[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12411]

Vol. 79

Friday,

No. 104

May 30, 2014

Part II

Department of Defense

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General Services Administration

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National Aeronautics and Space Administration

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48 CFR Chapter 1

Federal Acquisition Regulations; Final Rules

Federal Register / Vol. 79, No. 104 / Friday, May 30, 2014 / Rules and Regulations

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket No. FAR 2014-0051, Sequence No. 1]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-74; Introduction

AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Summary presentation of final rules.

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SUMMARY: This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-74. A companion document, the Small Entity Compliance Guide (SECG), follows this FAC. The FAC, including the SECG, is available via the Internet at http://www.regulations.gov.

DATES: For effective dates and comment dates see separate documents, which follow.

FOR FURTHER INFORMATION CONTACT: The analyst whose name appears in the table below in relation to the FAR case. Please cite FAC 2005-74 and the specific FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.

Rules Listed in FAC 2005-74

Item

Subject

FAR Case

Analyst

I

Commercial and Government Entity Code.

2012-024

Loeb.

II

Repeal of the Recovery Act Reporting Requirements.

2014-016

Glover.

III

Expansion of Applicability of the Senior Executive Compensation Benchmark.

2012-017

Chambers.

IV

Contractor Comment Period, Past Performance Evaluations.

2012-028

Glover.

V

Defense Base Act.

2012-016

Chambers.

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-74 amends the FAR as specified below:

Item I--Commercial and Government Entity Code (FAR Case 2012-024)

This final rule adds subpart 4.18, ``Commercial and Government Entity Code,'' and related provisions and clauses, to the FAR. The new subpart requires the use of Commercial and Government Entity (CAGE) codes, including North Atlantic Treaty Organization (NATO) Cage (NCAGE) codes for foreign entities, for awards valued above the micro-purchase threshold. The final rule also requires offerors, if owned by another entity, to identify that entity during System for Award Management (SAM) registration. The rule effective date is November 1, 2014.

Item II--Repeal of the Recovery Act Reporting Requirements (FAR Case 2014-016)

This final rule adopts as final, with changes, two interim rules published on March 31, 2009, and July 2, 2010, under FAR case numbers 2009-009 and 2010-008. The interim rules amended the FAR to implement reporting requirements of the American Recovery and Reinvestment Act in subpart 4.15, 42.15, and clause 52.204-11, American Recovery and Reinvestment Act-Reporting Requirements. Future reporting requirements after January 31, 2014, were repealed by section 627 of Division E of the Consolidated Appropriations Act, FY 2014 (Pub. L. 113-76). The reporting Web site has closed for future reporting. This rule does not change the reporting required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA) on existing contracts, as implemented in FAR subpart 4.14 and clause 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards. Therefore, contractors and agencies are still required to continue their FFATA reporting on existing contracts, as implemented in FAR subpart 4.14 and clause 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards.

Item III--Expansion of Applicability of the Senior Executive Compensation Benchmark (FAR Case 2012-017)

This final rule adopts, without change, the interim rule published on June 26, 2013, at 78 FR 38535. The interim final rule amended the FAR by expanding the reach of the limitation on allowability of compensation for certain contractor personnel from a contractor's five most highly paid executives to all employees, but only for contracts with the Department of Defense (DoD), the National Aeronautical and Space Administration (NASA), and Coast Guard. The interim rule implemented section 803 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81). Prior to the interim rule, this limitation on the allowability of compensation, which is an amount set annually by the Office of Federal Procurement Policy, applied only to a contractor's five most highly paid executives at each of their home office(s) and any segments that report directly to the contractors headquarters, and covered all Federal agencies. Under the interim and this final rule, the application of this limitation to a contractor's five most highly paid executives continues for agencies other than DoD, NASA, and the Coast Guard. Because most contracts awarded to small businesses are awarded on a competitive, fixed-price basis, the impact of this compensation limitation on small businesses will be minimal.

Item IV--Contractor Comment Period, Past Performance Evaluations (FAR Case 2012-028)

This final rule implements sections 853 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 (Pub. L. 112-239, enacted January 2, 2013) and 806 of the NDAA for FY 2012 (Pub. L. 112-81, enacted December 31, 2011; 10 U.S.C. 2302 Note). These statutes require the Government to provide past performance information to source selection officials more quickly and to give contractors 14 calendar days from the date of delivery of past performance evaluations to submit comments, rebuttals, or additional information for inclusion in the past performance database. The evaluations will be posted to the database no later than 14 days after the evaluations are provided to the contractor. If a contractor has submitted comments to the Government and the Government has not closed the evaluation (i.e., reconciled the comments), the evaluation as well as any contractor comment will be posted to the database automatically 14 days after the evaluations are provided to the contractor. In this case, the database will apply a ``Contractor Comment Pending Government Review'' notification to the evaluation. Once the Government completes the evaluation, the database will be updated the following day and remove this notification. Contractors will also still be allowed to submit comments after the 14-day period.

Item V--Defense Base Act (FAR Case 2012-016)

This final rule amends the FAR to clarify contractor and subcontractor responsibilities to obtain workers' compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 901, et seq.) as extended by the Defense Base Act (42 U.S.C. 1651, et seq.). This Act provides disability compensation, medical benefits, and death benefits, for certain employment outside of the United States. The rule only clarifies the current responsibilities of contractors under the Defense Base Act and Department of Labor (DOL) regulations, and does not initiate or impose any new administrative or performance requirements. This final rule has no impact on small business entities since it is merely clarifying already existing statutory and DOL regulatory requirements, and imposes no new requirements.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-Wide Policy.

Federal Acquisition Circular (FAC) 2005-74 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.

Unless otherwise specified, all Federal Acquisition Regulation (FAR) and other directive material contained in FAC 2005-74 is effective May 30, 2014 except for item I, which is effective November 1, 2014, and items IV and V, which are effective July 1, 2014.

Dated: May 20, 2014.

Richard Ginman,

Director, Defense Procurement and Acquisition Policy.

Dated: May 22, 2014.

Jeffrey A. Koses,

Senior Procurement Executive/Deputy CAO, Office of Acquisition Policy, U.S. General Services Administration.

Dated: May 20, 2014.

Ronald A. Poussard,

Director, Contract Management Division, National Aeronautics and Space Administration.

[FR Doc. 2014-12411 Filed 5-29-14; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12387]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 12, 22, and 52

[FAC 2005-74; FAR Case 2012-024; Item I; Docket No. 2012-0024, Sequence No. 1]

RIN 9000-AM49

Federal Acquisition Regulation; Commercial and Government Entity Code

AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to require the use of Commercial and Government Entity (CAGE) codes, including North Atlantic Treaty Organization (NATO) CAGE (NCAGE) codes for foreign entities, for awards valued at greater than the micro-purchase threshold. The CAGE code is a five-character alpha-numeric identifier used extensively within the Federal Government. The rule will also require offerors, if owned by another entity, to identify that entity.

DATES: Effective: November 1, 2014.

FOR FURTHER INFORMATION CONTACT: Mr. Edward Loeb, Procurement Analyst, at 202-501-0650, for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2012-024.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 78 FR 23194 on April 18, 2013, soliciting public comments on the proposed rule and received one response.

DoD, GSA, and NASA are revising the FAR to require that offerors provide their CAGE codes to contracting officers and that, if owned by another entity, offerors will provide, in a new provision with their representations and certifications, the CAGE codes and names of such entity or entities. For those offerors located in the United States or its outlying areas that register in the System for Award Management (SAM), a CAGE code is assigned as part of the registration process. If SAM registration is not required, the offeror must request and obtain a CAGE code from the Defense Logistics Agency (DLA) Contractor and Government Entity (CAGE) Branch. A CAGE code is not required when a condition described at FAR 4.605(c)(2) applies and the acquisition is funded by an agency other than DoD or NASA. Offerors located outside the United States will obtain an NCAGE from their NATO Codification Bureau or, if not a NATO member or sponsored nation, from the NATO Support Agency (NSPA).

The Federal procurement community strives toward greater measures of transparency and reliability of data, to facilitate achievement of rigorous accountability of procurement dollars, processes, and compliance with regulatory and statutory acquisition requirements, e.g., the Federal Funding and Accountability and Transparency Act of 2006 (Pub. L. 109-282, 31 U.S.C. 6101 note). Increased transparency and accuracy of procurement data broaden the Government's ability to implement fraud detection technologies restricting opportunities for mitigating occurrences of fraud, waste, and abuse of taxpayer dollars.

To further the desired increases in traceability and transparency, this rule uses the unique identification that a CAGE code provides, coupled with vendor representation of ownership and owner CAGE code. The CAGE code is a five-character alpha-numeric identifier used extensively within the Federal Government and will provide for standardization across the Federal Government. This rule will support successful implementation of business tools that provide insight into--

--Federal spending patterns across corporations;

--Traceability in tracking performance issues across corporations;

--Contractor personnel outside the United States; and

--Supply chain traceability and integrity efforts.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comment in the development of the final rule. A discussion of the comment and the changes made to the rule as a result of the comment are provided as follows:

A. Summary of Significant Changes

1. Modification of the definitions within the new provision at 52.204-17; ``owner'' has been deleted and the definitions of ``immediate owner'' and ``highest-level owner'' clarified so that—

a. Ownership is defined as having ownership or control, and the definition of immediate owner includes examples of the indicators of control; and

b. An immediate owner has at most one highest-level owner.

2. Direction was added to paragraph (b) of the provision to enable offerors comprised of more than one entity, i.e., joint ventures, to respond appropriately.

B. Analysis of Public Comment

Comment: The respondent indicated that the purposes of the changes in the proposed rule are not clear and make commenting on the rule difficult. For example, how does this rule support greater traceability or integrity of the supply chain? What is the Government's objective? Will contractors be required to have CAGE codes for every site at which work is performed? Does the proposed rule intend to add a CAGE code for the shipment function?

Response: The purpose of the rule, as stated in the background section of the preamble for the final rule is to (1) support successful implementation of business tools that seek insight into Federal spending patterns across corporations; (2) facilitate traceability in the tracking of performance issues across corporations; (3) provide insight on contractor personnel outside the United States (at a corporate/full organization level); and (4) support supply chain traceability and integrity efforts. The use of the CAGE code provides a Government-managed unique identifier for these entities; and the final rule provides a mechanism for the entities themselves to identify their hierarchical structure to the Government.

The final rule requires a CAGE code assignment for the entity (with its specific name and physical address) to whom the Government awards the contractual instrument, i.e., that entity noted on the front page of the contract document; and the final rule requires obtaining the immediate and highest-level owner's CAGE codes and legal names. The rule does not require CAGE code assignment to shipping and performance locations.

Comment: The respondent indicated that the proposed rule adds additional costs to the process not recognized in the proposed rule. This relates to usability issues with SAM. The respondent stated that the rule did not adequately support the burden estimates within the rule and noted that industry conducted a hierarchy assessment and this took well over an hour without the additional revalidations required by SAM. The respondent suggested republishing the rule for public comment after clarifying the issues raised.

