DFARS CHANGE NOTICE 19991118

Final Rules:

Debarment Investigation and Reports (DFARS Case 99-D013)

This final rule amends DFARS Parts 203, 209, 225, and 249 to clarify that any person may refer a matter to the agency debarring and suspending official, and that the absence of a referral or any information specified in the report format at DFARS 209.406-3(a)(ii) will not preclude the debarring and suspending official from initiating the debarment or suspension process or from making a final decision.

Affected subparts/sections: Part 203 Table of Contents; Part 209 Table of Contents; Part 225 Table of Contents; Part 249 Table of Contents; 203.1; 203.2; 203.3; 203.4; 203.5; 209.1; 209.4; 225.2; 249.1

Debarment Investigation and Reports

DFARS Case 99-D013

Final Rule

PART 203-IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

SUBPART 203.1-SAFEGUARDS

203.103 Independent pricing.

203.103-2 Evaluating the certification.

(b)(3) The contracting officer also shall r[R]eport the matter in accordance with 209.406-3 [or 209.407-3,] and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.

203.104 Procurement integrity.

* * * * *

[203.104-10 Violations or possible violations.

(d)(3) When referring a violation to the agency debarring and suspending official, use the procedures at 209.406-3 or 209.407-3, and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.]

* * * * *

SUBPART 203.2-CONTRACTOR GRATUITIES TO GOVERNMENT PERSONNEL

203.203 Reporting suspected violations of the Gratuities clause.

Report suspected violations of the Gratuities clause in accordance with 209.406-3 [or 209.407-3,] and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.

SUBPART 203.3-REPORTS OF SUSPECTED ANTITRUST VIOLATIONS

203.301 General.

(b) Report suspected antitrust violations in accordance with 209.406-3 [or 209.407-3,] and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.

SUBPART 203.4-CONTINGENT FEES

203.405 Misrepresentations or violations of the Covenant Against Contingent Fees.

(b) Report suspected fraud or other criminal conduct in accordance with 209.406-3 [or 209.407-3,] and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.

SUBPART 203.5--OTHER IMPROPER BUSINESS PRACTICES

203.502 Subcontractor kickbacks.

Report suspected violations of the Anti-Kickback Act in accordance with 209.406-3 [or 209.407-3,] and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.

* * * * *

203.570 Prohibition on persons convicted of fraud or other defense-contract-related felonies.

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203.570-4 Reporting.

When a defense contractor or first-tier subcontractor is found in violation of the prohibition in 203.570-2, the contracting officer shall report the matter in accordance with 209.406-3 [or 209.407-3,] and DoDD 7050.5, Coordination of Remedies for Fraud and Corruption Related to Procurement Activities.

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PART 209-CONTRACTOR QUALIFICATIONS

SUBPART 209.1-RESPONSIBLE PROSPECTIVE CONTRACTORS

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[209.105-2 Determinations and documentation.

(a) When the contracting officer considers such action appropriate, the contracting officer must submit a copy of the determination to the appropriate debarring and suspending official (see 209.403).]

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SUBPART 209.4-DEBARMENT, SUSPENSION, AND INELIGIBILITY

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209.403 Definitions.

"Debarring [and suspending] official."

(1) For DoD, the designees are-

(2) Overseas debarring [and suspending] officials-

* * * * *

* * * * *

209.406 Debarment.

* * * * *

209.406-3 Procedures.

(a) Investigation and R[r]eferral.
(i) The contracting officer shall prepare a report containing the information required by paragraph (a)(ii) of this subsection when-[Refer all matters appropriate for consideration by an agency debarring and suspending official as soon as practicable to the appropriate debarring and suspending official identified in 209.403. Any person may refer a matter to the debarring and suspending official

.]
(A) A contractor has committed, or is suspected of having committed, any of the
acts described in FAR 9.406-2 and 9.407-2;

(B) FAR 49.106 requires a report

;
(C) Part 203 requires a report

;
(D) The Government suspects a contractor of violating the Buy American Act (see FAR 25.204);

or
(E) The Government suspects a contractor of attempting to evade the prohibitions of debarment or suspension by changes of address, multiple addresses, formation of new companies, or by other devices.

