This supplementary information section is organized as follows:

Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of the interim rule. U.S. Citizenship and Immigration Services (USCIS) also invites comments that relate to the economic or federalism effects that might result from this interim rule. Comments that will provide the most assistance to USCIS in developing these procedures will reference a specific portion of the interim rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. See ADDRESSES above for information on how to submit comments.

Under Section 101(a)(15)(H) of the Immigration and Nationality Act (INA) and 8 CFR 214.2(h)(4), an H-1B nonimmigrant is an alien employed in a specialty occupation or a fashion model of distinguished merit and ability. A specialty occupation is an occupation that requires theoretical and practical application of a body of specialized knowledge and attainment of a bachelor's degree or higher degree in the specific specialty as a minimum qualification for entry into the United States.

Section 214(g) of the INA provides that the total number of nonimmigrant aliens who may be issued H-1B visas, or otherwise granted H-1B status, may not exceed 65,000 during any fiscal year. Under the INA, the 65,000 cap does not include H-1B nonimmigrant aliens who are employed by, or have received offers of employment at: (1) An institution of higher education, or a related or affiliated nonprofit entity; or (2) a nonprofit research organization or a governmental research organization.

On October 1, 2004, USCIS issued a press release announcing that USCIS had received a sufficient number of H-1B petitions to reach the statutory cap for fiscal year (FY) 2005, and that beginning October 2, 2004, USCIS would not accept for adjudication any H-1B petition for new employment containing a request for a work start date prior to October 1, 2005. A Notice to this effect subsequently was published in the Federal Register on November 23, 2004 at 69 FR 68154.

On December 8, 2004, the President signed the Omnibus Appropriations Act (OAA) for Fiscal Year 2005, Public Law 108-447, 118 Stat. 2809. Among the provisions of OAA is the H-1B Visa Reform Act of 2004. The H-1B Visa Reform Act of 2004 amends section 214(g)(5) of the INA by adding a third exemption, (C), to the H-1B cap:

The H-1B Visa Reform Act of 2004 also imposed two additional fees that must be filed with H-1B petitions. First, section 214(c)(9) of the INA was amended to reinstitute and modify the additional fees previously imposed by the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA), Title IV of Div C., Public Law 105-277, which are used for scholarships for U.S. low income students and for job training for U.S. workers. (The ACWIA fees expired effective October 1, 2003). The H-1B Visa Reform Act of 2004 raised the ACWIA fee to $1,500 or $750, depending on the size of the employer. Therefore, effective December 8, 2004, employers with 26 or more U.S. full-time-equivalent employees, including all affiliated or subsidiary entities, who seek to employ an H-1B nonimmigrant must pay $1,500, in addition to the base filing fee of $185 for a Form I-129, Petition for Temporary Nonimmigrant Worker. For employers with 25 or fewer U.S. full-time-equivalent employees, including all affiliated or subsidiary entities, the fee is $750, in addition to the base filing fee of $185 for a Form I-129.

Second, the H-1B Visa Reform Act of 2004 amended section 214(c) of the INA by adding a new subsection (c)(12) which imposes a $500 fraud prevention and detection fee on certain employers filing H-1B petitions. Effective March 8, 2005, employers seeking an initial grant of H-1B nonimmigrant status or authorization for an existing H-1B (or L-1 alien seeking to become an H-1B nonimmigrant) to change employers must submit the $500 fraud prevention and detection fee. The $500 fee does not need to be submitted by: (1) Employers who seek to extend a current H-1B alien's status where such an extension does not involve a change of employers, (2) employers who are seeking H-1B1, Chile-Singapore Free Trade Act nonimmigrants, or (3) dependents of H-1B principal beneficiaries.

These fees must be filed to USCIS in addition to the base filing fee (currently $185) for the Form I-129, Petition for Temporary Nonimmigrant Worker. Payment for the $185 petition filing fee and the $1,500 (or $750) additional ACWIA fee may be made in the form of a single check or money order for the total amount due or two checks or money orders. Those petitioners who must pay the $500 fraud prevention and detection fee must pay with a check or money order that is separate from the additional ACWIA application fees of $1,500 (or $750) and the $185 petition filing fees. Thus, in certain instances petitioners may have to, or elect to, file three separate checks or money orders—one for the $185 Form I-129 petition fee; one for the $1,500 or $750 additional ACWIA fee; and one for the $500 fraud prevention and detection fee.

The new ACWIA and Fraud Detection and Prevention fees are statutorily-mandated and do not require a separate rulemaking to implement the new fee provisions. However, USCIS, in a future rulemaking, will codify these new fees on H-1B petitions and the associated exemptions in the regulations to provide a place for affected petitioners to find all fee-related information in one place. USCIS specifically will amend 8 CFR 214.2(h)(19), which currently addresses the fees initially required pursuant to ACWIA, to reflect the enhanced ACWIA fees of $1,500 (or $750) and to codify the new fraud prevention and detection fees ($500) affecting all H and L petitioners.

To implement the H-1B Visa Reform Act of 2004, USCIS had to consider the plain language of the statute which specifically limited the new exemption to aliens who have earned a U.S. master's degree or higher. USCIS has determined that it is a reasonable interpretation of the H-1B Visa Reform Act of 2004 to make available 20,000 new H-1B numbers in FY 2005, limited to H-1B nonimmigrant aliens who possess a U.S. earned master's or higher degree.

USCIS will allocate the 20,000 new H-1B numbers authorized by the H-1B Visa Reform Act of 2004 in this manner for the following reasons. Congress left to the Secretary of Homeland Security broad discretion, through his authority under sections 103 and 214 of the INA, to prescribe regulations and procedures for the admission of nonimmigrant aliens, such as H-1B nonimmigrants. Thus, USCIS has broad discretion and authority to implement the H-1B Visa Reform Act of 2004.