Response: Obtaining a CAGE code is already a requirement for an active registration in SAM and for its predecessors the Online Representations and Certifications (ORCA) and the Central Contractor Registration (CCR) database. This final rule does not impose any new burden in that regard. Burden for registration in SAM was re-assessed as part of the rulemaking in the FAR case (FAR Case 2011-021) that established that requirement. Additionally, this final rule does not require the use of SAM to obtain the CAGE code(s) for the immediate owner or highest-level owner, although registration in SAM could be accomplished for U.S. registrants since U.S. registrants are assigned a CAGE code upon registration. It is true that it may take some time for larger organizations to update all contractor SAM registrations to include the immediate and highest-level owner CAGE information (if the contractor has hundreds of SAM records and if it updates them centrally and at the same time). However, including the data on an individual registration or on a renewal basis should not result in any significant additional time.

Comment: The respondent indicated that the proposed rule is unclear on the treatment of companies owned by foreign entities and U.S. based companies with business units performing work overseas for the U.S. Government.

Response: Foreign entities would not be exempted from this requirement. The rule also applies to U.S. companies, regardless of where work is performed.

Comment: The respondent stated that the proposed rule is unclear on the treatment of foreign Governments.

Response: Foreign governments, if receiving contracts from the U.S. Government, are required to have an NCAGE code as a result of this rule. In all practicality, if they are registered in SAM as they should be, they already do have an NCAGE code. For the questions related to ownership, foreign governments would indicate that they have no higher level owner.

Comment: The respondent indicated that the proposed rule is unclear on the treatment of commercial entities. Will purely commercial companies be required to have CAGEs? How will primes deal with commercial companies that do not wish to obtain a CAGE? How will primes address hierarchy issues associated with commercial companies that have a CAGE? How will additional costs be addressed? Are primes responsible for the currency of their commercial company subcontractor reporting?

Response: The rule applies to contractors with commercial contracts based upon the Councils' determination that applying this requirement to commercial contracts is necessary to fulfill the purpose of the rule. All entities reported as an immediate owner or highest-level owner of the offeror under the rule must have CAGE Codes. This final rule does not require subcontractors to have CAGE codes.

Comment: The respondent indicated that the rule is unclear on how Limited Liability Companies (LLCs) and joint ventures are to be treated. Also the definitions of owner, immediate owner and highest-level owner need to be clarified.

Response: The definitions have been clarified and the issue of joint ventures has been specifically addressed in the representation. Being a single legal entity, an LLC will be treated as any other offeror would. In addition, the term ``business entity'' was revised to use the term ``entity'' which, in this context, means a ``legal entity'', such as those entities listed at FAR 4.102.

Comment: The respondent stated that the requirement to provide ownership and control information on a proposal/contract basis is reversed by this rule and requires a large amount of resources. The respondent questioned why this information cannot be addressed when the CAGE is established. Managing at the proposal/contract level implies that changes in ownership and control would require a contract modification rather than CAGE code updates. Ownership and control information is managed centrally within many large government contractors.

Response: The implementation of this requirement will occur by incorporating the collection of data into the annual representations and certifications section of a prime contractor's SAM registration. This means that contractors will only be required to provide the information once and then update/renew it on an annual basis when they renew their SAM registration. As for later offers, the FAR requires the offeror to either update SAM or list the updated information on the offer (see 52.204-8(d)).

Comment: The respondent indicated that corporate linkage information is already being provided by Dun and Bradstreet in SAM by DUNS Number.

Response: There is some corporate linkage in SAM provided by the commercial entity, Dun & Bradstreet (D&B); however, the methodology by which D&B establishes ownership is proprietary and does not necessarily conform to the definitions in this case. The final rule instead establishes the use of a Government-managed unique identifier governed by established international rules (under NATO). Additionally, the rule provides the contractor the opportunity to provide what it believes is the correct information, rather than relying on information from an outside commercial source.

Comment: The respondent indicated that the proposed rule at FAR subpart 4.18 does not address which system is the master record for CAGE code information; it fails to outline the order of precedence for CAGE systems, particularly between the DLIS Master Cage code listing and SAM.

Response: The planned implementation will be to collect the information via SAM, as a part of the contractor's registration. That information collected will be transmitted to the actual CAGE code system, managed by the Defense Logistics Agency (DLA) on behalf of the Federal Government.

Comment: The respondent indicated that Standard Form (SF) 26, 30, 33, and Optional Form (OF) 307 forms already provide a place to input the CAGE code, which is not mentioned in the proposed rule.

Response: The standard forms referenced actually only provide a field for ``Code'' which is not specifically identified as the CAGE code, although DoD uses it that way.

III. Principal Changes to the FAR Resulting From This Rule

A. Changes to FAR Part 4

1. FAR 4.1202. A new provision for ownership or control of offeror is added to the list of representations and certifications under FAR 4.1202.

2. Addition of FAR subpart 4.18, Commercial and Government Entity Code. A new subpart is added to include scope, policy, and definitions for the subpart. Offerors are required to provide their CAGE codes to the contracting officer, to represent if they are owned by another entity, and, if so, give the legal name and CAGE code for the entity(s), unless a condition listed at FAR 4.605(c)(2) applies and the acquisition is funded by an agency other than DoD or NASA. The subpart also gives instruction to contracting officers to verify the CAGE codes provided.

3. A definition of ``Commercial and Government Entity code'' is provided. The definition encompasses both the CAGE code for entities located in the United States or its outlying areas, and the NCAGE code if the code is assigned by a NATO Codification Bureau or NATO Support Agency (NSPA).

4. The rule includes definitions of ``highest-level owner'' and ``immediate owner.'' The intent behind defining ``ownership'' is to describe how entities relate to one another in terms of their hierarchical relationships. The final rule established the definitions as follows:

Highest-level owner means the entity that owns or controls an immediate owner of the offeror or that owns or controls one or more entities that own or control an immediate owner of the offeror. No entity owns or exercises control of the highest-level owner. Immediate owner means an entity other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees. 5. The term ``business entity'' was revised to the term ``entity'' throughout the rule. In this context, the term ``entity'' means a ``legal entity'', such as those entities listed at FAR 4.102.

B. Changes to FAR Subpart 12.3

With respect to commercial items, changes to the list of other required provisions and clauses at FAR 12.301(d) are included to reflect that CAGE code reporting and maintenance are applicable to commercial items. This is accomplished by including the new provision, FAR 52.204-16, Commercial and Government Entity Code Reporting, and the new clause, FAR 52.204-18, Commercial and Government Entity Code Maintenance.

C. Changes to FAR Part 52

1. A new provision, FAR 52.204-16, Commercial and Government Entity Code Reporting, has been added, providing information on obtaining CAGE codes and requiring offerors to provide their CAGE codes.

2. A new provision, FAR 52.204-17, Ownership or Control of Offeror, requires the offeror to identify if it is owned by another entity(s) and, if so, to provide the legal name and CAGE code of such entity(s).

3. A new clause, FAR 52.204-18, Commercial and Government Entity Code Maintenance, provides instructions to contractors to maintain accurate CAGE information in the CAGE file and to inform their contracting officers if their CAGE codes change.

4. The rule also amends the FAR provision 52.204-8, Annual Representations and Certifications, by including the new provision 52.204-17, Ownership or Control of Offeror.

5. The rule also amends the provision at 52.212-3, Offeror Representations and Certifications--Commercial Items, by including definitions and ownership representations.

IV. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

V. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

A number of initiatives have surfaced in and across the Federal Government which have specific implication to the Federal procurement community. Goals of these initiatives, which include the Federal Funding Accountability and Transparency Act (Pub. L. 108-282, 31 U.S.C. 6101 note), further the President's commitment to make the Federal Government transparent and accountable to the American people. The changes identified in this rule will further the procurement community's efforts toward greater measures of transparency and reliability of data, reducing occurrences of fraud, waste, and abuse of taxpayer dollars.

This change will require use of the Commercial and Government Entity (CAGE) code referred to as North Atlantic Treaty Organization (NATO) CAGE (NCAGE) code for foreign entities, a five-character alpha-numeric identifier used extensively within the Federal Government that will provide for vendor identification standardization. Further, the change will couple vendor use of CAGE code with vendor identification of ownership and owner CAGE code. This change will lead to increases in data traceability and transparency, thereby broadening the Government's ability to, among other things, implement fraud detection technologies.

The rule will require vendors that do not already have a CAGE to obtain one. Only vendors that meet a registration exception of FAR subpart 4.11, but not an exception to subpart 4.6, will need to separately obtain a CAGE. It is estimated that 2,154 vendors will be required to obtain a CAGE code. It is estimated that 741 of these vendors are small businesses.

This rule would also affect offerors that are owned by another entity. This rule would require an offeror to represent that, if it is owned by another entity, it has entered the CAGE code and name of that entity. Approximately 413,808 unique vendors submitted offers for Federal Government awards in Fiscal Year 2011, and approximately 275,872 of these offers were from unique small businesses.

There were no public comments submitted by the Chief Counsel for Advocacy of the Small Business Administration.

There are no significant alternatives to accomplish the stated objectives of this rule.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

VI. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The rule contains information collection requirements. The Office of Management and Budget (OMB) has cleared this information collection requirement under OMB Control Number 9000-0185, titled: Commercial and Government Entity Code. In response to the notice of proposed rulemaking and the request for comment on the burden estimates, one respondent did question the burden estimates. The respondent indicated that the rule adds additional costs to the process not recognized in the rule. This relates to usability issues with SAM. The respondent indicated that, as a pilot, industry conducted hierarchy assessment and this took well over an hour without the additional revalidations required by SAM. The respondent requested that the FAR Council republish the rule for public comment after clarifying the issues raised.

The FAR Council determined that a revision to the Paperwork Burden is not warranted. Obtaining a CAGE code is already a requirement for an active registration in SAM and for its predecessors the Online Representations and Certifications (ORCA) and the Central Contractor Registration (CCR) database. This final rule applies no new burden in that regard. Burden for registration in SAM was re-assessed as part of the rulemaking in the FAR case (FAR Case 2011-021) that established that requirement. Additionally, this final rule does not require the use of SAM to obtain the CAGE code(s) for the immediate owner or highest-level owner; although registration in SAM could be accomplished to do so for U.S. registrants (as U.S. registrants are assigned a CAGE code upon registration). It is true that it may take some time in larger organizations to update all of the contractor's SAM registrations to include the immediate and highest-level owner CAGE information (if the contractor has hundreds of SAM records and it is updating them centrally and at the same time). However, including the data on an individual registration or renewal basis should not result in any significant additional time.

List of Subjects in 48 CFR Parts 1, 4, 12, 22, and 52

Government procurement.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 4, 12, 22, and 52 as set forth below:

1. The authority citation for 48 CFR parts 1, 4, 12, 22, and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

2. Amend section 1.106 in the table following the introductory text, by adding in sequence, FAR segments ``52.204-16'', ``52.204-17'', and ``52.204-18'' and the corresponding OMB Control Number ``9000-0185''.

PART 4--ADMINISTRATIVE MATTERS

3. Amend section 4.605 by adding a sentence to the end of paragraph (b) to read as follows:

4.605 Procedures.

* * * * *

(b) * * * (For a discussion of the Commercial and Government Entity (CAGE) Code, which is a different identification number, see subpart 4.18.)

