is unnecessary either because it is 
primarily procurement guidance adequately covered elsewhere (among 
other places, at 48 CFR 15.406-1 and 15.406-3 and internal DOE 
guidance) or primary funding guidance that should be addressed in the 
Office of Chief Financial Officer's guidance.
     Section 970.1504-3: DOE proposes to move the policy 
currently located at 48 CFR 970.1504-5 to this section. DOE's proposed 
revisions to the text of 970.1504-5 include:
    [cir] deleting references to the Total Available Fee clause's 
Alternates I through IV, currently found at 48 CFR 970.1504-5(a)(1) 
through (4) because elsewhere DOE is proposing revising the Total 
Available Fee clause and eliminating its Alternates I through IV;
    [cir] deleting the prescription for the Cost Reduction clause 
(currently found at 970.1504-5(c)) because DOE no longer uses cost 
reductions incentives (DOE is also proposing eliminating the policy and 
clause for cost reductions incentives, found at 970.1504-1-4(f) and 
970.5215-4, respectively, because DOE uses value engineering instead of 
cost reduction incentives);
    [cir] deleting the references to the clause at 970.5215-3's 
Alternates I and II, found at 48 CFR 970.1504-5(b)(2) and (3) because 
elsewhere DOE is proposing revising the clause to eliminate the need 
for the Alternates; and
    [cir] revising for clarity DOE's policy on using the Limitation on 
Fee solicitation provision (found at 970.5215-5).
     Section 970.1706-1: DOE proposes to amend this section to 
clarify the DOE policy on the award, renewal, and extension of M&O 
contracts.
    [cir] Paragraph (a): DOE proposes to amend this paragraph to 
clarify the DOE policy that: (1) effective performance under an M&O 
contract is facilitated by the use of a relatively long contract term; 
(2) only the Secretary can authorize the use of an M&O contract; and 
(3) only the Secretary can renew the original authorization of an M&O 
contract.
    [cir] Paragraph (a)(1): DOE proposes to add this paragraph to 
reorganize content and clarify DOE policy that an M&O contract shall 
provide for a base term not to exceed the lessor of five years or the 
maximum term the Secretary authorized.
    [cir] Paragraph (a)(2): DOE proposes to add this paragraph to 
reorganize content and clarify DOE policy that: (1) the contract may 
include option terms provided no option term exceeds the lessor of five 
years or the maximum term the Secretary authorized; (2) the sum of base 
term and the option terms does not exceed the lessor of 10 years or the 
maximum term the Secretary authorized for the contract; (3) in addition 
to the base term and the option terms just described, an M&O contract 
for a national laboratory that is competitively awarded may provide for 
award term incentives provided none exceed the maximum term the 
Secretary authorized for each; and (4) the sum of base term, option 
terms, and award terms shall not exceed the lessor of 20 years or the 
maximum term the Secretary authorized for the contract.
    [cir] Paragraph (a)(3): DOE proposes to add this paragraph to 
reorganize content and clarify DOE policy that after the Secretary's 
original authorization of the use of the M&O contract has expired, any 
continuation of work under an M&O contract must be preceded by the 
Secretary's renewal of the authorization for use of an M&O contract.
    [cir] Paragraph (a)(4): DOE proposes to add this paragraph to 
reorganize content and clarify DOE policy that a sole source extension 
of an M&O contract to the incumbent must be justified under one of the 
statutory authorities listed in 48 CFR 6.302 and authorized by the 
Secretary.

[[Page 73657]]

    [cir] Paragraph (a)(5): DOE proposes to add this paragraph to 
reorganize content and clarify DOE policy that the specific duration of 
the base term, option terms, and award terms of an M&O contract must be 
established concurrent with the Secretary's authorization (or renewal 
of his/her authorization) to use an M&O contract (for original use, 
sole source award to a new contractor, competitive award to a new 
contractor or to the incumbent, or sole source extension of the 
contract to the incumbent).
    [cir] Paragraph (b): DOE proposes to amend this paragraph to 
clarify the DOE policy that the contracting officer's decision to 
exercise an option must be approved by the Senior Procurement Executive 
and the cognizant Assistant Secretary(s), and that in deciding to 
exercise the option, the contracting officer shall make the 
determinations required by 48 CFR 17.605.
    [cir] Paragraph (b)(1): DOE proposes to add this paragraph to 
clarify DOE policy that for the exercise of an M&O option period, the 
contracting officer shall consider the extent to which performance-
based management contract provisions are present or can be negotiated 
into the contract.
    [cir] Paragraph (b)(2): DOE proposes to add this paragraph to 
reorganize content and clarify DOE policy that for the exercise of an 
M&O option period, the contracting officer shall make the 
determinations required by 48 CFR 17.605 in the manner described 
therein. The content formerly located at paragraph (b) is moved here 
and provides that as part of the review required by 48 CFR 17.605(b), 
the contracting officer shall assess whether competing the contract 
will produce a more advantageous offer than exercising the option; the 
incumbent contractor's past performance under the contract; the extent 
to which performance-based management contract provisions are present, 
or can be negotiated into, the contract; and the impact of a change in 
a contractor on the Department's discharge of its programs. The 
contracting office shall address the considerations in 48 CFR 17.605 in 
the decision that the exercise of the option is in the Government's 
best interest. The proposed paragraph adds that the determination 
described in 48 CFR 17.207(d) and (e)(2) is not required, and because 
of the way in which the evaluation of cost to the Government is 
performed in the award of an M&O contract that includes options, the 
contracting officer need only determine the option was evaluated as 
part of the initial competition and contains a maximum fee. The 
contracting officer need not, for example: issue a new solicitation; 
informally analyze prices; or determine the option is the more 
advantageous offer.
     Sections 970.1707-1, 970.1707-3, and 970.1707-4: DOE 
proposes to amend these sections to make minor editorial changes to 
update references and update policy to reflect the Department of Energy 
Research and Innovation Act (Pub. L. 115-246). In addition to 
referencing the Economy Act (31 U.S.C. 1535), 42 U.S.C. 7259a has been 
added as the authority for the Secretary to allow work to be performed 
at DOE laboratories ``on behalf of other departments and agencies of 
the Government, agencies of State and local governments, and private 
persons and entities''.
     Sections 970.1708, 970.1708-1, 970.1708-2, and 970.1708-3: 
DOE proposes to add these sections to integrate a new DOE policy on 
Agreements for Commercializing Technology (ACT) and prescribe a new 
clause at 48 CFR 970.5217-2. DOE proposes to add new regulatory 
coverage that provides authorization for M&O contractors to conduct 
third party-sponsored research at the M&O contractor's risk under 
Agreements for Commercializing Technology. Whereas the requirements and 
policy for Agreements for Commercializing Technology are currently 
contained in DOE guidance and in special provisions included in 
contracts, the proposed rule will establish regulatory coverage and 
incorporate the requirements into a new clause at 48 CFR 970.5217-2. 
DOE proposes the new policy and clause to allow M&O contractors to 
engage with industry more flexibly on research and technology transfer 
projects. Through ACT, an M&O contractor can negotiate and accept 
financial and performance risks and accept terms and conditions more 
consistent with industry practice that are not permitted under 
Cooperative Research and Development Agreements and SPP agreements to 
advance technology transfer and the commercialization of technologies.
     Section 970.1907-8: DOE proposes to add this subsection to 
clarify that Contracting Officers should insert the clause at 48 CFR 
5219-9, Small Business Subcontracting Plan, in all M&O solicitations 
and contracts and to prescribe a new clause that supplements the FAR 
clause at 48 CFR 970.5219, ``Small Business Subcontracting Plan''. The 
new clause incorporates a DOE policy concerning ``Management and 
Operating Contractor Subcontract Reporting Capability (MOSRC)'' to 
collect key information about M&O contractor first tier subcontracts 
for reporting to the Small Business Administration.
     Section 970.2201-1-1: DOE proposes to amend this section 
to identify situations with non-management and operating contracts 
where the applicability of management and operating contractor basic 
labor policies may apply.
     Section 970.2201-1-2: DOE proposes to amend this section 
in several places to identify the basis for the policies presented by 
adding a citation to the underlying regulations. The amendments also 
include minor textual edits for clarity, including applicability to 
certain non-M&O contracts as described in section 970.2201-1-1 and 
limit the scope of this section to wages, salaries, and employee 
benefits under the collective bargaining agreement process. The 
proposed rule also transfers more general matters from this section to 
section 970.2201-1-4.
     Section 970.2201-1-3: DOE proposes to amend this section 
to add language to expand the applicability of section 970.5222-1, 
Collective Bargaining Agreements-Management and Operating Contracts to 
certain non-M&O contracts (as described in section 970.2201-1-1) and 
require that it be flowed down to subcontracts for protective services 
or other services performed at a DOE-owned site that affect continuity 
of operations.
     Section 970.2201-1-4: DOE proposes to add this section to 
incorporate policy on critically skilled employees initially 
established in DOE Acquisition Letter 94-19 and to emphasize the 
connection to a contractor's compensation system and policies in the 
recruitment and retention of a critically skilled workforce. This 
section also emphasizes that costs in support of this policy must be 
reasonable and meet allowability requirements. Lastly, the discussion 
of wages, salaries, and employee benefits removed from section 
970.2201-1-2 is relocated to this section.
     Sections 970.2204, 970-2204-1, and 970-2204-1-1: DOE 
proposes to amend section 970.2204 to clarify that both non-management 
and operating contracts and management and operating contracts are 
subject to the same subpart (922.4) governing labor standards involving 
construction. Accordingly, the reader is pointed to the policy in 
subpart 922.4, and section 970.2204-1 is removed as duplicative. 
Section 970.2204-1-1 is relocated to subpart 922.4 as well.
     Section 970.2210: DOE proposes to revise this section to 
update the reference to the Service Contract Act of 1965. The section 
heading is revised to

[[Page 73658]]

read ``Service contract labor standards'' and the section text updates 
the reference to read ``The Service Contract Labor Standards, 
historically referred to as the Service Contract Act of 1965''.
     Section 970.2270: DOE proposes to revise this section 
regarding unemployment compensation to better comport with existing 
federal and state unemployment compensation laws and eliminate 
inconsistencies.
     Section 970.2270-2: DOE proposes to add this prescription 
to ensure contracting officers include the clause at 970.5222-4, 
Unemployment Compensation, in applicable solicitations and contracts 
and that fill-in data are also identified by the contracting officer.
     Section 970.2301-1: DOE proposes to remove this section as 
its contents include an out-of-date hyperlink, reference to the 
requirements of a rescinded Executive order, and internal procedures 
that are not necessary to set forth in regulation.
     Section 970.2301-2: DOE proposes to revise this section 
to: (1) add a prescription for the inclusion of the clause at 952.223-
78, ``Sustainable Acquisition Program''; (2) remove prescriptions for 
clauses that are proposed for removal (970.5223-6, which is removed 
because the Executive order that is its basis has been revoked and 
970.5223-7 which duplicates the clause at 952.223-78); and (3) remove 
prescriptions for various FAR clauses as they are already prescribed in 
48 CFR chapter 1 and it is unnecessary to prescribe them here.
     Section 970.2303-2-70: DOE proposes to revise this section 
to update the office name in paragraph (c)(2)(ii).
     Section 970.2672-3 is amended to clarify the applicability 
of 48 CFR 952.226-74 ``Workforce Restructuring and Displaced Employee 
Hiring Preference'' to both non-management and operating contracts and 
management and operating contracts pursuant to section 3161 of the 
National Defense Authorization Act For Fiscal Year 1993.
     Section 970.2673-2: DOE proposes to revise this subsection 
to change the prescription for the clause at 970.5226-3, ``Community 
Commitment'', making it optional rather than mandatory.
     Section 970.2701-1: DOE proposes to revise this section to 
clarify that subpart 970.27 applies to contracts for decontamination 
and decommissioning activities.
     Sections 970.2702 and 970.2702-1-2: DOE proposes several 
amendments to sections 970.2702 through 970.2702-6. Specifically, DOE 
proposes to: (1) revise the heading to section 970.2702 and section 
numbering to conform to the FAR subpart 27.2 which this subpart 
supplements; and (2) consolidate clause prescriptions formerly located 
in sections 970.2702-2 through 970.2702-6 into new section 970.2702-1-
2.
     Section 970.2703-1: DOE proposes to revise this section to 
streamline content by removing paragraph (b)(1) through (5) as its 
content is adequately addressed elsewhere, and redesignating paragraph 
(c) as paragraph (b).
     Section 970.2703-2: DOE proposes to revise this section to 
address more clearly when each of the patent clauses should be used 
based on the type of Contractor and patent waivers granted. In 
addition, paragraph (a)(2) addresses ``privately funded technology 
transfer'' activities that are authorized under Alternate I of 48 CFR 
970.5227-3. Although there is no specific language prescribed by an 
Alternate in this clause, the instructions allow further changes to the 
patent clause if DOE or the Contractor requests to further define use 
of royalty funds, cost restrictions and liability related to privately 
funded licensing activities. Since DOE has replaced a DEAR clause for 
subcontracts to non-profit organization or small business firms with 
the FAR provision at 37 CFR 401.14, a new paragraph (h) is added to 
address the use of appropriate Alternates I or II for 48 CFR 952.227-11 
to add agency implementing regulations and, if applicable, DOE's 
Declaration of Exceptional Circumstance for substantial U.S. 
manufacture.
     Section 970.2704-2: DOE proposes to revise this section 
to: (1) add a sentence at the end of paragraph (a) that, in compliance 
with Government-wide mandates to make research results publicly 
available, references section 935.010 for R&D results conveyed in 
scientific and technical information and DOE Order 241.1B which 
addresses requirements for scientific and technical information that 
are stored in the Office of Scientific and Technical Information 
(OSTI); and (2) revise the last sentence of paragraph (e) to reflect 
the new standard of not requiring the Contractor to renew copyright 
exclusivity every five years, which was administratively burdensome and 
hampered long-term licensing activity, but to notify Patent Counsel and 
OSTI when commercial activity ceases.
     Section 970.2704-3: DOE proposes to revise this subsection 
to add more clarity as to when to use either of the Rights in Data 
clauses in M&O Contracts.
     Section 970.2770-2: DOE proposes to revise this subsection 
to reflect the addition of the new clause at section 970.5217-2, 
Agreements for Commercializing Technology (ACT), and require its 
inclusion in new awards for or extensions of existing DOE laboratory or 
weapon production facility M&O contracts. By authorizing the use of 
ACT, the Contractor may engage with third parties with more flexibility 
in terms, but the Contractor accepts greater risks in advance funding 
and liability.
     Section 970.2803-1: DOE proposes to revise this section by 
updating the office name in paragraph (b)(1). Additionally, in 
paragraph (b)(3), DOE proposes to establish the Head of Contracting 
Activity as the official responsible for approving management and 
operating contractor employees' benefit plans because that individual 
is better situated to make these determinations.
     Section 970.2803-2: DOE proposes to revise this section to 
update the reference in the last sentence from ``(f)(3)(C)'' to 
``(f)(1)(iii)(C)''.
     Section 970.3101-00-71: DOE proposes to add this section 
to clarify that the cost principles of 48 CFR 31.2 and subpart 970.31 
apply to M&O contracts, regardless of entity type.
     Section 970.3102-3-70: DOE proposes to revise this section 
to remove the parenthetical reference in paragraph (a)(3)(i) because 
DOE's fee policy no longer distinguishes between a contract for the 
management and operation of a laboratory and a contract for the 
management and operation of a non-laboratory.
     Section 970.3102-05-6: DOE proposes to amend this section 
by removing the last sentence of paragraph (a)(6) which states ``For 
purposes of designating the threshold, total compensation includes only 
the employee's salary and cash bonus or incentive compensation.'' 
Removing this sentence increases DOE flexibility in this area to 
account for other things which should be included in the definition of 
total compensation, such as deferred compensation. In addition, DOE 
proposes to remove paragraph (p)(1) which references the Office of 
Federal Procurement Policy senior executive compensation benchmark 
because that information is covered in the FAR. The proposed rule also 
adds a pointer to that coverage at the end of paragraph (a)(7)(ii).
     Section 970.3200-1: DOE proposes to revise this 
subsection, in paragraph (c), by removing the words ``remedy 
coordination official'' and adding in their place ``Head of the 
Contracting Activity''. This change is intended to improve clarity 
since ``remedy coordination official'' is an undefined term that is not 
widely used whereas

[[Page 73659]]

``Head of the Contracting Activity'' is universally used and understood 
in the acquisition community.
     Section 970.3270: DOE proposes to amend this section by 
removing section 970.5203-1, ``Management Controls,'' from the list of 
standard financial management clauses at paragraph (a)(4) and 
redesignating paragraphs (a)(5) through (8) as paragraphs (a)(4) 
through (7). The management controls clause is prescribed elsewhere and 
does not need to be prescribed here as well.
     Section 970.3501-1: DOE proposes to amend this section to 
remove an obsolete reference.
     Section 970.3501-2: DOE proposes to amend this section to 
update references and clarify that only a federal Contracting Officer 
can obligate the Government to place work on the contract and obligate 
the Government to reimburse the contractor under the contract.
     Section 970.4102-1: DOE proposes to revise this section to 
update office names, remove references to a rescinded DOE Order, 
clarify that Federal Energy Management Program (FEMP) concurrence is 
not necessary for NNSA programs, and make minor editorial changes.
     Section 970.4207-05-01: DOE proposes to revise this 
section, in paragraph (b)(4)(ii) to add the words ``if such costs have 
been the subject of a DOE audit'' to the end of the sentence. This 
change is proposed in order to clarify that the contracting officer 
cannot resolve any questioned costs that have been the subject of a DOE 
audit without first obtaining the opinion of the DOE's auditor on the 
allowability of such costs.
     Section 970.4401-1: DOE proposes to amend this section to 
remove Balanced Scorecard metrics as a means of evaluating purchasing 
systems and allow for other metrics to be used. This change is proposed 
because the Balanced Scorecard program does not include metrics for 
evaluating M&O contractor purchasing systems.
     Section 970.4402-1: DOE proposes to revise this section to 
add a new paragraph (c) which states that the M&O contractor's 
purchasing performance, including compliance with its approved system 
and methods, will be evaluated against the performance criteria and 
measures set forth in 48 CFR part 44, subpart 44.3, using the 
procedures articulated in DOE policies including DOE guidance on 
oversight of M&O Contractor's Purchasing Systems.
     Section 970.4501-1: DOE proposes to amend this section by 
revising the section heading to read ``Applicability'' and replacing 
the existing section text (moved to new section 970.4501-2) with 
language that clarifies the applicability of this subpart to M&O 
contractors and on-site environmental management and other major prime 
contractors as designated by the SPE. A reference to 41 CFR chapter 109 
is also added.
     Section 970.4501-2: DOE proposes to add this section with 
text taken from the former section 970.4501-1. Paragraph (a) is 
modified by adding ``and environmental management, and other major 
prime contractors located at DOE sites'' to the end of the first 
sentence; removing the second sentence; and updating the reference to 
managerial personnel in the third sentence from ``paragraph (j)'' to 
``paragraph (k)''.
     Section 970.5203-1: DOE proposes to amend the ``Management 
Controls'' clause, in the introductory text, by removing the words 
``and 970.3270(a)(4)'' before the words ``insert the following 
clause:''. It is only necessary to prescribe this clause in one 
location, and the second prescription located at section 970.3270(a)(4) 
was therefore removed (as described above).
     Section 970.5204-1: DOE proposes to remove the 
``Counterintelligence'' clause from part 970 and relocate it to section 
952.204-74, as this requirement pertains to both M&O and non-M&O 
contractors.
     Section 970.5204-3: DOE proposes to revise the ``Access to 
and Ownership of Records'' clause to incorporate a class deviation. 
Paragraph (b) is revised to delete the parenthetical instruction to 
Contracting Officers in the second sentence as well as the last 
sentence of paragraph (b)(1), which lists examples of employee-related 
systems of record. Paragraph (g) is revised to replace the automatic 
flow down requirement based on the presence of the ``Integration of 
environment, safety, and health into work planning and execution'' 
clause currently at section 970.5223-1 with language that requires the 
contractor to flow down the clause (or maintain the applicable records 
themselves) whenever the subcontract scope of work could result in 
potential exposure to radioactive or other toxic substances that can 
cause long term health impacts.
     Section 970.5209-70: DOE proposes to add a new M&O-
specific ``Conflicts of Interest'' clause in order to provide uniform 
requirements for M&O contractors.
     Section 970.5215-1: DOE proposes to revise the ``Total 
available Fee: Base Fee Amount and Performance Fee Amount'' to make 
minor editorial revisions throughout to improve clarity.
     Section 970.5215-3: DOE proposes to revise the 
``Conditional Payment of Fee, Profit, and other Incentives--Facility 
Management Contracts'', to: add a new requirement that the contractor 
must comply with its contract's business and financial systems 
requirements; update references; make revisions for clarity; remove 
Alternate I (it addressed contracts without security requirements; its 
requirements are now combined with the basic clause); and remove 
Alternate II (it addressed contracts awarded on a cost plus award fee 
basis; it is no longer necessary).
     Section 970.5215-4: DOE proposes to remove the ``Cost 
Reduction'' clause. Because the Department has a value engineering 
policy for M&O contracts, a cost reduction clause is not necessary.
     Section 970.5215-5: DOE proposes to revise the 
``Limitation on Fee'' clause by updating the reference for the clause 
prescription in the introductory text and making minor editorial 
changes for clarity in paragraph (b).
     Section 970.5217-1: DOE proposes to revise the ``Strategic 
Partnership Projects Program (Non-DOE Funded Work)'' clause to 
incorporate the Research and Innovation Act and Master Statement of 
Work requirements, which reduce the transactional approvals by DOE for 
previously-approved groups of projects. In paragraph (d)(3), DOE has 
modified its requirements for requiring intellectual property indemnity 
to allow the contractor to reserve the provision when the sponsor is a 
federally-funded entity (DOE accepting liability to promote Government 
funded research) or a state or local government or public university, 
which may be prohibited from indemnifying others by state law.
     Section 970.5217-2: DOE proposes to add this new 
``Agreements for Commercializing Technology'' clause in order to 
integrate a new DOE policy that was developed to allow M&O contractors 
to engage with industry more flexibly on research and technology 
transfer projects. Through ACT, an M&O contractor can negotiate and 
accept financial and performance risks and accept terms and conditions 
more consistent with industry practice that are not permitted under 
Cooperative Research and Development Agreements and SPP agreements. 
Whereas the requirements and policy for Agreements for Commercializing 
Technology are currently contained in DOE guidance and in special 
provisions included in contracts, the proposed rule will establish 
regulatory coverage and incorporate the requirements into this new 
clause.
     Section 970.5219: DOE proposes to add this new ``Small 
Business Subcontracting Plan'' clause, in order to integrate a new DOE 
policy concerning

[[Page 73660]]

the ``Management and Operating Contractor Subcontract Reporting 
Capability (MOSRC)'', a DOE system, and associated processes to collect 
key information about M&O contractor first tier subcontracts for 
reporting to the Small Business Administration.
     Section 970.5222-4: DOE proposes to add this new 
``Unemployment Compensation'' clause to address situations where a 
contractor, under federal and state unemployment rules are permitted to 
opt out of paying the state unemployment insurance tax and permitted to 
instead reimburse the state for actual claims paid out to its former 
employees. This section requires notification to the Government of its 
election and asserts governments right to review such changes to assess 
budgetary and programmatic risks when opting out.
     Section 970.5223-6: DOE proposes to remove the ``Executive 
Order 13423, Strengthening Federal Environmental, Energy, and 
Transportation Management'' clause because Executive Order 13423 has 
been rescinded.
     Section 970.5223-7: DOE proposes to remove the 
``Sustainable Acquisition Program'' clause on the basis that it 
duplicates the clause at section 952.223-78, which is prescribed in 
section 923.172.
     Section 952.5226-1: DOE proposes to revise the ``Diversity 
Plan'' clause to incorporate the more current terminology of 
``Diversity, Equity, Inclusion, and Accessibility'' (DEIA) and make 
minor editorial revisions. This update will better align the DOE clause 
with current Administration initiatives and will clarify the broader 
scope of recent DEIA initiatives.
     Section 970.5227-1: DOE proposes to revise the ``Rights in 
Data-Facilities'' clause to add new definitions of Assistant General 
Counsel for Technology Transfer and Intellectual Property, Department 
of Energy, and Patent Counsel for clarity. The revisions also add a new 
paragraph (b)(4) requiring the Contractor to deposit technical data at 
the Office of Scientific and Technical Information per the DOE Order 
241.1. Paragraph (c)(3) is added to allow the Government to instruct 
the Contractor to assert copyright in technical data or software and 
transfer title to the Government for licensing and distribution if 
necessary. Paragraph (d) is modified to allow Patent Counsel to 
determine what Alternates are appropriate to data rights clauses in 
subcontracts. In order to allow for competitive solicitations, 
Alternate II is added to include a provision in the Limited Rights 
Notice to allow for the use of contractor's proprietary data in 
solicitations for government facilities being constructed, modified or 
decontaminated and decommissioned.
     Section 970.5227-2: DOE proposes to revise the ``Rights in 
Data-Technology Transfer'' clause to add several new definitions of 
Assistant General Counsel for Technology Transfer and Intellectual 
Property, Department of Energy, Open Source Software, and Patent 
Counsel for clarity. Paragraph (b) was broadened to allow the lab to 
assert copyright from just articles to ``works'' such as drawings, 
chapters in books, workshop documents, datasets, etc. that are released 
to the public. This allows control of the content when the public uses 
or references this copyright work, but still satisfies DOE's duty to 
disseminate the results of its research. Also, Office of Scientific and 
Technical Information requirements are updated in this section to 
comply with DOE Order 241.1. Added paragraph (c)(3) allows the 
government to direct the Contractor to assert copyright and transfer 
title to the Government for further control and distribution of 
technical data and software. As part of the broadening of copyright 
assertion without DOE Patent Counsel approval, paragraph (d) expands 
the type of data that the Contractor can protect for control without 
commercializing and adds a shorter notice to the publisher if 
necessary. Since paragraph (d) expanded the type of data, paragraph (e) 
is revised to require DOE Patent Counsel approval when the Contractor 
needs to control distribution to advance the goals of the technology 
transfer mission through commercialization. When the Contractor is 
granted permission to assert copyright, the five-year renewal periods 
have been changed to a period of commercialization activities since 
software can be useful for decades and licensees are reluctant to 
commercialize for only five years if DOE Patent Counsel rejected any 
extensions of time. The government may distribute copies to the public 
of the copyrighted work after the period of commercialization has 
ended. Paragraph (f) is added to address copyright assertion and 
distribution in open source software (OSS). The Contractor must notify 
the funding program that the Contractor intends to distribute the 
software as OSS and the program has two weeks to object. DOE Patent 
Counsel can supply that approval if a funding program doesn't exist. 
This section also provides the requirements that the Contractor to 
retain records, distribute OSS such as the type of OSS licenses used 
and allow the public free access to software. Paragraph (g), 
Subcontracting, has been revised to allow DOE Patent Counsel to approve 
the use of 48 CFR 52.227-14, Rights in Data-General, or 48 CFR 52.227-
17, Rights in Data-Special Works. The definitions in section 927.409(a) 
have been removed to use Alternate I of 48 CFR 52.227-14. The paragraph 
(d)(3) in 927.409 has been replaced with Alternate VIII of 48 CFR 
952.227-14 to allow DOE Patent Counsel to approve copyright requests. 
Similarly, Alternate I of 48 CFR 952.227-17 permits DOE Patent Counsel 
to direct a subcontractor to assert copyright in technical data and 
transfer to the Government or a third party such as the Contractor. 
This will allow the Laboratory to consolidate copyright title if 
portions are generated by subcontractors. Alternate II of this clause 
is added to include a provision for Limited Rights Data in the Notice 
for government facilities being constructed, modified or decontaminated 
and decommissioned.
     Section 970.5227-3: DOE proposes to revise the 
``Technology Transfer Mission'' clause to address the M&O Contractor's 
use of Trademark and Service marks with regards to the Laboratory names 
and facilities. In paragraph (a), statutory updates are included to 
comply with the Laboratory Modernization and Technology Transfer Act. 
Paragraph (b) includes, for clarity, new definitions for Bailment, 
Assignment, Strategic Partnership Projects (SPP), Agreements for 
Commercializing Technology (ACT), Master Scope of Work, and Joint Work 
Statement. Paragraph (d), Conflicts of Interest--Technology Transfer, 
has been modified in paragraph (d)(8) to include more information when 
the Contractor requests for approval of some exclusive licenses or 
assignments of technology to third parties. In addition, paragraph 
(d)(10) is revised to better define when the DOE is to be notified of 
potential conflicts when evaluating proposals on behalf of the program. 
In paragraph (f), U.S. Industrial Competitiveness, DOE has exercised 
its discretion to require M&O contractors to obtain written information 
from the U.S. Trade Representative (USTR) to assist in the 
consideration by the M&O contractor and the DOE Contracting Officer of 
a prospective foreign partner's home country's treatment of U.S. 
companies' intellectual property, and whether U.S. companies have 
opportunities to do collaborative research in the home country. After 
many years of experience, DOE has determined that a less cumbersome 
procedure, which involves relying on information available from USTR 
websites, can be utilized for

[[Page 73661]]

obtaining the relevant information. A new paragraph (f)(4) is added to 
address the Exceptional Circumstance Determination for U.S. 
Competitiveness (substantial U.S. manufacturing) when licensing 
Contractor technology. Paragraph (g) was amended to exclude CRADA 
(Cooperative Research and Development Agreements) and SPP requirements 
for product liability indemnity because it is covered under guidance 
for those agreements. Paragraph (l) was amended to allow the annual 
technology transfer plan to be included in the Annual Laboratory Plan. 
Paragraph (n)(3)(iii) was added to require the CRADA Final Report 
required in DOE Order 483.1 to be submitted to OSTI. Paragraph (n)(5) 
conflict of interest was changed from ``preparation, negotiation, or 
approval'' to ``negotiation, approval or performance'' of CRADAs since 
preparing the agreements would include support staff with no control 
over the content and performance is added to capture the principal 
investigator's role. When requirements for providing a Technology 
Partnership Ombudsman was added to the Contract, it was accidently 
added to Alternate I. To correct this error, paragraph (p) was added to 
move the Technology Partnership Ombudsman from Alternate I into the 
contract clause. Alternate I was revised to remove the ombudsman 
provision.
     Section 970.5227-4: DOE proposes to revise the 
``Authorization and Consent'' clause in paragraphs (c)(1) through (3) 
to replace $100,000 with ``simplified acquisition threshold'' so that 
when the simplified acquisition threshold limit is increased, this 
clause does not have to update the dollar value.
     Section 970.5227-5: DOE proposes to revise the ``Notice 
and Assistance Regarding Patent and Copyright Infringement'' clause, in 
paragraph (c) to replace $100,000 with ``simplified acquisition 
threshold'' so that when the simplified acquisition threshold limit is 
increased, this clause does not have to update the dollar value.
     Sections 970.5227-10 and 970.5227-12: DOE proposes to 
revise the clauses at section 970.5227-10, ``Patent Rights-Management 
and Operating Contracts, Nonprofit Organization or Small Business Firm 
Contractor,'' and section 970.5227-12, ``Patent Rights-Management and 
Operating Contracts, For-Profit Contractor,'' in order to reflect 
statutory changes and addition of approved determinations of 
exceptional circumstance (DEC). Paragraph (a) of both clauses adds 
definitions of Initial Patent Application and Statutory Period for 
clarity. Paragraph (b)(3) of the clause at section 970.5227-10 
(previously located at paragraph (b)(2)) and paragraph (b)(6) of the 
clause at section 970.5227-12 (previously located at paragraph (b)(5)) 
have been modified to clarify when the Contractor may elect title to 
inventions that are covered under a DEC. Paragraph (c) of both clauses 
has been revised to allow electronic reporting using the Government's 
iEdison or similar system along with certain information such as award 
numbers. Both clauses have changed the requirement for ``publication 
approval'' to ``publication review'' requiring the Contractor Invention 
Identification Procedures to address notification to DOE instead of 
approval. In paragraph (g) of both clauses, the reference to 48 CFR 
925.227-11 has been replaced with 37 CFR401.14 because 48 CFR 952.227-
11 has been revised with Alternates I and II for agency implementation 
of the DEC. In paragraph (j), March-in Rights, both clauses were 
modified to remove the four reasons where DOE can exercise this right 
by referencing the statute (for nonprofit organization or small 
business firm contractors) or patent waiver (for For-Profit 
Contractors.) Both clauses have added paragraph (t), U.S. 
Competitiveness, in compliance with the Determination of Exceptional 
Circumstance for Domestic Manufacture of DOE Science and Energy 
Technologies. Lastly, both clauses added a final paragraph on 
Unauthorized Access to require the Contractor to adequately protect 
materials related to inventions and notify DOE of a breach.
     Section 970.5227-11: DOE proposes to revise the ``Patent 
Rights-Management and Operating Contracts, For-profit Contractor Non-
Technology Transfer'' clause in a few ways. First, DOE proposes to 
change the clause title to remove ``Non-Technology Transfer'' and add 
``No Patent Waiver'' in its place. Second the proposed rule adds a 
definition of Department of Energy to paragraph (a) for clarity. 
Additional changes are made to reflect statutory changes. Furthermore, 
paragraph (c)(2)(vii) requires not only the B&R code but related 
information such as funding announcements or SPP/CRADA numbers to make 
it easier to identify inventions from other sources and paragraph 
(c)(5) is modified to include reporting inventions to Government 
electronic reporting systems instead of the contracting officer or 
patent counsel. Finally, DOE proposes to add an ``Unauthorized Access'' 
paragraph (o) to require the Contractor to adequately protect materials 
related to inventions and notify DOE of a breach.
     Section 970.5232-2: DOE proposes to revise the ``Payments 
and Advances'' clause to: (1) re-organize and re-number the paragraphs; 
(2) make editorial changes to streamline and simplify content to 
improve clarity and update references; and (3) add a paragraph 
concerning ``provisional fee,'' which DOE has never addressed in the 
DEAR, to Alternate II. Although DOE has issued internal guidance that 
defines provisional fee, articulates when it might be useful, and 
specifies how to use it, neither the FAR nor the DEAR define or 
addresses it. Consequently, DOE has concluded it would be prudent to 
heighten awareness of DOE's view of provisional fee by including some 
discussion of it in DEAR.
     Section 970.5232-3: DOE proposes to revise the ``Accounts, 
Records, and Inspection'' clause to clarify (in paragraph (c)) the 
contractor's responsibility to either perform a sufficient amount of 
audit work of its subcontractors' incurred costs or arrange for an 
audit of its subcontractors' incurred costs. Minor editorial changes 
for clarity are also proposed.
     Section 970.5232-5: DOE proposes to revise the ``Liability 
with Respect to Cost Accounting Standards'' clause, in the introductory 
text, by updating the citation for the clause prescription.
     Section 970.5232-6: DOE proposes to revise the ``Strategic 
Partnership Project Funding Authorization'' clause, in the introductory 
text, by updating the citation for the clause prescription.
     Section 970.5232-7: DOE proposes to revise the ``Financial 
Management System'' clause to: (1) reorganize and number the 
paragraphs; (2) clarify that contractors must maintain and administer a 
financial management system that is in accordance with Generally 
Accepted Accounting Principles (GAAP) for Federal Entities as defined 
by the Federal Accounting Standards Advisory Board and implemented by 
the DOE Financial Management Handbook and other implementing policies; 
and (3) make minor editorial changes for clarity.
     Section 970.5235-1: DOE proposes to revise the ``Federally 
Funded Research and Development Center Sponsoring Agreement'' clause to 
make minor editorial revisions and to clarify that only the Contracting 
Officer can place work on the contract and obligate the Government to 
reimburse the Contractor for the work.
     Section 970.5244-1: DOE proposes to revise the 
``Contractor Purchasing System'' clause to: (1) clarify the

[[Page 73662]]

Contactor's obligations regarding: maintaining documentation; providing 
audit or a sufficient amount of audit work; and for which subcontracts 
the Contractor must provide audit or a sufficient amount of audit work; 
(2) change the approval level for subcontractor indemnification 
requests from the SPE to the HCA in consultation with local legal 
counsel in paragraph (l) in order to give flexibility for local level 
approval of routine, low risk indemnity; (3) add seven clauses to the 
list of required subcontract flowdown requirements in paragraph (x); 
and (4) update references and make minor editorial changes for clarity.
     Section 970.5245-1: DOE proposes to revise the 
``Property'' clause to add references to 41 CFR chapters 102 and 109 
and make minor editorial changes for clarity.

III. Public Participation

    DOE will accept comments, data, and information regarding this NOPR 
on or before the date provided in the DATES section at the beginning of 
this proposed rule. Interested parties may submit comments, data, and 
other information using any of the methods described in the ADDRESSES 
section at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will not be publicly 
viewable except for your first and last names, organization name (if 
any), and submitter representative name (if any). If your comment is 
not processed properly because of technical difficulties, DOE will use 
this information to contact you. If DOE cannot read your comment due to 
technical difficulties and cannot contact you for clarification, DOE 
may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information the disclosure of 
which is restricted by statute, such as trade secrets and commercial or 
financial information (hereinafter referred to as Confidential Business 
Information (``CBI'')). Comments submitted through www.regulations.gov 
cannot be claimed as CBI. Comments received through the website will 
waive any CBI claims for the information submitted. For information on 
submitting CBI, see the Confidential Business Information section 
below.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email or postal mail. Comments and 
documents submitted via email or postal mail also will be posted to 
www.regulations.gov. If you do not want your personal contact 
information to be publicly viewable, do not include it in your comment 
or any accompanying documents. Instead, provide your contact 
information in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via postal mail, 
please provide all items on a CD, if feasible, in which case it is not 
necessary to submit printed copies. No telefacsimiles (faxes) will be 
accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are written in English, and that are free of any defects or viruses. 
Documents should not contain special characters or any form of 
encryption and, if possible, they should carry the electronic signature 
of the author.

Confidential Business Information

    Pursuant to 10 CFR 1004.11, any person submitting information that 
he or she believes to be confidential and exempt by law from public 
disclosure should submit via email or postal mail two well-marked 
copies: One copy of the document marked ``confidential'' including all 
the information believed to be confidential, and one copy of the 
document marked ``non-confidential'' that deletes the information 
believed to be confidential. Submit these documents via email or on a 
CD, if feasible. DOE will make its own determination about the 
confidential status of the information and will treat it according to 
its determination. It is DOE's policy that all comments, including any 
personal information provided in the comments, may be included in the 
public docket, without change and as received, except for information 
deemed to be exempt from public disclosure.

IV. Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order (E.O.) 12866, ``Regulatory Planning and Review,'' 
as supplemented and reaffirmed by E.O. 13563, ``Improving Regulation 
and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011), and amended by 
E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879 (April 11, 
2023), requires agencies, to the extent permitted by law, to (1) 
propose or adopt a regulation only upon a reasoned determination that 
its benefits justify its costs (recognizing that some benefits and 
costs are difficult to quantify); (2) tailor regulations to impose the 
least burden on society, consistent with obtaining regulatory 
objectives, taking into account, among other things, and to the extent 
practicable, the costs of cumulative regulations; (3) select, in 
choosing among alternative regulatory approaches, those approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety, and other advantages; distributive impacts; 
and equity); (4) to the extent feasible, specify performance 
objectives, rather than specifying the behavior or manner of compliance 
that regulated entities must adopt; and (5) identify and assess 
available alternatives to direct regulation, including providing 
economic incentives to encourage the desired behavior, such as user 
fees or marketable permits, or providing information upon which choices 
can be made by the public. Section 6(a) of E.O. 12866 also requires 
agencies to submit ``significant regulatory actions'' to the Office of 
Information and Regulatory Affairs (OIRA) for review. This proposed 
rule has been determined to be a ``significant regulatory action'' 
under Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735, October 4, 1993). Accordingly, this proposed rule was reviewed 
under that Executive order by OIRA of the Office of Management and 
Budget (OMB).

[[Page 73663]]

    Consistent with Executive Orders 12866, 13563 and 14094, DOE issues 
this proposed rule only on a reasoned determination that the benefits 
of the rule justify its costs, and, in choosing among alternative 
regulatory approaches, DOE has selected those approaches that maximize 
net benefits. DOE proposes a broad but largely procedural revision of 
its acquisition regulation to update and streamline the policies, 
procedures, provisions, and clauses that are currently applicable to 
its contracts.
    The proposed rule seeks to update, clarify, or eliminate coverage 
that is unclear, obsolete, or unnecessarily duplicates the FAR; 
incorporate class deviations into the coverage; streamline the 
coverage's policies and procedures where appropriate (taking into 
account DOE's and its contractors' actual experiences); and add several 
new minor clauses in order to standardize local clause language 
throughout the department by eliminating the multiple versions of local 
clauses in current use. While the proposed rule does include several 
minor policy revisions, none of the revisions are substantial and in 
total they will have negligible impact on DOE's operations, its 
contractors, or the economy. The revisions do not in any specific case, 
or in total, substantially change the existing DEAR or how DOE and DOE 
contractors adhere to the DEAR. Most of these proposed changes would 
not generate any additional costs.
    Nonetheless, DOE would like to highlight several changes to the 
DEAR that raise potential cost burden concerns and discuss the expected 
impacts of these changes.
    First, the proposed rule includes a revision of the Facility 
Clearance clause and associated policy coverage to incorporate a pre-
award Interim Access procedure and allow for final Facility Clearance 
post-award. This change should not result in any significant costs and 
is intended to benefit the Government by leveraging interim access 
authorizations for key contractor personnel and improving efficiencies 
in the timeliness of contract awards, and in contract management.
    Additionally, DOE proposes to revise the M&O fee policy to simplify 
the explanation of fee calculations, delete outdated requirements, and 
raise the classification factor for R&D laboratory from 1.25 to 1.5. 
These changes should not result in any significant costs. Most of the 
changes are editorial in nature, and are internal procedures directed 
to DOE contracting officers who will benefit from the simplified 
explanation of fee calculations. The change in classification factor 
will not result in any significant cost increase since DOE expects no 
change to the total available fees under these contracts. The revisions 
are intended to reduce the administrative burden associated with 
routine requests to the SPE to exceed the total available fees 
calculated using the existing classification factor.
    Furthermore, DOE proposes to add several new contract clauses. Four 
of these (Agreements for Commercializing Technology; Small Business 
Subcontracting Plan; Conditional Payment of Fee, Profit, and Other 
Incentives; Identification of Contractor Employees) are substantially 
similar to clauses already widely used in DOE contracts. As a result, 
these four changes would not result in any added burden or costs but 
would benefit the Department and its contractors by standardizing these 
clauses across contracts.
    The entirely new clauses are:
     A clause to address situations where a M&O contractor is 
permitted under federal and state unemployment rules to opt out of 
paying the state unemployment insurance tax and instead reimburse the 
state for actual claims paid out to its former employees. The proposed 
clause requires notification to the government of the contractor's 
election and asserts the government's right to review such changes to 
assess budgetary and programmatic risks when opting out. This clause 
only applies to M&O contracts and the notification required poses no 
significant burden or cost.
     A clause to address conflicts of interest, tailored to M&O 
contracts. The current DEAR requires M&O contracts to contain an 
organizational conflict of interest clause substantially similar to the 
clause at section 952.209-72. The proposed clause tailors that existing 
clause specifically for M&O contracts in an attempt to provide uniform 
requirements. The clause only applies to M&O contracts and poses no 
significant additional burden or cost, but the consistency across M&O 
contracts will benefit the Government in contract award and 
administration.
     A clause to clarify the policy and procedures for 
integrating DOE Directives into non-M&O contracts. Contractor 
requirements documents (CRDs), attached to DOE Directives, have been 
integrated into non-M&O contracts as needed for a long time. The 
addition of the proposed clause, along with the general information 
section and clause prescription is simply intended to codify the 
existing process of integrating the requirements of DOE Directives into 
non-M&O contracts on a bilateral basis and imposes no additional burden 
or cost.
    Finally, many of the proposed changes would result in benefits to 
the public. Because the DEAR has not had a comprehensive update in 
decades, it contains outdated and unused content. Additionally, it has 
citations to outdated laws and regulations and contains sections that 
are duplicative of the FAR or that are more appropriate for internal 
procedures and policies. The proposed changes would streamline the 
DEAR, make it easier to read, and would reflect current practice and 
requirements.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
requires preparation of an initial regulatory flexibility analysis for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE 
published procedures and policies on February 19, 2003, to ensure that 
the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. The Department 
has made its procedures and policies available on the Office of General 
Counsel's website: www.energy.gov/gc/office-general-counsel.
    The DEAR governs all DOE acquisitions which obligate appropriated 
funds. Using data from its Integrated Data Warehouse, DOE estimates 
that it currently has approximately 3,200 prime contractors whose 
contracts are governed in part by the DEAR and that approximately 2,000 
of those contractors are small entities under the RFA. Therefore, DOE 
has reason to believe that the proposed rule, which is a comprehensive 
update of the DEAR, could affect a substantial number of small 
entities.
    However, DOE expects that the proposed rule would not have a 
significant economic impact on those small entities. In fact, DOE 
expects that the overall impacts of the proposed rule would benefit 
small entities because the proposed changes would, among other things, 
revise or remove outdated information and citations, remove extraneous 
procedural information that applies only to DOE's internal procedures, 
and remove policy or procedures duplicative of FAR requirements.

[[Page 73664]]

    Moreover, proposed changes that are not merely technical or 
procedural primarily apply to DOE's twenty-three M&O contracts. An M&O 
contract is an agreement by which a private sector entity operates a 
DOE facility, such as a national laboratory. None of DOE's M&O 
contracts are held by small entities, and therefore changes to those 
contracts do not directly impact small entities.
    Furthermore, even if M&O contractors could be considered small 
entities under the RFA, the proposed changes that would only impact M&O 
contracts are not economically significant.
     DOE's proposed changes to the M&O fee policy sections 
would simplify and state explicitly the methodology Contracting 
Officers are to utilize for determining the total available fee for an 
M&O contract. The revisions are primarily intended to reduce the 
administrative burden for Contracting Officers. For instance, DOE's 
proposed rule clarifies that the maximum total available fee amount for 
an M&O contract may not exceed the fee derived from calculations 
included in the policy unless approved in advance by the SPE or 
designee. Additionally, the proposed rule includes an increase in the 
classification factor for R&D laboratory from 1.25 to 1.5. This change 
would impact 16 M&O contractors who currently operate national 
laboratories (all of which are managed and operated by large entities) 
but should not have a significant economic impact because DOE does not 
anticipate an increase in the total available fees approved for these 
contracts.
     DOE proposes to add a clause at section 970.5222-4 to 
address situations where a M&O contractor is permitted under Federal 
and state unemployment rules to opt out of paying the state 
unemployment insurance tax and instead reimburse the state for actual 
claims paid out to its former employees. The proposed clause requires 
notification to the government of the contractor's election and asserts 
the government's right to review such changes to assess budgetary and 
programmatic risks when opting out. DOE does not believe that the 
notification would result in any economic impact.
     DOE also proposes to add a clause at section 970.5209-70 
to address conflicts of interest, tailored to M&O contracts. The 
current DEAR requires M&O contracts to contain an organizational 
conflict of interest clause substantially similar to the clause at 
section 952.209-72. The proposed clause tailors that existing clause 
specifically for M&O contracts in an attempt to provide uniform 
requirements and poses no significant additional burden or cost. 
Therefore, DOE does not believe that the new clause will impose a 
significant economic impact.
     DOE proposes to add two clauses specific to M&O 
contractors: Agreements for Commercializing Technology at section 
970.5217-2 and Small Business Subcontracting Plan at section 970.1907-
8. These clauses are substantially similar to clauses already widely 
used in DOE contracts, and would therefore not have a significant 
economic impact.
    Finally, the remaining substantive revisions in the proposed rule 
that are applicable to non-M&O contracts would not have a significant 
economic impact.
     The proposed rule includes a revision of the Facility 
Clearance provision at section 952.204-73, which is required in all 
solicitations for which the contract work is anticipated to require 
access to classified information or special nuclear material. The 
current provision requires a full Facility Clearance prior to the award 
of a contract requiring access to classified information, and prior to 
granting any Interim Access Authorizations to key management personnel. 
The proposed revision would provide a process that permits contract 
award prior to granting a full Facility Clearance, and permit contract 
award prior to granting Interim Access Authorizations to key management 
personnel. There is no change to the processes themselves, only to the 
timing of the processes.
     DOE proposes to add a clause to clarify the policy and 
procedures for integrating DOE Directives into non-M&O contracts. 
Contractor requirements documents (CRDs), attached to DOE Directives, 
have been integrated into non-M&O contracts as needed for a long time. 
The addition of the proposed clause, along with the general information 
section and clause prescription is simply intended to codify the 
existing process of integrating the requirements of DOE Directives into 
non-M&O contracts on a bilateral basis and imposes no additional burden 
or cost to the contractors.
     The proposed rule includes two new clauses: Conditional 
Payment of Fee, Profit, and Other Incentives at section 952.242-71 and 
Identification of Contractor Employees at section 952.203-1. These 
clauses are substantially similar to clauses already widely used in DOE 
contracts, and would therefore not have a significant economic impact.
    Accordingly, DOE certifies that this proposed rule would not have a 
significant economic impact on a substantial number of small entities, 
and, therefore, no regulatory flexibility analysis has been prepared.

C. Review Under the Paperwork Reduction Act of 1995

    This rulemaking imposes no new information or record keeping 
requirements. Accordingly, Office of Management and Budget clearance is 
not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et 
seq.) Existing information collections imposed by the Department of 
Energy Acquisition Regulation are covered by OMB Control Number 1910-
4100.

D. Review Under the National Environmental Policy Act of 1969

    DOE analyzed this proposed rule in accordance with the National 
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and 
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has 
determined that the proposed rule fits within the following categorical 
exclusion listed in appendix A to subpart D of part 1021: A6 
(Procedural rulemakings, including rulemaking under 48 CFR chapter 9 
establishing procedures for technical and pricing proposals and 
establishing contract clauses and contracting practices for the 
purchase of goods and services). Therefore, this proposed rule does not 
require the preparation of either an environmental impact statement or 
environmental assessment pursuant to NEPA.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 
1999), imposes certain requirements on agencies formulating and 
implementing policies or regulations that preempt State law or that 
have federalism implications. The Executive order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has determined that 
this proposed rule does not limit the policymaking discretion of the 
States. No further action is required by Executive Order 13132.

[[Page 73665]]

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Federal agencies the general duty to adhere to the following 
requirements: (1) eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) clearly specifies 
the preemptive effect, if any; (2) clearly specifies any effect on 
existing Federal law or regulation; (3) provides a clear legal standard 
for affected conduct while promoting simplification and burden 
reduction; (4) specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that, to the extent 
permitted by law, this rule meets the relevant standards of Executive 
Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. (Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA (62 FR 12820) (This policy is 
also available at: www.energy.gov/gc/guidance-opinions under ``Guidance 
& Opinions'' (Rulemaking)). DOE examined the proposed rule according to 
UMRA and its statement of policy and has determined that the rule 
contains neither an intergovernmental mandate, nor a mandate that may 
result in the expenditure by State, local, and Tribal governments, in 
the aggregate, or by the private sector, of $100 million or more in any 
year. Accordingly, no further assessment or analysis is required under 
UMRA.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This proposed rule would not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

I. Review Under Executive Order 12630

    The Department has determined, under Executive Order 12630, 
``Governmental Actions and Interference with Constitutionally Protected 
Property Rights,'' 53 FR 8859 (March 18, 1988), that this proposed rule 
would not result in any takings which might require compensation under 
the Fifth Amendment to the United States Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), 
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). 
Pursuant to OMB Memorandum M-19-15, Improving Implementation of the 
Information Quality Act (April 24, 2019), DOE published updated 
guidelines which are available at: www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf.
    DOE has reviewed this proposed rule under the OMB and DOE 
guidelines and has concluded that it is consistent with applicable 
policies in those guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (OIRA), Office of 
Management and Budget, a Statement of Energy Effects for any proposed 
significant energy action. A ``significant energy action'' is defined 
as any action by an agency that promulgates or is expected to lead to 
promulgation of a final rule, and that: (1) is a significant regulatory 
action under Executive Order 12866, or any successor order; and (2) is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, or (3) is designated by the 
Administrator of OIRA as a significant energy action. For any proposed 
significant energy action, the agency must give a detailed statement of 
any adverse effects on energy supply, distribution, or use should the 
proposal be implemented, and of reasonable alternatives to the action 
and their expected benefits on energy supply, distribution, and use.
    This proposed rule, which revises and updates DOE's acquisition 
regulation, would not have a significant adverse effect on the supply, 
distribution, or use of energy and, therefore, is not a significant 
energy action.

V. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking and request for comment.

List of Subjects

48 CFR Parts 901, 902, 909, 912, 915, 916, 926, and 951

    Government procurement.

48 CFR Part 903

    Antitrust, Conflict of interest, Government procurement.

48 CFR Part 904

    Classified information, Government procurement.

[[Page 73666]]

48 CFR Part 908

    Government procurement, Motor vehicles, Printing, Utilities.

48 CFR Part 917

    Government procurement, Reporting and recordkeeping requirements, 
Research.

48 CFR Part 919

    Government procurement, Minority businesses, Small businesses, 
Women.

48 CFR Part 922

    Equal employment opportunity, Government procurement, Labor, 
Reporting and recordkeeping requirements.

48 CFR Part 923

    Drug abuse, Government procurement, Radiation protection.

48 CFR Part 925

    Foreign trade, Government procurement.

48 CFR Part 927

    Copyright, Government procurement, Inventions and patents.

48 CFR Part 931

    Accounting, Government procurement.

48 CFR Part 932

    Accounting, Government procurement, Loan programs--energy, Loan 
programs--National defense.

48 CFR Part 933

    Administrative procedure and practice, Government procurement.

48 CFR Part 935

    Government procurement, Research.

48 CFR Parts 936 and 952

    Government procurement, Reporting and recordkeeping requirements.

48 CFR Part 941

    Government procurement, Utilities.

48 CFR Part 942

    Accounting, Government procurement.

48 CFR Part 945

    Government procurement, Government property.

48 CFR Part 970

    Accounting, Classified information, Drug abuse, Government 
procurement, Insurance, Labor, Minority businesses, Reporting and 
recordkeeping requirements, Small businesses, Surety bonds, Taxes, 
Whistleblowing, Women.

Signing Authority

    This document of the Department of Energy was signed on August 2, 
2023, by William J. Quigley, Deputy Associate Administrator, 
Partnership and Acquisition Services, National Nuclear Security 
Administration, pursuant to delegated authority from the Administrator, 
National Nuclear Security Administration, and John R. Bashista, 
Director, Office of Acquisition Management, Department of Energy, 
pursuant to delegated authority from the Secretary of Energy. These 
documents with the original signature and date are maintained by DOE/
NNSA. For administrative purposes only, and in compliance with 
requirements of the Office of the Federal Register, the undersigned DOE 
Federal Register Liaison Officer has been authorized to sign and submit 
the document in electronic format for publication, as an official 
document of the Department of Energy. This administrative process in no 
way alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on August 2, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons stated in the preamble, DOE proposes to amend 
chapter 9 of title 48 of the Code of Federal Regulations as set forth 
below:

PART 901--FEDERAL ACQUISITION REGULATIONS SYSTEM

0
1. The authority citation for part 901 continues to read as follows:

    Authority:  42 U.S.C. 7101 et. seq. and 50 U.S.C. 2401 et seq.

0
2. Section 901.103 is revised to read as follows:


Sec.  901.103  Authority.

    The DEAR and amendments thereto are issued by the Senior 
Procurement Executives (SPEs) of the Department of Energy (DOE) and the 
National Nuclear Security Administration (NNSA). The SPEs may also 
approve deviations from the DEAR, together and individually. The DOE 
SPE delegation is pursuant to a delegation from the Secretary of Energy 
in accordance with the authority of section 644 of the Department of 
Energy Organization Act (42 U.S.C. 7254), section 205(c) of the Federal 
Property and Administrative Services Act of 1949, as amended (40 U.S.C. 
121(c)(2)), and other applicable laws. The NNSA SPE delegation is 
pursuant to a delegation from the Administrator of the NNSA, in 
accordance with section 3212 of the National Nuclear Security 
Administration Act (50 U.S.C. 2402), section 205(c) of the Federal 
Property and Administrative Services Act of 1949, as amended (40 U.S.C. 
121(c)(2)), and other applicable laws. Except for the authorities 
designated as non-delegable, the SPEs are delegated the authorities 
assigned to the Agency Head in the FAR. A reference to the SPE refers 
to the DOE SPE and the NNSA SPE, unless otherwise indicated.


Sec.  901.301.70  [Redesignated as 901.301-70]

0
3. Section 901.301.70 is redesignated as section 901.301-70.
0
4. Newly redesignated section 901.301-70 is revised to read as follows:


Sec.  901.301-70  Other issuances related to acquisition.

    In addition to the FAR and DEAR, there are other issuances which 
deal with acquisition. Among these are the Federal Property Management 
Regulation (41 CFR chapter 101), the Federal Management Regulation (41 
CFR chapter 102), the DOE Property Management Regulation (41 CFR 
chapter 109), and DOE Directives. The Department also maintains the DOE 
Acquisition Guide (``the Guide''), which has procedural guidance for 
the acquisition community. The DOE Acquisition Guide serves this 
purpose by identifying relevant internal standard operating procedures 
to be followed by both procurement and program personnel who are 
involved in various aspects of the acquisition process. The Guide also 
is intended to be a repository of best practices found throughout the 
agency that reflect specific illustrations of techniques which might be 
helpful to all readers. The Guide is at https://www.energy.gov/management/articles/department-energy-acquisition-guide.
0
5. Subpart 901.4 is added to read as follows:
Subpart 901.4--Deviations from the DEAR
Sec.
901.401 Definition.
901.403 Individual deviations.
901.404 Class deviations.

Subpart 901.4--Deviations from the DEAR


Sec.  901.401  Definition.

    A deviation from the DEAR is defined as the issuance or use of a 
policy, procedure, solicitation provision, contract clause, method, or 
practice of conducting acquisition actions of any kind at any stage of 
the acquisition process that is inconsistent with the DEAR.

[[Page 73667]]

Sec.  901.403  Individual deviations.

    Requests for individual deviations from the FAR or the DEAR shall 
be submitted to the cognizant Senior Procurement Executive (SPE), that 
is DOE or NNSA, (or designee) for approval. Requests shall cite the 
specific part of the FAR or DEAR from which it is desired to deviate, 
shall set forth the nature of the proposed deviation(s), and shall give 
the reasons for the action requested.


Sec.  901.404  Class deviations.

    Requests for class deviations from the FAR or the DEAR shall be 
submitted to the cognizant SPE, that is DOE or NNSA, (or designee) for 
processing in accordance with FAR 1.404 and this section. Requests 
shall include the same information prescribed in 901.403 for individual 
deviations.
0
6. Amend section 901.602-3 by revising paragraph (b)(3) to read as 
follows:


Sec.  901.602-3  Ratification of unauthorized commitments.

    (b) * * *
    (3) The ratification authority of the DOE and NNSA Senior 
Procurement Executives in paragraph (b)(2) of this section is delegated 
to the Head of the Contracting Activity (HCA) for individual 
unauthorized commitments of $250,000 or under. The ratification 
authority of the HCA is nondelegable.


Sec.  901.603-1  [Amended]

0
7. Amend section 901.603-1 by removing the text ``DOE Order 361.1B'' 
and adding in its place ``DOE Order 361.1''.


Sec.  901.603-70  [Amended]

0
8. Amend section 901.603-70 by removing the text ``DOE Order 541.1B'' 
and adding in its place ``DOE Order 541.1''.

PART 902--DEFINITIONS OF WORDS AND TERMS

0
9. The authority citation for part 902 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
10. Amend section 902.101 by revising the definition of ``Senior 
Procurement Executive'' to read as follows:


Sec.  902.101  Definitions.

* * * * *
    Senior Procurement Executive means for the Department of Energy, 
the Director, Office of Acquisition Management and for the National 
Nuclear Security Administration, the Deputy Associate Administrator for 
the Office of Partnership and Acquisition Services.

PART 903--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

0
11. The authority citation for part 903 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
12. Section 903.104-7 is revised to read as follows:


Sec.  903.104-7  Violations or possible violations.

    (a) Except for Headquarters activities, the individual within DOE 
responsible for fulfilling the requirements of FAR 3.104-7(a)(1) and 
(2), relative to contracting officer conclusions on the impact of a 
violation or possible violation of subsections 27 (a), (b), (c) or (d) 
of the Office of Federal Procurement Policy Act, shall be the 
individual who has procurement authority and is one supervisory level 
above the Contracting Officer. The legal counsel is the Chief Counsel 
for the Operations Offices or the Federal Energy Technology Center; the 
Counsel, or the Chief Counsel, for the Support Offices or the Naval 
Reactors Offices; the General Counsel for National Nuclear Security 
Administration (NNSA), and the General Counsel for the Power 
Administrations. For Headquarters activities, the individual designated 
to perform the responsibilities in FAR 3.104-7(a)(1) and (2) regarding 
questions of disclosure of proprietary or source selection information 
is the Assistant General Counsel for Procurement and Financial 
Assistance. The designated individual for other questions regarding FAR 
3.104-7(a)(1) and (2) for Headquarters activities, or for any other 
office that does not have authority through procurement operations, is 
the Agency Ethics Official (Designated Agency Ethics Official).
0
13. Section 903.1003 is added to read as follows:


Sec.  903.1003  Requirements.

    In accordance with FAR subpart 7.5, DOE does not contract for 
inherently governmental functions. However, DOE may contract for 
services that can require contractors to perform duties that require 
regular contact with DOE and the public related to DOE's mission. To 
ensure that all parties know the status of individuals as contractor 
personnel, contractors and their employees must properly identify 
themselves as contractors in all DOE internal and external 
communications and meetings.
0
14. Section 903.1004 is revised to read as follows:


Sec.  903.1004  Contract clauses.

    (a) The Contracting Officer shall insert the DOE website address 
https://www.energy.gov/sites/prod/files/2017/05/f34/HotlinePoster.pdf 
in paragraph (b)(3)(ii) of the clause at FAR 52.203-14, Display of 
Hotline Poster(s).
    (b) The Contracting Officer shall insert the clause at 952.203-1, 
Identification of Contractor Employees, in all solicitations and 
contracts for services over the micro-purchase threshold.

PART 904--ADMINISTRATIVE MATTERS

0
15. The authority citation for part 904 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
16. Amend section 904.401 by:
0
a. Revising the definition of ``Access authorization'';
0
b. Removing the definition of ``Classified information'' and adding the 
definition ``Classified information or Classified National Security 
Information'' in its place; and
0
c. Adding in alphabetical order a definition for 
``Counterintelligence''.
    The revision and additions read as follows:


Sec.  904.401  Definitions.

    Access authorization means an administrative determination that an 
individual is eligible for access to classified information or is 
eligible for access to, or control over, special nuclear material under 
the Atomic Energy Act of 1954; Executive Order 12968, Access to 
Classified Information, dated August 2, 1995; or 10 CFR part 710.
* * * * *
    Classified information or Classified National Security Information 
mean information officially determined to be Restricted Data, Formerly 
Restricted Data, or Transclassified Foreign Nuclear Information under 
the Atomic Energy Act of 1954, as amended, or information determined to 
require protection under Executive Order 13526, Classified National 
Security Information, dated December 29, 2009.
    Counterintelligence means information gathered and activities 
conducted to protect against espionage, other intelligence activities, 
sabotage, or assassinations conducted for or on behalf of foreign 
powers, organizations or persons, or international terrorist 
activities, but not including personnel,

[[Page 73668]]

physical, document or communication security programs.
* * * * *
0
17. Section 904.402 is revised to read as follows:


Sec.  904.402  General.

    (b) The basis of Department of Energy's (DOE) industrial security 
requirements is the Atomic Energy Act of 1954, as amended, the DOE 
Organization Act of 1977, as amended, and Executive Orders 13526 and 
12829.
    (3) DOE has established a counterintelligence program. All DOE 
elements and contractors managing DOE-owned or leased facilities that 
require access authorizations, should undertake the necessary 
precautions to ensure that DOE and covered contractor personnel, 
programs and resources are properly protected from foreign intelligence 
threats and activities.
    (4) DOE security regulations concerning restricted data are 
codified at 10 CFR part 1045.
    (5) Section 234B of the Atomic Energy Act (42 U.S.C. 2282b) 
requires that DOE contracts include a clause providing for appropriate 
reductions in fees or amounts paid to the contractor under the contract 
in the event of violations of any rule, regulation, or order relating 
to the safeguarding or security of Restricted Data or other classified 
information. The clause is required for all DOE prime contracts that 
involve any possibility of contractor access to Restricted Data or 
other classified information. The clause specifies various degrees of 
violations and the amount of reduction attributable to each degree. The 
clause at 952.242-71, Conditional Payment of Fee, Profit, or Other 
Incentives, shall be used to comply with 42 U.S.C. 2282b (unless the 
clause at 970.5215-3, Conditional Payment of Fee, Profit, and Other 
Incentives--Facility Management Contracts is used). See 942.71(d) for 
the clause's prescription.
    (e) Part 927 contains policies and procedures for safeguarding 
classified information in patent applications and patents.
0
18. Amend section 904.404 by revising paragraphs (d)(1), (3), (6), and 
(7) to read as follows:


Sec.  904.404  Solicitation provision and contract clause.

    (d) * * *
    (1) Security, 952.204-2. This clause is required in contracts and 
subcontracts, the performance of which involves or is likely to involve 
classified information, access to special nuclear materials or the 
provision of protective services. This includes contracts awarded under 
simplified acquisition procedures, as well as National Security Program 
contracts, under which access to proscribed information is required. 
Although DOE utilizes the National Industrial Security Program, DOE's 
security authority is derived from the Atomic Energy Act which contains 
specific language not found in other agencies' authorities. For this 
reason, DOE contracts must contain the clause at 952.204-2 rather than 
the clause at FAR 52.204-2 and Contracting Officers must incorporate 
DOE Form 470.1 or equivalent.
* * * * *
    (3) Sensitive foreign nation controls, 952.204-71. This clause is 
required in unclassified research contracts which may involve sharing 
unclassified information about nuclear technology with certain 
sensitive foreign nations. The contractor shall be provided at the time 
of award the listing of nations referenced in DOE Order 142.3, 
Unclassified Foreign Visits and Assignments Program, or its successor. 
(The attachment referred to in the clause shall set forth the 
applicable requirements of the DOE regulations on dissemination of 
unclassified published and unpublished technical information to foreign 
nations.)
* * * * *
    (6) Computer Security, 952.204-77. This clause is required in 
contracts in which the contractor may have access to computers owned, 
leased or operated on behalf of the Department of Energy.
    (7) Counterintelligence. The Contracting Officer shall include the 
clause at 952.204-74, Counterintelligence, in all contracts that 
include the clauses at 952.204-2, Security Requirements, and 952.204- 
70, Classification/Declassification.
0
19. Amend section 904.7004 by revising the first sentence of paragraph 
(a) to read as follows:


Sec.  904.7004  Findings, determination, and contract award or 
termination.

    (a) Based on the information disclosed by the offeror(s) or 
contractor, and after consulting with the DOE Office of Environment, 
Health, Safety and Security, the contracting officer must determine 
that award of a contract to an offeror(s) or continued performance of a 
contract by a contractor will not pose an undue risk to the common 
defense and security. * * *
* * * * *
0
20. Amend section 904.7102 by revising paragraph (e) to read as 
follows:


Sec.  904.7102  Waiver by the Secretary.