The H-1B Visa Reform Act of 2004 was enacted after the start of FY 2005 and after the receipt of all petitions necessary to reach the existing 65,000 H-1B cap for FY 2005. The amendment to section 214(g) of the INA, authorizing the cap exemption of 20,000 H-1B nonimmigrant aliens with U.S. master's or higher degrees, did not become effective until March 8, 2005. Congress did not specify any procedures for implementation or dictate the manner in which USCIS should allocate H-1B numbers made available pursuant to the new exemption. Congress specifically did not require USCIS to “reopen” its review of H-1B petitions already received and re-characterize the petitions that would have qualified for the new exemption had it been in effect at the time the petitions were received. Thus, in order to give full effect to the newly created exemption, it is reasonable to do so going forward only, applying the exemption to up to 20,000 petitions seeking work start dates during FY 2005. It also appears that Congress intended for the fees for 20,000 new petitions to be generated during FY 2005 to serve the important purposes of supporting the development of the U.S. labor market and the detection and prevention of immigration fraud.

USCIS has never previously been required to collect data concerning whether beneficiaries of H-1B petitions possess master's or higher degrees earned in the United States. While USCIS did collect information about the highest level of education of the beneficiary, it did not specifically collect information about whether the beneficiary had a U.S. masters or higher degree or whether the degree was earned from a U.S. institution. Thus, as to FY 2005, USCIS cannot accurately count the petitions already filed for FY 2005 on behalf of beneficiaries who have earned masters or higher degrees at U.S. institutions. USCIS has made amendments to its recordkeeping and data collection systems that will allow it, prospectively, to accurately capture the data needed to assess the exact number of H-1B nonimmigrant aliens who have a U.S. master's or higher degree.

In light of the above reasons, for FY 2005, USCIS has determined that the only appropriate way to implement the H-1B Visa Reform Act of 2004 is to apply the 20,000 exemptions prospectively.

USCIS will reopen the FY 2005 H-1B filing period, effective May 12, 2005, and make available 20,000 new H-1B numbers for FY 2005. These additional H-1B numbers will be limited to U.S. employers seeking an H-1B nonimmigrant alien who has earned a master's or higher degree from a U.S. institution of higher education, as the statute provides.

U.S. employers seeking an H-1B nonimmigrant alien for FY 2005 will file H-1B petitions through a special process, submitting the Form I-129 petition at a single USCIS service center—Vermont Service Center—at the address noted in section VII, paragraph A below. USCIS will accept and adjudicate properly filed H-1B petitions on a first-in, first-out basis until USCIS has allocated all 20,000 H-1B exemption numbers authorized, as provided in section VI below.

As noted below in section VII, paragraph B, USCIS will not accept FY 2005 petitions via electronic filing (“e-filing”). USCIS is precluding e-filing for FY 2005 petitions because of the need to quickly and accurately identify those petitions that will be subject to the 20,000 numerical limit. Allowing e-filing would complicate this effort due to the additional DHS administrative burden associated with matching e-filed petitions with separately filed (through paper) signed labor condition applications (LCA) and evidence of required degrees (which in general cannot be submitted electronically).

For FY 2006 and future fiscal years, U.S. employers seeking an H-1B nonimmigrant alien, regardless of whether the alien has a master's or higher degree, will file for an H-1B number through the normal process, submitting the Form I-129 petition at the USCIS Service Center with jurisdiction over the place of intended employment.

For FY 2006 only, U.S. employers who already have filed an FY 2006 H-1B petition which USCIS has approved or which is still pending with USCIS, will be given the option to upgrade such petitions and receive an FY 2005 H-1B, if any are available, in accordance with the procedures noted in section VIII, paragraph B below.

For FY 2006 and future fiscal years, USCIS will accept and adjudicate properly filed H-1B petitions on a first-in, first-out basis and will track those H-1B petitions that qualify for the U.S. master's or higher degree exemption under the H-1B Visa Reform Act of 2004 as cases are received and adjudicated. Petitions that are eligible for the first two exemptions, applicable to petitioners who are employed at institutions of higher learning, or in nonprofit research, will not count against the 65,000 cap or against the numerical limitation on the new exemption. Similarly, H-1B nonimmigrant aliens that are exempt under the H-1B Visa Reform Act of 2004 will not be counted towards the fiscal year numerical limit of 65,000. USCIS will continue to exempt such aliens until USCIS has allocated all 20,000 H-1B exemption numbers authorized, as provided in section VI below. Thereafter, any H-1B petition granted for an H-1B nonimmigrant alien who has earned a U.S. master's or higher degree, unless otherwise exempt, will be counted against the fiscal year numerical limitations.

As noted below in section VIII, paragraph A, USCIS is temporarily suspending electronic filing (“e-filing”) of FY 2006 petitions until USCIS has received all petitions that would apply to the FY 2005 numerical limits, including any upgraded applications. USCIS is temporarily suspending e-filing for FY 2006 petitions because of the need not only to quickly and accurately identify those petitions that will be subject to the FY 2005 numerical limits, including requests for upgrades from FY 2006 filings, but also to determine which petitions will apply against the FY 2006 U.S. master's or higher degree exemption. USCIS will provide notice, via the USCIS website, indicating when e-filing will be resumed for FY 2006.

In general, USCIS will require use of the Form I-129 (OMB 1615-0009) in the filing of H-1B petitions; however, for FY 2005 and 2006 filings, USCIS has made the additional accommodation for petitioners to utilize alternate versions of the form as noted in Sections VII and VIII below.