* * * * *

4. Amend section 4.1202 by redesignating paragraphs (e) through (bb) as paragraphs (f) through (cc), respectively; and adding a new paragraph (e) to read as follows:

4.1202 Solicitation provision and contract clause.

* * * * *

(e) 52.204-17, Ownership or Control of Offeror.

* * * * *

5. Add subpart 4.18 to read as follows:

Subpart 4.18--Commercial and Government Entity Code Sec.

4.1800 Scope of subpart.

4.1801 Definitions.

4.1802 Policy.

4.1803 Verifying CAGE codes prior to award.

4.1804 Solicitation provisions and contract clause.

Subpart 4.18--Commercial and Government Entity Code

4.1800 Scope of subpart.

(a) This subpart prescribes policies and procedures for identification of commercial and government entities. The Commercial and Government Entity (CAGE) code system may be used, among other things, to--

(1) Exchange data with another contracting activity, including contract administration activities and contract payment activities;

(2) Exchange data with another system that requires the unique identification of a contractor entity; or

(3) Identify when offerors are owned or controlled by another entity.

(b) For information on the Data Universal Numbering System (DUNS) number, which is a different identification number, see 4.605 and the provisions at 52.204-6 and 52.204-7.

4.1801 Definitions.

As used in this part--

Commercial and Government Entity (CAGE) code means--

(1) An identifier assigned to entities located in the United States or its outlying areas by the Defense Logistics Agency (DLA) Contractor and Government Entity (CAGE) Branch to identify a commercial or government entity; or

(2) An identifier assigned by a member of the North Atlantic Treaty Organization (NATO) or by the NATO Support Agency (NSPA) to entities located outside the United States and its outlying areas that the DLA Contractor and Government Entity (CAGE) Branch records and maintains in the CAGE master file. This type of code is known as an NCAGE code.

Highest-level owner means the entity that owns or controls an immediate owner of the offeror, or that owns or controls one or more entities that control an immediate owner of the offeror. No entity owns or exercises control of the highest level owner.

Immediate owner means an entity, other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees.

4.1802 Policy.

(a) Commercial and Government Entity code. (1) Offerors shall provide the contracting officer the Commercial and Government Entity (CAGE) code assigned to that offeror's location prior to the award of a contract action above the micro-purchase threshold, when there is a requirement to be registered in SAM or a requirement to have a DUNS Number in the solicitation.

(2) The contracting officer shall include the contractor's CAGE code in the contract and in any electronic transmissions of the contract data to other systems when it is provided in accordance with paragraph (a)(1) of this section.

(b) Ownership or control of offeror. Offerors, if owned or controlled by another entity, shall provide the contracting officer with the CAGE code and legal name of that entity prior to the award of a contract action above the micro-purchase threshold, when there is a requirement to be registered in SAM or a requirement to have a DUNS Number in the solicitation.

4.1803 Verifying CAGE codes prior to award.

(a) Contracting officers shall verify the offeror's CAGE code by reviewing the entity's registration in the System for Award Management (SAM). Active registrations in SAM have had the associated CAGE codes verified.

(b) For entities not required to be registered in SAM, the contracting officer shall validate the CAGE code using the CAGE code search feature at http://www.dlis.dla.mil/cage_welcome.asp.

4.1804 Solicitation provisions and contract clause.

(a) Insert the provision at 52.204-16, Commercial and Government Entity Code Reporting, in all solicitations that include--

(1) 52.204-6, Data Universal Numbering System Number; or

(2) 52.204-7, System for Award Management.

(b) Insert the provision at 52.204-17, Ownership or Control of Offeror, in all solicitations that include the provision at 52.204-16, Commercial and Government Entity Code Reporting.

(c) Insert the clause at 52.204-18, Commercial and Government Entity Code Maintenance, in all solicitations and contracts when the solicitation contains the provision at 52.204-16, Commercial and Government Entity Code Reporting.

PART 12--ACQUISITION OF COMMERCIAL ITEMS

6. Amend section 12.301 by revising paragraph (d) to read as follows:

12.301 Solicitation provisions and contract clauses for the acquisition of commercial items.

* * * * *

(d) Other required provisions and clauses. Notwithstanding prescriptions contained elsewhere in the FAR, when acquiring commercial items, contracting officers shall be required to use only those provisions and clauses prescribed in this part. The provisions and clauses prescribed in this part shall be revised, as necessary, to reflect the applicability of statutes and executive orders to the acquisition of commercial items.

(1) Insert the provision at 52.204-16, Commercial and Government Entity Code Reporting, when there is a requirement to be registered in SAM or a requirement to have a DUNS Number in the solicitation.

(2) Insert the clause at 52.204-18, Commercial and Government Entity Code Maintenance, when there is a requirement to be registered in SAM or a requirement to have a DUNS Number in the solicitation.

(3) Insert the provision at 52.209-7, Information Regarding Responsibility Matters, as prescribed in 9.104-7(b).

(4) Insert the clause at 52.225-19, Contractor Personnel in a Designated Operational Area or Supporting a Diplomatic or Consular Mission outside the United States, as prescribed in 25.301-4.

(5) Insert the clause at 52.232-40, Providing Accelerated Payments to Small Business Subcontractors, as prescribed in 32.009-2.

* * * * *

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

22.1006 [Amended]

7. Amend section 22.1006 by--

a. Removing from paragraph (a)(2)(i)(C) ``52.204-8(c)(2)(iii) or (iv)'' and adding ``52.204-8(c)(2)(iv) or (v)'' in its place;

b. Removing from paragraph (e)(2)(i) ``52.204-8(c)(2)(iii)'' and adding ``52.204-8(c)(2)(iv)'' in its place; and

c. Removing from paragraph (e)(4)(i) ``52.204-8(c)(2)(iv)'' and adding ``52.204-8(c)(2)(v)'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

8. Amend section 52.204-8 by--

a. Revising the date of the provision;

b. Redesignating paragraphs (c)(2)(i) through (c)(2)(vii) as paragraphs (c)(2)(ii) through (c)(2)(viii), respectively; and

c. Adding a new paragraph (c)(2)(i).

The revised and added text reads as follows:

52.204-8 Annual Representations and Certifications.

* * * * *

Annual Representations and Certifications (Nov 2014)

* * * * *

(c) * * *

(2) * * *

----(i) 52.204-17, Ownership or Control of Offeror.

* * * * *

9. Add section 52.204-16 to read as follows:

52.204-16 Commercial and Government Entity Code Reporting.

As prescribed in 4.1804(a), use the following provision:

Commercial and Government Entity Code Reporting (Nov 2014)

(a) Definition. As used in this provision--

Commercial and Government Entity (CAGE) code means--

(1) An identifier assigned to entities located in the United States or its outlying areas by the Defense Logistics Agency (DLA) Contractor and Government Entity (CAGE) Branch to identify a commercial or Government entity; or

(2) An identifier assigned by a member of the North Atlantic

Treaty Organization (NATO) or by the NATO Support Agency (NSPA) to entities located outside the United States and its outlying areas that the DLA Contractor and Government Entity (CAGE) Branch records and maintains in the CAGE master file. This type of code is known as an NCAGE code.

(b) The Offeror shall enter its CAGE code in its offer with its name and address or otherwise include it prominently in its proposal. The CAGE code entered must be for that name and address. Enter ``CAGE'' before the number. The CAGE code is required prior to award.

(c) CAGE codes may be obtained via--

(1) Registration in the System for Award Management (SAM) at www.sam.gov. If the Offeror is located in the United States or its outlying areas and does not already have a CAGE code assigned, the DLA Contractor and Government Entity (CAGE) Branch will assign a CAGE code as a part of the SAM registration process. SAM registrants located outside the United States and its outlying areas shall obtain a NCAGE code prior to registration in SAM (see paragraph (c)(3) of this provision).

(2) The DLA Contractor and Government Entity (CAGE) Branch. If registration in SAM is not required for the subject procurement, and the offeror does not otherwise register in SAM, an offeror located in the United States or its outlying areas may request that a CAGE code be assigned by submitting a request at http://www.dlis.dla.mil/cage_welcome.asp.

(3) The appropriate country codification bureau. Entities located outside the United States and its outlying areas may obtain an NCAGE code by contacting the Codification Bureau in the foreign entity's country if that country is a member of NATO or a sponsored nation. NCAGE codes may be obtained from the NSPA if the foreign entity's country is not a member of NATO or a sponsored nation. Points of contact for codification bureaus and NSPA, as well as additional information on obtaining NCAGE codes, are available at http://www.dlis.dla.mil/Forms/Form_AC135.asp.

(d) Additional guidance for establishing and maintaining CAGE codes is available at http://www.dlis.dla.mil/cage_welcome.asp.

(e) When a CAGE Code is required for the immediate owner and/or

the highest-level owner by 52.204-17 or 52.212-3(p), the Offeror shall obtain the respective CAGE Code from that entity to supply the CAGE Code to the Government.

(f) Do not delay submission of the offer pending receipt of a CAGE code.

(End of Provision)

10. Add section 52.204-17 to read as follows:

52.204-17 Ownership or Control of Offeror.

As prescribed in 4.1804(b), use the following provision:

Ownership of Control of Offeror (Nov 2014)

(a) Definitions. As used in this provision--

Commercial and Government Entity (CAGE) code means--

(1) An identifier assigned to entities located in the United States or its outlying areas by the Defense Logistics Agency (DLA) Contractor and Government Entity (CAGE) Branch to identify a commercial or government entity, or

(2) An identifier assigned by a member of the North Atlantic Treaty Organization (NATO) or by the NATO Support Agency (NSPA) to entities located outside the United States and its outlying areas that the DLA Contractor and Government Entity (CAGE) Branch records and maintains in the CAGE master file. This type of code is known as an NCAGE code.

Highest-level owner means the entity that owns or controls an immediate owner of the offeror, or that owns or controls one or more entities that control an immediate owner of the offeror. No entity owns or exercises control of the highest level owner.

Immediate owner means an entity, other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees.

(b) The Offeror represents that it [--] has or [--] does not have an immediate owner. If the Offeror has more than one immediate owner (such as a joint venture), then the Offeror shall respond to paragraph (c) and if applicable, paragraph (d) of this provision for each participant in the joint venture.

(c) If the Offeror indicates ``has'' in paragraph (b) of this provision, enter the following information:

Immediate owner CAGE code:

-----------------------------------------------------------------------

Immediate owner legal name:--------------------------------------------

(Do not use a ``doing business as'' name)

Is the immediate owner owned or controlled by another entity?:

[--] Yes or [--] No.

(d) If the Offeror indicates ``yes'' in paragraph (c) of this provision, indicating that the immediate owner is owned or controlled by another entity, then enter the following information:

Highest-level owner CAGE code:

----------------------------------------------------------------------

Highest-level owner legal name:

-----------------------------------------------------------------------

(Do not use a ``doing business as'' name)

(End of provision)

11. Add section 52.204-18 to read as follows:

52.204-18 Commercial and Government Entity Code Maintenance.