* * * * *
    (e) Any request for a waiver under this subpart shall be 
accompanied by the information required by the clause at 952.204-73, 
Facility Clearance.
0
21. Subpart 904.74 is added to read as follows:

Subpart 904.74--Department of Energy Directives

Sec.
904.7400 General.
904.7401 Contract clause.


Sec.  904.7400  General.

    The contractor is required to comply with the requirements of 
applicable Federal, State, and local laws and regulations, unless 
relief has been granted by the appropriate authority. Additionally, the 
Department of Energy (DOE) Directives Program is a system of 
instructions, including orders, notices, manuals, guides, and 
standards, for DOE elements. In certain circumstances, DOE will apply 
requirements contained in these directives to a contract. In these 
circumstances, program and requirements personnel will be responsible 
for identifying the requirements that are applicable to the contract 
and for providing a list of applicable requirements to the Contracting 
Officer for inclusion in the contract.


Sec.  904.7401  Contract clause.

    The Contracting Officer shall insert the clause at 952.204-78, DOE 
Directives, in non-management and operating contracts where the work 
will be performed on a DOE site and the contract will be subject to the 
requirements of DOE Directives. This includes information technology or 
cybersecurity work, as well as other work program officials identify as 
requiring the clause.

PART 908--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
22. The authority citation for part 908 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.


Sec.  908.7103 and 908.7115 through 908.7117  [Removed and Reserved]

0
23. Sections 908.7103 and 908.7115 through 908.7117 are removed and 
reserved.

PART 909--CONTRACTOR QUALIFICATIONS

0
24. The authority citation for part 909 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

[[Page 73669]]

0
25. Amend section 909.403 by revising the definition of ``Debarring and 
suspending official'' to read as follows:


Sec.  909.403  Definitions.

* * * * *
    Debarring and suspending official, for the DOE, the designees are:
    (1) Debarring Official means the Debarring Official for DOE 
contracts is the Director, Office of Acquisition Management, DOE, or 
designee. The debarring Official for NNSA contracts is the Deputy 
Associate Administrator for the Office of Partnership and Acquisition 
Services, or designee.
    (2) Suspending Official means the Suspending Official for DOE 
contracts is the Director, Office of Acquisition Management, DOE, or 
designee. The suspending Official for NNSA contracts is the Deputy 
Associate Administrator for the Office of Partnership and Acquisition 
Services, or designee.
0
26. Amend section 909.405 by revising paragraphs (f), (g), and (h) to 
read as follows:


Sec.  909.405  Effect of listing.

* * * * *
    (f) DOE or NNSA may disapprove or not consent to the selection (by 
a contractor) of an individual to serve as a principal investigator, as 
a project manager, in a position of responsibility for the 
administration of Federal funds, or in another key personnel position, 
if the individual is listed in the System for Award Management (SAM) 
exclusions.
    (g) DOE or NNSA shall not conduct business with an agent or 
representative of a contractor if the agent's or representative's name 
has an active exclusion in SAM.
    (h) DOE or NNSA shall review SAM before conducting a pre-award 
survey or soliciting proposals, awarding contracts, renewing or 
otherwise extending the duration of existing contracts, or approving or 
consenting to the award, extension, or renewal of subcontracts.


Sec.  909.407-3  [Amended]

0
27. Amend section 909.407-3 in paragraph (e)(1)(vii) by removing the 
text ``EPLS'' and adding in its place the text ``SAM exclusion''.
0
28. Amend section 909.507-2 by revising paragraphs (a)(1) and (3) and 
(b) to read as follows:


Sec.  909.507-2  Contract clause.

    (a)(1) The contracting officer shall insert the clause at 952.209-
72, Organizational Conflicts of Interest, in each non-M&O solicitation 
and contract for advisory and assistance services expected to exceed 
the simplified acquisition threshold.
* * * * *
    (3) The contracting officer shall include Alternate I with the 
clause at 952.209-72 in instances in which a meaningful amount of 
subcontracting for advisory and assistance services is expected or the 
contract provides for the operation of a DOE site or facility or 
environmental remediation of specific DOE sites.
    (b) For M&O contracts, see 970.0906.

PART 912--ACQUISITION OF COMMERCIAL ITEMS

0
29. The authority citation for part 912 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
30. Section 912.301 is added to read as follows:


Sec.  912.301  Solicitation provisions and contract clauses for the 
acquisition of commercial products and commercial services.

    (f) The Contracting Officer shall supplement the clauses prescribed 
at FAR 12.301--
    (1) In all cases, with 952.232-7, Electronic Submission of 
Invoices/Vouchers; and
    (2) In appropriate cases, following prescriptions elsewhere in this 
chapter, with the following:
    (i) 952.204-74, Counterintelligence.
    (ii) 952.204-77, Computer Security.
    (iii) 952.211-71, Priorities and allocations for energy programs 
(clause).

PART 915--CONTRACTING BY NEGOTIATION

0
31. The authority citation for part 915 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
32. Section 915.404-4-70 is revised to read as follows:


Sec.  915.404-4-70  DOE structured profit and fee system.

    (a) This section implements FAR 15.404-4(b) and (d).
    (b) DOE's structured profit and fee system for non-management and 
operating contracts comprises two approaches: a weighted guidelines 
system for all but construction contracts, construction management 
contracts, and special equipment purchases; and a fee schedules-based 
system for construction contracts, construction management contracts, 
and special equipment purchases. The former is covered at 915.404-70-2 
through 915.404-70-8; the latter is covered at 915.404-71 through 
915.404-4-71-6. Both approaches use the procedures at 915.404-4-72 for 
cost-plus-award-fee contracts.
0
33. Amend section 915.404-4-70-2 in the table in paragraph (d) by 
revising entries II, IV.b., V, and VI to read as follows:


Sec.  915.404-4-70-2  Weighted guidelines system.

* * * * *
    (d) * * *

------------------------------------------------------------------------
               Profit factors                   Weight ranges (percent)
------------------------------------------------------------------------
 
                              * * * * * * *
II. Contract Risk (type of contract-weights   0 to 8.
 applied to total cost of items items I.a.
 thru I.e.).
 
                              * * * * * * *
IV. * * *
    b. Developed items employed (Weights      0 to 20.
     applied to total of profit $ for items
     I.a. thru I.e.).
V. Special Program Participation (Weights     -5 to +5.
 applied to total of Profit $ for items I.a.
 thru I.e.).
VI. Other Considerations (Weights applied to  -5 to +5.
 total of Profits $ for items I.a. thru
 I.e.).
 
                              * * * * * * *
------------------------------------------------------------------------


[[Page 73670]]

Sec.  915.404-4-72  [Amended]

0
34. Amend section 915.404-4-72 in the second sentence of paragraph (a) 
by removing ``970.15404-4-8'' and adding in its place ``970.1504-1-1 
through 970.1504-3''.
0
35. Section 915.408-70 is revised to read as follows:


Sec.  915.408-70  Key personnel clause.

    The Contracting Officer shall insert the clause at 952.215-70, Key 
Personnel, in solicitations and contracts under which successful 
performance is largely dependent on the expertise of specific key 
personnel.

PART 916--TYPES OF CONTRACTS

0
36. The authority citation for part 916 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
37. Section 916.307 is revised to read as follows:


Sec.  916.307  Contract clauses.

    When using the clause at FAR 52.216-7, Allowable Cost and Payment, 
supplement the clause with 952.216-7, Allowable Cost and Payment.


Sec.  916.504  [Amended]

0
38. Amend section 916.504 by redesignating paragraph (c) as paragraph 
(a)(1).


Sec.  916.505  [Amended]

0
39. Amend section 916.505 by:
0
a. Redesignating paragraph (b)(6) as paragraph (b)(8); and
0
b. In newly redesignated paragraph (b)(8)(i):
0
i. Removing the words ``Office of Procurement and Assistance 
Management'' and adding in their place ``Office of Acquisition 
Management''; and
0
ii. Removing ``48 CFR 16.505(b)(6)'' and adding in its place ``FAR 
16.505(b)(8)''.

PART 917--SPECIAL CONTRACTING METHODS

0
40. The authority citation for part 917 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
41. Amend section 917.600 by revising paragraph (b) to read as follows:


Sec.  917.600  Scope of subpart.

* * * * *
    (b) The requirements of this subpart apply to any Department of 
Energy management and operating contract.


Sec.  917.601  [Removed]

0
42. Section 917.601 is removed.
0
43. Amend section 917.602 by revising paragraphs (b) and (c) to read as 
follows:


Sec.  917.602  Policy.

* * * * *
    (b) It is the policy of the Department of Energy to provide for 
full and open competition in the award of management and operating 
contracts.
    (c) A management and operating contract may be extended at the 
completion of its term without providing for full and open competition 
only when such extension is justified under one of the statutory 
authorities identified in FAR 6.302 and only when authorized by the 
Secretary.


Sec.  917.7402  Sec.  [Amended]

0
44. Amend section 917.7402 in paragraphs (b) and (c)(4) by removing 
``DOE Order 430.1B'' and adding in its place ``DOE Order 430.1C''.

PART 919--SMALL BUSINESS PROGRAMS

0
45. The authority citation for part 919 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.


Sec.  919.7001 and 919.7002  [Removed]

0
46. Sections 919.7001 and 919.7002 are removed.
0
47. Section 919.7003 is revised to read as follows:


Sec.  919.7003  General policy.

    (a) The DOE Mentor-Protege program seeks to foster long-term 
business relationships between DOE prime contractors and small business 
concerns, historically Black colleges and universities (HBCUs), and 
other minority institutions of higher learning, and to increase the 
overall number of such entities that receive DOE contract and 
subcontract awards.
    (b) DOE contractors may enter into Mentor-Protege Agreements, aimed 
at providing developmental assistance to enhance capabilities, with the 
entities identified in paragraph (a) of this section.
    (c) Costs incurred by a mentor to provide developmental assistance 
are allowable only to the extent incurred in performance of a contract 
identified in the Mentor-Protege Agreement and are otherwise allowable 
in accordance with the cost principles applicable to that contract. 
Developmental assistance must not duplicate any effort normally 
expended in the course of awarding and administering the Mentor firm's 
subcontract.
    (d) The DOE Headquarters Office of Small and Disadvantaged Business 
Utilization (OSDBU) is the Program Manager for the DOE Mentor-Protege 
Program.


Sec.  919.7004 and 919.7005  [Removed]

0
48. Sections 919.7004 and 919.7005 are removed.
0
49. Section 919.7006 is revised to read as follows:


Sec.  919.7006  Incentives for DOE contractor participation.

    (a) Under cost-plus-award fee contracts, approved Mentor firms may 
earn award fees associated with their performance as a Mentor. The 
award fee plan may include provision for the evaluation of the 
contractor's utilization of small business concerns, HBCUs, and other 
minority institutions of higher learning. DOE may evaluate the Mentor's 
performance in the DOE Mentor-Protege Program under any Mentor-Protege 
Agreement(s) as a separate element of the award fee plan.
    (b) Mentor firms shall receive credit towards applicable 
subcontracting goals for subcontracts awarded pursuant to their Mentor-
Protege Agreements, as negotiated under FAR subpart 19.7.
    (c) Mentor firms may be reimbursed for allowable developmental 
assistance costs for protege firms under the contract costs.


Sec.  919.7007  through 919.7013 [Removed]

0
50. Sections 919.7007 through 919.7013 are removed.
0
51. Section 919.7014 is revised to read as follows:


Sec.  919.7014  Solicitation provision.

    The cognizant contracting officer shall insert the provision at 
952.219-70, DOE Mentor-Protege Program, in all solicitations that 
include the clause at FAR 52.219-9, Small Business Subcontracting Plan.

PART 922--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION

0
52. The authority citation for part 922 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
53. Section 922.101-70 is added to read as follows:


Sec.  922.101-70  General (applicability of Management and Operating 
contractor basic labor policies to certain non-Management and Operating 
contracts).

    (a) The policies and associated contract clauses in 970.2201 apply 
to the award and administration of non-Management and Operating 
contracts if:
    (1) The contract work had been previously performed under a DOE

[[Page 73671]]

Management and Operating contract; and/or
    (2) The Contractor is required to employ all or part of the former 
Contractor's workforce; or
    (3) The contract has been specifically designated by the Senior 
Procurement Executive.
    (b) The non-M&O contracts described by paragraph (a) of this 
section may include, but are not limited to, contracts whose work is 
for:
    (1) Environmental remediation;
    (2) Decontamination and decommissioning;
    (3) Environmental restoration;
    (4) Infrastructure services for the site;
    (5) Site closure at a current or former M&O contract site or 
facility; or
    (6) Protective forces that provide physical security of sites at a 
current or former M&O contract site.
0
54. Subpart 922.4 is added to read as follows:

Subpart 922.4--Labor Standards for Contracts Involving Construction

Sec.
922.406 Administration and enforcement.
922.406-1 Policy.


Sec.  922.406  Administration and enforcement.


Sec.  922.406-1  Policy.

    This section sets forth additional controls and criteria for the 
application of the Construction Wage Rate Requirements Statute (40 
U.S.C. chapter 31, subchapter IV, Wage Rate Requirements 
(Construction), formerly known as the Davis-Bacon Act) (Statute) in the 
Department of Energy's operational or maintenance activities. The 
policy included in this subpart applies to M&O contracts.
    (c) Categorical exemptions. The two categories of work discussed in 
paragraphs (c)(1) and (2) of this section would normally be covered by 
the Statute. However, in limited circumstances, these types of work 
will be classified as non-covered by the Statute. These exceptions are 
to be narrowly construed and used only when clearly applicable. Any 
decision on the two categorical exemptions from Statute coverage shall 
be made by the Head of the Contracting Activity, without power of 
delegation.
    (1) Work for which continuity of operations is mission-essential 
(i.e., when life, property, or DOE operating requirements are 
confronted with material risks).
    (2) Emergency work to combat the effects of fire, flood, 
earthquake, military or terrorist attacks, technological emergencies, 
infectious disease/pandemic influenza threats, equipment failure, 
accident, or other casualties, and to restart the operational activity 
following the casualty. This exemption will generally apply only to 
work directly related to restarting the activity or work.
    (d) Particular exemptions. Work items meeting one of the following 
criteria normally will be classified as non-covered by the Statute:
    (1) Individual work items estimated to cost $2,000 or less. The 
total dollar amount of a contract is not the determining factor; 
rather, consider the cost of individual work items classified as 
construction, alteration and/or repair, including painting and 
decorating. However, no item of work, the cost of which is estimated to 
be in excess of $2,000, shall be artificially divided into portions 
less than $2,000 for the purpose of avoiding the application of the 
Statute.
    (2) General operational and maintenance activities. Service-type 
work that is a part of general operational and maintenance activities, 
including cyclic, routine, and recurring programs, or which, being very 
closely and directly involved therewith, are more in the nature of 
operational activities than construction, alteration, and or repair 
work.
    (3) Assembly, modification, setup, installation, replacement, 
removal, rearrangement, connection, testing, adjustment, and 
calibration of machinery and equipment. Note: If these activities are a 
logical part of the construction of a facility, or where there is more 
than incidental construction work, relative to the overall effort 
involved, they are Statute covered.
    (4) Experimental development of equipment, processes, or devices, 
including assembly, fitting, installation, testing, reworking, and 
disassembly. This refers to equipment, processes, and devices that are 
assembled and/or set in place and interconnected for the purpose of 
conducting a test or experiment. The nature of the test or experiment 
may be such that the professional personnel who are responsible for the 
test or experiment and/or data to be derived therefrom must, by 
necessity, participate in the assembly and interconnections. The 
following types of experiments are not Statute covered:
    (i) Set-up of devices and processes associated with the experiment, 
within established facilities, usually require utility connections. 
Such set-ups are generally not covered by the Statute. (However, set-up 
requiring structural changes or modifications of basic utility 
services, as distinguished from connections thereto, is covered by the 
Statute.)
    (ii) Assembly of piping and equipment, including adaptation and 
modification within existing hot cell facilities. Assembly of piping 
and equipment, including adaptation and modification thereof, within 
existing hot cell facilities to prove out conceptual designs of 
chemical processing units or remotely controlled machining equipment.
    (iii) Assembly of materials and equipment for thermonuclear 
experiments. Assembly of materials and equipment for particular aspects 
of thermonuclear experiments to explore feasibility and to study other 
ramifications of the concept of high energy and to collect data 
thereon.
    (iv) Assembly, erection, modification, and disassembly of a loop 
set-up. A loop facility differs from a loop set-up in that it is of a 
more permanent character. (Note that preparatory work for a loop set-up 
or facility requiring structural changes or modifications of basic 
utility services, as distinguished from connections thereto, is covered 
by the Statute. Similarly, material and equipment that are installed 
for a loop set-up that is a permanent part of the facility, or used for 
a succession of experimental programs are similarly covered by the 
Statute.)
    (v) Reactor component experiments involving the insertion of 
experimental components within reactor systems without the use of a 
loop assembly. Such a facility may consist of a reactor vessel, 
pressurizing tank, coolant loops, pumps, heat exchangers, and other 
auxiliary equipment as needed. The facility also may include sufficient 
shielding to permit work on the reactor to proceed following a short 
period of power interruption. (Note: Although the erection and on-site 
assembly of such a reactor facility is covered by the Statute, the set-
up of components whose characteristics are under study are excluded 
from Statute coverage.)
    (5) Decontamination. Decontamination includes washing, scrubbing, 
and scraping to remove contamination; removal of contaminated soil or 
other material (except asbestos); and painting or other resurfacing, 
provided that such painting or resurfacing is an integral part of the 
decontamination activity. Except to the extent section 1804 of the 
Atomic Energy Act of 1954 (as amended by Title XI of the Energy Policy 
Act of 1992), 42 U.S.C. 2297g-3, applies to the work at issue. Section 
1804 requires all laborers and mechanics performing decontamination or 
decommissioning of

[[Page 73672]]

DOE uranium enrichment facilities are paid prevailing wages.
    (6) Burial of contaminated soil waste or contained liquid. Note, 
however, that the initial preparatory work readying the burial ground 
for use (e.g., any grading or excavating that is a part of initial site 
preparation, fencing, drilling wells for continued monitoring of 
contamination, construction of guard or other office space) is covered 
by the Statute. Work performed subsequent to burial that involves the 
placement of concrete or other like activity is also covered by the 
Statute.
    (e) Statute-covered experimental development work. Notwithstanding 
the exceptions in paragraph (d)(4) of this section, the following 
experimental development work is Statute covered: building 
construction, structural changes, drilling, tunneling, excavation, 
back-filling, modifications to utility services, as distinguished from 
temporary connections thereto, and set-up of equipment to be used for 
continuous testing (e.g., a machine to be continuously used for testing 
the tensile strength of structural members).
    (f) Different work categories may have differing Statute coverage. 
For instance, a contract for operational or maintenance activities does 
not necessarily mean that all work and activities at the contract 
location are classifiable as not Statute covered, since it may be 
necessary to separate work that should be classified as Statute 
covered. Therefore, the Contracting Officer shall establish and 
maintain controls for the careful scrutiny of proposed work assignments 
under such contracts.
    (1) Contractors whose contracts do not contemplate the performance 
of work covered by the Statute with the contractor's employees are not 
authorized to perform such work within the scope of the Statute, unless 
the Contracting Officer, in compliance with FAR subpart 22.4, modifies 
the contract.
    (2) Determinations of Statute applicability are the responsibility 
of the HCA on a case-by-case basis. However, the HCA may delegate to 
the Contracting Officer, if consistent with DOE's responsibilities as 
described in this subsection, the authority to prescribe, from time to 
time, classes of work as to which applicability or non-applicability of 
the Statute is clear.
    (g) Contracting Officer responsibilities. The Contracting Officer 
shall comply with the procedures for requesting wage determinations set 
forth in FAR 22.404, as necessary.
    (h) Construction site contiguous to an established manufacturing 
facility. As DOE-owned property sometimes encompasses several thousand 
acres of real estate, a number of separate facilities may be located in 
areas contiguous to each other on the same property. These facilities 
may be built over a period of years, and established manufacturing 
activities may be regularly carried on at one site at the same time 
that construction of another facility is underway at another site. On 
occasion, the regular manufacturing activities of the operating 
contractor at the first site may include the manufacture, assembly, and 
reconditioning of components and equipment that in other industries 
would normally be done in established commercial plants. While the 
manufacture of components and equipment in the manufacturing plant is 
not covered by the Statute, the installation of any such manufactured 
items on a construction job is covered by the Statute if the 
installation includes more than incidental construction work relative 
to the overall effort involved.

PART 923--ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE 
ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

0
55. The authority citation for part 923 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.


Sec.  923.002  [Removed]

0
56. Section 923.002 is removed.


Sec.  923.101  [Redesignated as 923.170]

0
57. Section 923.101 is redesignated as section 923.170
0
58. Newly redesignated section 923.170 is revised to read as follows:


Sec.  923.170  Policy.

    The Department of Energy's (DOE) policy is to promote sustainable 
acquisition by acquiring products and services that are energy-
efficient, contain recycled or biobased content, and have other 
environmentally preferable attributes, as specified in applicable 
statutory, regulatory, and Executive Order based requirements. See FAR 
2.101 for applicable definitions. More information on environmentally 
preferable products and services is available from the DOE Sustainable 
Acquisition Program.


Sec.  923.102  [Redesignated as 923.171]

0
59. Section 923.102 is redesignated as section 923.171.


Sec.  923.103  [Redesignated as 923.172]

0
60. Section 923.103 is redesignated as section 923.172.
0
61. Newly redesignated section 923.172 is revised to read as follows:


Sec.  923.172  Contract clauses.

    Insert the clause at 952.223-78, Sustainable Acquisition Program, 
in all contracts under which the contractor operates Government-owned 
facilities or motor vehicle fleets, or significant portions thereof, or 
performs construction at a Government-owned facility.


Sec.  923.903  [Amended]

0
62. Amend section 923.903 by removing ``52.223-XX'' and adding in its 
place ``52.223-19'' wherever it appears.
0
63. Section 923.7002 is revised to read as follows:


Sec.  923.7002  Worker safety and health.

    (a) The Atomic Energy Act mandates that DOE shall either pursue 
civil penalties, as implemented at 10 CFR part 851, for a violation 
under 42 U.S.C. 2282c, or a contract fee reduction, but not both. For a 
contract fee reduction--
    (1) The clause prescribed at both 942.71(d) and 923.7003(f), which 
is 952.242-71, Conditional Payment of Fee, Profit, or Other Incentives, 
addresses contract fee reductions (for both non-management and 
operating contracts and management and operating contracts; for the 
latter 942.71(d) and 923.7003(f) refer to clause prescribed in 
970.1504-3(b)).
    (2) The clause provides, among other things, for an appropriate 
reduction to the fee, profit, or other incentives under the contract in 
the event of a violation by the contractor or any contractor employee 
of any Departmental regulation relating to the enforcement of worker 
safety and health concerns.
    (3) When reviewing performance failures that would warrant a 
reduction of otherwise earned fee, the Contracting Officer must 
consider mitigating factors that may warrant a reduction below the 
applicable range specified in the clause. The mitigating factors are 
specified in the clause.
    (4) The Contracting Officer must obtain the concurrence of the Head 
of the Contracting Activity: prior to effecting any reduction of fee, 
profit or other incentives otherwise payable under the clause at 
952.942-71, Conditional Payment of Fee, Profit, or Other Incentives; 
and prior to determining that no reduction is warranted for performance 
failure(s) that would otherwise warrant a reduction.

[[Page 73673]]

    (b) In the event of a violation by the contractor or any contractor 
employee of any Department regulation relating to worker safety and 
health concerns, before deciding to pursue a contract fee reduction, 
the Contracting Officer must coordinate with the Office of Nuclear 
Safety within the Office of Enforcement in the Office of Enterprise 
Assessments (or designated successor office).
0
64. Amend section 923.7003 by:
0
a. Revising paragraphs (a), (f), and (g); and
0
b. Removing paragraph (h).
    The revisions read as follows:


Sec.  923.7003  Contract clauses.

    (a) A decision to include or not include environmental, safety and 
health clauses in DOE contracts shall be made by the contracting 
officer in consultation with appropriate personnel within the Office of 
Environment, Health, Safety and Security (or designated successor 
office). For M&O contracts see 970.2303-3 and insert the clause at 
970.5223-1.
* * * * *
    (f) Unless the clause for management and operating contracts is 
prescribed (see 970.1504-3(b)), insert the clause at 952.242-71, 
Conditional Payment of Fee, Profit, and Other Incentives, in all 
contracts that contain the clause at 952.204-2, Security Requirements, 
the clause at 952.250-70, Nuclear Hazards Indemnity Agreement, or both 
clauses.
    (g) The contracting officer shall insert the clause at 952.223-75, 
Preservation of Individual Occupational Radiation Exposure Records, in 
contracts containing 952.223-71, Integration of Environment, Safety, 
and Health into Work Planning and Execution, or 952.223-72, Radiation 
Protection and Nuclear Criticality.

PART 925--FOREIGN ACQUISITION

0
65. The authority citation for part 925 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
66. Amend section 925.1001 by revising paragraph (b) to read as 
follows:


Sec.  925.1001  Waiver of right to examination of records.

    (b) Determination and findings. A determination and findings 
required by FAR 25.1001(b) shall be forwarded to either the Director, 
Office of Contract Management, Office of Acquisition Management, or for 
the National Nuclear Security Administration (NNSA), to the Deputy 
Associate Administrator for the Office of Partnership and Acquisition 
Services, for coordination of the Secretary's approval.

PART 926--OTHER SOCIOECONOMIC PROGRAMS

0
67. The authority citation for part 926 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
68. Amend section 926.7001 by revising paragraphs (a) and (b) to read 
as follows:


Sec.  926.7001  Policy.

    (a) Section 3021(a) of the Energy Policy Act of 1992, as amended, 
specifies that the Department of Energy (DOE) shall, to the extent 
practicable, provide that not less than 10 percent of the total 
combined amounts obligated for competitively awarded contracts and 
subcontracts under the Energy Policy Act be expended with -
    (1) Small business concerns controlled by socially and economically 
disadvantaged individuals or by women;
    (2) Historically Black colleges and universities;
    (3) Colleges and universities having a student body in which more 
than 20 percent of the students are Hispanic Americans or Native 
Americans; or
    (4) Qualified HUBZone small business concerns, as defined at FAR 
2.101.
    (b) The four groups in paragraph (a) of this section are 
collectively referred to in this section as ``Energy Policy Act target 
groups.''
* * * * *
0
69. Section 926.7004 is revised to read as follows:


Sec.  926.7004  Size standard for Energy Policy Act procurements.

    The size standard for Energy Policy Act engineering services 
procurements shall be North American Industry Classification System 
code 541330.
0
70. Section 926.7005 is revised to read as follows:


Sec.  926.7005  Preferences under the Energy Policy Act.

    Solicitations for all competitive Energy Policy Act procurements 
not for 8(a) firms and in excess of the simplified acquisition 
threshold shall provide for an evaluation preference for offers 
received from entities from among the Energy Policy Act target groups. 
The evaluation criteria shall provide that in instances in which two or 
more proposals being considered for final selection are ranked as 
essentially equal after consideration of all technical and cost 
evaluation factors, and if one of these proposals is from an offeror 
from among an Energy Policy Act target group that offeror will be 
selected for award.
0
71. Amend section 926.7006 by revising paragraph (a) to read as 
follows:


Sec.  926.7006  Goal measurement and reporting requirements.

    (a) General. The following types of contract awards for Energy 
Policy Act procurements shall be counted toward achievement by DOE of 
the 10 percent goal--
    (1) Any award set-aside for small disadvantaged business;
    (2) Any competitive section 8(a) award;
    (3) Any competitive award to one of the four target groups under an 
unrestricted procurement;
    (4) Any award to one of the four target groups conducted under 
simplified acquisition procedures in excess of the micro-purchase 
threshold; and
    (5) Any competitively awarded subcontract to one of the four target 
groups under a prime award.
* * * * *
0
72. Amend section 926.7007 by revising paragraph (c) to read as 
follows:


Sec.  926.7007  Solicitation provisions and contract clauses.

* * * * *
    (c) The contracting officer shall insert the clause at 952.226-72, 
Energy Policy Act Subcontracting Goals and Reporting Requirements, in 
contracts for Energy Policy Act requirements with an award value in 
excess of $750,000 ($1,500,000 in the case of construction).
* * * * *


Sec.  926.7101  [Amended]

0
73. Amend section 926.7101 by removing ``Section'', wherever it 
appears, and ``42 U.S.C. 7474h(c)(2)'' and adding in their places 
``section'' and ``50 U.S.C. 2704(c)(2)'', respectively.


Sec.  926.7103  [Amended]

0
74. Amend section 926.7103 in paragraph (a) by removing ``42 U.S.C. 
7474h'' and adding in its place ``50 U.S.C. 2704(c)(2)''.
0
75. Section 926.7104 is revised to read as follows:


Sec.  926.7104  Contract clause.

    The contracting officer shall insert the clause at 952.226-74, 
Workforce Restructuring and Displaced Employee Hiring Preference, in 
contracts (both non-management and operating contracts and management 
and operating contracts), except for contracts for commercial items, 
pursuant to 41 U.S.C. 403, that exceed $500,000.

[[Page 73674]]

PART 927--PATENTS, DATA, AND COPYRIGHTS

0
76. The authority citation for part 927 continues to read as follows:

    Authority:  Atomic Energy Act of 1954, as amended (42 U.S.C. 
2168, 2182, 2201); Federal Nonnuclear Energy Research and 
Development Act of 1974 (42 U.S.C. 5908); Department of Energy 
National Security and Military Applications of Nuclear Energy 
Authorization Act of 1987 (42 U.S.C. 7261a.); Department of Energy 
Organization Act (42 U.S.C. 7101 et seq.); National Nuclear Security 
Administration Act (50 U.S.C. 4201 et seq.)


Sec.  927.200  [Removed]

0
77. Section 927.200 is removed.
0
78. Section 927.201-1 is revised to read as follows:


Sec.  927.201-1  General.

    For the purposes of this subpart, ``research and development 
(R&D)'' includes ``research, development, and demonstration.'' In 
certain contracting situations, such as those involving research, 
development, or demonstration projects, consideration should be given 
to the impact of third party-owned patents covering technology that may 
be incorporated in the project if the patents may ultimately affect 
widespread commercial use of the project results. In such situations, 
Patent Counsel shall be consulted to determine what modifications, if 
any, are to be made to the utilization of the Patent and Copyright 
Infringement Liability and Patent Indemnity provisions or clauses or 
what other action might be deemed appropriate.


Sec.  927.206  [Removed]

0
79. Section 927.206 is removed.


Sec.  927.206-1  [Redesignated as 927.202]

0
80. Section 927.206-1 is redesignated as section 927.202.


Sec.  927.206-2  [Redesignated as 927.202-5]

0
81. Section 927.206-2 is redesignated as section 927.202-5.
0
82. Amend newly redesignated section 927.202 by revising the section 
heading to read as follows:


Sec.  927.202  Royalties.

* * * * *
0
83. Amend newly redesignated section 927.202-5 by revising the section 
heading to read as follows:


Sec.  927.202-5  Solicitation provisions and contract clause.

* * * * *


Sec.  927.207  [Redesignated as 927.203]

0
84. Section 927.207 is redesignated as section 927.203.


Sec.  927.207-1  [Redesignated as 927.203-1]

0
85. Section 927.207-1 is redesignated as section 927.203-1.
0
86. Newly redesignated section 927.203 is revised to read as follows:


Sec.  927.203  Security requirements for patent applications containing 
classified subject matter.


Sec.  927.302  [Redesignated as 927.302-70]

0
87. Section 927.302 is redesignated as sections 927.302-70.


Sec.  927.300  [Redesignated as 927.302]

0
88. Section 927.300 is redesignated as section 927.302.
0
89. Newly redesignated section 927.302 is revised to read as follows:


Sec.  927.302  Policy.

    (a) Introduction. (1) A primary mission of the Department of Energy 
(DOE) is to conduct research, development, and demonstration leading to 
the ultimate commercialization of efficient sources of energy. To 
accomplish this mission, DOE must work in cooperation with industry in 
the development of new energy sources and achieve the ultimate goal of 
widespread commercial utilization of those energy sources in the 
shortest practicable time. To this end, Congress has provided DOE with 
the authority to invoke an array of incentives to secure the 
commercialization of new technologies developed for DOE. One such 
important incentive is provided by the patent system.
    (2) Another primary mission of DOE is to manage the Nation's 
nuclear weapons programs and other classified programs, where research 
and development procurements are directed toward processes and 
equipment not available to the public. To support DOE programs for 
bringing private industry into these and other special programs to the 
maximum extent permitted by national security and policy 
considerations, the technology developed in these programs should be 
made available for use in the particular fields of interest and under 
controlled conditions by properly cleared industrial and scientific 
research institutions. To ensure such availability and control, the 
granting of waivers in these programs may be more limited, either by 
the imposition of field of use restrictions or national security 
measures, than in other DOE programs.
    (b) Government right to receive title. Pursuant to 42 U.S.C. 2182 
and 5908, DOE takes title to all inventions conceived or first actually 
reduced to practice in the course of or under contracts with large, 
for-profit companies, foreign organizations, and other entities that 
are not beneficiaries of 35 U.S.C. 200 et seq. Regulations dealing with 
Department's authority to waive its title to subject inventions, 
including the relevant statutory objectives, exist at 10 CFR part 784. 
Pursuant to that section, DOE may waive the Government's patent rights 
in appropriate situations at the time of contracting to encourage 
industrial participation, foster commercial utilization and 
competition, and make the benefits of DOE activities widely available 
to the public. In addition to considering the waiver of patent rights 
at the time of contracting, DOE will also consider the incentive of a 
waiver of patent rights upon the reporting of an identified invention 
when requested by such entities or by the employee-inventor with the 
permission of the contractor. These requests can be made whether or not 
a waiver request was made at the time of contracting. Waivers for 
identified inventions will be granted where it is determined that the 
patent waiver will be a meaningful incentive to achieving the 
development and ultimate commercial utilization of inventions. Where 
DOE grants a waiver of the Government's patent rights, either at the 
time of contracting or after an invention is made, certain minimum 
rights and obligations will be required by DOE to protect the public 
interest.
0
90. Newly redesignated section 927.302-70 is revised to read as 
follows:


Sec.  927.302-70  Sec.  Additional policy.

    (a) In this section and 927.303, background patent means a U.S. 
patent covering an invention or discovery that is not a subject 
invention (as defined at 35 U.S.C. 201(e)) and that is owned or 
controlled by the Contractor at any time through the completion of the 
contract:
    (1) Which the Contractor, but not the Government, has the right to 
license to others without obligation to pay royalties thereon; and
    (2) Infringement of which cannot reasonably be avoided upon the 
practice of any specific process, method, machine, manufacture, or 
composition of matter (including relatively minor modifications 
thereof) which is a subject of the research, development, or 
demonstration work performed under this contract.
    (b) Except for contracts with organizations that are beneficiaries 
of Public Law 96-517, the United States, as represented by DOE, shall 
normally acquire title in and to any invention or discovery conceived 
or first actually reduced to practice in the course of or under the 
contract, allowing the contractor to retain a nonexclusive,

[[Page 73675]]

revocable, paid-up license in the invention and the right to request 
permission to file an application for a patent and retain title to any 
ensuing patent in any foreign country in which DOE does not elect to 
secure patent rights. DOE may approve the request if it determines that 
such approval would be in the national interest. The contractor's 
nonexclusive license may be revoked or modified by DOE only to the 
extent necessary to achieve expeditious practical application of the 
invention pursuant to any application for and the grant of an exclusive 
license in the invention to another party.
    (c) Normally, contracts will not include background patent and 
background data provisions. Under special circumstances, however, to 
provide heightened assurance of commercialization, a provision 
providing for a right to require licensing to third parties of 
background inventions, limited rights data or restricted computer 
software may be included (see 927.303(d)(5)). Inclusion of such a 
provision will be done only with the written concurrence of the DOE 
program official setting forth the need for such assurance. A contract 
may include the right to license the Government and third-party 
contractors for special Government purposes when future availability of 
the technology would also benefit the Government. The scope of any such 
background patent or data licensing is subject to negotiation.
    (d) The Assistant General Counsel for Technology Transfer and 
Intellectual Property shall:
    (1) Determine whether reported inventions are subject inventions 
under the patent rights clause of the contract;
    (2) Determine whether and where patent protection will be obtained 
on inventions;
    (3) Represent DOE before domestic and foreign patent offices;
    (4) Accept assignments and instruments confirmatory of the 
Government's rights to inventions; and
    (5) Represent DOE in patent, trademark, technical data, copyright, 
and other intellectual property matters not specifically reserved to 
the Head of the Agency or designee under this part.
0
91. Section 927.303 is revised to read as follows:


Sec.  927.303  Contract clauses.

    (a)(1) Insert a patent rights clause in all solicitations and 
contracts for experimental, research, developmental, or demonstration 
work as prescribed in this section.
    (2)-(3) [Reserved]
    (4) For M&O contracts, certain decontamination and decommissioning 
activities and the building and/or operation of other DOE facilities, 
see subpart 970.27.
    (d) The Contracting Officer shall use the clause at 952.227-13, 
Patent Rights--Ownership by the Government, except for--
    (1) Contracts for construction work or architect-engineer services. 
When the services can be expected to involve only ``standard types of 
construction'' such as involving previously developed equipment, 
methods, and processes as described in FAR 27.303(a)(3), the 
Contracting Officer shall not include a patent clause;
    (2) Contracts with domestic small business firms or nonprofit 
organizations (see FAR 27.301). In such cases, the Contracting Officer 
shall use the clause at 37 CFR 401.14, Standard Patent Rights, and 
Alternate I of 952.227-11 that includes the agency implementing 
regulations specific for DOE, suitably modified to identify the 
parties, in all contracts, at any tier, for experimental, 
developmental, demonstration or research work to be performed by a 
small business firm or domestic nonprofit organization, unless the work 
is subject to an Exceptional Circumstances Determination by DOE or 
another exception (see 37 CFR 401.3(a)). If the Determination of 
Exceptional Circumstances under the Bayh-Dole Act to Further Promote 
Domestic Manufacture of DOE Science and Energy Technologies executed by 
DOE on June 7, 2021 (S&E DEC) or any other Determination of Exceptional 
Circumstances under the Bayh-Dole Act (DEC) is applicable, the 
Contractor shall include the clause at 37 CFR 401.14 and Alternate II 
of 952.227-11;
    (3) Waivers of rights. In cases where DOE grants an advance waiver 
or waives its rights in an identified invention pursuant to 10 CFR part 
784, Contracting Officers shall consult with patent counsel on 
appropriate clauses;
    (4) Contracts for the design, construction, operation, or 
management (or the integration of a collection of contracts for the 
same purpose) of a Government-owned research, development, 
demonstration or production facility. In such cases, the Government 
must be accorded certain rights, applicable to further use of the 
facility by or on behalf of the Government after contract termination 
or completion. For such contracts, the Contracting Officer shall 
include Alternate II with the clause at 952.227-13;
    (5) Background patent rights. For contracts involving DOE 
background patent rights, the Contracting Officer shall use Alternate I 
to the clause at 952.227-13. Alternate I may be modified with the 
concurrence of Patent Counsel in order to reflect the equities of the 
contracting parties in particular situations; or
    (6) U.S. Competitiveness. If the funding program is subject to the 
S&E DEC, then the Contracting Officer shall use Alternate II to the 
clause at 952.227-13 when Patent Counsel has determined that the S&E 
DEC applies to the Contractor's funding and should be included in the 
contract.
0
92. Amend section 927.304 by:
0
a. In the first sentence, removing ``952.227-11'' and adding in its 
place ``37 CFR 401.14''; and
0
b. Revising the second sentence.
    The revision reads as follows:


Sec.  927.304  Procedures.

    * * * This section supplements FAR 27.304-1(c).
0
93. The heading for subpart 927.4 is revised to read as follows:

Subpart 927.4--Rights in Data and Copyrights

0
94. Section 927.401 is added to read as follows:


Sec.  927.401  Definitions.

    Technical data means data (other than computer software) of a 
scientific or technical nature. Technical data does not include 
computer software, but does include manuals and instructional materials 
and technical data formatted as a computer database (see appendix A to 
subpart D of 2 CFR part 910).


Sec.  927.402 and 927.402-1  [Removed]

0
95. Sections 927.402 and 927.402-1 are removed.


Sec.  927.402-2  [Redesignated as 927.402]

0
96. Section 927.402-2 is redesignated as section 927.402.
0
97. Amend newly redesignated section 927.402 by revising the 
introductory text to read as follows:


Sec.  927.402  Policy.

    The technical data and scientific and technical information (STI) 
policies are directed toward achieving the following objectives:
* * * * *


Sec.  927.403  [Removed]

0
98. Remove section 927.403.


Sec.  927.404 and 927.404-70  [Redesignated as 927.404-70 and 927.404-
71]

0
99. Sections 927.404 and 927.404-70 are redesignated as sections 
927.404-70 and 927.404-71, respectively.
0
100. Newly redesignated section 927.404-70 is revised to read as 
follows:

[[Page 73676]]

Sec.  927.404-70  Rights in technical data in subcontracts.

    (a) Prime contractors and higher-tier subcontractors, in meeting 
their obligations with respect to contract data, must obtain from their 
subcontractors the rights in, access to, and delivery of such data on 
behalf of the Government. Accordingly, subject to the policy set forth 
in this subpart and subject to the approval of the Contracting Officer, 
where required, prime contractors or higher-tier subcontractors must 
select appropriate technical data provisions for their subcontracts.
    (1) In many, but not all instances, use of the clause at FAR 
52.227-14, Rights in Data--General, as supplemented pursuant to this 
subpart, in a subcontract will provide for sufficient Government rights 
in and access to technical data. The inspection rights afforded in 
Alternate V to the clause at FAR 52.227-14 normally should be obtained 
only in first-tier subcontracts for research, development, or 
demonstration work or the furnishing of supplies for which there are 
substantial technical data requirements as reflected in the prime 
contract.
    (2) If a subcontractor refuses to accept technical data provisions 
affording rights in and access to technical data on behalf of the 
Government, the Contractor shall so inform the Contracting Officer in 
writing and not proceed with the subcontract award without written 
authorization of the Contracting Officer.
    (3) In prime contracts or higher-tier subcontracts that contain the 
clause at FAR 52.227-16, Additional Data Requirements, the Contractor 
or higher-tier subcontractor must determine whether inclusion of such 
clause in a subcontract is required to satisfy technical data 
requirements of the prime contract or higher-tier subcontract.
    (b) As is the case for DOE in its determination of technical data 
requirements, the clause at FAR 52.227-16, Additional Data 
Requirements, should not be used at any subcontracting tier where the 
technical data requirements are fully known. Normally, the clause will 
be used only in subcontracts having as a purpose the conduct of 
research, development, or demonstration work. Prime contractors and 
higher-tier subcontractors shall not use their power to award 
subcontracts as economic leverage to acquire rights in the 
subcontractor's limited rights data or restricted computer software for 
their private use, and they shall not acquire rights to limited rights 
data or restricted computer software on behalf of the Government for 
standard commercial items without the prior approval of Patent Counsel.
0
101. Amend newly redesignated section 927.404-71 by revising the fourth 
sentence to read as follows:


Sec.  927.404-71  Statutory programs.

    * * * Generally, such clauses will be based upon the clause at FAR 
52.227-14, Rights in Data-General, with appropriate modifications to 
define and protect the ``protected data'' in accordance with the 
applicable statute. * * *
0
102. Sections 927.406 and 927.406-4 are added to read as follows:


Sec.  927.406  Acquisition of data.


Sec.  927.406-4  Acquisition and use of technical data.

    To meet the objectives stated in 927.402, DOE has extensive 
technical data needs.
    (a) Section 982 of the Energy Policy Act of 2005 (EPAct 2005, 42 
U.S.C. 16352) mandates that the Secretary of Energy, through the Office 
of Scientific and Technical Information, shall maintain within the 
Department publicly available collections of STI resulting from 
research, development, demonstration, and commercial-applications 
activities supported by DOE.
    (b) Section 105 of the DOE Energy Research and Innovation Act (Pub. 
L. 115-246) further mandates that DOE establish and maintain a public 
database populated with information on unclassified research and 
development projects, as well as relevant literature and patents.
    (c) The legal rights in technical data acquired by the Government 
through DOE contracts, other than management and operating (M&O) 
contracts (see 970.2704), or contracts involving the production of data 
necessary for DOE sites/facilities management or operations, are set 
forth in the clause at FAR 52.227-14, Rights in Data--General, as 
supplemented in accordance with this subpart. However, those clauses do 
not obtain for the Government delivery of any data whatsoever. Rather, 
known technical data delivery requirements shall be set forth as part 
of the contract. For Research and Development contracting, requirements 
for results (conveyed as STI) are addressed in 935.010 and should be 
set forth in the contract.
    (d) Contracting Officers shall contact Patent Counsel assisting 
their contracting activity or the Assistant General Counsel for 
Technology Transfer and Intellectual Property for assistance in 
selecting, negotiating, or approving appropriate data and copyright 
clauses in accordance with the procedures set forth in this subpart and 
FAR subpart 27.4. In particular, Contracting Officers shall seek the 
advice of Patent Counsel regarding any situation not in conformance 
with this subpart, including the inclusion or modification of alternate 
paragraphs of the clause at FAR 52.227-14, as supplemented pursuant to 
this subpart, the exclusion of specific items from that clause, the 
exclusion of the clause at FAR 52.227-16, Additional Data Requirements, 
and the inclusion of any special provisions in a particular contract. 
Deviations shall follow the requirements in FAR subpart 1.4 and subpart 
901.4.
    (e) Contractors are required by Alternate VIII of the clause at 
952.227-14, as supplemented pursuant to this subpart, to acquire 
permission from DOE Patent Counsel to assert copyright in any data 
including computer software first produced in the performance of the 
contract. This requirement reflects DOE's established software 
distribution program, and DOE's statutory dissemination obligations. 
When a contractor requests permission to assert copyright, Patent 
Counsel shall predicate its decision on the considerations reflected in 
paragraph (e) of the clause at 970.5227-2, Rights in Data--Technology 
Transfer.
    (f) In many situations the achievement of DOE's objectives would be 
frustrated if the Government, at time of award, did not obtain on 
behalf of responsible third parties and itself limited license rights 
in and to limited rights data or restricted computer software, or both. 
Such rights are necessary for the practice of subject inventions or 
data first produced or delivered under the contract. When the contract 
is for research, development, or demonstration, Contracting Officers 
should consult with program officials and Patent Counsel to determine 
whether such rights should be acquired. No such rights should be 
obtained from a small business or non-profit organization, unless 
similar rights in background inventions of such organizations have been 
authorized in accordance with 35 U.S.C. 202(f). In all cases when the 
Contractor has agreed to include a provision assuring commercial 
availability of background patents, consideration should be given to 
securing for the Government and responsible third parties at reasonable 
royalties and under appropriate restrictions, co-extensive license 
rights for data, which are limited rights data and restricted computer 
software.
0
103. Section 927.409 is revised to read as follows:

[[Page 73677]]

Sec.  927.409  Solicitation provisions and contract clauses.

    (a) The contracting officer shall insert the clause at FAR 52.227-
14, Rights in Data-General, and supplement it with Alternates I and V 
of FAR 52.227-14 and Alternate VIII of FAR 952.227-14, Rights in Data-
General, in solicitations and contracts if it is contemplated that data 
will be produced, furnished, or acquired under the contract. Generally, 
a contract should contain only one data rights clause. However, where 
more than one is needed as prescribed in paragraph (b) of this section, 
the contact should distinguish the portion of contract performance to 
which each pertains.
    (b)(1) However, the rights in data in specific situations will be 
treated as described, where the contract is--
    (i) For the production of special works of the type set forth in 
FAR 27.405-1, the Patent Counsel shall insert the clause at FAR 52.227-
17, Rights in Data-Special Works, including Alternate I. The clause at 
FAR 52.227-14, Rights in Data-General, may be included in the contract 
and made applicable to data other than special works, as appropriate 
(see paragraph (e) of FAR 27.409);
    (ii) For the acquisition of existing data works, as described in 
FAR 27.405-2 (see paragraph (f) of FAR 27.409);
    (iii) To be performed outside the United States, its possessions, 
and Puerto Rico, in which case agencies may prescribe different clauses 
(see paragraph (i) of FAR 27.409);
    (iv) For architect-engineer services or construction work, in which 
case the Patent Counsel shall utilize the clause at FAR 52.227-17, 
Rights in Data-Special Works, including Alternate I;
    (v) A Small Business Innovation Research contract (see paragraph 
(h) of FAR 27.409);
    (vi) For management and operation of a DOE facility (see 970.2704) 
or other contracts involving the production of data necessary for the 
management or operation of DOE facilities or a DOE site, certain 
decontamination and decommissioning activities, or the building and/or 
operation of other DOE facilities, after consultation with Patent 
Counsel (see 927.402-1(b));
    (vii) Awarded pursuant to a statute expressly providing authority 
for the protection of data first produced thereunder from disclosure or 
dissemination. (see 927.404-70);
    (viii) For basic or applied research with educational institutions 
(other than those in which software is specified for delivery unless 
the software will be released as open source software or other special 
circumstances exist), the Patent Counsel may use the clause at FAR 
52.227-14 with its Alternate IV instead of Alternate VIII of the clause 
at FAR 952.227-14, Rights in Data-General;
    (ix)(A) Requiring license rights that are deemed necessary, the 
Patent Counsel should supplement the clause at FAR 52.227-14, Rights in 
Data--General, with Alternate VI, as provided at 952.227-14, Rights in 
Data--General, which will normally be sufficient to cover limited 
rights data and restricted computer software for items and processes 
used in the contract and necessary to ensure widespread commercial use 
or practical utilization of a subject of the contract. The phrase 
``subject of the contract'' in Alternate VI is intended to limit 
licensing to the fields of technology specifically contemplated under 
the contract; the phrase may be replaced by a more specific statement 
of the fields of technology intended to be covered in the manner 
described in the clause at 952.227-13, Patent Rights--Ownership by the 
Government.
    (B) Where limited rights data and restricted computer software are 
the main purpose or basic technology of the research, development, or 
demonstration effort of the contract (rather than subcomponents, 
products, or processes ancillary to the contract effort), the 
limitations in paragraphs (k)(1) through (4) of Alternate VI of the 
clause at 952.227-14 should be supplemented or deleted. Paragraph (k) 
of Alternate VI further provides that limited rights data or restricted 
computer software may be specified in the contract as being excluded 
from or not subject to the licensing requirements. This exclusion is 
implemented by limiting the applicability of the provisions of 
paragraph (k) of Alternate VI to only those classes or categories of 
limited rights data and restricted computer software determined 
essential for licensing. Although contractor licensing may be required 
under paragraph (k) of Alternate VI, the final resolution of questions 
regarding the scope of such licenses and the terms thereof, including 
provisions for confidentiality, and reasonable royalties, is left to 
the negotiation between the contractor and the Contracting Officer; or
    (x) Where the contractor has access to certain categories of DOE-
owned Category C-24 restricted data, as set forth in 10 CFR part 725, 
Alternate VII of 952.227-14, Rights in Data-General, shall be used. DOE 
has reserved the right to receive reasonable compensation for the use 
of its inventions and discoveries, including its related data and 
technology. In addition, in any other types of contracting situations 
in which the contractor may be given access to restricted data owned by 
DOE, appropriate limitations on the use of such data must be specified.
    (d) The contracting officer shall insert the clause at FAR 52.227-
16, Additional Data Requirements, in solicitations and contracts 
involving experimental, developmental, research, or demonstration work 
(other than basic or applied research to be performed solely by a 
university or college where the contract amount will be $500,000 or 
less.) See FAR 27.406-2. Patent Counsel may use the clause at FAR 
52.227-16, Additional Data Requirements, along with the clause at FAR 
52.227-14, Rights in Data--General, to require the contractor to 
furnish additional technical data, in instances where technical data 
requirements were not known at the time of award. There is, however, a 
built-in limitation on the kind of technical data that a contractor may 
be required to deliver under either the contract or the Additional Data 
Requirements clause. This limitation is in the withholding provision of 
paragraph (g) of FAR 52.227-14, Rights in Data--General, which provides 
that the contractor need not furnish limited rights data or restricted 
computer software. Unless Alternate II or III to the clause at FAR 
52.227-14 is used, the Additional Data Rights clause is specifically 
intended that the contractor may withhold limited rights data or 
restricted computer software even though a requirement for technical 
data specified in the contract or called for delivery (pursuant to the 
clause at FAR 52.227-16) would otherwise require the delivery of such 
data.
    (m) Contracting officers shall incorporate the solicitation 
provision at FAR 52.227-23, Rights to Proposal Data (Technical), in all 
requests for proposals.
    (n) Contracting officers shall include the solicitation provision 
at 952.227-84 in all solicitations involving research, developmental, 
or demonstration work.

PART 931--CONTRACT COST PRINCIPLES AND PROCEDURES

0
104. The authority citation for part 931 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
105. Section 931.205-18 is revised to read as follows:


Sec.  931.205-18  Independent research and development and bid and 
proposal costs.

    (c)(1) Independent research and development (IR&D) costs are

[[Page 73678]]

recoverable under DOE contracts to the extent they are reasonable, 
allocable, not otherwise unallowable, and they have potential benefit 
or relationship to the DOE program. The term ``DOE program'' 
encompasses the DOE total mission and its objectives. Bid and proposal 
(B&P) costs are recoverable under DOE contracts to the extent they are 
reasonable, allocable, and not otherwise unallowable.
    (2) [Reserved]


Sec.  931.205-47  [Amended]

0
106. Amend section 931.205-47 in paragraph (h), in the definition of 
``Employee whistleblower action'', by removing ``42 U.S.C. 7239'' and 
adding in its place ``50 U.S.C. 2702''.

PART 932--CONTRACT FINANCING

0
107. The authority citation for part 932 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
108. Amend section 932.970 by revising paragraph (b) to read as 
follows:


Sec.  932.970  Implementing DOE policies and procedures.

* * * * *
    (b) Accelerated payments to limit contractor working capital 
requirements. Contracting Officers may specify payment due dates that 
are less than the standard under the Prompt Payment Act when a 
determination is made, in writing, on a case-by-case basis, that a 
shorter contract financing payment cycle will be beneficial to the 
Government by reducing the contractor's working capital requirements. 
In such cases, the Contracting Officer should coordinate with the 
finance and program officials that will be involved in the payment 
process to ensure that the contract payment terms to be specified in 
solicitations and resulting contract awards will provide sufficient 
time for officials to perform an appropriate review of the invoices 
before they are paid. Consideration should be given to geographical 
separation, workload, contractor ability to submit a proper request, 
and other factors that could affect timing of payment. However, payment 
due dates that are less than 7 days for progress payments or less than 
14 days for interim payments on cost-type contracts are not authorized. 
In all cases whereby the contract specifies payment due dates that are 
sooner than those required under the relevant prompt payment 
requirements, the contract will permit the Contracting Officer to 
unilaterally authorize additional time for review of invoices if needed 
to perform an adequate review of those invoices prior to payment.
0
109. Section 932.971 is added to read as follows:


Sec.  932.971  Electronic submission of invoices/vouchers.

    In general, Contracting Officers should insert the clause at 
952.232-7, Electronic Submission of Invoices/Vouchers, in contracts. 
However, after consultation with the Office of the Chief Financial 
Officer, the Contracting Officer may approve alternate methods of 
submission.

Subpart 932.70 [Removed]

0
110. Subpart 932.70, consisting of 932.7002 through 932.7004-3, is 
removed.

PART 933--PROTESTS, DISPUTES, AND APPEALS

0
111. The authority citation for part 933 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
112. Section 933.103 is revised to read as follows:


Sec.  933.103  Protests to the agency.

    (a) Reference. The Department of Energy (DOE) does not accept or 
adjudicate protests from prospective subcontractors.
    (c) The Department of Energy encourages direct negotiations between 
an offeror and the contracting officer, including alternative dispute 
resolution (ADR) techniques. A protest requesting a decision at the 
Headquarters level shall state whether the protester is willing to 
utilize ADR techniques such as mediation or nonbinding evaluation of 
the protest by a neutral party. Both the protester and the Department 
must agree that the use of such techniques is appropriate. If the 
parties do not mutually agree to utilize ADR techniques to resolve the 
protest, the protest will be processed in accordance with the 
procedures set forth in paragraphs (f) and (g) of this section.
    (f)(5) Upon receipt of a protest filed against DOE, the contracting 
officer shall prepare a report similar to that discussed in FAR 
33.104(a)(3)(iv).
    (6) Protests filed with the contracting officer before or after 
award shall be decided by the HCA except for the following cases, which 
shall be decided by the Senior Procurement Executive:
    (i) The protester requests that the protest be decided by the 
Senior Procurement Executive;
    (ii) The HCA is the contracting officer of record at the time the 
protest is filed, having signed either the solicitation where the award 
has not been made, or the contract, where the award or nomination of 
the apparent successful offeror has been made;
    (iii) The HCA concludes that one or more of the issues raised in 
the protest have the potential for significant impact on Department of 
Energy (DOE) acquisition policy; or
    (iv) The SPE elects to decide the protest.
    (g) The official identified in paragraph (f)(6) of this section 
will render a decision on a protest within 35 calendar days, unless a 
longer period of time is deemed necessary.
0
113. Section 933.104 is revised to read as follows:


Sec.  933.104  Protests to GAO.

    The GAO does not have jurisdiction over protests from 
subcontractors.
    (a)(2) The contracting officer shall provide the notice of protest.
    (b)(1) The finding required under FAR 33.104(b)(1) shall be 
concurred upon by the local DOE counsel with cognizance over the 
underlying procurement and the Senior Program Official, and approved by 
the SPE before the HCA authorizes a contract award. The finding shall 
also address the likelihood that the protest will be sustained by the 
GAO.
    (c)(2) The finding required by FAR 33.104(c)(2) shall be concurred 
upon by the local DOE counsel with cognizance over the underlying 
procurement and the Senior Program Official, and approved by the SPE 
before the HCA authorizes contract performance.
    (g) Notice to GAO. DOE's policy is to comply promptly with the 
recommendations in Comptroller General decisions unless compelling 
reasons exist. Any decision to not comply shall be substantiated by the 
HCA making the award, after approval by the SPE. The report to the GAO 
regarding a decision to not comply with the GAO's recommendation shall 
be transmitted to the GAO by the HCA making the award or, if a DOE-wide 
policy issue is involved, the report shall be provided by the SPE.
0
114. Section 933.106 is revised to read as follows:


Sec.  933.106  Solicitation provisions and contract clauses.

    (a) When using the provision at FAR 52.233-2, Service of Protest, 
the Contracting Officer shall insert the provision at 952.233-2, 
Service of Protest.

PART 935--RESEARCH AND DEVELOPMENT CONTRACTING

0
115. The authority citation for part 935 continues to read as follows:


[[Page 73679]]


    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
116. Section 935.010 is revised to read as follows:


Sec.  935.010  Scientific and technical reports.

    (c) For purposes of section 982 of the Energy Policy Act of 2005 
(42 U.S.C. 16322), the research results, referred to as scientific and 
technical information (STI), are derived from management and operation 
(M&O), research and development (R&D), facility management, and non-
major site/facility management type contracts. STI must be documented, 
managed, and electronically submitted to the Department of Energy 
(DOE), Office of Scientific and Technical Information (OSTI), using the 
DOE Energy Link System. DOE Order 241.1B, Scientific and Technical 
Information Management, or successor, sets forth requirements for STI 
management and the types of STI products to be announced and submitted 
to DOE OSTI. STI products identified in DOE Order 241.1B are reportable 
to OSTI whether publicly releasable, controlled unclassified 
information or classified.
    (d) The Contracting Officer shall ensure that the requirements for 
STI management, as prescribed in DOE Order 241.1B, or its successor 
version, are included in accordance with the attendant Contractor 
Requirements Document or in the statement of work.
0
117. Section 935.070 is revised to read as follows:


Sec.  935.070  Research misconduct.

    The policy on research misconduct, set forth at 10 CFR part 733, 
applies to individuals who propose, perform or review research of any 
kind for the Department of Energy pursuant to a contract. The 
regulations in 10 CFR part 733 apply regardless of where the research 
or other activity is conducted or by whom.

PART 936--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
118. The authority citation for part 936 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.


Sec.  936.202-71  [Removed]

0
119. Section 936.202-71 is removed.

PART 941--ACQUISITION OF UTILITY SERVICES

0
120. The authority citation for part 941 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
121. Section 941.201-70 is revised to read as follows:


Sec.  941.201-70  Policy.

    Utility services shall be acquired in accordance with 48 CFR part 
41 and the Energy Policy Act of 2005 (EPAct 2005) (25 U.S.C. 3502). 
Pursuant to EPAct 2005, the requirement must be publicized 
appropriately, and pricing may not exceed prevailing market prices for 
energy. For Department of Energy (DOE) programs, Acquisition Plans for 
utility services shall be submitted to DOE's Federal Energy Management 
Program (FEMP) for review, technical input, and concurrence. For NNSA 
programs, FEMP review and technical input may be obtained, but FEMP 
concurrence is not required.

PART 942--CONTRACT ADMINISTRATION AND AUDIT SERVICES

0
122. The authority citation for part 942 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.


Sec.  942.705-1  [Amended]

0
123. Amend section 942.705-1 by removing paragraph (a)(3).


Sec.  942.705-3 through 942.705-5  [Removed]

0
124. Sections 942.705-3 through 942.705-5 are removed.
0
125. Subpart 942.71 is added to read as follows:

Subpart 942.71--Conditional Payment of Fee, Profit, and Other 
Incentives


Sec.  942.7100  Conditional payment of fee, profit, and other 
incentives.

    (a) If the contractor does not meet the contract's requirements 
relating to environment, safety and health (ES&H) (see subpart 923.70), 
security or safeguarding of Restricted Data and other classified 
information (see subpart 904.4), or business and financial systems, the 
Contracting Officer may unilaterally reduce otherwise earned fee, fixed 
fee, profit, or other incentives in accordance with the clause at 
952.242-71, Conditional Payment of Fee, Profit, and Other Incentives.
    (b) When reviewing performance failures that would warrant a 
reduction of otherwise earned fee, the Contracting Officer must 
consider mitigating factors that may warrant a reduction below the 
applicable range specified in the clause. The mitigating factors are 
specified in the clause. The Contracting Officer must obtain the 
concurrence of the Head of the Contracting Activity--
    (1) Prior to effecting any reduction of fee, profit or other 
incentives otherwise payable under the clause at 952.242-71, 
Conditional Payment of Fee, Profit, or Other Incentives; and
    (2) Prior to determining that no reduction is warranted for 
performance failure(s) that would otherwise warrant a reduction.
    (c) Before pursuing a reduction in the event of a violation by the 
contractor or any contractor employee of any Department regulation 
relating to worker safety and health concerns, the Contracting Officer 
must coordinate with the Office of Enforcement within the Office of 
Enterprise Assessments (or designated successor office).
    (d) Unless the clause for management and operating contracts is 
prescribed (see 970.1504-3(b)), insert the clause at 952.242-71, 
Conditional Payment of Fee, Profit, and Other Incentives, in all 
contracts that contain the clause at 952.204-2, Security Requirements, 
the clause at 952.250-70, Nuclear Hazards Indemnity Agreement, or both 
clauses.

PART 945--GOVERNMENT PROPERTY

0
126. The authority citation for part 945 continues to read as follows:

    Authority:  42 U.S.C. 7101, et seq.; 50 U.S.C. 2401, et seq.

0
127. Section 945.000 is revised to read as follows:


Sec.  945.000  Scope of part.

    This part and FAR part 45 are not applicable to the management of 
property by management and operating contractors or other on-site 
contractors designated in 41 CFR chapter 109, unless otherwise stated 
in the applicable contract.


Sec.  945.101, 945.102-70, and 945.102-71  [Removed]

0
128. Sections 945.101, 945.102-70, and 945.102-71 are removed.


Sec.  945.570-1  [Amended]

0
129. Amend section 945.570-1 in paragraph (g) by removing the words 
``Personal Property Policy Division'' and adding in their place 
``Office of Asset Management''.


Sec.  945.602, 945.602-3, 945.602-70, and 945.603  [Removed]

0
130. Sections 945.602, 945.602-3, 945.602-70, and 945.603 are removed.


Sec.  945.670-1  [Amended]

0
131. Amend section 945.670-1 by removing ``48 CFR 45.606-3'' and adding 
in its place ``FAR 2.101''.


Sec.  945.670-3  [Removed]

0
132. Section 945.670-3 is removed.

[[Page 73680]]

Sec.  945.671  [Amended]

0
133. Amend section 945.671 by removing ``41 CFR 109-43.5 and 45.41, or 
its successor and 48 CFR 45.302'' and adding in its place ``41 CFR 
chapter 109 and FAR 45.302''.

PART 951--USE OF GOVERNMENT SOURCES BY CONTRACTORS

0
134. The authority citation for part 951 continues to read as follows:

    Authority:  42 U.S.C. 7101 et seq. and 50 U.S.C. 2401 et seq.

0
135. Amend section 951.102 by revising paragraph (c)(1) to read as 
follows:


Sec.  951.102  Authorization to use Government supply sources.

* * * * *
    (c)(1) The DOE central point of contact for the assignment, 
correction, or deletion of activity address codes is the Systems 
Division, within the Office of Acquisition Management.
* * * * *

PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
136. The authority citation for part 952 continues to read as follows:

    Authority:  42 U.S.C. 2201; 2282a; 2282b; 2282c; 42 U.S.C. 7101 
et seq.; 50 U.S.C. 2401 et seq.

0
137. Section 952.203-1 is added to read as follows:


Sec.  952.203-1  Identification of contractor employees.

    As prescribed at 903.1004, insert the following clause:
Identification of Contractor Employees (XXX 20XX)
    Contractors and their employees shall be properly identified in 
communications (e.g., email communications, texts, video and 
teleconference calls, etc.) and in meetings so that all participants 
can differentiate between Federal employees and contractor employees.


(End of clause)
0
138. Section 952.204-2 is revised to read as follows:


Sec.  952.204-2  Security requirements.