In the past, USCIS has faced two primary challenges in actual cap counting: (1) Anticipating when the cap will be hit and (2) monitoring of the inflow of H-1B petition filings. To address the second challenge, USCIS has implemented new technology and enhanced its systems capability to allow USCIS to monitor H-1B petition receipts on a daily basis.

The first challenge however remains: Picking the number of petitions necessary for the cap to be reached. USCIS cannot wait until the petitions received have been adjudicated to make this decision, because during the time the adjudications are being completed and an exact count obtained, the cap would be exceeded by these petitions already received and unnecessarily processed. Petitioners whose petitions were received and initially processed after the point at which the cap would be found to have been reached would have gained an unrealistic expectation of having a chance at an H-1B number, and either such petitioners would lose significant filing fees without substantive adjudication or USCIS would expend unnecessary resources on initially processing such petitions and fees and then returning those petitions and refunding the fees. Therefore, estimating and projecting rates of approval of petitions is required. Through experience of several years, USCIS has gained some statistical understanding of various factors that play into the cap, including the number of petitions already approved, denied, and still pending, the period of time that unadjudicated petitions have been pending, and the education level of the petitions that are pending. USCIS can apply different projected rates of approval (including reversal of denials on appeal) to groups of cases based on these factors. None of these factors or rates can be projected precisely, and therefore determining when the cap will be reached unavoidably involves estimation. The specific factors and rates may vary from year to year and will be applied in USCIS' discretion with assistance of the DHS Office of Statistics. The interim final rule acknowledges USCIS' unavoidable use of projection and estimation in cap management.

To ensure the fair and orderly allocation of numbers in a particular classification subject to numerical limits, USCIS will employ a random selection process. USCIS' random selection process will be computer-generated and validated by the Office of Immigration Statistics. When calculating the numerical limitations for a given fiscal year, USCIS will make numbers available to petitions in the order in which the petitions are filed. USCIS will make projections of the number of petitions necessary to achieve the numerical limit of approvals, taking into account historical data related to approvals, denials, revocations, and other relevant factors. USCIS will monitor the number of petitions received (including the number of beneficiaries when necessary) and will notify the public of the date that USCIS has received the necessary number of petitions (the “final receipt date”). The date of publication will not control the final receipt date.

During the random selection process, USCIS will randomly select from among the petitions received on the final receipt date the remaining number of petitions deemed necessary to generate the numerical limit of approvals. Petitions not selected, and petitions received after the final receipt date, will be rejected. If the final receipt date is the same as the first date on which petitions subject to the applicable cap may be filed (i.e., if the cap is reached on the first day filings can be made), USCIS will randomly apply all of the numbers among the petitions filed on the final receipt date and the following day.

DHS seeks comment on the methodology to approve eligible H-1B petitions in circumstances where such petitions were received on the day the annual cap was forecasted to be reached.

U.S. employers seeking one of the new FY 2005 H-1B numbers made available pursuant to the H-1B Visa Reform Act of 2004 may file H-1B petitions beginning May 12, 2005. Any petition requesting new FY 2005 H-1B employment received before May 12, 2005 will be rejected and returned, along with the associated filing fees, to the petitioner or representative.

Under the authority created by this interim rule, USCIS is hereby advising petitioners seeking an FY 2005 H-1B number that they must submit the H-1B petition to the following address: USCIS Vermont Service Center, 1A Lemnah Drive, St. Albans, VT 05479-7001.

Only H-1B petitions received at this specific address at the Vermont Service Center will be deemed eligible for an FY 2005 number. Filings may not be personally delivered and must be submitted by U.S. mail, express shipping services, or by other courier companies normally servicing the Vermont Service Center. Any petition seeking an FY 2005 H-1B number filed or received at another USCIS Service Center will be rejected and returned, along with the associated filing fees, to the petitioner or representative. USCIS will not accept any FY 2005 petitions by electronic filing (“e-filing”).

U.S. employers seeking one of the new FY 2005 H-1B numbers made available pursuant to the H-1B Visa Reform Act of 2004 may file the new Form I-129, Petition for Nonimmigrant Worker (edition date 3-17-05, OMB 1615-0009), which incorporates the Form I-129W, H-1B Data Collection and Filing Fee Exemption, as well as the H and H-1B Supplements. Petitioners should note that as of May 30, 2005, all H-1B submissions must be made on the new Form I-129 (edition date 3-17-05, OMB 1615-0009).

U.S. employers may also file the old Form I-129 (edition date 12-10-01, OMB 1115-0168, OMB 1615-0093) and the old Form I-129W (edition date 2-14-02, OMB 1115-0225). U.S. employers filing the old Form I-129 (edition date 12-10-01, OMB 1115-0168, OMB 1615-0093) must complete the data field in Part 5, marked “Current number of employees”. Petitioners filing the old Form I-129W (edition date 2-14-02, OMB 1115-0225) must complete Part A, section “Beneficiary's Highest Level of Education”, by: (1) Checking the appropriate box indicating Master's, Professional or Doctorate degree; (2) clearly annotating next to the selection the phrase—“U.S. earned'; and (3) providing the name and location of the U.S institution of higher education.

Petitioners seeking FY 2005 H-1B numbers also may file one of a few additional versions of the Form I-129 that were posted on USCIS' Web site during March 2005 before the 3-17-05 version was finalized. Regardless of which version of the Form I-129, U.S. employers choose to file, a certified Labor Condition Application (LCA) from the Department of Labor valid for the period of requested employment must be submitted with the Form I-129.

USCIS recognizes that many H-1B petitioners seeking an FY 2005 H-1B number desire the beneficiary to begin work as soon as possible. USCIS therefore will allow petitioners to file for the additional FY 2005 numbers using the Premium Processing Program.