As prescribed in 4.1804(c), use the following clause:

Commercial and Government Entity Code Maintenance (Nov 2014)

(a) Definition. As used in this clause--

Commercial and Government Entity (CAGE) code means--

(1) An identifier assigned to entities located in the United States or its outlying areas by the Defense Logistics Agency (DLA) Contractor and Government Entity (CAGE) Branch to identify a commercial or government entity, or

(2) An identifier assigned by a member of the North Atlantic Treaty Organization (NATO) or by the NATO Support Agency (NSPA) to entities located outside the United States and its outlying areas that the DLA Contractor and Government Entity (CAGE) Branch records and maintains in the CAGE master file. This type of code is known as an NCAGE code.

(b) Contractors shall ensure that the CAGE code is maintained throughout the life of the contract. For contractors registered in the System for Award Management (SAM), the DLA Contractor and Government Entity (CAGE) Branch shall only modify data received from SAM in the CAGE master file if the contractor initiates those changes via update of its SAM registration. Contractors undergoing a novation or change-of-name agreement shall notify the contracting officer in accordance with subpart 42.12. The contractor shall communicate any change to the CAGE code to the contracting officer within 30 days after the change, so that a modification can be issued to update the CAGE code on the contract.

(c) Contractors located in the United States or its outlying areas that are not registered in SAM shall submit written change requests to the DLA Contractor and Government Entity (CAGE) Branch. Requests for changes shall be provided on a DD Form 2051, Request for Assignment of a Commercial and Government Entity (CAGE) Code, to the address shown on the back of the DD Form 2051. Change requests to the CAGE master file are accepted from the entity identified by the code.

(d) Contractors located outside the United States and its outlying areas that are not registered in SAM shall contact the appropriate National Codification Bureau or NSPA to request CAGE changes. Points of contact for National Codification Bureaus and NSPA, as well as additional information on obtaining NCAGE codes, are available at http://www.dlis.dla.mil/Forms/Form_AC135.asp.

(e) Additional guidance for maintaining CAGE codes is available at http://www.dlis.dla.mil/cage_welcome.asp.

(End of Clause)

12. Amend section 52.212-3 by--

a. Revising the date of the provision;

b. Revising the introductory text of the provision;

c. Amending paragraph (a) by adding, in alphabetical order, the definitions

``Highest-level owner'' and ``Immediate owner'';

d. Removing from the second paragraph of (b)(2) ``(c) through (o)'' and adding ``(c) through (p)'' in its place; and

0

e. Adding paragraph (p).

The revised and added text reads as follows:

52.212-3 Offeror Representations and Certifications--Commercial Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (Nov 2014)

The Offeror shall complete only paragraph (b) of this provision if the Offeror has completed the annual representations and certification electronically via the System for Award Management (SAM) Web site accessed through http://www.acquisition.gov. If the Offeror has not completed the annual representations and certifications electronically, the Offeror shall complete only paragraphs (c) through (p) of this provision. (a) * * *

Highest-level owner means the entity that owns or controls an immediate owner of the offeror, or that owns or controls one or more entities that control an immediate owner of the offeror. No entity owns or exercises control of the highest level owner.

Immediate owner means an entity, other than the offeror, that has direct control of the offeror. Indicators of control include, but are not limited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees.

* * * * *

(p) Ownership or Control of Offeror. (Applies in all solicitations when there is a requirement to be registered in SAM or a requirement to have a DUNS Number in the solicitation.

(1) The Offeror represents that it [--] has or [--] does not have an immediate owner. If the Offeror has more than one immediate owner (such as a joint venture), then the Offeror shall respond to paragraph (2) and if applicable, paragraph (3) of this provision for each participant in the joint venture.

(2) If the Offeror indicates ``has'' in paragraph (p)(1) of this provision, enter the following information:

Immediate owner CAGE code:

-----------------------------------------------------------------------

Immediate owner legal name:

----------------------------------------------------------------------

(Do not use a ``doing business as'' name)

Is the immediate owner owned or controlled by another entity:

[--] Yes or [--] No.

(3) If the Offeror indicates ``yes'' in paragraph (p)(2) of this provision, indicating that the immediate owner is owned or controlled by another entity, then enter the following information:

Highest-level owner CAGE code:

-----------------------------------------------------------------------

Highest-level owner legal name:

-----------------------------------------------------------------------

(Do not use a ``doing business as'' name)

(End of provision)

* * * * *

[FR Doc. 2014-12387 Filed 5-29-14; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12393]

-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4, 42, and 52

[FAC 2005-74; FAR Case 2014-016; Item II; Docket No. 2014-0016, Sequence No. 1]

RIN 9000-AM77

Federal Acquisition Regulation; Repeal of the Recovery Act Reporting Requirements

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA have adopted as final, with changes, two interim rules amending the Federal Acquisition Regulation (FAR) to revise the clause on Recovery Act reporting procedures. This final rule implements a section of the Consolidated Appropriations Act, 2014, by repealing the reporting requirements of the American Recovery and Reinvestment Act of 2009.

DATES: Effective: May 30, 2014.

Applicability: In accordance with FAR 1.108(d)(3), Contracting Officers may, at their discretion, modify existing contracts to amend 52.204-11 in paragraph (c) to add a statement that ``Starting February 1, 2014, future reporting is not required.''

FOR FURTHER INFORMATION CONTACT: Mr. Curtis E. Glover, Sr., Procurement Analyst, at 202-501-1448 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2014-016.

SUPPLEMENTARY INFORMATION:

I. Background

Section 627 of Division E of the Consolidated Appropriations Act, 2014 (Pub. L. 113-76), repealed the contractor reporting requirements that were in section 1512(c) of Division A of the American Recovery and Reinvestment Act of 2009 (Recovery Act) (Pub. L. 111-5). Starting February 1, 2014, future reporting is not required. A message has been posted at www.federalreporting.gov notifying Federal contractors of this change. As of March 20, 2014, the Web site is closed for future reporting.

Section 627 also amended section 1512(d) to replace the requirement that agencies make publicly available the information previously reported by contractors under section 1512(c) with the requirement that each agency that made recovery funds available to any recipient, make publicly available detailed spending data as prescribed by the Office of Management and Budget and pursuant to the Federal Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109-282).

Although Federal contractors and agencies are not required after January 31, 2014, to comply with future reporting requirements of the Recovery Act, which were implemented in FAR subpart 4.15, 42.15, and the clause at 52.204-11, American Recovery and Reinvestment Act--Reporting Requirements, contractors and agencies are still required to continue their FFATA reporting on existing contracts, as implemented in FAR subpart 4.14 and clause 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards.

To notify the acquisition community of this change the following steps were taken: (1) The Civilian Agency Acquisition Council (CAAC) issued CAAC letter 2014-02 titled ``Class Deviation from the Federal Acquisition Regulation (FAR) to Repeal the American Recovery and Reinvestment Act of 2009 (the Recovery Act) Reporting Requirement'' on February 20, 2014; and (2) DoD issued a deviation titled ``Class Deviation-Repeal of the Recovery Act Reporting Requirements'' dated March 11, 2014.

II. Discussion and Analysis

DoD, GSA, and NASA published an interim rule under FAR Case 2009-009, American Recovery and Reinvestment Act of 2009 (Recovery Act)--Reporting Requirements, in the Federal Register at 74 FR 14639 on March 31, 2009, and notices published at 74 FR 42877 on August 25, 2009, and at 74 FR 48971 on September 25, 2009. DoD, GSA, and NASA published in the Federal Register a separate interim rule under FAR Case 2010-008, Recovery Act Subcontract Reporting Procedures, at 75 FR 38684 on July 2, 2010, and a correction published at 75 FR 43090 on July 23, 2010. Responses to the interim rule published under 2009-009 were received from 39 respondents, and one respondent commented on the interim rule published under FAR Case 2010-008.

The CAAC and the Defense Acquisition Regulations Council (DARC) reviewed the public comments received.

However, due to the repeal of the Recovery Act reporting requirements, the two FAR cases under which the interim rules were published have been closed into this FAR Case 2014-016, which adopts the interim rules as a final rule, with changes. This final rule deletes the obsolete text at FAR subpart 4.15 and 52.204-11 and makes conforming changes at 42.1501(a)(5) and 52.212-5(b)(5).

Therefore, the comments received with regard to the two previously published interim rules that addressed applicability, definitions, Web sites, the reporting requirements, paperwork burden, and impact on small business, are no longer relevant.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a final regulatory flexibility analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The objective of this final rule is to delete the reporting requirements at FAR subpart 4.15 and the clause at 52.204-11, American Recovery and Reinvestment Act Reporting Requirements. The two prior interim rules (2009-009 and 2010-008), which established the current FAR coverage, have been closed into this final rule. This is necessary because section 627 of Division E of the Consolidated Appropriations Act, 2014, amended Title XV of Division A of the American Recovery and Reinvestment Act, FY 2014 (Pub. L. 111-5), including repeal of the contractor reporting requirements.

Although comments were received on the two prior interim rules, these comments are no longer relevant, because the reporting requirements have been deleted, and there is no further burden on any entity, small or large, that is associated with Recovery Act reporting.

An initial report, with quarterly updates, was required from all Federal contractors that received awards funded by the Recovery Act. As of March 15, 2010, the Federal Procurement Data System (FPDS) indicated that there were 36,680 Recovery Act awards, including modifications, totaling $43,716,219,816. Of the Recovery Act prime contract awards, 39.5%, or 14,501 were made to small businesses. The number of first-tier subcontractors estimated to participate in Recovery Act awards was 73,360. Of these 73,360 Recovery Act first-tier subcontractors, it was estimated that 40%, or 29,344, were small businesses.

Performance of most contracts awarded using Recovery Act funds is already complete. Therefore, we estimate that not more than several hundred small entities will be positively impacted by the elimination of the reporting requirements.

The reports being deleted were probably prepared by a company contract administrator or contract manager or a company subcontract administrator. The information required in the report was primarily information that companies would maintain for their own business purposes including, but not limited to, contract or other award number, the dollar amount of invoices, the supplies or services delivered, a broad assessment of progress towards completion, the estimated number of new jobs created or retained resulting from the award, and first-tier subcontract information (or aggregate information if the subcontract is less than $25,000, or the subcontractor is an individual or had gross income in the previous tax year of less than $300,000). While most of the data elements imposed only one-time burden collection, some required quarterly updates.

Deletion of the Recovery Act reporting requirements from the FAR has eliminated all economic impact of the two prior interim FAR rules on small entities.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). This final rule repealed the contractor reporting requirements that were in section 1512(c) of Division A of the American Recovery and Reinvestment Act of 2009 (Recovery Act) (Pub. L. 111-5). Therefore, a request will be submitted to OMB to cancel OMB clearances 9000-0166, 9000-0167, 9000-0168, 9000-0169, and 9000-0176. As a result of this action, the public burden for reporting recovery actions has been reduced by 419,019 hours. However, even though Federal contractors and agencies are not required after January 31, 2014, to comply with future reporting requirements of the Recovery Act, which were implemented in FAR subparts 4.15 and 42.15, and the clause at 52.204-11, American Recovery and Reinvestment Act--Reporting Requirements, both groups are still required to continue their FFATA reporting on existing contracts, as implemented in FAR subpart 4.14 and clause 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards and that reporting requirement is covered under a separate collection.