    As prescribed in 904.404(d)(1), insert the following clause:
Security Requirements (XXX 20XX)
    (a) Definitions. ``Classified Information'' means information that 
is classified as Restricted Data or Formerly Restricted Data or 
Transclassified Foreign Nuclear Information under the Atomic Energy Act 
of 1954, or information identified as National Security Information and 
therefore determined to require protection against unauthorized 
disclosure under E.O. 13526, Classified National Security Information, 
as amended, or prior or successive Executive orders.
    ``Contracting Officer'' means the DOE Contracting Officer.
    ``Contract,'' when this clause is used in a subcontract, means 
subcontract.
    ``Contractor,'' when this clause is included in a subcontract, 
means subcontractor.
    ``Cyber system'' means any combination of facilities, equipment, 
personnel, procedures, and communications integrated to provide cyber 
services; examples include business systems, control systems, and 
access control systems (National Infrastructure Protection Plan, 2009).
    ``Restricted Data'' means all data concerning design, manufacture, 
or utilization of atomic weapons; production of special nuclear 
material; or use of special nuclear material in the production of 
energy, but excluding data declassified or removed from the Restricted 
Data category pursuant to section 142 of the Atomic Energy Act of 1954 
(42 U.S.C. 2162).
    ``Formerly Restricted Data'' means information removed from the 
Restricted Data category based on a joint determination by DOE or its 
predecessor agencies and the Department of Defense (DoD) that the 
information--
    (1) Relates primarily to the military utilization of atomic 
weapons; and
    (2) Can be adequately protected as National Security Information. 
However, such information is subject to the same restrictions on 
transmission to other countries or regional defense organizations that 
apply to Restricted Data.
    ``National Security Information'' means information that has been 
determined, pursuant to E.O. 13526, Classified National Security 
Information, as amended, or any predecessor or successor order, to 
require protection against unauthorized disclosure, and that is marked 
to indicate its classified status when in documentary form.
    ``Special Access Program'' means any program that is established to 
control access, distribution, and to provide protection for 
particularly sensitive classified information beyond that normally 
required for RESTRICTED DATA, TOP SECRET, SECRET, or CONFIDENTIAL 
information.
    ``Special nuclear material'' means--
    (1) Plutonium, uranium enriched in the isotope 233 or in the 
isotope 235, and any other material that, pursuant to section 51 of the 
Atomic Energy Act of 1954 (42 U.S.C. 2071) has been determined to be 
special nuclear material, but does not include source material; or
    (2) Any material artificially enriched by any of the foregoing, but 
does not include source material.
    (b) Responsibility. The Contractor shall, in accordance with DOE 
security regulations and requirements, be responsible for protecting 
all classified information and all classified matter (including 
documents, material and special nuclear material) which are in the 
Contractor's possession in connection with the performance of work 
under this contract against sabotage, espionage, loss or theft. Except 
as otherwise expressly provided in this contract, the Contractor shall, 
upon completion or termination of this contract, transmit to DOE any 
classified matter or special nuclear material in the possession of the 
Contractor or any person under the Contractor's control in connection 
with performance of this contract. If retention by the Contractor of 
any classified matter is required after the completion or termination 
of the contract, the Contractor shall identify the items and 
classification levels and categories of matter proposed for retention, 
the reasons for the retention, and the proposed period of retention. If 
the retention is approved by the Contracting Officer, the security 
provisions of the contract shall continue to be applicable to the 
classified matter retained. Special nuclear material shall not be 
retained after the completion or termination of the contract.
    (c) Regulations. The Contractor shall comply with all security and 
classification regulations and contract requirements of DOE.
    (d) Access authorizations of personnel. (1) The Contractor shall 
not permit any individual to have access to any classified information, 
special nuclear material, or Special Access Program (SAP) information, 
except in accordance with the Atomic Energy Act of 1954, as amended, 
and the DOE's regulations and contract requirements applicable to the 
particular level and category of classified information or particular 
category of special nuclear material.
    (2) The Contractor shall conduct a thorough review or background 
review, as defined at 48 CFR 904.401, of any uncleared applicants or 
employees, and must test individuals for illegal drugs prior to 
selecting them for positions requiring DOE access authorizations.
    (i) The review must--(A) Verify applicant's or employee's 
educational

[[Page 73681]]

backgrounds, including any high school diplomas obtained within the 
past five years, and degrees or diplomas granted by an institution of 
higher learning;
    (B) Contact listed employers for the last three years and listed 
personal references;
    (C) Conduct local law enforcement checks when such checks are not 
prohibited by state or local law or regulation and when the uncleared 
applicant or uncleared employee resides in the jurisdiction where the 
Contractor is located; and
    (D) Conduct a credit check and other checks as appropriate.
    (ii) For DOE access authorization, contractor reviews are not 
required for applicants who possesses a current access authorization 
from DOE or another Federal agency, or whose access authorization may 
be reapproved without a federal background investigation pursuant to 
Executive Order 12968 of August 2, 1995, as amended, Access to 
Classified Information, sections 3.3(c) and (d).
    (iii) In collecting and using this information to make a 
determination as to whether it is appropriate to select an uncleared 
applicant or uncleared employee to a position requiring an access 
authorization, the Contractor must comply with all applicable laws, 
regulations, and Executive orders, including those--
    (A) Governing the processing and privacy of an individual's 
information, such as the Fair Credit Reporting Act, Americans with 
Disabilities Act Amendments Act of 2008 (ADAAA), and Health Insurance 
Portability and Accountability Act; and
    (B) prohibiting discrimination in employment, such as under the 
Genetic Information Nondiscrimination Act of 2008, ADAAA, Title VII and 
the Older Workers Benefit and Protection Act of 1990, including with 
respect to pre- and post-offer of employment disability related 
questioning.
    (iv) In addition to a review, each candidate for a DOE access 
authorization must be tested to demonstrate the absence of any illegal 
drug, as defined in 10 CFR 707.4. All positions requiring access 
authorizations are deemed testing designated positions in accordance 
with 10 CFR part 707. All employees possessing access authorizations 
are subject to applicant, random or for cause testing for use of 
illegal drugs. DOE will not process candidates for a DOE access 
authorization unless their tests confirm the absence from their system 
of any illegal drug.
    (v) When an uncleared applicant or uncleared employee receives an 
offer of employment for a position that requires a DOE access 
authorization, the Contractor shall not place that individual in such a 
position prior to the individual's receipt of a DOE access 
authorization, unless an approval has been obtained from the head of 
the cognizant local DOE security office. If the individual is hired and 
placed in the position prior to receiving an access authorization, the 
uncleared employee may not be afforded access to classified information 
or matter or special nuclear material (in categories requiring access 
authorization) until an access authorization has been granted.
    (vi) The Contractor must maintain a record of information 
concerning each uncleared applicant or uncleared employee who is 
selected for a position requiring an access authorization. Upon request 
only, the following information will be furnished to the head of the 
cognizant local DOE Security Office:
    (A) The date(s) each Review was conducted;
    (B) Each entity that provided information concerning the 
individual;
    (C) A certification that the review was conducted in accordance 
with all applicable laws, regulations, and Executive orders, including 
those governing the processing and privacy of an individual's 
information collected during the review;
    (D) A certification that all information collected during the 
review was reviewed and evaluated in accordance with the Contractor's 
personnel policies; and
    (E) The results of the test for illegal drugs.
    (vii) Criminal liability. It is understood that disclosure of any 
classified information relating to the work or services ordered 
hereunder to any person not entitled to receive it, or failure to 
protect any classified information, special nuclear material, or other 
Government property that may come to the Contractor or any person under 
the Contractor's control in connection with work under this contract, 
may subject the Contractor, its agents, employees, or Subcontractors to 
criminal liability under the laws of the United States (see the Atomic 
Energy Act of 1954, 42 U.S.C. 2011 et seq.; 18 U.S.C. 793 and 794).
    (e) Foreign ownership, control, or influence (FOCI). (1) The 
Contractor shall immediately provide the cognizant security office 
written notice of any change in the extent and nature of FOCI over the 
Contractor which would affect any answer to the questions presented in 
the Standard Form (SF) 328, Certificate Pertaining to Foreign 
Interests, executed prior to award of this contract. The Contractor 
will submit the FOCI information in the format directed by DOE. When 
completed, the Contractor must sign the SF 328 and submit it to the 
Contracting Officer. In addition, any notice of changes in ownership or 
control which are required to be reported to the Securities and 
Exchange Commission, the Federal Trade Commission, or the Department of 
Justice, shall also be furnished concurrently to the Contracting 
Officer and to the cognizant security office.
    (2) If a Contractor has changes involving FOCI, DOE must determine 
whether the changes will pose an undue risk to the common defense and 
security. In making this determination, DOE will consider proposals 
made by the Contractor to avoid or mitigate foreign influences.
    (3) If the cognizant security office at any time determines that 
the Contractor is, or is potentially, subject to FOCI, the Contractor 
shall comply with such instructions as the Contracting Officer shall 
provide in writing to protect any classified information or special 
nuclear material.
    (4) The Contracting Officer may terminate this contract for default 
either if the Contractor fails to meet obligations imposed by this 
clause or if the Contractor creates a FOCI situation in order to avoid 
performance or a termination for default. The Contracting Officer may 
terminate this contract for convenience if the Contractor becomes 
subject to FOCI for reasons other than avoidance of performance of the 
contract, cannot, or chooses not to, avoid or mitigate the FOCI 
problem.
    (f) Employment announcements. When placing announcements seeking 
applicants for positions requiring access authorizations, the 
Contractor shall include in the written vacancy announcement, a 
notification to prospective applicants that reviews, and tests for the 
absence of any illegal drug as defined in 10 CFR 707.4, will be 
conducted by the employer and a background investigation by the Federal 
government may be required to obtain an access authorization prior to 
employment, and that subsequent reinvestigations may be required. If 
the position is covered by the Counterintelligence Evaluation Program 
regulations at 10 CFR part 709, the announcement should also alert 
applicants that successful completion of a counterintelligence 
evaluation may include a counterintelligence-scope polygraph 
examination.
    (g) Flow down to subcontracts. The Contractor agrees to insert 
terms that conform substantially to the language of this clause, 
including this paragraph

[[Page 73682]]

and related DOE policies, in all subcontracts that will require 
subcontractor employees to possess access authorizations.
    Additionally, the Contractor must require such subcontractors to 
have an existing DOD or DOE facility clearance or submit a completed SF 
328, Certificate Pertaining to Foreign Interests, as required in title 
48 of the CFR consistent with the clause at 48 CFR 952.204-73, Facility 
Clearance, and obtain a foreign ownership, control and influence 
determination prior to award of a subcontract. Facility clearance may 
be granted prior to award or after award of a subcontract in accordance 
with the clause at 48 CFR 952.204-73, Facility Clearance. Information 
to be provided by a subcontractor pursuant to this clause may be 
submitted directly to the Contracting Officer.


(End of clause)
0
139. Section 952.204-70 is revised to read as follows:


Sec.  952.204-70  Classification/Declassification.

    As prescribed in 904.404(d)(2), the following clause shall be 
included in all contracts which involve classified information:
Classification/Declassification (XXX 20XX)
    (a) Definitions. ``Classified information'' means information that 
is classified as Restricted Data, Formerly Restricted Data or 
Transclassified Foreign Nuclear Information under the Atomic Energy Act 
of 1954, or information identified as National Security Information and 
therefore determined to require protection against unauthorized 
disclosure under E.O. 13526, Classified National Security Information, 
as amended, or prior or successive Executive orders.
    ``Contractor,'' as used in this clause includes subcontractors.
    ``Document'' means any recorded information, regardless of the 
nature of the medium or the method or circumstances of recording (e.g., 
email).
    ``Information'' means facts, data, or knowledge itself.
    ``Material'' means a product or substance that contains or reveals 
information, regardless of its physical form or characteristics.
    (b) The Contractor shall comply with all provisions of DOE's 
regulations and DOE directives applicable to work involving the 
classification and declassification of information, documents, or 
material. (Note: The decision to classify or declassify information is 
considered an inherently Governmental function. As such, only 
Government personnel may serve as Federal Government original 
classifiers. Both Government and Contractor personnel may serve as 
derivative classifiers; this involves making decisions based upon 
classification guidance and, where authorized by DOE directives, 
portion marked source documents that reflects the decisions of Federal 
Government. Both Government and Contractor personnel may also serve as 
derivative declassifiers; this involves making decisions based only on 
classification guidance).
    (c) The Contractor shall ensure that any document or material that 
may contain classified information is reviewed by either a derivative 
classifier, or in the case of documents intended for public release, a 
classification officer or a specifically designated DC, in accordance 
with classification regulations, and DOE directives. In accordance with 
DOE directives DCs must use classification/declassification guidance 
furnished to the Contractor by the DOE or a portion marked source 
document, when authorized to determine whether it contains classified 
information prior to dissemination. For information not addressed in 
classification/declassification guidance, but whose sensitivity appears 
to warrant classification, the Contractor shall ensure it is reviewed 
by a Federal Government original classifier or the Director, Office of 
Classification in accordance with classification directives or 
regulations.
    (d) The Contractor shall ensure that existing classified documents 
(containing either Restricted Data, Formerly Restricted Data, 
Transclassified Foreign Nuclear Information, or National Security 
Information) in its possession or under its control are periodically 
reviewed by a Federal Government or Contractor derivative declassifier 
in accordance with classification regulations, DOE directives and 
classification/declassification guidance furnished to the Contractor by 
DOE to determine if the documents are no longer appropriately 
classified. Priorities for declassification review of classified 
documents shall be based on the degree of public and researcher 
interest and the likelihood of declassification upon review. Documents 
that no longer contain classified information are to be declassified. 
Declassified documents then shall be reviewed to determine if they are 
publicly releasable. Documents that are declassified and determined to 
be publicly releasable are to be made available to the public in order 
to maximize the public's access while minimizing security costs.
    (e) Subcontracts. The Contractor shall insert this clause in any 
subcontract that involves or may involve access to classified 
information.


(End of clause)
0
140. Section 952.204-73 is revised to read as follows:


Sec.  952.204-73  Facility clearance.

    As prescribed in 904.404(d)(5), insert the following provision in 
all solicitations and contracts which require the use of Standard Form 
328, Certificate Pertaining to Foreign Interests, for contracts or 
subcontracts subject to the provisions of subpart 904.70:
Facility Clearance (XXX 20XX)
Notices to Offerors and the Contract Requirements of the Successful 
Offeror (Contractor)
    Section 2536 of title 10, United States Code, prohibits the award 
of a contract under a national security program to an entity controlled 
by a foreign government if it is necessary for that entity to be given 
access to information in a proscribed category of information in order 
to perform the contract unless a waiver is granted by the Secretary of 
Energy. In addition, a Facility Clearance and foreign ownership, 
control and influence information are required when the contract or 
subcontract to be awarded is expected to require employees to have 
access authorizations. An offeror who has either a Department of 
Defense or a Department of Energy Facility Clearance generally need not 
resubmit the following foreign ownership, control and influence 
information unless specifically requested to do so. Instead, provide 
your DOE Facility Clearance code or your DOD assigned commercial and 
government entity (CAGE) code. If uncertain, consult the office that 
issued this solicitation.
    (a) Use of Certificate Pertaining to Foreign Interests, Standard 
Form 328. (1) The contract work to be performed by the successful 
offeror anticipated by this solicitation will require access to 
classified information or special nuclear material. Such access will 
require a Facility Clearance for the Contractor's (that is, the 
successful offeror's) organization and access authorizations (security 
clearances) for Contractor personnel working with the classified 
information or special nuclear material. To obtain a Facility Clearance 
the Contractor must submit the Standard Form 328, Certificate 
Pertaining to Foreign Interests, and all required

[[Page 73683]]

supporting documents to form a complete Foreign Ownership, Control or 
Influence (FOCI) Package. The Contractor must submit the FOCI Package 
in the format directed by DOE. After the FOCI Package is completed, the 
Contractor must print and sign one copy of the SF 328 and submit it to 
the Contracting Officer.
    (2) Information submitted by the offeror in the Standard Form 328 
will be used solely for the purposes of evaluating foreign ownership, 
control or influence and will be treated by DOE, to the extent 
permitted by law, as business or financial information submitted in 
confidence.
    (3) Following submission of a Standard Form 328 and prior to 
contract award, the successful offeror/Contractor shall immediately 
submit to the Contracting Officer written notification of any changes 
in the extent and nature of FOCI information it submitted that could 
affect its answers to the questions in Standard Form 328. Following 
award of a contract, the Contractor must immediately submit to the 
cognizant security office written notification of any changes in the 
extent and nature of FOCI information it submitted that could affect 
its answers to the questions in Standard Form 328. Notice of changes in 
FOCI information that are required to be reported to the Securities and 
Exchange Commission, the Federal Trade Commission, or the Department of 
Justice must also be reported concurrently to the cognizant security 
office.
    (b) Definitions. (1) Foreign Interest means any of the following--
    (i) A foreign government, foreign government agency, or 
representative of a foreign government;
    (ii) Any form of business enterprise or legal entity organized, 
chartered or incorporated under the laws of any country other than the 
United States or its possessions and trust territories; and
    (iii) Any person who is not a citizen or national of the United 
States.
    (2) Foreign Ownership, Control, or Influence (FOCI) means the 
situation where the degree of ownership, control, or influence over a 
Contractor by a foreign interest is such that a reasonable basis exists 
for concluding that compromise of classified information or special 
nuclear material may result.
    (c) Facility Clearance means an administrative determination that a 
facility is eligible to access, produce, use or store classified 
information, or special nuclear material. A Facility Clearance is based 
upon a determination that satisfactory safeguards and security measures 
are carried out for the activities being performed at the facility. It 
is DOE policy that all Contractors or Subcontractors requiring access 
authorizations be processed for a Facility Clearance at the level 
appropriate to the activities being performed under the contract. 
Approval for a Facility Clearance shall be based upon--
    (1) A favorable foreign ownership, control, or influence (FOCI) 
determination based upon the Contractor's response to the ten questions 
in Standard Form 328 and any required, supporting data provided by the 
Contractor;
    (2) A contract or proposed contract containing the appropriate 
security clauses;
    (3) Approved safeguards and security plans which describe 
protective measures appropriate to the activities being performed at 
the facility;
    (4) An established Reporting Identification Symbol code for the 
Nuclear Materials Management and Safeguards Reporting System if access 
to nuclear materials is involved;
    (5) A survey conducted no more than 6 months before the Facility 
Clearance date, with a composite facility rating of satisfactory, if 
the facility is to possess classified matter or special nuclear 
material at its location;
    (6) Appointment of a Facility Security Officer, who must possess or 
be in the process of obtaining an access authorization equivalent to 
the Facility Clearance; and, if applicable, appointment of a Materials 
Control and Accountability Representative; and
    (7) Access authorizations for key management personnel who will be 
determined on a case-by-case basis, and who possess or are in the 
process of obtaining access authorizations equivalent to the level of 
the Facility Clearance.
    (d) Facility Clearance and Employees Requiring Access 
Authorizations Prior to DOE's Granting Facility Clearance.
    (1) A Facility Clearance is required for this contract, although 
not necessarily prior to contract award. A favorable FOCI determination 
for this contract is required prior to contract award. It must be 
rendered by the responsible cognizant security office. The Contracting 
Officer may require the offeror to submit additional information as 
deemed pertinent to this determination.
    (i) The DOE must determine that awarding this contract to the 
offeror will not pose an undue risk to the common defense and security 
as a result of its access to classified information or special nuclear 
material in the performance of the contract. The Contracting Officer 
may require the offeror to submit such additional information as deemed 
pertinent to this determination.
    (ii) Before contract award, after obtaining a favorable FOCI 
determination, the successful offeror/Contractor may be eligible to 
obtain a Facility Clearance.
    (iii) If the successful offeror/Contractor does not obtain a 
Facility Clearance before contract award, after contract award the 
Contractor shall submit the necessary information to obtain a Facility 
Clearance and to obtain personnel Interim Access Authorizations in 
accordance with Departmental policies and procedures.
    (2) The DOE may grant certain of the Contractor's Key Management 
Personnel and the Contractor's Facility Security Officer Interim Access 
Authorization. If granted Interim Access Authorization, the 
Contractor's Key Management Personnel and the Contractor's Facility 
Security Officer will have access to classified information or special 
nuclear material.
    (e) A Facility Clearance is required even for contracts that do not 
require the Contractor's corporate offices to receive, process, 
reproduce, store, transmit, or handle classified information or special 
nuclear material, but that require DOE access authorizations for the 
Contractor's employees to perform work at a DOE location. This type of 
facility is identified as a non-possessing facility.
    (f) Except as otherwise authorized in writing by the Contracting 
Officer, the Contractor shall insert provisions similar to the 
foregoing in all subcontracts and purchase orders (or vendors for 
purchase orders) requiring access authorizations for access to 
classified information or special nuclear material. Subcontractors 
shall be directed to provide responses to the questions in Standard 
Form 328, Certificate Pertaining to Foreign Interests, directly to the 
prime Contractor or the Contracting Officer for the prime contract.
Notice to Offerors--Contents Review (Please Review Before Submitting)
    Prior to submitting the Standard Form 328, required by paragraph 
(a)(1) of this clause, the offeror should review the FOCI submission to 
ensure that:
    (1) The Standard Form 328 has been signed and dated by an 
authorized official of the offeror;
    (2) If publicly owned, the Contractor's most recent annual report, 
and its most recent proxy statement for its annual meeting of 
stockholders; or, if privately owned, the audited, consolidated 
financial information for the most

[[Page 73684]]

recently closed accounting year has been attached;
    (3) A copy of the company's articles of incorporation and an 
attested copy of the company's by-laws, or similar documents filed for 
the company's existence and management, and all amendments to those 
documents are provided;
    (4) A list identifying the organization's owners, officers, 
directors, and executive personnel, including their names, social 
security numbers, citizenship, titles of all positions they hold within 
the organization, and what clearances, if any, they possess or are in 
the process of obtaining, and identification of the government 
agency(ies) that granted or will be granting those clearances; and
    (5) A summary FOCI data sheet is provided.
    Note: A FOCI submission must be attached for each tier parent 
organization (i.e., ultimate parent and any intervening levels of 
ownership). If any of these documents are missing, award of the 
contract cannot be completed.


(End of provision)
0
141. Section 952.204-74 is added to read as follows:


Sec.  952.204-74  Counterintelligence.

    As prescribed in 904.404(d)(7), insert the following clause:
Counterintelligence (XXX 20XX)
    (a) The Contractor shall take all reasonable precautions in 
performing the work under this contract to protect Department of Energy 
(DOE) programs, facilities, technology, personnel, unclassified 
sensitive information and classified matter from foreign intelligence 
threats and activities conducted for governmental or industrial 
purposes, in accordance with the current version of DOE Order 475.1, 
Counterintelligence Program; E.O. 12333 of December 4, 1981, U.S. 
Intelligence Activities; and other applicable national and DOE 
counterintelligence requirements.
    (b) The Contractor shall appoint qualified employees to function as 
contractor counterintelligence officers. A contractor 
counterintelligence officer is responsible for conducting defensive 
counterintelligence briefings and debriefings of employees traveling to 
foreign countries or interacting with foreign nationals; providing 
thoroughly documented written reports relative to targeting, suspicious 
activity and other matters of counterintelligence interest; immediately 
reporting targeting, suspicious activity and other counterintelligence 
concerns to the DOE Headquarters Counterintelligence Division; and 
providing assistance to other elements of the U.S. Intelligence 
Community as stated in E.O. 12333, DOE Order 475.1, and other 
applicable national and DOE counterintelligence requirements.


(End of clause)


Sec.  952.204-76  [Removed]

0
142. Section 952.204-76 is removed.
0
143. Section 952.204-77 is amended by revising the introductory text to 
read as follows:


Sec.  952.204-77  Computer security.

    As prescribed in 904.404(d)(6), insert the following clause:
* * * * *
0
144. Section 952.204-78 is added to read as follows:


Sec.  952.204-78  DOE Directives.

    As prescribed in 904.7401, insert the following clause:
DOE Directives (XXX 20XX)
    (a) In performing work under this contract, the Contractor shall 
comply with the requirements of Department of Energy Directives, or 
parts thereof, identified in the List of Applicable Directives appended 
to this contract, identified in the Statement of Work or identified in 
a special clause within this contract. The Contracting Officer may 
revise the list of applicable Directives by bilateral modification to 
the contract. Prior to the modification, the Contracting Officer shall 
notify the Contractor in writing of DOE's intent and provide the 
contractor with the opportunity to: assess the impact on cost, funding, 
technical performance, and schedule; and identify any potential 
inconsistencies between the revised list and the other terms and 
conditions of the contract. Within 30 days of being notified, the 
Contractor shall advise the Contracting Officer in writing of the 
potential impact of the modification. The Contracting Officer and 
Contractor shall decide whether or not to proceed with the 
modification. Before executing the modification, they must agree to any 
appropriate changes to other contract terms and conditions, including 
cost and schedule, pursuant to the clause of this contract entitled 
``Changes.''
    (b) Regardless of the performer of the work, the Contractor is 
responsible for compliance with the requirements of this clause. The 
Contractor is responsible for flowing down the requirements of this 
clause to subcontracts at any tier to the extent necessary to ensure 
the contractor's compliance with the requirements.


(End of clause)
0
145. Section 952.215-70 is revised to read as follows:


Sec.  952.215-70  Key personnel.

    As prescribed in 915.408-70, the contracting officer shall insert 
the following clause:
Key Personnel (XXX 20XX)
    (a) The personnel listed below or elsewhere in this contract 
[Insert cross-reference, if applicable] are considered essential to the 
work being performed under this contract. Before removing, replacing, 
or diverting any of the listed or specified personnel, the Contractor 
must:
    (1) Notify the Contracting Officer and submit justification 
including resumes for any proposed substitutions, at least [insert 
number] calendar days in advance; and
    (2) Obtain the Contracting Officer's written approval. 
Notwithstanding the foregoing, the Contractor may immediately remove or 
suspend any key person if necessary to maintain satisfactory standards 
of employee competency, conduct, and integrity under the clause at 48 
CFR 970.5203-3, Contractor's Organization, although the Contractor must 
notify Contracting Officer prior to or concurrently with such action.
    (b) The list of personnel may, with the consent of the contracting 
parties, be amended from time to time during the course of the contract 
to add or delete personnel. The Contractor must provide written notice 
to the cognizant security office if changes to the list of personnel 
affect key personnel connected to a facility clearance.


[Insert List of Key Personnel by position/title, reflecting the actual 
position title of the top-level key personnel, such as Program Manager, 
Laboratory Director, Project Manager, etc. unless listed elsewhere in 
the contract]


(End of clause)


Sec.  952.216-15  [Removed]

0
146. Section 952.216-15 is removed.
0
147. Section 952.219-70 is revised to read as follows:


Sec.  952.219-70  DOE Mentor-Prot[eacute]g[eacute] program.

    In accordance with 919.7014 insert the following provision:
DOE Mentor-Prot[eacute]g[eacute] Program (XXX 20XX)
    The Department of Energy has established a Mentor-Protege Program 
to encourage its prime contractors to assist small business concerns, 
Historically Black Colleges and Universities and Minority Institutions, 
and other

[[Page 73685]]

minority institutions of higher learning in enhancing their 
capabilities to perform contracts and subcontracts for DOE and other 
Federal agencies. If the contract resulting from this solicitation is 
awarded on a cost-plus-award fee basis, the Contractor's performance as 
a Mentor may be evaluated as part of the award fee plan. Any DOE 
contractor that is interested in becoming a Mentor should contact the 
Department of Energy's Office of Small and Disadvantaged Business 
Utilization.


(End of provision)
0
148. Section 952.223-71 is revised to read as follows:


Sec.  952.223-71  Integration of environment, safety, and health into 
work planning and execution.

    As prescribed in 923.7003, insert the following clause:
Integration of Environment, Safety, and Health into Work Planning and 
Execution (XXX 20XX)
    (a) Definitions. ``Employees'' means both contractor and 
subcontractor employees.
    ``Safety'' encompasses environment, safety and health, including 
pollution prevention and waste minimization.
    (b) In performing work under this contract, the Contractor shall 
perform work safely, in a manner that ensures adequate protection for 
employees, the public, and the environment, and shall be accountable 
for the safe performance of work. The Contractor shall exercise a 
degree of care commensurate with the work and the associated hazards. 
The Contractor shall ensure that management of environment, safety and 
health (ES&H) functions and activities becomes an integral but visible 
part of the Contractor's work planning and execution processes. The 
Contractor shall, in the performance of work, ensure that:
    (1) Line management is responsible for the protection of employees, 
the public, and the environment. Line management includes those 
Contractor and subcontractor employees who manage or supervise 
employees.
    (2) Clear lines of authority and responsibility for ensuring ES&H 
are established and maintained at all organizational levels.
    (3) Personnel possess the experience, knowledge, skills, and 
abilities that are necessary to discharge their responsibilities.
    (4) Resources are effectively allocated to address ES&H, 
programmatic, and operational considerations. Protecting employees, the 
public, and the environment is a priority whenever activities are 
planned and performed.
    (5) Before work is performed, the associated hazards are evaluated 
and an agreed-upon set of ES&H standards and requirements are 
established that, if properly implemented, provide adequate assurance 
that employees, the public, and the environment are protected from 
adverse consequences.
    (6) Administrative and engineering controls to prevent and mitigate 
hazards are tailored to the work being performed and associated 
hazards. Emphasis should be on designing the work and/or controls to 
reduce or eliminate the hazards and to prevent accidents and unplanned 
releases and exposures.
    (7) The conditions and requirements to be satisfied for operations 
to be initiated and conducted are established and agreed-upon by DOE 
and the Contractor. These agreed-upon conditions and requirements are 
requirements of the contract and binding upon the Contractor. The 
extent of documentation and level of authority for agreement shall be 
tailored to the complexity and hazards associated with the work and 
shall be established in a Safety Management System.
    (c) The Contractor shall manage and perform work in accordance with 
a documented Safety Management System that, at a minimum, fulfills all 
conditions in paragraph (b) of this clause. Documentation of this 
system shall describe how the Contractor will--
    (1) Define the scope of work;
    (2) Identify and analyze hazards associated with the work;
    (3) Develop and implement hazard controls;
    (4) Perform work within controls; and
    (5) Provide feedback on adequacy of controls and continue to 
improve safety management.
    (d) The system shall describe how the Contractor will establish, 
document, and implement safety performance objectives, performance 
measures, and commitments in response to DOE program and budget 
execution guidance while maintaining the integrity of the system. The 
system shall also describe how the Contractor will measure system 
effectiveness.
    (e) The Contractor shall submit to the Contracting Officer 
documentation of its system for review and approval. Dates for 
submittal, discussions, and revisions to the system will be established 
by the Contracting Officer. Guidance on the preparation, content, 
review, and approval of the system will be provided by the Contracting 
Officer. On an annual basis, the Contractor shall review and update, 
for DOE approval, its safety performance objectives, performance 
measures, and commitments consistent with and in response to DOE's 
program and budget execution guidance and direction. Resources shall be 
identified and allocated to meet the safety objectives and performance 
commitments as well as maintain the integrity of the entire System. 
Accordingly, the system shall be integrated with the Contractor's 
business processes for work planning, budgeting, authorization, 
execution, and change control.
    (f) The Contractor shall comply with, and assist the Department of 
Energy in complying with, ES&H requirements of all applicable laws and 
regulations, and applicable directives in accordance with the DOE 
Directives clause. The Contractor shall cooperate with Federal and non-
Federal agencies having jurisdiction over ES&H matters under this 
contract.
    (g) The Contractor shall promptly evaluate and resolve any 
noncompliance with applicable ES&H requirements and the System. If the 
Contractor fails to provide resolution or if, at any time, the 
Contractor's acts or failure to act causes substantial harm or an 
imminent danger to the environment or health and safety of employees or 
the public, the Contracting Officer may issue an order stopping work in 
whole or in part. Any stop work order issued by a contracting officer 
under this clause (or issued by the Contractor to a subcontractor in 
accordance with paragraph (i) of this clause) shall be without 
prejudice to any other legal or contractual rights of the Government. 
In the event that the Contracting Officer issues a stop work order, an 
order authorizing the resumption of the work may be issued at the 
discretion of the Contracting Officer. The Contractor shall not be 
entitled to an extension of time or additional fee or damages by reason 
of, or in connection with, any work stoppage ordered in accordance with 
this clause.
    (h) Regardless of the performer of the work, the Contractor is 
responsible for compliance with the ES&H requirements applicable to 
this contract. The Contractor is responsible for flowing down the ES&H 
requirements applicable to this contract to subcontracts at any tier to 
the extent necessary to ensure the Contractor's compliance with the 
requirements.
    (i) Subcontracts. The Contractor shall include a clause 
substantially the same as this clause in subcontracts involving complex 
or hazardous work on site at a DOE-owned or -leased facility. Such 
subcontracts shall provide for the right to stop work under the 
conditions described in paragraph (g) of this clause. Depending on the 
complexity and hazards associated with the work, the

[[Page 73686]]

Contractor may choose not to require the subcontractor to submit a 
Safety Management System for the Contractor's review and approval.


(End of clause)


Sec.  952.223-75  [Amended]

0
149. Amend section 952.223-75 in the introductory text by removing 
``923.7003(h)'' and adding in its place ``923.7003(g)''.


Sec.  952.223-76 and 952.223-77  [Removed]

0
150. Sections 952.223-76 and 952.223-77 are removed.
0
151. Section 952.223-78 is revised to read as follows:


Sec.  952.223-78  Sustainable acquisition program.

    As prescribed in 923.172, insert the following clause:
Sustainable Acquisition Program (XXX 20XX)
    (a) Pursuant to DOE policy, as specified in 48 CFR 923.170, the 
Contractor shall maintain a sustainable acquisition program that 
ensures procurement of environmentally preferable products and services 
as required of DOE by statute, regulation and Executive order. This 
program shall apply to all products and services acquired in 
performance of this contract, including first-tier subcontracts, which 
have reasonable opportunities for environmentally preferable 
purchasing, consistent with the requirements specified above.
    (b) The Contractor shall coordinate its sustainable acquisition 
activities, and submit any required annual reports at the end of the 
Government fiscal year, through their Sustainability Coordinator (or 
equivalent), or as otherwise directed by the Contracting Officer. 
Reporting under this paragraph is only required if the contract offers 
subcontracting opportunities exceeding the simplified acquisition 
threshold in any contract year.
    (c) Subcontracts. These provisions shall be flowed down only to 
first-tier subcontracts exceeding the simplified acquisition threshold 
that support operation of the DOE facility and offer significant 
subcontracting opportunities for energy-efficient or environmentally 
sustainable products or services. When this clause is included in a 
subcontract, the word ``Contractor'' will be understood to mean 
``Subcontractor.''


(End of clause)
0
152. Section 952.226-70 is revised to read as follows:


Sec.  952.226-70  Subcontracting goals under section 3021(a) of the 
Energy Policy Act of 1992.

    As prescribed in 926.7008(b)(1), insert the following provision:
Subcontracting Goals Under Section 3021(A) of the Energy Policy Act of 
1992 (Pub. L. 102-486) (XXX 20XX)
    (a) Definition. Energy Policy Act (EPAct 1992) target groups, as 
used in this provision, has the meaning conveyed in 48 CFR 926.7002.
    (b) Section 3021 of the EPAct 1992 establishes a goal of award of 
10 percent of the contract dollar value for prime and subcontract EPAct 
1992 awards to EPAct 1992 target groups.
    (c) The Offeror, if other than one of the three groups specified in 
paragraph (a) of this clause, shall submit, as part of its business 
management proposal or, if this solicitation requires the submission of 
a Small Business Subcontracting Plan, then as part of that plan, unless 
otherwise stated in the proposal preparation instructions, individual 
subcontracting goals for each of the EPAct 1992 target groups. 
Individual goals shall be expressed in terms of a percentage of the 
Offeror's proposed contract dollar value. In addition, the Offeror 
shall provide a description of the nature of the effort to be performed 
by each of the three groups, and, if possible, the identity of the 
contemplated subcontractor(s).
    (d) Unless otherwise stated, such goals shall be considered in the 
evaluation of the Business Management Proposal as discussed in Section 
M of this solicitation or, if applicable, as part of the evaluation of 
the Small Business Subcontracting Plan.


(End of provision)
0
153. Section 952.226-71 is revised to read as follows:


Sec.  952.226-71  Utilization of Energy Policy Act target entities.

    As prescribed in 926.7008(b)(2), insert the following clause:
Utilization of Energy Policy Act 1992 Target Entities (XXX 20XX)
    (a) Definition. Energy Policy Act (EPAct 1992) target groups, as 
used in this clause, has the meaning conveyed in 48 CFR 926.7002.
    (b) Obligation. In addition to its obligations under the clause of 
this contract entitled Utilization of Small Business Concerns (48 CFR 
52.219-8), the contractor, in performance of this contract, agrees to 
provide its best efforts to competitively award subcontracts to 
entities from among the EPAct 1992 target groups.


(End of clause)
0
154. Section 952.226-72 is revised to read as follows:


Sec.  952.226-72  Energy Policy Act subcontracting goals and reporting 
requirements.

    As prescribed in 926.7008(c), insert the following clause:
Energy Policy Act 1992 Subcontracting Goals and Reporting Requirements 
(XXX 20XX)
    (a) Definition. Energy Policy Act (EPAct 1992) target groups, as 
used in this clause, has the meaning conveyed in 48 CFR 926.7002.
    (b) Goals. The Contractor, in performance of this contract, agrees 
to provide its best efforts to award subcontracts to the following 
classes of entities--
    (1) Small business concerns controlled by socially and economically 
disadvantaged individuals or by women: * * * percent;
    (2) Historically Black colleges and universities: * * * percent;
    (3) Colleges or universities having a student body in which more 
than 20 percent of the students are Hispanic Americans or Native 
Americans: * * * percent;
    (4) Qualified HUBZone small business concerns: * * * percent.
    [ * * * These goals are stated in a percentage reflecting the 
relationship of estimated award value of subcontracts to the value of 
this contract and appear elsewhere in this contract.]
    (c) Reporting requirements. (1) The Contractor agrees to report, on 
an annual Federal Government fiscal year basis, its progress against 
the goals by providing the actual annual dollar value of subcontract 
payments for the preceding 12-month period, and the relationship of 
those payments to the incurred contract costs for the same period. 
Reports submitted pursuant to this clause must be received by the 
Contracting Officer (or designee) not later than 45 days after the end 
of the reporting period.
    (2) If the contract includes reporting requirements under 48 CFR 
52.219-9, Small Business Subcontracting Plan, the Contractor's progress 
against the goals stated in paragraph (b) of this clause shall be 
included as an addendum to the Individual Subcontract Report and/or the 
Summary Subcontract Report using the Electronic Subcontracting 
Reporting System (available at https://www.esrs.gov/) for the period 
that corresponds to the end of the Federal Government fiscal year.


(End of clause)
0
155. Amend section 952.226-73 by revising the section heading,

[[Page 73687]]

introductory text, clause heading and date, and paragraph (a) to read 
as follows:


Sec.  952.226-73  Energy Policy Act target group representation.

    As prescribed in 926.7008(a)(1), insert the following provision:
Energy Policy Act of 1992 Target Group Representation (XXX 20XX)
    (a) The Offeror is:
    (1) __ An institution of higher education that meets the 
requirements of 34 CFR 600.4(a), and has a student enrollment that 
consists of at least 20 percent--
    (i) Hispanic Americans, i.e., students whose origins are in Mexico, 
Puerto Rico, Cuba, or Central or South America, or any combination 
thereof; or
    (ii) Native Americans, i.e., American Indians, Eskimos, Aleuts, and 
Native Hawaiians, or any combination thereof;
    (2) __ An institution of higher learning determined to be a 
Historically Black College and University by the Secretary of Education 
pursuant to 34 CFR 608.2; or
    (3) __ A small business concern, as defined under section 3 of the 
Small Business Act (15 U.S.C. 632), that is owned and controlled by 
individuals who are both socially and economically disadvantaged within 
the meaning of section 8(d) of the Small Business Act (15 U.S.C. 
637(d)) or by a woman or women; or
    (4) Qualified HUBZone small business concerns, as defined at 48 CFR 
2.101.
* * * * *
0
156. Amend section 952.226-74 by revising the section heading and 
clause heading and date to read as follows:


Sec.  952.226-74  Workforce restructuring and displaced employee hiring 
preference.

* * * * *
Workforce Restructuring and Displaced Employee Hiring Preference (XXX 
20XX)
* * * * *
0
157. Amend section 952.227-9 by:
0
a. Revising the introductory text and clause date;
0
b. In paragraph (b):
0
i. Adding a heading; and
0
ii. Revising the first sentence of the paragraph; and
0
c. Adding a sentence at the end of paragraph (c).
    The revisions and addition read as follows:


Sec.  952.227-9  Refund of royalties.

    As prescribed in 927.202-5, insert the following clause:
Refund of Royalties (XXX 20XX)
* * * * *
    (b) Definition. ``Royalties'' means any costs or charges in the 
nature of royalties, license fees, patent or license amortization 
costs, or the like, for the use of or for rights in patents and patent 
applications in connection with performing this contract or any 
subcontract here-under. * * *
    (c) * * * For contracts greater than five years in duration, the 
contractor shall furnish the statement to the Contracting Officer every 
five years.
* * * * *
0
158. Section 952.227-11 is revised to read as follows:


Sec.  952.227-11  Patent rights--retention by the contractor.

    Alternate I (XXX 20XX) As prescribed at 970.2703-2(a), insert the 
most recent Standard Patent Rights clause at 37 CFR 401.14 with the 
following modifications:
    Replace the heading (``Standard Patent Rights'') with ``37 CFR 
401.14 Standard Patent Rights with Alternate I of 48 CFR 952.227-11 
Patent rights--retention by the contractor''.
    Replace subparagraphs (g)(1) and (2) with the following:
    (g) Subcontracts.
    (1) The contractor will include this clause, suitably modified to 
identify the parties, in all subawards, regardless of tier, for 
experimental, developmental or research work to be performed by a 
domestic small business firm or nonprofit organization. The 
subcontractor will retain all rights provided for the contractor in 
this clause, and the contractor will not, as part of the consideration 
for awarding the subaward, obtain rights in the subcontractor's subject 
inventions.
    (2) The contractor will include in all other subawards, regardless 
of tier, for experimental developmental or research work the patent 
rights clause directed by the Contracting Officer.
    Replace paragraph (l), Communications, with the following:
    (l) Communication.
    Unless otherwise directed by DOE Patent Counsel, all reports and 
notifications required by this clause shall be submitted via the 
iEdison invention management system.


(End of alternate)
    Alternate II (XXX 20XX) As prescribed at 970.2703-2(a), insert the 
most recent Standard Patent Rights clause at 37 CFR 401.14 with the 
following modifications when the Determination of Exceptional 
Circumstances (DEC) under 35 U.S.C 202(a) applies:
    Replace the heading (``Standard Patent Rights'') with ``37 CFR 
401.14 Standard Patent Rights with Alternate II of 48 CFR 952.227-11 
Patent Rights-Retention by the Contractor (DETERMINATION OF EXCEPTIONAL 
CIRCUMSTANCES)''.
    Add the following subparagraph:
    (d)(3) Upon breach of paragraph (n) U.S. Competitiveness of this 
Patent Rights clause.
    Replace subparagraphs (g)(1) and (2) with the following:
    (g) Subcontracts.
    (1) The contractor will include this clause, suitably modified to 
identify the parties, in all subawards, regardless of tier, for 
experimental, developmental or research work to be performed by a 
domestic small business firm or nonprofit organization. The 
subcontractor will retain all rights provided for the contractor in 
this clause, and the contractor will not, as part of the consideration 
for awarding the subaward, obtain rights in the subcontractor's subject 
inventions.
    (2) The contractor will include in all other subawards, regardless 
of tier, for experimental developmental or research work the patent 
rights clause directed by the Contracting Officer.
    Replace paragraph (l), Communications, with the following:
    (l) Communication.
    Unless otherwise directed by DOE Patent Counsel, all reports and 
notifications required by this clause shall be submitted via the 
iEdison invention management system.
    Add the following paragraphs (n) and (o):
    (n) The Contractor agrees that any products embodying any subject 
invention or produced through the use of any subject invention will be 
manufactured substantially in the United States unless the Contractor 
can show to the satisfaction of DOE that it is not commercially 
feasible. In the event DOE agrees to foreign manufacture, there will be 
a requirement that the Government's support of the technology be 
recognized in some appropriate manner, e.g., alternative binding 
commitments to provide an overall net benefit to the U.S. economy. The 
Contractor agrees that it will not license, assign or otherwise 
transfer any subject invention to any entity, at any tier, unless that 
entity agrees to these same requirements. In the event that the 
Contractor or other such entity receiving rights in the Subject 
Invention undergoes a change in ownership amounting to a controlling 
interest, the Contractor or other such entity receiving rights shall 
ensure continual compliance with the requirements of this paragraph (n) 
and shall inform DOE, in writing, of the

[[Page 73688]]

change in ownership within six months of the change. The Contractor and 
any successor assignee will convey to DOE, upon written request from 
DOE, title to any subject invention, upon a breach of this paragraph 
(n). The Contractor will include this paragraph (n) in all subawards/
contracts, regardless of tier, for experimental, developmental or 
research work.
    (o) The requirements, rights and administration of paragraph (n) 
are further clarified as follows:
    1. Waivers. The Contractor (or any entity subject to paragraph (n)) 
may request a waiver or modification of paragraph (n). Such waivers or 
modifications may be granted when DOE determines that (1) the 
Contractor (or any entity subject to paragraph (n)) has demonstrated, 
with quantifiable data, that manufacturing in the United States is not 
commercially feasible and (2) a waiver or modification would best serve 
the interests of the United States and the general public.
    2. Final determination of breach of paragraph (n). If DOE 
determines the Contractor is in breach of paragraph (n), the Department 
may issue a final written determination of such breach. If such 
determination includes a demand for title to the subject inventions 
under the award, the demand for title will cause an immediate 
conveyance and assignment of all rights to all subject inventions under 
the award to the United States Government, including all pending U.S. 
and foreign patent applications and all U.S. and foreign patents that 
cover any subject invention, without compensation. Any such final 
determination shall be signed by the cognizant DOE Contracting Officer 
with the concurrence of the Assistant General Counsel for Technology 
Transfer & Intellectual Property. Advanced notice will be provided for 
comment to the Contractor before any final written determination by DOE 
is issued.
    3. Pursuant to Contractor's agreement in paragraph (n) to not 
license, assign or otherwise transfer rights to subject inventions at 
any tier unless the entity agrees to paragraph (n): any such license, 
assignment, or other transfer of right to any subject invention 
developed under the award shall contain paragraph (n) suitably modified 
to properly identify the parties. If a licensee, assignee, or other 
transferee of rights to any subject invention is finally determined by 
DOE in writing to be in breach of paragraph (n), the applicable 
license, assignment or other transfer shall be deemed null and void. 
Advanced notice will be provided for comment to the non-complying party 
before any final written determination by DOE is made.
    4. For clarity, if the forfeiture of title to any subject invention 
is due to a breach of paragraph (n), the Contractor shall not be 
entitled to any compensation, or to a license to the subject invention 
including the reserved license in paragraph (e)(1), unless DOE grants a 
license through a separately agreed upon licensing agreement.
    5. Authority. The requirements and administration of paragraph (n) 
is in accordance with the Determination of Exceptional Circumstances 
(DEC) under the Bayh-Dole Act to Further Promote Domestic Manufacture 
of DOE Science and Energy Technologies executed by DOE on June 7, 2021, 
or any other applicable DEC. A copy of the DEC is available at https://www.energy.gov/gc/determination-exceptional-circumstances-decs. By 
accepting or acknowledging the award, the Contractor is also 
acknowledging that it has received a copy of the DEC through the 
foregoing link. As set forth in 37 CFR 401.4, any nonprofit 
organization or small business firm as defined by 35 U.S.C. 201 
affected by any DEC has the right to appeal the imposition of the DEC 
within thirty (30) working days from the Contractor's acceptance or 
acknowledgement of this award.


(End of alternate)
0
159. Amend 952.227-13 by:
0
a. Revising the introductory text, clause date, and paragraphs 
(b)(2)(iii), (e)(2), (e)(3)(i), and (h)(1);
0
b. Removing paragraph (k);
0
c. Redesignating paragraphs (l) and (m) as paragraphs (k) and (l);
0
d. Revising the introductory text of newly redesignated paragraph 
(l)(2) and the last sentence of newly redesignated paragraph (l)(3); 
and
0
e. Adding Alternates I and II at the end of the section following 
``(End of clause)''.
    The revisions and additions read as follows:


Sec.  952.227-13  Patent rights--acquisition by the Government.

    As prescribed at 927.303(d), insert the following clause:

Patent Rights--Acquisition by the Government (XXX 20XX)
* * * * *
    (b) * * *
    (2) * * *
    (iii) Not less than sixty (60) days before the expiration of the 
response period for any action required by the Patent and Trademark 
Office, notify the Patent Counsel of any decision not to continue 
prosecution of the application.
* * * * *
    (e) * * *
    (2) Unless otherwise directed by DOE Patent Counsel, the Contractor 
shall disclose each subject invention to DOE through the iEdison 
invention management system within 2 months after the inventor 
discloses it in writing to Contractor personnel responsible for patent 
matters or, if earlier, within 6 months after the Contractor becomes 
aware that a subject invention has been made, but in any event before 
any on sale, public use, or publication of such invention known to the 
Contractor. The disclosure to DOE shall be in the form of a written 
report and shall identify the contract under which the invention was 
made and the inventor(s). It shall be sufficiently complete in 
technical detail to convey a clear understanding, to the extent known 
at the time of the disclosure, of the nature, purpose, operation, and 
physical, chemical, biological, or electrical characteristics of the 
invention. The disclosure shall also identify any publication, on sale, 
or public use of the invention and whether a manuscript describing the 
invention has been submitted for publication and, if so, whether it has 
been accepted for publication at the time of disclosure. In addition, 
after disclosure to DOE, the Contractor shall promptly notify Patent 
Counsel of the acceptance of any manuscript describing the invention 
for publication or of any on sale or public use planned by the 
Contractor. The report should also include any request for a greater 
rights determination in accordance with subparagraph (b)(2) of this 
clause. When an invention is disclosed to DOE under this paragraph, it 
shall be deemed to have been made in the manner specified in sections 
(a)(1) and (a)(2) of 42 U.S.C. 5908, unless the Contractor contends in 
writing at the time the invention is disclosed that it was not so made.
    (3) * * *
    (i) Interim reports every 12 months (or such longer period as may 
be specified by the Contracting Officer) from the date of the contract, 
listing all subject inventions during that period, and including a 
statement that all subject inventions have been disclosed (or that 
there are not such inventions), and that such disclosure has been made 
in accordance with the procedures required by paragraph (e)(1) of this 
clause.
* * * * *
    (h) * * *
    (1) The contractor shall include the clause at 37 CFR 401.14 
(suitably modified to identify the parties) in all subcontracts, 
regardless of tier, for experimental, developmental,

[[Page 73689]]

demonstration, or research work to be performed by a small business 
firm or domestic nonprofit organization, except where the work of the 
subcontract is subject to an Exceptional Circumstances Determination by 
DOE or another exception in 37 CFR 401.3(a). In all other subcontracts, 
regardless of tier, for experimental, developmental, demonstration, or 
research work, the contractor shall include this clause (suitably 
modified to identify the parties). The contractor shall not, as part of 
the consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
* * * * *
    (l) * * *
    (2) However, the Contractor shall not forfeit rights in a subject 
invention if, within the time specified in subparagraph (l)(1) of this 
clause, the Contractor:
* * * * *
    (3) * * * The forfeiture provision of this paragraph (l) shall be 
in addition to and shall not supersede other rights and remedies which 
the Government may have with respect to subject inventions.
* * * * *
    Alternate I (XXX 20XX). As prescribed in 927.303(d)(5), insert 
Alternate I under special circumstances to provide for a right to 
require licensing of third parties to background inventions:
    (m) Background patents. (1) Background patent means a domestic 
patent covering an invention or discovery which is not a subject 
invention, and which is owned or controlled by the Contractor at any 
time through the completion of this contract:
    (i) Which the contractor, but not the Government, has the right to 
license to others without obligation to pay royalties thereon, and
    (ii) Infringement of which cannot reasonably be avoided upon the 
practice of any specific process, method, machine, manufacture, or 
composition of matter (including relatively minor modifications 
thereof) which is a subject of the research, development, or 
demonstration work performed under this contract.
    (2) The Contractor agrees to and does hereby grant to the 
Government a royalty-free, nonexclusive license under any background 
patent for purposes of practicing a subject of this contract by or for 
the Government in research, development, and demonstration work only.
    (3) The Contractor also agrees that upon written application by 
DOE, it will grant to responsible parties, for purposes of practicing a 
subject of this contract, nonexclusive licenses under any background 
patent on terms that are reasonable under the circumstances. If, 
however, the Contractor believes that exclusive rights are necessary to 
achieve expeditious commercial development or utilization, then a 
request may be made to DOE for DOE approval of such licensing by the 
Contractor.
    (4) Notwithstanding subparagraph (m)(3) of this clause, the 
contractor shall not be obligated to license any background patent if 
the Contractor demonstrates to the satisfaction of the Secretary of 
Energy or designee that:
    (i) A competitive alternative to the subject matter covered by said 
background patent is commercially available or readily introducible 
from one or more other sources; or
    (ii) The Contractor or its licensees are supplying the subject 
matter covered by said background patent in sufficient quantity and at 
reasonable prices to satisfy market needs, or have taken effective 
steps or within a reasonable time are expected to take effective steps 
to so supply the subject matter.


(End of alternate)
    Alternate II (XXX 20XX). As prescribed in 48 CFR 927.303(d), the 
following modifications must be made when the ``Department of Energy 
Determination of Exceptional Circumstances under the Bayh-Dole Act to 
Further Promote Domestic Manufacture of DOE Science and Energy 
Technologies'' applies:
    The Contracting Officer shall insert the phrase ``or upon a breach 
of paragraph (n) U.S. Competitiveness of this clause'' after ``fails to 
disclose the subject invention within the times specified in 
subparagraph (e)(2) of this clause'' in the first sentence of paragraph 
(d)(1).
    The Contracting Officer shall insert the following paragraph (n):
    (n) U. S. Competitiveness. With regard to the license granted in 
paragraph (d)(1) of this clause, the Contractor agrees that any 
products embodying any subject invention or produced through the use of 
any subject invention will be manufactured substantially in the United 
States unless the Contractor can show to the satisfaction of DOE that 
it is not commercially feasible. In the event DOE agrees to foreign 
manufacture, there will be a requirement that the Government's support 
of the technology be recognized in some appropriate manner, e.g., 
alternative binding commitments to provide an overall net benefit to 
the U.S. economy. The Contractor agrees that it will not license, 
assign or otherwise transfer any subject invention to any entity, at 
any tier, unless that entity agrees to these same requirements. Should 
the Contractor or other such entity receiving rights in the 
invention(s):
    (1) Undergo a change in ownership amounting to a controlling 
interest, or
    (2) Sell, assign, or otherwise transfer title or exclusive rights 
in the invention(s), then the assignment, license, or other transfer of 
rights in the subject invention(s) is/are suspended until approved in 
writing by DOE. The Contractor and any successor assignee will convey 
to DOE, upon written request from DOE, title to any subject invention, 
upon a breach of this paragraph. The Contractor will include this 
paragraph in all subawards/contracts, regardless of tier, for 
experimental, developmental or research work.


(End of alternate)
0
160. Section 952.227-14 is revised to read as follows:


Sec.  952.227-14  Rights in data-general.

    Alternate VI (XXX 20XX) As prescribed at 927.409(b)(1)(ix), insert 
Alternate VI to require the contractor to license data regarded as 
limited rights data or restricted computer software to the Government 
and third parties at reasonable royalties upon request by the 
Department of Energy.
    (k) Contractor licensing. Except as may be otherwise specified in 
this contract as data not subject to this paragraph, the contractor 
agrees that upon written application by DOE, it will grant to the 
Government and responsible third parties, for purposes of practicing a 
subject of this contract, a nonexclusive license in any limited rights 
data or restricted computer software on terms and conditions reasonable 
under the circumstances including appropriate provisions for 
confidentiality; provided, however, the contractor shall not be obliged 
to license any such data if the contractor demonstrates to the 
satisfaction of the Secretary of Energy or designee that:
    (1) Such data are not essential to the manufacture or practice of 
hardware designed or fabricated, or processes developed, under this 
contract;
    (2) Such data, in the form of results obtained by their use, have a 
commercially competitive alternate available or readily introducible 
from one or more other sources;
    (3) Such data, in the form of results obtained by their use, are 
being supplied by the contractor or its licensees in sufficient 
quantity and at reasonable prices to satisfy market needs, or the 
contractor or its licensees

[[Page 73690]]

have taken effective steps or within a reasonable time are expected to 
take effective steps to so supply such data in the form of results 
obtained by their use; or
    (4) Such data, in the form of results obtained by their use, can be 
furnished by another firm skilled in the art of manufacturing items or 
performing processes of the same general type and character necessary 
to achieve the contract results.


(End of alternate)
    Alternate VII (XXX 20XX) As prescribed in 927.409(b)(1), substitute 
the following for paragraph (b)(2)(i) of the clause at FAR 52.227-14:
    (b)(2)(i) Assert copyright in data first produced in the 
performance of this contract (except Restricted Data in category C-24, 
10 CFR part 725, in which DOE has reserved the right to receive 
reasonable compensation for the use of its inventions and discoveries, 
including related data and technology) to the extent provided in 
paragraph (c)(1) of this clause.


(End of alternate)
    Alternate VIII (XXX 20XX) As prescribed in 927.409(a), substitute 
the following for subparagraph (c)(1)(i) of the clause at FAR 52.227-
14:
    (c) Copyright--(1) Data first produced in the performance of this 
contract. (i) Unless provided otherwise in paragraph (d) of this 
clause, the Contractor may, without prior approval of the Contracting 
Officer, assert copyright in scientific and technical articles based on 
or containing data first produced in the performance of this contract 
and published in academic, technical or professional journals, symposia 
proceedings, or similar works. The prior, express written permission of 
the DOE Patent Counsel is required to assert copyright in all other 
data first produced in the performance of this contract. When such 
permission is granted, the DOE Patent Counsel shall specify appropriate 
terms, conditions, and submission requirements to assure utilization, 
dissemination, and commercialization of the data. The Contractor, when 
requested, shall promptly deliver to Patent Counsel a duly executed and 
approved instrument fully confirmatory of all rights to which the 
Government is entitled.


(End of alternate)
0
161. Section 952.227-17 is added to read as follows:


Sec.  952.227-17  Rights in data-special works.

    Alternate I (XXX 20XX) As prescribed at 927.409(b)(1), substitute 
the following for subparagraph (c)(1)(ii) of the clause at FAR 52.227-
17:
    (c)(1)(ii) If the Government desires to obtain copyright in data 
first produced in the performance of this contract and permission has 
not been granted as set forth in paragraph (c)(1)(i) of this clause, 
the DOE Patent Counsel may direct the Contractor to assign (with or 
without registration), or obtain the assignment of, the copyright to 
the Government or its designated assignee.


(End of alternate)


Sec.  952.227-82  [Removed]

0
162. Section 952.227-82 is removed.
0
163. Amend section 952.227-84 by revising the introductory text, clause 
date, and third sentence of the clause to read as follows:


Sec.  952.227-84  Notice of right to request patent waiver.

    As prescribed in 927.409(n), insert this provision:
Right To Request Patent Waiver (XXX 20XX)
    * * * Domestic small businesses and domestic nonprofit 
organizations normally will receive the patent rights clause at 37 CFR 
401.14 which permits the contractor to retain title to such inventions, 
except under contracts for management or operation of a Government-
owned research and development facility or under contracts involving 
exceptional circumstances or intelligence activities. * * *
0
164. Amend section 952.231-71 by revising the introductory text, clause 
date, and paragraph (f)(2) read as follows:


Sec.  952.231-71  Insurance-litigation and claims.

    As prescribed in 931.205-19(f), insert the following clause in 
applicable non-management and operating contracts:
Insurance--Litigation and Claims (XXX 20XX)
* * * * *
    (f) * * *
    (2) The term ``contractor's managerial personnel'' is defined in 
the Property clause
    48 CFR 970.5245-1 in this contract.
* * * * *
0
165. Section 952.232-7 is added to read as follows:


Sec.  952.232-7  Electronic submission of invoices/vouchers.

    As prescribed at 932.971, insert the following clause:
Electronic Submission of Invoices/Vouchers (XXX 20XX)
    Contractors shall submit vouchers electronically through the Oak 
Ridge Financial Service Center's (ORFSC) Vendor Inquiry Payment 
Electronic Reporting System (VIPERS). VIPERS allows vendors to submit 
vouchers, attach supporting documentation and check the payment status 
of any voucher submitted to the DOE. Instructions concerning contractor 
enrollment and use of VIPERS can be found at https://vipers.doe.gov.


(End of clause)
0
166. Section 952.233-2 is revised to read as follows:


Sec.  952.233-2  Service of protest.

    As prescribed in 933.106, insert the following provision:
Service of Protest (XXX 20XX)
    (c) Another copy of a protest filed with the Government 
Accountability Office shall be furnished to the following address 
within the time periods described in paragraph (b) of this clause: U.S. 
Department of Energy, Assistant General Counsel for Procurement and 
Financial Assistance (GC-61), 1000 Independence Avenue SW, Washington, 
DC 20585, or email: [email protected].
    (d) Notice of Protest File Availability. (1) If a protest of this 
procurement is filed with the GAO in accordance with 4 CFR part 21, any 
actual or prospective offeror may request the Department of Energy 
(DOE) to provide it with reasonable access to the protest file pursuant 
to 48 CFR 33.104(a)(3)(ii). Such request must be in writing and 
addressed to the Contracting Officer for this procurement.
    (2) Any offeror who submits information or documents to DOE for the 
purpose of competing in this procurement is hereby notified that 
information or documents it submits may be included in the protest file 
that will be available to actual or prospective offerors in accordance 
with the requirements of 48 CFR 33.104(a)(3)(ii). DOE will be required 
to make such documents available unless they are exempt from disclosure 
pursuant to the Freedom of Information Act. Therefore, offerors should 
mark any documents as to which they would assert that an exemption 
applies (see 10 CFR part 1004).
    (e) Protests to the Agency. The DOE's agency protest procedures are 
in 48 CFR 933.103. Potential protesters should discuss their concerns 
with the Contracting Officer prior to filing a protest. In the event 
that an interested party believes a protest is necessary, efforts 
should be made to resolve the protest at the lowest level possible.


(End of provision)

[[Page 73691]]

Sec.  952.233-4 and 952.233-5  [Removed]

0
167. Sections 952.233-4 and 952.233-5 are removed.
0
168. Section 952.242-71 is added to read as follows:


Sec.  952.242-71  Conditional payment of fee, profit, and other 
incentives.

    As prescribed at 923.7003(f) and 942.71(d), insert the following 
clause: (Note: If the clause at 952.204-2, Security Requirements, is 
not included in the contract, the security or safeguarding of 
Restricted Data and other classified information requirements of the 
clause do not apply; if the clause at 952.250-70, Nuclear Hazards 
Indemnity Agreement, is not included in this contract, the environment, 
safety and health requirements of the clause do not apply.)
Conditional Payment of Fee, Profit, and Other Incentives (XXX 20XX)
    (a) Definitions.
    (1) Amount of payment for otherwise earned fee, fixed fee, profit, 
or other incentives for a period means the quantity the Contracting 
Officer or fee determining official determines the Contractor is due 
for its performance prior to a separate determination that the 
Contractor did not comply with a term or condition of the contract or 
experienced a failure relating to: environment, safety, and health; 
security or safeguarding of Restricted Data and other classified 
information; or business and financial systems.
    (i) If the contract includes incentives allocable to more than one 
period, the amount of payment for otherwise earned fee, fixed fee, 
profit, or other incentives for a period includes the allocable amount 
of payment for each such incentive for otherwise earned fee, fixed fee, 
profit, or other incentives. Unless stated otherwise, the allocable 
amount is the total amount divided by the number of periods the 
incentive covered.
    (2) Amount actually payable to the Contractor for a period means: 
(the amount of payment for otherwise earned fee, fixed fee, profit, or 
other incentives for the period) less (the amount of any reduction 
under this clause and the amount of any reductions under other clauses 
to the amount of payment for otherwise earned fee, fixed fee, profit, 
or other incentives for the period).
    (b) General.
    (1) (Note: If the clause at 48 CFR 952.204-2, Security 
Requirements, is not included in this contract, the security or 
safeguarding of Restricted Data and other classified information 
requirements of this clause do not apply; if the clause at 48 CFR 
952.250-70, Nuclear Hazards Indemnity Agreement, is not included in 
this contract, the environment, safety and health requirements of this 
clause do not apply.)
    The amount of payment of otherwise earned fee, fixed fee, profit, 
or other incentives for any period under this contract is dependent 
upon the Contractor's and the Contractor's employees' compliance during 
the period with the performance requirements of this contract relating 
to:
    (i) environment, safety and health (ES&H), which includes worker 
safety and health (WS&H);
    (ii) security or safeguarding of Restricted Data and other 
classified information; and
    (iii) business and financial systems.
    (2) The ES&H performance requirements of this contract are set 
forth in its ES&H terms and conditions, including in some cases a DOE 
approved contractor (Integrated Safety Management System (ISMS) or 
similar document. Financial incentives for timely mission 
accomplishment or cost effectiveness shall never compromise or impede 
full and effective implementation of the ISMS and full ES&H compliance.
    (3) The security or safeguarding of Restricted Data and other 
classified information performance requirements of this contract are 
set forth in the clause of this contract entitled, ``Security 
requirements,'' the clause (if it is included) of this contract 
entitled ``Laws, Regulations, and DOE Directives,'' and in other terms 
and conditions.
    (4) The business and financial systems performance requirements of 
this contract are set forth in various terms and conditions relating to 
management, accounting, property, procurement, and earned value 
management, such as, the ``Management controls'' clause (if it is 
included).
    (5) If the Contractor does not, in any period, meet the performance 
requirements of this contract relating to ES&H, security or the 
safeguarding of Restricted Data and other classified information, or 
business and financial systems, the Contracting Officer may, per this 
clause, reduce the amount of payment of otherwise earned fee, fixed 
fee, profit or other incentives.
    (c) Amount of Reduction.
    (1) If in any period (see paragraph (c)(5) of this clause) the 
Contractor does not meet the performance requirements of this contract 
relating to ES&H, security or the safeguarding of Restricted Data and 
other classified information, or business and financial systems, the 
Contracting Officer will unilaterally determine the amount of reduction 
to the amount of payment for otherwise earned fee, fixed fee, profit, 
or other incentives for the period based on the severity of the 
performance failure pursuant to the degrees of failure specified in 
paragraphs (e), (f), and (g) of this clause. The percent reduction for 
each performance failure will be: not less than 26% nor more than 100% 
for a first degree failure; not less than 11% nor more than 26% for a 
second degree failure; and no more than 11% for a third degree failure.
    (2) For a reduction allocable to more than one period, the 
Government will make the allocation at the end of the period in which 
it determines the total amount of the reduction. Unless stated 
otherwise, the allocable amount is the total reduction amount divided 
by the number of periods the reduction covered.
    (3) The Government will reduce the payment of otherwise earned fee, 
fixed fee, profit, or other incentives as soon as practicable after the 
end of the period in which the performance failure occurs. If the 
Government is not aware of the failure when it occurs, it will make the 
reduction as soon as practical after becoming aware.
    (4) In determining the reduction to the amount of payment and the 
applicability of mitigating factors, the Contracting Officer must 
consider the Contractor's overall performance in meeting the ES&H, 
security or safeguarding of Restricted Data and other classified 
information, or business and financial systems performance requirements 
of the contract. Such consideration must include performance against 
any specific performance criteria/requirements that provide additional 
definition, guidance for the amount of reduction, or guidance for the 
applicability of mitigating factors. In all cases, the Contracting 
Officer must consider mitigating factors that may warrant a reduction 
below the reduction that would be appropriate absent mitigating 
factors. Mitigating factors include, but are not limited to, the 
following (paragraphs (c)(4)(v), (vi), (vii) and (viii) of this clause 
apply to ES&H only).
    (i) Degree of control the Contractor had over the event or 
incident.
    (ii) Efforts the Contractor had made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor's self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of: ES&H and 
compliance in related areas; safeguarding Restricted

[[Page 73692]]

Data and other classified information and compliance in related areas; 
and business and financial systems and compliance in related areas.
    (v) Contractor's demonstration to the Contracting Officer's 
satisfaction that the principles of industrial ES&H standards are 
routinely practiced.
    (vi) Event caused by ``Good Samaritan'' act by the Contractor 
(e.g., offsite emergency response).
    (vii) Contractor's demonstration that a performance measurement 
system is routinely used to improve and maintain ES&H performance 
(including effective resource allocation) and to support DOE corporate 
decision-making (e.g., policy, ES&H programs).
    (viii) Contractor's demonstration that an Operating Experience and 
Feedback Program is functioning that demonstrably affects continuous 
improvement in ES&H by use of lessons-learned and best practices inter- 
and intra-DOE sites.
    (5) The Contracting Officer will, for purposes of this clause, at 
the time of contract award or as soon as possible after contract award, 
allocate the total amount of fee, profit, and other incentives that is 
available under the contract to equal periods of [insert 6 or 12] 
months to run sequentially for the term of the contract, including 
options. The amount to be allocated to each period shall equal: (the 
average monthly amount available during the term of the contact) 
multiplied by (the number of months for each period).
    (d) Reductions to the amount of payments the Contractor has 
received for earned fee, fixed fee, profit, or other incentives under 
this and other clauses.
    (1) The amount of the reduction under this clause, in combination 
with the amount of any reduction under any other clause, shall not 
exceed the amount of payment for otherwise earned fee, fixed fee, 
profit, or other incentives for the period.
    (2) If at any time during the contract any reductions under this 
clause or other clauses result in the sum of the amount of payments the 
Contractor has received for earned fee, fixed fee, profit, or other 
incentives to exceed the sum of the amounts of actually payable to the 
Contractor, the Contractor shall immediately return the excess to the 
Government.
    (3) At the end of the contract--
    (i) The Government will pay the Contractor the amount by which the 
sum of amounts actually payable to the Contractor exceeds the sum of 
the payments the Contractor has received; or
    (ii) The Contractor shall return to the Government the amount by 
which the sum of the payments the Contractor has received exceeds the 
sum of the amounts actually payable to the Contractor.
    (e) Environment, Safety and Health (ES&H). Performance failures 
occur if the Contractor does not comply with the contract's ES&H terms 
and conditions, including applicable ES&H laws, regulations, DOE 
directives, and DOE approved Contractor ISMS. The degrees of 
performance failure under which reductions of earned or fixed fee, 
profit, or other incentives will be determined are:
    (1) First Degree: Performance failures that are most adverse to 
ES&H. They include:
    (i) Failure to develop and obtain required DOE approval of an ISMS, 
if an ISMS is required.