Petitioners are reminded that the Form I-129 must be filed with the base filing fee of $185, the ACWIA fees of $1,500 (for employers with 26 or more U.S. full-time-equivalent employees) or $750 (for employers with 25 or less U.S. full-time-equivalent employees, including all affiliated or subsidiary entities), the $500 fraud prevention and detection fee (as applicable), as well as the Form I-907 and premium processing fee of $1,000. Payment for the $185 petition filing fee and the $1,500 (or $750) additional ACWIA fee may be made in the form of a single check or money order for the total amount due or two checks or money orders to the Department of Homeland Security, in accordance with the instructions on the revised Form I-129. Those petitioners who must pay the $500 fraud prevention and detection fee must pay with a check or money order that is separate from the additional ACWIA application fees of $1,500 (or $750) and the $185 petition filing fees. Similarly, any premium processing fee of $1,000 must be paid by separate check. Thus, in certain instances petitioners may need to file up to four separate checks or money orders: One for the $185 Form I-129 petition fee; one for the $1,500 or $750 additional ACWIA fee (which may be combined with the $185 fee); one for the $500 fraud prevention and detection fee; and one for the $1,000 premium processing fee (if applicable).

USCIS anticipates that it will receive a large volume of petitions from U.S. employers seeking an FY 2005 number for an H-1B nonimmigrant who has earned a U.S. master's degree or higher and that there will likely be more petitions filed than there are numbers available. USCIS anticipates that many U.S. employers will have already filed H-1B petitions seeking an FY 2006 number or will be filing an H-1B petition seeking an FY 2006 number. USCIS also anticipates that petitioners who do not receive an FY 2005 number likely will seek an FY 2006 number or be willing to accept an FY 2006 number if available.

To facilitate processing of FY 2005 numbers, to avoid the filing of multiple petitions on behalf of the same alien for the same employment starting on different possible dates, and to properly segregate FY 2005 petitions, USCIS will assume that petitioners who are filing for a FY 2005 number are willing to receive an FY 2006 number and start date (October 1, 2005) if an FY 2005 number is unavailable and if the petitioner still seeks an alien for employment in FY 2006. Petitioners who seek an FY 2005 number only must, in addition to indicating a start date for employment prior to October 1, 2005, clearly annotate the top of the first page of the Form I-129 with the phrase “FY 2005 only.” Such petitions that are found to exceed the numerical limit will be returned to the petitioner, and any associated filing fees will be returned or refunded.

Until further notice, USCIS has temporarily suspended electronic filing (“e-filing”) of FY 2006 H-1B petitions. U.S. employers seeking an FY 2006 number, however, may file H-1B petitions for an FY 2006 number by U.S. mail, express shipping services, or by other courier companies normally servicing the USCIS Service Center with jurisdiction over the place of intended employment according to the normal procedure. Such petitions may not be personally delivered to the applicable USCIS Service Center.

USCIS is aware that some H-1B petitioners who have already filed H-1B petitions for FY 2006 employment may wish to convert an approved or pending petition into an FY 2005 filing to allow the alien beneficiary to commence employment at an earlier date. USCIS will permit petitioners to “upgrade” a pending or approved FY 2006 H-1B petition if the beneficiary has a U.S. master's degree or higher degree from a U.S. institution and the petition is otherwise approvable. Such a petition will be treated as a request for an FY 2005 number and start date and, in the event that an FY 2005 number is not available, as an alternative request for an FY 2006 number with an October 1, 2005 start date for employment.

In order to upgrade an FY 2006 H-1B petition, the petitioner must submit to USCIS: (1) A letter requesting the upgrade; (2) either (a) a copy of the approval notice for the FY 2006 petition, (b) a copy of the receipt notice for the FY 2006 petition, (c) a copy of the first two pages of the related Form I-129 if a receipt notice has not yet been received, or (d) a new Form I-129; and (3) a certified Labor Condition Application (LCA) from the Department of Labor valid for the period of requested employment (or copy thereof if not already provided with the FY 2006 petition).

Petitioners seeking an upgrade must submit the required documentation to the following address: USCIS Vermont Service Center, 1A Lemnah Drive, St. Albans, VT 05479-7001. There is no fee to upgrade a previously filed or approved FY 2006 petition. Upgrade filings may not be personally delivered and must be submitted by U.S. mail, express shipping services, or by other courier companies normally servicing the Vermont Service Center.

Any request to upgrade a FY 2006 for purposes of a FY 2005 filing will be treated as having been filed on the date of receipt at the Vermont Service Center address and is subject to the same timing rules for full petitions submitted for FY 2005 as set forth in Section VII, paragraph A above. In the event that a FY 2005 number is not available for an upgrade request, the original petition will be deemed as having been filed for an FY 2006 number on the date the petition was initially filed at one of the four service centers.

U.S. employers seeking FY 2006 H-1B numbers may file the new Form I-129, Petition for Nonimmigrant Worker (edition date 3-17-05, OMB 1615-0009), which incorporates the Form I-129W, H-1B Data Collection and Filing Fee Exemption, as well as the H and H-1B Supplements. Petitioners should note that as of May 30, 2005, all H-1B submissions must be made on the new Form I-129 (edition date 3-17-05, OMB 1615-0009).