List of Subjects in 48 CFR Parts 4, 42, and 52

Government procurement.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Government-wide Policy.

Interim Rules Adopted as Final With Changes

Accordingly, the interim rules amending 48 CFR parts 4 and 52, which were published in the Federal Register at 74 FR 14639, March 31, 2009, and at 75 FR 38684, July 2, 2010, are adopted as final with the following changes:

1. The authority citation for 48 CFR parts 4, 42, and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 4--ADMINISTRATIVE MATTERS

Subpart 4.15 [Removed and Reserved]

2. Remove and reserve Subpart 4.15.

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

42.1501 [Amended]

3. Amend section 42.1501 by removing from paragraph (a)(5) ``subparts 4.14 and 4.15'' and adding ``subpart 4.14'' in its place.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

52.204-11 [Removed and Reserved]

4. Remove and reserve section 52.204-11.

5. Amended section 52.212-5 by--

a. Revising the date of the clause; and

b. Removing and reserving paragraph (b)(5).

The revised text reads as follows:

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or Executive Orders--Commercial Items (May 2014)

* * * * *

[FR Doc. 2014-12393 Filed 5-29-14; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12408]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 31 and 52

[FAC 2005-74; FAR Case 2012-017; Item III; Docket No. 2012-0017,

Sequence No. 1]

RIN 9000-AM38

Federal Acquisition Regulation; Expansion of Applicability of the Senior Executive Compensation Benchmark

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are adopting as final, without change, an interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act of 2012. This section expands the application of the senior executive compensation benchmark to a broader group of contractor employees on contracts awarded by DoD, NASA, and the Coast Guard. The senior executive compensation benchmark amount limits the reimbursement of contractor employee compensation costs.

DATES: Effective: May 30, 2014.

FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2012-017.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published an interim rule in the Federal Register at 78 FR 38535, on June 26, 2013 to implement section 803 of the National Defense Authorization Act for Fiscal Year 2012. The interim rule required in FAR 31.205-6(p) that the incurred compensation costs for all contractor employees on all DoD, NASA, and Coast Guard contracts awarded on or after December 31, 2011, be subject to the senior executive compensation amount. The reference to 31.205-6(p) in FAR 52.216-7 was also updated to reflect this revision in 31.205-6(p).

Section 803(c)(2) stated that the expanded reach of the compensation cap ``shall apply with respect to costs of compensation incurred after January 1, 2012, under contracts entered into before, on, or after the date of the enactment of this Act'' (which was December 31, 2011). This final rule addresses only the prospective application of section 803, i.e., to contracts awarded on or after its enactment (December 31, 2011). A separate proposed rule (FAR Case 2012-025) was published in the Federal Register at 78 FR 38539, on June 26, 2013 to address the retroactive application of section 803 to contracts that had been awarded before its enactment.

A technical correction was published in the Federal Register at 78 FR 70481, on November 25, 2013, correcting the dates in 31.205-6(p)(2)(ii).

Three respondents submitted comments on the interim rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments is provided as follows:

A. Summary of Significant Changes

Based on a review of the public comments, discussed below, the Councils have concluded that no change to the interim rule is necessary.

B. Analysis of Public Comments

1. Retroactive Application of Rule Not Appropriate

Comment: Respondents submitted comments stating that it was inappropriate to retroactively apply the rule. These comments included:

(a) The interim rule creates a breach of contract per case law cited in the General Dynamics and ATK Launch Systems decisions. Thus, the effective date of the interim rule should be June 26, 2013 (the effective date of the interim rule) and not the date of the statute (January 1, 2012).

(b) The interim rule's premise that section 803 of the NDAA must automatically prevail for contracts signed prior to the effective date of the rule but after enactment of the NDAA is incorrect. It is well established in the Federal Courts that a contract that conflicts with Federal statute should still be honored.

(c) Case law has established that statutory language which explicitly requires the issuance of implementing regulations is not self-executing but instead takes effect upon the promulgation of implementing regulations.

(d) The Government was mistaken in its conclusion that the holdings in the General Dynamics and ATK Launch Systems decisions cited in the preamble would impact only contracts awarded before the effective date of the statute. A close reading of those decisions reveals the Government would also be in breach of FAR 52.216-7 in implementing this interim rule because it attempts to impose its requirements on contracts awarded before the published date of the interim rule (June 26, 2013).

(e) The retroactive application of this rule is expressly prohibited per FAR 1.108(d).

Response: Section 803(c)(2) states that the expanded reach of the compensation cap ``shall apply with respect to costs of compensation incurred after January 1, 2012, under contracts entered into before, on, or after the date of the enactment of this Act'' (which was December 31, 2011). This final rule addresses only the prospective application of section 803, i.e., to contracts awarded on or after its enactment (December 31, 2011). A separate proposed rule (FAR Case 2012-025) was published in the Federal Register at 78 FR 38539 on June 26, 2013 to address the retroactive application of section 803 to contracts that had been awarded before its enactment.

FAR 1.108(d) does not expressly prohibit retroactive application of FAR changes, but instead states that unless otherwise specified, FAR changes apply to solicitations issued on or after the effective date of the change. In this instance, however, section 803(c)(2) of the National Defense Authorization Act for Fiscal Year 2012 explicitly states that that the expanded reach of the compensation cap ``shall apply with respect to costs of compensation incurred after January 1, 2012, under contracts entered into before, on, or after the date of the enactment of this Act'' (which was December 31, 2011). Therefore, in accordance with the National Defense Authorization Act for Fiscal Year 2012 and consistent with FAR 1.108(d), the specified effective date for this rule is January 1, 2012. The General Dynamics and ATK Launch Systems decisions only addressed contracts that predate the enactment of the statute; those decisions did not specifically address contracts awarded during the period beginning on the date of enactment of the underlying statute through the date before implementation of the statute in the regulations. The Councils are required to implement the statute in the FAR to the maximum extent that is legally permissible.

2. Exceptions for Scientists and Engineers Must Be Addressed

Comment: One respondent believed that the expansion of the executive compensation cap to all contractor employees and the exceptions for scientists and engineers must align. Any future Defense Federal Acquisition Supplement rule relative to exception for scientist and engineers would be in conflict with this interim rule. Response: This rule does not prohibit DoD from considering an exception for scientists and engineers.

3. Urgent and Compelling Determination Inappropriate Comment: One respondent stated that the urgent and compelling determination in the preamble was inappropriate. These comments included the following:

(a) The statement in the preamble that urgent and compelling reasons exist to issue an interim rule without public comment was reached in error because the interim rule does impose reporting, recordkeeping, or other information collection requirements.

(b) The 18-month time period to issue the interim rule is inconsistent with the statement that urgent and compelling reasons existed to issue the interim rule. If truly urgent and compelling, the interim rule would have been issued much sooner.

Response: There are no reporting or record keeping burdens associated with the interim or final rule that require the approval of the Office of Management and Budget. The determination to issue the interim rule prior to the receipt of public comments was necessary because it allowed agencies to immediately implement the requirements of the law. The delay in issuing the interim rule was necessary to resolve issues in the development of the interim rule and obtain necessary clearances. The delay did not alleviate the urgency of implementing the rule in the FAR.

4. Impact on Contractors' Ability To Perform

Comment: One respondent stated that application of an arbitrary cap on the compensation of all contractor employees will reduce contractors' ability to attract and retain experienced and talented individuals and will jeopardize contractors' ability to support Government mission critical requirements. The respondent also believed that the rule was a disincentive and created a barrier to commercial and small businesses entering the Federal Government market. With tight profit margins on Federal Government contracts, companies will evaluate viability of entering such a market that now imposes executive compensation caps which will lower profit margins even more.

Response: GAO Report 13-566, issued June 2013, ``Defense Contractors Information on the Impact of Reducing the Cap on Employee Compensation Costs,'' did not draw any conclusions on the impact of compensation caps. However, it found that less than .4 percent of employees would be affected if the cap were set at the President's salary of $400,000 and the vast majority of these would be executive employees. Further, using the caps established by the Office of Federal Procurement Policy for 2010 through 2012, GAO found that fewer than .1 percent of employees were affected, all of whom were executive employees (page 13 of report). In the case of small businesses surveyed, these businesses reported to GAO that they would only be minimally affected, or not affected, should the cap be reduced as low as $237,700, because they generally did not offer compensation above this threshold (page 23 of report). The FAR was revised (by the interim rule for this FAR case) to incorporate section 803 of the National Defense Authorization Act for Fiscal Year 2012 that mandated the expansion of the application of the contractor employee compensation cap.

5. Financial Impact on Contractors

Comment: One respondent commented that this rule will have a direct impact on company cash flows that will act as a disincentive to contractors considering entering the Government market. Furthermore, this rule will lower profit margins and have a negative impact on cash flow which will force current contractors out of the Government market and weaken the defense industrial base.

Response: The FAR was revised to implement section 803 of the National Defense Authorization Act for Fiscal Year 2012 that mandated the expansion of the application of the contractor employee compensation cap.

6. Potential To Reduce Industrial Base

Comment: One respondent believed that application of this rule is contrary to Government policy to encourage small business participation in the Government market. In fact, contractors are given specific requirements for small business participation in Government contracts and this rule impacts the ability of contractors to comply with these requirements.

Response: This rule was established to implement the National Defense Authorization Act for Fiscal Year 2012. The Councils do not anticipate that this rule will have a significant economic impact on a substantial number of small businesses.

7. Additional Recordkeeping Requirements

Comment: Some respondents stated that the statement ``imposes no reporting, recordkeeping, or other information collection requirements'' is unrealistic since contractors will need to adjust their accounting systems to capture data required by this rule and maintain more than one billing structure.

Response: The rule does not contain any additional information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

DoD, GSA, and NASA do not expect this 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, per data from the Federal Procurement Data System for fiscal year 2013, most contracts awarded to small entities are awarded on a competitive, fixed-price basis, and do not require application of the cost principle contained in this rule. With extremely few exceptions, compensation to small business employees remains below the compensation caps.

The rule imposes no reporting, recordkeeping, or other information collection requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules, and there are no known significant alternatives to the rule.

No comments were filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the rule and no changes were made to the rule.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 31 and 52

Government procurement.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Interim Rule Adopted As Final Without Change

Accordingly, the interim rule amending 48 CFR parts 31 and 52 which was published in the Federal Register at 78 FR 38535 on June 26, 2013 is adopted as a final rule without change.

[FR Doc. 2014-12408 Filed 5-29-14; 8:45 am]

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[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12407]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 42

[FAC 2005-74; FAR Case 2012-028; Item IV; Docket No. 2012-0028, Sequence No. 1]

RIN 9000-AM40

Federal Acquisition Regulation; Contractor Comment Period, Past Performance Evaluations

AGENCY: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to implement provisions of law that change the period allowed for contractor comments on past performance evaluations and require that past performance evaluations be made available to source selection officials sooner.

DATES: Effective: July 1, 2014.