    (The Government will perform necessary reviews in a timely manner 
and not unreasonably withhold approval.)
    (ii) Performance failures determined, per applicable ES&H laws, 
regulations, or DOE directives to have resulted in, or that could 
reasonably be expected to result in, serious injury or death to a 
worker.
    (iii) Occurrence of any accident or event that meets the criteria 
of Appendix A of DOE Order 225.1B (or successor Order) and results in a 
determination to conduct a Federal Accident Investigation Board.
    (2) Second Degree: Performance failures that are significantly 
adverse to ES&H. They include:
    (i) Failures to comply with an approved ISMS, if an ISMS is 
required.
    (ii) Failures that have been determined, per applicable ES&H laws, 
regulations, or DOE directives, to have resulted in, or could 
reasonably be expected to result in, an actual injury, exposure, or 
exceedance that occurred or nearly occurred but had minor practical 
long-term health consequences.
    (iii) A breakdown of the Integrated Safety Management System.
    (iv) Non-compliance with applicable ES&H laws, regulations, or DOE 
directives actually resulting in an accident that meets the criteria of 
Appendix A of DOE Order 225.1B (or successor Order) but not resulting 
in a determination to conduct a Federal Accident Investigation Board.
    (v) Non-compliance with applicable ES&H laws, regulations, or DOE 
directives that results in a near miss of an accident or event that 
could have resulted in an adverse effect and a determination to conduct 
a Federal Accident Investigation Board. (A near miss is a situation in 
which an inappropriate action occurs, or a necessary action is omitted, 
that does not result in an adverse effect.)
    (3) Third Degree: Performance failures that have been determined 
per applicable ES&H laws, regulations, or DOE directives to reflect a 
lack of focus on improving ES&H. They include:
    (i) Non-compliance with applicable ES&H laws, regulations, or DOE 
directives actually resulting in potential breakdown of the Integrated 
Safety Management System. The following performance failures or 
performance failures of similar import will be considered third degree:
    (A) Failure to implement effective corrective actions to address 
deficiencies/non-compliances documented through external (e.g., 
Federal) oversight and/or reported per DOE Order 231.B (or successor 
Order) requirements; internal oversight of 10 CFR parts 830, 835, 850, 
and 851; or DOE Orders 227.1A and 436.1 (or successor Order) 
requirements.
    (B) Multiple similar non-compliances identified by external (e.g., 
Federal) oversight that in aggregate indicate a significant 
programmatic breakdown.
    (C) Non-compliances that: have, or that may have, significant 
negative impacts to the worker, the public, or the environment; or 
indicate a significant programmatic breakdown.
    (D) Failure to notify DOE upon discovery of events or conditions 
where notification is required by the terms and conditions of the 
contract.
    (f) Security or Safeguarding Restricted Data and Other Classified 
Information. Performance failures occur if the Contractor does not 
comply with the terms and conditions of this contract relating to the 
safeguarding of Restricted Data and other classified information. The 
degrees of performance failure under which reductions of fee, profit, 
or other incentives occur will be determined are as follows:
    (1) First Degree: Performance failures that have been determined, 
in accordance with applicable law, DOE regulation, or directive, to 
have resulted in, or that can reasonably be expected to result in, 
exceptionally grave damage to the national security. The following are 
examples of performance failures or performance failures of similar 
import that will be considered first degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating a risk of, loss, 
compromise, or unauthorized disclosure of Top Secret Restricted Data or 
other information classified as Top Secret, any classification level of 
information in a Special Access Program

[[Page 73693]]

(SAP), information identified as sensitive compartmented information 
(SCI), or high risk nuclear weapons-related data.
    (ii) Contractor actions that result in a breakdown of the 
safeguards and security management system that can reasonably be 
expected to result in the loss, compromise, or unauthorized disclosure 
of Top Secret Restricted Data or other information classified as Top 
Secret, any classification level of information in an SAP, information 
identified as SCI, or high risk nuclear weapons-related data.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Top Secret Restricted Data or other 
information classified as Top Secret, any classification level of 
information in an SAP, information identified as SCI, or high risk 
nuclear weapons-related data.
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (2) Second Degree: Performance failures that have been determined, 
in accordance with applicable law, DOE regulation, or directive, to 
have actually resulted in, or that can reasonably be expected to result 
in, serious damage to the national security. The following are examples 
of performance failures or performance failures of similar import that 
will be considered second degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, 
compromise, or unauthorized disclosure of Secret Restricted Data or 
other information classified as Secret.
    (ii) Contractor actions that result in a breakdown of the 
safeguards and security management system that can reasonably be 
expected to result in the loss, compromise, or unauthorized disclosure 
of Secret Restricted Data, or other information classified as Secret.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Secret Restricted Data or other classified 
information regardless of classification (except for information 
covered by paragraph (f)(1)(iii) of this clause).
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data or other classified information classified as Secret.
    (3) Third Degree: Performance failures that have been determined, 
in accordance with applicable law, regulation, or DOE directive, to 
have actually resulted in, or that can reasonably be expected to result 
in, undue risk to the common defense and security. This category 
includes performance failures that result from a lack of Contractor 
management and/or employee attention to the proper safeguarding of 
Restricted Data and other classified information. These performance 
failures may be indicators of future, more severe performance failures 
and/or conditions that if identified and corrected early would prevent 
serious incidents. The following are examples of performance failures 
or performance failures of similar import that will be considered third 
degree:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, 
compromise, or unauthorized disclosure of Restricted Data or other 
information classified as Confidential.
    (ii) Failure to promptly report alleged or suspected violations of 
laws, regulations, or directives pertaining to the safeguarding of 
Restricted Data or other classified information.
    (iii) Failure to identify or timely execute corrective actions to 
mitigate or eliminate identified vulnerabilities and reduce residual 
risk relating to the protection of Restricted Data or other classified 
information in accordance with the Contractor's Safeguards and Security 
Plan or other security plan, as applicable.
    (iv) Contractor actions that result in performance failures that 
unto themselves pose minor risk, but when viewed in the aggregate 
indicate degradation in the integrity of the Contractor's safeguards 
and security management system relating to the protection of Restricted 
Data and other classified information.
    (g) Business and Financial systems. Performance failures occur if 
the Contractor does not comply with the terms and conditions of this 
contract relating to business and financial systems. The degrees of 
performance failure under which reductions of fee, profit, or other 
incentives will be determined are as follows:
    (1) First Degree: A performance failure that poses significant 
adverse long-term practical consequences to the mission of the site is 
a first-degree performance failure.
    (2) Second Degree: A performance failure that poses measurable, but 
less than significant, adverse long-term practical consequences to the 
mission of the site is a second-degree performance failure.
    (3) Third Degree: A performance failure that results in minor 
adverse long-term practical consequences to the mission of the site is 
a third degree performance failure.


(End of clause)
0
169. Section 952.245-2 is revised to read as follows:


Sec.  952.245-2  Government property (fixed-price contracts).

    Modify FAR 52.245-2 by adding ``and the DOE Acquisition Regulation 
subpart 945.5,'' at the end of paragraph (d) of the clause.
0
170. Section 952.245-5 is revised to read as follows:


Sec.  952.245-5  Government property (cost-reimbursement, time-and-
materials, or labor-hour contracts).

    Modify FAR 52.245-1 by adding ``and DOE Acquisition Regulation 
subpart 945.5'' at the end of the first sentence in paragraphs (e)(1) 
and (2) of the clause.
0
171. Section 952.250-70 is revised to read as follows:


Sec.  952.250-70  Nuclear hazards indemnity agreement.

    Insert the following clause in accordance with 950.7006:
Nuclear Hazards Indemnity Agreement (XXX 20XX)
    (a) Definitions. Except as otherwise specified within this clause, 
all definitions set forth in the Atomic Energy Act of 1954, as amended 
(hereinafter called the Act), shall apply to this clause.
    ``Extraordinary nuclear occurrence'' means an event that DOE has 
determined to be such an occurrence, as defined in the Act. A 
determination of whether or not there has been an extraordinary nuclear 
occurrence will be made in accordance with the procedures in 10 CFR 
part 840.
    ``Public liability,'' as defined in the Act, means liability that 
arises out of or in connection with the activities under this contract, 
including transportation; and arises out of or results from a nuclear 
incident or precautionary evacuation.
    (b) Authority. This clause is incorporated into this contract 
pursuant to the authority contained in subsection 170d. of the Act.
    (c) Financial protection. Except as hereafter permitted or required 
in writing by DOE, the Contractor will not be required to provide or 
maintain, and will not provide or maintain at Government expense, any 
form of financial protection to cover public

[[Page 73694]]

liability, as described in paragraph (a) of this clause. DOE may, 
however, at any time require in writing that the Contractor provide and 
maintain financial protection of such a type and in such amount as DOE 
shall determine to be appropriate to cover such public liability, 
provided that the costs of such financial protection are reimbursed to 
the Contractor by DOE.
    (d) Indemnification. To the extent that the Contractor and other 
persons indemnified are not compensated by any financial protection 
permitted or required by DOE, DOE will indemnify the Contractor and 
other persons indemnified against (i) claims for public liability as 
described in paragraph (a) of this clause; and (ii) such legal costs of 
the Contractor and other persons indemnified as are approved by DOE, 
provided that DOE's liability, including such legal costs, shall not 
exceed the amount set forth in section 170t of the Act in the aggregate 
for each nuclear incident or precautionary evacuation occurring within 
the United States or $100 million in the aggregate for each nuclear 
incident occurring outside the United States, irrespective of the 
number of persons indemnified in connection with this contract.
    (e)(1) Waiver of defenses. In the event of a nuclear incident (as 
defined in the Act) arising out of nuclear waste activities (as defined 
in the Act), the Contractor, on behalf of itself and other persons 
indemnified, agrees to waive any issue or defense as to charitable or 
governmental immunity.
    (2) In the event of an extraordinary nuclear occurrence that--
    (i) Arises out of, results from, or occurs in the course of the 
construction, possession, or operation of a production or utilization 
facility; or
    (ii) Arises out of, results from, or occurs in the course of 
transportation of source material, by- product material, or special 
nuclear material to or from a production or utilization facility; or
    (iii) Arises out of or results from the possession, operation, or 
use by the Contractor or a subcontractor of a device utilizing special 
nuclear material or by-product material, during the course of the 
contract activity; or
    (iv) Arises out of, results from, or occurs in the course of 
nuclear waste activities, the Contractor, on behalf of itself and other 
persons indemnified, agrees to waive--
    (A) Any issue or defense as to the conduct of the claimant 
(including the conduct of persons through whom the claimant derives its 
cause of action) or fault of persons indemnified, including, but not 
limited to negligence, contributory negligence, assumption of risk; or
    (B) Unforeseeable intervening causes, whether involving the conduct 
of a third person or an act of God; any issue or defense as to 
charitable or governmental immunity; and any issue or defense based on 
any statute of limitations, if suit is instituted within three years of 
the date on which the claimant first knew, or reasonably could have 
known, of his injury or change and the cause thereof. The waiver of any 
such issue or defense shall be effective regardless of whether such 
issue or defense may otherwise be deemed jurisdictional or relating to 
an element in the cause of action. The waiver shall be judicially 
enforceable in accordance with its terms by the claimant against the 
person indemnified.
    (v) For the purposes of making a determination of whether or not 
there has been an extraordinary nuclear occurrence, ``offsite,'' as 
used in 10 CFR part 840, means ``away from the contract location,'' a 
phrase that means any DOE facility, installation, or site at which the 
contract is being performed, or any contractor-owned or -controlled 
facility, installation, or site at which the Contractor is engaged in 
performing the contract.
    (3) The waivers set forth in paragraph (e)(1) of this clause--
    (i) Shall be effective regardless of whether such issue or defense 
may otherwise be deemed jurisdictional or relating to an element in the 
cause of action;
    (ii) Shall be judicially enforceable in accordance with its terms 
by the claimant against the person indemnified;
    (iii) Shall not preclude a defense based upon a failure to take 
reasonable steps to mitigate damages;
    (iv) Shall not apply to any injury or damage to a claimant (or his 
property) that is intentionally sustained by the claimant, or that 
results from a nuclear incident intentionally and wrongfully caused by 
the claimant;
    (v) Shall not apply to injury to a claimant who is employed at the 
site of and in connection with the activity where the extraordinary 
nuclear occurrence takes place, if benefits therefor are either payable 
or required to be provided under any workmen's compensation or 
occupational disease law;
    (vi) Shall not apply to any claim resulting from a nuclear incident 
occurring outside the United States;
    (vii) Shall be effective only with respect to those obligations set 
forth in this clause and in insurance policies, contracts or other 
proof of financial protection; and
    (viii) Shall not apply to, or prejudice the prosecution or defense 
of, any claim or portion of claim not within the protection afforded 
under (A) the limit of liability provisions under subsection 170e. of 
the Act, and (B) the terms of this agreement and the terms of insurance 
policies, contracts, or other proof of financial protection.
    (f) Notification and litigation of claims. The Contractor shall 
give immediate written notice to DOE of any known action or claim filed 
or made against the Contractor or other person indemnified for public 
liability as defined in paragraph (a) of this clause. Except as 
otherwise directed by DOE, the Contractor shall furnish promptly to DOE 
copies of all pertinent papers received by the Contractor or filed with 
respect to such actions or claims. DOE shall have the right to, and may 
collaborate with, the Contractor and any other person indemnified in 
the settlement or defense of any action or claim and shall have the 
right to:
    (1) Require the prior approval of DOE for the payment of any claim 
that DOE may be required to indemnify hereunder; and
    (2) Appear through the Attorney General on behalf of the Contractor 
or other person indemnified in any action brought upon any claim that 
DOE may be required to indemnify hereunder, take charge of such action, 
and settle or defend any such action. If the settlement or defense of 
any such action or claim is undertaken by DOE, the Contractor or other 
person indemnified shall furnish all reasonable assistance in effecting 
a settlement or asserting a defense.
    (g) Continuity of DOE obligations. The obligations of DOE under 
this clause shall not be affected by any failure on the part of the 
Contractor to fulfill its obligation under this contract and shall be 
unaffected by the death, disability, or termination of existence of the 
Contractor, or by the completion, termination or expiration of this 
contract.
    (h) Effect of other clauses. The provisions of this clause shall 
not be limited in any way by, and shall be interpreted without 
reference to, any other clause of this contract, including the Disputes 
clause, provided, however, that this clause is subject to the clauses 
at 48 CFR 52.203-5, Covenant Against Contingent Fees, and 48 CFR 
970.5232-3, Accounts, Records, and Inspection, and any provisions later 
added to this contract, as required by applicable Federal law, 
including statutes, Executive orders and regulations, to be

[[Page 73695]]

included in Nuclear Hazards Indemnity Agreements.
    (i) Civil penalties. The Contractor and its subcontractors and 
suppliers who are indemnified under the provisions of this clause are 
subject to civil penalties, pursuant to section 234A of the Act, for 
violations of applicable DOE nuclear-safety related rules, regulations, 
or orders, and pursuant to section 234C of the Act, for violations of 
applicable DOE worker safety and health related rules, regulations, and 
orders. If the Contractor is a not-for-profit contractor, as defined by 
section 234Ad.(2), the total amount of civil penalties paid shall not 
exceed the total amount of fees paid within any one-year period (as 
determined by the Secretary) under this contract.
    (j) Criminal penalties. Any individual director, officer, or 
employee of the Contractor or of its subcontractors and suppliers 
indemnified under the provisions of this clause are subject to criminal 
penalties, pursuant to section 223(c) of the Act, for knowing and 
willfully violating the Act, and applicable DOE nuclear safety-related 
rules, regulations or orders for which violation results in, or if 
undetected, would have resulted in a nuclear incident.
    (k) Inclusion in Subcontracts. The Contractor shall insert this 
clause in any subcontract that may involve the risk of public 
liability, as that term is defined in the Act and further described in 
paragraph (d)(2) of this clause. However, this clause shall not be 
included in subcontracts in which the subcontractor is subject to 
Nuclear Regulatory Commission (NRC) financial protection requirements 
under section 170b. of the Act or NRC agreements of indemnification 
under section 170c. or k. of the Act for the activities under the 
subcontract.
Effective Date
    ( ) See note II below for instructions related to this section on 
Effective Date.
Relationship to General Indemnity
    ( ) See note III below for instructions related to this section on 
Relationship to General Indemnity.


(End of clause)
Note I
    (1) For contracts with an award date after August 16, 2012, do not 
include an effective date provision.
    (2) For contracts with an award date before August 16, 2012--
    (i) If the contract contains the Nuclear Hazards Indemnity 
Agreement clause (June 1996 or prior version), replace the clause at 48 
CFR 952.250-70 with this clause and use the EFFECTIVE DATE title and 
language, as follows:
    ``Effective Date. This contract was awarded on or after August 8, 
2005, and at contract award contained the clause at 48 CFR 952.250-70 
(JUN 1996) or prior version. That clause has been deleted and replaced 
with this clause. The Price-Anderson Amendments Act of 2005, described 
by this clause, controls the indemnity for any nuclear incident that 
occurred on or after August 8, 2005. The Contractor's liability for 
civil penalties for violations of the Atomic Energy Act of 1954 under 
this contract is described by paragraph (i) of this clause.
    (ii) If the contract was awarded prior to August 8, 2005, and 
contains the Nuclear Hazards Indemnity Agreement clause, dated June 
1996 or prior version, add this clause in addition to the clause at 48 
CFR 952.250-70 or prior version and use the EFFECTIVE DATE title and 
language, as follows:
    ``Effective Date. This contract was in effect prior to August 8, 
2005, and contains the clause at 48 CFR 952.250-70 (JUN 1996) or prior 
version. The indemnity of paragraph (d)(1) is limited to the indemnity 
provided by the Price-Anderson Amendments Act of 1988 for any nuclear 
incident to which the indemnity applies that occurred before August 8, 
2005.
    The indemnity of paragraph (d)(1) of this clause applies to any 
nuclear incident that occurred on or after August 8, 2005. The 
Contractor's liability for violations of the Atomic Energy Act of 1954 
under this contract is that in effect prior to August 8, 2005.
Note II
    The following alternate will be added to the above Nuclear Hazards 
Indemnity Agreement clause for all contracts that contain a general 
authority indemnity pursuant to 48 CFR 950.7101. Caution: Be aware that 
for contracts that will have this provision added, but that do not 
contain an effective date provision, this paragraph shall be marked 
(1). In the event an Effective Date provision has been included, it 
shall be marked (m).
    ``( ) To the extent that the Contractor is compensated by any 
financial protection, or is indemnified pursuant to this clause, or is 
effectively relieved of public liability by an order or orders limiting 
same, pursuant to 170e of the Act, the provisions of the clause 
providing general authority indemnity shall not apply.''


(End of note)

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

0
172. The authority citation for part 970 continues to read as follows:

    Authority:  42 U.S.C. 2201; 2282a; 2282b; 2282c; 42 U.S.C. 7101 
et seq.; 50 U.S.C. 2401 et seq.

0
173. Amend section 970.0100 by adding a sentence at the end of the 
section to read as follows:


Sec.  970.0100  Scope of part.

    * * * This part does not apply to contracts not designated as M&O 
contracts by the Secretary of Energy, except as approved by the 
cognizant Senior Procurement Executive (SPE) or as otherwise prescribed 
in the DEAR.
0
174. Amend section 970.0371-8 by revising paragraph (a)(1) to read as 
follows:


Sec.  970.0371-8  Employee disclosure concerning other employment 
services.

    (a) * * *
    (1) Acknowledge that the employee has read and is familiar with:
    (i) The requirements and restrictions prescribed in this section;
    (ii) Current version of DOE Order 486.1, Department of Energy 
Foreign Government Sponsored or Affiliated Activities;
    (iii) Current version of DOE Order 241.1, Scientific and Technical 
Information Management; and
    (iv) The requirements of the contractor's contract with DOE 
relating to patents.
* * * * *
0
175. Section 970.0371-9 is amended by revising the last sentence of the 
section to read as follows:


Sec.  970.0371-9  Contract clause.

    * * * In paragraph (a), the words ``and managerial personnel (see 
970.5245-1(k))'' may be inserted after ``(see 952.215-70)''.


Sec.  970.0404-1  [Removed]

0
176. Section 970.0404-1 is removed.
0
177. Section 970.0404-2 is revised to read as follows:


Sec.  970.0404-2  General.

    (a) DOE policies, definitions, provisions, and clauses associated 
with safeguarding and security of classified information are in part 
904.
    (b) For DOE management and operating contracts and other contracts 
designated by the Senior Procurement Executive or designee, the clause 
at 970.5215-3, ``Conditional Payment of Fee, Profit, and Other 
Incentives--Facility Management Contracts,'' implements the 
requirements of section

[[Page 73696]]

234B of the Atomic Energy Act (42 U.S.C. 2282b) that provide for an 
appropriate reduction in the fee or amount paid to the contractor under 
the contract in the event of a violation by the contractor or any 
contractor employee of any rule, regulation, or order relating to the 
safeguarding or security of classified information, including 
Restricted Data.


Sec.  970.0404-4  [Removed]

0
178. Section 970.0404-4 is removed.
0
179. Section 970.0407-1-3 is revised to read as follows:


Sec.  970.0407-1-3  Contract clause.

    The contracting officer shall insert the clause at 970.5204-3, 
Access to and Ownership of Records, in management and operating 
contracts and other contracts that contain:
    (a) The Integration of Environment, Safety, and Health into Work 
Planning and Execution clause located at either 952.223-71 or 970.5223-
1; or
    (b) The clause at 952.223-72, Radiation Protection and Nuclear 
Criticality.
0
180. Section 970.0801-2 is revised to read as follows:


Sec.  970.0801-2  Policy.

    The provisions of FAR subpart 8.1, 41 CFR chapter 102, and 41 CFR 
part 109-43 apply to DOE's management and operating contracts.
0
181. Section 970.0905 is revised to read as follows:


Sec.  970.0905  Organizational and consultant conflicts of interest.

    (a) The Department of Energy (DOE) requires all activities 
performed under M&O contracts to be conducted without conflict of 
interest at the organizational and individual level.
    (b) Management and Operating (M&O) contractors shall develop, 
maintain and follow a policy on organizational and financial conflict 
of interest in accordance with the clause at 970.5209-70, Conflicts of 
Interest. The policy must be appropriate to the statement of work of 
the underlying contract to ensure that the contractor:
    (1) Is not biased because of its financial, contractual, 
organizational, or other interests which relate to the work under the 
contract; and
    (2) Does not obtain any unfair competitive advantage over other 
parties by virtue of its performance of the contract.
    (c) The Contracting Officer shall ensure that M&O contractors adopt 
policies and procedures in the award of subcontracts that will protect 
against a biased work product and an unfair competitive advantage.
0
182. Section 970.0906 is added to read as follows:


Sec.  970.0906  Contract clause.

    The Contracting Officer shall insert the clause at 970.5209-70, 
Conflicts of Interest, in all M&O contracts.
0
183. Section 970.1100-1 is revised to read as follows:


Sec.  970.1100-1  Performance-based contracting.

    (a) Each management and operating (M&O) contract must contain a 
performance work statement that describes, in general terms, work 
planned and/or required to be performed and expectations in terms of 
outcome, results, or final work products, as opposed to methods, 
processes, or design.
    (b) Contract performance requirements and expectations should be 
consistent with the Department's strategic planning goals and 
objectives, as made applicable to the site or facility through 
Departmental programmatic and financial planning processes. Measurable 
performance criteria, objective measures, and where appropriate, 
performance incentives, shall be structured to correspond to the 
performance requirements established in the statement of work and other 
documents used to establish work requirements.


Sec.  970.1100-2  [Removed]

0
184. Section 970.1100-2 is removed.
0
185. Subpart 970.15 is revised to read as follows:

Subpart 970.15--Contracting by Negotiation

Sec.
970.1504 Contract pricing.
970.1504-1 Price analysis.
970.1504-1-1 Fees for management and operating contracts.
970.1504-1-2 Fee policy.
970.1504-1-3 Fee determination.
970.1504-1-4 Calculating the maximum total available fee amount for 
a one-year period.
970.1504-1-5 Fee base.
970.1504-1-6 Fee schedules.
970.1504-1-7 Classification factors.
970.1504-1-8 Determining the appropriate percentage by considering 
the significant factors.
970.1504-1-9 Adding the fee subtotals for a one-year period.
970.1504-1-10 Allocating the maximum total available fee amount for 
a one-year period to one or more of the contract's evaluation 
periods.
970.1504-1-11 The maximum total available fee amount for a contract.
970.1504-2 Documentation.
970.1504-2-1 Cost or pricing data.
970.1504-3 Solicitation provision and contract clauses.
970.1504-4 Special cost or pricing areas.
970.1504-4-1--970.1504-4-3 [Reserved]


Sec.  970.1504  Contract pricing.


Sec.  970.1504-1  Price analysis.


Sec.  970.1504-1-1  Fees for management and operating contracts.

    This subsection sets forth the Department's policies on fees for 
management and operating (M&O) contracts.


Sec.  970.1504-1-2  Fee policy.

    (a) Basic principles. (1) M&O contracts are typically cost-
reimbursement type contracts with incentive fees. An M&O contract, 
however, may be of any contract type or combination of types (for 
example, firm-fixed-price, cost-plus-award-fee, cost-plus-incentive-
fee, multiple-incentive, etc.). Regardless of contract type, an M&O 
contract may contain work elements using different incentives.
    (2) A cost-plus-fixed-fee contract shall only be used if approved 
in advance by the Senior Procurement Executive (SPE) or designee. The 
fee for a cost-plus-fixed-fee contract may not exceed the limits at FAR 
15.404-4(c)(4)(i).
    (3) A base fee amount may only be used if approved in advance by 
the SPE or designee.
    (4) Incentive fees allocated to evaluation periods under cost-
reimbursement type contracts should, to the greatest extent 
appropriate, be tied to a specific portion of the maximum total 
available fee.
    (5) The maximum total available fee amount may not exceed the fee 
derived from this subsection unless approved in advance by the SPE or 
designee. A request to allow a higher fee must be in writing and must 
clearly explain why the situation merits consideration.
    (i) Typically, only a situation where either unusually difficult 
objective performance incentives would be used or where successful 
performance would provide extraordinary value would merit 
consideration.
    (ii) When a contract requires a contractor to use its own 
facilities, equipment, or other resources for contract performance 
(e.g., when there is no letter-of-credit financing), consideration may 
be given, subject to approval by the SPE or designee, to allowing a 
maximum total available fee amount above the amount calculated by this 
subsection.
    (6) Each M&O contract must set forth in the contract (or in a 
Performance Evaluation and Measurement Plan (PEMP) or similar document) 
the methods that will be used to rate the contractor's performance and 
to

[[Page 73697]]

determine the fee the contractor's performance will earn. The DOE 
Contracting Officer must ensure all important areas of contract 
performance are specified in the contract or in a PEMP (or similar 
document), even if such areas are not assigned a specific portion of 
the maximum total available fee the contractor might earn.
    (i) An M&O contract is an ``incentive contract'' as that term is 
used in FAR subpart 16.4. FAR subpart 16.4 prohibits the use in a 
contract of other than cost incentives without also providing a cost 
incentive (or constraint).
    (ii) Award fee not earned during the award fee cycle shall not be 
carried over to any future award fee cycle. Consequently--
    (A) When the award fee cycle consists of one evaluation period, 
unearned award fee amounts may not be carried over from one evaluation 
period to the next.
    (B) When the award fee cycle consists of two or more evaluation 
periods, at the sole discretion of the Contracting Officer, unearned 
award fee amounts may be carried over from one evaluation period to the 
next, so long as the periods are within the same award fee cycle.
    (b) Coordination requirements. (1) Before issuing a competitive 
solicitation, the Head of the Contracting Activity (HCA) must 
coordinate the greatest maximum total available fee amount the HCA will 
accept with the SPE or designee. A competitive solicitation must 
identify the greatest maximum total available fee amount the Government 
will accept and may invite offerors to propose a lower fee amount.
    (2) Before beginning to negotiate an extension to an existing 
contract, the HCA must coordinate the greatest maximum total available 
fee amount the HCA will accept and the maximum total available fee 
amount targeted for negotiation with the SPE or designee.


Sec.  970.1504-1-3  Fee determination.

    (a) General. Determining the fee of an M&O contract requires 
considering the:
    (1) Magnitude of the effort;
    (2) Type of the effort;
    (3) Nature, difficulty, complexity, and importance of the work; and
    (4) Specific circumstances of the procurement.
    (b) Maximum total available fee amount for the contract, annual fee 
bases, and allocation of the maximum total available fee amount. (1) 
Determining the maximum total available fee amount of an M&O contract, 
which is based upon the fee base (among other things) in each of the 
one-year periods of the M&O contract, is a separate action from 
allocating that amount to the evaluation periods of the contract, which 
is based upon what best motivates the M&O contractor's superior 
performance. The Government's objective is to allocate incentives in a 
manner that will result in reasonable contractor risk and provide the 
contractor with the greatest incentive for efficient and economical 
performance.
    (2) The maximum total available fee amount in an M&O contract is 
the sum of the maximum total available fee amounts in the contract's 
one-year periods. (See 970.1504-1-4 for a complete explanation of the 
calculation of the maximum total available fee amount for a one-year 
period and an example.)
    (3) The maximum total available fee amount for a one-year period is 
based on the fee base for that one-year period. The fee base is an 
estimate of the allowable costs (with some exclusions) for that one-
year period.
    (4) The fee base is a basic component of the fee schedules, which 
link the fee base to fee. A fundamental aspect of fee calculations is 
the amount of the fee base and the amount of fee in the fee schedules 
are annual amounts. Calculating the maximum total available fee amount 
for a one-year period starts with determining the fee base for the one-
year period. Consequently, a contract's maximum total available fee 
amount is based on the contract's one-year periods and their fee bases.
    (5) Usually (but not necessarily) once the maximum total available 
fee amount for a one-year period is calculated, it is allocated (that 
is, made available to be earned by the M&O contractor) to the same one-
year period. Additionally, when a maximum total available fee amount is 
established for longer than a year, it is subject to adjustment in the 
event of a significant change (greater than plus or minus ten percent 
or a lessor percent if appropriate) to the budget or work scope.
    (6) In summary, while the maximum total available fee amount for a 
one-year period is based on the fee base for the one-year period, the 
evaluation period in which the contractor may earn all or part of that 
fee need not be the same one-year period or even a single evaluation 
period. Usually, the length of an evaluation period is one year, 
mirroring the one-year period used in the calculation of the maximum 
total available fee amount for a one-year period. In fact, the SPE's or 
designee's approval is required to do otherwise. Nonetheless, the 
Government's objective is to allocate incentives in a manner that will 
provide the contractor with the greatest incentive for efficient and 
economical performance. Consequently, there may be occasions where 
after calculating the maximum total available fee amount for a year, 
part or all of it should be allocated to a subsequent one-year 
evaluation period, an evaluation period of greater than a year, or to 
several evaluation periods.
    (7) Before each year (or other appropriate period), at any time 
before the year (or period), including as early as the time of contract 
award, the Contracting Officer and M&O contractor will enter 
negotiations to establish the requirements for the year (or other 
appropriate period), including evaluation areas, individual 
requirements, and the maximum total available fee that the contractor 
can earn for its performance. If the parties cannot agree, the 
Contracting Officer will unilaterally establish the requirements and 
the maximum total available fee. The maximum total available fee 
allocated to an evaluation period must be apportioned among a base fee 
amount (which is usually zero) and a performance fee amount. The 
performance fee amount may consist of an incentive fee component for 
objective performance requirements, an award fee component for 
subjective performance requirements, or both. Both performance fee 
components are ``incentives'' per FAR subpart 16.4 and both are 
performance based. The performance fee must be tied to objective 
measures to the maximum extent appropriate. Performance incentive fee 
is preferable to performance award fee because it uses objective 
performance requirements rather than subjective performance 
requirements. Performance fee that is award fee may be used when: 
objective measures are not feasible (that is, when it is not feasible 
to devise effective predetermined objective measures applicable to 
cost, technical performance, or schedule); and the likelihood of 
meeting acquisition objectives will be enhanced by using incentives 
that effectively motivate the contactor toward exceptional performance 
and provide the Government with the flexibility to evaluate both actual 
performance and the conditions under which it was achieved.
    (8) Within the maximum total available fee, Contracting Officer may 
include a type of incentive fee component, often labeled ``performance 
based incentive (PBI),'' that includes a target fee for a target level 
of performance. Each PBI must be tied to a specific portion of the 
total available fee pool. PBIs may only be used when--
    (i) A target level of performance can be established that the 
contractor can reasonably be expected to reach;

[[Page 73698]]

    (ii) Factors likely to impede the target performance are clearly 
within the control of the contractor; and
    (iii) The contract indicates clearly a level below which 
performance is not acceptable.
    (c) Determining the maximum total available fee for each one-year 
period of the contract. (1) Determining the maximum total available fee 
for each one-year period of the contract is a function of the:
    (i) Magnitude of the effort (reflected by the total fee base for 
the year; see 970.1504-1-5);
    (ii) Type of the effort (reflected by the allocation of the total 
fee base to the three fee schedules--production, research and 
development, and environmental restoration; see 970.1504-1-6);
    (iii) Nature, difficulty, complexity, and importance of the work 
(reflected by the choice of classification factors; see 970.1504-1-7); 
and
    (iv) Specific circumstances of the procurement (reflected by the 
appropriate percentages derived from considering significant factors; 
see 970.1504-1-8).
    (2) Calculating the maximum total available fee for a one-year 
period entails determining the total fee base for the year, allocating 
it to the fee schedules based on the type of effort, using the fee 
schedules to determine a fee subtotal for each type of effort, 
multiplying those fee subtotals by classification factors, multiplying 
the resulting products by appropriate percentages, and summing those 
products. (See 970.1504-1-4 for a complete explanation and an example.)
    (d) Conditional payment of fee, profit, and other incentives. (1) 
In addition to other performance requirements specified in their 
contracts, M&O contractors are subject to performance requirements 
relating to: environment, safety, and health (ES&H), including worker 
safety and health (WS&H); safeguarding of Restricted Data and other 
classified information; and business and financial systems. Performance 
requirements relating to ES&H will be set forth in the contract's ES&H 
terms and conditions, including a DOE-approved Integrated Safety 
Management System (ISMS), or similar document. Performance requirements 
relating to the safeguarding of Restricted Data and other classified 
information will be set forth in the clauses of the contract at 
952.204-2, ``Security Requirements,'' and 970.5204-2, ``Laws, 
Regulations, and DOE Directives,'' as well as in other terms and 
conditions that prescribe requirements for the safeguarding of 
Restricted Data and other classified information. (If the contract does 
not include the clause at 952.204-2, ``Security Requirements,'' the 
safeguarding of Restricted Data and other classified information 
requirements of the clause at 970.5215-3, ``Conditional Payment of Fee, 
Profit, and Other Incentives--Facility Management Contracts,'' do not 
apply.) Performance requirements relating to business and financial 
systems are set forth in the contract's various terms and conditions 
relating to management, accounting, property, and procurement.
    (2) If the contractor does not meet the performance requirements of 
the contract relating to ES&H, to the safeguarding of Restricted Data 
and other classified information, or to business and financial systems, 
otherwise earned fee, fixed fee, profit, or other incentives may be 
unilaterally reduced by the Contracting Officer in accordance with the 
clause at 970.5215-3, ``Conditional Payment of Fee, Profit, and Other 
Incentives--Facility Management Contracts.''
    (3) The clause at 970.5215-3, entitled ``Conditional Payment of 
Fee, Profit, and Other Incentives--Facility Management Contracts,'' 
provides for reductions of earned fee, fixed fee, profit, or other 
incentives under the contract depending upon the severity of the 
contractor's performance failure relating to ES&H requirements, 
relating to the safeguarding of Restricted Data and other classified 
information, and relating to business and financial systems. When 
reviewing performance failures that would otherwise warrant a reduction 
of earned fee, fixed fee, profit, or other incentives, the Contracting 
Officer must consider mitigating factors that may warrant a reduction 
below the applicable range specified in the clause. Some of the 
mitigating factors that must be considered are included in the clause.
    (4) The Contracting Officer must obtain the concurrence of the 
cognizant Program Secretarial Officer--
    (i) Prior to effecting any reduction; and
    (ii) Prior to determining that a reduction is not warranted for a 
particular performance failure or a group of performance failures.
    (5) The Contracting Officer must coordinate with the Office of 
Enforcement within the Office of Enterprise Assessments (or with any 
designated successor office) before pursuing a contract fee reduction 
in the event of a violation by the contractor or any contractor 
employee of any DOE regulation relating to worker safety and health 
concerns. See 970.2303-2-70.
    (e) Types of contracts and fee arrangements. (1) Contracts that are 
a combination of types or include work elements with fee arrangements 
that are a combination of contract types must--
    (i) Conform to the requirements of parts 915 and 916 and FAR parts 
15 and 16; and
    (ii) Where appropriate to the type, be supported by:
    (A) Negotiated costs subject to the requirements of the 41 U.S.C. 
chapter 35;
    (B) A pre-negotiation memorandum; and
    (C) A plan describing how each contract type or fee arrangement 
will be administered.
    (2) [Reserved]
    (f) Establishing contract type. Operations and field offices shall 
take the lead in establishing the most appropriate contract type for 
their requirements. Before establishing contract types and fee 
arrangements, operations and field offices must ensure the necessary 
resources exist within the contractor's and the Government's 
organizations to administer them.


Sec.  970.1504-1-4  Calculating the maximum total available fee amount 
for a one-year period.

    (a) The maximum total available fee amount for a contract is the 
sum of the maximum total available fee amounts of the contract's one-
year periods. The maximum total available fee amount in a one-year 
period is based on the fee base of the one-year period. Calculating the 
maximum total available fee amount for a one-year period requires 
considering the: magnitude of the effort (reflected by the total fee 
base for the year); type of effort (reflected by the allocation of the 
total fee base to the three fee schedules); nature, difficulty, 
complexity, and importance of the work (reflected by the choice of 
classification factors); and specific circumstances of the procurement 
(reflected by the appropriate percentages derived from considering 
significant factors).
    (b) To calculate the maximum total available fee amount for a year, 
the Contracting Officer takes the following steps:
    (1) Step 1. Determines the total fee base for the year (see 
970.1504-1-5);
    (2) Step 2 Allocates the total fee base for the year as appropriate 
to the three types of efforts reflected by the three fee schedules (if 
there is only one type of effort, all of the total fee base is 
allocated to the fee schedule appropriate for the effort);
    (3) Step 3. Using the portion of the total fee base allocated to 
the schedule in paragraph (b)(2) of this section (step

[[Page 73699]]

2), determines a fee subtotal for each type of effort (see 970.1504-1-
6);
    (4) Step 4. Multiplies each of the fee subtotals in paragraph 
(b)(3) of this section (step 3) by the appropriate classification 
factor (see 970.1504-1-7);
    (5) Step 5. Multiplies each of the products produced in paragraph 
(b)(4) of this section (step 4) by the appropriate percentage, which is 
determined by considering the significant factors (see 970.1504-1-8); 
and
    (6) Step 6. Adds the products of paragraph (b)(5) of this section 
(step 5).
    (c) An example of calculating the maximum total available fee for a 
one-year period follows in paragraphs (c)(1) through (6) of this 
section. The assumptions are: total fee base is 50,000,000 (comprising 
10,000,000 of Production efforts, 15,000,000 of Research and 
Development (R&D) efforts, and 25,000,000 of Environmental Management 
(EM) efforts), classification factors are 3.0, 1.5, and 2.0, and 
appropriate percentages are 90%, 85%, and 75%.
    (1) Step 1. Determination of the total fee base: 50,000,000.
    (2) Step 2: Allocation of the total fee base in paragraph (c)(1) of 
this section (step 1) to the three fee schedules (based on the types of 
effort in the total fee base):
    (i) 10,000,000 to Production;
    (ii) 15,000,000 to R&D; and
    (iii) 25,000,000 to EM.
    (3) Step 3. Determination of the fee subtotal for each type of 
effort using the applicable fee schedules:
    (i) 578,726 for Production;
    (ii) 957,250 for R&D; and
    (iii) 1,236,340 for EM.
    (4) Step 4. Multiplication of the fee subtotal in paragraph (c)(3) 
of this section (step 3) for each type of effort by the appropriate 
classification factor:
    578,726 x 3.0 = 1,736,178 for Production;
    957,250 x 1.5 = 1,435,875 for R&D; and
    1,236,340 x 2.0 = 2,472,680 for EM.
    (5) Step 5. Multiplication of each of the products of paragraph 
(c)(4) of this section (step 4) by the appropriate percentage for the 
type of work (determined by considering the significant factors (see 
970.1504-1-8)):
    (i) 1,736,178 x .9 = 1,562,560 for Production;
    (ii) 1,435,875 x .85 = 1,220,494 for R&D; and
    (iii) 2,472,680 x .75 = 1,854,510 for EM.
    (6) Step 6. Addition of the products of paragraph (c)(5) of this 
section (step 5):
    1,562,560.
    1,220,494.
    1,854,510.
    4,637,564.
    (d) In summary, the maximum total available fee amount for a 
contract is the sum of the maximum total available fee amounts of the 
contract's one-year periods. Calculating the maximum total available 
fee amount for a one-year period entails determining the total fee 
base, allocating it to the fee schedules, using the fee schedules to 
determine fee subtotals, multiplying the fee subtotals by 
classification factors, multiplying the resulting products by 
appropriate percentages, and summing those products. (Allocating the 
amount of maximum total available fee for a one-year period to an 
evaluation period or periods is a separate action.)


Sec.  970.1504-1-5  Fee base.

    (a) The total fee base for a one-year period (see step 1 located at 
970.1504-1-4(b)(1)) is an estimate of the allowable costs for the one-
year period, with some exclusions. (Estimates for Strategic Partnership 
Projects may be included in the total fee base, where appropriate.) The 
total fee base excludes estimates of allowable costs for: source and 
special nuclear materials; land, buildings, and facilities (whether 
they are to be leased, purchased or constructed); depreciation of 
Government facilities; and efforts for which a separate fee is to be 
negotiated.
    (b) In addition to the exclusions in paragraph (a) of the section, 
the total fee base excludes:
    (1) Any part of the estimated allowable cost of capital equipment 
that the contractor procures by subcontract and other similar costs 
that are of such magnitude or nature as to distort the technical and 
management effort required of the contractor;
    (2) At least 20% of the estimated allowable cost of subcontracts 
and other major contractor procurements, with the excluded amount 
increasing as the contractor's estimated required management effort 
decreases;
    (3) Estimates of allowable home office or corporate general and 
administrative expenses that will be reimbursed;
    (4) Any cost of work funded with uncosted balances previously 
included in a fee base of this or any other contract performed by the 
contractor;
    (5) Cost of rework attributable to the contractor; and
    (6) State taxes.
    (c) The total fee base does not reflect any fee or compensation for 
unusual architect-engineer or construction services provided by the M&O 
contractor. Architect-engineer and construction services are normally 
covered by special agreements based on the policies applying to 
architect-engineer or construction contracts. The fees for such 
services shall be calculated per 915.404-4-71 and added to the fees 
calculated using the production, R&D, and EM schedules. The total fee 
base also does not reflect any fee or compensation for special 
equipment purchases. The fees for special equipment purchases shall be 
calculated per 915.404-4-71 and added to the fees calculated using the 
production, R&D, and EM schedules.
    (d) No fee schedule may be used more than once in calculating the 
maximum total available fee amount for a one-year period.


Sec.  970.1504-1-6  Fee schedules.

    (a) In calculating the amount of maximum total available fee amount 
for a one-year period (see 970.1504-1-4), once the total fee base for 
the year is determined it is allocated to one or more of the three fee 
schedules based upon the type of effort. The three types of efforts 
are: Production; R&D; and EM. Each fee schedule provides a fee subtotal 
(see steps 2 and 3 in 970.1504-1-4(b)(2) and (3)).
    (b) The three schedules are:

                                            Table 1 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
                                                                                                       INCR.
                       Fee base  (dollars)                          Fee dollars   Fee  (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
                                           PRODUCTION EFFORTS SCHEDULE
----------------------------------------------------------------------------------------------------------------
Up to $1 Million................................................  ..............  ..............            7.66
1,000,000.......................................................         $76,580            7.66            6.78
3,000,000.......................................................         212,236            7.07            6.07
5,000,000.......................................................         333,670            6.67            4.90
10,000,000......................................................         578,726            5.79            4.24

[[Page 73700]]

 
15,000,000......................................................         790,962            5.27            3.71
25,000,000......................................................       1,161,828            4.65            3.35
40,000,000......................................................       1,663,974            4.16            2.92
60,000,000......................................................       2,247,076            3.75            2.57
80,000,000......................................................       2,761,256            3.45            2.34
100,000,000.....................................................       3,229,488            3.23            1.45
150,000,000.....................................................       3,952,622            2.64            1.12
200,000,000.....................................................       4,510,562            2.26            0.61
300,000,000.....................................................       5,117,732            1.71            0.53
400,000,000.....................................................       5,647,228            1.41            0.45
500,000,000.....................................................       6,097,956            1.22  ..............
Over $500,000,000...............................................       6,097,956  ..............            0.45
----------------------------------------------------------------------------------------------------------------


                                            Table 2 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
                                                                                                       INCR.
                       Fee base  (dollars)                          Fee dollars   Fee  (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
                                    RESEARCH AND DEVELOPMENT EFFORTS SCHEDULE
----------------------------------------------------------------------------------------------------------------
Up to $1 Million................................................  ..............  ..............            8.42
1,000,000.......................................................         $84,238            8.42            7.00
3,000,000.......................................................         224,270            7.48            6.84
5,000,000.......................................................         361,020            7.22            6.21
10,000,000......................................................         671,716            6.72            5.71
15,000,000......................................................         957,250            6.38            4.85
25,000,000......................................................       1,441,892            5.77            4.22
40,000,000......................................................       2,075,318            5.19            3.69
60,000,000......................................................       2,813,768            4.69            3.27
80,000,000......................................................       3,467,980            4.33            2.69
100,000,000.....................................................       4,006,228            4.01            1.69
150,000,000.....................................................       4,850,796            3.23            1.14
200,000,000.....................................................       5,420,770            2.71            0.66
300,000,000.....................................................       6,083,734            2.03            0.58
400,000,000.....................................................       6,667,930            1.67            0.50
500,000,000.....................................................       7,172,264            1.43  ..............
Over $500,000,000...............................................       7,172,264  ..............            0.50
----------------------------------------------------------------------------------------------------------------


                                            Table 3 to Paragraph (b)
----------------------------------------------------------------------------------------------------------------
                                                                                                       INCR.
                       Fee base (dollars)                           Fee dollars    Fee (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
                                    ENVIRONMENTAL MANAGEMENT EFFORTS SCHEDULE
----------------------------------------------------------------------------------------------------------------
Up to $1 Million................................................  ..............  ..............            7.33
1,000,000.......................................................         $73,298            7.33            6.49
3,000,000.......................................................         203,120            6.77            5.95
5,000,000.......................................................         322,118            6.44            5.40
10,000,000......................................................         592,348            5.92            4.83
15,000,000......................................................         833,654            5.56            4.03
25,000,000......................................................       1,236,340            4.95            3.44
40,000,000......................................................       1,752,960            4.38            3.29
60,000,000......................................................       2,411,890            4.02            3.10
80,000,000......................................................       3,032,844            3.79            2.49
100,000,000.....................................................       3,530,679            3.53            1.90
150,000,000.....................................................       4,479,366            2.99            1.48
200,000,000.....................................................       5,2197924            2.61            1.12
300,000,000.....................................................       6,337,250            2.11            0.88
400,000,000.....................................................       7,219,046            1.80            0.75
500,000,000.....................................................       7,972,396            1.59            0.58
750,000,000.....................................................       9,423,463            1.26            0.55
1,000,000,000...................................................      10,786,788            1.08  ..............
Over $1 Billion.................................................      10,786,788  ..............            0.55
----------------------------------------------------------------------------------------------------------------


[[Page 73701]]

Sec.  970.1504-1-7  Classification factors.

    (a) There are five classification factors. They are tied to 
facility/task categories. Step 4 in calculating the maximum total 
available fee amount for the one-year period (see 970.1504-1-4(b)(4)) 
is to multiply the fee subtotal in step 3 for each type of effort by 
the appropriate classification factor. The classification factors and 
their corresponding facility/task categories are:

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
                                                          Classification
                 Facility/Task category                       factor
------------------------------------------------------------------------
A.......................................................             3.0
B.......................................................             2.5
C.......................................................             2.0
D.......................................................             1.5
E.......................................................             1.0
------------------------------------------------------------------------

    (b) The Contracting Officer shall select the Facility/Task Category 
after considering the following:
    (1) Facility/Task Category A. The main focus of effort performed is 
related to--
    (i) The manufacture, assembly, retrieval, disassembly, or disposal 
of nuclear weapons with explosive potential;
    (ii) The physical cleanup, processing, handling, or storage of 
nuclear radioactive or toxic chemicals with consideration given to the 
degree the nature of the work advances state-of-the-art technologies in 
cleanup, processing or storage operations and/or the inherent 
difficulty or risk of the work is significantly demanding when compared 
to similar industrial/DOE settings (i.e., nuclear energy processing, 
industrial environmental cleanup);
    (iii) Construction of facilities such as nuclear reactors, atomic 
particle accelerators, or complex laboratories or industrial units 
especially designed for handling radioactive materials;
    (iv) R&D directly supporting paragraph (b)(1)(i), (ii), or (iii) of 
this subsection and not conducted in a DOE laboratory; or
    (v) As designated by the SPE, or designee. (Classification factor 
3.0)
    (2) Facility/Task Category B. The main focus of effort performed is 
related to--
    (i) The safeguarding and maintenance of nuclear weapons or nuclear 
material;
    (ii) The manufacture or assembly of nuclear components;
    (iii) The physical cleanup, processing, handling, or storage of 
nuclear radioactive or toxic chemicals or other substances that pose a 
significant threat to the environment or the health and safety of 
workers or the public, if the nature of the work uses state-of-the-art 
technologies or applications in such operations and/or the inherent 
difficulty or risk of the work is more demanding than that found in 
similar industrial/DOE settings (i.e., nuclear energy, chemical or 
petroleum processing, industrial environmental cleanup);
    (iv) The detailed planning necessary for the assembly/disassembly 
of nuclear weapons/components;
    (v) Construction of facilities involving operations requiring a 
high degree of design layout or process control;
    (vi) R&D directly supporting paragraph (b)(2)(i), (ii), (iii), 
(iv), or (v) of this subsection and not conducted in a DOE laboratory; 
or
    (vii) As designated by the SPE or designee. (Classification factor 
2.5)
    (3) Facility/Task Category C. The main focus of effort performed is 
related to--
    (i) The physical cleanup, processing, or storage of nuclear 
radioactive or toxic chemicals if the nature of the work uses routine 
technologies in cleanup, processing or storage operations and/or the 
inherent difficulty or risk of the work is similar to that found in 
similar industrial/DOE settings (i.e., nuclear energy, chemical 
processing, industrial environmental cleanup);
    (ii) Plant and facility maintenance;
    (iii) Plant and facility security (other than the safeguarding of 
nuclear weapons and material);
    (iv) Construction of facilities involving operations requiring 
normal processes and operations; general or administrative service 
buildings; or routine infrastructure requirements;
    (v) R&D directly supporting paragraph (b)(3)(i), (ii), (iii), or 
(iv) of this subsection and not conducted in a DOE laboratory; or
    (vi) As designated by the SPE or designee. (Classification factor 
2.0)
    (4) Facility/Task Category D. The main focus of the effort 
performed is R&D conducted at a DOE laboratory. (Classification factor 
1.5)
    (5) Facility/Task Category E. Efforts performed using a fixed fee. 
(Classification factor 1.0) (c) Where the SPE or designee has approved 
a base fee, the Classification Factors shall be reduced, as approved by 
the SPE or designee.
    (d) Any risks that are indemnified by the Government (for example, 
risks under the Price-Anderson Act) will not be considered as risks to 
the contractor.


Sec.  970.1504-1-8  Determining the appropriate percentage by 
considering the significant factors.

    (a) In calculating the maximum total available fee for a one-year 
period (see 970.1504-1-4), step 5 (970.1504-1-4(b)(5)) is to consider 
the specific circumstances of the procurement using the following 
significant factors for each type of effort, determine the appropriate 
percentage for the type of work, and apply it to the subtotals of fee 
from step 4 (970.1504-1-4(b)(4)). An appropriate percentage of 100% 
would be applied to work of maximum difficulty and/or complexity; 
lesser percentages would be applied to work less difficult or complex. 
The significant factors are:
    (1) The relative difficulty of work, including specific performance 
objectives, environment, safety and health concerns, and the technical 
and administrative knowledge, and skill necessary for work 
accomplishment and experience;
    (2) Management risk relating to performance, including--
    (i) Composite risk and complexity of principal work tasks required 
to do the job; and
    (ii) Advance planning, forecasting and other such requirements;
    (3) Size and operation (number of locations, plants, differing 
operations, etc.);
    (4) The nature and relative complexity of subcontracted efforts, 
subcontractor management, and complexity of integration with other 
contractors;
    (5) Other special considerations, including support of Government 
programs such as those relating to small and minority business 
subcontracting, energy conservation, etc.; and
    (6) The presence or absence of financial risk, including the type 
and terms of the contract.
    (b) [Reserved]


Sec.  970.1504-1-9  Adding the fee subtotals for a one-year period.

    In calculating the maximum total available fee amount for a one-
year period (see 970.1504-1-4), step 6 (970.1504-1-4(b)(6)) is to add 
the products of step 5 (970.1504-1-4(b)(5).


Sec.  970.1504-1-10  Allocating the maximum total available fee amount 
for a one-year period to one or more of the contract's evaluation 
periods.

    Usually, the length of an evaluation period is one year, mirroring 
the one-year period used in calculating the maximum total available fee 
amount for a one-year period. The SPE's or designee's approval is 
required to do otherwise. Nonetheless, the Government's objective is to 
allocate incentives in a manner that will result in reasonable 
contractor risk and provide the contractor with the greatest incentive 
for efficient and economical performance. Consequently, there may

[[Page 73702]]

be occasions where after calculating the maximum total available fee 
amount for a one-year period, part or all of it should be allocated to 
a subsequent one-year evaluation period, an evaluation period of 
greater than a year, or to several evaluation periods.


Sec.  970.1504-1-11  The maximum total available fee amount for a 
contract.

    The maximum total available fee amount for a contract is the sum of 
the maximum total available fee amounts of the contract's one-year 
periods.


Sec.  970.1504-2  Documentation.


Sec.  970.1504-2-1  Cost or pricing data.

    (a) The certification requirements of FAR 15.406-2 are not applied 
to DOE cost- reimbursement M&O contracts.
    (b) The Contracting Officer shall ensure that M&O contractors and 
their subcontractors obtain certified cost or pricing data prior to the 
award of a negotiated subcontract or modification of a subcontract in 
accordance with FAR 15.406-2, if required by FAR 15.403-4, and 
incorporate appropriate contract provisions similar to those set forth 
at FAR 52.215-10 and 52.215-11 that provide for the reduction of a 
negotiated subcontract price by any significant amount that the 
subcontract price was increased because of the submission of defective 
cost or pricing data by a subcontractor at any tier.
    (c) The clauses at FAR 52.215-12 and 52.215-13 shall be included in 
M&O contracts.


Sec.  970.1504-3  Solicitation provision and contract clauses.

    (a) The Contracting Officer shall insert the clause at 970.5215-1, 
Total Available Fee: Base Fee Amount and Performance Fee Amount, in M&O 
contracts.
    (b) The Contracting Officer shall insert the clause at 970.5215-3, 
Conditional Payment of Fee, Profit, and Other Incentives--Facility 
Management Contracts, in M&O contracts. (Note: The clause states if the 
contract does not include the Security Requirements clause (952.204-2), 
the requirements of the clause related to security or safeguarding of 
Restricted Data and other classified information do not apply.)
    (c) The Contracting Officer shall insert the provision at 970.5215-
5, Limitation on Fee, in solicitations for M&O contracts.


Sec.  970.1504-4  Special cost or pricing areas.


Sec.  970.1504-4-1--970.1504-4-3  [Reserved]

0
186. Amend section 970.1706-1 by revising paragraphs (a) and (b) to 
read as follows:


Sec.  970.1706-1  Award, renewal, and extension.

    (a) Contract term. Effective performance under an M&O contract is 
facilitated by the use of a relatively long contract term. Only the 
Secretary can authorize the use of an M&O contract and only the 
Secretary can renew the original authorization of an M&O contract.
    (1) An M&O contract shall--after the Secretary has authorized its 
original use (either by a competitive award or by a sole source award), 
its maximum term, and any other limits on its terms (options or other 
terms)--provide for a base term not to exceed the lessor of five years 
or the maximum term the Secretary authorized.
    (2) The contract may include option terms provided no option term 
exceeds the lessor of five years or the maximum term the Secretary 
authorized (for options or the contract) and the sum of base term and 
the option terms does not exceed the lessor of 10 years or the maximum 
term the Secretary authorized for the contract. In addition to the base 
term and the option terms just described, an M&O contract for a 
national laboratory that is competitively awarded may provide for award 
term incentives provided none exceed the maximum term the Secretary 
authorized for each. The sum of base term, option terms, and award 
terms shall not exceed the lessor of 20 years or the maximum term the 
Secretary authorized for the contract.
    (3) After the Secretary's original authorization of the use of the 
M&O contract has expired, any continuation of work under an M&O 
contract must be preceded by the Secretary's renewal of his/her 
authorization for use of an M&O contract. Whether work is to be 
continued by a competitive award to a new contractor or to the 
incumbent, by a sole source award to a new contractor, or by a sole 
source extension of the contract to the incumbent, the Secretary's 
renewal of his/her authorization for use of an M&O contract to perform 
the work is required before work may continue.
    (4) In addition to requiring the Secretary's renewal of his/her 
authorization for use of an M&O contract, a sole source extension of an 
M&O contract to the incumbent must be justified under one of the 
statutory authorities listed in FAR 6.302 and authorized by the 
Secretary.
    (5) The specific duration of the base term, option terms, and award 
terms of an M&O contract must be established concurrent with the 
Secretary's authorization (or renewal of his/her authorization) to use 
an M&O contract (for original use, sole source award to a new 
contractor, competitive award to a new contractor or to the incumbent, 
or sole source extension of the contract to the incumbent).
    (b) Exercise of option. The contracting officer's decision to 
exercise an option (if the Secretary's authorization to use an M&O 
contract covers the option period) must be approved by the Senior 
Procurement Executive and the cognizant Assistant Secretary(s). In 
deciding to exercise the option, the contracting officer shall:
    (1) Consider the extent to which performance-based management 
contract provisions are present or can be negotiated into the contract.
    (2) Make the determinations required by FAR 17.605 in the manner 
described therein. As part of the review required by FAR 17.605(b), the 
Contracting Officer shall assess whether competing the contract will 
produce a more advantageous offer than exercising the option. The 
incumbent contractor's past performance under the contract, the extent 
to which performance-based management contract provisions are present, 
or can be negotiated into the contract, and the impact of a change in a 
contractor on the Department's discharge of its programs are 
considerations that shall be addressed in the Contracting Officer's 
decision that the exercise of the option is in the Government's best 
interest. The Contracting Officer's decision shall be approved by the 
Senior Procurement Executive and the cognizant Assistant Secretary(s). 
The determinations described in FAR 17.207(d) and (e)(2) are not 
required, and because of the way in which the evaluation of cost to the 
Government is performed in the award of an M&O contract that includes 
options, the Contracting Officer need only determine the option was 
evaluated as part of the initial competition and contains a maximum 
fee. The Contracting Officer need not, for example: issue a new 
solicitation; informally analyze prices; or determine the option is the 
more advantageous offer.
* * * * *
0
187. Section 970.1707-1 is revised to read as follows:


Sec.  970.1707-1  Scope.

    Pursuant to 42 U.S.C. 2053 and 7259a, DOE is authorized to make its 
facilities available to other Federal and non-Federal entities 
(sponsors) for the conduct of certain research and development and 
training activities. Pursuant to 31 U.S.C. 1535 and 42 U.S.C. 7259a, or 
other applicable authority, other Federal entities may

[[Page 73703]]

request DOE to conduct work. DOE has implemented these and other 
statutory authorities and requirements in its Strategic Partnership 
Projects Program.
0
188. Amend section 970.1707-3 by:
0
a. Revising paragraph (a);
0
b. Adding the word ``and'' at the end of paragraph (b)(2);
0
c. Removing paragraph (b)(3) and redesignating paragraph (b)(4) as 
paragraph (b)(3); and
0
d. Revising paragraph (c)(1).
    The revisions read as follows:


Sec.  970.1707-3  Terms governing strategic partnership projects.

    (a) DOE's internal review and approval procedural requirements for 
strategic partnership projects agreements are set forth in the current 
version of DOE Order 481.1, and such other guidance as may be issued by 
DOE.
* * * * *
    (c) * * *
    (1) The interagency agreement with DOE complies with the Economy 
Act of 1932 (31 U.S.C. 1535) or other applicable statutory authorities 
and FAR 6.002, which prohibits the use of an Interagency Agreement for 
the purpose of avoiding the competition requirements of the Federal 
Acquisition Regulation (48 CFR chapter 1); and
* * * * *
0
189. Section 970.1707-4 is revised to read as follows:


Sec.  970.1707-4  Contract clause.

    Insert the clause at 970.5217-1, Strategic Partnership Projects 
Program (Non-DOE Funded Work), in any contract that may involve work 
under the Strategic Partnership Projects Program.
0
190. Sections 970.1708, 970.1708-1, 970.1708-2, and 970.1708-3 are 
added to read as follows:

Sec.
970.1708 Agreements for commercializing technology (ACT).
970.1708-1 Scope.
970.1708-2 General.
970.1708-3 Contract clause.


Sec.  970.1708  Agreements for commercializing technology (ACT).


Sec.  970.1708-1  Scope.

    The scope of this subpart is to provide authorization for the M&O 
contractor to conduct third party-sponsored research at the M&O 
contractor's risk.


Sec.  970.1708-2  General.

    M&O contractors may elect to enter into agreements directly with 
non-Federal sponsors to conduct research at the facility the M&O 
contractor is responsible for managing and operating so long as the 
work does not present, or minimizes, any apparent COI, as well as 
avoiding or neutralizing any actual COI as a result of the agreement. 
This research is conducted at the M&O contractor's risk and the M&O 
contractor may obtain compensation beyond full-cost recovery for 
accepting the risk of performance.


Sec.  970.1708-3  Contract clause.

    The Contracting Officer shall insert the clause at 970.5217-2, 
Agreements for Commercializing Technology (ACT), in any contract that 
may involve ACT pursuant to 970.1708.
0
191. Section 970.1907-8 is added to read as follows:


Sec.  970.1907-8  Contract clauses.

    (a) In accordance with FAR 19.708(b)(1), the Contracting Officer 
shall insert the clause FAR 52.219-9, Small Business Subcontracting 
Plan, in all M&O solicitations and contracts.
    (b) The Contracting Officer shall supplement the clause at FAR 
52.219-9 with the clause at 970.5219, Small Business Subcontracting 
Plan, in M&O solicitations and contracts, except for those for the Ames 
Laboratory and Princeton Plasma Physics Laboratory. The Contracting 
Officer may tailor the clause as needed.
0
192. Section 970.2201-1-1 is revised to read as follows:


Sec.  970.2201-1-1  General.

    Contracting officers shall, in appropriate circumstances, follow 
the requirements in FAR subpart 22.1, as supplemented in this section, 
in the award and administration of:
    (a) Management and operating (M&O) contracts;
    (b) Contracts the Senior Procurement Executive designates; and
    (c) Non-M&O contracts where the current contract's work was 
previously performed under an M&O contract and the current Contractor 
was required to, and did, employ the former Contractor's legacy 
workforce. These non-M&O contracts may include, but are not limited to, 
contracts whose work is for:
    (1) Environmental remediation;
    (2) Decontamination and decommissioning;
    (3) Environmental restoration;
    (4) Infrastructure services for the site;
    (5) Site closure at a current or former M&O contract site or 
facility; or
    (6) Protective forces that provide physical security of sites at a 
current of former M&O contract site or facility.
0
193. Section 970.2201-1-2 is revised to read as follows:


Sec.  970.2201-1-2  Policies.