U.S. employers may also file the old Form I-129 (edition date 12-10-01, OMB 1115-0168, OMB 1615-0093) and the old Form I-129W (edition date 2-14-02, OMB 1115-0225). U.S. employers filing the old Form I-129 (edition date 12-10-01, OMB 1115-0168, OMB 1615-0093) must complete the data field in Part 5, marked “Current number of employees”. Petitioners filing the old Form I-129W (edition date 2-14-02, OMB 1115-0225) must complete Part A, section “Beneficiary's Highest Level of Education”, by: (1) Checking the appropriate box indicating Master's, Professional or Doctorate degree; (2) clearly annotating next to the selection the phrase—“U.S. earned”; and (3) providing the name and location of the U.S institution of higher education.

Petitioners may file also one of a few additional versions of the Form I-129 that were posted on USCIS' Web site during March 2005 before the 3-17-05 version was finalized. Regardless of which version of the Form I-129, U.S. employers chose to file, a certified Labor Condition Application (LCA) from the Department of Labor valid for the period of requested employment must be submitted with the Form I-129.

FY 2006 petitions may be filed via the Premium Processing Program and should include the required Form I-907, Request for Premium Processing, along with the $1,000 premium processing fee.

U.S. employers who: (1) Have already filed an FY 2006 H-1B petition with premium processing, (2) whose FY 2006 H-1B petition is still pending adjudication, and (3) who now seek an upgrade for an FY 2005 number, do not need to submit a new Form I-907 or new premium processing fee.

U.S. employers who: (1) Have already filed an FY 2006 H-1B petition without using premium processing, (2) whose FY 2006 H-1B petition is still pending adjudication, and (3) who now seek an upgrade for an FY 2005 number, must include with the upgrade request a Form I-907, Request for Premium Processing, along with the premium processing fee.

U.S. employers who: (1) Have already filed an FY 2006 H-1B petition that has been approved, regardless of whether premium processing was requested, and (2) who now seek an upgrade for an FY 2005 number, do not need to submit a new Form I-907 or new premium processing fee.

Petitioners are reminded that the Form I-129 must be filed with the base filing fee of $185, the ACWIA fees of $1,500 (for employers with 26 or more U.S. full-time-equivalent employees) or $750 (for employers with 25 or less U.S. full-time-equivalent employees, including all affiliated or subsidiary entities), the $500 fraud prevention and detection fee (as applicable), as well as the Form I-907 and premium processing fee of $1,000, if applicable. Payment for the $185 petition filing fee and the $1,500 (or $750) additional ACWIA fee may be made in the form of a single check or money order for the total amount due or two checks or money orders. Those petitioners who must pay the $500 fraud prevention and detection fee must pay with a check or money order that is separate from the additional ACWIA application fees of $1,500 (or $750) and the $185 petition filing fees. Similarly, any premium processing fee of $1,000 must be paid by separate check. Thus, in certain instances petitioners may need to file up to four separate checks or money orders: One for the $185 Form I-129 petition fee; one for the $1,500 or $750 additional ACWIA fee (which may be combined with the $185 fee); one for the $500 fraud prevention and detection fee; and one for the $1,000 premium processing fee (if applicable).

USCIS is revising 8 CFR 214.2(h)(2)(i)(A) to provide that USCIS may set alternate filing locations via notice in the Federal Register.

USCIS is revising 8 CFR 214.2(h)(8)(ii) in its entirety to properly reflect that USCIS tracks petitions or applications subject to numerical limits, not by individual petition receipt numbers, but by monitoring the total number of petitions (including the number of beneficiaries when necessary) filed within a given fiscal year. This revision applies to all H nonimmigrant classifications subject to numerical limits. In calculating when the numerical limits have been or will likely be reached, USCIS will make projections of the number of petitions necessary to achieve the numerical limit of approvals, taking into account historical data related to approvals, denials, revocations, and other relevant factors. USCIS will continue to count H-1B petitions on a first-in, first-out basis and monitor the number of petitions received, approved, and pending adjudication to determine when USCIS is likely to reach or exceed the numerical limits in a given fiscal year.

As discussed above in Section VI, USCIS also is amending 8 CFR 214.2(h)(8)(ii)(B) to authorize random selection of H-1B numbers in FY 2005, FY 2006 and future fiscal years when USCIS determines that the numerical limits in a particular category will be reached.

USCIS recognizes that, given the period of time that has passed since cap-subject H-1B filings last were received, the anticipated high demand for immediate validity dates is substantial and may even exceed the 20,000 newly available numbers for FY 2005 on the first day. Therefore, any petitioner who desires an FY 2005 number must consider the importance of having the petition (or “upgrade” of an already filed FY 2006 petition) delivered on the first day on which filings will be accepted. Petitioners likely will send the petition or upgrade on the day before that date by overnight delivery to ensure arrival at the Vermont Service Center on the first day.

In order to reduce petitioners' concern that even an overnight delivery service from a remote location might not actually deliver the package on the first day, USCIS has decided that, in the event that the final receipt date is the same as the first date on which petitions may be filed (i.e. if the cap is reached on the first day filings can be made for FY 2005), USCIS will randomly apply all of the numbers among the petitions filed on the final receipt date and the following day. In such cases, no advantage will be gained by the particular time of day a filing is received. USCIS has concluded that such a commitment best ensures general fairness and orderly procedures for allocations of petitions subject to numerical limits.

Implementation of this rule without notice and the opportunity for public comment is warranted under the “good cause” exception found under the Administrative Procedure Act (APA) at 5 U.S.C. 553(b). USCIS has determined that delaying implementation of this rule to await public notice and comment is impracticable and contrary to the public interest. The H-1B Visa Reform Act of 2004 was enacted on December 8, 2004. The provisions related to the H-1B numerical limitations and new fraud prevention and detection fees became effective March 8, 2005.

