[Federal Register Volume 74, Number 170 (Thursday, September 3, 2009)]
[Proposed Rules]
[Pages 45579-45583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21174]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 9, 12, and 52
[FAR Case 2008-027; Docket 2009-0030, Sequence 1]
RIN 9000-AL38
Federal Acquisition Regulation; FAR Case 2008-027, Federal
Awardee Performance and Integrity Information System
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) are proposing to amend the
Federal Acquisition Regulation (FAR) to implement Section 872 of the
Duncan Hunter National Defense Authorization Act for Fiscal Year 2009.
Section 872 requires the General Services Administration to establish
and maintain a data system containing specific information on the
integrity and performance of covered Federal agency contractors and
grantees. Section 872 also requires awarding officials to review the
data system and consider other past performance information when making
any past performance evaluation or responsibility determination.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat on or before October 5, 2009 to be considered in
the formulation of a final rule.
ADDRESSES: Submit comments identified by FAR case 2008-027 by any of
the following methods:
Regulations.gov: http://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``FAR Case 2008-027'' under the heading ``Comment or Submission''.
Select the link ``Send a Comment or Submission'' that corresponds with
FAR Case 2008-027. Follow the instructions provided to complete the
``Public Comment and Submission Form''. Please include your name,
company name (if any), and ``FAR Case 2008-027'' on your attached
document.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (VPR), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers,
Washington, DC 20405.
Instructions: Please submit comments only and cite FAR case 2008-
027 in all correspondence related to this case. All comments received
will be posted without change to http://www.regulations.gov, including
any personal and/or business confidential information provided.
FOR FURTHER INFORMATION CONTACT: Ms. Meredith Murphy, Procurement
Analyst, at (202) 208-6925 for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAR case 2008-
027.
SUPPLEMENTARY INFORMATION:
A. Background.
The Duncan Hunter National Defense Authorization Act of 2009
(Public Law 110-417) was enacted on October 14, 2008. Section 872 of
the Act, subject to the authority, direction, and control the Office of
Management and Budget, requires the General Services Administration
(GSA) to develop and maintain an information system containing specific
information on the integrity and performance of covered Federal agency
contractors and grantees.
In addition, the statute requires that contracting officers shall
consider other past performance information available with respect to
the offeror when making any responsibility determination. A
responsibility determination, in accordance with the President's March
4, 2009, Government Contracting memorandum pertains to whether an
offeror has historically completed projects both effectively and cost
efficiently.
The statute stipulates that the information system shall be
available to ``appropriate acquisition officials of Federal agencies,
to such other government officials as the Administrator (of the GSA)
determines appropriate, and, upon request, to the Chairman and Ranking
Member of the committees of Congress having jurisdiction.'' (section
872(e)(1)).
The OMB's Office of Federal Financial Management will provide
similar, separate guidance to grantees, given that section 872 was
enacted to provide a source of information on integrity and past
performance of contractors and grantees.
B. Sources of information.
To the extent feasible, the Councils identified existing sources of
[[Page 45580]]
information that would not require the creation of additional
information submissions. If no existing source was found, preference
was given to obtaining information from Government sources rather than
contractors.
1. Existing sources within the Government.
a. The Excluded Parties List System (EPLS) is an adequate source
of information on entities that are currently suspended or debarred.
However, in general, suspensions or debarments last for a maximum of 3
years. Since the law requires information for the preceding 5 years, it
will be necessary to access the EPLS archives to obtain information on
entities that were suspended or debarred within the last 5 years but
are no longer suspended or debarred.
b. Past Performance Information Retrieval System (PPIRS) and
Contractor Performance Assessment Reporting System (CPARS). PPIRS
contains past performance reports from all agencies. Some, but not all,
Federal agencies currently use CPARS to enter information into PPIRS.
2. New Government sources.
a. Contracting officer. Contracting officers will provide
information on determinations of non-responsibility and terminations
for default or cause.
b. Suspension/Debarment Official (SDO). The SDO will provide the
necessary information on administrative agreements.
3. Contractors.
The proposed rule requires contractors with contracts and grants
over $10 million total to provide information relating to criminal,
civil, and administrative proceedings directly.
C. The planned Federal Awardee Performance and Integrity Information
System (FAPIIS).
This system will draw from existing systems where feasible and will
also use existing systems as a location to store new information on
contractor integrity.
The following business rules were developed to ensure timely
availability of information and proper use of the information while
also protecting against improper disclosure to the public:
1. Only Federal government personnel can view the information,
except that a contractor can view its own information.
2. There must be a systems point of contact for system errors and a
point of contact for each Government information entry.