    (a) The extent of Government ownership of the nation's energy plant 
and materials, and the overriding concerns of national defense and 
security, impose special conditions on personnel and labor relations in 
the energy program. Such special conditions include the need for 
continuity of vital operations at DOE installations; retention by DOE 
of absolute authority on all questions of security in accordance with 
10 CFR 706.40; and DOE review of labor expenses under management and 
operating (M&O) contracts (and certain other contracts) to assure 
judicious expenditure of public funds. It is the intent of DOE that 
personnel and labor policies throughout the energy program reflect the 
best experience of American industry in aiming to achieve the type of 
stable labor-management relations that are essential to the proper 
development of the energy program. The following enunciates the 
principles upon which the DOE policy is based:
    (1) Employment standards. (i) M&O contractors (and certain other 
non-M&O contractors and subcontractors as described in 970.2201-1-1) 
are expected to bring experienced, proven personnel from their private 
operations to staff key positions on the contract and to recruit other 
well-qualified personnel as needed. Such personnel should be employed 
and treated during employment without discrimination by reason of race, 
color, religion, sex, age, disability, or national origin. Contractors 
are required to take affirmative action to achieve these objectives as 
required by, among other things, the clause at FAR 52.222-26.
    (ii) When the clause at 952.204-2, Security Requirements, is 
applicable (see 904.404), the Contracting Officer will obtain adequate 
assurance that the Contractor performed the required review of an 
uncleared applicant's or of an uncleared employee's background in its 
determination to select an individual for a position requiring a DOE 
access authorization.
    (2) Security. In accordance with 10 CFR 706.40, on all matters of 
security at its facilities, DOE retains absolute authority. Neither the 
regulations or policies pertaining to security, nor their 
administration, are matters for collective bargaining between the 
contractor's management and labor. Insofar as DOE security regulations 
affect the collective bargaining process, the security policies and 
regulations will be made known to both parties. To the fullest extent 
feasible, DOE will consult with representatives of the contractor's 
management and labor when

[[Page 73704]]

formulating security regulations and policies that may affect the 
collective bargaining process.
    (3) Wages, salaries, and employee benefits. The aspects of wages, 
hours, and working conditions which are the substance of collective 
bargaining in normal organized industries will be left to the orderly 
processes of negotiation and agreement between contractor management 
and employee representatives with maximum possible freedom from 
Government interference and consistent with 970.2201-1-2(a)(5) and 
970.2201-1-4.
    (4) Employee relations. The handling of employee relations on 
contract work, including such matters as the conduct and discipline of 
the work force and the handling of employee grievances, is part of the 
normal management responsibility of the contractor.
    (5) Collective bargaining. (i) DOE review of collective bargaining 
practices will be premised on the view that management's trusteeship 
for the operation of the Government facilities includes the duty to 
adopt practices (which experience has shown) that are fundamental to 
the equitable resolution of disputes, and promote orderly collective 
bargaining relationships. Practices inconsistent with this view may be 
objected to if not found to be otherwise clearly warranted.
    (ii) Consistent with the policy of assuring continuity of operation 
of vital facilities, all collective bargaining agreements at DOE-owned 
facilities should provide that grievances and disputes involving the 
interpretation or application of the agreement will be settled without 
resorting to strike, lockout, or other interruption of normal 
operations. For purposes of this paragraph (a)(5)(ii), each collective 
bargaining agreement entered into during the period of performance of 
this contract should provide an effective grievance procedure with 
arbitration as its final step, unless the parties mutually agree upon 
some other method of assuring continuity of operation for the term of 
the collective bargaining agreement.
    (iii) DOE expects its management and operating contractors and the 
unions representing the contractor's employees to cooperate fully with 
the Federal Mediation and Conciliation Service.
    (6) Personnel training. DOE encourages and supports personnel 
training programs aimed at improving work efficiency or developing 
needed skills which are not otherwise obtainable.
    (7) Working conditions. Accident, fire, health, and occupational 
hazards associated with DOE activities should be held to a practical 
minimum level and controlled in the interest of maintenance of health 
and prevention of accidents. Subject to DOE control, to the extent set 
forth in the terms and conditions of the contract, contractors are 
required to:
    (i) Maintain comprehensive continuous preventive and protective 
programs appropriate to the particular activities throughout all 
operations.
    (ii) Provide appropriate financial protection in case of 
occupational disability to employees.
    (b) Title to payroll and associated records under certain contracts 
(see 970.0407-1-2) for the management and operation of DOE facilities, 
and for necessary miscellaneous construction incidental to the function 
of these facilities, shall vest in the Government. Such records are to 
be disposed of in accordance with the clause at 970.5232-3, Accounts, 
Records, and Inspection, and other DOE directions. For such contracts, 
the Solicitor of Labor has granted a tolerance from the Department of 
Labor regulations to omit from the prescribed labor clauses the 
requirement for the retention of payrolls and associated records for a 
period of three years after completion of the contract. Under this 
tolerance, the records retention requirements for all labor clauses in 
the contract and the Fair Labor Standards Act are satisfied by disposal 
of such records in accordance with applicable DOE directives.
0
194. Section 970.2201-1-3 is revised to read as follows:


Sec.  970.2201-1-3  Contract clause.

    In addition to the clause at FAR 52.222-1, Notice to the Government 
of Labor Disputes, the contracting officer shall insert the clause at 
970.5222-1, Collective Bargaining Agreements--Management and Operating 
Contracts, in all M&O contracts and certain other non-M&O contracts as 
described in 970.2201-1-1. The substance of the clause at 970.5222-1, 
Collective Bargaining Agreements, shall be included in any subcontract 
for protective services or other services performed on the DOE-owned 
site which will affect the continuity of operations of the facility.
0
195. Section 970.2201-1-4 is added to read as follows:


Sec.  970.2201-1-4  Wages, salaries, and employee benefits.

    (a) It is DOE policy that contractors facilitate the retention of 
certain critically skilled employees for: the management and operation 
of laboratories and other national defense and security site 
facilities; contracts designated by the Senior Procurement Executive; 
and certain other non-M&O contracts as described in 970.2201-1. 
Critically skilled employees are those employees whose specific 
recognized technical skills, knowledge, and experience in a specific 
field are critical to the operations or strategy of a contractor, and 
whose loss from the DOE contractor's workforce system would cause a 
significant negative impact on achieving and supporting national 
research, environmental, defense, and security objectives.
    (b) Wages, salaries, and employee benefits shall be administered in 
a manner designated to adapt the normal practices and conditions of 
industry or institutions of higher education to the contract work, and 
to provide for appropriate review by DOE.
    (c) The contractor's compensation systems and supporting policies 
should support the effective recruitment and retention of a highly 
skilled, motivated, and experienced workforce at a reasonable cost. For 
a cost to be allowable it must comply with each of the five 
requirements for allowability stated in FAR 31.201-2. Some of the 
specific details of the allowable costs for compensation for personal 
services are discussed at FAR 31.205-6, as supplemented by, 970.3102-
05-6, and other pertinent parts of the DEAR and DOE directives and 
policies.
0
196. Section 970.2204 is revised to read as follows:


Sec.  970.2204  Labor standards for contracts involving construction.

    The policy in 922.406-1 applies to M&O contracts.


Sec.  970.2204-1 and 970.2204-1-1  [Removed]

0
197. Sections 970.2204-1 and 970.2204-1-1 are removed.
0
198. Section 970.2210 is revised to read as follows:


Sec.  970.2210  Service contract labor standards.

    The Service Contract Labor Standards, historically referred to as 
the Service Contract Act of 1965, is not applicable to contracts for 
the management and operation of DOE facilities, but it is applicable to 
subcontracts under such contracts (see 970.5244-1(x)).
0
199. Section 970.2270 is revised to read as follows:


Sec.  970.2270  Unemployment compensation.

    (a) Each state has its own unemployment compensation system to 
provide payments to workers who become unemployed involuntarily and 
through no fault of their own. These claims are payable by employers 
through the state unemployment

[[Page 73705]]

insurance tax. Some entities such as nonprofits may be permitted to 
either pay in or opt out. These claims are payable either through the 
state unemployment insurance tax (pay in) or by reimbursing the state 
for actual claims paid out to former employees (opt out).
    (b) The predictability of paying claims through the state 
unemployment insurance tax is preferred and highly encouraged. However, 
an M&O contractor may choose to opt out. A contractor before deciding 
to opt out, generally performs an analysis of its workforce including 
size and stability of the workforce, historical turnover rate and 
historical payout data. This information may also be provided to state 
regulators who are interested in ensuring that employers who opt out 
establish an adequate reserve fund to reimburse the state for the 
claims that are processed for the company's former employees.
    (c) When an M&O contractor opts out of paying for claims through 
the state's unemployment insurance tax, as permitted and in accordance 
with state laws, regulations and guidelines, the reimbursement by DOE, 
in any given year, should generally be limited to the actual incurred 
cost, but no more than what would have been incurred had the contractor 
chosen to pay in.
0
200. Section 970.2270-2 is added to read as follows:


Sec.  970.2270-2  Contract clause.

    The Contracting Officer shall insert the clause at 970.5222-4, 
Unemployment Compensation, in all solicitations for an M&O contract and 
in all M&O contracts awarded to a nonprofit entity. When this is 
included in a contract or solicitation, the Contracting Officer shall 
fill in the appropriate number of calendar days.


Sec.  970.2301-1  [Removed and Reserved]

0
201. Section 970.2301-1 is removed and reserved.
0
202. Section 970.2301-2 is revised to read as follows:


Sec.  970.2301-2  Contract clauses.

    The Contracting Officer shall insert the clause at 952.223-78, 
Sustainable Acquisition Requirements, in all management and operating 
(M&O) contracts in accordance with 923.172.


Sec.  970.2303-2-70  [Amended]

0
203. Amend section 970.2303-2-70 in paragraph (c)(2)(ii) by removing 
the text ``the Office of Price Anderson Enforcement within the Office 
of the Assistant Secretary for Health, Safety and Security'' and adding 
in its place ``the Office of Enforcement within the Office of 
Enterprise Assessments''.
0
204. Section 970.2672-3 is revised to read as follows:


Sec.  970.2672-3  Contract clause.

    The contracting officer shall insert the clause at 970.5226-2, 
Workforce Restructuring under section 3161 of the National Defense 
Authorization Act for Fiscal Year 1993, in contracts for the management 
and operation of Department of Energy Defense Nuclear Facilities and, 
as appropriate, in other contracts that include site management 
responsibilities at a Department of Energy Defense Nuclear Facility. 
The contracting officer shall insert the clause at 952.226-74, 
Workforce Restructuring and Displaced Employee Hiring Preference, in 
contracts and subcontracts at any tier (except for contracts for 
commercial items, pursuant to 41 U.S.C. 403) which exceed $500,000 in 
value.
0
205. Section 970.2673-2 is revised to read as follows:


Sec.  970.2673-2  Contract clause.

    The contracting officer may insert the clause at 970.5226-3, 
Community Commitment, in management and operating contracts where 
community involvement will be required of the contractor.
0
206. Section 970.2701-1 is revised to read as follows:


Sec.  970.2701-1  Applicability.

    This subpart applies to negotiation of patent rights, rights in 
technical data provisions and other related provisions for the 
Department of Energy contracts for the management and operation of 
DOE's major sites or facilities, including the conduct of research and 
development and nuclear weapons production, and contracts which involve 
major, long-term or continuing activities conducted at a DOE site, 
including decontamination and decommissioning activities.
0
207. Section 970.2702 is revised to read as follows:


Sec.  970.2702  Patent and copyrights.


Sec.  970.2702-1 through 970.2702-6  [Removed]

0
208. Sections 970.2702-1 through 970.2702-6 are removed.
0
209. Section 970.2702-1-2 is added to read as follows:


Sec.  970.2702-1-2  Solicitation provision and contract clauses.

    (a) Authorization and consent. Contracting officers must include 
the clause at 970.5227-4, Authorization and Consent, instead of the 
clause at FAR 52.227-1.
    (b) Notice and assistance regarding patent and copyright 
infringement. Contracting Officers must include the clause at 970.5227-
5, Notice and Assistance Regarding Patent and Copyright Infringement, 
instead of the clause at FAR 52.227-2.
    (c) Patent indemnity. (1) Contracting Officers must include the 
clause at 970.5227-6, Patent Indemnity-Subcontracts, to assure that 
subcontracts appropriately address patent indemnity.
    (2) Normally, the clause at FAR 52.227-3 would not be appropriate 
for an M&O contract; however, if there is a question, such as when the 
mission of the contractor involves production, the Contracting Officer 
must consult with DOE patent counsel and use the clause where 
appropriate.
    (d) Rights to proposal data. Contracting Officers must include the 
clause at FAR 52.227-23, Rights to Proposal Data (Technical), in all 
solicitations and contracts for the management and operation of DOE 
sites and facilities.
    (e) Notice of right to request patent waiver. Contracting Officers 
must include the provision at 970.5227-9 in all solicitations for 
contracts for the management and operation of DOE sites or facilities.
    (f) Royalties. Contracting Officers must include the solicitation 
provision at 970.5227-7, Royalty Information, and the clause at 
970.5227-8, Refund of Royalties, instead of the provision at FAR 
52.227-6 and the clause at FAR 52.227-9, respectively.


Sec.  970.2703-1  [Amended]

0
210. Amend section 970.2703-1 by:
0
a. Removing paragraph (b); and
0
b. Redesignating paragraph (c) as paragraph (b).
0
211. Amend section 970.2703-2 by revising paragraphs (a), (b), and (c) 
and adding paragraph (h) to read as follows:


Sec.  970.2703-2  Patent rights clause provisions for management and 
operating contractors.

    (a) Allocation of principal rights: Bayh-Dole provisions. (1) If 
the M&O contractor is a nonprofit organization or small business firm 
as defined by 35 U.S.C. 201, the clause at 970.5227-10 must be inserted 
into the M&O contract, except when the M&O contract is for the 
operation of a DOE facility primarily dedicated to naval nuclear 
propulsion or weapons related programs. The patent rights clause at 
970.5227-10 allows the contractor to elect to retain title to 
inventions conceived or first actually reduced to practice in 
performance of work under the contract in accordance with 35 U.S.C. 200 
et seq. (the Bayh-Dole Act).

[[Page 73706]]

    (2) If the M&O contractor is conducting privately funded technology 
transfer activities, involving the use of private funds to conduct 
licensing and marketing activities related to inventions made under the 
contract in accordance with the Bayh-Dole Act, DOE may modify the 
clause at 970.5227-10 to address issues such as the disposition of 
royalties earned under the privately funded technology transfer 
program, the transfer of patent rights to a successor contractor, 
allowable cost restrictions concerning privately funded technology 
transfer activities, and the Government's freedom from any liability 
related to licensing under the contractor's privately funded technology 
transfer program.
    (b) Allocation of principal rights: Government title. (1) The 
clause at 970.5227-11 must be incorporated into the M&O contract:
    (i) For any the M&O contractor that does not qualify as a nonprofit 
organization or small business firm as defined by 35 U.S.C. 201 and for 
which DOE has not granted a patent waiver pursuant to 10 CFR part 784; 
or
    (ii) If, without regard to the type of contractor, the M&O contract 
is for the operation of a DOE facility primarily dedicated to naval 
nuclear propulsion or weapons related programs.
    (2) The clause at 970.5227-11 requires the contractor to assign the 
Government title to inventions conceived or first actually reduced to 
practice in the course of or under an M&O contract in accordance with 
42 U.S.C. 2182 and 5908 (the Atomic Energy of 1954 and the Federal 
Nonnuclear Energy Act of 1974).
    (c) Allocation of principal rights: Contractor right to elect title 
under a patent waiver. DOE may grant a patent waiver for an M&O 
contractor that does not qualify as a nonprofit organization or a small 
business firm pursuant to 10 CFR part 784. The patent waiver would 
allow the contractor to elect to retain title to inventions made in the 
course of or under the M&O contract. When a patent waiver is granted 
that covers the M&O contractor, the clause at 970.5227-12 must be 
inserted into the M&O contract, instead of using the clause at 
970.5227-11. The clause at 970.5227-12 may be modified by applicable 
patent. If the M&O contractor is conducting privately funded technology 
transfer activities, involving the use of private funds to conduct 
licensing and marketing activities related to inventions made under the 
contract, DOE may modify the patent rights clause to address issues 
such as the disposition of royalties earned under the privately funded 
technology transfer program, the transfer of patent rights to a 
successor contractor, allowable cost restrictions concerning privately 
funded technology transfer activities, and the Government's freedom 
from any liability related to licensing under the contractor's 
privately funded technology transfer program.
* * * * *
    (h) Allocation of principal rights: Subcontractor rights to elect 
title under Bayh-Dole provisions. When the M&O contractor is issuing a 
subcontract to a nonprofit organization or small business firm as 
defined by 35 U.S.C. 201, the subcontractor retains all rights provided 
in the patent rights clause at 37 CFR 401.3(a) and 401.14 and adding 
Alternate I of FAR 52.227-11, Patent Rights-Retention by the 
Contractor, that includes the agency implementing regulations specific 
for DOE. If the S&E DEC, or any other applicable DEC, is applicable, 
the Contractor shall include Alternate II of 952.227-11, Patent Rights-
Retention by the Contractor. Alternate II modifies 37 CFR 401.14 to:
    (1) Reflect DOE required subcontracting instructions pursuant to 37 
CFR 401.5(a) as well as the deletion of the definition of contractor 
that does not apply based on the subcontracting instructions; and
    (2) Include the U.S. competitiveness provision in paragraph (m) of 
the clause pursuant to the Determination of Exceptional Circumstances 
under the Bayh-Dole Act to Further Promote Domestic Manufacture of DOE 
Science and Energy Technologies executed by DOE on June 7, 2021.
0
212. Amend section 970.2704-2 by revising paragraphs (a), (c)(2), and 
(e) to read as follows:


Sec.  970.2704-2  Procedures.

    (a) The clauses at 970.5227-1, Rights in Data--Facilities, and 
970.5227-2, Rights in Data--Technology Transfer, both provide generally 
for Government ownership and for unlimited rights in the Government for 
all data first produced in the performance of the contract and 
unlimited rights in data specifically used in the performance of the 
contract. Both clauses provide that, subject to patent, security, and 
other provisions of the contract, the contractor may use contract data 
for its private purposes. The contractor, under either clause, must 
treat any data furnished by DOE or acquired from other Government 
agencies or private entities in the performance of their contracts in 
accordance with any restrictive legends contained therein. For Research 
and Development Contracting, requirements for R&D results conveyed in 
scientific and technical information are addressed in 935.010 and 
should be set forth as part of the contract. These contractual 
requirements are further addressed in DOE Order 241.1B, or its 
successor version, which sets forth requirements for scientific and 
technical information.
* * * * *
    (c) * * *
    (2) Where, however, a subcontract is to be awarded by the 
management and operating contractor in connection with a program, as 
discussed at 927.404-71, which provides statutory authority to protect 
from public disclosure, data first produced under contracts awarded 
pursuant to the program, contracting officers shall ensure that the 
management and operating contractor includes in that subcontract the 
rights in data clause provided by DOE Patent Counsel, consistent with 
any accompanying guidance.
* * * * *
    (e) The Rights in Data--Technology Transfer clause at 970.5227-2 
differs from the clause at 970.5227-1, Rights in Data--Facilities, in 
the context of its more detailed treatment of copyright. In management 
and operating contracts that have technology transfer as a mission, the 
right to assert copyright in data first produced under the contract 
will be a valuable right, and commercialization of such data, including 
computer software, will assist the management and operating contractor 
in advancing the technology transfer mission of the contract. The 
clause at 970.5227-2, Rights in Data--Technology Transfer, provides for 
DOE approval of DOE's taking a limited copyright license during the 
period in which the copyrighted data is being commercialized. The 
contractor must notify DOE (Patent Counsel and Office of Scientific and 
Technical Information (OSTI)) when commercial activity ceases.
* * * * *
0
213. Section 970.2704-3 is revised to read as follows:


Sec.  970.2704-3  Contract clauses.

    (a) The contracting officer shall insert the clause at 970.5227-1, 
Rights in Data--Facilities, in management and operating contracts which 
do not contain the clause at 970.5227-2, Rights in Data--Technology 
Transfer. The Contracting Officer may insert, with concurrence of 
Patent Counsel, the clause at 970.5227-1, Rights in Data--Facilities, 
in other contracts where Government facilities are being constructed, 
modified, or in decontamination and decommissioning. The contracting 
officer shall include the clause with its Alternate I in contracts

[[Page 73707]]

where access to Category C-24 restricted data, as set forth in 10 CFR 
part 725, is to be provided to contractors. The Contracting Officer 
shall include the clause with its Alternate II in contracts where 
Government facilities are being constructed, modified, or in 
decontamination and decommissioning, and it is anticipated that further 
solicitation may be required to complete the project.
    (b) The contracting officer shall insert the clause at 970.5227-2, 
Rights in Data--Technology Transfer, in management and operating 
contracts which contain the clause at 970.5227-3, Technology Transfer 
Mission. The contracting officer shall include the clause with its 
Alternate I in contracts where access to Category C-24 restricted data, 
as set forth in 10 CFR part 725, is to be provided to contractors. The 
Contracting Officer shall include the clause with its Alternate II in 
contracts where Government facilities are being constructed, modified, 
or in decontamination and decommissioning, and it is anticipated that 
further solicitation may be required to complete the project.
0
214. Amend section 970.2770-2 by adding a sentence after the first 
sentence to read as follows:


Sec.  970.2770-2  Policy.

    * * * All new awards for or extensions of existing DOE laboratory 
or weapon production facility M&O contracts shall include authorization 
for the M&O contractor to engage directly with third parties in 
Agreements for Commercializing Technology, under section 107 of the 
Department of Energy Research and Innovation Act, Public Law 115-246, 
by using 970.5217-2, Agreements for Commercializing Technology. * * *
0
215. Amend section 970.2803-1 by revising paragraph (b) to read as 
follows:


Sec.  970.2803-1  Workers' Compensation Insurance.

* * * * *
    (b) Assignment of responsibilities. (1) Office of Acquisition 
Management, other officials, and the Heads of Contracting Activities, 
consistent with their delegations of responsibility, shall assure 
management and operating contracts are consistent with the policies and 
requirements of paragraph (a) of this section.
    (2) In discharging assigned responsibility, the Heads of 
Contracting Activities shall--
    (i) Periodically review workers' compensation insurance programs of 
management and operating contractors in the light of applicable 
workers' compensation statutes to assure conformance with the 
requirements of paragraph (a) of this section;
    (ii) Evaluate the adequacy of coverage of ``self-insured'' 
workers'' compensation programs; and
    (iii) Provide arrangements for the administration of any existing 
``employees'' benefit plans until such plans'' are terminated.
    (3) Heads of Contracting Activities are responsible for approving 
management and operating contractor ``employees' benefit plans.''
0
216. Amend section 970.2803-2 by revising the second sentence to read 
as follows:


Sec.  970.2803-2  Contract clause.

    * * * Paragraphs (f)(1)(iii)(C) and (g)(2) of that clause apply to 
a nonprofit contractor only to the extent specifically provided in the 
individual contract.
0
217. Section 970.3101-00-71 is added to read as follows:


Sec.  970.3101-00-71  Applicability.

    The cost principles of FAR subpart 31.2 and this subpart apply 
regardless of entity type for the M&O contract.
0
218. Amend section 970.3102-3-70 by revising paragraph (a)(3)(i) to 
read as follows:


Sec.  970.3102-3-70  Home office expenses.

    (a) * * *
    (3) * * *
    (i) Fee in addition to its normal fee; or
* * * * *
0
219. Section 970.3102-05-6 is revised to read as follows:


Sec.  970.3102-05-6  Compensation for personal services.

    (a)(6) In determining the reasonableness of compensation, the 
compensation of each individual contractor employee normally need not 
be subjected to review and approval. Generally, the compensation paid 
individual employees should be left to the judgment of contractors 
subject to the limitations of DOE-approved compensation policies, 
programs, classification systems, and schedules, and amounts of money 
authorized for wage and salary increases for groups of employees. 
However, the contracting officer shall designate a compensation 
threshold appropriate for the particular situation. The contract shall 
specifically provide that contracting officer approval is required for 
compensating an individual contractor employee above the threshold if a 
total of 50 percent or more of such compensation is reimbursed under 
DOE cost-type contracts.
    (7)(i) Reimbursable costs for compensation for personal services 
are to be set forth in the contract. This compensation shall be set 
forth using the principles and policies of FAR 31.205-6, Compensation 
for personal services, as supplemented by this section, and other 
pertinent parts of the DEAR. Costs that are unallowable under other 
contract terms shall not be allowable as compensation for personnel 
services.
    (ii) The contract sets forth, in detail, personnel costs and 
related expenses allowable under the contract and documents personnel 
policies, practices and plans which have been found acceptable by the 
contracting officer. The contractor will advise DOE of any proposed 
changes in any matters covered by these policies, practices, or plans 
which relate to personnel costs. Types of personnel costs and related 
expenses addressed in the contract are as follows: Salaries and wages; 
bonuses and incentive compensation; overtime, shift differential, 
holiday, and other premium pay for time worked; welfare benefits and 
retirement programs; paid time off, and salaries and wages to employees 
in their capacity as union stewards and committeemen for time spent in 
handling grievances, or serving on labor management (contractor) 
committees provided, however, that the contracting officer's approval 
is required in each instance of total compensation to an individual 
employee above an annual rate as specified in the contract. Allowable 
costs of employee compensation shall be determined pursuant to FAR 
31.205-6(p).


Sec.  970.3200-1  [Amended]

0
220. Amend section 970.3200-1 in paragraph (c) by removing ``remedy 
coordination official'' and adding in its place ``Head of the 
Contracting Activity''.


Sec.  970.3270  [Amended]

0
221. Amend section 970.3270 by removing paragraph (a)(4) and 
redesignating paragraphs (a)(5) through (8) as paragraphs (a)(4) 
through (7), respectively.
0
222. Amend section 970.3501-1 by:
0
a. Removing the period at the end of paragraph (c)(1) and adding a 
semicolon in its place; and
0
b. Revising paragraph (c)(2).
    The revision reads as follows:


Sec.  970.3501-1  Sponsoring agreements.

* * * * *
    (c) * * *

[[Page 73708]]

    (2) The plan for the identification, use, and disposition of 
retained earnings, if applicable;
* * * * *
0
223. Section 970.3501-2 is revised to read as follows:


Sec.  970.3501-2  Using an FFRDC.

    The contractor may only accept work from a non-sponsor (as defined 
in FAR 35.017) in accordance with the requirements of the current DOE 
approved mechanisms for engaging with a non-sponsor (e.g., Strategic 
Partnership Projects, Cooperative Research and Development Agreements, 
and Agreements for Commercializing Technology). Only a Federal 
Contracting Officer can obligate the Government to place work on the 
contract and obligate the Government to reimburse the contractor under 
the contract.
0
224. Amend section 970.4102-1 by revising paragraphs (b) and (c) to 
read as follows:


Sec.  970.4102-1  Policy.

* * * * *
    (b) Where it is determined to be in the best interest of the 
Government, a DOE contracting activity may authorize a management and 
operating contractor for a facility to acquire such utility service for 
the facility, after requesting and receiving concurrence to make such 
an authorization from the DOE Federal Energy Management Program (FEMP). 
Any request for such concurrence should be included in the Utility 
Acquisition Plan. Alternatively, it may be made in a separate document 
submitted to the FEMP Utility Program Manager early in the acquisition 
cycle. Any request shall set forth why it is in the best interest of 
the DOE to acquire utility service(s) by subcontract, i.e., low 
performance risk and cost risk. For NNSA programs, FEMP review and 
technical input may be obtained, but FEMP concurrence is not necessary.
    (c) The requirements of FAR part 41 and this section shall be 
applied to a subcontract level acquisition for furnishing utility 
services to a facility owned or leased by DOE.
0
225. Amend section 970.4207-05-01 by revising paragraph (b)(4)(ii) to 
read as follows:


Sec.  970.4207-05-01  Contracting officer determination procedure.

    (b) * * *
    (4) * * *
    (ii) The opinion of the Department of Energy's auditor on the 
allowability of such costs if such costs have been the subject of a DOE 
audit.
* * * * *
0
226. Amend section 970.4401-1 by revising paragraph (b)(4) to read as 
follows:


Sec.  970.4401-1  General.

* * * * *
    (b) * * *
    (4) Ensure that periodic appraisals of the contractor's management 
of all facets of the purchasing function, including compliance with the 
contractor's approved system and methods, are performed by the 
contracting officer.
* * * * *
0
227. Amend section 970.4402-1 by adding paragraph (c) to read as 
follows:


Sec.  970.4402-1  Policy.

* * * * *
    (c) The M&O contractor's purchasing performance, including 
compliance with the contractor's approved system and methods, will be 
evaluated against the performance criteria and measures set forth in 
FAR subpart 44.3, using the procedures articulated in DOE policies 
including DOE guidance on oversight of M&O Contractors' Purchasing 
Systems.
0
228. Section 970.4501-1 is revised to read as follows:


Sec.  970.4501-1  Applicability.

    This subpart is applicable to management and operating (M&O) 
contractors, and on-site environmental management and other major prime 
contractors as designated by the Senior Procurement Executive, or 
designee. This subpart supplements 41 CFR part 109.
0
229. Section 970.4501-2 is added to read as follows:


Sec.  970.4501-2  Contract clause.

    (a) The contracting officer shall insert the clause at 970.5245-1, 
Property, in management and operating contracts and environmental 
management, and other major prime contractors located at DOE sites. 
Specific managerial personnel may be listed in paragraph (k) of the 
clause at 970.5245-1, provided their listing is consistent with the 
clause and the DEAR.
    (b) The contracting officer shall insert the basic clause at 
970.5245-1 with its Alternate I in contracts with nonprofit 
contractors.
0
230. Amend section 970.5203-1 by revising the introductory text to read 
as follows:


Sec.  970.5203-1  Management controls.

    As prescribed in 970.0370-2(a), insert the following clause:
* * * * *


Sec.  970.5204-1  [Removed]

0
231. Section 970.5204-1 is removed.
0
232. Amend section 970.5204-3 by revising the clause date and 
paragraphs (b) and (g) to read as follows:


Sec.  970.5204-3  Access to and ownership of records.

* * * * *
Access to and Ownership of Records (XXX 20XX)
* * * * *
    (b) Contractor-owned records. The following records are considered 
the property of the contractor and are not within the scope of 
paragraph (a) of this clause.
    (1) Employment-related records (such as worker's compensation 
files; employee relations records, records on salary and employee 
benefits; drug testing records, labor negotiation records; records on 
ethics, employee concerns; records generated during the course of 
responding to allegations of research misconduct; records generated 
during other employee related investigations conducted under an 
expectation of confidentiality; employee assistance program records; 
and personnel and medical/health-related records and similar files), 
and non-employee patient medical/health-related records, except those 
records described by the contract as being operated and maintained by 
the Contractor in Privacy Act system of records.
* * * * *
    (g) Subcontracts.
    (1) The contractor shall include the requirements of this clause in 
all subcontracts that contain the Radiation Protection and Nuclear 
Criticality clause at 48 CFR 952.223-72, or whenever an on-site 
subcontract scope of work:
    (i) Could result in potential exposure to:
    (A) Radioactive materials;
    (B) Beryllium; or
    (C) Asbestos; or
    (ii) Involves a risk associated with chronic or acute exposure to 
toxic chemicals or substances or other hazardous materials that can 
cause adverse health impacts, in accordance with 10 CFR part 851. In 
determining its flow-down responsibilities, the Contractor shall 
include the requirements of this clause in all on-site subcontracts 
where the scope of work is performed in:
    (A) Radiological areas and/or radioactive materials areas (as 
defined at 10 CFR 835.2);
    (B) Areas where beryllium concentrations exceed or can reasonably 
be expected to exceed action levels specified in 10 CFR part 850;

[[Page 73709]]

    (C) An asbestos regulated area (as defined at 29 CFR 1926.1101 or 
1910.1001); or
    (D) A workplace where hazard prevention and abatement processes are 
implemented in compliance with 10 CFR 851.21 to specifically control 
potential exposure to toxic chemicals or substances or other hazardous 
materials that can cause long term health impacts.
    (2) The Contractor may elect to take on the obligations of the 
provisions of this clause in lieu of the subcontractor and maintain 
records that would otherwise be maintained by the subcontractor.
* * * * *
0
233. Section 970.5209-70 is added to read as follows:


Sec.  970.5209-70  Conflicts of interest.

    As prescribed in 970.0906, insert the following clause:
Conflicts of Interest (XXX 20XX)
    (a) The M&O contractor shall ensure, in accordance with 48 CFR part 
9, subpart 9.5, that it maintains and enforces a written policy on 
conflicts of interest (COI).
    (b) The restrictions described herein shall apply to performance or 
participation by the M&O contractor and any of its affiliates or their 
successors in interest (hereinafter collectively referred to as ``M&O 
contractor'') in the activities covered by this clause as a prime 
contractor, subcontractor, cosponsor, joint venturer, consultant, or in 
any similar capacity. For the purpose of this clause, affiliation 
occurs when a business concern is controlled by or has the power to 
control another or when a third party has the power to control both.
    (1) Use of M&O contractor's work product. (i) The M&O contractor 
shall be ineligible to participate in any capacity in new Department 
contracts, subcontracts, or acquisition request for proposals 
(solicited and unsolicited) that stem directly from the M&O 
contractor's performance of work under this contract for a period of 
[enter specific term] years after the completion of this contract's 
work product, unless otherwise determined by the Contracting Officer 
for the new Department contract, subcontract, or acquisition request 
for proposal. Furthermore, unless so directed in writing by the 
Contracting Officer, the M&O contractor shall not perform any work 
under this contract on any of its products or services or the products 
or services of another firm if the Contractor is or has been 
substantially involved in their development or marketing.
    (ii) If, under this contract, the M&O contractor prepares a 
complete or essentially complete statement of work or specifications to 
be used in competitive acquisitions, the Contractor shall be ineligible 
to perform or participate in any capacity in any contractual effort 
based on such statement of work or specifications.
    (iii) A Contractor performing under a Federally Funded Research and 
Development Center (FFRDC) contract (to discharge its responsibilities 
under the contract to the sponsoring agency) has access (beyond the 
access common in the typical contractual relationship between the 
Government and a Contractor) to both Government and supplier data 
(including sensitive and proprietary data) and to employees and 
installations' equipment and real property. Therefore, a FFRDC 
Contractor is required to: conduct its business in a manner befitting 
the uncommon access it has due to its special contractual relationship 
with the Government; operate in the public interest with objectivity 
and independence; be free from organizational conflicts of interest; 
and make full disclosure of its affairs to the sponsoring agency.
    (2) Access to and use of information. (i) If the M&O contractor, in 
the performance of this contract, obtains access to information, such 
as Department plans, policies, reports, studies, financial plans, 
internal data protected by the Privacy Act of 1974 (5 U.S.C. 552a), or 
data that have not been released or otherwise made available to the 
public, the M&O contractor agrees that without prior written approval 
of the Contracting Officer it shall not--
    (A) Use such information for any private purpose unless the 
information has been released or otherwise made available to the 
public;
    (B) Compete for work for the Department based on such information 
for a period of six months after either the completion of this contract 
or until such information is released or otherwise made available to 
the public, whichever is first;
    (C) submit an unsolicited proposal to the Government that is based 
on such information until one year after such information is released 
or otherwise made available to the public; and
    (D) release such information unless such information has previously 
been released or otherwise made available to the public by the 
Department.
    (ii) In addition, the M&O contractor agrees that to the extent it 
receives or is given access to proprietary data, data protected by the 
Privacy Act of 1974 (5 U.S.C. 552a), or other confidential or 
privileged technical, business, or financial information under this 
contract, it shall treat such information in accordance with any 
restrictions imposed on such information.
    (iii) The Contractor may use technical data it first produces under 
this contract for its private purposes consistent with paragraphs 
(b)(2)(i)(A) and (D) of this clause and the patent, rights in data, and 
security provisions of this contract.
    (c) Contents of COI Policy. The M&O contractor must take steps to 
ensure that policies and procedures are in place and provided to all 
employees, subcontractors, consultants and other appropriate entities.
    (1) The policy shall include coverage for parents, affiliates, 
subsidiaries, subrecipients, and contractors, including subcontractors.
    (2) The policy shall require disclosure by each investigator of all 
COI and require the disclosures to remain current.
    (3) The policy shall designate one or more individuals to review 
disclosures by investigators.
    (4) The policy should designate one or more individuals to oversee 
organizational review and enforcement of COI.
    (5) The policy shall include adequate enforcement mechanisms and 
procedures for managing COI.
    (6) The policy shall include appropriate restraints on intra-
corporate relations between the M&O contractor's organization and 
personnel operating the Department's facility and its parent corporate 
body and affiliates. Such restraints shall include personnel access to 
the facility, technical transfer of information from the facility, and 
the availability from the facility of other advantages flowing from 
performance of the contract.
    (7) The policy shall include, where a university is the prime 
contractor, a statement identifying that the university has adopted 
policies and procedures, designed to avoid conflict-of-interest 
situations, which are in substantial conformance with the Joint 
Statement of the Council of American Association of University 
Professors and the American Council on Education of December 1964, 
entitled ``On Preventing Conflicts of Interest.''
    (8) The policy shall be updated regularly, but at least once every 
five years.
    (d) The M&O contractor must disclose all COIs that cannot be 
mitigated, including those with parent company, affiliate or 
subsidiaries, contractors, subrecipients and investigators to the 
Contracting Officer. Disclosure should be within 10 calendar days of 
identifying a COI. All COI disclosures

[[Page 73710]]

must be in writing and provided to the Contracting Officer. The COI 
disclosure should include a description of the COI, the actions in 
order to mitigate the COI and impacts to performance under the 
contract.
    (e) Waiver. If the Contractor believes it both appropriate and in 
the best interests of the Government, the Contractor may request a 
waiver to any of this clause's requirements. In requesting a waiver, 
the Contractor shall: submit the request for waiver in writing to the 
Contracting Officer; include a full description of the requirements of 
this clause to be waived; and include compelling reasons why the 
requirements should be waived. The Contracting Officer: may approve or 
disapprove, in whole or in part, at the Contractor's Officer's sole 
discretion, the waiver request based on the Contracting Officer's 
determination of what is in the best interests of the Government; and 
will approve or deny the waiver request in writing.
    (f) Subcontracts. The Contractor shall include the clause at 48 CFR 
952.209-72, ``Organizational Conflicts of Interest,'' in subcontracts 
expected to exceed the simplified acquisition threshold determined in 
accordance with 48 CFR part 13 and involving the performance of 
advisory and assistance services as that term is defined at 48 CFR 
2.101. The terms ``contract,'' ``Contractor,'' and ``Contracting 
Officer'' shall be appropriately modified to preserve the Government's 
rights.
    Prior to the award under this contract of any such subcontracts for 
advisory and assistance services, the Contractor shall obtain from the 
proposed subcontractor or consultant the disclosure required by 48 CFR 
909.507-1, and shall determine in writing whether the interests 
disclosed present an actual or significant potential for an 
organizational conflict of interest. Where an actual or significant 
potential organizational conflict of interest is identified, the 
Contractor shall take actions to avoid, neutralize, or mitigate the 
organizational conflict to the satisfaction of the Contractor. If the 
conflict cannot be avoided or neutralized, the Contractor must obtain 
the approval of the DOE Contracting Officer prior to entering into the 
subcontract.


(End of clause)
0
234. Section 970.5215-1 is revised to read as follows:


Sec.  970.5215-1  Total available fee: Base fee amount and performance 
fee amount.

    As prescribed in 970.1504-3(a), insert the following clause.
Total Available Fee: Base Fee Amount and Performance Fee Amount (XXX 
20XX)
    (a) Total available fee. Total available fee, consisting of a base 
fee amount (which may be zero) and a performance fee amount (consisting 
of an incentive fee component for objective performance requirements, 
an award fee component for subjective performance requirements, or 
both) determined in accordance with the provisions of this clause, is 
available for payment in accordance with the clause of this contract 
entitled, ``Payments and advances.''
    (b) Fee negotiations. For any fee negotiations under this contract, 
at any time prior to the beginning of the evaluation period the 
negotiations cover, the Contracting Officer and Contractor shall 
attempt to reach agreement on: the requirements for the evaluation 
period including, if appropriate, the evaluation areas and individual 
requirements subject to incentives; the total available fee amount of 
the evaluation period; and the allocation of the total available fee 
amount. If agreement is reached prior to the beginning of the 
evaluation period, the Contracting Officer shall modify the contract to 
reflect the agreement. If agreement is not reached prior to the 
beginning of the evaluation period, the Contracting Officer will, prior 
to the beginning of the evaluation period, unilaterally determine: the 
requirements of the evaluation period including, if appropriate, the 
evaluation areas and individual requirements subject to incentives, the 
total available fee amount, and the allocation of the total available 
fee amount. The Contracting Officer shall modify the contract to 
reflect the determination.
    (c) Determination of total available fee amount earned. (1) The 
Department of Energy (DOE) shall, at the conclusion of each specified 
evaluation period, evaluate the Contractor's performance of all 
requirements, and determine the total available fee amount earned. At 
DOE's discretion, if the contact established specific incentivized 
requirements and a schedule for their completion and the Contractor 
completes them during the evaluation period, DOE may evaluate the 
Contractor's performance upon the requirements' completion. The 
Contractor agrees the determination of the total available fee amount 
earned is a unilateral determination made by the Fee Determining 
Official (FDO). DOE will identify the FDO. The FDO will be the DOE 
Operations/Field Office Manager, or another DOE official designated by 
the Assistant Secretary or equivalent (not delegable).
    (2) If the award fee cycle consists of one evaluation period, award 
fee not earned during the evaluation period shall not be allocated to 
future evaluation periods. At the sole discretion of DOE, if the award 
fee cycle consists of more than one evaluation period, award fee not 
earned during the evaluation period may be allocated to future 
evaluation periods within the same award fee cycle.
    (3) Following each evaluation period, the Contractor [insert may or 
shall] submit a self-assessment within [insert number] calendar days 
after the end of the period. This self-assessment shall address both 
the strengths and weaknesses of the Contractor's performance during the 
evaluation period. Where deficiencies in performance are noted, the 
Contractor shall describe the actions planned or taken to correct them 
and avoid their recurrence. The FDO will review the Contractor's self-
assessment as part of the evaluation of the Contractor's performance 
during the period.
    (4) The FDO will evaluate the Contractor's performance in 
accordance with the Performance Evaluation and Measurement Plan (PEMP) 
described in subparagraph (d) of this clause unless otherwise set forth 
in the contract. The Contractor shall be promptly advised in writing of 
the total available fee amount earned determination and the basis of 
the determination.
    (d) PEMP. To the extent not set forth elsewhere in the contract:
    (1) DOE shall establish a PEMP upon which the determination of the 
total available fee amount earned shall be based. The PEMP will address 
all of the requirements of contract performance specified in the 
contract directly or by reference. The Contracting Officer shall 
provide the Contractor with a copy of the PEMP before the start of an 
evaluation period.
    (2) The PEMP will set forth the criteria upon which the Contractor 
will be evaluated relating to any technical, schedule, management, and/
or cost objectives selected for evaluation. The PEMP will include, per 
48 CFR 16.402-1, a cost incentive (or constraint). The criteria in the 
PEMP should be objective but may also include subjective criteria. The 
PEMP will set forth the method by which the total available fee amount 
will be allocated, and the total available fee amount earned will be 
determined.
    (3) The PEMP may be revised, either unilaterally (by DOE) or 
bilaterally, during the evaluation period. If it is revised, the 
Contracting Officer shall notify the contractor--

[[Page 73711]]

    (i) Of unilateral revisions (unless they are urgent and high 
priority) at least ninety calendar days prior to the end of the 
evaluation period and at least thirty calendar days prior to the 
effective date of the revision;
    (ii) Of bilateral revisions (unless they are urgent and high 
priority) at least sixty calendar days prior to the end of the 
evaluation period;
    (iii) Of urgent and high priority revisions, whether made 
unilaterally or bilaterally, at least thirty calendar days prior to the 
end of the evaluation period.
    (e) Schedule for total available fee amount earned determinations. 
The FDO shall issue the final total available fee amount earned 
determination in accordance with the schedule set forth in the PEMP or 
as otherwise set forth in this contract.
    (1) The determination for the evaluation period must be made within 
the later of: sixty calendar days after the receipt by the Contracting 
Officer of the Contractor's self-assessment, if one is required or 
permitted; seventy calendar days after the end of the evaluation 
period; or a longer period if the Contractor and Contracting Officer 
agree.
    (2) If the FDO elects to evaluate the Contractor's performance of 
any specific requirements upon their completion, the determination of 
any fee amount earned must be made: within seventy calendar days of the 
requirements' completion; or a longer period if the Contractor and 
Contracting Officer agree.
    (3) If the determination is not made within the periods stated 
above, the Contractor shall be entitled to interest on the total 
available fee amount earned at the rate established by the Secretary of 
the Treasury under section 12 of the Contract Disputes Act of 1978 (41 
U.S.C. 7109) that is in effect on the payment date. This rate is 
referred to as the ``Renegotiation Board Interest Rate,'' and is 
published in the Federal Register semiannually on or about January 1 
and July 1. The interest on any late total available fee amount earned 
determination will accrue daily and be compounded in 30-day increments 
inclusive from the first day after the schedule determination date 
through the actual date the determination is made. That is, interest 
accrued at the end of any 30-day period will be added to the total 
available fee amount earned and be subject to interest if not paid in 
the succeeding 30-day period.


(End of clause)
0
235. Section 970.5215-3 is revised to read as follows:


Sec.  970.5215-3  Conditional payment of fee, profit, and other 
incentives--facility management contracts

    As prescribed in 970.1504-3(b), insert the following clause:
Conditional Payment of Fee, Profit, and Other Incentives--Facility 
Management Contracts (XXX 20XX)
    (a) Definitions. ``Amount of payment for otherwise earned fee, 
fixed fee, profit, or other incentives for an evaluation period'' means 
the quantity the Contracting Officer or Fee Determining Official 
determines the Contractor is due for its performance in consideration 
of the Performance Evaluation and Measurement Plan, Award Fee Plan, or 
similar document prior to a separate determination that the Contractor 
did not comply with a term or condition of the contract or experienced 
a failure relating to: environment, safety, and health; security or 
safeguarding of Restricted Data and other classified information; or 
business and financial systems. If the contract includes incentives 
allocable to more than one evaluation period, the amount of payment for 
otherwise earned fee, fixed fee, profit, or other incentives for an 
evaluation period includes the allocable amount of payment for each 
such incentive for otherwise earned fee, fixed fee, profit, or other 
incentives. The allocable amount is the total amount divided by the 
number of evaluation periods the incentive covered. ``Amount actually 
payable to the Contractor for an evaluation period'' means: (the amount 
of payment for otherwise earned fee, fixed fee, profit, or other 
incentives for the evaluation period) less (the amount of any reduction 
under this clause and the amount of any reductions under other clauses 
to the amount of payment for otherwise earned fee, fixed fee, profit, 
or other incentives for the evaluation period).
    (b) General. (Note: If this contract does not include the Security 
Requirements clause (48 CFR 952.204-2), the requirements of this clause 
related to security or safeguarding of Restricted Data and other 
classified information do not apply.)
    (1) The amount of payment of otherwise earned fee, fixed fee, 
profit, or other incentives for any evaluation period under this 
contract is dependent upon the Contractor's and the Contractor's 
employees' compliance during the evaluation period with the performance 
requirements of this contract relating to:
    (i) Environment, safety and health (ES&H), which includes worker 
safety and health (WS&H);
    (ii) Security or safeguarding of Restricted Data and other 
classified information; and
    (iii) Business and financial systems.
    (2) The ES&H performance requirements of this contract are set 
forth in its ES&H terms and conditions, including the DOE-approved 
contractor Integrated Safety Management System (ISMS) or similar 
document. Financial incentives for timely mission accomplishment or 
cost effectiveness shall never compromise or impede full and effective 
implementation of the ISMS and full ES&H compliance.
    (3) The security or safeguarding of Restricted Data and other 
classified information performance requirements of this contract are 
set forth in: the clause of this contract entitled, ``Security 
Requirements''; the clause of this contract entitled ``Laws, 
Regulations, and DOE Directives''; and other terms and conditions of 
this contract.
    (4) The business and financial systems performance requirements of 
this contract are set forth in terms and conditions relating to 
management, accounting, property, procurement, and earned value 
management, such as the ``Management controls'' clause.
    (5) If the Contractor does not meet the performance requirements of 
this contract relating to ES&H, security or safeguarding of Restricted 
Data and other classified information, or business and financial 
systems during any evaluation period established under the contract 
pursuant to the clause of this contract entitled ``Total Available Fee: 
Base Fee Amount and Performance Fee Amount,'' the amount of payment of 
otherwise earned fee, fixed fee, profit or other incentives for the 
evaluation period may be unilaterally reduced by the Contracting 
Officer.
    (c) Amount of Reduction. (1) The Contracting Officer will 
unilaterally determine the amount of reduction to the amount of payment 
for otherwise earned fee, fixed fee, profit, or other incentives for an 
evaluation period based on the severity of the performance failure 
pursuant to the degrees of failure specified in paragraphs (e), (f), 
and (g) of this clause. The percent reduction for each performance 
failure will be: not less than 26% nor more than 100% for a first 
degree failure; not less than 11% or more than 26% for a second degree 
failure; and no more than 11% for a third degree failure.
    (2) For a reduction allocable to more than one evaluation period, 
the Government will effect the allocation at the end of the evaluation 
period in which it determines the total amount of the reduction. The 
allocable amount is

[[Page 73712]]

the total reduction amount divided by the number of evaluation periods 
the reduction covered.
    (3) The Government will reduce the payment of otherwise earned fee, 
fixed fee, profit, or other incentives as soon as practicable after the 
end of the evaluation period in which the performance failure occurs. 
If the Government is not aware of the failure, it will effect the 
reduction as soon as practicable after becoming aware.
    (4) In determining the reduction and in applying the mitigating 
factors, the Contracting Officer must consider the Contractor's overall 
performance in meeting the ES&H, security or safeguarding of Restricted 
Data and other classified information, or business and financial 
systems performance requirements of the contract. Such consideration 
must include performance against any site-specific performance 
criteria/requirements that provide additional definition or guidance 
for the amount of reduction or for the applicability of mitigating 
factors. In all cases, the Contracting Office must consider mitigating 
factors that may warrant a reduction below the reduction that would be 
appropriate absent mitigating factors. Mitigating factors include, but 
are not limited to, the following (paragraphs (c)(4)(v), (vi), (vii), 
and (viii) of this clause apply to ES&H only):
    (i) Degree of control the Contractor had over the event or 
incident.
    (ii) Efforts the Contractor made to anticipate and mitigate the 
possibility of the event in advance.
    (iii) Contractor self-identification and response to the event to 
mitigate impacts and recurrence.
    (iv) General status (trend and absolute performance) of: ES&H and 
compliance in related areas; or of safeguarding Restricted Data and 
other classified information and compliance in related areas; and 
business and financial systems and compliance in related areas.
    (v) Contractor demonstration to the Contracting Officer's 
satisfaction that the principles of industrial ES&H standards are 
routinely practiced.
    (vi) Event caused by ``Good Samaritan'' act by the Contractor 
(e.g., offsite emergency response).
    (vii) Contractor demonstration that a performance measurement 
system is routinely used to improve and maintain ES&H performance 
(including effective resource allocation) and to support DOE corporate 
decision-making (e.g., policy, ES&H programs).
    (viii) Contractor demonstration that an operating experience and 
feedback program is functioning that demonstrably affects continuous 
improvement in ES&H by use of lessons learned and best practices inter- 
and intra-DOE sites.
    (d) Reductions to the amount of payments the Contractor has 
received for earned fee, fixed fee, profit, or other incentives under 
this and other clauses.
    (1) The amount of the reduction under this clause for an evaluation 
period, in combination with the amount of any reduction under any other 
clause, shall not exceed the amount of payment for otherwise earned 
fee, fixed fee, profit, or other incentives for the evaluation period.
    (2) If at any time during the contract any reductions under this 
clause or other clauses result in the sum of the amount of payments the 
Contractor has received for earned fee, fixed fee, profit, or other 
incentives to exceed the sum of the amounts of actually payable to the 
Contractor, the Contractor shall immediately return the excess to the 
Government.
    (3) At the end of the contract--
    (i) The Government will pay the Contractor the amount by which the 
sum of amounts actually payable to the Contractor exceeds the sum of 
the payments the Contractor has received; or
    (ii) The Contractor shall return to the Government the amount by 
which the sum of the payments the Contractor has received exceeds the 
sum of the amounts actually payable to the Contractor.
    (e) Environment, Safety and Health (ES&H). Performance failures 
occur if the Contractor does not comply with the contract's ES&H terms 
and conditions, including applicable ES&H laws, regulations, DOE 
directives, and the DOE approved Contractor ISMS. The degrees of 
performance failure under which reductions of earned or fixed fee, 
profit, or share of cost savings will be determined are:
    (1) First Degree. Performance failures most adverse to ES&H are 
first degree. They include:
    (i) Failure to develop and obtain required DOE approval of an ISMS. 
(The Government will perform necessary reviews in a timely manner and 
not unreasonably withhold approval.)
    (ii) Performance failures determined, per applicable ES&H laws, 
regulations, or DOE directives, to have resulted in, or that could 
reasonably be expected to result in, serious injury or death to a 
worker.
    (iii) Occurrence of any accident or event that meets the criteria 
of Appendix A of DOE Order 225.1B (or successor Order) and results in a 
determination to conduct a Federal Accident Investigation Board.
    (2) Second Degree. Performance failures significantly adverse to 
ES&H are second degree. They include:
    (i) Failures to comply with an approved ISMS.
    (ii) Failures that have been determined, per applicable ES&H laws, 
regulations, or DOE directives, to have resulted in, or could 
reasonably be expected to result in, an actual injury, exposure, or 
exceedance that occurred or nearly occurred but had minor practical 
long-term health consequences.
    (iii) A breakdown of the Safety Management System.
    (iv) The following performance failures or performance failures of 
similar import will be considered second degree:
    (A) Non-compliance with applicable ES&H laws, regulations, or DOE 
directives actually resulting in an accident that meets the criteria of 
Appendix A of DOE Order 225.1B (or successor Order) but not resulting 
in a determination to conduct a Federal Accident Investigation Board.
    (B) Non-compliance with applicable ES&H laws, regulations, or DOE 
directives that results in a near miss of an accident or event that 
could have resulted in an adverse effect and a determination to conduct 
a Federal Accident Investigation Board. (A near miss is a situation in 
which an inappropriate action occurs, or a necessary action is omitted, 
that does not result in an adverse effect.)
    (3) Third Degree. Performance failures determined per applicable 
ES&H laws, regulations, or DOE directives to reflect a lack of focus on 
improving ES&H are third degree. They include:
    (i) Non-compliance with applicable ES&H laws, regulations, or DOE 
directives actually resulting in potential breakdown of the Safety 
Management System. The following performance failures or performance 
failures of similar import will be considered third degree:
    (A) Failure to implement effective corrective actions to address 
deficiencies/non-compliances documented through: external (e.g., 
Federal) oversight and/or reported per DOE Order 231.B (or successor 
Order) requirements; or internal oversight of 10 CFR parts 830, 835, 
850, and 851, or DOE Orders 227.1A and 436.1 (or successor Order) 
requirements.
    (B) Multiple similar non-compliances identified by external (e.g., 
Federal) oversight that in aggregate indicate a significant 
programmatic breakdown.

[[Page 73713]]

    (C) Non-compliances that have, or may have, significant negative 
impacts to the worker, the public, or the environment or that indicate 
a significant programmatic breakdown.
    (D) Failure to notify DOE upon discovery of events or conditions 
where notification is required by the terms and conditions of the 
contract.
    (f) Security or Safeguarding Restricted Data and Other Classified 
Information. Performance failures occur if the Contractor does not 
comply with the terms and conditions of this contract relating to the 
safeguarding of Restricted Data and other classified information. The 
degrees of performance failure under which reductions of fee, profit, 
or other incentives will be determined are as follows:
    (1) First Degree. Performance failures determined, in accordance 
with applicable law, regulation, or DOE directive, to have resulted in, 
or that can reasonably be expected to result in, exceptionally grave 
damage to the national security are first degree. The following are 
examples:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating a risk of, loss, 
compromise, or unauthorized disclosure of Top Secret Restricted Data or 
other information classified as Top Secret, any classification level of 
information in a Special Access Program (SAP), information identified 
as sensitive compartmented information (SCI), or high risk nuclear 
weapons-related data.
    (ii) Contractor actions that result in a breakdown of the 
safeguards and security management system that can reasonably be 
expected to result in the loss, compromise, or unauthorized disclosure 
of Top Secret Restricted Data, or other information classified as Top 
Secret, any classification level of information in an SAP, information 
identified as SCI, or high risk nuclear weapons-related data.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Top Secret Restricted Data, or other 
information classified as Top Secret, any classification level of 
information in an SAP, information identified as SCI, or high risk 
nuclear weapons-related data.
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Top Secret 
Restricted Data or other information classified as Top Secret, any 
classification level of information in a SAP, information identified as 
SCI, or high risk nuclear weapons-related data.
    (2) Second Degree. Performance failures determined, in accordance 
with applicable law, DOE regulation, or directive, to have actually 
resulted in, or that can reasonably be expected to result in, serious 
damage to the national security are second degree. The following are 
examples:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, 
compromise, or unauthorized disclosure of Secret Restricted Data or 
other information classified as Secret.
    (ii) Contractor actions that result in a breakdown of the 
safeguards and security management system that can reasonably be 
expected to result in the loss, compromise, or unauthorized disclosure 
of Secret Restricted Data or other information classified as Secret.
    (iii) Failure to promptly report the loss, compromise, or 
unauthorized disclosure of Secret Restricted Data or other classified 
information regardless of classification (except for information 
covered by paragraph (f)(1)(iii) of this clause).
    (iv) Failure to timely implement corrective actions stemming from 
the loss, compromise, or unauthorized disclosure of Secret Restricted 
Data or other classified information classified as Secret.
    (3) Third Degree. Performance failures determined, in accordance 
with applicable law, regulation, or DOE directive, to have actually 
resulted in, or that can reasonably be expected to result in, undue 
risk to the common defense and security are third degree. This category 
also includes performance failures that result from a lack of 
Contractor management and/or employee attention to the proper 
safeguarding of Restricted Data and other classified information. These 
performance failures may be indicators of future more severe 
performance failures and/or conditions that if identified and corrected 
early would prevent serious incidents. The following are examples:
    (i) Non-compliance with applicable laws, regulations, and DOE 
directives actually resulting in, or creating risk of, loss, 
compromise, or unauthorized disclosure of Restricted Data or other 
information classified as Confidential.
    (ii) Failure to promptly report alleged or suspected violations of 
laws, regulations, or directives pertaining to the safeguarding of 
Restricted Data or other classified information.
    (iii) Failure to identify or timely execute corrective actions to 
mitigate or eliminate identified vulnerabilities and reduce residual 
risk relating to the protection of Restricted Data or other classified 
information in accordance with the Contractor's Safeguards and Security 
Plan or other security plan, as applicable.
    (iv) Contractor actions that result in performance failures that by 
themselves pose minor risk, but when viewed in the aggregate indicate 
degradation in the integrity of the Contractor's safeguards and 
security management system relating to the protection of Restricted 
Data and other classified information.
    (g) Business and Financial systems. Performance failures occur if 
the Contractor does not comply with the terms and conditions of this 
contract relating to business and financial systems. The degrees of 
performance failure under which reductions of fee, profit, or other 
incentives will be determined are:
    (1) First Degree. A performance failure that poses significant 
adverse long-term practical consequences to the mission of the site is 
a first-degree performance failure.
    (2) Second Degree. A performance failure that poses measurable, but 
less than significant, adverse long-term practical consequences to the 
mission of the site is a second-degree performance failure.
    (3) Third Degree. A performance failure that results in minor 
adverse long-term practical consequences to the mission of the site is 
a third-degree performance failure.


(End of clause)


Sec.  970.5215-4  [Removed]

0
236. Section 970.5215-4 is removed.
0
237. Section 970.5215-5 is revised to read as follows:


Sec.  970.5215-5  Limitation on fee.

    As prescribed in 970.1504-3(c), insert the following provision:
Limitation on Fee (XXX 20XX)
    (a) For the purpose of this solicitation, fee amounts shall not 
exceed the total available fee allowed by the fee policy at 48 CFR 
970.1504-1-1, or as specifically stated elsewhere in the solicitation.
    (b) The Government reserves the unilateral right, in the event an 
offeror's proposal is selected for award, to limit the total available 
fee to an amount allowed by the fee policy at 48 CFR 970.1504-1-1 
unless specifically stated in this solicitation.


(End of provision)
0
238. Section 970.5217-1 is revised to read as follows:

[[Page 73714]]

Sec.  970.5217-1  Strategic partnership projects program.

    As prescribed in 970.1707-4, insert the following clause:
Strategic Partnership Projects Program (Non-Doe Funded Work) (XXX 20XX)
    (a) Authority to perform Strategic Partnership Projects. Pursuant 
to the Atomic Energy Act of 1954, as amended (42 U.S.C. 2011 et seq.) 
the Contractor may perform work for non-DOE entities (sponsors) on a 
fully reimbursable basis in accordance with this clause. For instances 
in which the Atomic Energy Act of 1954 does not apply, and no other 
specific authority applies, DOE may use the Economy Act of 1932, as 
amended (31 U.S.C. 1535), as authority to accept and perform the work.
    (b) Contractor's implementation. The Contractor must draft, 
implement, and maintain formal policies, practices, and procedures in 
accordance with this clause, which must be submitted to the Contracting 
Officer for review and approval.
    (c) Conditions of participation in Strategic Partnership Projects 
program. The Contractor--
    (1) Must not perform Strategic Partnership Projects activities that 
would place it in direct competition with the domestic private sector;
    (2) Must not respond to a request for proposals or any other 
solicitation from another Federal agency or non-Federal organization 
that involves direct comparative competition, either as an offeror, 
team member, or subcontractor to an offeror; however, the Contractor 
may, following notification to the Contracting Officer, respond to 
Broad Agency Announcements, Financial Assistance solicitations, and 
similar solicitations from another Federal Agency or non-Federal 
organizations when the selection is based on merit or peer review, the 
work involves basic or applied research to further advance scientific 
knowledge or understanding, and a response does not result in direct, 
comparative competition;
    (3) Must not commence work on any Strategic Partnership Projects 
activity until a Strategic Partnership Projects proposal package has 
been approved by the DOE Contracting Officer or designated 
representative or, if it includes support for a Special Access Program 
(SAP), receives formal approval outlined in DOE Order 471.5 (or its 
successor), or the work falls under an approved Master Statement of 
Work (MSW);
    (4) Must not incur project costs until receipt of DOE notification 
that a budgetary resource is available for the project, except as 
provided in 48 CFR 970.5232-6;
    (5) Must ensure that all costs associated with the performance of 
the work, as provided for in the current version of DOE Order 522.1, 
Pricing of Departmental Materials and Services, including specifically 
all DOE direct costs and applicable surcharges, are included in any 
Strategic Partnership Projects proposal;
    (6) Must maintain records for the accumulation of costs and the 
billing of such work to ensure that DOE's appropriated funds are not 
used in support of Strategic Partnership Projects activities and to 
provide an accounting of the expenditures to DOE and the sponsor upon 
request;
    (7) Must perform all Strategic Partnership Projects agreements in 
accordance with the standards, policies, and procedures that apply to 
performance under this contract, including but not limited to 
environmental, safety and health, security, safeguards and 
classification procedures, and human and animal research regulations;
    (8) May subcontract portion(s) of a Strategic Partnership Project; 
however, the Contractor must select the subcontractor and the work to 
be subcontracted. Any subcontracted work must be in direct support of 
the Contractor's performance as defined in the DOE approved Strategic 
Partnership Projects proposal package;
    (9) Must maintain a summary listing of project information for each 
active Strategic Partnership Projects project, consisting of--
    (i) Sponsoring agency;
    (ii) Total estimated costs;
    (iii) Project title and description;
    (iv) Project point of contact; and,
    (v) Estimated start and completion dates; and,
    (10) May use a Master Scope of Work (MSW) as defined in 48 CFR 
970.5227-3 in a Strategic Partnership Project Agreement.
    (d) Negotiation and execution of Strategic Partnership Projects 
agreement. (1) When delegated authority by the Contracting Officer, the 
Contractor may negotiate the terms and conditions that will govern the 
performance of a specific Strategic Partnership Projects project. Such 
terms and conditions must be consistent with the terms, conditions, and 
requirements of the Contractor's contract with DOE. The Contractor may 
use DOE-approved contract terms and conditions as delineated in the 
current version of DOE Order 481.1 or terms and conditions previously 
approved by the responsible Contracting Officer or authorized designee 
for agreements with non-Federal entities. The Contractor must not hold 
itself out as representing DOE when negotiating the proposed Strategic 
Partnership Projects agreement.
    (2) With the exception of a Strategic Partnership Project using a 
Contracting Officer approved MSW, the Contractor must submit all 
Strategic Partnership Projects agreements to the DOE Contracting 
Officer for DOE review and approval. The Contactor shall also include 
in any request for DOE approval a listing of any associated 
intellectual property having a prior assignment, exclusive licensing or 
option for exclusive licensing. The Contractor may not execute any 
proposed agreement until it has received notice of DOE approval except 
when the work falls under an approved MSW.
    (3) The Contractor is authorized to reserve the intellectual 
property indemnity clause for federally-funded sponsors, state and 
local governments and public universities. The Contractor is further 
authorized to include in subcontracts with other domestic sponsors 
(i.e., private universities and small and large businesses a warranty 
provision in lieu of a patent indemnification clause.)
    (e) Preparation of project proposals. When the Contractor proposes 
to perform Strategic Partnership Projects activities pursuant to this 
clause, it may assist the project sponsor in the preparation of project 
proposal packages including the preparation of cost estimates.
    (f) Strategic Partnership Projects appraisals. DOE may conduct 
periodic appraisals of the Contractor's compliance with its Strategic 
Partnership Projects Program policies, practices and procedures. The 
Contractor must provide facilities and other support in conjunction 
with such appraisals as directed by the Contracting Officer or 
authorized designee.
    (g) Annual Strategic Partnership Projects report. The Contractor 
must provide assistance as required by the Contracting Officer or 
authorized designee in the preparation of a DOE Annual Summary Report 
of Strategic Partnership Projects Activities under the contract.


(End of clause)
0
239. Section 970.5217-2 is added to read as follows:


Sec.  970.5217-2  Agreements for commercializing technology.