Immediate implementation of this rule is in the public interest, specifically that of U.S. employers, students and workers. While processing for the FY 2006 H-1B cap began on April 1, 2005, U.S. employers have been unable to hire new H-1B workers since October 1, 2004. A worker with an FY 2006 cap number cannot begin work until October 1, 2005, the date on which FY 2006 begins. In order to provide U.S. employers with the ability to address their employment needs as soon as possible and to alleviate the burdens imposed on their ability to hire H-1B workers since October 1, 2004, USCIS must issue this interim rule to implement immediately these provisions and notify the public of the process by which the remaining H-1B numbers for FY 2005 will be made available. This interim rule is necessary to allocate fairly and equitably the new FY 2005 H-1B numbers in an expeditious manner. In addition, the new fees to be generated by the FY 2005 filings will be allocated to public purposes of low-income student education, job training, and fraud prevention and detection, and further delay of the FY 2005 filings would delay the funding of those purposes. It is therefore impracticable and contrary to the public interest to adopt this rule with the prior notice and comment period normally required under 5 U.S.C. 553(b).

USCIS also finds that good cause exists under the Congressional Review Act, 5 U.S.C. 808, to implement this interim rule immediately upon publication in the Federal Register.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 605(b)), as amended by the Small Business Regulatory Enforcement and Fairness Act of 1996 (SBREFA), requires an agency to prepare and make available to the public a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small governmental jurisdictions). Because good cause exists for issuing this regulation as an interim rule, no regulatory flexibility analysis is required under the RFA.

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538, requires Federal agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or tribal governments, in the aggregate, or by the private sector of more than $100 million in any one year (adjusted for inflation with 1995 base year). Before promulgating a rule for which a written statement is needed, section 205 of UMRA requires an agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome option that achieves the objective of the rule. Section 205 allows an agency to adopt an alternative, other than the least costly, most cost-effective, or least burdensome option if DHS publishes an explanation with the final rule.

As discussed below under Executive Order 12866, this action will result in the expenditure by the private sector of $100 million or more in any one year, but these fees are mandated by statute and USCIS is obligated to implement the law as enacted by the OAA. Further, these costs do not accrue to the general public, but only those who choose to participate in the H-1B program, nor will they result in expenditures in excess of $100 million a year by State, local, or tribal governments.

This interim rule is a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This interim rule will result in an annual effect on the economy of more than $100 million.

This interim final rule is considered by DHS to be an economically “significant regulatory action” under Executive Order 12866, section 3(f), Regulatory Planning and Review. The implementation of this interim rule will provide USCIS with an additional $36,200,000 in FY 2005 in annual fee revenue over the fee revenue that would be collected under the current fee structure, based on a projected annual fee-paying volume of 20,000 approved petitions. This interim rule would provide USCIS with $138,425,000 in FY 2006 annual fee revenue, based on a projected annual fee-paying volume of 85,000 approved petitions (20,000 new exemptions and 65,000 petitions). This increase in revenue pursuant to the OAA (and ACWIA as amended), will be used to fund grants for training in high-growth industries, job training services and related activities, and programs and activities to prevent and detect fraud with respect to H and L petitions. Accordingly, this rule has been submitted to the Office of Management and Budget (OMB) for clearance.

USCIS is issuing this rule in order to provide for a fair and equitable allocation of additional H-1B numbers made available for FY 2005 by Congress.

USCIS has assessed both the costs and benefits of this rule as required by Executive Order 12866, section 1(b)(6), and has made a reasoned determination that this rule will result in additional costs to petitioning employers. The additional costs to employers are due to the new statutory requirement that H-1B petitioners must now pay an additional fee of either $1,500 or $750 per petition, depending upon the size of the business, unless otherwise exempt. In addition to the $1,500 or $750 fee, as of March 8, 2005, H-1B petitioners must also pay a separate fee of $500 per petition to assist federal agencies in fraud prevention and detection.

USCIS estimates that for FY 2005, all of the aforementioned new fees will cost H-1B petitioning employers an additional $36,200,000. DHS reached this conclusion by estimating that approximately half of the 20,000 new H-1B petitions that will be approved for FY 2005 employment will be for businesses with 25 or less full-time equivalent employees ($750 × 10,000 = $7,500,000), while the other half will be for businesses with 26 or more full-time equivalent employees ($1,500 × 10,000 = $15,000,000). USCIS has also included in this estimate the new $500 Fraud Prevention and Detection Fee applicable to the forthcoming 20,000 new H-1B petition approvals for FY 2005 employment ($500 × 20,000 = $10,000,000).

There will also be an additional 20,000 I-129 petitions approved for new H-1B employment in FY 2005 at a base filing fee cost of $185 per Form I-129, which adds an additional cost to H-1B petitioners ($185 × 20,000 = $3,700,000). Therefore, the total additional cost to the public during FY 2005 is $36,200,000.

In future fiscal years, the additional cost to H-1B petitioners is estimated to be $138,425,000 each fiscal year. USCIS reached this conclusion by estimating that approximately half of the 85,000 H-1B petitions approved per fiscal year will be for businesses with 25 or less full-time equivalent employees ($750 × 42,500 = $31,875,000), while the other half will be for businesses with 26 or more full-time equivalent employees ($1,500 × 42,500 = $63,750,000). USCIS includes in this estimate the fact that an additional 20,000 petitions for H-1B classification will be filed each fiscal year at a base filing fee cost of $185 per I-129 petition ($185 × 20,000 = $3,700,000). USCIS has also included in this estimate the new $500 Fraud Prevention and Detection Fee applicable to 78,200 new H-1B petitions approved per fiscal year ($500 × 78,200 = $39,100,000). USCIS notes that the $500 Fraud Prevention and Detection Fee is not required for Chileans and Singaporeans entering the United States under the Free Trade Agreements. Therefore, USCIS estimates that the total additional cost to the public in the future each fiscal year will be $138,425,000.