3. Data is only accessible for a period of five years and will then
be archived for an additional one-year period to allow an audit trail.
4. A contractor will have an opportunity to post comments regarding
information that has been posted by the Government. The comments will
be retained as long as the associated information is retained, i.e.,
for a total period of six years. Contractor comments will remain part
of the record unless the contractor revises them.
5. Instructions used in the FAPIIS will apply to both contracts and
grants.
6. The system will be designed with an automatic notification to
the contractor when new information is posted to the contractor's
record.
D. Proposed changes to the FAR.
The Councils are proposing to amend FAR subparts 9.1, Responsible
Prospective Contractors; 9.4, Debarment, Suspension, and Ineligibility;
and Part 52, Solicitation Provisions and Contract Clauses, as well as
making conforming changes in Part 12, to implement this rule as
follows:
1. Contracting officer determination of non-responsibility:
a. FAR 9.105-2(a)(3) will require the contracting officer to enter
into the FAPIIS data on contracts, including orders, over the
simplified acquisition threshold if the contracting officer makes a
final determination that the otherwise successful offeror is not a
responsible source due to lack of satisfactory performance record or
satisfactory record of integrity and business ethics.
b. FAR 9.104-3(d) will clarify the relationship of the non-
responsibility determination and the Certificate of Competency (COC).
When making a non-responsibility determination for a small business,
the contracting officer must refer the matter to the Small Business
Administration (SBA). If the SBA does not issue a COC, then the
contracting officer, if the determination of non-responsibility was
based on past performance or integrity and business ethics, must enter
the determination into the FAPIIS.
2. Terminations.
Terminations for default or cause under this proposed rule are not
covered in detail because FAR Case 2008-016, Termination for Default
Reporting, is in process to extend the Defense Federal Acquisition
Regulation Supplement (DFARS) requirement for the contracting officer
to report contract terminations for default or cause into a common data
base (CPAR/PPIRS). The Councils will seek specific comments on
terminations. Both FAR cases will be worked jointly.
3. Administrative agreements.
In some cases where the SDO determines that suspending or debarring
a contractor is not in the Government's interest, the SDO can negotiate
an administrative agreement with the contractor. This administrative
agreement sets forth compliance actions that the contractor must take
within a certain time frame in order to be determined presently
responsible. SDOs will now have to enter data about administrative
agreements into the FAPIIS. This requirement is added to FAR 9.406-3
and 9.407-3.
4. Contractor information regarding responsibility matters.
The law requires any person ``with Federal agency contracts and
grants valued in total greater than $10,000,000'' to input information
required for inclusion in the information system. A new provision at
52.209-XX is added which requires an offeror to identify if it has
cumulative active Federal contracts and grants with a total value
(including any options) greater than $10 million. This is prescribed
where the contract is expected to exceed $500,000.
If the offeror has more than $10 million in current contracts and
grants, then the offeror must go to the FAPIIS website (to be
specified) and provide information on any of the occurrences required
to be reported in the information system. (Section 872, paragraph (f)).
5. Contracting officer utilization of the information system and
other past performance information.
Procedures are provided for contracting officer access to the
information system and utilization of the information. The Councils are
committed to avoiding de facto debarments. The procedures emphasize
that certain past information in the system may no longer be relevant
to a determination of present responsibility. It is recommended that a
statement to this effect be posted on the screen when the contracting
officer accesses the information.
If the contracting officer does obtain relevant information that
has not already resulted in suspension or debarment, the contracting
officer must promptly--
Contact the offeror to request additional information such
as the offeror deems necessary in order to demonstrate responsibility;
Notify, prior to proceeding with award, in accordance with
agency procedures, the agency official responsible for initiating
debarment or suspension action, if the information appears appropriate
for that official's consideration.
[[Page 45581]]
Document the file as to how the information was considered
in any responsibility determination.
6. Applicability to commercial items.
Given that section 872 was enacted to provide a source of
information on integrity and past performance of contractors and
grantees, but does not specifically mention applicability to commercial
items despite 41 U.S.C. 430, the Councils expect that the FAR Council
will determine that the rule should apply to contracts for commercial
items, as defined at FAR 2.101.
7. Applicability to commercially available off-the-shelf (COTS)
item contracts.
Section 4203 of Public Law 104-106, the Clinger-Cohen Act of 1996
(41 U.S.C. 431), governs the applicability of laws to the procurement
of COTS items and is intended to limit the applicability of laws to
COTS acquisitions. The Clinger-Cohen Act provides that, if a provision
of law contains criminal or civil penalties or if the Administrator for
Federal Procurement Policy makes a written determination that it is not
in the best interest of the Federal Government to exempt COTS item
contracts, the provision of law will apply.