(ii) Include the following information, when available, in the report required by paragraph (a)(i) of this subsection- [Use the following format when referring a matter to the agency debarring and suspending official for consideration. To the extent practicable, provide all specified information.]

(A) Name, address, and telephone number of the point of contact for the activity making the report;[.]

(B) Name, contractor and Government entity (CAGE) code, and address of the contractor;[.]

(C) Name and addresses of the members of the board, principal officers, partners, owners, and managers;[.]

to whom; and

to whom; and

a recommendation regarding current contracts is not included) ;[.]

agency];

(iii) Send three copies of each report, including enclosures, to the [appropriate] debarring [and suspending] official in 209.403.

[(iv) If a referral lacks sufficient evidence of a cause for debarment, the debarring and suspending official may initiate a review or investigation, as appropriate, by reporting the referral to the appropriate Government entity, e.g., contracting activity, inspector general, or criminal investigative agency.]

[(b) Decisionmaking process.

(i) The agency debarring and suspending official may initiate the debarment process by issuing a notice of proposed debarment in accordance with FAR 9.406-3(c) when the debarring and suspending official finds that the administrative record contains sufficient evidence of one or more of the causes for debarment stated in FAR 9.406-2 or 209.406-2.

(A) The absence of a referral in accordance with paragraph (a)(i) of this subsection, or the absence of any information specified in the report format in paragraph (a)(ii) of this subsection, will not preclude the debarring and suspending official from making such a finding.

(B) The signature of the debarring and suspending official on the notice of proposed debarment is sufficient evidence that the debarring and suspending official has made such a finding.

(ii) The agency debarring and suspending official must use the decisionmaking process stated in FAR 9.406-3(b), DFARS Appendix H, and any agency-specific procedures that were provided to the contractor in advance of the decision.

(d) Debarring official's decision.

The absence of a referral in accordance with paragraph (a)(i) of this subsection, or the absence of any information specified in the report format in paragraph (a)(ii) of this subsection, will not preclude the debarring and suspending official from making a decision.

209.407 Suspension.

209.407-3 Procedures.
(a) Investigation and referral.
(i) Refer all matters appropriate for consideration by an agency debarring and suspending official as soon as practicable to the appropriate debarring and suspending official identified in 209.403. Any person may refer a matter to the debarring and suspending official.

(ii) Use the format at 209.406-3(a)(ii) when referring a matter to the agency debarring and suspending official for consideration. To the extent practicable, provide all information specified in the format.
(iii) If a referral lacks sufficient evidence of a cause for suspension, the debarring and suspending official may initiate a review or investigation, as appropriate, by reporting the referral to the appropriate Government entity, e.g., contracting activity, inspector general, or criminal investigative agency.

(b) Decisionmaking process.

(i) The agency debarring and suspending official may initiate the suspension process by issuing a notice of suspension in accordance with FAR 9.407-3(c) when the debarring and suspending official finds that the administrative record contains sufficient evidence of one or more of the causes for suspension stated in FAR 9.407-2.

(A) The absence of a referral in accordance with paragraph (a)(i) of this subsection, or the absence of any information specified in the report format at 209.406-3(a)(ii), will not preclude the debarring and suspending official from making such a finding.

(B) The signature of the debarring and suspending official on the notice of suspension is sufficient evidence that the debarring and suspending official has made such a finding.

(ii) In deciding whether to terminate a suspension following a submission of matters in opposition, the agency debarring and suspending official must use the decisionmaking process stated in FAR 9.407-3(b), DFARS Appendix H, and any agency-specific procedures that were provided to the contractor in advance of the decision

.

(d) Suspending official's decision.

The absence of a referral in accordance with paragraph (a)(i) of this subsection, or the absence of any information specified in the report format at 209.406-3(a)(ii), will not preclude the debarring and suspending official from making a decision.]

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PART 225-FOREIGN ACQUISITION

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SUBPART 225.2-BUY AMERICAN ACT-CONSTRUCTION MATERIALS

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[225.206 Noncompliance.

(c)(4) Prepare any report of noncompliance in accordance with the procedures at 209.406-3 or 209.407-3.]

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PART 249-TERMINATION OF CONTRACTS

SUBPART 249.1-GENERAL PRINCIPLES

* * * * *

[249.106 Fraud or other criminal conduct.