    As prescribed in 970.1708-3, insert the following clause:

[[Page 73715]]

Agreements for Commercializing Technology (Act) (XXX 20XX)
    (a) This clause authorizes the use of the mechanism, Agreements for 
Commercializing Technology (ACT). In accordance with the requirements 
specified in this clause, the M&O Contractor may conduct third party-
sponsored research at the M&O Contractor's risk. While the Department 
believes ACT has the potential to greatly assist in the 
commercialization of technologies, it also specifically recognizes that 
ACT can be used for other engagements with outside entities that are 
not necessary aimed at commercialization (e.g., technical assistance, 
training, studies), but that facilitate access to DOE facilities. In 
performing ACT work, the M&O Contractor may use staff and other 
resources associated with this M&O contract for the purposes of 
conducting technical services, training, studies, performing research 
and development, and/or furthering the technology transfer mission of 
the Department, only when such work does not interfere with DOE-funded 
activities conducted as authorized by other parts of this M&O contract. 
Any allocation of resources that adversely affects work for DOE due to 
performing ACT work is the responsibility of the M&O Contractor. The 
resources that may be used include Government-owned or leased 
facilities, equipment, or other property that is either in the M&O 
Contractor's custody or available to the M&O Contractor under this M&O 
contract (unless specifically excluded by the Contracting Officer). For 
M&O Contractor activities conducted under authority of this clause, the 
M&O Contractor shall provide full-cost recovery, assume indemnification 
and liability as provided in paragraph (b)(9) below, and may assume 
other risks normally borne by private parties sponsoring research at 
the DOE national laboratories and production plants. In exchange for 
accepting such risks, or for other private consideration provided by 
the M&O Contractor, the M&O Contractor is authorized to negotiate 
separate ACT agreements with the sponsoring third parties. Under ACT 
agreements, the M&O Contractor may charge those parties additional 
compensation beyond the full costs of the work at the facility.
    (b) The following applies to all work conducted under the ACT 
mechanism, regardless of the source of funding:
    (1) Authority to Perform work under this clause. Pursuant to the 
Atomic Energy Act of 1954, as amended (42 U.S.C. 2011 et seq.) and 
other applicable authorities, the M&O Contractor may perform work for 
non-Federal entities, in accordance with the requirements of this 
clause.
    (2) M&O Contractor's Implementation. For ACT work conducted under 
the contract, the M&O Contractor must draft, implement, and maintain 
formal policies, practices, and procedures in accordance with this 
clause, which must be approved by the Contracting Officer, and such 
approval shall not be unreasonably withheld.
    (3) Conditions for Participation in ACT. The M&O Contractor: (i) 
Must not perform ACT activities that would place it in direct 
competition with the private sector;
    (ii) May only conduct work under this clause if the work does not 
interfere with or adversely affect projects and programs the M&O 
Contractor conducts on behalf of the DOE under this contract, and 
complies with the terms and conditions of the prime contract If the 
Government determines that an activity conducted under this clause 
interferes with the Department's work under the M&O contract, or that 
termination/stay/suspension of work under an ACT agreement is in the 
best interest of the Government, the M&O Contractor must stop the 
interfering ACT work immediately to the extent necessary to resolve the 
interference. At any time, the Contracting Officer may require the use 
of specified Government-owned or leased property and facilities for the 
exclusive use of the DOE mission by providing a written notice 
excluding said property from the M&O Contractor's activities under this 
clause. Any cost incurred as a result of Contracting Officer decisions 
identified in this subparagraph shall be borne by the M&O Contractor. 
The Contracting Officer shall provide to the M&O Contractor in writing 
its decision, identifying the issues and reasons for the decisions. The 
M&O Contractor shall be provided with a reasonable opportunity to 
address and resolve the issues identified by the Contracting Officer;
    (iii) Except as otherwise excluded in this clause, must perform all 
ACT activities in accordance with the standards, policies, and 
procedures that apply to performance under this M&O contract, including 
but not limited to environmental, safety and health, security, 
safeguards, conflict of interest and classification procedures, and 
human and animal research regulations;
    (iv) Must maintain and provide when requested by the DOE 
Contracting Officer, a summary of project information for each active 
ACT project, consisting of: sponsor name; total estimated costs; 
project title and description; project point of contact; and estimated 
start and completion dates;
    (v) Is responsible for addressing the following items in ACT 
agreements as appropriate: disposition of property acquired under the 
agreement; export control; notice of intellectual property 
infringement; and a statement that the Government and/or the M&O 
Contractor shall have the right to perform similar services in the 
Statement of Work for other Parties as otherwise authorized by this M&O 
contract subject to applicable data restrictions;
    (vi) Must include a standard legal disclaimer notice on all 
publications generated under ACT activities. Each DOE M&O Contractor 
has its own pre-approved publications statement, and this should be 
included; and
    (vii) Must insert the following disclaimer in each agreement under 
ACT, which must be conspicuous (e.g., bold type, all capital letters, 
or large font) in all Agreements under ACT so as to meet the standards 
of due notice.
DISCLAIMER
    THIS AGREEMENT IS SOLELY BETWEEN [INSERT NAME OF THE M&O 
CONTRACTOR] AND [THE OTHER IDENTIFIED PARTY]. THE UNITED STATES 
GOVERNMENT IS NOT A PARTY TO THIS AGREEMENT, THIS AGREEMENT DOES NOT 
CREATE ANY OBLIGATIONS OR LIABILITY ON BEHALF OF THE GOVERNMENT AND THE 
GOVERNMENT MAKES NO EXPRESS OR IMPLIED WARRANTY AS TO THE CONDITIONS OF 
THE RESEARCH OR ANY INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR 
PRODUCT MADE OR DEVELOPED UNDER THIS AGREEMENT, OR THE OWNERSHIP, 
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR 
RESULTING PRODUCT; THAT THE GOODS, SERVICES, MATERIALS, PRODUCTS, 
PROCESSES, INFORMATION, OR DATA TO BE FURNISHED HEREUNDER WILL 
ACCOMPLISH INTENDED RESULTS OR ARE SAFE FOR ANY PURPOSE INCLUDING THE 
INTENDED PURPOSE; OR THAT ANY OF THE ABOVE WILL NOT INTERFERE WITH 
PRIVATELY OWNED RIGHTS OF OTHERS. THE GOVERNMENT SHALL NOT BE LIABLE 
FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES ATTRIBUTED TO SUCH 
RESEARCH OR RESULTING PRODUCT, INTELLECTUAL PROPERTY, GENERATED 
INFORMATION, OR PRODUCT MADE OR DELIVERED UNDER THIS AGREEMENT. THIS

[[Page 73716]]

DISCLAIMER DOES NOT AFFECT ANY RIGHTS THE GOVERNMENT MAY HAVE AGAINST 
THIRD PARTIES ARISING FROM WORK CONDUCTED IN CONNECTION WITH THIS 
AGREEMENT.
    (4) Contracting Authority. (i) Subject to DOE approval as described 
in this paragraph, the M&O Contractor is hereby authorized to negotiate 
terms and conditions between the M&O Contractor and third parties when 
entering into ACT agreements. The M&O Contractor will have no authority 
to bind the Government in any way with such terms and conditions. The 
Government will have no obligation to the M&O Contractor due to such 
terms and conditions.
    (ii) The M&O Contractor shall submit an ACT proposal package 
(Package) to the Contracting Officer for approval prior to beginning 
work under an ACT agreement.
    (A) A complete Package will include at a minimum: the identity of 
the parties to the ACT agreement; the principal place of performance; 
any foreign ownership or control of the ACT agreement parties; a 
Statement of Work; an estimate of costs incurred under the M&O 
contract; an anticipated schedule; identification of key Government 
equipment and facilities that will be used under the ACT agreement; a 
list of expected deliverables; identification of the Intellectual 
Property (IP) lead and proposed selection of IP rights, as defined in 
DOE Class Waiver W(C)-2011-013; a signed certification by the private 
party(ies) that the M&O Contractor offered the option to use 
Cooperative Research and Development Agreement (CRADA) and Strategic 
Partnership Project (SPP) alternatives (see paragraph (b)(7)(i) 
sufficiently such that the private parties are aware of the relative 
costs and other differences between the ACT agreement and the CRADA and 
SPP alternatives; source of funds, including a statement that no 
Federal funds, including pass-through funds received as a subcontractor 
or partner, are being utilized; applicable ES&H and NEPA documentation; 
a statement of consideration, summarizing the risk and/or consideration 
offered the ACT participants in exchange for charging beyond full cost 
recovery or for other compensation provided by the participants; and 
when multiple third parties are parties to the ACT agreement, or as 
otherwise requested by the Contracting Officer, an IP Management Plan 
that sets forth the proposed disposition of IP rights, and income and 
royalty sharing, among the parties to an ACT agreement.
    (B) If the M&O Contractor, the M&O Contractor's parent, member, 
subsidiary, or other entity in which the M&O Contractor, the M&O 
Contractor's parent, member or subsidiary has an equity interest, is a 
party to the ACT agreement, the M&O Contractor shall include as 
necessary a project-specific addendum to the Master OCI Plan in the 
Package to address special circumstances not fully anticipated in the 
prior approved Master OCI Plan (see paragraph (b)(7) of this clause).
    (C) If the ACT agreement includes a foreign entity as a party or 
the statement of work includes the use of human subjects, animal 
subjects, classified or sensitive subject matter or describes a work 
scope involving high risks or hazards including environmental issues, 
the M&O Contractor shall include additional information as necessary or 
as requested by the Contracting Officer.
    (iii) The Contracting Officer shall use reasonable best efforts to 
review each complete Package submitted by the M&O Contractor under 
subparagraph (b)(4)(ii)(B) of this clause within 10 business days of 
receiving the Package and provide the M&O Contractor with approval or 
non-approval of the Package. The review of the complete Package by the 
Contracting Officer shall include a determination that the proposed 
work: is consistent with or complementary to DOE missions and the 
contract statement of work; will not adversely impact programs under 
the contract scope of work; will not place the contractor in direct 
competition with the domestic private sector; and will not create a 
detrimental future burden on DOE resources.
    (iv) Except as conditionally allowed under subparagraph 
(b)(4)(iv)(A) of this clause, the Contracting Officer must approve the 
Package before the M&O Contractor may begin work under the proposed ACT 
agreement. If the Contracting Officer rejects the Package, then the 
Contracting Officer must provide said rejection to the M&O Contractor 
in writing including the reasons for the rejection. Upon receipt of the 
Contracting Officer's written rejection, the M&O Contractor agrees to 
not further pursue the work described in the package or incur 
additional costs under the M&O contract for the work described in the 
Package.
    (A) The M&O Contractor may request a preliminary determination that 
the proposed scope of work is consistent with the contract statement of 
work and the Contracting Officer will use his/her best efforts to 
provide such a determination within three business days. Upon such a 
determination from the Contracting Officer, the M&O Contractor may 
begin work under the ACT agreement at the M&O Contractor's risk pending 
final approval of the complete Package. The M&O Contractor must submit 
a complete Package, as identified in subparagraph (b)(4)(ii) of this 
clause, within 10 business days of the preliminary determination. All 
costs associated with the performance of work under a preliminary 
determination are the responsibility of the M&O Contractor, as no 
Federal funds will be used to fund any work conducted under this 
clause.
    (B) If any source affiliated with the M&O Contractor (any division, 
subsidiary, or affiliate of the M&O Contractor or its parent company) 
is a party sponsoring work in connection with the ACT agreement, work 
may not commence until approval of the complete Package by the 
Contracting Officer.
    (5) Advance Payment for ACT Projects. The M&O Contractor shall be 
responsible for providing adequate advance payment for ACT work 
conducted under this clause consistent with procedures defined in the 
Department's Financial Management Handbook. The M&O Contractor shall be 
solely responsible for collecting payments from third parties for any 
work conducted under this clause and such collections shall be 
independent of providing advance payment. For such payments and for any 
costs, obligations, or liabilities arising due to the M&O Contractor's 
work under this clause, the M&O Contractor is entirely at risk and the 
Government shall have no risk.
    (6) Costs and Fee. (i) All direct costs associated with the M&O 
Contractor's work conducted under this clause shall be directly charged 
to separate and identifiable accounts in accordance with the 
requirements of the Department's Financial Management Handbook. An 
allocable portion of indirect costs normally applied to equivalent work 
under this M&O contract shall also be applied to work conducted under 
this clause in accordance with the requirements of the Financial 
Management Handbook. As required by the Financial Management Handbook, 
changes to the Handbook will be incorporated into this clause by a 
unilateral administrative modification to the contract. In addition, 
all work must be performed at full costs that would include Federal 
Administrative Charge (FAC).
    (ii) Work conducted under this clause shall be excluded from the 
M&O contract award fee calculations and such fee shall not be allocable 
to work conducted under this clause.

[[Page 73717]]

    (7) Organizational Conflict of Interest. The M&O Contractor shall 
conduct work under this clause in a manner that minimizes the 
appearance of conflicts of interest and avoids or mitigates actual 
conflicts of interest with the M&O Contractor's functions under this 
M&O contract. Accordingly, the M&O Contractor shall develop an 
Organizational Conflict of Interest Mitigation Plan (OCI Plan). The OCI 
Plan should address OCI issues that arise as a result of the M&O 
Contractor taking a financial interest in ACT projects, especially in 
those cases where the M&O Contractor retains rights in ACT IP. Said OCI 
Plan shall be provided to the Contracting Officer for review and 
approval as soon as practicable after execution of the M&O contract 
modification incorporating this clause into the M&O contract. Unless 
provided otherwise by the Contracting Officer, no work on ACT 
agreements may commence before Contracting Officer approval of the OCI 
Plan. In addition to those elements expressly stated in the OCI Plan, 
the Department may condition any ACT transaction on such other 
mitigating conditions it determines are appropriate. The OCI Plan 
shall, at a minimum, include elements that address the following:
    (i) Full Disclosure. Before work can begin under an ACT 
transaction, all parties to ACT agreements must sign a DOE-approved 
certification that they have been fully informed about the availability 
of SPP agreements and CRADAs in addition to ACT. The certification at a 
minimum shall briefly describe SPP agreements, CRADAs and ACT, and will 
include the relative disposition of IP rights and the costs (including 
identification of any additional costs e.g., insurance, and other 
compensation to the M&O Contractor under ACT) for each type of 
agreement for the scope of work being proposed.
    (ii) Priority of Work. The M&O Contractor shall not give work under 
ACT any special attention or priority over other work under the DOE M&O 
contract. Work under ACT shall be approved by the Contracting Officer 
and assigned the same priority relative to other work under the DOE M&O 
contract that it would normally have if performed under a non-Federal 
SPP agreement. The Contracting Officer has discretion to determine the 
agency's priority of work, considering the M&O Contractor's input.
    (iii) Participation by Contractor-affiliated sources: If any source 
affiliated with the M&O Contractor (any division, subsidiary, or 
affiliate of the M&O Contractor or its parent company) is a party to 
the ACT agreement, the M&O Contractor shall include as necessary an 
addendum to the OCI Plan to address special circumstances not fully 
anticipated in the OCI Plan.
    (iv) Right of Inquiry for ACT IP Designation. The Contracting 
Officer, upon request of DOE Patent Counsel may inquire into the M&O 
Contractor's designation of any invention or data as arising under an 
ACT transaction. The M&O Contractor is responsible for curing any 
defect identified in such inquiry, and if the M&O Contractor cannot 
adequately justify the designation or cure the defect, then the parties 
to the ACT agreement may receive modified rights in the IP to the 
degree necessary to resolve the issues identified by the inquiry.
    (8) Intellectual Property. Disposition of intellectual property 
(IP) arising from work conducted under this clause shall be governed by 
Class Waiver W(C)-2011-013 (ACT Class Waiver), which is incorporated 
herein by reference.
    (i) All Contractor ACT inventions shall be reported to DOE pursuant 
to the requirements of the [cite Patent Rights--M&O contract, Nonprofit 
Organization or Small Business Firm Contractor] clause of this M&O 
contract.
    (ii) In reporting ACT inventions, the M&O Contractor shall identify 
the ACT agreement under which the invention was made and specify the 
rights reserved by the Government pursuant to the ACT Class Waiver.
    (iii) All technical data identified by the ACT client as Protected 
ACT Information shall also be marked to identify the ACT agreement 
under which the data was generated.
    (iv) The M&O Contractor shall ensure that all rights and 
obligations concerning ACT IP, including the appropriate IP provisions 
authorized in the ACT Class Waiver, are clearly provided in ACT 
agreements, and that all parties granted any rights in ACT IP are 
informed of the terms of the waived rights, including the rights 
reserved by the Government.
    (v) Where the M&O Contractor receives ownership or license rights 
to ACT IP, the M&O Contractor may elect to commercialize the ACT IP 
consistent with the Technology Transfer Mission clause of this M&O 
contract.
    (vi) As an alternative to subparagraph (b)(8)(v) of this clause, if 
the M&O Contractor has an authorized Private Funded Technology Transfer 
(PFTT) program, the M&O Contractor may elect to retain private 
ownership of the ACT IP and commercialize the IP under its applicable 
PFTT clause, using its private funds, where no costs for developing, 
patenting, and marketing will be allowable under this M&O contract. The 
M&O Contractor will share royalties collected on ACT IP with inventors 
in accordance with paragraph (h) of the Technology Transfer Mission 
clause of this M&O contract.
    (vii) For ACT projects in which the terms of the Agreement provide 
that the Government reserves the right to use generated data after the 
particular project expires, the M&O Contractor must provide, to the DOE 
Office of Technical Information (OSTI), computer software produced 
under the Agreement in both source and executable object code format.
    (viii) Where terms and conditions governing Data and Subject 
Inventions under this Contract are inconsistent with the terms of the 
ACT Class Waiver, the ACT Class Waiver will control.
    (9) Contractor Liability and Indemnification.
    (i) General Indemnity.
    (A) The M&O Contractor agrees to indemnify and hold harmless the 
Government, the Department, and persons acting on their behalf from all 
liability, including costs and expenses incurred, to any person, 
including the ACT participants, for injury to or death of persons or 
other living things or injury to or destruction of property arising out 
of the performance of an ACT transaction by the Government, the 
Department, the M&O Contractor, or persons acting on their behalf, or 
arising out of the use of the services performed, materials supplied, 
or information given hereunder by any person including the M&O 
Contractor, and not directly resulting from the fault or negligence of 
the Government, the Department, or persons (other than the M&O 
Contractor) acting on their behalf.
    (B) Subject to Contracting Officer approval, the General Indemnity 
set forth in this paragraph (b)(9)(i) may be modified or waived where:
    (1) ACT participants are not providing material or equipment to the 
M&O Contractor to be used in the performance of the Statement of Work 
under the ACT transaction; and (2) ACT participants are not sending 
their employees to the M&O facilities as part of the Statement of Work; 
and (3) the specific activities performed under the ACT transaction are 
normally performed by the DOE M&O Contractor under the DOE contract.
    (C) Notwithstanding the provisions in a (b)(9)(i)(A) and (B) above, 
the M&O Contractor shall indemnify and hold harmless the Government, 
the Department, and persons acting on their behalf for loss, damage, or 
destruction of Government property resulting from the fault or 
negligence of the M&O

[[Page 73718]]

Contractor. Such indemnification shall be subject to a liability limit 
of $2,000,000 (two million dollars) per year, or such greater liability 
limit approved by the cognizant DOE Contracting Officer under the DOE 
contract. Above the applicable liability limit, the M&O Contractor's 
responsibility to the Government for such loss, damage or destruction, 
shall be as set forth in the ``Property'' clause of this contract.
    (ii) Intellectual Property Indemnity. The M&O Contractor shall 
indemnify the Government, its agents, and employees against liability, 
including costs, for infringement of any United States patent, 
copyright, or other intellectual property arising out of any acts 
required or directed to be performed under the Statement of Work under 
an ACT transaction to the extent such acts are not already performed at 
the M&O contract facilities. Such indemnity shall not apply to a 
claimed infringement that is settled without the consent of the M&O 
Contractor unless required by a court of competent jurisdiction.
    (iii) Product Liability Indemnity.
    (A) Except for any liability resulting from any negligent acts or 
omissions of the Government, the M&O Contractor agrees to indemnify the 
Government for all damages, costs, and expenses, including attorney's 
fees, arising from personal injury or property damage occurring as a 
result of the making, using, or selling of a product, process, or 
service by or on behalf of the ACT participants or the M&O Contractor, 
their assignees, or licensees, which was derived from the work 
performed under ACT transactions. With respect to this clause, neither 
the Government nor the M&O Contractor shall be considered assignees or 
licensees as a result of reserved Government rights in ACT IP. The 
indemnity set forth in this paragraph shall apply only if the M&O 
Contractor shall have been informed as soon and as completely as 
practical by the Government of the action alleging such claim and shall 
have been given an opportunity, to the maximum extent afforded by 
applicable laws, rules, or regulations, to participate in and control 
its defense, and the Government shall have provided all reasonably 
available information and reasonable assistance requested by the M&O 
Contractor. No settlement for which the M&O Contractor would be 
responsible shall be made without the M&O Contractor's consent, unless 
required by final decree of a court of competent jurisdiction.
    (B) Where the M&O Contractor assigns the responsibility for 
indemnifying the Government under subparagraph (b)(9)(iii)(A) of this 
clause to other ACT participants, the M&O Contractor agrees to seek 
such indemnification from the other ACT participants.
    (iv) Claims and Liabilities. Claims and liabilities resulting from 
the M&O Contractor's performance of work under an ACT transaction 
authorized pursuant to this clause shall not be subject to the M&O 
contract clause entitled ``Insurance--Litigation and Claims.'' In no 
event shall the M&O Contractor be reimbursed under the M&O contract for 
liabilities (and expenses incidental to such liabilities, including 
litigation costs, counsel fees, and judgment and settlements) incurred 
as a result of third party claims related to the M&O Contractor's 
performance under this clause.
    (v) Government Obligations. The M&O Contractor shall not include 
any guarantee or requirement that will obligate the Government to pay 
or incur any costs or create any liability on behalf of the Government 
in any ACT agreement or commitment the M&O Contractor executes under 
authority of this clause. The M&O Contractor agrees if the Contractor 
does include such a guarantee or requirement, it will have no effect on 
the Government, such that, the M&O Contractor will be responsible for 
any costs or liability due to such a guarantee or requirement.
    (vi) Insurance. Any cost of insurance to cover risks of the M&O 
Contractor associated with ACT agreements is unallowable under this 
contract.
    (10) ACT Records. All records associated with the M&O Contractor's 
activities conducted under the authority of this clause, with the 
exception of information required under paragraphs (b)(3)(v), 
(b)(4)(ii)(A), and (b)(13) of this clause shall be treated as M&O 
Contractor-owned records under the provisions of the Access to and 
Ownership of Records clause of this M&O contract. The Government or its 
designees shall use such records in accordance with applicable Federal 
laws (including the Privacy Act), as appropriate.
    (11) Termination. The Government or the M&O Contractor may 
terminate ACT authority under this contract by providing written 
notification of termination to the other party (Contracting Officer or 
the M&O Contractor) as appropriate, no less than 60 days prior to the 
requested termination date. In such cases, the M&O Contractor shall 
provide DOE a comprehensive list of active ACT projects. DOE 
anticipates work commitments under these agreements will be completed 
regardless of termination. All costs associated with early termination 
of any ACT agreements prior to the completion shall be the 
responsibility of the M&O Contractor.
    (12) Successor M&O Contractor. To minimize the potential for 
negative Government programmatic impact and to facilitate seamless 
transition of work to a successor M&O Contractor, ACT agreement(s) 
executed under this clause and any contractual instruments associated 
therewith may be novated to the successor M&O Contractor with the 
mutual consent of the M&O Contractor, the successor M&O Contractor, and 
the parties to the affected ACT agreement(s). If the ACT agreement(s) 
cannot be novated, then the M&O Contractor as a private sponsor shall 
be permitted to enter into a Non-Federal SPP agreement with the 
successor M&O Contractor that will enable completion of the statement 
of work. Such agreements shall be entered into pursuant to DOE SPP 
policies. DOE shall make good faith efforts to incorporate the terms of 
the applicable ACT agreement.
    (13) Minimum Reporting requirements. The M&O Contractor shall 
maintain records of its activities related to ACT in a manner and to 
the extent satisfactory to DOE and specifically including, but not 
limited to the number of ACT agreements, the amount of funds reimbursed 
to DOE for work under ACT and aggregate funding received beyond costs 
in the performance of ACT, the number of third party entities engaged 
through ACT that had not previously sponsored projects under the M&O 
contract and the number that had not previously sponsored projects 
under any DOE M&O contract, the amount of funds reimbursed to DOE by 
newly engaged entities, the number of parties and types of entities 
engaged in each individual ACT agreement, and the number of invention 
disclosures, licenses and start-ups arising from ACT. The M&O 
Contractor shall establish performance metric(s) to measure the time 
required to negotiate ACT agreements in a manner consistent with the 
time required to negotiate CRADAs and SPPs. The M&O Contractor shall 
obtain from each entity engaged in ACT the entity's reason(s) for 
selecting ACT for performance of work under the M&O contract. Also, the 
M&O Contractor shall report the above identified data annually to the 
DOE Contracting Officer and in such a format that will serve to 
adequately inform DOE of the Contractor's activities under ACT while 
protecting any data not subject to disclosure under this M&O contract. 
Such records shall be made available in accordance with the clauses of 
this

[[Page 73719]]

M&O contract pertaining to inspection, audit and examination of 
records.


(End of clause)
0
240. Section 970.5219 is added to read as follows:


Sec.  970.5219  Small business subcontracting plan.

    As prescribed in 970.1907-8(b), supplement the clause at FAR 
52.219-9 with the following:
Small Business Subcontracting Plan (XXX 20XX)
    (b) Definitions. ``First-tier subcontract'' means a subcontract 
awarded directly by the Contractor for the purpose of acquiring 
supplies or services (including construction) for performance of a 
prime contract. It does not include the Contractor's supplier 
agreements with vendors, such as long-term arrangements for materials 
or supplies that would benefit multiple contracts and/or the costs of 
which are normally applied to a Contractor's general and administrative 
expenses or indirect costs.
    ``Management and Operating Contractor Subcontract Reporting 
Capability (MOSRC)'' means a DOE system and associated processes to 
collect key information about Management and Operating Contractor 
first-tier subcontracts for reporting to the Small Business 
Administration.
    ``Transaction'' means any contract, order, other agreement or 
modification thereof (other than one involving an employer-employee 
relationship) entered into by the Contractor acquiring supplies or 
services (including construction) required solely for performance of 
the prime contract.
    (l)(3) MOSRC. The Contractor shall collect and report data via 
MOSRC necessary for DOE to meet its agency reporting requirements, as 
determined by the Small Business Administration. The Contractor shall 
report first-tier subcontract data in MOSRC. Classified subcontracts 
shall not be reported. Subcontracts with Controlled Unclassified 
Information marking shall not be reported if restricted by its 
category. The Contractor should contact its Contracting Officer if 
uncertain of reporting requirements. The MOSRC requirement does not 
replace any other reporting requirements under this clause.


(End of clause)
0
241. Section 970.5222-4 is added to read as follows:


Sec.  970.5222-4  Unemployment compensation.

    As prescribed in 970.2270-2, insert the following clause.
Unemployment Compensation (XXX 20XX)
    (a) When under state law the contractor is permitted the option to 
pay unemployment claims either through the state unemployment insurance 
tax (pay in) or by reimbursing the state for actual claims paid out to 
former employees (opt out), the contractor shall provide the following:
    (1) Statement of Coverage. The statement of coverage shall identify 
whether the contractor will opt into the state unemployment fund 
through payment of the unemployment insurance tax or opt out by 
reimbursing the state(s) for actual claims paid. A statement of 
coverage shall be provided within (fill in) __calendar days of contract 
award, contract extension, or exercise of an option.
    (2) Change in Election Status. The contractor shall notify the 
contracting officer no less than (fill in) __calendar days before state 
approval is sought to change its pay in or opt out election.
    (b) The Government reserves the right to request additional 
information to assess budgetary and programmatic risks and impact when 
the contractor chooses to opt out.


(End of clause)


Sec.  970.5223-6 and 970.5223-7  [Removed]

0
242. Sections 970.5223-6 and 970.5223-7 are removed.
0
243. Section 970.5226-1 is revised to read as follows:


Sec.  970.5226-1  Diversity plan.

    As prescribed in 970.2671-2, insert the following clause:
Diversity Plan (XXX 20XX)
    The Contractor shall submit a Diversity, Equity, Inclusion, and 
Accessibility (DEIA) Plan to the Contracting Officer for approval 
within 90 days after the effective date of this contract (or contract 
modification, if appropriate). The Contractor shall submit an update to 
its Plan annually or with its annual fee proposal. Guidance for 
preparation of a Diversity Plan is provided in the Appendix __. The 
Plan shall include innovative strategies for increasing opportunities 
to fully use the talents and capabilities of a diverse work force. The 
Plan shall address, at a minimum, the Contractor's approach for 
promoting diversity through (1) the Contractor's work force, (2) 
educational outreach, (3) community involvement and outreach, (4) 
subcontracting, (5) economic development (including technology 
transfer), and (6) the prevention of profiling, harassment, 
discrimination, and/or retaliation based on protected EEO categories.


(End of clause)
0
244. Amend section 970.5227-1 by:
0
a. Revising the clause date and paragraphs (a), (b)(1) introductory 
text, and (b)(1)(ii);
0
b. Adding paragraphs (b)(4) and (c)(3);
0
c. Revising paragraph (d)(1);
0
d. Removing ``(End of clause)'' after Alternate I and adding in its 
place ``(End of Alternate)''; and
0
e. Adding Alternate II after Alternate I.
    The revisions and additions read as follows:


Sec.  970.5227-1  Rights in data--facilities.

* * * * *
Rights In Data--Facilities (XXX 20XX)
    (a) Definitions.
    Assistant General Counsel for Technology Transfer and Intellectual 
Property is the senior intellectual property counsel for the Department 
of Energy, as distinguished from the NNSA Patent Counsel, and, where 
used in this clause, indicates that the authority for the activity(ies) 
being described belongs to DOE.
    Computer data bases, as used in this clause, means a collection of 
data in a form capable of, and for the purpose of, being stored in, 
processed, and operated on by a computer. The term does not include 
computer software.
    Computer software, as used in this clause, means:
    (1) Computer programs which are data comprising a series of 
instructions, rules, routines, or statements, regardless of the media 
in which recorded, that allow or cause a computer to perform a specific 
operation or series of operations; and
    (2) Data comprising source code listings, design details, 
algorithms, processes, flow charts, formulae, and related material that 
would enable the computer program to be produced, created, or compiled. 
The term does not include computer data bases.
    Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The term 
includes technical data and computer software. The term ``data'' does 
not include data incidental to the administration of this contract, 
such as financial, administrative, cost and pricing, or management 
information.
    Department of Energy (DOE), as used in this clause, includes the 
National Nuclear Security Administration (NNSA), unless otherwise 
identified or indicated.
    Limited rights data, as used in this clause, means data, other than 
computer software, developed at private expense

[[Page 73720]]

that embody trade secrets or are commercial or financial and 
confidential or privileged. The Government's rights to use, duplicate, 
or disclose limited rights data are as set forth in the Limited Rights 
Notice of subparagraph (e) of this clause.
    Patent Counsel means the DOE or NNSA Patent Counsel assisting the 
contracting activity.
    Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade 
secret; is commercial or financial and is confidential or privileged; 
or is published copyrighted computer software, including minor 
modifications of any such computer software. The Government's rights to 
use, duplicate, or disclose restricted computer software are as set 
forth in the Restricted Rights Notice of paragraph (f) of this clause.
    Technical data, as used in this clause, means recorded data, 
regardless of form or characteristic, that are of a scientific or 
technical nature. Technical data does not include computer software, 
but does include manuals and instructional materials and technical data 
formatted as a computer data base.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, including by electronic means, and 
perform publicly and display publicly, in any manner, including by 
electronic means, and for any purpose whatsoever, and to have or permit 
others to do so.
    (b) * * *
    (1) Except as may be otherwise expressly provided or directed in 
writing by the Patent Counsel, the Government shall have:
* * * * *
    (ii) Unlimited rights in technical data and computer software 
specifically used in the performance of this Contract, except as 
provided herein regarding copyright, limited rights data, or restricted 
computer software, or except for other data specifically protected by 
statute for a period of time or, where, approved by Patent Counsel;
* * * * *
    (4) In the performance of DOE contracted obligations, each 
contractor is required to manage scientific and technical information 
(STI) produced under the contract as a direct and integral part of the 
work and ensure its broad availability to all customer segments by 
making STI available to DOE's central STI coordinating office, the 
Office of Scientific and Technical Information (OSTI). Requirements for 
all such reportable information to OSTI are in DOE Order 241.1, or 
successor version, whether it is publicly releasable, controlled 
unclassified information, or classified.
    (c) * * *
    (3) If the Contractor has not been granted permission to copyright 
technical data or computer software first produced under the contract, 
and if the Government desires to obtain copyright in such data and 
computer software, the Patent Counsel may direct the Contractor to 
establish claim to copyright in such data or computer software and to 
assign such copyright to the Government or its designated assignee.
    (d) * * *
    (1) Unless otherwise directed by the contracting officer, the 
Contractor agrees to use in subcontracts in which technical data or 
computer software is expected to be produced or in subcontracts for 
supplies that contain a requirement for production or delivery of data 
in accordance with the policy and procedures the clause entitled, 
``Rights in Data--General'' at 48 CFR 52.227-14 modified in accordance 
with 48 CFR 927.409 including alternates as appropriate with the prior 
approval of DOE Patent Counsel, and the Contractor shall not acquire 
rights in a subcontractor's limited rights data or restricted computer 
software, except through the use of Alternate II or III, respectively, 
without the prior approval of DOE Patent Counsel. The clause at 48 CFR 
52.227-16, Additional Data Requirements, shall be included in 
subcontracts in accordance with 48 CFR 927.409(d). In subcontracts, 
including subcontracts for related support services, involving the 
design or operation of any plants or facilities or specially designed 
equipment for such plants or facilities that are managed or operated 
under its contract with DOE, the Contractor shall use the ``rights in 
Data--Facilities clause at 48 CFR 970.5227-1.
* * * * *
    Alternate II (DATE XXXX). As prescribed in 970.2704-3(a), where 
Government facilities are being constructed, modified, or in 
decontamination and decommissioning, and it is anticipated that further 
solicitation may be required to complete the project, insert paragraph 
(f) in the Limited Rights Notice required by paragraph (e) of the basic 
clause:
    (f) This ``limited rights data'' may be disclosed in future 
solicitations for the continuation or completion of the work 
contemplated under this contract under the restriction that the 
``limited rights data'' be retained in confidence and not be further 
disclosed.


(End of alternate)
0
245. Section 970.5227-2 is revised to read as follows:


Sec.  970.5227-2  Rights in data--technology transfer.

    As prescribed in 970.2704-3(b), insert the following clause:
Rights In Data--Technology Transfer (XXX 20XX)
    (a) Definitions.
    Assistant General Counsel for Technology Transfer and Intellectual 
Property is the senior intellectual property counsel for the Department 
of Energy, as distinguished from the NNSA Patent Counsel, and, where 
used in this clause, indicates that the authority for the activity(ies) 
being described belongs to DOE.
    Computer data bases, as used in this clause, means a collection of 
data in a form capable of, and for the purpose of, being stored in, 
processed, and operated on by a computer. The term does not include 
computer software.
    Computer software, as used in this clause, means:
    (1) Computer programs which are data comprising a series of 
instructions, rules, routines, or statements, regardless of the media 
in which recorded, that allow or cause a computer to perform a specific 
operation or series of operations; and
    (2) Data comprising source code listings, design details, 
algorithms, processes, flow charts, formulae, and related material that 
would enable the computer program to be produced, created, or compiled. 
The term does not include computer data bases.
    Data, as used in this clause, means recorded information, 
regardless of form or the media on which it may be recorded. The term 
includes technical data and computer software. The term ``data'' does 
not include data incidental to the administration of this contract, 
such as financial, administrative, cost and pricing, or management 
information.
    Department of Energy (DOE), as used in this clause, includes the 
National Nuclear Security Administration (NNSA), unless otherwise 
identified or indicated.
    Limited rights data, as used in this clause, means data, other than 
computer software, developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged. 
The Government's rights to use, duplicate, or disclose limited rights 
data are as set forth in the Limited Rights Notice of paragraph (g) of 
this clause.
    Open source software, as used in this clause, means computer 
software with

[[Page 73721]]

its source code that is distributed under a license in which the user 
is granted the right to use, copy, modify, and prepare derivative works 
thereof, without having to make royalty payments.
    Patent Counsel means the DOE or NNSA Patent Counsel assisting the 
contracting activity.
    Restricted computer software, as used in this clause, means 
computer software developed at private expense and that is a trade 
secret; is commercial or financial and is confidential or privileged; 
or is published copyrighted computer software, including minor 
modifications of any such computer software. The Government's rights to 
use, duplicate, or disclose restricted computer software are as set 
forth in the Restricted Rights Notice of subparagraph (h) of this 
clause.
    Technical data, as used in this clause, means recorded data, 
regardless of form or characteristic, that are of a scientific or 
technical nature. Technical data does not include computer software, 
but does include manuals and instructional materials and technical data 
formatted as a computer data base.
    Unlimited rights, as used in this clause, means the rights of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, including by electronic means, and 
perform publicly and display publicly, in any manner, including by 
electronic means, and for any purpose whatsoever, and to have or permit 
others to do so.
    (b) Allocation of Rights. (1) Except as may be otherwise expressly 
provided or directed in writing by the Patent Counsel, the Government 
shall have:
    (i) Ownership of all technical data and computer software first 
produced in the performance of this Contract;
    (ii) Unlimited rights in technical data and computer software 
specifically used in the performance of this Contract, except as 
provided herein regarding copyright, limited rights data, or restricted 
computer software, and except for data subject to the withholding 
provisions for protected Cooperative Research and Development Agreement 
(CRADA) information in accordance with Technology Transfer actions 
under this Contract, or other data specifically protected by statute 
for a period of time or, where, approved by Patent Counsel, appropriate 
instances of the DOE Strategic Partnership Projects Program;
    (iii) The right to inspect technical data and computer software 
first produced or specifically used in the performance of this Contract 
at all reasonable times. The Contractor shall make available all 
necessary facilities to allow DOE personnel to perform such inspection;
    (iv) The right to have all technical data and computer software 
first produced or specifically used in the performance of this Contract 
delivered to the Government or otherwise disposed of by the Contractor, 
either as the contracting officer may from time to time direct during 
the progress of the work or in any event as the contracting officer 
shall direct upon completion or termination of this Contract. When 
delivering all Contractor-produced computer software to the DOE Office 
of Scientific and Technical Information (OSTI), the Contractor shall 
submit a complete package as prescribed in paragraph (e)(3) of this 
clause. The Contractor agrees to leave a copy of such data at the 
facility or plant to which such data relate, and to make available for 
access or to deliver to the Government such data upon request by the 
contracting officer. If such data are limited rights data or restricted 
computer software, the rights of the Government in such data shall be 
governed solely by the provisions of paragraph (h) of this clause 
(``Rights in Limited Rights Data'') or paragraph (i) of this clause 
(``Rights in Restricted Computer Software''); and
    (v) The right to remove, cancel, correct, or ignore any markings 
not authorized by the terms of this Contract on any data furnished 
hereunder if, in response to a written inquiry by DOE concerning the 
propriety of the markings, the Contractor fails to respond thereto 
within 60 days or fails to substantiate the propriety of the markings. 
In either case DOE will notify the Contractor of the action taken.
    (2) The Contractor shall have:
    (i) The right to withhold limited rights data and restricted 
computer software unless otherwise provided in provisions of this 
clause;
    (ii) The right to use for its private purposes, subject to patent, 
security or other provisions of this Contract, data it first produces 
in the performance of this Contract, except for data in DOE's Uranium 
Enrichment Technology, including diffusion, centrifuge, and atomic 
vapor laser isotope separation, provided the data requirements of this 
Contract have been met as of the date of the private use of such data; 
and
    (iii) The right to assert copyright subsisting in scientific and 
technical works, and works produced by Contractor under 48 CFR 952.204-
75 as provided in paragraph (d) of this clause and the right to request 
permission to assert copyright subsisting in works other than 
scientific and technical articles as provided in paragraph (e) of this 
clause.
    (3) The Contractor agrees that for limited rights data or 
restricted computer software or other technical business or financial 
data in the form of recorded information which it receives from, or is 
given access to by DOE or a third party, including a DOE contractor or 
subcontractor, and for technical data or computer software it first 
produces under this Contract which is authorized to be marked by DOE, 
the Contractor shall treat such data in accordance with any restrictive 
legend contained thereon.
    (4) In the performance of DOE contracted obligations, each 
Contractor is required to manage scientific and technical information 
(STI) produced under the contract as a direct and integral part of the 
work and ensure its broad availability to all customer segments by 
making STI available to DOE's central STI coordinating office, OSTI. 
Requirements for all such reportable information to OSTI are in DOE 
Order 241.1B, or successor version, whether it is publicly releasable, 
controlled unclassified information, or classified.
    (c) Copyright (General). (1) The Contractor agrees not to mark, 
register, or otherwise assert copyright in any data in a published or 
unpublished work, other than as set forth in paragraph (d), (e), or (f) 
of this clause.
    (2) Except for material to which the Contractor has obtained the 
right to assert copyright in accordance with either paragraph (d), (e), 
or (f) of this clause, the Contractor agrees not to include in the data 
delivered under this Contract any material copyrighted by the 
Contractor and not to knowingly include any material copyrighted by 
others without first granting or obtaining at no cost a license therein 
for the benefit of the Government of the same scope as set forth in 
paragraph (d) of this clause. If the Contractor believes that such 
copyrighted material for which the license cannot be obtained must be 
included in the data to be delivered, rather than merely incorporated 
therein by reference, the Contractor shall obtain the written 
authorization of the contracting officer to include such material in 
the data prior to its delivery.
    (3) If the Contractor has not been granted permission to copyright 
data or computer software first produced under the contract where such 
permission is necessary, i.e., for works other than scientific and 
technical journal articles and data produced under a CRADA, and if the 
Government desires to obtain copyright in such data or computer

[[Page 73722]]

software, the Patent Counsel may direct the Contractor to establish 
claim to copyright in such data or computer software and to assign such 
copyright to the Government or its designated assignee.
    (d) Copyrighted works (scientific and technical works). (1) The 
Contractor shall have the right to assert, without prior approval of 
the contracting officer, copyright subsisting in scientific and 
technical works composed under this contract or based on or containing 
data first produced by the Contractor in the performance of this 
Contract, and published in academic, technical or professional 
journals, symposia, proceedings, contributions to chapters of book 
compilations or similar means of dissemination to make broadly 
available to the public or scientific community for the purpose of 
scientific, research, knowledge and education. Such scientific and 
technical works may be recorded or fixed in any medium including but 
not limited to print, online, web, audio, video or other medium, and 
released or disseminated through any communication or distribution 
channel including but not limited to articles, reports, books, non-
architectural drawings, repositories, videos, websites, workshops, or 
social media. When assertion of copyright is made, the Contractor shall 
affix the applicable copyright notice of 17 U.S.C. 401 or 402 and 
acknowledgment of Government sponsorship (including contract number) on 
the data when such data are delivered to the Government as well as when 
the data are published or deposited for registration as a published 
work in the U.S. Copyright Office. The Contractor grants to the 
Government, and others acting on its behalf, a nonexclusive, paid-up, 
irrevocable, world-wide license in such copyrighted data to reproduce, 
prepare derivative works, distribute copies to the public, and perform 
publicly and display publicly, by or on behalf of the Government.
    (2) For each scientific or technical work first produced or 
composed under this contract and submitted for publication or similar 
means of dissemination, the contractor shall provide notice to the 
publisher of the Government's license in the copyright that is 
substantially similar to or otherwise references one of the following 
notices below:
    A suitable notice (long version) reflecting the Government's non-
exclusive, paid-up, irrevocable, world-wide license in the copyright.
    Notice: This work was produced by [insert the name of the 
Contractor] under contract No. [insert the contract number] with the 
U.S. Department of Energy. The United States Government retains and the 
publisher, by accepting the work for publication, acknowledges that the 
United States Government retains a non-exclusive, paid-up, irrevocable, 
world-wide license to publish or reproduce the published form of this 
work, or allow others to do so, for United States Government purposes. 
The Department of Energy will provide public access to these results of 
federally sponsored research in accordance with the DOE Public Access 
Plan [insert current link].


(End of notice)
    A suitable notice (short version) reflecting the Government's non-
exclusive, paid-up, irrevocable, world-wide license in the copyright 
follows:
    Notice: This work was produced by [insert the name of the 
Contractor] under Contract No. [insert the contract number] with the 
U.S. Department of Energy. Publisher acknowledges the U.S. Government 
license to provide public access under the DOE Public Access Plan 
[insert current link].
    (3) The title to the copyright of the original of unclassified 
graduate theses and the original of related unclassified scientific 
papers shall vest in the author thereof, subject to the right of DOE to 
retain duplicates of such documents and to use such documents for any 
purpose whatsoever without any claim on the part of the author or the 
contractor for additional compensation.
    (e) Copyrighted works (other than scientific and technical works 
and data produced under a CRADA). The Contractor may obtain permission 
to assert copyright subsisting in technical data and computer software 
first produced by the Contractor in performance of this Contract, when 
the Contractor needs to control distribution to advance the goals of 
the technology transfer mission and where the Contractor can show that 
commercialization would be enhanced by such copyright protection, 
subject to the following:
    (1) Contractor Request to Assert Copyright.
    (i) For data other than scientific and technical works under 
paragraph (d) of this clause and data produced under a CRADA, the 
Contractor shall submit in writing to Patent Counsel its request to 
assert copyright in data first produced in the performance of this 
Contract pursuant to this clause. The right of the Contractor to 
copyright data first produced under a CRADA is as described in the 
individual CRADA. Each request by the Contractor must include:
    (A) The identity of the data (including any computer program) for 
which the Contractor requests permission to assert copyright, as well 
as an abstract which is descriptive of the data and is suitable for 
dissemination purposes;
    (B) The program under which it was funded;
    (C) Whether, to the best knowledge of the Contractor, the data is 
subject to an international treaty or agreement;
    (D) Whether the data is subject to export control; and if so, which 
jurisdiction;
    (E) A statement that the Contractor plans to commercialize the data 
in compliance with the clause of this contract entitled, ``Technology 
Transfer Mission,'' within five (5) years after obtaining permission to 
assert copyright or, on a case-by-case basis, a specified longer period 
where the Contractor can demonstrate that the ability to commercialize 
effectively is dependent upon such longer period; and
    (F) For data other than computer software, a statement explaining 
why the assertion of copyright is necessary to enhance 
commercialization and is consistent with DOE's dissemination 
responsibilities.
    (ii) For data that is developed using other funding sources in 
addition to DOE funding, the permission to assert copyright in 
accordance with this clause must also be obtained by the Contractor 
from all other funding sources prior to the Contractor's request to 
Patent Counsel. The request shall include the Contractor's 
certification or other documentation acceptable to Patent Counsel 
demonstrating such permission has been obtained.
    (iii) Permission for the Contractor to assert copyright in excepted 
categories of data as determined exclusively by DOE will be expressly 
withheld. Such excepted categories include data whose release:
    (A) Would be detrimental to national security, i.e., involve 
classified information or data or sensitive information under section 
148 of the Atomic Energy Act of 1954, as amended, or are subject to 
export control for nonproliferation and other nuclear-related national 
security purposes;
    (B) Would not enhance the appropriate transfer or dissemination and 
commercialization of such data;
    (C) Would have a negative impact on U.S. industrial 
competitiveness;
    (D) Would prevent DOE from meeting its obligations under treaties 
and international agreements; or
    (E) Would be detrimental to one or more of DOE's programs.
    (iv) The Contractor will obtain the advanced written approval of 
the Patent

[[Page 73723]]

Counsel to assert copyright where data are determined to be in the 
following excepted categories:
    (A) Under export control restrictions;
    (B) Developed with Naval Reactors' funding;
    (C) Subject to disposition of data rights under treaties and 
international agreements. Additional excepted categories may be added 
by the Assistant General Counsel for Technology Transfer and 
Intellectual Property. Where data are determined to be under export 
control restriction, the Contractor may obtain permission to assert 
copyright subject to the provisions of this clause for purposes of 
limited commercialization in a manner that complies with export control 
statutes and applicable regulations. In addition, notwithstanding any 
other provision of this contract, all data developed with Naval 
Reactors' funding and those data that are classified fall within 
excepted categories. The rights of the Contractor in data are subject 
to the disposition of data rights in the treaties and international 
agreements identified at DOE's Office of International Affairs 
(International Commitments--IEC).
    If a patent application containing export-controlled information 
(ECI) stems from a Federally funded project, then the cognizant Federal 
Program Manager must approve its submittal without a secrecy order, and 
the NNSA Office of Nonproliferation and Arms Control must be notified 
in advance.
    The following situations apply when patent applications containing 
ECI are intended to be submitted without a secrecy order.
     Any patent application containing controlled technology 
that falls within the scope of the International Traffic in Arms 
Regulations requires advance authorization from the Department of 
State, Directorate of Defense Trade Controls.
     Any patent application containing export-controlled 
technology as captured in Tier 2 as defined in NNSA Policy Letter NAP 
476.1 (or successor version) must receive approval from NNSA's Office 
of Defense Programs.
    (2) Patent Counsel Review and Response to Contractor's Request. The 
Patent Counsel shall use its best efforts to respond in writing within 
60 days of receipt of a complete request by the Contractor to assert 
copyright in technical data and computer software pursuant to this 
clause. Such response shall either give or withhold DOE's permission 
for the Contractor to assert copyright or advise the Contractor that 
DOE needs additional time to respond, and the reasons therefor. If 
Patent Counsel grants permission for the Contractor to assert copyright 
in computer software, the permission automatically extends to 
subsequent minor versions (e.g., minor revisions, patches and bug 
fixes) having the same funding source, same name and substantially same 
functionality as the original computer software, and may be extended to 
subsequent major versions representing significant modifications of the 
program with the approval of Patent Counsel.
    (3) Permission for Contractor to Assert Copyright.
    (i) For computer software, the Contractor shall furnish, or make 
available to the DOE Office of Scientific and Technical Information 
(OSTI) in accordance with OSTI guidelines at the time permission to 
assert copyright is given under paragraph (e)(2) of this clause:
    (A) Announcement information/metadata contained in the Software 
Announcement Notice 241.4;
    (B) the source code and/or executable file for each software 
program; and
    (C) Documentation, if any, which may consist of a user manual, 
sample test cases, or similar information, needed by a technically 
competent user to understand and use the software (whether included on 
the software media itself or provided in a separate file or in paper 
format).
    (ii) The Contractor acknowledges that the DOE designated software 
distribution and control point may provide a technical description of 
the software in an announcement identifying its availability from the 
copyright holder.
    (iii) Unless otherwise directed by the Patent Counsel, for data 
other than computer software to which the Contractor has received 
permission to assert copyright under paragraph (e)(2) of this clause, 
the Contractor shall within sixty (60) days of obtaining such 
permission furnish, or make available to OSTI in accordance with OSTI 
guidelines, a copy of such data as well as an abstract of the data 
suitable for dissemination purposes. The Contractor acknowledges that 
OSTI may provide an abstract of the data in an announcement to DOE, its 
contractors and to the public identifying its availability from the 
copyright holder.
    (iv) Once the Contractor is given permission to assert copyright in 
data, the Contractor may begin to commercialize the copyrighted data by 
making copyrighted data available for licensing to third parties and by 
offering other types of distribution to third parties. During the 
period in which commercialization activities pertaining to the 
copyrighted data are continuing, or for a specified period of time 
prescribed by Patent Counsel in paragraph (e)(2) of this clause, the 
Contractor grants to the Government, and others acting on its behalf, a 
paid-up, nonexclusive, irrevocable worldwide license in such 
copyrighted data to reproduce, prepare derivative works and perform 
publicly and display publicly, by or on behalf of the Government. For 
all previously approved and current copyrighted data that the 
Contractor is actively commercializing, the Contractor may continue to 
commercialize in accordance with this paragraph.
    (v) When the Contractor abandons commercialization activities 
pertaining to the data to which the Contractor has been given 
permission to assert copyright or at the end of the specified period as 
prescribed by Patent Counsel, the Contractor grants to the Government, 
and others acting on its behalf, a paid-up, nonexclusive, irrevocable 
worldwide license in such copyrighted data to reproduce, distribute 
copies to the public, prepare derivative works, perform publicly and 
display publicly, and to permit others to do so.
    (vi) At any time the Contractor abandons commercialization 
activities for copyrighted data, the Contractor shall advise OSTI and 
Patent Counsel and, upon request, assign the copyright to the 
Government so that the Government can distribute the copyrighted data 
to the public. When the Contractor abandons commercialization 
activities, the Contractor will provide to OSTI the latest version of 
the copyrighted data (for example, source code, object code, minimal 
support documentation, drawings or updated manuals.) In addition, the 
Contractor will provide annually to Patent Counsel, if requested, a 
list of all copyrighted data that the Contractor has abandoned 
commercial licensing activity during that year.
    (vii) Whenever the Contractor asserts copyright in data pursuant to 
this paragraph (e), the Contractor shall affix the applicable copyright 
notice of 17 U.S.C. 401 or 402 on the copyrighted data and also an 
acknowledgment of the Government sponsorship and license rights of 
paragraphs (e)(3)(iv) and (v) of this clause. Such action shall be 
taken when the data are delivered to the Government, licensed or 
deposited for registration as a published work in the U.S. Copyright 
Office, or when submitted for publication. The acknowledgment of 
Government sponsorship and license rights shall be substantially 
similar to the following:

[[Page 73724]]

    Notice: These data were produced by (insert name of Contractor) 
under Contract No.___ with the Department of Energy. During the period 
of commercialization or such other time period specified by the 
Department of Energy, the Government is granted for itself and others 
acting on its behalf a nonexclusive, paid-up, irrevocable worldwide 
license in this data to reproduce, prepare derivative works, and 
perform publicly and display publicly, by or on behalf of the 
Government. Subsequent to that period the Government is granted for 
itself and others acting on its behalf a nonexclusive, paid-up, 
irrevocable worldwide license in this data to reproduce, prepare 
derivative works, distribute copies to the public, perform publicly and 
display publicly, and to permit others to do so. The specific term of 
the license can be identified by inquiry made to Contractor or DOE. 
Neither the United States nor the United States Department of Energy, 
nor any of their employees, makes any warranty, express or implied, or 
assumes any legal liability or responsibility for the accuracy, 
completeness, or usefulness of any data, apparatus, product, or process 
disclosed, or represents that its use would not infringe privately 
owned rights.


(End of notice)
    (viii) With respect to any data to which the Contractor has 
received permission to assert copyright, the DOE has the right, during 
the period that Contractor is commercializing the data as provided for 
in paragraph (e)(3)(iv) of this clause, to request the Contractor to 
grant a nonexclusive, partially exclusive or exclusive license in any 
field of use to a responsible applicant(s) upon terms that are 
reasonable under the circumstances, and if the Contractor refuses such 
request, to grant such license itself, if the DOE determines that the 
Contractor has not made a satisfactory demonstration that either it or 
its licensee(s) is actively pursuing commercialization of the data as 
set forth in subparagraph (e)(1)(i) of this clause. Before licensing 
under this subparagraph, DOE shall furnish the Contractor a written 
request for the Contractor to grant the stated license, and the 
Contractor shall be allowed thirty (30) days (or such longer period as 
may be authorized by the contracting officer for good cause shown in 
writing by the Contractor) after such notice to show cause why the 
license should not be granted. The Contractor shall have the right to 
appeal the decision of the DOE to grant the stated license to the 
Invention Licensing Appeal Board as set forth in 10 CFR 781.65--
``Appeals.''
    (ix) No costs shall be allowable for maintenance of copyrighted 
data, primarily for the benefit of the Contractor and/or a licensee 
which exceeds DOE Program needs, except as expressly provided in 
writing by the contracting officer. The Contractor may use its net 
royalty income to effect such maintenance costs.
    (4) The following notice may be included in computer software prior 
to any publication or release and prior to the Contractor's obtaining 
permission from the Department of Energy to assert copyright in the 
computer software pursuant to paragraph (c)(3) of this clause.
    Notice: This computer software was prepared by [insert the 
Contractor's name and the individual author], hereinafter the 
Contractor, under Contract [insert the Contract Number] with the 
Department of Energy (DOE). All rights in the computer software are 
reserved by DOE on behalf of the United States Government and the 
Contractor as provided in the Contract. You are authorized to use this 
computer software for Governmental purposes but it is not to be 
released or distributed to the public. NEITHER THE GOVERNMENT NOR THE 
CONTRACTOR MAKES ANY WARRANTY, EXPRESS OR IMPLIED, OR ASSUMES ANY 
LIABILITY FOR THE USE OF THIS SOFTWARE. This notice including this 
sentence must appear on any copies of this computer software.


(End of notice)
    (5) A similar notice can be used for data, other than computer 
software, prior to any publication or release and prior to Contractor's 
obtaining permission of DOE Patent Counsel to assert copyright.
    (f) Open software source. The Contractor may release computer 
software first produced by the Contractor in the performance of this 
contract under an open source software license. Such software shall 
hereinafter be referred to as open source software or OSS, subject to 
the following:
    (1) DOE Program notice for copyright assertion for OSS.
    (i) The Contractor shall provide written notice (including relevant 
data such as, for example, the software disclosure form) to each DOE 
Program or Programs that have provided a substantial portion of the 
funding (funding source(s)) to develop the software that the Contractor 
intends to release as OSS unless the funding Program(s) has previously 
provided blanket approval for all software developed with funding from 
that Program or a specific DOE project stipulates the software to be 
released as OSS. If Program has neither consented nor objected to the 
assertion of copyright within two weeks of such written notification, 
the Contractor may assert copyright in the software. If notification of 
a funding DOE Program(s) is not practicable or DOE Program(s) has 
objected, the Contractor shall consult with Patent Counsel, which may 
provide approval. For software developed under a CRADA, Strategic 
Partnership Projects (SPP), User Facility Agreement, or Agreement for 
Commercializing Technology (ACT), authorization from the partner of 
such agreement shall be additionally obtained for OSS release unless 
such agreement has a provision providing for such copyright assertion.
    (ii) If the software is developed with funding from a federal 
government agency or agencies (funding source(s)) other than DOE, then 
authorization from all the funding agency(ies) shall be obtained for 
OSS release, if practicable. Such federal government agency(ies) may 
provide blanket approval for all software developed with funding from 
that agency(ies). However, OSS release of any one of such software 
shall be subject to approval by all other funding sources for the 
software, if any. If approval from such federal government agency(ies) 
is not practicable, the Patent Counsel may provide approval instead.
    (2) Assert copyright in the OSS. Once the Contractor has met the 
program approval requirements set forth in paragraph (f)(1) of this 
clause, copyright in the software to be distributed as OSS may be 
asserted by the Contractor, or, for OSS developed under a CRADA, User 
Facility Agreement, or SPP Agreement, either by the Contractor, CRADA 
Participant, User Facility User, or SPP Sponsor, as applicable, which 
precludes marking such OSS as protectable from public distribution.
    (3) Submit Software Announcement Notice 241.4 to OSTI. The 
Contractor must submit Software Announcement Notice (AN) 241.4 (or the 
current notice as may be required by DOE) to OSTI . In the AN 241.4, 
the Contractor shall provide the unique URL (i.e., a persistent 
identifier) from which the software can be obtained so that OSTI can 
announce the availability of the OSS and the public has access via the 
URL.
    (4) Maintain OSS record. The Contractor must maintain a record of 
all software distributed as OSS. Upon request of the Patent Counsel, 
the

[[Page 73725]]

Contractor shall provide the necessary information regarding any or all 
OSS.
    (5) Provide public access to the OSS. The Contractor shall ensure 
that the OSS is publicly accessible as open source via the Contractor's 
website, Open Source Bulletin Boards operated by third parties, DOE, or 
other standard industry methods.
    (6) Select an OSS license. Each OSS will be distributed pursuant to 
an OSS license. The Contractor may choose among industry standard OSS 
licenses or create its own set of Contractor standard licenses. To 
assist the Contractor, the Assistant General Counsel for Technology 
Transfer and Intellectual Property, may periodically issue guidance on 
OSS licenses. Each Contractor-created OSS license, must contain, at a 
minimum, the following provisions--
    (i) A disclaimer or equivalent that disclaims the Government's and 
Contractor's liability for licensees' and third parties' use of the 
software; and
    (ii) A grant of permission for licensee to distribute OSS 
containing the licensee's derivative works. This provision may allow 
the licensee and third parties to commercialize their derivative works 
or might request that the licensee's derivative works be forwarded to 
the Contractor for incorporation into future OSS versions.
    (7) Relationship to other required clauses in the contract. OSS 
distributed in accordance with this section shall not be subject to the 
requirements relating to indemnification of the Contractor or Federal 
Government, U.S. Competitiveness and U.S. Preference, as set forth in 
paragraphs (f) and (g) of the clause within this contract entitled 
Technology Transfer Mission (48 CFR 970.5227-3). The requirement for 
the Contractor to request permission to assert copyright for the 
purpose of engaging in licensing software for royalties, as set forth 
elsewhere in this clause, is not modified by this section.
    (8) Government license. For all OSS, the Contractor grants to the 
Government, and others acting on its behalf, a paid-up, nonexclusive, 
irrevocable worldwide license in data copyrighted in accordance with 
paragraph (f)(2) of this clause to reproduce, distribute copies to the 
public, prepare derivative works, perform publicly and display 
publicly, and to permit others to do so.
    (9) Contractor abandons OSS. If the Contractor ceases to make OSS 
publicly available, then the Contractor shall submit to OSTI the object 
code and source code of the latest version of the OSS developed by the 
Contractor in addition to a revised Announcement Notice 241.4 (which 
includes an abstract) and the Contractor shall direct any inquiries 
from third parties seeking to obtain the original OSS to OSTI.
    (g) Subcontracting. (1) Unless otherwise directed by the Patent 
Counsel, the Contractor agrees to use in subcontracts in which 
technical data or computer software is expected to be produced or in 
subcontracts for supplies that contain a requirement for production or 
delivery of data in accordance with the DOE policy and procedures, the 
clause entitled, ``Rights in Data-General'' at 48 CFR 52.227-14 
modified in accordance with 48 CFR 927.409 including alternates as 
appropriate with the prior approval of DOE Patent Counsel. The 
Contractor shall not acquire rights in a subcontractor's limited rights 
data or restricted computer software, except through the use of 
Alternate II or III, respectively, without the prior approval of the 
Patent Counsel. The clause at 48 CFR 52.227-16, Additional Data 
Requirements, shall be included in subcontracts in accordance with 48 
CFR 927.409(d). In subcontracts, including subcontracts for related 
support services, involving the design or operation of any plants or 
facilities or specially designed equipment for such plants or 
facilities that are managed or operated under its contract with DOE, 
the Contractor shall use the ``Rights in Data-Facilities'' clause at 48 
CFR 970.5227-1.
    (2) It is the responsibility of the Contractor to obtain from its 
subcontractors technical data and computer software and rights therein, 
on behalf of the Government, necessary to fulfill the Contractor's 
obligations to the Government with respect to such data. In the event 
of refusal by a subcontractor to accept a clause affording the 
Government such rights, the Contractor shall:
    (i) Promptly submit written notice to the contracting officer 
setting forth reasons or the subcontractor's refusal and other 
pertinent information which may expedite disposition of the matter, and
    (ii) Not proceed with the subcontract without the written 
authorization of the contracting officer.
    (3) Neither the Contractor nor higher-tier subcontractors shall use 
their power to award subcontracts as economic leverage to acquire 
rights in a subcontractor's limited rights data and restricted computer 
software for their private use.
    (h) Rights in Limited Rights Data. Except as may be otherwise 
specified in this Contract as data which are not subject to this 
paragraph, the Contractor agrees to and does hereby grant to the 
Government an irrevocable nonexclusive, paid-up license by or for the 
Government, in any limited rights data of the Contractor specifically 
used in the performance of this Contract, provided, however, that to 
the extent that any limited rights data when furnished or delivered is 
specifically identified by the Contractor at the time of initial 
delivery to the Government or a representative of the Government, such 
data shall not be used within or outside the Government except as 
provided in the ``Limited Rights Notice'' set forth below. All such 
limited rights data shall be marked with the following ``Limited Rights 
Notice:''
Limited Rights Notice
    These data contain ``limited rights data,'' furnished under 
Contract No. ___ with the United States Department of Energy which may 
be duplicated and used by the Government with the express limitations 
that the ``limited rights data'' may not be disclosed outside the 
Government or be used for purposes of manufacture without prior 
permission of the Contractor, except that further disclosure or use may 
be made solely for the following purposes:
    (a) Use (except for manufacture) by support services contractors 
within the scope of their contracts;
    (b) This ``limited rights data'' may be disclosed for evaluation 
purposes under the restriction that the ``limited rights data'' be 
retained in confidence and not be further disclosed;
    (c) This ``limited rights data'' may be disclosed to other 
contractors participating in the Government's program of which this 
Contract is a part for information or use (except for manufacture) in 
connection with the work performed under their contracts and under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed;
    (d) This ``limited rights data'' may be used by the Government or 
others on its behalf for emergency repair or overhaul work under the 
restriction that the ``limited rights data'' be retained in confidence 
and not be further disclosed; and
    (e) Release to a foreign government, or instrumentality thereof, as 
the interests of the United States Government may require, for 
information or evaluation, or for emergency repair or overhaul work by 
such government.
    This Notice shall be marked on any reproduction of this data in 
whole or in part.


(End of Notice)

[[Page 73726]]

    (i) Rights in restricted computer software. (1) Except as may be 
otherwise specified in this Contract as data which are not subject to 
this paragraph, the Contractor agrees to and does hereby grant to the 
Government an irrevocable, nonexclusive, paid-up, license by or for the 
Government, in any restricted computer software of the Contractor 
specifically used in the performance of this Contract; provided, 
however, that to the extent that any restricted computer software when 
furnished or delivered is specifically identified by the Contractor at 
the time of initial delivery to the Government or a representative of 
the Government, such data shall not be used within or outside the 
Government except as provided in the ``Restricted Rights Notice'' set 
forth below. All such restricted computer software shall be marked with 
the following ``Restricted Rights Notice:''
Restricted Rights Notice--Long Form
    (a) This computer software is submitted with restricted rights 
under Department of Energy Contract No. ___. It may not be used, 
reproduced, or disclosed by the Government except as provided in 
paragraph (b) of this notice.
    (b) This computer software may be:
    (1) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (2) Used, copied for use, in a backup or replacement computer if 
any computer for which it was acquired is inoperative or is replaced;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that only the portions of the derivative software consisting 
of the restricted computer software are to be made subject to the same 
restricted rights; and
    (5) Disclosed to and reproduced for use by contractors under a 
service contract (of the type defined in 48 CFR 37.101) in accordance 
with subparagraphs (b)(1) through (4) of this Notice, provided the 
Government makes such disclosure or reproduction subject to these 
restricted rights.
    (c) Notwithstanding the foregoing, if this computer software has 
been published under copyright, it is licensed to the Government, 
without disclosure prohibitions, with the rights set forth in the 
restricted rights notice above.
    (d) This Notice shall be marked on any reproduction of this 
computer software, in whole or in part.


(End of Notice)
    (2) Where it is impractical to include the Restricted Rights Notice 
on restricted computer software, the following short-form Notice may be 
used in lieu thereof:
Restricted Rights Notice--Short Form
    Use, reproduction, or disclosure is subject to restrictions set 
forth in the Long Form Notice of DOE Contract No. ___ with (name of 
Contractor).


(End of Notice)
    (3) If the software is embedded, or if it is commercially 
impractical to mark it with human readable text, then the symbol R and 
the clause date (mo/yr) in brackets or a box, a [R-mo/yr], may be used. 
This will be read to mean restricted computer software, subject to the 
rights of the Government as described in the Long Form Notice, in 
effect as of the date indicated next to the symbol. The symbol shall 
not be used to mark human readable material. In the event this Contract 
contains any variation to the rights in the Long Form Notice, then the 
contract number must also be cited.
    (4) If restricted computer software is delivered with the copyright 
notice of 17 U.S.C. 401, the software will be presumed to be published 
copyrighted computer software licensed to the Government without 
disclosure prohibitions and with unlimited rights, unless the 
Contractor includes the following statement with such copyright notice 
``Unpublished-rights reserved under the Copyright Laws of the United 
States.''
    (j) Relationship to patents. Nothing contained in this clause 
creates or is intended to imply a license to the Government in any 
patent or is intended to be construed as affecting the scope of any 
licenses or other rights otherwise granted to the Government under any 
patent.


(End of clause)
    Alternate I (DEC 2000). As prescribed in 970.2704-3(b), where 
access to Category C-24 restricted data is contemplated in the 
performance of a contract the contracting officer shall insert the 
phrase ``and except Restricted Data in category C-24, 10 CFR part 725, 
in which DOE has reserved the right to receive reasonable compensation 
for the use of its inventions and discoveries, including related data 
and technology'' after ``laser isotope separation'' and before the 
comma in paragraph (b)(2)(ii) of the clause at 970.5227-2, Rights in 
Data--Technology Transfer, as appropriate.