Therefore, given section 872 of the Duncan Hunter National Defense
Authorization Act for Fiscal Year 2009, the Councils expect that the
Administrator for Federal Procurement Policy will determine that the
rule should apply to COTS item contracts.
This proposed rule is a significant regulatory action and,
therefore, is subject to review under Section 6(b) of Executive Order
12866, Regulatory Planning and Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C. 804.
E. Regulatory Flexibility Act
The Councils do not expect this proposed rule to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.,
because the rule will only impact an offeror that has failed to meet
the Government's performance requirements or standards for integrity
and business ethics. The FAR already contains standards for present
responsibility of offerors. This information system provides an
additional source for contracting officers to use making a
responsibility determination. The proposed rule only imposes an
information collection requirement on small businesses that have total
Government grants and contracts exceeding $10 million. An Initial
Regulatory Flexibility Analysis has, therefore, not been performed. We
invite comments from small businesses and other interested parties. The
Councils will consider comments from small entities concerning the
affected FAR Parts 9, 12, and 52 in accordance with 5 U.S.C. 610.
Interested parties must submit such comments separately and should cite
5 U.S.C. 601, et seq. (FAR case 2008-027), in correspondence.
F. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
proposed rule contains information collection requirements.
Accordingly, the Regulatory Secretariat will submit a request for
approval of a new information collection requirement concerning Federal
Awardee Performance and Integrity Information System to the Office of
Management and Budget under 44 U.S.C. Chapter 35, et seq.
Annual Reporting Burden:
The proposed rule requires that for each solicitation of $500,000
or more, the offeror respond whether it has, or has not, current
contracts and grants under performance that total at least $10,000,000.
Only if the offeror responds affirmatively is there any further
information collection requirement. Given that the amount of current
Federal contracts and grants is basic knowledge for any firm, the
estimated number of hours for this initial response is 0.1 hours. Using
data from the Federal Procurement Data System--Next Generation (FPDS-
NG), it is estimated that there will be approximately 12,000 - 14,000
contracts over $500,000 each year. Estimating between five and six
responses to each solicitation, there will be 80,000 responses annually
to the question regarding contracts/grants exceeding $10 million.
It is estimated that 5,000 contractors will answer the first
question affirmatively and then will have to enter data into the
website. We have used a burden estimate of 0.5 hours to enter the
company's data into the website. This time estimate does not include
the time necessary to maintain the company's information internally.
Most large businesses and some small businesses probably have
established systems to track compliance. Such systems would be required
in any complex organization to obtain the significant reductions that
we have built into estimates of subsequent response time. At this time,
all or most Government contractors have entered relevant company data
in the Central Contractor Registration (CCR) in accordance with another
information collection requirement. Therefore, the estimate includes an
average of 100 hours per year for recordkeeping for each of the 5,000
respondents that will be required to provide additional information,
for a total of 500,000 annual recordkeeping hours. The total annual
reporting burden is estimated as follows:
Public reporting burden for this collection of information is
estimated to average 0.15 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The annual reporting burden is estimated as follows:
Respondents: 8,000.
Responses per respondent: approx. 11.
Total annual responses: 90,000.
Preparation hours per response: approx. 0.15 hours.
Response burden hours: 13,000.
Recordkeeping hours: 500,000.
Total burden hours: 513,000.
G. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than October 5, 2009 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room
4041, Washington, DC 20405.
Public comments are particularly invited on: whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requester may obtain a copy of the justification from the General
Services Administration, Regulatory Secretariat (VPR), Room 4041,
Washington, DC 20405, telephone (202) 501-4755. Please cite OMB Control
Number 9000-00XX, Federal Awardee Performance and Integrity Information
System, in all correspondence.
[[Page 45582]]
List of Subjects in 48 CFR Parts 9, 12, and 52
Government procurement.
Dated: August 27, 2009.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 9, 12,
and 52 as set forth below:
1. The authority citation for 48 CFR parts 9, 12, and 52 continues
to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 9--CONTRACTOR QUALIFICATIONS
2. Amend section 9.104-3 by revising paragraph (d)(1) to read as
follows:
9.104-3 Application of standards.
* * * * *
(d) Small business concerns. (1)(i) Upon making a determination of
nonresponsibility with regard to a small business concern, the
contracting officer shall refer the matter to the Small Business
Administration, which will decide whether to issue a Certificate of
Competency (see Subpart 19.6).