Although this interim rule will result in additional costs to H-1B petitioners that may deter some employers from seeking H-1B nonimmigrant workers, USCIS notes that these fees and the specific amounts of these fees are mandated by statute. USCIS is obligated to implement the law as enacted by the OAA.

The benefit of this interim rule is that affected employers will be able to address inconveniences and difficulties caused by the reaching of the FY 2005 H-1B, and USCIS will be able to facilitate that process in a manner that is fair to all employers. This interim rule will also facilitate the hiring of H-1B nonimmigrant aliens by U.S. employers who have not been able to fill jobs due to the H-1B cap being reached early in recent fiscal years and who demonstrate that they are willing to offer the same prevailing wage and working conditions as those of U.S. workers. The fees imposed will benefit congressional purposes of education for low-income students, job training for U.S. workers, and fraud detection and prevention in immigration programs.

USCIS will receive a larger number of filings subject to the increased filing fees than the number of petitions that ultimately will be approved. Almost all of such filings, however, will be those received in excess of the applicable numerical limits, and USCIS will be rejecting or refunding fee payments for such petitions. Petitions that are exempt from the cap, because they are for beneficiaries who are already in H-1B status and were previously been counted against the cap, are also exempt from the ACWIA fees. Such petitions, the number of which is unpredictable, are not exempt from the $500 fraud prevention and detection fee. Also a somewhat unpredictable number of petitions subject to the new ACWIA and fraud detection and prevention fees will be filed for initial petitions that will be denied or withdrawn, and those will be in excess of the 85,000 set forth above. These petitions will impose costs on the employers that result from the OAA and this interim final rule, but funds will be applied to the congressionally required, publicly beneficial purposes of low-income student education, job training, and fraud detection and prevention. During fiscal years 2001, 2002 and 2003, an average of less than 2.5 percent of initial petitions were denied; thus, this cost factor is relatively insignificant.

The additional fees mandated by the OAA are not being codified by USCIS within the context of this rulemaking. However, USCIS, in a future rulemaking, will amend 8 CFR 214.2(h)(19), which currently addresses the fees initially required pursuant to ACWIA, to reflect the enhanced ACWIA fees of $1,500 (or $750) and to codify the new fraud prevention and detection fees ($500) affecting all H and L petitioners. USCIS notes, however, that the Form I-129 has recently been revised to comport with the provisions of the OAA by adding a supplement titled H-1B Data Collection and Filing Fee Exemption. The inclusion of the H-1B Data Collection and Filing Fee Exemption supplement within the revised Form I-129 has rendered the previous Form I-129W moot, as it captures the required information previously obtained via the Form I-129W. Therefore, the Form I-129W has been removed from the USCIS forms inventory. OMB has approved the revised Form I-129 for official use by the public and USCIS has released the revised Form I-129 for official use as of March 11, 2005. Petitioners are urged to consult and comply with the instructions on the revised I-129 and the H-1B Data Collection and Filing Fee Exemption supplement when filing their petitions for H-1B nonimmigrant workers.

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circ), in Table 1, USCIS has prepared an accounting statement showing the classification of the expenditures associated with the Allocation of Additional H-1B Visas created by the H-1B Visa Reform Act of 2004. The table provides our best estimate of the dollar amount of these costs and benefits, expressed in 2005 dollars, at three percent and seven percent discount rates. We estimate that the cost of this interim rule will be approximately $125 million annualized (7 percent discount rate) and approximately $127 million annualized (3 percent discount rate). The non-quantified benefit is compliance with the OAA.

In accordance with the provisions of E.O. 12866, this regulation was reviewed by the Office of Management and Budget.

This interim rule will not have substantial direct effects on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this interim rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This interim rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.

Under the Paperwork Reduction Act of 1995, Public Law 104-13, all Departments are required to submit to OMB, for review and approval, any reporting and recordkeeping requirements inherent in a rule. This interim rule does not impose any new reporting or recordkeeping requirements under the Paperwork Reduction Act. As previously stated under Executive Order 12866, the Form I-129, Petition for Nonimmigrant Worker (OMB 1615-0009), has recently been revised to include the H-1B Data Collection and Filing Fee Exemption supplement to comport with the provisions of the OAA. These revisions include amendments to the H-1B Data Collection and Filing Fee Exemption Supplement to capture information about the beneficiary's level of education and whether the degrees were earned from a U.S. institution of higher education; to assist U.S. employers in assessing whether they are subject to the new $1,500 (or $750) ACWIA and $500 Fraud Detection and Prevention fees; and to assist U.S. employers in assessing whether they are eligible for the numerical limit exemptions provided under section 214(g)(5) of the INA. OMB has approved the revised Form I-129 for official use by the public (OMB Control Number 1615-0009); however, USCIS will continue to accept the prior paper editions of Form I-129 until May 30, 2005. In addition, by increasing the number of Forms I-129 and Forms I-907 being submitted as a result of the OAA, USCIS has submitted to OMB for emergency clearance the Paperwork Reduction Change Worksheet (OMB-83C) increasing the total annual burden hours. Further, USCIS has submitted to OMB for emergency clearance Paperwork Reduction Act Submission (OMB 83-I) to permit USCIS to concurrent use of the Form I-129 (edition date 3-17-05, OMB 1615-0009 and the old Form I-129 (edition date 12-10-01, OMB 1115-0168, OMB 1615-0093) until May 30, 2005. Due to this temporary information collection, USCIS submitted the OMB 83-I to formally request that OMB adjust the burden hours for the use of the 12-10-01 version of the Form I-129. The public should reference the Federal Register notice contained at 70 FR 20590 (Apr. 20, 2005) for information about this collection. Please note however that USCIS hereby extends the deadline for comments solicited in that notice until May 30, 2005.