(End of clause)
    Alternate II (DATE XXXX). As prescribed in 970.2704-3(b), where 
government facilities are being constructed, modified, or in 
decontamination and decommissioning, and it is anticipated that further 
solicitation may be required to complete the project, insert paragraph 
(f) in the Limited Rights Notice of the basic clause:
    (f) This ``limited rights data'' may be disclosed in future 
solicitations for the continuation or completion of the work 
contemplated under this contract under the restriction that the 
``limited rights data'' be retained in confidence and not be further 
disclosed.


(End of clause)
0
246. Section 970.5227-3 is revised to read as follows:


Sec.  970.5227-3  Technology transfer mission.

    As prescribed in 970.2770-4(a), insert the following clause:
Technology Transfer Mission (XXX 20XX)
    This clause has as its purpose implementation of the National 
Competitiveness Technology Transfer Act of 1989 (sections 3131, 3132, 
3133, and 3157 of Public Law 101-189 and as amended by Public Law 103-
160, sections 3134 and 3160). The Contractor shall conduct technology 
transfer activities with a purpose of providing benefit from Federal 
research to U.S. industrial competitiveness.
    (a) Authority. (1) In order to ensure the full use of the results 
of research and development efforts of, and the capabilities of, the 
Laboratory, technology transfer, including Cooperative Research and 
Development Agreements (CRADAs), is established as a mission of the 
Laboratory consistent with the policy, principles and purposes of 
sections 11(a)(1) and 12(g) of the Stevenson-Wydler Technology 
Innovation Act of 1980, as amended (15 U.S.C. 3710a); section 3132(b) 
of Public Law 101-189, sections 3134 and 3160 of Public Law 103-160, 
and of chapter 38 of the Patent Laws (35 U.S.C. 200 et seq.); section 
152 of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2182); 
section 9 of the Federal Nonnuclear Energy Research and Development Act 
of 1974 (42 U.S.C. 5908); section 102 of the Laboratory Modernization 
and Technology Transfer Act (Pub. L. 115-246) and Executive Order 12591 
of April 10, 1987.
    (2) In pursuing the technology transfer mission, the Contractor is 
authorized to conduct activities including but not limited to: 
identifying and protecting Intellectual Property made, created or 
acquired at or by the Laboratory; negotiating licensing agreements and 
assignments for Intellectual Property

[[Page 73727]]

made, created or acquired at or by the Laboratory that the Contractor 
controls or owns; bailments; negotiating all aspects of and entering 
into CRADAs; providing technical consulting and personnel exchanges; 
conducting science education activities and reimbursable Strategic 
Partnership Projects (SPP); providing information exchanges; and making 
available laboratory or weapon production user facilities. It is fully 
expected that the Contractor shall use all of the mechanisms available 
to it to accomplish this technology transfer mission, including, but 
not limited to, CRADAs, user facilities, SPP, science education 
activities, consulting, personnel exchanges, assignments, and licensing 
in accordance with this clause.
    (3) Trademarks and service marks. The Contractor, with notification 
to DOE Patent Counsel, is authorized to protect goods/services 
resulting from work at the Laboratory through Trademark and Service 
Mark protection. The Laboratory name and associated logos are owned by 
the Department of Energy unless an exception is allowed by the DOE 
Patent Counsel, and shall be protected by DOE Patent Counsel. In 
furtherance of the technology transfer mission, should the Contractor 
want to assert trademark or service mark protection for any word, 
phrase, symbol, design, or combination thereof that includes or is 
associated with the Laboratory name, the Contractor must first notify 
and obtain permission from the Department of Energy Patent Counsel. All 
marks, whether or not registered with the United States Patent and 
Trademark Office, are to be included in the ``Intellectual property 
rights'' paragraph (i) of this clause, regarding transfer to successor 
contractor, DOE reserves the right to require the Contractor to cancel 
registration of the mark or cease use of the mark.
    (b) Definitions.
    Agreements for Commercializing Technology (ACT) means any agreement 
pursuant to the ACT clause, if included in this M&O contract, entered 
into between the Contractor as operator of the Laboratory and a third 
party to conduct sponsored research at the M&O Contractor's risk, only 
when such work does not interfere with DOE-funded activities conducted 
as authorized by other parts of this M&O contract and on a fully 
reimbursable basis.
    Assignment means any agreement by which the Contractor transfers 
ownership of Laboratory Intellectual Property, subject to the 
Government's retained rights.
    Bailment means any agreement in which the Contractor permits the 
commercial or non-commercial transfer of custody, access or use of 
Laboratory Biological Materials or Laboratory Tangible Research Product 
for a specified purpose of technology transfer or research and 
development, including without limitation evaluation, and without 
transferring ownership to the bailee.
    Contractor's Laboratory Director means the individual who has 
supervision over all or substantially all of the Contractor's 
operations at the Laboratory.
    Cooperative Research and Development Agreement (CRADA) means any 
agreement entered into between the Contractor as operator of the 
Laboratory, and one or more parties including at least one non-Federal 
party under which the Government, through its laboratory, provides 
personnel, services, facilities, equipment, intellectual property, or 
other resources with or without reimbursement (but not funds to non-
Federal parties) and the non-Federal parties provide funds, personnel, 
services, facilities, equipment, intellectual property, or other 
resources toward the conduct of specified research or development 
efforts which are consistent with the missions of the Laboratory; 
except that such term does not include a procurement contract, grant, 
or cooperative agreement as those terms are used in sections 6303, 
6304, and 6305 of title 31 of the United States Code.
    Department of Energy (DOE), as used in this clause, includes the 
National Nuclear Security Administration (NNSA), unless otherwise 
identified or indicated.
    Intellectual property means data, inventions, patents, patent 
applications, trademarks, service marks, copyrights, mask works, 
protected CRADA information, and other forms of comparable property 
rights protected by Federal Law and other foreign counterparts.
    Joint Work Statement (JWS) means a proposal for a CRADA prepared by 
the Contractor, signed by the Contractor's Laboratory Director or 
designee which describes the project.
    Laboratory Biological Materials means biological materials capable 
of replication or reproduction, such as plasmids, deoxyribonucleic acid 
molecules, ribonucleic acid molecules, living organisms of any sort and 
their progeny, including viruses, prokaryote and eukaryote cell lines, 
transgenic plants and animals, and any derivatives or modifications 
thereof or products produced through their use or associated biological 
products, made under this contract by Laboratory employees or through 
the use of Laboratory research facilities.
    Laboratory Tangible Research Product means tangible material 
results of research which
    (1) Are provided to permit replication, reproduction, evaluation or 
confirmation of the research effort, or to evaluate its potential 
commercial utility;
    (2) Are not materials generally commercially available; and
    (3) Were made under this contract by Laboratory employees or 
through the use of Laboratory research facilities.
    Master Scope of Work (MSW) means a detailed description of a 
routine scope of work containing information sufficient to:
    (1) Ensure that the Contractor and the cognizant Contracting 
Officer (CO) have a common understanding of the work to be performed;
    (2) Allow DOE to make all reviews, approvals, determinations, and 
certifications required pursuant to relevant DOE Orders and policy; and
    (3) Enable the CO and the Contractor to agree that the work is 
suitable for special processing as the subject of Strategic Partnership 
Project (SPP) agreements or Cooperative Research and Development 
Agreements (CRADAs) for non-Federal sponsors.
    Patent Counsel means the DOE or NNSA Patent Counsel assisting the 
contracting activity. The Patent Counsel is the first and primary point 
of contact for activities described in this clause.
    Strategic Partnership Projects (SPP) means any agreement pursuant 
to the SPP clause, if included in this M&O contract, entered into 
between the Contractor as operator of the Laboratory and a non-Federal 
party under which the Government, through its laboratory, provides 
personnel, services, facilities, equipment, intellectual property, only 
when such work does not interfere with DOE-funded activities conducted 
as authorized by other parts of this M&O contract and on a fully 
reimbursable basis.
    (c) Allowable costs. (1) The Contractor shall establish and carry 
out its technology transfer efforts through appropriate organizational 
elements consistent with the requirements for an Office of Research and 
Technology Applications (ORTA) pursuant to paragraphs (b) and (c) of 
section 11 of the Stevenson-Wydler Technology Innovation Act of 1980, 
as amended (15 U.S.C. 3710). The costs associated with the conduct of 
technology transfer through the ORTA including activities associated 
with obtaining, maintaining,

[[Page 73728]]

licensing, and assigning Intellectual Property rights, increasing the 
potential for the transfer of technology, widespread notice of 
technology transfer opportunities, and early stage and precommercial 
technology demonstration to remove barriers that limit private sector 
interest and demonstrate potential commercial applications of any 
research and technologies arising from Laboratory activities, shall be 
deemed allowable provided that such costs meet the other requirements 
of the allowable cost provisions of this Contract.
    (2) The Contractor's participation in litigation to enforce or 
defend Intellectual Property claims incurred in its technology transfer 
efforts shall be as provided in the clause entitled ``Insurance--
Litigation and Claims'' of this contract.
    (d) Conflicts of Interest--Technology Transfer. The Contractor 
shall have implementing procedures that seek to avoid employee and 
organizational conflicts of interest, or the appearance of conflicts of 
interest, in the conduct of its technology transfer activities. These 
procedures shall apply to all persons participating in Laboratory 
research or related technology transfer activities. Such implementing 
procedures shall be provided to the contracting officer for review and 
approval within sixty (60) days after execution of this contract. The 
contracting officer shall have thirty (30) days thereafter to approve 
or require specific changes to such procedures. Such implementing 
procedures shall include procedures to:
    (1) Inform employees of and require conformance with standards of 
conduct and integrity in connection with research involving non-federal 
sponsors in accordance with the provisions of paragraph (n)(5) of this 
clause;
    (2) Review and approve employee activities so as to avoid conflicts 
of interest arising from commercial utilization activities relating to 
Contractor-developed Intellectual Property;
    (3) Conduct work performed using royalties so as to avoid 
interference with or adverse effects on ongoing DOE projects and 
programs;
    (4) Conduct activities relating to commercial utilization of 
Contractor-developed Intellectual Property so as to avoid interference 
with or adverse effects on user facility or SPP activities of the 
Contractor;
    (5) Conduct DOE-funded projects and programs so as to avoid the 
appearance of conflicts of interest or actual conflicts of interest 
with non-Government funded work;
    (6) Notify the contracting officer with respect to any new work to 
be performed or proposed to be performed under the Contract for DOE or 
other Federal agencies where the new work or proposal involves 
Intellectual Property in which the Contractor has obtained or intends 
to request or elect title;
    (7) Except as provided elsewhere in this Contract, obtain the 
approval of the contracting officer for any licensing of or assignment 
of title to Intellectual Property rights by the Contractor to any 
business or corporate affiliate of the Contractor;
    (8) Obtain the approval of the contracting officer prior to any 
assignment, exclusive licensing, or option for exclusive licensing, of 
Intellectual Property to any individual who is a current or has been a 
Laboratory employee within the previous two years or to the company in 
which the individual is a principal and the Contractor's request should 
include notice of any SPP, CRADA and/or ACT associated with the 
Intellectual Property;
    (9) Notify non-Federal sponsors of SPP activities of any relevant 
Intellectual Property interest of the Contractor prior to execution of 
SPP; and
    (10) Notify the Contracting Officer and DOE funding program prior 
to evaluating a proposal from a third party for DOE, when:
    (i) The evaluator is an inventor of a Contractor invention that is 
the subject matter of the proposal; or
    (ii) The evaluator is a principal or has financial interest in the 
third party; or
    (iii) The third party is a licensee of the Contractor.
    (e) Fairness of Opportunity. In conducting its technology transfer 
activities, the Contractor shall prepare procedures and take all 
reasonable measures to ensure widespread notice of availability of 
technologies suited for transfer and opportunities for exclusive 
licensing and joint research arrangements. The requirement to widely 
disseminate the availability of technology transfer opportunities does 
not apply to a specific application originated outside of the 
Laboratory and by entities other than the Contractor.
    (f) U.S. Industrial Competitiveness for licensing and assignments 
of intellectual property. (1) In the interest of enhancing U.S. 
Industrial Competitiveness, the Contractor shall, in its licensing and 
assignments of Intellectual Property, give preference in such a manner 
as to enhance the accrual of economic and technological benefits to the 
U.S. domestic economy. The Contractor shall consider the following 
factors in all of its licensing and assignment decisions involving 
Laboratory intellectual property where the Laboratory obtains rights 
during the course of the Contractor's operation of the Laboratory under 
this contract:
    (i) Whether any resulting design and development will be performed 
in the United States and whether resulting products, embodying parts, 
including components thereof, will be substantially manufactured in the 
United States; or
    (ii)(A) Whether the proposed licensee or assignee has a business 
unit located in the United States and whether significant economic and 
technical benefits will flow to the United States as a result of the 
license or assignment agreement; and
    (B) In licensing or assigning any entity subject to the control of 
a foreign company or government, whether such foreign government 
permits United States agencies, organizations or other persons to enter 
into cooperative research and development agreements and licensing 
agreements and has policies to protect United States Intellectual 
Property rights.
    (C) If the proposed licensee, assignee, or parent of either type of 
entity is subject to the control of a foreign company or government, 
the Contractor, with the assistance of the Contracting Officer, in 
considering the factors set forth in paragraph (f)(1)(ii)(B) of this 
clause, may rely upon the following information--
    (1) U.S. Trade Representative Inventory of Foreign Trade Barriers;
    (2) U.S. Trade Representative Special 301 Report; and
    (3) Such other relevant information available to the Contracting 
Officer; and
    (D)(1) The Contractor should review the U.S. Trade Representative 
website at: https://www.ustr.gov for the most current versions of these 
reports and other relevant information. The Contractor is encouraged to 
utilize other available resources, as necessary, to allow for a 
complete and informed decision.
    (2) If the Contractor determines that neither of the conditions in 
paragraph (f)(1)(i) or (ii) of this clause are likely to be fulfilled, 
the Contractor, prior to entering into such an agreement, must obtain 
the approval of the contracting officer. The contracting officer shall 
act on any such requests for approval within thirty (30) days.
    (3) The Contractor agrees to be bound by the provisions of 35 
U.S.C. 204 (Preference for United States industry).
    (4) The Contractor agrees to be bound by paragraph (t) U.S. 
Competitiveness in its Patent Rights provision (e.g., 48 CFR

[[Page 73729]]

970.5227-10 or 970.5227-12 as may be modified) as applicable.
    (g) Indemnity--Product Liability. In entering into written 
technology transfer agreements, including but not limited to, research 
and development agreements, licenses, assignments and CRADAs, the 
Contractor agrees to include in such agreements a requirement that the 
U.S. Government and the Contractor, except for any negligent acts or 
omissions of the Contractor, be indemnified for all damages, costs, and 
expenses, including attorneys' fees, arising from personal injury or 
property damage occurring as a result of the making, using or selling 
of a product, process or service by or on behalf of the Participant, 
its assignees or licensees which was derived from the work performed 
under the agreement. Except for CRADA and SPP where the guidance is 
already provided elsewhere, the Contractor shall identify and obtain 
the approval of the contracting officer for any proposed exceptions to 
this requirement such as where State or local law expressly prohibit 
the Participant from providing indemnification or where the research 
results will be placed in the public domain.
    (h) Disposition of Income. (1) Royalties or other income earned or 
retained by the Contractor as a result of performance of authorized 
technology transfer activities herein shall be used by the Contractor 
for scientific research, development, technology transfer, and 
education at the Laboratory, consistent with the research and 
development mission and objectives of the Laboratory and subject to 
section 12(b)(5) of the Stevenson-Wydler Technology Innovation Act of 
1980, as amended (15 U.S.C. 3710a(b)(5)) and chapter 38 of the Patent 
Laws (35 U.S.C. 200 et seq.) as amended through the effective date of 
this contract award or modification. If the net amounts of such 
royalties and income received from patent licensing after payment of 
patenting costs, licensing costs, payments to inventors and other 
expenses incidental to the administration of Subject Inventions during 
any fiscal year exceed 5 percent of the Laboratory's budget for that 
fiscal year, 15 percent of such excess amounts shall be paid to the 
Treasury of the United States, and the remaining amount of such excess 
shall be used by the Contractor for the purposes as described above in 
this paragraph. Any inventions arising out of such scientific research 
and development activities shall be deemed to be Subject Inventions 
under the Contract.
    (2) The Contractor shall include as a part of its annual Laboratory 
Institutional Plan or other such annual document a plan setting out 
those uses to which royalties and other income received as a result of 
performance of authorized technology transfer activities herein will be 
applied at the Laboratory, and at the end of the year, provide a 
separate accounting for how the funds were actually used. Under no 
circumstances shall these royalties and income be used for any purpose 
inconsistent with DOE mission direction.
    (3) The Contractor shall establish subject to the approval of the 
contracting officer a policy for making awards or sharing of royalties 
with Contractor employees, other coinventors and coauthors, including 
Federal employee coinventors when deemed appropriate by the contracting 
officer. The Contractor shall notify the contracting officer of any 
changes to that policy, and such changes, shall be subject to the 
approval of the contracting officer.
    (i) Transfer to successor contractor. In the event of termination 
or upon the expiration of this Contract, any unexpended balance of 
income received for use at the Laboratory shall be transferred, at the 
contracting officer's request, to a successor contractor, or in the 
absence of a successor contractor, to such other entity as designated 
by the contracting officer. The Contractor shall transfer title, as one 
or several packages if necessary, to the extent the Contractor retains 
title, in all patents and patent applications, licenses, accounts 
containing royalty revenues from such license agreements, including 
equity positions in third party entities, and other Intellectual 
Property rights which arose at the Laboratory, to the successor 
contractor or to the Government as directed by the contracting officer.
    (j) Technology transfer affecting the national security. (1) The 
Contractor shall notify and obtain the approval of the contracting 
officer, prior to entering into any technology transfer arrangement, 
when such technology or any part of such technology is classified or 
sensitive under section 148 of the Atomic Energy Act (42 U.S.C. 2168), 
as amended. Such notification shall include sufficient information to 
enable DOE to determine the extent that commercialization of such 
technology would enhance or diminish security interests of the United 
States, or diminish communications within DOE's nuclear weapon 
production complex. DOE shall use its best efforts to complete its 
determination within sixty (60) days of the Contractor's notification, 
and provision of any supporting information, and DOE shall promptly 
notify the Contractor as to whether the technology is transferable.
    (2) The Contractor shall include in all of its technology transfer 
agreements with third parties, including, but not limited to, CRADAs, 
licensing agreements and assignments, notice to such third parties that 
the export of goods and/or Technical Data from the United States may 
require some form of export control license or other authority from the 
U.S. Government and that failure to obtain such export control license 
may result in criminal liability under U.S. laws.
    (3) For other than fundamental research as defined in National 
Security Decision Directive 189, the Contractor is responsible to 
conduct internal export control reviews and assure that technology is 
transferred in accordance with applicable law.
    (k) Records. The Contractor shall maintain records of its 
technology transfer activities in a manner and to the extent 
satisfactory to the DOE and specifically including, but not limited to, 
the licensing agreements, assignments and the records required to 
implement the requirements of paragraphs (e), (f), and (h) of this 
clause and shall provide reports to the contracting officer to enable 
DOE to maintain the reporting requirements of section 12(c)(6) of the 
Stevenson-Wydler Technology Innovation Act of 1980, as amended (15 
U.S.C. 3710a(c)(6)). Such reports shall be made annually in a format to 
be agreed upon between the Contractor and DOE and in such a format 
which will serve to adequately inform DOE of the Contractor's 
technology transfer activities while protecting any data not subject to 
disclosure under the Rights in Technical Data clause and paragraph (n) 
of this clause. Such records shall be made available in accordance with 
the clauses of this Contract pertaining to inspection, audit and 
examination of records.
    (l) Reports to Congress. To facilitate DOE's reporting to Congress, 
the Contractor is required to submit annually to DOE a technology 
transfer plan for conducting its technology transfer function for the 
upcoming year, including plans for securing Intellectual Property 
rights in Laboratory innovations with commercial promise and plans for 
managing such innovations so as to benefit the competitiveness of 
United States industry. This plan, which may be included in the Annual 
Laboratory Plan, shall be provided to the contracting officer on or 
before October 1st of each year.
    (m) Oversight and appraisal. The Contractor is responsible for 
developing

[[Page 73730]]

and implementing effective internal controls for all technology 
transfer activities consistent with the audit and record requirements 
of this Contract. Laboratory Contractor performance in implementing the 
technology transfer mission and the effectiveness of the Contractor's 
procedures will be evaluated by the contracting officer as part of the 
annual appraisal process, with input from the cognizant Secretarial 
Officer or program office.
    (n) Technology transfer through cooperative research and 
development agreements. Upon approval of the contracting officer and as 
provided in DOE approved guidance, the Laboratory Director, or 
designee, may enter into CRADAs on behalf of the DOE subject to the 
requirements set forth in this paragraph.
    (1) Review and approval of CRADAs. (i) Except as otherwise directed 
in writing by the contracting officer, each JWS or MSW shall be 
submitted to the contracting officer for approval. The Contractor's 
Laboratory Director or designee shall provide a program mission impact 
statement and shall include an impact statement regarding related 
Intellectual Property rights known by the Contractor to be owned by the 
Government to assist the contracting officer in the approval 
determination.
    (ii) The Contractor shall also include (specific to the proposed 
CRADA) a statement of compliance with the Fairness of Opportunity 
requirements of paragraph (e) of this clause.
    (iii) Within thirty (30) days after submission of a JWS, MSW or 
proposed CRADA, the contracting officer shall approve, disapprove or 
request modification to the JWS, MSW or CRADA. The contracting officer 
shall provide a written explanation to the Contractor's Laboratory 
Director or designee of any disapproval or requirement for modification 
of a JWS or proposed CRADA.
    (iv) Except as otherwise directed in writing by the contracting 
officer, the Contractor shall not enter into, or begin work under, a 
CRADA until approval of the CRADA or relevant MSW has been granted by 
the contracting officer. The Contractor may submit its proposed CRADA 
to the contracting officer at the time of submitting its proposed JWS, 
relevant MSW or any time thereafter.
    (2) Selection of participants. The Contractor's Laboratory Director 
or designee in deciding what CRADA to enter into shall:
    (i) Give special consideration to small business firms, and 
consortia involving small business firms;
    (ii) Give preference to business units located in the United States 
which agree that products or processes embodying Intellectual Property 
will be substantially manufactured or practiced in the United States 
and, in the case of any industrial organization or other person subject 
to the control of a foreign company or government, take into 
consideration whether or not such foreign government permits United 
States agencies, organizations, or other persons to enter into 
cooperative research and development agreements and licensing 
agreements. The Contractor, in considering these factors, may rely upon 
the information and same sources as referenced in paragraphs 
(f)(1)(ii)(C) and (D) of this clause;
    (iii) Provide Fairness of Opportunity in accordance with the 
requirements of paragraph (e) of this clause; and
    (iv) Give consideration to the Conflicts of Interest requirements 
of paragraph (d) of this clause.
    (3) Withholding of data. (i) Data that is first produced as a 
result of research and development activities conducted under a CRADA 
and that would be a trade secret or commercial or financial data that 
would be privileged or confidential, if such data had been obtained 
from a non-Federal third party, may be protected from disclosure under 
the Freedom of Information Act as provided in the Stevenson-Wydler 
Technology Innovation Act of 1980, as amended (15 U.S.C. 3710a(c)(7)) 
for a period as agreed in the CRADA of up to five (5) years from the 
time the data is first produced or otherwise as delineated in 
Stevenson-Wydler, as amended. The DOE shall cooperate with the 
Contractor in protecting such data.
    (ii) Unless otherwise expressly approved by the contracting officer 
in advance for a specific CRADA, the Contractor agrees, at the request 
of the contracting officer, to transmit such data to other DOE 
facilities for use by DOE or its Contractors by or on behalf of the 
Government. When data protected pursuant to paragraph (n)(3)(i) of this 
clause is so transferred, the Contractor shall clearly mark the data 
with a legend setting out the restrictions against private use and 
further dissemination, along with the expiration date of such 
restrictions.
    (iii) A final technical report, upon completion of a CRADA, shall 
be provided to DOE's Office of Scientific and Technical Information; 
reports marked as Protected CRADA Information will not be released to 
the public for a period in accordance with the terms of the CRADA.
    (iv) In addition to its authority to license Intellectual Property, 
the Contractor may enter into licensing agreements with third parties 
for data developed by the Contractor under a CRADA subject to other 
provisions of this Contract. However, the Contractor shall neither use 
the protection against dissemination nor the licensing of data as an 
alternative to the submittal of invention disclosures which include 
data protected pursuant to paragraph (n)(3)(i) of this clause.
    (4) SPP, ACT and user facility programs. (i) SPP, ACT and User 
Facility Agreements (UFAs) may be available for use by the Contractor 
in addition to CRADAs. The Contractor agrees to inform prospective 
CRADA participants, which are intending to substantially pay full cost 
recovery for the effort under a proposed CRADA, of the availability of 
alternative forms of agreements, i.e., SPP, ACT and UFA, and of the 
Class Patent Waiver provisions associated therewith.
    (ii) Where the Contractor believes that the transfer of technology 
to the U.S. domestic economy will benefit from, or other equity 
considerations dictate, an arrangement other than the Class Waiver of 
patent rights to the sponsor in SPP, ACT and UFAs, a request may be 
made to the contracting officer for an exception to the Class Waivers.
    (iii) Rights to inventions made under agreements other than funding 
agreements with third parties shall be governed by the appropriate 
provisions incorporated, with DOE approval, in such agreements, and the 
provisions in such agreements take precedence over any disposition of 
rights contained in this Contract. Disposition of rights under any such 
agreement shall be in accordance with any DOE class waiver (including 
SPP, ACT and User Class Waivers) or individually negotiated waiver 
which applies to the agreement.
    (5) Conflicts of interest. (i) Except as provided in paragraph 
(n)(5)(iii) of this clause, the Contractor shall assure that no 
employee of the Contractor shall have a substantial role (including an 
advisory role) in the negotiation, approval or performance of a CRADA, 
if, to such employee's knowledge:
    (A) Such employee, or the spouse, child, parent, sibling, or 
partner of such employee, or an organization (other than the 
Contractor) in which such employee serves as an officer, director, 
trustee, partner, or employee--
    (1) Holds financial interest in any entity, other than the 
Contractor, that has a substantial interest in the entity of the CRADA; 
or
    (2) Receives a gift or gratuity from any entity, other than the 
Contractor, that has a substantial interest in the entity of the CRADA; 
or

[[Page 73731]]

    (B) A financial interest in any entity, other than the Contractor, 
that has a substantial interest in the entity of the CRADA, is held by 
any person or organization with whom such employee is negotiating or 
has any arrangement concerning prospective employment.
    (ii) The Contractor shall require that each employee of the 
Contractor who has a substantial role (including an advisory role) in 
the negotiation, approval or performance of the CRADA certify through 
the Contractor to the contracting officer that the circumstances 
described in paragraph (n)(5)(i) of this clause do not apply to that 
employee.
    (iii) The requirements of paragraphs (n)(5)(i) and (ii) of this 
clause shall not apply in a case where the contracting officer is 
advised by the Contractor in advance of the participation of an 
employee described in those paragraphs of the nature of and extent of 
any financial interest described in paragraph (n)(5)(i) of this clause, 
and the contracting officer determines that such financial interest is 
not so substantial as to be considered likely to affect the integrity 
of the Contractor employee's participation in the process of 
negotiation, approval or performance of the CRADA.
    (o) Technology transfer in other cost-sharing agreements. In 
conducting research and development activities in cost-shared 
agreements not covered by paragraph (n) of this clause, the Contractor, 
with prior written permission of the contracting officer, may provide 
for the withholding of data produced thereunder in accordance with the 
applicable provisions of paragraph (n)(3) of this clause.
    (p) Technology partnership ombudsman. (1) The Contractor agrees to 
establish a position to be known as ``Technology Partnership 
Ombudsman,'' to help resolve complaints from outside organizations 
regarding the policies and actions of the contractor with respect to 
technology partnerships (including CRADAs), patents owned by the 
contractor for inventions made at the laboratory, and technology 
licensing.
    (2) The Ombudsman shall be a senior official of the Contactor's 
laboratory staff, who is not involved in day-to-day technology 
partnerships, patents or technology licensing, or, if appointed from 
outside the laboratory or facility, shall function as such senior 
official.
    (3) The duties of the Technology Partnership Ombudsman shall 
include:
    (i) Serving as the focal point for assisting the public and 
industry in resolving complaints and disputes with the laboratory or 
facility regarding technology partnerships, patents, and technology 
licensing;
    (ii) Promoting the use of collaborative alternative dispute 
resolution techniques such as mediation to facilitate the speedy and 
low cost resolution of complaints and disputes, when appropriate; and
    (iii) Submitting a quarterly report, in a format provided by DOE, 
to the Director of the DOE Office of Dispute Resolution, and the 
Contracting Officer concerning the number and nature of complaints and 
disputes raised, along with the Ombudsman's assessment of their 
resolution, consistent with the protection of confidential and 
sensitive information.


(End of clause)
    Alternate I (DATE XXXX). As prescribed in 970.2770-4(b), add the 
following definition and new paragraph (q):
    Privately funded technology transfer means the prosecuting, 
maintaining, licensing, and marketing of inventions which are not owned 
by the Government (and not related to CRADAs) when such activities are 
conducted entirely without the use of Government funds.
    (q) Nothing in paragraphs (c) Allowable Costs, (e) Fairness of 
Opportunity, (f) U.S. Industrial Competitiveness, (g) Indemnity--
Product Liability, (h) Disposition of Income, and (i) Transfer to 
Successor Contractor of this clause are intended to apply to the 
contractor's privately funded technology transfer activities if such 
privately funded activities are addressed elsewhere in the contract.
    Alternate II (DEC 2000). As prescribed in 970.2770-4(c), the 
contracting officer shall substitute the phrase ``weapon production 
facility'' wherever the word ``laboratory'' appears in the clause.
0
247. Amend section 970.5227-4 by revising the introductory text, clause 
date, and paragraph (c) to read as follows:


Sec.  970.5227-4  Authorization and consent.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-1:
Authorization and Consent (XXX 20XX)
* * * * *
    (c)(1) The Contractor agrees to include, and require inclusion of, 
the Authorization and Consent clause at 48 CFR 52.227-1, without 
Alternate 1, but suitably modified to identify the parties, in all 
subcontracts expected to exceed the simplified acquisition threshold at 
any tier for supplies or services, including construction, architect-
engineer services, and materials, supplies, models, samples, and design 
or testing services.
    (2) The Contractor agrees to include, and require inclusion of, 
paragraph (a) of this Authorization and Consent clause, suitably 
modified to identify the parties, in all subcontracts at any tier for 
research and development activities expected to exceed the simplified 
acquisition threshold.
    (3) Omission of an authorization and consent clause from any 
subcontract, including those valued less than the simplified 
acquisition threshold does not affect this authorization and consent.
* * * * *
0
248. Amend section 970.5227-5 by:
0
a. Revising the introductory text and clause date; and
0
b. In paragraph (c), removing ``$100,000'' and adding in its place 
``the simplified acquisition threshold''.
    The revisions read as follows:


Sec.  970.5227-5  Notice and assistance regarding patent and copyright 
infringement.

    Insert the following clause in solicitations and contracts in 
accordance with 970.2702-2:
Notice and Assistance Regarding Patent and Copyright Infringement (XXX 
20XX)
* * * * *
0
249. Section 970.5227-10 is revised to read as follows:


Sec.  970.5227-10  Patent rights--management and operating contracts, 
nonprofit organization or small business firm contractor.

    As prescribed in 970.2703-2(a), insert the following clause:
Patent Rights--Management and Operating Contracts, Nonprofit 
Organization or Small Business Firm Contractor (XXX 20XX)
    (a) Definitions.
    DOE licensing regulations means the Department of Energy patent 
licensing regulations at 10 CFR part 781.
    Exceptional circumstance subject invention means any subject 
invention in a technical field or related to a task determined by the 
Department of Energy to be subject to an exceptional circumstance under 
35 U.S.C. 202(a)(ii) and in accordance with 37 CFR 401.3(e).
    Initial Patent Application means, as to a given Subject Invention, 
the first provisional or non-provisional U.S. national application for 
patent as defined in 37 CFR 1.9(a)(2) and (3), respectively, the first 
international application filed under the Patent Cooperation Treaty as 
defined in 37 CFR 1.9(b) which designates the United

[[Page 73732]]

States, or the first application for a Plant Variety Protection 
certificate, as applicable.
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under Title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
    Made when used in relation to any invention means the conception or 
first actual reduction to practice of such invention.
    Nonprofit organization means a university or other institution of 
higher education, or an organization of the type described in section 
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and 
exempt from taxation under section 501(a) of the Internal Revenue Code 
(26 U.S.C. 501(a)) or any nonprofit scientific or educational 
organization qualified under a state nonprofit organization statute.
    Patent Counsel means the Department of Energy (DOE) Patent Counsel 
assisting the DOE contracting activity. The Patent Counsel is the first 
and primary point of contact for activities described in this clause.
    Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in each 
case, under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    Small business firm means a small business concern as defined at 
section 2 of Public Law 85-536 (15 U.S.C. 632) and implementing 
regulations of the Administrator of the Small Business Administration. 
For the purpose of this clause, the size standards for small business 
concerns involved in Government procurement and subcontracting at 13 
CFR 121.3-8 and 121.3-12, respectively, are used.
    Statutory Period means the one-year period before the effective 
filing date of a claimed invention during which exceptions to prior art 
exist per 35 U.S.C. 102(b) as amended by the Leahy-Smith America 
Invents Act, Public Law 112-29.
    Subject Invention means any invention of the contractor conceived 
or first actually reduced to practice in the performance of work under 
this contract, provided that in the case of a variety of plant, the 
date of determination (as defined in section 41(d) of the Plant Variety 
Protection Act, 7 U.S.C. 2401(d)) shall also occur during the period of 
contract performance.
    (b) Allocation of Principal Rights. (1) Retention of title by the 
Contractor. Except for exceptional circumstance subject inventions 
outlined in paragraph (b)(3)(i) of this clause, the contractor may 
retain the entire right, title, and interest throughout the world to 
each subject invention subject to the provisions of this clause and 35 
U.S.C. 203. With respect to any subject invention in which the 
Contractor retains title, the Federal Government shall have a 
nonexclusive, nontransferable, irrevocable, paid-up license to practice 
or have practiced for or on behalf of the United States the subject 
invention throughout the world.
    (2) Treaties and international agreements. Any rights acquired by 
the Contractor in subject inventions are subject to any disposition of 
right, title, or interest in or to subject inventions provided for in 
treaties or international agreements identified at DOE's Office of 
International Affairs (International Commitments--IEC) (https://energy.gov/ia/iec-documents), or other rights which are necessary for 
the Government to meet its obligations to foreign governments, their 
nationals and international organizations under such treaties or 
international agreements with respect to subject inventions.
    (3) Exceptional circumstance subject inventions. Except to the 
extent that rights are retained by the Contractor in a determination of 
exceptional circumstances or granted to a contractor through a 
determination of greater rights in accordance with subparagraph (b)(4) 
of this clause, the Contractor does not have a right to retain title to 
any exceptional circumstance subject inventions and agrees to assign to 
the Government the entire right, title, and interest, throughout the 
world, in and to any exceptional circumstance subject inventions.
    (i) Inventions within or relating to the following fields of 
technology are exceptional circumstance subject inventions in which the 
Contractor cannot retain title without specific grant of a waiver from 
DOE:
    (A) Uranium enrichment technology;
    (B) Storage and disposal of civilian high-level nuclear waste and 
spent fuel technology; and
    (C) National security technologies classified or sensitive under 
section 148 of the Atomic Energy Act (42 U.S.C. 2168); and
    (D) DOE Steel Initiative and Metals Initiative.
    (ii) As determined by the DOE, inventions made under any agreement, 
contract or subcontract related to the exceptional circumstance subject 
inventions subject to specific terms outlined in those declarations of 
exceptional circumstance, the Contractor may take title to these 
inventions consistent with the terms of the contract. A complete list 
of declarations of exceptional circumstance, which is maintained by the 
Office of the Assistant General Counsel for Technology Transfer and 
Intellectual Property, include but is not limited to the following--
    (A) U.S. Advanced Battery Consortium;
    (B) Any funding agreement which is funded in part by the Electric 
Power Research Institute (EPRI) or the Gas Research Institute (GRI);
    (C) Any funding agreement related to Energy Efficiency, Storage, 
Integration and Related Technologies, Renewable Energy, and Advanced 
Energy Technologies which is funded by the Office of Energy Efficiency 
and Renewable Energy (EERE) or the Advanced Research Projects Agency--
Energy (ARPA-E);
    (D) Solid State Energy Conversion Alliance (SECA), if the 
Contractor is a participant in the ``Core Technology Program'';
    (E) Solid State Lighting (SSL) Program, if the Contractor is a 
participant in the ``Core Technology Program.''
    (F) Cybersecurity, Energy Security, and Emergency Response;
    (G) Quantum Information Science Technologies; and
    (H) Domestic Manufacture of DOE Science and Energy Technologies 
(S&E DEC).
    (iii) Inventions subject to ``Department of Energy Determination of 
Exceptional Circumstances under the Bayh-Dole Act to Further Promote 
Domestic Manufacture of DOE Science and Energy Technologies'' (S&E DEC) 
issued June 7, 2021, must comply with paragraph (t) U.S. 
Competitiveness requirements to the maximum extent authorized by the 
S&E DEC unless otherwise directed by DOE Patent Counsel in writing.
    (iv) DOE reserves the right to unilaterally amend this contract to 
modify, by deletion or insertion, technical fields, tasks, or other 
classifications for the purpose of determining DOE exceptional 
circumstance subject inventions.
    (4) Contractor request for greater rights in exceptional 
circumstance subject inventions. The Contractor may request rights 
greater than allowed by the exceptional circumstance determination in 
an exceptional

[[Page 73733]]

circumstance subject invention by submitting such a request in writing 
to Patent Counsel at the time the exceptional circumstance subject 
invention is disclosed to DOE or within eight (8) months after 
conception or first actual reduction to practice of the exceptional 
circumstance subject invention, whichever occurs first, unless a longer 
period is authorized in writing by the Patent Counsel for good cause 
shown in writing by the Contractor. DOE may, in its discretion, grant 
or refuse to grant such a request by the Contractor.
    (5) Contractor employee-inventor rights. If the Contractor does not 
elect to retain title to a subject invention or does not request 
greater rights in an exceptional circumstance subject invention, a 
Contractor employee-inventor, after consultation with the Contractor 
and with written authorization from the Contractor in accordance with 
10 CFR 784.9(b)(4), may request greater rights, including title, in the 
subject invention or the exceptional circumstance invention from DOE, 
and DOE may, in its discretion, grant or refuse to grant such a request 
by the Contractor employee-inventor.
    (6) Government assignment of rights in Government employees' 
subject inventions. If a Government employee is a joint inventor of a 
subject invention or of an exceptional circumstance subject invention 
to which the Contractor has rights, the Government may assign or refuse 
to assign to the Contractor any rights in the subject invention or 
exceptional circumstance subject invention acquired by the Government 
from the Government employee, in accordance with 48 CFR 27.304-1(d). 
The rights assigned to the Contractor are subject to any provision of 
this clause that is applicable to subject inventions in which the 
Contractor retains title, including reservation by the Government of a 
nonexclusive, nontransferable, irrevocable, paid-up license, except 
that the Contractor shall file its initial patent application claiming 
the subject invention or exceptional circumstance invention within one 
(1) year after the assignment of such rights. The Contractor shall 
share royalties collected for the manufacture, use or sale of the 
subject invention with the Government employee.
    (c) Subject invention disclosure, election of title and filing of 
patent application by contractor--(1) Subject invention disclosure. The 
contractor will disclose each subject invention to the Patent Counsel 
within two months after the inventor discloses it in writing to 
contractor personnel responsible for patent matters. The disclosure to 
the agency shall be in the form of a written or electronic report and 
shall identify the contract or any other agreement under which the 
invention was made and the inventor(s) and all sources of funding by 
Budget and Resources (B&R) code for the invention. The funding program 
may require other invention identifiers such as related award numbers 
or funding opportunity announcement numbers. It shall be sufficiently 
complete in technical detail to convey a clear understanding to the 
extent known at the time of the disclosure, of the nature, purpose, 
operation, and the physical, chemical, biological or electrical 
characteristics of the invention. The disclosure shall also identify 
any publication, on sale or public use of the invention and whether a 
manuscript describing the invention has been submitted or made 
available for publication at the time of disclosure. The disclosure 
shall identify if the invention falls within an exceptional 
circumstance field. DOE will make a determination and advise the 
Contractor within 30 days of receipt of an invention disclosure as to 
whether the invention is an exceptional circumstance subject invention. 
In addition, after disclosure to the Patent Counsel, the Contractor 
will notify the agency of any accepted manuscript describing the 
invention for publication or of any on sale or public use planned by 
the contractor that is 60 days prior to the end of the Statutory 
Period. The Contractor shall notify Patent Counsel prior to any release 
or publication of information concerning any nonelectable subject 
invention such as an exceptional circumstance subject invention or any 
subject invention related to a treaty or international agreement.
    (2) Election by the Contractor. Except as provided in paragraph 
(b)(2) of this clause, the Contractor will elect in writing whether or 
not to retain title to any such invention by notifying the Federal 
agency within two years of disclosure to the Federal agency. However, 
in any case where publication, on sale or public use has initiated the 
statutory period wherein valid patent protection can still be obtained 
in the United States, the period for election of title may be shortened 
by the agency to a date that is no more than 60 days prior to the end 
of the statutory period.
    (3) Filing of patent applications by the Contractor. The Contractor 
will file its initial patent application on a subject invention to 
which it elects to retain title within one year after election of title 
or, if earlier, or prior to the end of any statutory period wherein 
valid patent protection can be obtained in the United States after a 
publication, on sale, or public use. The Contractor will file patent 
applications in additional countries or international patent offices 
within either ten months of the corresponding first filed patent 
application or six months from the date permission is granted by the 
Commissioner of Patents and Trademarks to file foreign patent 
applications where such filing has been prohibited by a Secrecy Order.
    (4) Contractor's request for an extension of time. Requests for an 
extension of the time for disclosure, election, and filing under 
subparagraphs (c)(1), (2), and (3) of this clause may, at the 
discretion of Patent Counsel, be granted.
    (5) Publication review. During the course of the work under this 
contract, the Contractor may desire to release or publish information 
regarding scientific or technical developments conceived or first 
actually reduced to practice in the course of or under this contract. 
Contractor's Invention Identification Procedures under paragraph (f)(5) 
of this clause should address timely disclosure of inventions, consider 
whether review is required, and if so, facilitate such review by 
Contractor personnel responsible for patent matters prior to disclosure 
of publications in order that public disclosure of such information 
will not adversely affect the patent interest of DOE or the Contractor.
    (6) Reporting to DOE and Approvals. Whenever possible in this 
paragraph (c), the Government electronic reporting system (e.g., 
iEdison or similar system) shall be used for reporting and approvals.
    (d) Conditions when the Government may obtain title. The Contractor 
will convey to the DOE, upon written request, title to any subject 
invention -
    (1) If the Contractor fails to disclose or elect title to the 
subject invention within the times specified in paragraph (c) of this 
clause, or elects not to retain title.
    (2) In those countries in which the Contractor fails to file a 
patent application within the times specified in paragraph (c) of this 
clause; provided, however, that if the Contractor has filed a patent 
application in a country after the times specified in paragraph (c), 
but prior to its receipt of the written request of the DOE, the 
Contractor shall continue to retain title in that country.
    (3) In any country in which the Contractor decides not to continue 
the prosecution of any application for, to pay the maintenance fees on, 
or defend

[[Page 73734]]

in a reexamination or opposition proceeding on, a patent on a subject 
invention.
    (4) If the Contractor requests that DOE acquire title or rights 
from the Contractor in a subject invention to which the Contractor had 
initially retained title or rights, or in an exceptional circumstance 
subject invention to which the Contractor was granted greater rights, 
DOE may acquire such title or rights from the Contractor, or DOE may 
decide against acquiring such title or rights from the Contractor, at 
DOE's sole discretion.
    (5) Upon a breach of paragraph (t) U.S. Competitiveness of this 
clause.
    (e) Minimum rights of the Contractor and protection of the 
Contractor's right to file--(1) Request for a Contractor license. The 
Contractor may request the right to reserve a revocable, nonexclusive, 
royalty-free license throughout the world in each subject invention to 
which the Government obtains title, except if the Contractor fails to 
disclose the invention within the times specified in paragraph (c) of 
this clause. DOE may grant or refuse to grant such a request by the 
Contractor. When DOE approves such reservation, the Contractor's 
license will normally extend to its domestic subsidiaries and 
affiliates, if any, within the corporate structure of which the 
Contractor is a party and includes the right to grant sublicenses of 
the same scope to the extent the Contractor was legally obligated to do 
so at the time the contract was awarded. The license is transferable 
only with the approval of DOE, except when transferred to the successor 
of that part of the contractor's business to which the invention 
pertains.
    (2) Revocation or modification of a Contractor license. The 
Contractor's domestic license may be revoked or modified by DOE to the 
extent necessary to achieve expeditious practical application of the 
subject invention pursuant to an application for an exclusive license 
submitted in accordance with applicable provisions at 37 CFR part 404 
and DOE licensing regulations at 10 CFR part 781. This license will not 
be revoked in the field of use or the geographical areas in which the 
Contractor has achieved practical application and continues to make the 
benefits of the subject invention reasonably accessible to the public. 
The license in any foreign country may be revoked or modified at the 
discretion of DOE to the extent the Contractor, its licensees, or the 
domestic subsidiaries or affiliates have failed to achieve practical 
application of the subject invention in that foreign country.
    (3) Notice of revocation of modification of a Contractor license. 
Before revocation or modification of the license, DOE will furnish the 
Contractor a written notice of its intention to revoke or modify the 
license, and the Contractor will be allowed thirty days (or such other 
time as may be authorized by DOE for good cause shown by the 
Contractor) after the notice to show cause why the license should not 
be revoked or modified. The Contractor has the right to appeal, in 
accordance with applicable regulations in 37 CFR part 404 and DOE 
licensing regulations at 10 CFR part 781 concerning the licensing of 
Government owned inventions, any decision concerning the revocation or 
modification of the license.
    (f) Contractor action to protect the Government's interest--(1) 
Execution of delivery of title or license instruments. The Contractor 
agrees to execute or to have executed, and promptly deliver to the 
Patent Counsel all instruments necessary to accomplish the following 
actions:
    (i) Establish or confirm the rights the Government has throughout 
the world in those subject inventions to which the Contractor elects to 
retain title; and
    (ii) Convey title to DOE when requested under subparagraphs (b) or 
paragraph (d) of this clause and to enable the Government to obtain 
patent protection throughout the world in that subject invention.
    (2) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical and 
nontechnical employees, to disclose promptly in writing to Contractor 
personnel identified as responsible for the administration of patent 
matters and in a format suggested by the Contractor, each subject 
invention made under this contract in order that the Contractor can 
comply with the disclosure provisions of paragraph (c) of this clause, 
and to execute all papers necessary to file patent applications on 
subject inventions and to establish the Government's rights in the 
subject inventions. This disclosure format should require, as a 
minimum, the information required by subparagraph (c)(1) of this 
clause. The Contractor shall instruct such employees, through employee 
agreements or other suitable educational programs, on the importance of 
reporting inventions in sufficient time to permit the filing of patent 
applications prior to U.S. or foreign statutory bars.
    (3) Notification of discontinuation of patent protection. The 
contractor will notify the Patent Counsel of any decision not to file a 
patent application, continue the prosecution of a patent application, 
pay maintenance fees, or defend in a reexamination or opposition 
proceeding on a patent, in any country, not less than 60 days before 
the expiration of the response period required by the relevant patent 
office.
    (4) Notification of Government rights. The contractor agrees to 
include, within the specification of any United States patent 
applications and any patent issuing thereon covering a subject 
invention, the following statement, ``This invention was made with 
government support under (identify the contract) awarded by (identify 
the Federal agency). The government has certain rights in the 
invention.''
    (5) Invention identification procedures. The Contractor shall 
establish and maintain active and effective procedures to ensure that 
subject inventions are promptly identified and timely disclosed and 
shall submit a written description of such procedures to the 
Contracting Officer so that the Contracting Officer may evaluate and 
determine their effectiveness.
    (6) Patent filing documentation. If the Contractor files a domestic 
or foreign patent application claiming a subject invention, the 
Contractor shall promptly submit to Patent Counsel, upon request, the 
following information and documents:
    (i) The filing date, serial number, title, and a copy of the patent 
application (including an English-language version if filed in a 
language other than English);
    (ii) An executed and approved instrument fully confirmatory of all 
Government rights in the subject invention; and
    (iii) The patent number, issue date, and a copy of any issued 
patent claiming the subject invention.
    (7) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or disclosure 
by the Government is subject to the confidentiality provision at 35 
U.S.C. 205 and 37 CFR part 401.
    (g) Subcontracts--(1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.

[[Page 73735]]

    (2) Inclusion of patent rights clause--non-profit organization or 
small business firm subcontractors. Unless otherwise authorized or 
directed by the Contracting Officer, the Contractor shall include the 
patent rights clause at 37 CFR 401.14 with Alternate I of 48 CFR 
952.227-11, Patent Rights--Retention by the Contractor, suitably 
modified to identify the parties, in all subcontracts, at any tier, for 
experimental, developmental, demonstration or research work to be 
performed by a small business firm or domestic nonprofit organization, 
except subcontracts which are subject to exceptional circumstances in 
accordance with 35 U.S.C. 202 and subparagraph (b)(2) of this clause. 
The subcontractor retains all rights provided for the contractor in the 
patent rights clause at 37 CFR 401.3(a) and 401.14. If the S&E DEC, or 
any other applicable DEC, is applicable (see subparagraph (b)(6)(iii) 
of this clause), the Contractor shall use Alternate II of DEAR 952.227-
11, Patent Rights--Retention by the Contractor.
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations and small business firms. Except for the 
subcontracts described in subparagraph (g)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-13, 
suitably modified to identify the parties, in any contract for 
experimental, developmental, demonstration or research work. For 
subcontracts subject to a patent waiver granted by DOE Patent Counsel, 
the contractor must consult with DOE patent counsel with respect to the 
appropriate patent clause. For subcontracts subject to exceptional 
circumstances, the contractor must consult with DOE patent counsel with 
respect to the appropriate patent clause which may require the use of 
Alternate II of 48 CFR 952.227-11.
    (4) DOE and subcontractor contract. With respect to subcontracts at 
any tier, DOE, the subcontractor, and the Contractor agree that the 
mutual obligations of the parties created by this clause constitute a 
contract between the subcontractor and DOE with respect to the matters 
covered by the clause; provided, however, that nothing in this 
paragraph is intended to confer any jurisdiction under the Contract 
Disputes Act in connection with proceedings under paragraph (j) of this 
clause.
    (5) Subcontractor refusal to accept terms of patent clause. If a 
prospective subcontractor refuses to accept the terms of a patent 
rights clause, the Contractor shall promptly submit a written notice to 
the Contracting Officer stating the subcontractor's reasons for such a 
refusal, including any relevant information for expediting disposition 
of the matter, and the Contractor shall not proceed with the 
subcontract without the written authorization of the Contracting 
Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing and 
identify the subcontractor, the applicable patent rights clause, the 
work to be performed under the subcontract, and the dates of award and 
estimated completion. Upon request of the Contracting Officer, the 
Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention.
    (h) Reporting on utilization of subject inventions. The Contractor 
agrees to submit to DOE on request, periodic reports, no more 
frequently than annually, on the utilization of a subject invention or 
on efforts at obtaining such utilization that are being made by the 
Contractor or its licensees or assignees. In addition, the Contractor 
shall provide data to DOE for the annual data call for the Department 
of Commerce report that includes the number of patent applications 
filed, the number of patents issued, licensing activity, gross 
royalties received by the Contractor, and such other data and 
information as DOE may reasonably specify. The Contractor also agrees 
to provide additional reports as may be requested by DOE in connection 
with any march-in proceeding undertaken by DOE in accordance with 
paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE 
agrees it will not disclose such information to persons outside the 
Government without permission of the Contractor.
    (i) Preference for United States Industry. Notwithstanding any 
other provision of this clause, the Contractor agrees that neither it 
nor any assignee will grant to any person the exclusive right to use or 
sell any subject invention in the United States unless such person 
agrees that any product embodying the subject invention or produced 
through the use of the subject invention will be manufactured 
substantially in the United States. However, in individual cases, the 
requirement for such an agreement may be waived by DOE upon a showing 
by the Contractor or its assignee that reasonable but unsuccessful 
efforts have been made to grant licenses on similar terms to potential 
licensees that would be likely to manufacture substantially in the 
United States or that under the circumstances domestic manufacture is 
not commercially feasible.
    (j) March-in Rights. The Contractor agrees that, with respect to 
any subject invention in which it has acquired title, DOE has the right 
under 35 U.S.C. 203 and in accordance with the procedures in 37 CFR 
401.6 and any DOE supplemental regulations to require the Contractor, 
an assignee or exclusive licensee of a subject invention to grant a 
nonexclusive, partially exclusive, or exclusive license in any field of 
use to a responsible applicant or applicants, upon terms that are 
reasonable under the circumstances, and, if the Contractor, assignee or 
exclusive licensee refuses such a request, DOE has the right to grant 
such a license itself under applicable law stated above.
    (k) Special provisions for contracts with nonprofit organizations. 
If the Contractor is a nonprofit organization, it agrees that--
    (1) DOE approval of assignment of rights. Rights to a subject 
invention in the United States may not be assigned by the Contractor 
without the approval of DOE, except where such assignment is made to an 
organization which has as one of its primary functions the management 
of inventions; provided, that such assignee will be subject to the same 
provisions of this clause as the Contractor.
    (2) Small business firm licensees. It will make efforts that are 
reasonable under the circumstances to attract licensees of subject 
inventions that are small business firms, and that it will give a 
preference to a small business firm when licensing a subject invention 
if the Contractor determines that the small business firm has a plan or 
proposal for marketing the invention which, if executed, is equally as 
likely to bring the invention to practical application as any plans or 
proposals from applicants that are not small business firms; provided, 
that the Contractor is also satisfied that the small business firm has 
the capability and resources to carry out its plan or proposal. The 
decision whether to give a preference in any specific case will be at 
the discretion of the Contractor. However, the Contractor agrees that 
the Secretary of Commerce may review the Contractor's licensing program 
and decisions regarding small business firm applicants, and the 
Contractor will negotiate changes to its licensing policies, 
procedures, or practices with the Secretary of Commerce when that

[[Page 73736]]

Secretary's review discloses that the Contractor could take reasonable 
steps to more effectively implement the requirements of this 
subparagraph (k)(2).
    (3) Contractor licensing of subject inventions. To the extent that 
it provides the most effective technology transfer, licensing of 
subject inventions shall be administered by Contractor employees on 
location at the facility.
    (l) Communications. The Contractor shall direct any notification, 
disclosure or request provided for in this clause to the Patent Counsel 
assisting the DOE contracting activity.
    (m) Reports--(1) Interim reports. Upon DOE's request, the 
Contractor shall submit to DOE, no more frequently than annually, a 
list of subject inventions disclosed to DOE during a specified period, 
or a statement that no subject inventions were made during the 
specified period; and a list of subcontracts containing a patent clause 
and awarded by the Contractor during a specified period, or a statement 
that no such subcontracts were awarded during the specified period.
    (2) Final reports. Upon DOE's request, the Contractor shall submit 
to DOE, prior to closeout of the contract, a list of all subject 
inventions disclosed during the performance period of the contract, or 
a statement that no subject inventions were made during the contract 
performance period; and a list of all subcontracts containing a patent 
clause and awarded by the Contractor during the contract performance 
period under which a subject invention was reported, or a statement 
that no such subject inventions under subcontracts were reported during 
the contract performance period.
    (n) Examination of Records Relating to Subject Inventions--(1) 
Contractor compliance. Until the expiration of three (3) years after 
final payment under this contract, the Contracting Officer or any 
authorized representative may examine any books (including laboratory 
notebooks), records, documents, and other supporting data of the 
Contractor, which the Contracting Officer or authorized representative 
deems reasonably pertinent to the discovery or identification of 
subject inventions, including exceptional circumstance subject 
inventions, or to determine Contractor compliance with any requirement 
of this clause.
    (2) Unreported inventions. If the Contracting Officer is aware of 
an invention that is not disclosed by the Contractor to DOE, and the 
Contracting Officer believes the unreported invention may be a subject 
invention, including exceptional circumstance subject inventions, DOE 
may require the Contractor to submit to DOE a disclosure of the 
invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this 
paragraph is subject to appropriate conditions to protect the 
confidentiality of the information involved.
    (4) Power of inspection. With respect to a subject invention for 
which the Contractor has responsibility for patent prosecution, the 
Contractor shall furnish the Government, upon request by DOE, an 
irrevocable power to inspect and make copies of a prosecution file for 
any patent application claiming the subject invention.
    (o) Facilities License. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first actually 
reduced to practice in the course of or under this contract, the 
Contractor agrees to and does hereby grant to the Government an 
irrevocable, nonexclusive, paid-up license in and to any inventions or 
discoveries regardless of when conceived or actually reduced to 
practice or acquired by the Contractor at any time through completion 
of this contract and which are incorporated or embodied in the 
construction of the facility or which are utilized in the operation of 
the facility or which cover articles, materials, or product 
manufactured at the facility.
    (1) To practice or have practiced by or for the Government at the 
facility; and
    (2) To transfer such license with the transfer of that facility. 
Notwithstanding the acceptance or exercise by the Government of these 
rights, the Government may contest at any time the enforceability, 
validity or scope of, or title to, any rights or patents herein 
licensed.
    (p) Atomic Energy--(1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act of 
1954, as amended, may be asserted with respect to any invention or 
discovery made or conceived in the course of or under this contract.
    (2) Patent agreements. Except as otherwise authorized in writing by 
the Contracting Officer, the Contractor shall obtain patent agreements 
to effectuate the provisions of subparagraph (p)(1) of this clause from 
all persons who perform any part of the work under this contract, 
except nontechnical personnel, such as clerical employees and manual 
laborers.
    (q) Classified inventions--(1) Approval for filing a foreign patent 
application. The Contractor shall not file or cause to be filed an 
application or registration for a patent disclosing a subject invention 
related to classified subject matter in any country other than the 
United States without first obtaining the written approval of the 
Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance 
with this clause the Contractor files a patent application in the 
United States disclosing a subject invention that is classified for 
reasons of security, the Contractor shall observe all applicable 
security regulations covering the transmission of classified subject 
matter. If the Contractor transmits a patent application disclosing a 
classified subject invention to the United States Patent and Trademark 
Office (USPTO), the Contractor shall submit a separate letter to the 
USPTO identifying the contract or contracts by agency and agreement 
number that require security classification markings to be placed on 
the patent application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees to 
include the substance of this clause in subcontracts at any tier that 
cover or are likely to cover subject matter classified for reasons of 
security.
    (r) Patent functions. Upon the written request of the Contracting 
Officer or Patent Counsel, the Contractor agrees to make reasonable 
efforts to support DOE in accomplishing patent-related functions for 
work arising out of the contract, including, but not limited to, the 
prosecution of patent applications, and the determination of questions 
of novelty, patentability, and inventorship.
    (s) Educational awards subject to 35 U.S.C. 212. The Contractor 
shall notify the Contracting Officer prior to the placement of any 
person subject to 35 U.S.C. 212 in an area of technology or task (1) 
related to exceptional circumstance technology or (2) which is subject 
to treaties or international agreements as set forth in paragraph 
(b)(3) of this clause or agreements other than funding agreements. The 
Contracting Officer may disapprove of any such placement.
    (t) U.S. Competitiveness. Notwithstanding 48 CFR 970.5227-3(f), 
U.S. Industrial Competitiveness, for all work subject to the S&E DEC, 
the Contractor agrees that any products embodying any subject invention 
or produced through the use of any subject invention will be 
manufactured substantially in the United States unless the Contractor 
can show to the satisfaction of DOE that it is not commercially 
feasible. In the event DOE agrees to foreign manufacture, there will be 
a requirement that the Government's support of the technology be 
recognized in some appropriate manner, e.g., alternative binding 
commitments to

[[Page 73737]]

provide an overall net benefit to the U.S. economy. The Contractor 
agrees that it will not license, assign, or otherwise transfer any 
subject invention to any entity, at any tier, unless that entity agrees 
to these same requirements. Should the Contractor or other such entity 
receiving rights in the invention(s):
    (1) Undergo a change in ownership amounting to a controlling 
interest; or
    (2) Sell, assign, or otherwise transfer title or exclusive rights 
in the invention(s), then the assignment, license, or other transfer of 
rights in the subject invention(s) is/are suspended until approved in 
writing by DOE. The Contractor and any successor assignee will convey 
to DOE, upon written request from DOE, title to any subject invention, 
upon a breach of this paragraph. The Contractor will include this 
paragraph in all subawards/contracts, regardless of tier, for 
experimental, developmental or research work.
    (u) Annual appraisal by Patent Counsel. Patent Counsel may conduct 
an annual appraisal to evaluate the Contractor's effectiveness in 
identifying and protecting subject inventions in accordance with DOE 
policy.
    (v) Unauthorized Access. The contractor will protect all invention 
reports, unpublished patent applications and other invention related 
information from unauthorized access and disclosure using at least 
commonly available techniques and practices. In the event that the 
Contractor becomes aware of unauthorized access to invention reports, 
unpublished patent applications and other invention related 
information, the Contractor shall notify Patent Counsel within 7 days.


(End of clause)
    Alternate 1 Weapons Related Subject Inventions. As prescribed at 
970.2703-2(g), insert the following definition in paragraph (a) and add 
subparagraph (b)(7), respectively:
    (a) Definitions. Weapons related subject invention means any 
subject invention conceived or first actually reduced to practice in 
the course of or under work funded by or through defense programs, 
including Department of Defense and intelligence reimbursable work, or 
the Naval Nuclear Propulsion Program of the Department of Energy or the 
National Nuclear Security Administration.
    (b) Allocation of Principal Rights--(7) Weapons related subject 
inventions. Except to the extent that DOE is solely satisfied that the 
Contractor meets certain procedural requirements and DOE grants rights 
to the Contractor in weapons related subject inventions, the Contractor 
does not have the right to retain title to any weapons related subject 
inventions.


(End of alternate)
0
250. Amend section 970.5227-11 by:
0
a. Revising the introductory text, clause heading and date, and 
paragraphs (a), (c)(2) introductory text, (c)(2)(vii), (c)(5), and 
(f)(3); and
0
b. Adding paragraph (o).
    The revisions and addition read as follows:


Sec.  970.5227-11  Patent rights--management and operating contracts, 
for-profit contractor, no patent waiver.

    As prescribed in 970.2702-2(b), insert the following clause:
Patent Rights--Management and Operating Contracts, For-Profit 
Contractor, No Patent Waiver (XXX 20XX)
    (a) Definitions.
    Department of Energy (DOE), as used in this clause, includes the 
National Nuclear Security Administration (NNSA), and unless otherwise 
identified or indicated, includes the coordinated efforts of the DOE 
and NNSA.
    DOE licensing regulations means the Department of Energy patent 
licensing regulations at 10 CFR part 781.
    DOE patent waiver regulations means the Department of Energy patent 
waiver regulations at 10 CFR part 784.
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).
    Made when used in relation to any invention means the conception or 
first actual reduction to practice of such invention.
    Patent counsel means DOE Patent Counsel assisting the contracting 
activity. The Patent Counsel is the first and primary point of contact 
for activities described in this clause.
    Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in each 
case, under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    Subject invention means any invention of the contractor conceived 
or first actually reduced to practice in the course of or under this 
contract, provided that in the case of a variety of plant, the date of 
determination (as defined in section 41(d) of the Plant Variety 
Protection Act, 7 U.S.C. 2401(d)) shall also occur during the period of 
contract performance.
* * * * *
    (c) * * *
    (2) Subject invention disclosure. The Contractor shall disclose 
each subject invention to Patent Counsel with a copy to the Contracting 
Officer within two (2) months after the subject invention is reported 
to Contractor personnel responsible for patent matters, in accordance 
with subparagraph (c)(1) of this clause, or, if earlier, within six (6) 
months after the Contractor has knowledge of the subject invention, but 
in any event no less than 60 days before any on sale, public use, or 
publication of the subject invention. The disclosure to DOE shall be in 
the form of a written report and shall include:
* * * * *
    (vii) All sources of funding by Budget and Resources (B&R) code. 
The funding program may require other invention identifiers such as 
related award numbers or funding opportunity announcement numbers; and
* * * * *
    (5) Contractor procedures for reporting subject inventions to DOE. 
The Contractor agrees to establish and maintain effective procedures 
for ensuring the prompt identification and timely disclosure of subject 
inventions to DOE. The Contractor shall submit a written description of 
such procedures to the Contracting Officer, upon request, for 
evaluation of the effectiveness of such procedures by the Contracting 
Officer. Whenever possible in this paragraph (c), the Government 
electronic reporting system (e.g., iEdison or similar system) may be 
used for reporting and approvals.
* * * * *
    (f) * * *
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations and small business firms. Except for the 
subcontracts described in subparagraph (f)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-13, 
suitably modified to identify the parties and any applicable patent 
waiver granted by DOE Patent Counsel, in any contract for experimental, 
developmental, demonstration or research work.
* * * * *
    (o) Unauthorized Access. The contractor will protect all invention 
reports, unpublished patent applications and other invention related

[[Page 73738]]

information from unauthorized access and disclosure using at least 
commonly available techniques and practices. In the event that the 
Contractor becomes aware of unauthorized access to invention reports, 
unpublished patent applications and other invention related 
information, the Contractor shall notify Patent Counsel within 7 days.
* * * * *
0
251. Section 970.5227-12 is revised to read as follows:


Sec.  970.5227-12  Patent rights--management and operating contracts, 
for-profit contractor, patent waiver.