(ii) If the determination of nonresponsibility is based on lack of
a satisfactory performance record or lack of a satisfactory record of
integrity and business ethics and SBA does not issue a Certificate of
Competency, the contracting officer shall promptly document the
determination of nonresponsibility in the FAPIIS.
* * * * *
3. Redesignate section 9.104-6 as section 9.104-7 and add a new
section 9.104-6 to read as follows:
9.104-6 Federal Awardee Performance and Integrity Information System.
(a) Before awarding a contract (including an order under FAR
Subparts 8.4, 13.3 or 16.5) in excess of the simplified acquisition
threshold, the contracting officer shall review the Federal Awardee
Performance and Integrity Information System (FAPIIS), (available at --
---------- ). (Website should provide information on how to gain
access, passwords, etc.)
(b) The contracting officer shall consider all the information in
the FAPIIS and other past performance information when making a
responsibility determination or past performance evaluation. Since the
FAPIIS may contain information covering a five year period, some of
that information may no longer be relevant to a determination of
present responsibility, e.g., a prior administrative action such as
debarment or suspension that has expired or otherwise been resolved.
(c) If the contracting officer obtains relevant information from
the FAPIIS regarding criminal, civil, or administrative proceedings in
connection with the award or performance of a Government contract
(including an order); terminations for default or cause; or
determinations of non-responsibility because the contractor does not
have a satisfactory performance record or a satisfactory record of
integrity and business ethics, the contracting officer shall, unless
the contractor has already been debarred or suspended--
(1) Promptly request such additional information from the offeror
as the offeror deems necessary in order to demonstrate the offeror's
responsibility to the contracting officer (but see 9.405); and
(2) Notify, prior to proceeding with award, in accordance with
agency procedures (see 9.406-3(a) and 9.407-3(a)), the agency official
responsible for initiating debarment or suspension action, if the
information appears appropriate for the official's consideration.
(d) The contracting officer shall document the file for each
contract (including orders) in excess of the simplified acquisition
threshold to indicate the manner in which the information in the FAPIIS
or past performance evaluation was considered in any responsibility
determination or past performance evaluation, as well as the action
that was taken as a result of the information. A contracting officer
who makes a nonresponsibility determination is required to enter that
information into the FAPIIS in accordance with 9.105-2(a)(3).
4. Revise the newly redesignated section 9.104-7 to read as
follows:
9.104-7 Solicitation provisions.
(a) The contracting officer shall insert the provision at 52.209-5,
Certification Regarding Responsibility Matters, in solicitations where
the contract value is expected to exceed the simplified acquisition
threshold.
(b) The contracting officer shall insert the provision at 52.209-
XX, Information Regarding Responsibility Matters, in solicitations
where the resultant contract value is expected to exceed $500,000.
5. Amend section 9.105-1 by revising the introductory text of
paragraph (c); by removing paragraph (c)(1); and redesignating
paragraphs (c)(2) through (c)(6) as paragraphs (c)(1) through (c)(5).
The revised paragraph reads as follows:
9.105-1 Obtaining information.
* * * * *
(c) In making the determination of responsibility, the contracting
officer shall consider relevant past performance information (see
9.104-1(c) and Subpart 42.15); the Excluded Parties List System
maintained in accordance with Subpart 9.4; and the FAPIIS (if required
in accordance with 9.104-6). In addition, the contracting officer
should use the following sources of information to support such
determinations:
* * * * *
6. Amend section 9.105-2 by revising paragraph (a) to read as
follows:
9.105-2 Determinations and documentation.
(a) Determinations. (1)(i) The contracting officer's signing of a
contract constitutes a determination that the prospective contractor is
responsible with respect to that contract, but see 9.104-6(d).
(ii) When an offer on which an award would otherwise be made is
rejected because the prospective contractor is found to be
nonresponsible, the contracting officer shall make, sign, and place in
the contract file a determination of nonresponsibility, which shall
state the basis for the determination.
(2) If the contracting officer determines that a responsive small
business lacks certain elements of responsibility, the contracting
officer shall comply with the procedures in Subpart 19.6. When a
certificate of competency is issued for a small business concern (see
Subpart 19.6), the contracting officer may accept the factors covered
by the certificate without further inquiry.
(3) The contracting officer shall enter the determination of
nonresponsibility in the FAPIIS if--
(i) The contract (including an order) is valued at more than the
simplified acquisition threshold;
(ii) The determination of nonresponsibility is based on lack of
satisfactory performance record or satisfactory record of integrity and
business ethics; and
(iii) The Small Business Administration does not issue a
certificate of competency.
* * * * *
7. Amend section 9.406-3 by adding paragraph (f) to read as
follows:
9.406-3 Procedures.