FOR FURTHER INFORMATION CONTACT: Mr. Curtis E. Glover, Sr., Procurement Analyst, at 202-501-1448 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2012-028.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 78 FR 48123 on August 7, 2013, under FAR Case 2012-028, to implement section 853 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 (Pub. L. 112-239, enacted January 2, 2013) and section 806 of the NDAA for FY 2012 (Pub. L. 112-81, enacted December 31, 2011; 10 U.S.C. 2302 Note). Section 853, entitled ``Inclusion of Data on Contractor Performance in Past Performance Databases for Executive Agency Source Selection Decisions,'' and section 806, entitled ``Inclusion of Data on Contractor Performance in Past Performance Databases for Source Selection Decisions,'' require revisions to the acquisition regulations on past performance evaluations at FAR subpart 42.15 so that contractors are provided ``up to 14 calendar days . . . from the date of delivery'' of past performance evaluations ``to submit comments, rebuttals, or additional information pertaining to past performance'' for inclusion in the database. In addition, paragraph (c) of both sections 853 and 806 requires that agency evaluations of contractor performance, including any information submitted by contractors, be ``included in the relevant past performance database not later than the date that is 14 days after the date of delivery of the information'' to the contractor.

Ten respondents submitted comments on the proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulation Council (the Councils) reviewed the public comments in the development of the final rule. A discussion of the comments is provided in the following sections.

A. Analysis of Changes

No changes were made from the proposed rule as a result of the public comments.

B. Analysis of Public Comments

1. Contractor Response Time of Fourteen Days

Comments: Almost all respondents commented on the burden imposed on contractors to submit comments in a maximum of 14 days, especially given that FAR 42.1503 provides ``a minimum of 30 days'' for contractors to provide comments, rebuttals, or additional information. One respondent cited statistics from the Contractor Performance Assessment Rating System (CPARS) Program Office for DoD past performance evaluations completed in FY 2010-2012:

Percentage

Contractor response times

19.

No comments provided.

43

Comments provided within 14 days.

30

Comments provided between 14-30 days.

9

Comments provided after 30 days.

   

Two other respondents noted that, when the contractor disagrees with any given Government evaluation or comment, it takes time for the contractor to gather input from multiple employees and subcontractors and draft an objective response, i.e., more than 14 days in their opinion. A respondent noted that DoD had more than doubled the number of contracting officials trained on contract past performance from FY 2010 to 2012, but that, as of April 2013, more than half of Federal agencies had no required contractor assessments in Past Performance Information Retrieval System (PPIRS). Given that, the respondent suggested that the focus should remain on improving agency performance rather than curtailing the time allotted for contractor review and comment.

Another respondent stated that, after receipt of the past performance evaluation, the contractor ``has the opportunity to request a meeting with the assessment official to discuss differences and possible modifications to the ratings and the comments.'' These meetings, according to the respondent, often result in a better assessment for the Government.

One respondent noted that the statutory action of providing up to 14 days from the date of delivery is beneficial in that it sets a generally applicable fixed period.

One respondent requested that the current 30-day period be retained and not reduced because the shortened time may lead many contractors to seek additional business opportunities in the private-rather than Federal-market.

One respondent stated that, because the 14-day time period is statutory, the Councils should consider guidelines to ensure that requirements for the content of past performance evaluations are clear, concise, and contain sufficient detail to allow a contractor to promptly begin its assessment of any negative findings.

Last, a respondent quoted paragraph (d) of section 853, which reads as follows:

Nothing in this section shall be construed to prohibit a contractor from submitting comments, rebuttals, or additional information pertaining to past performance after the period described in subsection (c)(2) has elapsed or to prohibit a contractor from challenging a past performance evaluation in accordance with applicable laws, regulations, or procedures.

Response: The FAR is incorporating section 853 of the NDAA for FY 2013. Paragraph (c) of section 853 provides, at (c)(2) and (3), that ``contractors are afforded up to 14 calendar days, from the date of delivery of the information provided in accordance with paragraph (1), to submit comments, rebuttals, or additional information pertaining to past performance for inclusion in such databases;'' and that ``agency evaluations of contractor past performance, including any comments, rebuttals, or additional information submitted under paragraph (2), are included in the relevant past performance database not later than the date that is 14 days after the date of delivery of the information provided in accordance with paragraph (1).'' The information provided in accordance with paragraph (c)(1) is the notice that a past performance evaluation has been submitted to CPARS. CPARS will generate a notice to the contractor automatically, so the 14 calendar day period for contractor comments begins at that point in time. The law specifically states that the 14 days allotted for contractor comments are calendar days, not business days or any other method of counting days. The Councils are aware of the effort and coordination involved in gathering, summarizing, and vetting possible responses but were provided no latitude under the terms of the law.

There is no requirement in the law for the Government assessing official to meet with the contractor. However, if the contractor requests such a meeting, the assessing official may accept the request. In this case, the statute is clear and does not allow for alterations to the 14 calendar day time frame and requires that the past performance evaluation must be made available for the use of source selection officials 14 days after its initial submission, and it will be made available at that time with any contractor comments that have been received. Delaying the availability of the contractor's comments until after a meeting with the assessing official would only result in the past performance evaluation being seen by source selection officials without them having the benefit of any contractor comments. The CPARS and PPIRS systems have been revised so that transfers between CPARS and PPIRS occur automatically, thus eliminating delays in availability. The assessing official, who may also be the contracting officer, has a responsibility to review the contractor's comments when, and if, they are submitted by the contractor, but that review should not be allowed to delay or prevent source selection officials from seeing the contractor's comments as soon as they are provided.

The Councils are mindful of the terms of section 853, including paragraph (d), and have structured this rule so that contractor comments, rebuttals, or additional information can be submitted at any point in time between the initial notification of availability of a past performance evaluation until the evaluation is removed from PPIRS and archived (see FAR 42.1503(g)). The other element of section 853(d), the ability for a contractor to appeal a past performance evaluation and have a review at a level above the contracting officer, is retained, without change, in the FAR at 42.1503(d).

The intent of the statute is to make timely, relevant past performance information available to source selection officials without delay. The statute ensures that past performance information moves forward without allowing for delays caused by agencies or contractors. Any information or changes from such meetings or reviews will be added to the past performance information as it becomes available, but its absence will no longer lengthen the process.

2. Accuracy of Information Available to Source Selection Officials

Comments: Nine respondents submitted comments concerning the proposed rule requirement that past performance evaluations be available to source selection officials not later than 14 days after the evaluation was provided to the contractor, whether or not the contractor comments have been received. Four respondents stated this requirement may result in agencies relying upon potentially inaccurate or erroneous information in source selection decisions and may increase the number of disputes. One respondent stated past performance evaluations which do not have the benefit of either the contractor's comments or the more senior official's review could be obtained by source selection officials but would impact these source selections officials since they would have to take the time to address contractor reactions to the evaluations. One respondent stated that the reductions in the contractor comment period places the integrity of the past performance system at significant risk due to the likelihood that it will result in incorrect information passing through the system and on to procurement offices. Another respondent strongly objects to halving the time allotted for contractor comment because it would ``sacrifice the quality (of past performance evaluations) for quantity.'' One respondent commented on the mechanism to make changes to incomplete or inaccurate reports after they have been provided to PPIRS. The respondent is concerned that, although the mechanism is in place to correct mistakes, the inaccurate information would be available for release before the information is corrected.

Response: The FAR is incorporating section 853 of the NDAA for FY 2013 and section 806 of the NDAA for FY 2012. These laws require that past performance evaluations be made available to source selection officials not later than 14 days after the evaluation was provided to the contractor, whether or not contractor comments have been received. The purpose of the 14 calendar day deadline is to make timely, relevant past performance information available to source selection officials without delay so that award decisions can be better informed and made in a more timely manner. Having a past performance evaluation, with the contractor's comments and explanations included, available to source selection officials in 14-days will be advantageous, not detrimental, to most contractors. These timely evaluations will allow contractors that are meeting their contractual obligations to be more competitive for future awards. Therefore, it is anticipated that the deadline for comments will serve as a greater impetus to contractors to meet the new 14 calendar day deadline for comments. When a contractor is unable to provide comments within 14 days, however, the changes to CPARS and PPIRS will enable the contractor's comments to be added to the past performance evaluation after the evaluation has been moved into PPIRS. Currently, if a contractor does not submit comments, rebuttals, or additional information with regard to a past performance evaluation, the evaluation remains in CPARS indefinitely and will not move to PPIRS so as to become available to source selection officials.

In addition, the system changes to CPARS and PPIRS will allow the Government to revise the evaluation after it has moved to PPIRS, if the Government determines that such revisions are appropriate. OFPP issued guidance in its memoranda dated March 6, 2013, January 21, 2011, and July 29, 2009, encouraging agencies to improve the quality and timeliness of reporting past performance information. The FAR was also recently updated at FAR 42.1501(b) and 42.1503(b)(1) to require the Government to provide past performance evaluations that are clear, concise, and contain sufficient detail to allow a contractor to begin its assessment promptly.

3. Posting of the Evaluation

Comment: One respondent found FAR 42.1503(f) of the proposed rule ambiguous ``as to whether the rule permits the agency to post its evaluation before receiving the contractor comments within this 14-day period.'' This respondent requested a clarification in the final rule to the effect that ``the agency will not post the evaluation until it affords the contractor the opportunity to submit its comments with in this 14-day period, or if no contractor comments are forthcoming, at the end of the 14-day period.''

Response: If a contractor has submitted comments to the Government and the Government has not closed the evaluation (i.e., reconciled the comments), the evaluation as well as any contractor comment will be posted to the database automatically 14 days after the evaluations are provided to the contractor. In this case, the database will apply a ``Contractor Comment Pending Government Review'' notification to the evaluation. Once the Government completes the evaluation, the database will be updated the following day and remove this notification. Also, CPARS and PPIRS software will not allow a past performance evaluation to be released into PPIRS until the end of the 14th day, unless the evaluation has been completed by the Government (i.e., the contractor has commented and the Government has reconciled the comments).

4. Further Updates to a Past Performance Evaluation

Comments: Three respondents stated the proposed rule does not require the Government to timely revise a past performance evaluation in PPIRS if the Government determines, after the 14-day period expired, that it was in error, and these respondents recommend that the final rule include a deadline by which the Government shall update PPIRS to include any contractor comments provided after the initial comment period as well as any subsequent agency review of comments received, within 14 days of receipt of such additional comments. The respondents suggest a 14-day deadline be established for agency updates to PPIRS or require the Government to update PPIRS to include the current status of the evaluation review process and include the submissions and final evaluations ``promptly'' or ``within a reasonable time''. Another respondent recommended that the agency senior reviewer be given a deadline of 5 working days to resolve any differences. One respondent commented that one of its member companies had a CPARS assessment done with which it did not concur, and that the company submitted its response in a timely manner; however, the respondent stated that the assessing officer did not respond in a reasonable amount of time to the response.

Response: Agencies are required to have internal management and technical controls for past performance evaluations. Agency compliance delays should be addressed with the office that issued the assessment and its management. A specific past performance evaluation should be discussed with the assessing official responsible for the past performance evaluation.