    As prescribed in 970.2703-2(c), insert the following clause:
Patent Rights--Management and Operating Contracts, For-Profit 
Contractor, Patent Waiver (XXX 20XX)
    (a) Definitions.
    Department of Energy (DOE), as used in this clause, includes the 
National Nuclear Security Administration (NNSA), and unless otherwise 
identified or indicated, includes the coordinated efforts of the DOE 
and NNSA.
    DOE licensing regulations means the Department of Energy patent 
licensing regulations at 10 CFR part 781.
    DOE patent waiver regulations means the Department of Energy patent 
waiver regulations at 10 CFR part 784.
    Exceptional Circumstance Subject Invention means any subject 
invention in a technical field or related to a task determined by the 
Department of Energy to be subject to an exceptional circumstance under 
35 U.S.C. 202(a)(ii), and in accordance with 37 CFR 401.3(e).
    Initial Patent Application means, as to a given Subject Invention, 
the first provisional or non-provisional U.S. national application for 
patent as defined in 37 CFR 1.9(a)(2) and (3), respectively, the first 
international application filed under the Patent Cooperation Treaty as 
defined in 37 CFR 1.9(b) which designates the United States, or the 
first application for a Plant Variety Protection certificate, as 
applicable.
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of plant which is or may be protected under 
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).
    Made when used in relation to any invention means the conception or 
first actual reduction to practice of such invention.
    Patent counsel means DOE Patent Counsel assisting the contracting 
activity. The Patent Counsel is the first and primary point of contact 
for activities described in this clause.
    Practical application means to manufacture, in the case of a 
composition or product; to practice, in the case of a process or 
method; or to operate, in the case of a machine or system; and, in each 
case, under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    Statutory period means the one-year period before the effective 
filing date of a claimed invention during which exceptions to prior art 
exist per 35 U.S.C. 102(b) as amended by the Leahy-Smith America 
Invents Act, Public Law 112-29.
    Subject invention means any invention of the contractor conceived 
or first actually reduced to practice in the course of or under this 
contract, provided that in the case of a variety of plant, the date of 
determination (as defined in section 41(d) of the Plant Variety 
Protection Act, 7 U.S.C. 2401(d)) shall also occur during the period of 
contract performance.
    (b) Allocation of principal rights--(1) Assignment to the 
Government. Except to the extent that rights are retained by the 
Contractor by the granting of an advance class waiver pursuant to 
subparagraph (b)(2) of this clause or a determination of greater rights 
pursuant to subparagraph (b)(7) of this clause, the Contractor agrees 
to assign to the Government the entire right, title, and interest 
throughout the world in and to each subject invention.
    (2) Advance class waiver of Government rights to the contractor. 
DOE may grant to the Contractor an advance class waiver of Government 
rights in any or all subject inventions, at the time of execution of 
the contract, such that the Contractor may elect to retain the entire 
right, title and interest throughout the world to such waived subject 
inventions, in accordance with the terms and conditions of the advance 
class waiver. Unless otherwise provided by the terms of the advance 
class waiver, any rights in a subject invention retained by the 
Contractor under an advance class waiver are subject to 35 U.S.C. 203 
and the provisions of this clause, including the Government license 
provided for in subparagraph (b)(3) of this clause, paragraph (t) U.S. 
Competitiveness of this clause, and any reservations and conditions 
deemed appropriate by the Secretary of Energy or designee.
    (3) Government license. With respect to any subject invention to 
which the Contractor retains title, either under an advance class 
waiver pursuant to subparagraph (b)(2) or a determination of greater 
rights pursuant to subparagraph (b)(7) of this clause, the Government 
has a nonexclusive, nontransferable, irrevocable, paid-up license to 
practice or have practiced for or on behalf of the United States the 
subject invention throughout the world.
    (4) Foreign patent rights. If the Government has title to a subject 
invention and the Government decides against securing patent rights in 
a foreign country for the subject invention, the Contractor may request 
such foreign patent rights from DOE, and DOE may grant the Contractor's 
request, subject to 35 U.S.C. 203 and the provisions of this clause, 
including the Government license provided for in subparagraph (b)(3) of 
this clause, and any reservations and conditions deemed appropriate by 
the Secretary of Energy or designee.
    (5) Treaties and international agreements. Any rights acquired by 
the Contractor in subject inventions are subject to any disposition of 
right, title, or interest in or to subject inventions provided for in 
treaties or international agreements identified at DOE's Office of 
International Affairs (international Commitments--IEC) (https://energy.gov/ia/.iec-documents), or other rights which are necessary for 
the Government to meet its obligations to foreign governments, their 
nationals and international organizations under such treaties or 
international agreements with respect to subject inventions.
    (6) Exceptional circumstance subject inventions. Except to the 
extent that rights are retained by the Contractor by a determination of 
greater rights in accordance with subparagraph (b)(7) of this clause, 
the Contractor does not have the right to retain title to any 
exceptional circumstance subject inventions and agrees to assign to the 
Government the entire right, title, and interest, throughout the world, 
in and to any exceptional circumstance subject inventions.
    (i) Inventions within or relating to the following fields of 
technology are exceptional circumstance subject inventions in which the 
Contractor cannot retain title without specific grant of a waiver from 
DOE:
    (A) Uranium enrichment technology;
    (B) Storage and disposal of civilian high-level nuclear waste and 
spent fuel technology; and
    (C) National security technologies classified or sensitive under 
section 148 of the Atomic Energy Act (42 U.S.C. 2168); and

[[Page 73739]]

    (D) DOE Steel Initiative and Metals Initiative.
    (ii) As determined by the DOE, inventions made under any agreement, 
contract or subcontract related to the exceptional circumstance subject 
inventions subject to specific terms outlined in those declarations of 
exceptional circumstance, the Contractor may take title to these 
inventions consistent with the terms of this contract. A complete list 
of declarations of exceptional circumstance, which is maintained by the 
Office of the Assistant General Counsel for Technology Transfer and 
Intellectual Property, include but is not limited to the following--
    (A) U.S. Advanced Battery Consortium;
    (B) Any funding agreement which is funded in part by the Electric 
Power Research Institute (EPRI) or the Gas Research Institute (GRI);
    (C) Any funding agreement related to Energy Efficiency, Storage, 
Integration and Related Technologies, Renewable Energy, and Advanced 
Energy Technologies which is funded by the Office of Energy Efficiency 
and Renewable Energy (EERE) or the Advanced Research Projects Agency--
Energy (ARPA-E);
    (D) Solid State Energy Conversion Alliance (SECA), if the 
Contractor is a participant in the ``Core Technology Program'';
    (E) Solid State Lighting (SSL) Program, if the Contractor is a 
participant in the ``Core Technology Program.''
    (F) Cybersecurity, Energy Security, and Emergency Response;
    (G) Quantum Information Science Technologies; and
    (H) Domestic Manufacture of DOE Science and Energy Technologies 
(S&E DEC).
    (iii) Inventions subject to ``Department of Energy Determination of 
Exceptional Circumstances under the Bayh-Dole Act to Further Promote 
Domestic Manufacture of DOE Science and Energy Technologies'' (S&E DEC) 
issued 6/7/2021 must comply with paragraph (t) U.S. Competitiveness 
requirements to the maximum extent authorized by the S&E DEC unless 
otherwise directed by DOE Patent Counsel in writing.
    (iv) Exceptional circumstances subject inventions are as set forth 
in the applicable patent waiver. In addition, DOE reserves the right to 
unilaterally amend this contract to modify, by deletion or insertion, 
technical fields, programs, initiatives, and/or other classifications 
for the purpose of defining DOE exceptional circumstance subject 
inventions.
    (7) Contractor request for greater rights. The Contractor may 
request greater rights in an identified subject invention, including an 
exceptional circumstance subject invention, to which the Contractor 
does not have the right to elect to retain title, in accordance with 
the DOE patent waiver regulations, by submitting such a request in 
writing to Patent Counsel with a copy to the Contracting Officer at the 
time the subject invention is first disclosed to DOE pursuant to 
subparagraph (c)(1) of this clause, or not later than eight (8) months 
after such disclosure, unless a longer period is authorized in writing 
by the Contracting Officer for good cause shown in writing by the 
Contractor. DOE may grant or refuse to grant such a request by the 
Contractor. Unless otherwise provided in the greater rights 
determination, any rights in a subject invention obtained by the 
Contractor under a determination of greater rights is subject to 35 
U.S.C. 203 and the provisions of this clause, including the Government 
license provided for in subparagraph (b)(3) of this clause, and to any 
reservations and conditions deemed appropriate by the Secretary of 
Energy or designee.
    (8) Contractor employee-inventor rights. If the Contractor does not 
elect to retain title to a subject invention or does not request 
greater rights in a subject invention, including an exceptional 
circumstance subject invention, to which the Contractor does not have 
the right to elect to retain title, a Contractor employee-inventor, 
after consultation with the Contractor and with written authorization 
from the Contractor in accordance with 10 CFR 784.9(b)(4), may request 
greater rights, including title, in the subject invention or the 
exceptional circumstance invention from DOE, and DOE may grant or 
refuse to grant such a request by the Contractor employee-inventor.
    (9) Government assignment of rights in Government employees' 
subject inventions. If a DOE employee is a joint inventor of a subject 
invention to which the Contractor has rights, DOE may assign or refuse 
to assign any rights in the subject invention acquired by the 
Government from the DOE employee to the Contractor, consistent with 48 
CFR 27.304-1(d). Unless otherwise provided in the assignment, the 
rights assigned to the Contractor are subject to the Government license 
provided for in subparagraph (b)(3) of this clause, and to any 
provision of this clause applicable to subject inventions in which 
rights are retained by the Contractor, and to any reservations and 
conditions deemed appropriate by the Secretary of Energy or designee. 
The Contractor shall share royalties collected for the manufacture, use 
or sale of the subject invention with the DOE employee.
    (c) Subject invention disclosure, election of title, and filing of 
patent application by Contractor--(1) Subject invention disclosure. The 
Contractor shall disclose each subject invention to Patent Counsel with 
a copy to the Contracting Officer within two (2) months after an 
inventor discloses it in writing to Contractor personnel responsible 
for patent matters or, if earlier, within six (6) months after the 
Contractor has knowledge of the subject invention, but in any event no 
less than 60 days before any on sale, public use, or publication of the 
subject invention. The disclosure to DOE shall be in the form of a 
written or electronic report and shall include:
    (i) The contract number under which the subject invention was made;
    (ii) The inventor(s) of the subject invention;
    (iii) A description of the subject invention in sufficient 
technical detail to convey a clear understanding of the nature, purpose 
and operation of the subject invention, and of the physical, chemical, 
biological or electrical characteristics of the subject invention, to 
the extent known by the Contractor at the time of the disclosure;
    (iv) The date and identification of any publication, on sale or 
public use of the invention;
    (v) The date and identification of any submissions for publication 
of any manuscripts describing the invention, and a statement of whether 
the manuscript is accepted for publication, to the extent known by the 
Contractor at the time of the disclosure;
    (vi) A statement indicating whether the subject invention is an 
exceptional circumstance subject invention, related to national 
security, or subject to a treaty or an international agreement, to the 
extent known or believed by Contractor at the time of the disclosure;
    (vii) All sources of funding by Budget and Resources (B&R) code. 
The funding program may require other invention identifiers such as 
related award numbers or funding opportunity announcement numbers; and
    (viii) The identification of any agreement relating to the subject 
invention, including Cooperative Research and Development Agreements 
and Strategic Partnership Projects agreements.
    Unless the Contractor contends otherwise in writing at the time the 
invention is disclosed, inventions

[[Page 73740]]

disclosed to DOE under this paragraph are deemed made in the manner 
specified in sections (a)(1) and (a)(2) of 42 U.S.C. 5908.
    (2) Publication after disclosure. After disclosure of the subject 
invention to the DOE, the Contractor shall promptly notify Patent 
Counsel of the acceptance for publication of any manuscript describing 
the subject invention or of any expected or on sale or public use of 
the subject invention, known by the Contractor. The Contractor shall 
obtain approval from Patent Counsel prior to any release or publication 
of information concerning an exceptional circumstance subject invention 
or any subject invention related to a treaty or international 
agreement.
    (3) Election by the Contractor under an advance class waiver. If 
the Contractor has the right to elect to retain title to subject 
inventions under an advance class waiver granted in accordance with 
subparagraph (b)(2) of this clause, and unless otherwise provided for 
by the terms of the advance class waiver, the Contractor shall elect in 
writing whether or not to retain title to any subject invention by 
notifying DOE within two (2) years of the date of the disclosure of the 
subject invention to DOE, in accordance with subparagraph (c)(1) of 
this clause. The notification shall identify the advance class waiver, 
state the countries, including the United States, in which rights are 
retained, and certify that the subject invention is not an exceptional 
circumstance subject invention or subject to a treaty or international 
agreement. If a publication, on sale or public use of the subject 
invention has initiated the statutory period under 35 U.S.C. 102(b), 
the period for election may be shortened by DOE to a date that is no 
more than sixty (60) days prior to the end of the statutory period.
    (4) Filing of patent applications by the Contractor under an 
advance class waiver. If the Contractor has the right to retain title 
to a subject invention in accordance with an advance class waiver 
pursuant to subparagraph (b)(2) of this clause or a determination of 
greater rights pursuant to paragraph (b)(7) of this clause, and unless 
otherwise provided for by the terms of the advance class waiver or 
greater rights determination, the Contractor shall file an initial 
patent application claiming the subject invention to which it retains 
title either within one (1) year after the Contractor's election to 
retain or grant of title to the subject invention or prior to the end 
of any statutory period, whichever occurs first. Any patent 
applications filed by the Contractor in foreign countries or 
international patent offices shall be filed within either ten (10) 
months of the corresponding initial patent application or, if such 
filing has been prohibited by a Secrecy Order, within six (6) months 
from the date permission is granted by the Commissioner of Patents and 
Trademarks to file foreign patent applications.
    (5) Submission of patent information and documents. If the 
Contractor files a domestic or foreign patent application claiming a 
subject invention, the Contractor shall promptly submit to Patent 
Counsel, upon request, the following information and documents:
    (i) The filing date, serial number, title, and a copy of the patent 
application (including an English-language version if filed in a 
language other than English);
    (ii) An executed and approved instrument fully confirmatory of all 
Government rights in the subject invention; and
    (iii) The patent number, issue date, and a copy of any issued 
patent claiming the subject invention.
    (6) Contractor's request for an extension of time. Requests for an 
extension of the time to disclose a subject invention, to elect to 
retain title to a subject invention, or to file a patent application 
under subparagraphs (c)(1), (3), and (4) of this clause may be granted 
at the discretion of Patent Counsel or DOE.
    (7) Duplication and disclosure of documents. The Government may 
duplicate and disclose subject invention disclosures and all other 
reports and papers furnished or required to be furnished pursuant to 
this clause; provided, however, that any such duplication or disclosure 
by the Government is subject to 35 U.S.C. 205 and 37 CFR part 40.
    (8) Reporting to DOE and Approvals. Whenever possible in this 
paragraph (c), the Government electronic reporting system (e.g., 
iEdison or similar system) may be used for reporting and approvals.
    (d) Conditions when the Government may obtain title notwithstanding 
an advance class waiver--(1) Return of title to a subject invention. If 
the Contractor requests that DOE acquire title or rights from the 
Contractor in a subject invention, including an exceptional 
circumstance subject invention, to which the Contractor retained title 
or rights under subparagraph (b)(2) or (7) of this clause, DOE may 
acquire such title or rights from the Contractor, or DOE may decide 
against acquiring such title or rights from the Contractor, at DOE's 
sole discretion.
    (2) Failure to disclose or elect to retain title. Title vests in 
DOE and DOE may request, in writing, a formal assignment of title to a 
subject invention from the Contractor, and the Contractor shall convey 
title to the subject invention to DOE, if the Contractor elects not to 
retain title to the subject invention under an advance class waiver, or 
the Contractor fails to disclose or fails to elect to retain title to 
the subject invention within the times specified in subparagraphs 
(c)(1) and (3) of this clause.
    (3) Failure to file domestic or foreign patent applications. In 
those countries in which the Contractor fails to file a patent 
application within the times specified in subparagraph (c)(4) of this 
clause, DOE may request, in writing, title to the subject invention 
from the Contractor, and the Contractor shall convey title to the 
subject invention to DOE; provided, however, that if the Contractor has 
filed a patent application in any country after the times specified in 
subparagraph (c)(4) of this clause, but prior to its receipt of DOE's 
written request for title, the Contractor continues to retain title in 
that country.
    (4) Discontinuation of patent protection by the Contractor. If the 
Contractor decides to not file a non-provisional application, or to 
discontinue the prosecution of a patent application, the payment of 
maintenance fees, or the defense of a subject invention in a 
reexamination or opposition proceeding, in any country, DOE may 
request, in writing, title to the subject invention from the 
Contractor, and the Contractor shall convey title to the subject 
invention to DOE.
    (5) Termination of advance class waiver. DOE may request, in 
writing, title to any subject inventions from the Contractor, and the 
Contractor shall convey title to the subject inventions to DOE, if the 
advance class waiver granted under subparagraph (b)(2) of this clause 
is terminated under paragraph (v) of this clause.
    (6) Upon a breach of paragraph (t) U.S. Competitiveness of this 
clause.
    (e) Minimum rights of the Contractor--(1) Request for a Contractor 
license. Except for subject inventions that the Contractor fails to 
disclose within the time periods specified at subparagraph (c)(1) of 
this clause, the Contractor may request a revocable, nonexclusive, 
royalty-free license in each patent application filed in any country 
claiming a subject invention and any resulting patent in which the 
Government obtains title, and DOE may grant or refuse to grant such a 
request by the Contractor. If DOE grants the Contractor's request for a 
license, the

[[Page 73741]]

Contractor's license extends to its domestic subsidiaries and 
affiliates, if any, within the corporate structure of which the 
Contractor is a party and includes the right to grant sublicenses of 
the same scope to the extent the Contractor was legally obligated to do 
so at the time the contract was awarded.
    (2) Transfer of a Contractor license. Contractor must obtain DOE 
approval of any transfer of the Contractor's license in a subject 
invention, and DOE may determine that the Contractor's license is non-
transferrable, on a case-by-case basis.
    (3) Revocation or modification of a Contractor license. DOE may 
revoke or modify the Contractor's domestic license to the extent 
necessary to achieve expeditious practical application of the subject 
invention pursuant to an application for an exclusive license submitted 
in accordance with applicable provisions in 37 CFR part 404 and DOE 
licensing regulations. DOE may not revoke the Contractor's domestic 
license in that field of use or the geographical areas in which the 
Contractor, its licensees or its domestic subsidiaries or affiliates 
have achieved practical applications and continues to make the benefits 
of the invention reasonably accessible to the public. DOE may revoke or 
modify the Contractor's license in any foreign country to the extent 
the Contractor, its licensees, or its domestic subsidiaries or 
affiliates have failed to achieve practical application in that foreign 
country.
    (4) Notice of revocation or modification of a Contractor license. 
Before revocation or modification of the license, DOE shall furnish the 
Contractor a written notice of its intention to revoke or modify the 
license, and the Contractor shall be allowed thirty (30) days from the 
date of the notice (or such other time as may be authorized by DOE for 
good cause shown by the Contractor) to show cause why the license 
should not be revoked or modified. The Contractor has the right to 
appeal any decision concerning the revocation or modification of its 
license, in accordance with applicable regulations in 37 CFR part 404 
and DOE licensing regulations.
    (f) Contractor action to protect the Government's interest--(1) 
Execution and delivery of title or license instruments. The Contractor 
agrees to execute or have executed, and to deliver promptly to DOE all 
instruments necessary to accomplish the following actions:
    (i) Establish or confirm the Government's rights throughout the 
world in subject inventions to which the Contractor elects to retain 
title;
    (ii) Convey title in a subject invention to DOE pursuant to 
subparagraph (b)(5) and paragraph (d) of this clause; or
    (iii) Enable the Government to obtain patent protection throughout 
the world in a subject invention to which the Government has title.
    (2) Contractor employee agreements. The Contractor agrees to 
require, by written agreement, its employees, other than clerical and 
nontechnical employees, to disclose promptly in writing to Contractor 
personnel identified as responsible for the administration of patent 
matters and in a format suggested by the Contractor, each subject 
invention made under this contract, and to execute all papers necessary 
to file patent applications claiming subject inventions or to establish 
the Government's rights in the subject inventions. This disclosure 
format shall at a minimum include the information required by 
subparagraph (c)(1) of this clause. The Contractor shall instruct such 
employees, through employee agreements or other suitable educational 
programs, on the importance of reporting inventions in sufficient time 
to permit the filing of patent applications prior to U.S. or foreign 
statutory bars.
    (3) Contractor procedures for reporting subject inventions to DOE. 
The Contractor agrees to establish and maintain effective procedures 
for ensuring the prompt identification and timely disclosure of subject 
inventions to DOE. The Contractor shall submit a written description of 
such procedures to the Contracting Officer, upon request, for 
evaluation and approval of the effectiveness of such procedures by the 
Contracting Officer.
    (4) Notification of discontinuation of patent protection. With 
respect to any subject invention for which the Contractor has 
responsibility for patent prosecution, the Contractor shall notify 
Patent Counsel of any decision to discontinue the prosecution of a 
patent application, payment of maintenance fees, or defense of a 
subject invention in a reexamination or opposition proceeding, in any 
country, not less than 60 days before the expiration of the response 
period for any action required by the corresponding patent office.
    (5) Notification of Government rights. With respect to any subject 
invention to which the Contractor has title, the Contractor agrees to 
include, within the specification of any United States patent 
application and within any patent issuing thereon claiming a subject 
invention, the following statement, ``This invention was made with 
Government support under (identify the contract) awarded by the United 
States Department of Energy. The Government has certain rights in the 
invention.''
    (6) Avoidance of royalty charges. If the Contractor licenses a 
subject invention, the Contractor agrees to avoid royalty charges on 
acquisitions involving Government funds, including funds derived 
through a Military Assistance Program of the Government or otherwise 
derived through the Government, to refund any amounts received as 
royalty charges on a subject invention in acquisitions for, or on 
behalf of, the Government, and to provide for such refund in any 
instrument transferring rights in the subject invention to any party.
    (7) DOE approval of assignment of rights. Rights in a subject 
invention in the United States may not be assigned by the Contractor 
without the approval of DOE.
    (8) Small business firm licensees. The Contractor shall make 
efforts that are reasonable under the circumstances to attract 
licensees of subject inventions that are small business firms, and may 
give a preference to a small business firm when licensing a subject 
invention if the Contractor determines that the small business firm has 
a plan or proposal for marketing the invention which, if executed, is 
equally as likely to bring the invention to practical application as 
any plans or proposals from applicants that are not small business 
firms; provided, the Contractor is also satisfied that the small 
business firm has the capability and resources to carry out its plan or 
proposal. The decision as to whether to give a preference in any 
specific case is at the discretion of the Contractor.
    (9) Contractor licensing of subject inventions. To the extent that 
it provides the most effective technology transfer, licensing of 
subject inventions shall be administered by Contractor employees on 
location at the facility.
    (g) Subcontracts--(1) Subcontractor subject inventions. The 
Contractor shall not obtain rights in the subcontractor's subject 
inventions as part of the consideration for awarding a subcontract.
    (2) Inclusion of patent rights clause--non-profit organization or 
small business firm subcontractors. Unless otherwise authorized or 
directed by the Contracting Officer, the Contractor shall include the 
patent rights clause at 37 CFR 401.14, suitably modified to identify 
the parties, in all subcontracts, at any tier, for experimental, 
developmental, demonstration or research work to be performed by a 
small business firm or domestic nonprofit organization, except 
subcontracts which are subject to

[[Page 73742]]

exceptional circumstances in accordance with 35 U.S.C. 202 and 
subparagraph (b)(5) of this clause. If the S&E DEC is applicable (see 
subparagraph (b)(3)(iii) of this clause), paragraph (t) U.S. 
Competitiveness must be included in the subcontractor's patent clause 
as paragraph (m) U.S. Competitiveness. Additionally, the following item 
(4) must be added to paragraph (d) of the subcontractor's patent clause 
``(4) Upon a breach of paragraph (m) U.S. Competitiveness of this 
clause.''
    (3) Inclusion of patent rights clause--subcontractors other than 
non-profit organizations or small business firms. Except for the 
subcontracts described in subparagraph (g)(2) of this clause, the 
Contractor shall include the patent rights clause at 48 CFR 952.227-13, 
suitably modified to identify the parties and any applicable patent 
waiver granted by DOE Patent Counsel, in any contract for experimental, 
developmental, demonstration or research work. If the S&E DEC is 
applicable (see subparagraph (b)(3)(iii) of this clause), paragraph (t) 
U.S. Competitiveness must be included in the subcontractor's patent 
clause as paragraph (n) U.S. Competitiveness. Additionally, the 
following must be appended to the first sentence paragraph of (d)(1) 
``or upon a breach of paragraph (n) U.S. Competitiveness of this 
clause.''
    (4) DOE and subcontractor contract. With respect to subcontracts at 
any tier, DOE, the subcontractor and Contractor agree that the mutual 
obligations of the parties created by this clause constitute a contract 
between the subcontractor and DOE with respect to those matters covered 
by this clause; provided, however, that nothing in this paragraph is 
intended to confer any jurisdiction under the Contract Disputes Act in 
connection with proceedings under paragraph (j) of this clause.
    (5) Subcontractor refusal to accept terms of patent rights clause. 
If a prospective subcontractor refuses to accept the terms of a patent 
rights clause, the Contractor shall promptly submit a written notice to 
the Contracting Officer stating the subcontractor's reasons for such 
refusal and including relevant information for expediting disposition 
of the matter; and the Contractor shall not proceed with the 
subcontract without the written authorization of the Contracting 
Officer.
    (6) Notification of award of subcontract. Upon the award of any 
subcontract at any tier containing a patent rights clause, the 
Contractor shall promptly notify the Contracting Officer in writing and 
identify the subcontractor, the applicable patent rights clause, the 
work to be performed under the subcontract, and the dates of award and 
estimated completion. Upon request of the Contracting Officer, the 
Contractor shall furnish a copy of a subcontract.
    (7) Identification of subcontractor subject inventions. If the 
Contractor in the performance of this contract becomes aware of a 
subject invention made under a subcontract, the Contractor shall 
promptly notify Patent Counsel and identify the subject invention, with 
a copy of the notification and identification to the Contracting 
Officer.
    (h) Reporting on utilization of subject inventions. Upon request by 
DOE, the Contractor agrees to submit periodic reports, no more 
frequently than annually, describing the utilization of a subject 
invention or efforts made by the Contractor or its licensees or 
assignees to obtain utilization of the subject invention. In addition, 
the Contractor shall provide data to DOE for the annual data call for 
the Department of Commerce report that included the number of patent 
applications filed, the number of patents issued, licensing activity, 
gross royalties received by the Contractor, and other data and 
information reasonably specified by DOE. Upon request by DOE, the 
Contractor also agrees to provide reports in connection with any march-
in proceedings undertaken by DOE, in accordance with paragraph (j) of 
this clause. If any data or information reported by the Contractor in 
accordance with this provision is considered privileged and 
confidential by the Contractor, its licensee, or assignee and the 
Contractor properly marks the data or information privileged or 
confidential, DOE agrees not to disclose such information to persons 
outside the Government, to the extent permitted by law.
    (i) Preference for United States industry. Notwithstanding any 
other provision of this clause the Contractor agrees that with respect 
to any subject invention in which it retains title, neither it nor any 
assignee may grant to any person the exclusive right to use or sell any 
subject invention in the United States unless such person agrees that 
any products embodying the subject invention or produced through the 
use of the subject invention will be manufactured substantially in the 
United States. However, in individual cases, DOE may waive the 
requirement for such an agreement upon a showing by the Contractor or 
its assignee that reasonable but unsuccessful efforts have been made to 
grant licenses on similar terms to potential licensees that would be 
likely to manufacture substantially in the United States or that under 
the circumstances domestic manufacture is not commercially feasible.
    (j) March-In rights. With respect to any subject invention to which 
the Contractor has elected to retain or is granted title, DOE may, in 
accordance with the procedures in the DOE patent waiver regulations, 
require the Contractor, an assignee or exclusive licensee of a subject 
invention to grant a nonexclusive, partially exclusive or exclusive 
license in any field of use to a responsible applicant or applicants, 
upon terms that are reasonable under the circumstances. If the 
Contractor, assignee or exclusive licensee refuses such a request, DOE 
has the right to grant such a license itself under the patent waiver.
    (k) Communications. The Contractor shall direct any notification, 
disclosure, or request provided for in this clause to the Patent 
Counsel identified in the contract.
    (l) Reports--(1) Interim reports. Upon DOE's request, the 
Contractor shall submit to DOE, no more frequently than annually, a 
list of subject inventions disclosed to DOE during a specified period, 
or a statement that no subject inventions were made during the 
specified period; and/or a list of subcontracts containing a patent 
clause and awarded by the Contractor during a specified period, or a 
statement that no such subcontracts were awarded during the specified 
period. The interim report shall state whether the Contractor's 
invention disclosures were submitted to DOE in accordance with the 
requirements of subparagraphs (f)(3) and (4) of this clause.
    (2) Final reports. Upon DOE's request, the Contractor shall submit 
to DOE, prior to closeout of the contract or within three (3) months of 
the date of completion of the contracted work, a list of all subject 
inventions disclosed during the performance period of the contract, or 
a statement that no subject inventions were made during the contract 
performance period; and/or a list of all subcontracts containing a 
patent clause and awarded by the Contractor during the contract 
performance period, or a statement that no such subcontracts were 
awarded during the contract performance period.
    (m) Facilities License. In addition to the rights of the parties 
with respect to inventions or discoveries conceived or first actually 
reduced to practice in the course of or under this contract, the 
Contractor agrees to and does hereby grant to the Government an 
irrevocable, nonexclusive, paid-up license in and to

[[Page 73743]]

any inventions or discoveries regardless of when conceived or actually 
reduced to practice or acquired by the contractor at any time through 
completion of this contract and which are incorporated or embodied in 
the construction of the facility or which are utilized in the operation 
of the facility or which cover articles, materials, or products 
manufactured at the facility:
    (1) To practice or have practiced by or for the Government at the 
facility; and
    (2) To transfer such license with the transfer of that facility. 
Notwithstanding the acceptance or exercise by the Government of these 
rights, the Government may contest at any time the enforceability, 
validity or scope of, or title to, any rights or patents herein 
licensed.
    (n) Atomic energy--(1) Pecuniary awards. No claim for pecuniary 
award of compensation under the provisions of the Atomic Energy Act of 
1954, as amended, may be asserted with respect to any invention or 
discovery made or conceived in the course of or under this contract.
    (2) Patent agreements. Except as otherwise authorized in writing by 
the Contracting Officer, the Contractor shall obtain patent agreements 
to effectuate the provisions of subparagraph (o)(1) of this clause from 
all persons who perform any part of the work under this contract, 
except nontechnical personnel, such as clerical employees and manual 
laborers.
    (o) Classified inventions--(1) Approval for filing a foreign patent 
application. The Contractor shall not file or cause to be filed an 
application or registration for a patent disclosing a subject invention 
related to classified subject matter in any country other than the 
United States without first obtaining the written approval of the 
Contracting Officer.
    (2) Transmission of classified subject matter. If in accordance 
with this clause the Contractor files a patent application in the 
United States disclosing a subject invention that is classified for 
reasons of security, the Contractor shall observe all applicable 
security regulations covering the transmission of classified subject 
matter. If the Contractor transmits a patent application disclosing a 
classified subject invention to the United States Patent and Trademark 
Office (USPTO), the Contractor shall submit a separate letter to the 
USPTO identifying the contract or contracts by agency and agreement 
number that require security classification markings to be placed on 
the patent application.
    (3) Inclusion of clause in subcontracts. The Contractor agrees to 
include the substance of this clause in subcontracts at any tier that 
cover or are likely to cover subject matter classified for reasons of 
security.
    (p) Records relating to inventions--(1) Contractor compliance. 
Until the expiration of three (3) years after final payment under this 
contract, the Contracting Officer or any authorized representative may 
examine any books (including laboratory notebooks), records, and 
documents and other supporting data of the Contractor, which the 
Contracting Officer or authorized representative deems reasonably 
pertinent to the discovery or identification of subject inventions, 
including exceptional circumstance subject inventions, or to determine 
Contractor (and inventor) compliance with the requirements of this 
clause, including proper identification and disclosure of subject 
inventions, and establishment and maintenance of invention disclosure 
procedures.
    (2) Unreported inventions. If the Contracting Officer is aware of 
an invention that is not disclosed by the Contractor to DOE, and the 
Contracting Officer believes the unreported invention may be a subject 
invention, DOE may require the Contractor to submit to DOE a disclosure 
of the invention for a determination of ownership rights.
    (3) Confidentiality. Any examination of records under this 
paragraph is subject to appropriate conditions to protect the 
confidentiality of the information involved.
    (4) Power of inspection. With respect to a subject invention for 
which the Contractor has responsibility for patent prosecution, the 
Contractor shall furnish the Government, upon request by DOE, an 
irrevocable power to inspect and make copies of a prosecution file for 
any patent application claiming the subject invention.
    (q) Patent functions. Upon the written request of the Contracting 
Officer or Patent Counsel, the Contractor agrees to make reasonable 
efforts to support DOE in accomplishing patent-related functions for 
work arising out of the contract, including, but not limited to, the 
prosecution of patent applications, and the determination of questions 
of novelty, patentability, and inventorship.
    (r) Educational awards subject to 35 U.S.C. 212. The Contractor 
shall notify the Contracting Officer prior to the placement of any 
person subject to 35 U.S.C. 212 in an area of technology or task (1) 
related to exceptional circumstance technology or (2) any person who is 
subject to treaties or international agreements as set forth in 
paragraph (b)(6) of this clause or to agreements other than funding 
agreements. The Contracting Officer may disapprove of any such 
placement.
    (s) Annual appraisal by Patent Counsel. Patent Counsel may conduct 
an annual appraisal to evaluate the Contractor's effectiveness in 
identifying and protecting subject inventions in accordance with DOE 
policy.
    (t) U.S. Competitiveness. Notwithstanding 48 CFR 970.5227-3(f), 
U.S. Industrial Competitiveness, for all work subject to the S&E DEC, 
the Contractor agrees that any products embodying any subject invention 
or produced through the use of any subject invention will be 
manufactured substantially in the United States unless the Contractor 
can show to the satisfaction of DOE that it is not commercially 
feasible. In the event DOE agrees to foreign manufacture, there will be 
a requirement that the Government's support of the technology be 
recognized in some appropriate manner, e.g., alternative binding 
commitments to provide an overall net benefit to the U.S. economy. The 
Contractor agrees that it will not license, assign or otherwise 
transfer any subject invention to any entity, at any tier, unless that 
entity agrees to these same requirements. Should the Contractor or 
other such entity receiving rights in the invention(s): (1) undergo a 
change in ownership amounting to a controlling interest, or (2) sell, 
assign, or otherwise transfer title or exclusive rights in the 
invention(s), then the assignment, license, or other transfer of rights 
in the subject invention(s) is/are suspended until approved in writing 
by DOE. The Contractor and any successor assignee will convey to DOE, 
upon written request from DOE, title to any subject invention, upon a 
breach of this paragraph. The Contractor will include this paragraph in 
all subawards/contracts, regardless of tier, for experimental, 
developmental or research work.
    (u) Publication. The Contractor shall receive approval from Patent 
Counsel prior to releasing or publishing information regarding 
scientific or technical developments conceived or first actually 
reduced to practice in the course of or under this contract, to ensure 
such release or publication does not adversely affect the patent rights 
of DOE or the Contractor. At the discretion of the Patent Counsel, 
authority to review publications prior to release may be delegated to 
the Contractor.
    (v) Termination of contractor's advance class waiver. If a request 
by the Contractor for an advance class waiver pursuant to subparagraph 
(b)(2) of this clause or a determination of greater rights pursuant to 
paragraph (c) of this

[[Page 73744]]

clause contains false material statements or fails to disclose material 
facts, and DOE relies on the false statements or omissions in granting 
the Contractor's request, the waiver or grant of any Government rights 
(in whole or in part) to the subject invention(s) may be terminated at 
the discretion of the Secretary of Energy or designee. Prior to 
termination, DOE shall provide the Contractor with written notification 
of the termination, including a statement of facts in support of the 
termination, and the Contractor shall be allowed thirty (30) days, or a 
longer period authorized by the Secretary of Energy or designee for 
good cause shown in writing by the Contractor, to show cause for not 
terminating the waiver or grant. Any termination of an advance class 
waiver or a determination of greater rights is subject to the 
Contractor's license as provided for in paragraph (f) of this clause.
    (w) Unauthorized Access. The contractor will protect all invention 
reports, unpublished patent applications and other invention related 
information from unauthorized access and disclosure using at least 
commonly available techniques and practices. In the event that the 
Contractor becomes aware of unauthorized access to invention reports, 
unpublished patent applications and other invention related 
information, the Contractor shall notify Patent Counsel within 7 days.


(End of clause)
    Alternate 1 Weapons Related Subject Inventions. As prescribed at 
970.2703-2(g), insert the following definition in paragraph (a) and add 
subparagraph (b)(10) respectively:
    (a) Definitions.
    Weapons Related Subject Invention means any subject invention 
conceived or first actually reduced to practice in the course of or 
under work funded by or through defense programs, including Department 
of Defense and intelligence reimbursable work, or the Naval Nuclear 
Propulsion Program of the Department of Energy or the National Nuclear 
Security Administration.
    (b) Allocation of Principal Rights. (10) Weapons related subject 
inventions. Except to the extent that DOE is solely satisfied that the 
Contractor meets certain procedural requirements and DOE grants rights 
to the Contractor in weapons related subject inventions, the Contractor 
does not have a right to retain title to any weapons related subject 
inventions.


(End of alternate)
0
252. Section 970.5232-2 is revised to read as follows:


Sec.  970.5232-2  Payments and advances.

    As prescribed in 970.3270(a)(1), insert the following clause:
Payments and Advances (XXX 20XX)
    (a) Installments of fixed-fee. The fixed-fee payable, if 
applicable, under this contract shall become due and payable in 
periodic installments in accordance with a schedule determined by the 
Contracting Officer. Fixed-fee payments shall be made by direct payment 
or withdrawn from funds advanced or available under this contract, as 
determined by the Contracting Officer. The Contracting Officer may 
offset against any such fee payment the amounts owed to the Government 
by the Contractor, including any amounts owed for disallowed costs 
under this contract. No fixed-fee payment may be withdrawn against the 
payments cleared financing arrangement without prior written approval 
of the Contracting Officer.
    (b) Payments on Account of Allowable Costs. The Contracting Officer 
and the Contractor shall agree as to the extent to which payment for 
allowable costs or payments for other items specifically approved in 
writing by the Contracting Officer (for example, negotiated fixed 
amounts) shall be made from advances of Government funds.
    (c) Timing of payments. Funds for payments of allowable costs, 
including payments for pension plan contributions, shall be drawn from 
the special financial institution account when those payments are made, 
not when the costs are accrued.
    (d) Special financial institution account--use. All advances of 
Government funds shall be withdrawn pursuant to a payments cleared 
financing arrangement prescribed by DOE in favor of the financial 
institution or, at the option of the Government, shall be made by 
direct payment or other payment mechanism to the Contractor, and shall 
be deposited only in the special financial institution account referred 
to in the Special Financial Institution Account Agreement, which is 
incorporated into this contract as Appendix--``_____''. The contractor 
will follow current procedures and requirements for establishing and 
managing the special financial institution account that are stated in 
the Department's Financial Management Handbook and relevant Department 
of Treasury rules.
    (e) Use of the special financial institution account for 
unallowable costs. Government funds in the special financial 
institution account shall be used only for costs allowable and, if 
applicable, fees earned under this contract, negotiated fixed amounts, 
or payments for other items specifically approved in writing by the 
Contracting Officer.
    (f) Title to funds advanced. Title to the unexpended balance of any 
funds advanced and of any special financial institution account 
established pursuant to this clause shall remain in the Government and 
be superior to any claim or lien of the financial institution of 
deposit or others. It is understood that an advance to the Contractor 
hereunder is not a loan to the Contractor, and will not require the 
payment of interest by the Contractor, and that the Contractor acquires 
no right, title or interest in or to such advance other than the right 
to make expenditures therefrom, as provided in this clause.
    (g) Financial settlement. The Government shall promptly pay to the 
Contractor the unpaid balance of allowable costs (or other items 
specifically approved in writing by the Contracting Officer) and fee 
upon termination of the work, expiration of the term of the contract, 
or completion of the work and its acceptance by the Government after--
    (1) Compliance by the Contractor with DOE's patent clearance 
requirements; and
    (2) The furnishing by the Contractor of--
    (i) An assignment of the Contractor's rights to any refunds, 
rebates, allowances, accounts receivable, collections accruing to the 
Contractor in connection with the work under this contract, or other 
credits applicable to allowable costs under the contract;
    (ii) A closing financial statement;
    (iii) The accounting for Government-owned property required by the 
clause entitled ``Property''; and
    (iv) A release discharging the Government, its officers, agents, 
and employees from all liabilities, obligations, and claims arising out 
of or under this contract subject only to the following exceptions--
    (A) Specified claims in stated amounts or in estimated amounts 
where the amounts are not susceptible to exact statement by the 
Contractor;
    (B) Claims, together with reasonable expenses incidental thereto, 
based upon liabilities of the Contractor to third parties arising out 
of the performance of this contract; provided that such claims are not 
known to the Contractor on the date of the execution of the release; 
and provided further that the Contractor gives notice of such claims in 
writing to the Contracting Officer promptly, but not more than one (1) 
year after the Contractor's right of action first accrues.

[[Page 73745]]

In addition, the Contractor shall provide prompt notice to the 
Contracting Officer of all potential claims under this clause, whether 
in litigation or not (see Contract Clause, 48 CFR 970.5228-1, 
Insurance--Litigation and Claims);
    (C) Claims for reimbursement of costs (other than expenses of the 
Contractor by reason of any indemnification of the Government against 
patent liability), including reasonable expenses incidental thereto, 
incurred by the Contractor under the provisions of this contract 
relating to patents; and
    (D) Claims recognizable under the clause entitled, Nuclear Hazards 
Indemnity Agreement.
    (3) In arriving at the amount due the Contractor under this clause, 
there shall be deducted--
    (i) Any claim which the Government may have against the Contractor 
in connection with this contract; and
    (ii) Deductions due under the terms of this contract and not 
otherwise recovered by or credited to the Government. The unliquidated 
balance of the special financial institution account may be applied to 
the amount due, and any balance shall be returned to the Government 
forthwith.
    (h) Claims. Claims for credit against funds advanced for payment 
shall be accompanied by such supporting documents and justification as 
the Contracting Officer shall prescribe.
    (i) Discounts. The Contractor shall take and afford the Government 
the advantage of all known and available cash and trade discounts, 
rebates, allowances, credits, salvage, and commissions unless the 
Contracting Officer finds that action is not in the best interest of 
the Government.
    (j) Collections. All collections accruing to the Contractor in 
connection with the work under this contract, except for the 
Contractor's fee and royalties or other income accruing to the 
Contractor from technology transfer activities in accordance with this 
contract, shall be Government property and shall be processed and 
accounted for in accordance with applicable requirements imposed by the 
Contracting Officer pursuant to the Laws, regulations, and DOE 
directives clause of this contract and, to the extent consistent with 
those requirements, shall be deposited in the special financial 
institution account or otherwise made available for payment of 
allowable costs under this contract, unless otherwise directed by the 
Contracting Officer.
    (k) Direct payment of charges. The Government reserves the right, 
upon ten days written notice from the Contracting Officer to the 
Contractor, to pay directly to the persons concerned, all amounts due 
which otherwise would be allowable under this contract. Any payment so 
made shall discharge the Government of all liability to the Contractor.
    (l) Determining allowable costs. Regardless of contractor type, the 
Contracting Officer shall determine allowable costs in accordance with 
the Federal Acquisition Regulation subpart 31.2 and the Department of 
Energy Acquisition Regulation subpart 48 CFR 970.31 in effect on the 
date of this contract and other provisions of this contract.


(End of clause)
    Alternate I (DEC 2000). As prescribed in 970.3270(a)(1)(i), if a 
separate fixed-fee is provided for a separate item of work, paragraph 
(a) of the basic clause should be modified to permit payment of the 
entire fixed-fee upon completion of that item.
    Alternate II (DATE XXXX). As prescribed in 970.3270(a)(1)(ii), when 
total available fee provisions are used, replace paragraph (a) of the 
basic clause with the following paragraph (a):
    (a) Payment of Total available fee: Base Fee and Performance Fee. 
(1) The base fee amount, if any, is payable in equal monthly 
installments. Total available fee amount earned is payable following 
the Government's Determination of Total Available Fee Amount Earned in 
accordance with the clause of this contract entitled ``Total Available 
Fee: Base Fee Amount and Performance Fee Amount.'' Base fee amount and 
total available fee amount earned payments shall be made by direct 
payment or withdrawn from funds advanced or available under this 
contract, as determined by the Contracting Officer. The Contracting 
Officer may offset against any such fee payment the amounts owed to the 
Government by the Contractor, including any amounts owed for disallowed 
costs under this contract. No base fee amount or total available fee 
amount earned payment may be withdrawn against the payments cleared 
financing arrangement without the prior written approval of the 
contracting officer.
    (2) Provisional fee. Additionally, if the Contracting Officer 
authorizes provisional payment of fee and for only as long as the 
Contracting Officer authorizes it, the Contractor may withdraw from 
funds advanced on the last working day of each month a provisional fee 
equal to 6 percent of the annual total available fee amount. The 
Contracting Officer may for any reason withdraw his/her authorization 
allowing the Contractor's withdrawal of provisional fee if at any time 
in his/her judgement the Contractor will not earn the provisional fee. 
The Contracting Officer's decision to authorize the Contractor's 
withdrawal of provisional fee or to withdraw such authorization is 
solely within the Contracting Officer's discretion. Following the 
Government's determination of total available fee amount earned, the 
Contractor may withdraw from funds advanced the amount by which earned 
fee exceeds provisional fee; and must immediately return to funds 
advanced the amount by which provisional fee exceeds earned fee.


(End of alternate)
    Alternate III (DATE XXXX). As prescribed in 970.3270(a)(1)(iii), 
the following paragraph (k) shall be included in management and 
operating contracts with integrated accounting systems: (k) Review and 
approval of costs incurred. The Contractor shall prepare and submit 
annually as of September 30, a ``Statement of Costs Incurred and 
Claimed'' (Cost Statement) for the total of net expenditures accrued 
(i.e., net costs incurred) for the period covered by the Cost 
Statement. The Contractor shall certify the Cost Statement subject to 
the penalty provisions for unallowable costs as stated in sections 
306(b) and (i) of the Federal Property and Administrative Services Act 
of 1949 (41 U.S.C. 308), as amended, and the False Claims Act (31 
U.S.C. 3279, et seq.). DOE, after audit and appropriate adjustment, 
will approve such Cost Statement. This approval by DOE will constitute 
an acknowledgment by DOE that the net costs incurred are allowable 
under the contract and that they have been recorded in the accounts 
maintained by the Contractor in accordance with DOE accounting 
policies, but will not relieve the Contractor of responsibility for 
DOE's assets in its care, for appropriate subsequent adjustments, or 
for errors later becoming known to DOE.


(End of alternate)
    Alternate IV (DATE XXXX). As prescribed in 970.3270(a)(1)(iv), the 
following paragraph (k) shall be included in management and operating 
contracts without integrated accounting systems:
    (k) Certification and penalties. The Contractor shall prepare and 
submit a ``Statement of Costs Incurred and Claimed'' (Cost Statement) 
for the total of net expenditures incurred for the period covered by 
the Cost Statement. It is anticipated that this will be an annual 
submission unless otherwise agreed to by the Contracting Officer. The

[[Page 73746]]

Contractor shall certify the Cost Statement subject to the penalty 
provisions for unallowable costs as stated in sections 306(b) and (i) 
of the Federal Property and Administrative Services Act of 1949 (41 
U.S.C. 308), as amended.


(End of alternate)
0
253. Amend section 970.5232-3 by revising the clause date and 
paragraphs (a), (c), and (h)(1) to read as follows:


Sec.  970.5232-3  Accounts, records, and inspection.

* * * * *
Accounts, Records, and Inspection (XXX 20XX)
    (a) Accounts. The Contractor shall maintain a separate and distinct 
set of accounts, records, documents, and other evidence showing and 
supporting: all allowable costs; collections accruing to the Contractor 
in connection with the work under this contract, other applicable 
credits, negotiated fixed amounts, and fee accruals under this 
contract; and the receipt, use, and disposition of all Government 
property coming into the possession of the Contractor under this 
contract. The system of accounts employed by the Contractor shall be 
satisfactory to DOE and in accordance with generally accepted 
accounting principles consistently applied.
* * * * *
    (c) Audit of subcontractors' incurred costs. If the subcontractor's 
incurred costs are a factor in determining the amount the Contractor 
pays the subcontractor and submits to the Government for reimbursement, 
the Contractor shall: perform a sufficient amount of audit work (that 
the Contractor's auditor or the Contracting Officer agrees is 
sufficient) of its subcontractor's incurred costs to provide reasonable 
assurance the costs are allowable; or arrange for an audit by the 
cognizant government audit agency through the Contracting Officer of 
its subcontractor's incurred costs.
* * * * *
    (h) * * *
    (1) The Comptroller General of the United States, or an authorized 
representative, shall have access to and the right to examine any of 
the contractor's or subcontractor's directly pertinent records 
involving transactions related to this contract or a subcontract 
hereunder and to interview any employee regarding such transactions.
* * * * *
0
254. Section 970.5232-5 is amended by revising the introductory text to 
read as follows:


Sec.  970.5232-5  Liability with respect to cost accounting standards.

    As prescribed in 970.3270(a)(4), insert the following clause:
* * * * *
0
255. Section 970.5232-6 is amended by revising the introductory text to 
read as follows:


Sec.  970.5232-6  Strategic partnership project funding authorization.

    As prescribed in 970.3270(a)(5), insert the following clause:
* * * * *
0
256. Section 970.5232-7 is revised to read as follows:


Sec.  970.5232-7  Financial management system.

    As prescribed in 970.3270(b)(1), insert the following clause:
Financial Management System (XXX 20XX)
    (a) The Contractor shall maintain and administer a financial 
management system that is suitable to provide proper accounting in 
accordance with DOE requirements. In addition, the Contractor shall 
maintain and administer a financial management system that is in 
accordance with Generally Accepted Accounting Principles (GAAP) for 
Federal entities, as defined by the Federal Accounting Standards 
Advisory Board and implemented by the DOE Financial Management Handbook 
and other implementing policies. The financial system will also permit 
the proper allocation of costs to separately funded activities 
consistent with Cost Accounting Standards (CAS), as defined by 48 CFR 
part 9900 and any implementing DOE policies, and ensures that 
accountability for the assets can be maintained.
    (b) The Contractor shall submit to the Contracting Officer for 
written approval an annual plan for new financial management systems 
and/or subsystems and major enhancements and/or upgrades to the 
currently existing financial systems and/or subsystems. The Contractor 
shall notify DOE thirty (30) days in advance of any planned 
implementation of any substantial changes to the plan and, as requested 
by the Contracting Officer, shall submit any such changes to the 
Contracting Officer for written approval before implementation.


(End of clause)
0
257. Amend section 970.5235-1 by revising the clause heading and date 
and paragraphs (c) and (d) to read as follows:


Sec.  970.5235-1  Federally funded research and development center 
sponsoring agreement.

* * * * *
Federally Funded Research and Development Center Sponsoring Agreement 
(XXX 20XX)
* * * * *
    (c) Unless otherwise provided by the contract, the Contractor may 
accept work from a nonsponsor (as defined in 48 CFR 35.017) in 
accordance with the requirements and limitations of 48 CFR 970.3501, 
and the clause at 48 CFR 970.5217-1, Strategic Partnership Projects 
Program. Only the Contracting Officer can place work on the contract; 
and obligate the Government to reimburse the contractor for the work.
    (d) As an FFRDC, the Contractor shall not use its privileged 
information or access to government facilities to compete with the 
private sector. Specific guidance on restricted activities is contained 
in DOE Order 481.1, Strategic Partnership Projects (Non-Department of 
Energy Funded Work)), or its successor version.
* * * * *
0
258. Amend section 970.5244-1 by revising the clause date and 
paragraphs (a), (c), (e), (f), (h)(1), (l), (w), and (x) to read as 
follows:


Sec.  970.5244-1  Contractor purchasing system.

* * * * *
Contractor Purchasing System (XXX 20XX)
    (a) General. The Contractor shall develop, implement, and maintain 
formal policies, practices, and procedures to be used in the award of 
subcontracts consistent with this clause. The Contractor's purchasing 
system and methods shall be fully documented, consistently applied, and 
acceptable to the Department of Energy (DOE) in accordance with 48 CFR 
970.4401-1. The Contractor shall maintain file documentation which is 
appropriate to the value of the purchase and is adequate to establish 
the propriety of the transaction and the price paid. The Contractor's 
obligations include, among other things, retaining documentation to 
justify the cost on any flexibly priced subcontract or any subcontract 
with a flexibly priced element. DOE reserves the right at any time to 
require that the Contractor submit for approval any or all subcontracts 
or purchases under this contract. The Contractor shall not purchase any 
item or service, the purchase of which is expressly prohibited by the 
written direction of DOE, and shall use such special and

[[Page 73747]]

directed sources as may be expressly required by the DOE Contracting 
Officer. DOE will conduct periodic appraisals of the Contractor's 
management of all facets of the Contractor's purchasing function, 
including the Contractor's compliance with its approved system and 
methods. Such appraisals shall be performed against the criteria and 
measures set forth in 48 CFR part 44, subpart 44.3. The Contractor's 
approved purchasing system and methods shall include the requirements 
set forth in paragraphs (b) through (y) of this clause.
* * * * *
    (c) Acquisition of real property. Real estate or real property 
interests shall be acquired in accordance with 48 CFR part 917, subpart 
917.74.
* * * * *
    (e) Audit of subcontractors. (1) The Contractor shall provide for--
    (i) Periodic post-award audit--or a sufficient amount of audit work 
(that the Contractor's auditor or the Contracting Officer agrees is 
sufficient)--to provide reasonable assurance that all claimed 
subcontract costs are allowable for: flexibly priced subcontracts at 
all tiers; and the flexibly priced elements in any subcontracts at all 
tiers (``flexibly priced'' subcontracts and elements include Cost-
Reimbursement subcontracts, Time-and-Materials subcontracts, cost-
reimbursement elements in Fixed-Priced contracts, etc.); and
    (ii) Audits, where necessary, to provide a valid basis for pre-
award or cost or price analysis.
    (2) Responsibility for determining the costs allowable under each 
cost-reimbursement subcontract remains with the contractor or next 
higher-tier subcontractor. The Contractor shall provide, in appropriate 
cases, for the timely joint involvement of the Contractor and the DOE 
Contracting Officer in resolution of subcontract cost allowability. In 
no case, however, shall the Contractor's subcontract audit arrangements 
preclude the Contracting Officer's determination of the allowability or 
unallowability of the subcontract costs the Contractor claims for 
reimbursement.
    (3) Where audits of subcontractors at any tier are required, the 
Contractor shall consult with the DOE Contracting Officer on the best 
approach for obtaining an audit; this may involve employing external 
auditors. The Contractor shall interact with the cognizant Federal 
agency in a manner appropriate to the magnitude and nature of the 
subcontracted work. In no case, however, shall subcontractor auditing 
arrangements preclude determination by the DOE Contracting Officer of 
the allowability or unallowability of subcontractor costs claimed for 
reimbursement by the Contractor.
    (4) Allowable costs for cost reimbursable subcontracts are to be 
determined in accordance with the cost principles of 48 CFR part 31, 
appropriate for the type of organization to which the subcontract is to 
be awarded, as supplemented by 48 CFR part 931. Allowable costs in the 
purchase or transfer from contractor-affiliated sources shall be 
determined in accordance with 48 CFR 970.4402-3 and 31.205-26(e).
    (f) Bonds and insurance. (1) The Contractor shall require 
performance bonds in amounts as set forth in 48 CFR 28.102-2(b) for all 
fixed-priced and unit-priced construction subcontracts in excess of 
$150,000. The Contractor shall consider the use of performance bonds in 
fixed-price non-construction subcontracts, where appropriate.
    (2) For fixed-price, unit-priced and cost reimbursement 
construction subcontracts in excess of $150,000, a payment bond shall 
be obtained on Standard Form 25A modified to name the Contractor as 
well as the United States of America as obligees. The amounts shall be 
determined in accordance with 48 CFR 28.102-2(b).
    (3) For fixed-price, unit-priced and cost-reimbursement 
construction subcontracts greater than $35,000, but not greater than 
$150,000, the Contractor shall select two or more of the payment 
protections at 48 CFR 28.102-1(b), giving particular consideration to 
the inclusion of an irrevocable letter of credit as one of the selected 
alternatives.
    (4) A subcontractor may have more than one acceptable surety in 
both construction and other subcontracts, provided that in no case will 
the liability of any one surety exceed the maximum sum for which it is 
qualified for any one obligation. For subcontracts other than 
construction, a co-surety (two or more sureties together) may reinsure 
amounts in excess of their individual capacity, with each surety having 
the required underwriting capacity that appears on the list of 
acceptable corporate sureties.
* * * * *
    (h) * * *
    (1) Independent Estimates. A detailed, independent estimate of 
costs shall be prepared for all construction work to be subcontracted 
that is expected to exceed the simplified acquisition threshold.
* * * * *
    (l) Indemnification. Except for Price-Anderson Nuclear Hazards 
Indemnity, no subcontractor may be indemnified except with the prior 
approval of the Head of the Contracting Activity, in consultation with 
local legal counsel.
* * * * *
    (w) Unclassified controlled nuclear information. Subcontracts 
involving unclassified controlled nuclear information shall be treated 
in accordance with 10 CFR part 1017.
    (x) Subcontract flowdown requirements. In addition to terms and 
conditions that are included in the prime contract which direct 
application of such terms and conditions in appropriate subcontracts, 
the Contractor shall include the following clauses in subcontracts, as 
applicable:
    (1) Construction Wage Rate requirements, formerly known as Davis-
Bacon, clauses prescribed in 48 CFR 22.407.
    (2) Foreign Travel clause prescribed in 48 CFR 952.247-70.
    (3) Counterintelligence clause prescribed in 48 CFR 904.404(d)(7).
    (4) Service Contract Labor Standards, formerly known as Service 
Contract Act, clauses prescribed in 48 CFR 22.1006.
    (5) State and local taxes clause prescribed in 48 CFR 970.2904-1.
    (6) Cost or pricing data clauses prescribed in 48 CFR 970.1504-2-1.
    (7) Workforce Restructuring and Displaced Employee Hiring 
Preference clause prescribed in 48 CFR 970.2672-3.
    (8) Service Contract Reporting clause prescribed in 48 CFR 4.1705.
    (9) Contract Work Hours and Safety Standards--Overtime Compensation 
as prescribed in 48 CFR 22.305.
    (10) Paid Sick leave under Executive Order 13706 as prescribed in 
48 CFR 22.2110.
    (11) Collective Bargaining Agreements Management and Operating 
Contracts as prescribed in 48 CFR 970.2201-1-3.
    (12) Workplace Substance Abuse Programs at DOE Sites as prescribed 
in 48 CFR 970.2305-4.
    (13) Contracts for Materials, Supplies, Articles, and Equipment 
clause prescribed in 48 CFR 22.610.
* * * * *
0
259. Section 970.5245-1 is revised to read as follows:


Sec.  970.5245-1  Property.

    As prescribed in 970.4501-2, insert the following clause:
Property (XXX 20XX)
    (a) Application of regulations. The Contractor shall comply with 
the requirements in 41 CFR chapters 102 and 109 in addition to this 
clause.
    (b) Furnishing of Government property. The Government reserves the

[[Page 73748]]

right to furnish any property or services required for the performance 
of the work under this contract.
    (c) Title to property. Except as otherwise provided by the 
Contracting Officer, title to all materials, equipment, supplies, and 
tangible personal property of every kind and description purchased by 
the Contractor, for the cost of which the Contractor is entitled to be 
reimbursed as a direct item of cost under this contract, shall pass 
directly from the vendor to the Government. The Government reserves the 
right to inspect, and to accept or reject, any item of such property. 
The Contractor shall make such disposition of rejected items as the 
Contracting Officer shall direct. Title to other property, the cost of 
which is reimbursable to the Contractor under this contract, shall pass 
to and vest in the Government upon:
    (1) Issuance for use of such property in the performance of this 
contract; or
    (2) Commencement of processing or use of such property in the 
performance of this contract; or
    (3) Reimbursement of the cost thereof by the Government, whichever 
first occurs. Property furnished by the Government and property 
purchased or furnished by the Contractor, title to which vests in the 
Government, under this paragraph are hereinafter referred to as 
Government property. Title to Government property shall not be affected 
by the incorporation of the property into or the attachment of it to 
any property not owned by the Government, nor shall such Government 
property or any part thereof, be or become a fixture or lose its 
identity as personal property by reason of affixation to any realty.
    (d) Identification. To the extent directed by the Contracting 
Officer, the Contractor shall identify Government property coming into 
the Contractor's possession or custody, by marking and segregating in 
such a way, satisfactory to the Contracting Officer, as shall indicate 
its ownership by the Government.
    (e) Disposition. The Contractor shall make such disposition of 
Government property which has come into the possession or custody of 
the Contractor under this contract as the Contracting Officer may 
direct during the progress of the work or upon completion or 
termination of this contract. The Contractor may, upon such terms and 
conditions as the Contracting Officer may approve, sell, or exchange 
such property, or acquire such property at a price agreed upon by the 
Contracting Officer and the Contractor as the fair value thereof. The 
amount received by the Contractor as the result of any disposition, or 
the agreed fair value of any such property acquired by the Contractor, 
shall be applied in reduction of costs allowable under this contract or 
shall be otherwise credited to account to the Government, as the 
Contracting Officer may direct. Upon completion of the work or the 
termination of this contract, the Contractor shall render an 
accounting, as prescribed by the Contracting Officer, of all government 
property which had come into the possession or custody of the 
Contractor under this contract.
    (f) Protection of government property--management of high-risk 
property and classified materials. (1) The Contractor shall take all 
reasonable precautions, and such other actions as may be directed by 
the Contracting Officer, or in the absence of such direction, in 
accordance with sound business practice, to safeguard and protect 
government property in the Contractor's possession or custody.
    (2) In addition, the Contractor shall ensure that adequate 
safeguards are in place, and adhered to, for the handling, control and 
disposition of high-risk property and classified materials throughout 
the life cycle of the property and materials consistent with the 
policies, practices and procedures for property management contained in 
the Federal Property Management Regulations (41 CFR chapter 101), the 
Department of Energy (DOE) Property Management Regulations (41 CFR 
chapter 109), and other applicable Regulations.
    (3) High-risk property is property, the loss, destruction, damage 
to, or the unintended or premature transfer of which could pose risks 
to the public, the environment, or the national security interests of 
the United States. High-risk property includes proliferation sensitive, 
nuclear related dual use, export controlled, chemically or 
radioactively contaminated, hazardous, and specially designed and 
prepared property, including property on the militarily critical 
technologies list.
    (g) Risk of loss of Government property. (1)(i) The Contractor 
shall not be liable for the loss or destruction of, or damage to, 
Government property unless such loss, destruction, or damage was caused 
by any of the following--
    (A) Willful misconduct or lack of good faith on the part of the 
Contractor's managerial personnel;
    (B) Failure of the Contractor's managerial personnel to take all 
reasonable steps to comply with any appropriate written direction of 
the Contracting Officer to safeguard such property and classified 
materials; or
    (C) Failure of contractor managerial personnel to establish, 
administer, or properly maintain an approved property management system 
in accordance with 41 CFR chapter 109.
    (ii) If, after an initial review of the facts, the Contracting 
Officer informs the Contractor that there is reason to believe that the 
loss, destruction of, or damage to the government property results from 
conduct falling within one of the categories set forth above, the 
burden of proof shall be upon the Contractor to show that the 
Contractor should not be required to compensate the government for the 
loss, destruction, or damage.
    (2) In the event that the Contractor is determined liable for the 
loss, destruction or damage to Government property in accordance with 
this clause, the Contractor's compensation to the Government shall be 
determined as follows:
    (i) For damaged property, the compensation shall be the cost of 
repairing such damaged property, plus any costs incurred for temporary 
replacement of the damaged property. However, the value of repair costs 
shall not exceed the fair market value of the damaged property. If a 
fair market value of the property does not exist, the Contracting 
Officer shall determine the value of such property, consistent with all 
relevant facts and circumstances.
    (ii) For destroyed or lost property, the compensation shall be the 
fair market value of such property at the time of such loss or 
destruction, plus any costs incurred for temporary replacement and 
costs associated with the disposition of destroyed property. If a fair 
market value of the property does not exist, the Contracting Officer 
shall determine the value of such property, consistent with all 
relevant facts and circumstances.
    (3) The portion of the cost of insurance obtained by the Contractor 
that is allocable to coverage of risks of loss referred to in this 
clause is not allowable.
    (h) Steps to be taken in event of loss. In the event of any damage, 
destruction, or loss to Government property in the possession or 
custody of the Contractor with a value above the threshold set out in 
the Contractor's approved property management system, the Contractor -
    (1) Shall immediately inform the Contracting Officer of the 
occasion and extent thereof;
    (2) Shall take all reasonable steps to protect the property 
remaining; and
    (3) Shall repair or replace the damaged, destroyed, or lost 
property in accordance with the written direction of the Contracting 
Officer. The Contractor shall take no action prejudicial to the

[[Page 73749]]

right of the Government to recover therefore, and shall furnish to the 
Government, on request, all reasonable assistance in obtaining 
recovery.
    (i) Government property for Government use only. Government 
property shall be used only for the performance of this contract.
    (j) Property Management--(1) Property Management System. (i) The 
Contractor shall establish, administer, and properly maintain an 
approved property management system of accounting for and control, 
utilization, maintenance, repair, protection, preservation, and 
disposition of Government property in its possession under the 
contract. The Contractor's property management system shall be 
submitted to the Contracting Officer for approval and shall be 
maintained and administered in accordance with sound business practice, 
applicable Federal Property Management Regulations and Department of 
Energy Property Management Regulations, and such directives or 
instructions which the Contracting Officer may from time to time 
prescribe.
    (ii) In order for a property management system to be approved, it 
must provide for--
    (A) Comprehensive coverage of property from the requirement 
identification, through its life cycle, to final disposition;
    (B) [Reserved]
    (C) Full integration with the Contractor's other administrative and 
financial systems; and
    (D) A method for continuously improving property management 
practices through the identification of best practices established by 
``best in class'' performers.
    (iii) Approval of the Contractor's property management system shall 
be contingent upon the completion of the baseline inventory as provided 
in subparagraph (i)(2) of this clause.
    (2) Property Inventory. (i) Unless otherwise directed by the 
Contracting Officer, the Contractor shall within six months after 
execution of the contract provide a baseline inventory covering all 
items of Government property.
    (ii) If the Contractor is succeeding another contractor in the 
performance of this contract, the Contractor shall conduct a joint 
reconciliation of the property inventory with the predecessor 
contractor. The Contractor agrees to participate in a joint 
reconciliation of the property inventory at the completion of this 
contract. This information will be used to provide a baseline for the 
succeeding contract as well as information for closeout of the 
predecessor contract.
    (k) The term ``contractor's managerial personnel'' as used in this 
clause means the Contractor's directors, officers and any of its 
managers, superintendents, or other equivalent representatives who have 
supervision or direction of--
    (1) All or substantially all of the Contractor's business; or
    (2) All or substantially all of the Contractor's operations at any 
one facility or separate location to which this contract is being 
performed; or
    (3) A separate and complete major industrial operation in 
connection with the performance of this contract; or
    (4) A separate and complete major construction, alteration, or 
repair operation in connection with performance of this contract; or
    (5) A separate and discrete major task or operation in connection 
with the performance of this contract.
    (l) The Contractor shall include this clause in all cost 
reimbursable subcontracts.


(End of clause)
    Alternate I (DATE XXXX). As prescribed in 970.4501-2, when the 
award is to a nonprofit contractor, replace paragraph (k) of the basic 
clause with the following paragraph (k):
    (k) The term ``contractor's managerial personnel'' as used in this 
clause means the Contractor's directors, officers and any of its 
managers, superintendents, or other equivalent representatives who have 
supervision or direction of all or substantially all of--
    (1) The Contractor's business; or
    (2) The Contractor's operations at any one facility or separate 
location at which this contract is being performed; or
    (3) The Contractor's Government property system and/or a Major 
System Project as defined in DOE Order 413.3B, or successor version 
(Version in effect on effective date of contract).

[FR Doc. 2023-16875 Filed 10-25-23; 8:45 am]
BILLING CODE 6450-01-P