* * * * *
[[Page 45583]]
(f) If the contractor enters into an administrative agreement with
the Government in order to resolve a debarment proceeding, the
debarment official shall access the website at ------------ and enter
the requested information.
8. Amend section 9.407-3 by adding paragraph (e) to read as
follows:
9.407-3 Procedures.
* * * * *
(e) If the contractor enters into an administrative agreement with
the Government in order to resolve a suspension proceeding, the
suspension official shall access the website at ------------ and enter
the requested information.
PART 12--ACQUISITION OF COMMERICAL ITEMS
9. Amend section 12.301 by adding paragraph (d)(3) to read as
follows:
12.301 Solicitation provisions and contract clauses for the
acquisition of commercial items.
* * * * *
(d) * * *
(3) Insert the provision at 52.209-XX, Information Regarding
Responsibility Matters, as prescribed in 9.104-7(b).
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
10. Amend section 52.209-5 by removing from the introductory
paragraph the phrase ``9.104-6'' and adding ``9.104-7(a)'' in its
place; and by revising the date of the provision and paragraph
(a)(1)(B) to read as follows:
52.209-5 Certification Regarding Responsibility Matters.
* * * * *
CERTIFICATION REGARDING RESPONSIBILITY MATTERS (DATE)
(a) * * *
(1) * * *
(B)(i) Have [ ] have not [ ], within a three-year period
preceding this offer, been convicted of or had a civil judgment
rendered against them for: commission of fraud or a criminal offense
in connection with obtaining, attempting to obtain, or performing a
public (Federal, State, or local) contract or subcontract; violation
of Federal or State antitrust statutes relating to the submission of
offers; or commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements,
tax evasion, violating Federal criminal tax laws, or receiving
stolen property (If offeror checks ``have'', the offeror shall also
see 52.209-XX).
* * * * *
11. Add section 52.209-XX to read as follows:
52.209-XX Information Regarding Responsibility Matters.
As prescribed at 9.104-7(b), insert the following provision:
INFORMATION REGARDING RESPONSIBILITY MATTERS (DATE)
(a) Definition.
Principal, as used in this provision, means an officer,
director, owner, partner, or a person having primary management or
supervisory responsibilities within a business entity (e.g., general
manager; plant manager; head of a subsidiary, division, or business
segment; and similar positions).
Federal contracts and grants with total value (including any
options) greater than $10,000,000 means--
(1) The value, at the time of their award, of the current,
active contracts and grants, including all priced options; and
(2) The total value, at the time of their award, of all current,
active orders under indefinite-delivery, indefinite-quantity, 8(a),
or requirements contracts (including task and delivery and multiple-
award schedules).
(b) The offeror [ ] has [ ] does not have current active Federal
contracts and grants with total value (including any options)
greater than $10,000,000.
(c) If the offeror checked ``has'' in paragraph (b) of this
provision, the offeror represents, by submission of this proposal,
that its information in the Federal Awardee Performance and
Integrity Information System (FAPIIS) is current, accurate, and
complete as of the date of submission of this proposal with regard
to the following information:
(1) Whether the offeror, and/or any of its principals, has or
has not, within the last five years, been involved in civil or
criminal proceeding, or any administrative proceeding, in connection
with the award to or performance by the offeror of a Federal or
State contract or grant, to the extent that such proceeding resulted
in any of the following dispositions:
(i) In a criminal proceeding, a conviction.
(ii) In a civil proceeding, a finding of fault and liability
that results in the payment of a monetary fine, penalty,
reimbursement, restitution, or damages of $5,000 or more.
(iii) In an administrative proceeding, a finding of fault and
liability that results in--
(A) The payment of a monetary fine or penalty of $5,000 or more;
or
(B) The payment of a reimbursement, restitution, or damages in
excess of $100,000.
(iv) To the maximum extent practicable and consistent with
applicable laws and regulations, in a criminal, civil, or
administrative proceeding, a disposition of the matter by consent or
compromise with an acknowledgment of fault by the Contractor if the
proceeding could have led to any of the outcomes specified in
subparagraphs (c)(1)(i), (c)(1)(ii), or (c)(1)(iii) of this section.
(2) If the offeror has been involved in the last five years in
any of the occurrences listed in (c)(1) of this section, whether the
offeror has provided the requested information with regard to each
occurrence.
(d) The offeror, if awarded a contract as a result of this
solicitation, shall update the information in the FAPIIS on a semi-
annual basis, throughout the life of the contract.
(End of provision)
[FR Doc. E9-21174 Filed 9-2-09; 8:45 am]
BILLING CODE 6820-EP-S