5. Contractors' Interim Response

Comment: The respondent proposed allowing contractors to submit an interim response; the interim response would be to the effect that the contractor is in the process of reviewing the evaluation and will provide final comments.

Response: Contractors can submit an interim response but any interim response received will be posted and may be evaluated as if it were the final response.

6. System Changes

Comments: A respondent stated that the Government should provide a timeline when CPARS and PPIRS system changes/updates will be started, completed, tested, and verified. Another respondent stated that the rule should not be made effective until these critical systems (software) changes have been put into effect.

Response: The effective date for the FAR change is aligned with the effective date for the system changes. The systems changes are expected to be fully operational on July 1, 2014.

7. Other

Comment: One respondent commented that, given the severely truncated timeline, more than one contractor focal point per contract should be allowed to receive draft CPARS reports.

Response: The FAR does not prevent contractors from assigning more than one contractor focal point per contract. Although each contractor has one primary focal point, the CPARS Program Office recommends that the same contractor could have multiple back-up focal points, all of whom would receive an email notification that a past performance evaluation had been submitted to CPARS.

Comment: One respondent commented that automatic notification to the contractor when a past performance evaluation is available should be specified with a standardized cover sheet and a label warning the contractor about the 14-day deadline; the respondent suggested that FAR 53.302-17 (Offer Label) provides a useful model.

Response: A standardized PPIRS notification email will be sent to the contractor's stated contact point via email once a past performance evaluation is available for review by the contractor.

Comment: One respondent urged public access to contractor performance information relating to late or nonpayment of subcontractors.

Response: The public access to contractor performance information is currently prohibited per FAR 9.105-2(b)(2)(iii) as required by section 3010 of the Supplemental Appropriations Act, 2010 (Pub. L. 111-212).

Comment: One respondent requested the creation of a new FAR clause mandating timely submission of past performance evaluations and stating the contractor's right to dispute untimely past performance evaluations.

Response: The FAR requires the Government to submit timely past performance evaluations. FAR 42.1503(d) requires agencies to evaluate a contractor's performance after the end of the period of performance as soon as practicable. Once the evaluation is completed and submitted to CPARS, CPARS will automatically send it to the contractor. After the 14-day period, the Government's evaluation and the contractor's response, if any, will be posted in PPIRS. A FAR clause is not necessary because contractors have the right to dispute past performance evaluations, regardless of when the evaluations are submitted for the contractor's review.

Comment: One respondent suggested assigning a regional ``overseer'' or ``ombudsman'' for the evaluation process.

Response: FAR 42.1503, Agency procedures, requires agencies to establish roles and responsibilities for ensuring past performance information is timely reported in CPARS and PPIRS. OFPP's January 21, 2011, memorandum required agencies to assign an agency point of contact accountable for updating agency guidance, workforce training, oversight mechanisms, and identification of improvements to CPARS and PPIRS. OFPP's March 6, 2012, memorandum required agencies to report the designated agency point of contact to OMB.

Comment: One respondent commented that some agencies overuse past performance questionnaires, and this should be considered for correction in the FAR, to streamline the past performance evaluation process.

Response: Per FAR 15.305(a)(2)(ii), offerors are provided an opportunity to identify past or current contracts (including Federal, State, and local government and private) for efforts similar to the Government requirement. However, this rule is not intended to set standards for use of past performance questionnaires across the Federal Government.

Comment: One respondent commented that the Government should consider assessing the actual impact of the rule 12 to 18 months after implementation.

Response: FAR regulations are periodically reviewed for continuous improvement and industry is always invited to submit regulatory change proposals. For the past several years, OFPP has issued memoranda to improve agencies use and reporting of past performance information and is also exploring ways to enhance the evaluation process and systems. Further, the law, at paragraph (e) of section 853 of the NDAA for FY 2013, requires a review and report by the Comptroller General on the actions taken by the FAR Council pursuant to the law.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a final regulatory flexibility analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

Section 806 of the National Defense Authorization Act (NDAA) for Fiscal Year 2012 (Public Law 112-81, enacted December 31, 2011) is entitled ``Inclusion of Data on Contractor Performance in Past Performance Databases for Source Selection Decisions.'' Paragraph (c) of section 806 mandates DFARS revisions so that contractors are provided ``up to 14 calendar days from the date of delivery'' to them of past performance evaluations ``to submit comments, rebuttals, or additional information pertaining to past performance'' for inclusion in the database. In addition, section 806(c) requires that DoD agency evaluations of contractor performance, including any information submitted by contractors, be ``included in the relevant past performance database not later than 14 days after the date of delivery of the information'' to the contractor. Section 853 of the NDAA for FY 2013 (Public Law 112-239, enacted January 2, 2013) is entitled ``Inclusion of Data on Contractor Performance in Past Performance Databases for Executive Agency Source Selection Decisions,'' and it extends the requirements of section 806 to all Executive agencies.

Two respondents expressed concern about the reduced comment period and the hardship it would create for small businesses. The respondents said that the 14-day comment period would negatively impact the limited human resources of small businesses, affect the accuracy of evaluations, and have an overall negative effect on small entities. One erroneous evaluation affects a small business more than a large business. However, the 14-day comment period is mandated by law, and it will be advantageous to the Government and all its contractors to standardize past performance evaluation practices. Further, the statute does not prohibit, and the CPARS and PPIRS systems allow, submission by businesses of their comments, rebuttals, and additional information after the 14-day comment period has expired. The Chief Counsel for Advocacy of the Small Business Administration did not submit comments in response to the initial regulatory flexibility analysis.

The final rule applies to all small businesses for which past performance evaluations are completed. The information collection for past performance evaluations, OMB Control Number 9000-0142, published in the Federal Register at 77 FR 6799, on February 9, 2012, is the source for the data used in the FRFA. It indicates that an estimated 150,000 respondents submit an average four responses annually, for a total of 600,000 responses. Data from the Federal Procurement Data System (FPDS) for FY 2011 show that approximately 32 percent of the relevant actions of the responses are from small businesses; the rule applies to approximately 48,000 small entities.

There are no new reporting, recordkeeping, or other compliance requirements created by the rule. The difference between the current FAR past performance evaluation requirements (see FAR subpart 42.15) and this final rule is that sections 806 and 853 reduce the time allowed for a contractor to submit comments, rebuttals, or additional information pertaining to past performance for inclusion in the past performance database from ``a minimum of 30 days'' (FAR 42.1503(b)) to ``up to 14 calendar days'' and the law now requires that past performance evaluations be available to source selection officials not later than 14 days after the evaluation was provided to the contractor, whether or not contractor comments have been received.

The specifics of the statutory requirement do not allow for alternative implementation strategies.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

This rule affects the information collection requirements in the provisions at FAR subpart 42.15, currently approved under OMB Control Number 9000-0142, entitled ``Past Performance Information,'' in the amount of 1,200,000 hours, in accordance with the Paperwork Reduction Act (44 U.S.C. chapter 35). This rule would shorten the contractors' response time, but it would not expand the reporting requirement. Therefore, the impact is considered negligible because contractors are already allowed to submit comments, rebutting statements, or additional information regarding agency evaluations of their performance. The number of contractors providing comments will be unaffected by this rule. Further, the type of information provided is not impacted by this proposed rule.

List of Subjects in 48 CFR Part 42

Government procurement.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR part 42 as set forth below:

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

1. The authority citation for 48 CFR part 42 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

2. Amend section 42.1503 by revising the third sentence in paragraph (d); and paragraph (f) to read as follows:

42.1503 Procedures.

* * * * *

(d) * * * Contractors shall be afforded up to 14 calendar days from the date of notification of availability of the past performance evaluation to submit comments, rebutting statements, or additional information. * * *

* * * * *

(f) Agencies shall prepare and submit all past performance evaluations electronically in the CPARS at http://www.cpars.gov. These evaluations, including any contractor-submitted information (with indication whether agency review is pending), are automatically transmitted to PPIRS at http://www.ppirs.gov not later than 14 days after the date on which the contractor is notified of the evaluation's availability for comment. The Government shall update PPIRS with any contractor comments provided after 14 days, as well as any subsequent agency review of comments received. Past performance evaluations for classified contracts and special access programs shall not be reported in CPARS, but will be reported as stated in this subpart and in accordance with agency procedures. Agencies shall ensure that appropriate management and technical controls are in place to ensure that only authorized personnel have access to the data and the information safeguarded in accordance with 42.1503(d).

* * * * *

[FR Doc. 2014-12407 Filed 5-29-14; 8:45 am]

BILLING CODE 6820-EP-P

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[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12406]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 52

[FAC 2005-74; FAR Case 2012-016; Item V; Docket No. 2012-0016, Sequence No. 1]

RIN 9000-AM50

Federal Acquisition Regulation; Defense Base Act

AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to clarify contractor and subcontractor responsibilities to obtain workers' compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the Longshore and Harbor Workers' Compensation Act (LHWCA) as extended by the Defense Base Act (DBA).

DATES: Effective: July 1, 2014.

FOR FURTHER INFORMATION CONTACT: Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-74, FAR Case 2012-016.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 78 FR 17176 on March 20, 2013, to make the necessary regulatory revisions to revise the FAR to clarify contractor and

subcontractor responsibilities to obtain workers' compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the LHWCA, 33 U.S.C. 901, et seq., as extended by the DBA, 42 U.S.C. 1651, et seq. Three respondents submitted comments on the proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:

A. Summary of Significant Changes

This final rule includes one change to align the FAR with Department of Labor's (DOL) regulations and implementation of section 30(a) of the LHWCA. This change involves deleting proposed paragraph (b) of FAR clause 52.228-3, which stated that the actions set forth under paragraphs (a)(2) through (a)(8) may be performed by the contractor's agent or insurance carrier. The DOL's regulations place the responsibility for reporting injuries on the employer, see 20 CFR 703.115. The removal of proposed FAR 52.228-3 paragraph (b) also promotes consistency with the statutory requirements.

B. Analysis of Public Comments

1. Support of the Proposed Rule

Comment: Two respondents expressed support for the rule.

Response: The public's support for this rule is acknowledged.

2. Clarify Term ``Days''

Comment: One respondent recommends that the ten-day reporting period within the report of injury requirements set forth in proposed FAR 52.228-3 paragraph (a)(2) should be revised to read ``ten business days.'' The respondent asserts this modification will clarify the reporting period.

Response: The intent of this rule is to alert contractors to their obligations under the LHWCA, rather than to alter those obligations. The respondent's suggested revisions could result in altering a contractor's obligations and therefore are beyond the scope of the FAR rule. The DOL's regulation interprets the ten-day injury reporting period set forth in LHWCA section 30(a), 33 U.S.C. 930(a), as ten calendar days. See 20 CFR 702.201(a) (using unqualified term ``days'' to describe reporting period). Thus, adding ``business'' days would alter the intent of the law.

3. Inclusion of ``Work-Related'' Terminology

Comment: The respondent states that the terms injury and death should be modified by adding the phrase ``work-related'' before both. The respondent asserts that this modification will serve to clarify a contractor's obligation.