If the TCO suspects fraud or other criminal conduct, the TCO must report the facts in accordance with the procedures at 209.406-3 or 209.407-3.]

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________________________________________________________________

Contract Goal for Small Disadvantaged Businesses and Certain Institutions of Higher Education (DFARS Case 99-D305)

This final rule amends DFARS 219.000 and 226.7000 to implement Section 808 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 808 amends 10 U.S.C. 2323, which establishes a goal for DoD to award 5 percent of contract and subcontract dollars to small disadvantaged business concerns, historically black colleges and universities, and minority institutions. 10 U.S.C. 2323 previously contained a termination date of September 30, 2000. Section 808 extends the termination date to September 30, 2003.

Affected subparts/sections: 219.0; 226.70

Contract Goal for Small Disadvantaged Businesses and

Certain Institutions of Higher Education

DFARS Case 99-D305

Final Rule

PART 219--SMALL BUSINESS PROGRAMS

219.000 Scope of part.

This part also implements 10 U.S.C. 2323, which sets a goal for DoD for each of fiscal years 1987 through 2000[3] to-

* * * * *

SUBPART 226.70--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND MINORITY INSTITUTIONS

226.7000 Scope of subpart.

This subpart implements the historically black college and university (HBCU) and minority institution (MI) provisions of 10 U.S.C. 2323, which-

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Comprehensive Small Business Subcontracting Plans (DFARS Case 99-D306)

This final rule amends DFARS 219.702 to implement Section 817 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 817 amends Section 834(e) of the National Defense Authorization Act for Fiscal Years 1990 and 1991 (Public Law 101-189; 15 U.S.C. 637 note) to extend the termination date of the DoD test program for negotiation of comprehensive small business subcontracting plans from September 30, 2000, to

September 30, 2005.

In addition, a correction is made at DFARS 219.702(a)(ii)(C) to reflect a change that was published in the Federal Register on March 26, 1998 (63 FR 14640), but was inadvertently omitted from the 1998 edition of the DFARS.

Affected subpart: 219.7

Comprehensive Small Business Subcontracting Plans

DFARS Case 99-D306

Final Rule

SUBPART 219.7--SUBCONTRACTING WITH SMALL BUSINESS, SMALL DISADVANTAGED BUSINESS AND WOMEN-OWNED

SMALL BUSINESS CONCERNS

219.702 Statutory requirements.

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Subcontracting Goals for Purchases Benefiting People Who Are Blind or Severely Disabled (DFARS Case 99-D304)

This final rule amends DFARS 219.703 to implement Section 807 of the National Defense Authorization Act for Fiscal Year 2000 (Public Law 106-65). Section 807 amends 10 U.S.C. 2410d, which provides that contractors may credit their purchases from qualified nonprofit agencies for the blind or severely disabled toward their small business subcontracting goals. 10 U.S.C. 2410d previously contained a termination date of September 30, 1999. Section 807 repeals this termination date.

Affected subpart: 219.7

Subcontracting Goals for Purchases Benefiting

People Who Are Blind or Severely Disabled

DFARS Case 99-D304

Final Rule

SUBPART 219.7--SUBCONTRACTING WITH SMALL BUSINESS, SMALL DISADVANTAGED BUSINESS AND WOMEN-OWNED

SMALL BUSINESS CONCERNS

* * * * *

219.703 Eligibility requirements for participating in the program.

* * * * *

Proposed Rules:

Anticompetitive Teaming (DFARS Case 99-D028)

This rule proposes amendments to DFARS Subpart 203.3 to add a definition of "exclusive teaming arrangement" and to specify that certain exclusive teaming arrangements may evidence violations of the antitrust laws.

Utilization of Indian Organizations and Indian-Owned Economic Enterprises (DFARS Case 99-D300)

This rule proposes amendments to DFARS Subpart 226.1 to update procedures pertaining to the Indian Incentive Program.

The rule implements Section 8024 of the DoD Appropriations Act for Fiscal Year 1999 (Public Law 105-262) and Section 8024 of the DoD Appropriations Act for Fiscal Year 2000 (Public Law 106-79), which eliminate the requirement for a DoD contractor to submit a subcontracting plan before it may participate in the Indian Incentive Program. This rule supplements the proposed FAR rule that was published in the Federal Register on October 27, 1999 (64 FR 57964).