Response: The Councils do not recommend adding the phrase ``work-related'' to the terms ``injury'' and ``death.'' The added phrase is not necessary as the LHWCA defines an injury in 33 U.S.C. 902(2) and the concept of work-relatedness is subsumed in the term ``injury.'' Moreover, the question whether a particular injury is work-related is often a difficult issue to resolve, and a contractor may not be able to decide whether a particular injury arose out of and in the course of employment within the meaning of the statute. By leaving the terms ``injury'' and ``death'' unqualified, contractors will be encouraged to err on the side of reporting any incident that may be work-related.

4. Inclusion of ``Actual'' Terminology

Comment: One respondent suggests that the provision should specify that the contractor's ``actual/constructive'' knowledge of the injury triggers the reporting period. The respondent recommends this revision to further clarify a contractor's obligation.

Response: DOL's governing rules use the unqualified term ``knowledge of an employee's injury or death'' when describing the event that triggers the reporting period. This FAR rule simply tracks that language.

5. Conflicts With Current Practice

Comment: One respondent states that FAR 52.228-3 paragraph (b), which allows the contractor's agent or insurance carrier to submit the first report of injury referenced in paragraph (a)(2), is inconsistent with section 30(a) of the LHWCA, 33 U.S.C. 930(a), as extended by the DBA, and the DOL's current practice. The respondent argues that it is inappropriate to redefine this statutory provision through a FAR clause. The respondent recommends the proposed paragraph (b) should be amended to conform to current practice both under the DBA and LHWCA.

Response: The Councils concur with the respondent. The intent of this FAR rule is to clarify and inform contractors of their obligations under the DBA and the DOL's regulations, not to alter those requirements. Section 30(a) of the LHWCA, as implemented by the DOL's regulations, places the responsibility for reporting injuries on the employer. See 20 CFR 703.115. Accordingly, the Councils are removing the proposed FAR 52.228-3 paragraph (b) to promote consistency with the statutes referenced above.

6. Contractors Should Provide Insurance

Comment: One respondent states that the contractors should have sufficient insurance to be able to pay compensation if an employee is injured.

Response: The Councils concur that the views of this respondent are in accord with the intent of the law, this FAR rule, and the existing FAR clause 52.228-3.

III. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

DoD, GSA, and NASA do not expect this 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 this rule merely clarifies the existing prescriptions and clauses relating to contractor and subcontractor responsibilities to obtain workers' compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the LHWCA as extended by the DBA, and implemented in DOL Regulations. No comments from small entities were submitted in reference to the Regulatory Flexibility Act request under the proposed rule.

The rule imposes no reporting, recordkeeping, or other information collection requirements. The rule does not duplicate, overlap, or conflict with any other Federal rules, and there are no known significant alternatives to the rule.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The FAR Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The rule does not contain any new information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. Chapter 35).

List of Subjects in 48 CFR Part 52

Government procurement.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Government-wide Policy.

Therefore, DoD, GSA, and NASA amend 48 CFR part 52 as set forth below:

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

1. The authority citation for 48 CFR part 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

2. Revise section 52.228-3 to read as follows:

52.228-3 Workers' Compensation Insurance (Defense Base Act).

As prescribed in 28.309(a), insert the following clause:

Workers' Compensation Insurance (Defense Base Act) (Jul 2014)

(a) The Contractor shall--

(1) Before commencing performance under this contract, establish provisions to provide for the payment of disability compensation and medical benefits to covered employees and death benefits to their eligible survivors, by purchasing workers' compensation insurance or qualifying as a self-insurer under the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 932) as extended by the Defense Base Act (42 U.S.C. 1651, et seq.), and continue to maintain provisions to provide such Defense Base Act benefits until contract performance is completed;

(2) Within ten days of an employee's injury or death or from the date the Contractor has knowledge of the injury or death, submit Form LS-202 (Employee's First Report of Injury or Occupational Illness) to the Department of Labor in accordance with the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 930(a), 20 CFR 702.201 to 702.203);

(3) Pay all compensation due for disability or death within the time frames required by the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 914, 20 CFR 702.231 and 703.232);

(4) Provide for medical care as required by the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 907, 20 CFR 702.402 and 702.419);

(5) If controverting the right to compensation, submit Form LS-207 (Notice of Controversion of Right to Compensation) to the Department of Labor in accordance with the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 914(d), 20 CFR 702.251);

(6) Immediately upon making the first payment of compensation in any case, submit Form LS-206 (Payment Of Compensation Without Award) to the Department of Labor in accordance with the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 914(c), 20 CFR 702.234);

(7) When payments are suspended or when making the final payment, submit Form LS-208 (Notice of Final Payment or Suspension of Compensation Payments) to the Department of Labor in accordance with the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 914(c) and (g), 20 CFR 702.234 and 702.235); and

(8) Adhere to all other provisions of the Longshore and Harbor Workers' Compensation Act as extended by the Defense Base Act, and Department of Labor regulations at 20 CFR Parts 701 to 704.

(b) For additional information on the Longshore and Harbor Workers' Compensation Act requirements see http://www.dol.gov/owcp/dlhwc/lsdba.htm.

(c) The Contractor shall insert the substance of this clause, including this paragraph (c), in all subcontracts to which the Defense Base Act applies.

(End of clause)

[FR Doc. 2014-12406 Filed 5-29-14; 8:45 am]

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[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]

[Rules and Regulations]

From the Federal Register Online via the Government Printing Office [www.gpo.gov]

[FR Doc No: 2014-12404]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Chapter 1

[Docket No. FAR 2014-0052, Sequence No. 2]

Federal Acquisition Regulation; Federal Acquisition Circular 2005-74; Small Entity Compliance Guide

AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Small Entity Compliance Guide.

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SUMMARY: This document is issued under the joint authority of DOD, GSA, and NASA. This Small Entity Compliance Guide has been prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. It consists of a summary of the rules appearing in Federal Acquisition Circular (FAC) 2005-74, which amends the Federal Acquisition Regulation (FAR). An asterisk (*) next to a rule indicates that a regulatory flexibility analysis has been prepared. Interested parties may obtain further information regarding these rules by referring to FAC 2005-74, which precedes this document. These documents are also available via the Internet at http://www.regulations.gov.

DATES: May 30, 2014.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-74 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.

Rules Listed in FAC 2005-74

Item

Subject

FAR Case

Analyst

*I

Commercial and Government Entity Code.

2012-024

Loeb.

*II

Repeal of the Recovery Act Reporting Requirements.

2014-016

Glover.

*III

Expansion of Applicability of the Senior Executive Compensation Benchmark.

2012-017

Chambers.

*IV

Contractor Comment Period, Past Performance Evaluations.

2012-028

Glover.

*V

Defense Base Act.

2012-016

Chambers.

SUPPLEMENTARY INFORMATION: Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these rules, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-74 amends the FAR as specified below:

Item I--Commercial and Government Entity Code (FAR Case 2012-024)

This final rule adds subpart 4.18, ``Commercial and Government Entity Code,'' and related provisions and clauses, to the FAR. The new subpart requires the use of Commercial and Government Entity (CAGE) codes, including North Atlantic Treaty Organization (NATO) Cage (NCAGE) codes for foreign entities, for awards valued above the micro-purchase threshold. The final rule also requires offerors, if owned by another entity, to identify that entity during System for Award Management (SAM) registration. The rule effective date is November 1, 2014.

Item II--Repeal of the Recovery Act Reporting Requirements (FAR Case 2014-016)

This final rule adopts as final, with changes, two interim rules published on March 31, 2009, and July 2, 2010, under FAR case numbers 2009-009 and 2010-008. The interim rules amended the FAR to implement reporting requirements of the American Recovery and Reinvestment Act in subpart 4.15, 42.15, and clause 52.204-11, American Recovery and Reinvestment Act-Reporting Requirements. Future reporting requirements after January 31, 2014, were repealed by section 627 of Division E of the Consolidated Appropriations Act, FY 2014 (Pub. L. 113-76). The reporting Web site has closed for future reporting. This rule does not change the reporting required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA) on existing contracts, as implemented in FAR subpart 4.14 and clause 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards. Therefore, contractors and agencies are still required to continue their FFATA reporting on existing contracts, as implemented in FAR subpart 4.14 and clause 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards.

Item III--Expansion of Applicability of the Senior Executive Compensation Benchmark (FAR Case 2012-017)

This final rule adopts, without change, the interim rule published on June 26, 2013, at 78 FR 38535. The interim final rule amended the FAR by expanding the reach of the limitation on allowability of compensation for certain contractor personnel from a contractor's five most highly paid executives to all employees, but only for contracts with the Department of Defense (DoD), the National Aeronautical and Space Administration (NASA), and Coast Guard. The interim rule implemented section 803 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81). Prior to the interim rule, this limitation on the allowability of compensation, which is an amount set annually by the Office of Federal Procurement Policy, applied only to a contractor's five most highly paid executives at each of their home office(s) and any segments that report directly to the contractors headquarters, and covered all Federal agencies. Under the interim and this final rule, the application of this limitation to a contractor's five most highly paid executives continues for agencies other than DoD, NASA, and the Coast Guard. Because most contracts awarded to small businesses are awarded on a competitive, fixed-price basis, the impact of this compensation limitation on small businesses will be minimal.

Item IV--Contractor Comment Period, Past Performance Evaluations (FAR Case 2012-028)

This final rule implements sections 853 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013 (Pub. L. 112-239, enacted January 2, 2013) and 806 of the NDAA for FY 2012 (Pub. L. 112-81, enacted December 31, 2011; 10 U.S.C. 2302 Note). These statutes require the Government to provide past performance information to source selection officials more quickly and to give contractors 14 calendar days from the date of delivery of past performance evaluations to submit comments, rebuttals, or additional information for inclusion in the past performance database. The evaluations will be posted to the database no later than 14 days after the evaluations are provided to the contractor. If a contractor has submitted comments to the Government and the Government has not closed the evaluation (i.e., reconciled the comments), the evaluation as well as any contractor comment will be posted to the database automatically 14 days after the evaluations are provided to the contractor. In this case, the database will apply a ``Contractor Comment Pending Government Review'' notification to the evaluation. Once the Government completes the evaluation, the database will be updated the following day and remove this notification. Contractors will also still be allowed to submit comments after the 14-day period.

Item V--Defense Base Act (FAR Case 2012-016)

This final rule amends the FAR to clarify contractor and subcontractor responsibilities to obtain workers' compensation insurance or to qualify as a self-insurer, and other requirements, under the terms of the Longshore and Harbor Workers' Compensation Act (33 U.S.C. 901, et seq.) as extended by the Defense Base Act (42 U.S.C. 1651, et seq.). This Act provides disability compensation, medical benefits, and death benefits, for certain employment outside of the United States. The rule only clarifies the current responsibilities of contractors under the Defense Base Act and Department of Labor (DOL) regulations, and does not initiate or impose any new administrative or performance requirements. This final rule has no impact on small business entities since it is merely clarifying already existing statutory and DOL regulatory requirements, and imposes no new requirements.

Dated: May 22, 2014.

William Clark,

Acting Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

[FR Doc. 2014-12404 Filed 5-29-14; 8:45 am]

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