A final rule AD, FR Doc. 05-5299, that applies to GE CF6-80A1/A3 and CF6-80C2A series turbofan engines, was published in the Federal Register on March 21, 2005, (70 FR 13365). The following correction is needed:

On February 14, 2003, we issued AD 2003-04-10, amendment 39-13058 (68 FR 9513, February 28, 2003). On January 26, 2005, we issued AD 2005-03-05, amendment 39-13961 (70 FR 5920, February 4, 2005).

Both ADs apply to the same certain McDonnell Douglas MD-90-30 airplanes. Both require a one-time general visual inspection to detect wire chafing damage and to determine adequate clearance between the disconnect panel structure and the wires above the aft left lavatory; and corrective actions, if necessary. The actions specified in the ADs are intended to prevent damage to certain wires due to contact between the wires and the adjacent structure, which could result in electrical arcing and consequent smoke and fire in the cabin.

Since we issued those ADs, we discovered some procedural regulatory complications that could prevent operators from complying with either AD. We had initially determined that AD 2003-04-10 should be revised when in fact it should have been superseded. Although a revised AD is identified by adding “R1” to the original AD number, in this case the “revised” AD was instead given a new AD number (AD 2005-03-05). As a result, two essentially identical ADs apply to the same airplanes. We have determined that superseding both AD 2003-04-10 and AD 2005-03-05 will eliminate the confusion associated with recording compliance with potentially conflicting requirements in the two ADs.

The unsafe condition described previously is likely to exist or develop on other airplanes of the same type design. This AD is being issued to supersede AD 2003-04-10 and AD 2005-03-05. This new AD retains the requirements of the existing AD.

The requirements of this new AD are unchanged from those of AD 2003-04-10 and AD 2005-03-05; therefore, this AD imposes no additional economic burden on operators. The estimated costs associated with this AD are repeated for the convenience of affected operators, as follows:

There are about 89 airplanes of the affected design worldwide. The following table provides the estimated costs for U.S. operators to comply with this AD.

This AD is issued for clarification only and adds no new burden on operators. Therefore, providing notice and opportunity for public comment is unnecessary before this AD is issued, and this AD may be made effective in less than 30 days after it is published in the Federal Register.

Although this is a final rule that was not preceded by notice and an opportunity for public comment, we invite you to submit any relevant written data, views, or arguments regarding this AD. Send your comments to an address listed under ADDRESSES. Include “Docket No. FAA-2005-21029; Directorate Identifier 2005-NM-045-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light of those comments.

We will post all comments we receive, without change, to http://dms.dot.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of our docket Web site, anyone can find and read the comments in any of our dockets, including the name of the individual who sent the comment (or signed the comment on behalf of an association, business, labor union, etc.). You can review the DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78), or you can visit http://dms.dot.gov.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that the regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a regulatory evaluation of the estimated costs to comply with this AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

On Monday, February 7, 2005, the FAA proposed to revise part 71 of the Federal Aviation Regulations (14 CFR part 71) to create new Class E airspace upward from 700 ft. and 1,200 ft. above the surface at Perryville, AK (70 FR 6378). The action was proposed in order to add Class E airspace sufficient in size to contain aircraft while executing a new Standard Instrument Approach Procedure and Departure Procedure for the Perryville Airport. The new approach is Area Navigation-Global Positioning System (RNAV GPS) Runway (RWY) 3, original. The new departure procedure is the CILAC ONE RNAV Departure. New Class E controlled airspace extending upward from 700 feet and 1,200 feet above the surface in the Perryville Airport area is established by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received; thus the rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 of FAA Order 7400.9M, Airspace Designations and Reporting Points, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This revision to 14 CFR part 71 establishes Class E airspace at Perryville, Alaska. This additional Class E airspace was created to accommodate aircraft executing a new SIAP and Departure Procedure and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at Perryville Airport, Perryville, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, part A, subpart 1, section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing new and existing instrument procedures for the Perryville Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

On Monday, February 7, 2005, the FAA proposed to revise part 71 of the Federal Aviation Regulations (14 CFR part 71) to revise the Class E airspace upward from 700 ft. above the surface at Kalskag, AK (70 FR 6379). The action was proposed in order to add Class E airspace sufficient in size to contain aircraft while executing two new SIAPs and a textual departure procedure for the Kalskag Airport. The new approaches are (1) Area Navigation-Global Positioning System (RNAV GPS) Runway 6, original; and (2) RNAV (GPS)-A, original. Revised Class E controlled airspace extending upward from 700 feet above the surface within a 12.1-mile radius of the Kalskag Airport area is established by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received, thus, the rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 of FAA Order 7400.9M, Airspace Designations and Reporting Points, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This revision to 14 CFR part 71 revises Class E airspace at Kalskag, Alaska. Additional Class E airspace is being created to accommodate aircraft executing new instrument procedures and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at Kalskag Airport, Kalskag, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart 1, section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing new and existing instrument procedures for the Kalskag Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

On Monday, February 7, 2005, the FAA proposed to revise part 71 of the Federal Aviation Regulations (14 CFR part 71) to revise the Class E airspace upward from 700 ft. above the surface at St. Michael, AK (70 FR 6381). The action was proposed in order to add Class E airspace sufficient in size to contain aircraft while executing two new SIAPs and a textual departure procedure for the St. Michael Airport. The new approaches are (1) Area Navigation-Global Positioning System (RNAV GPS) Runway 2, original; and (2) RNAV (GPS) RWY 20, original. Revised Class E controlled airspace extending upward from 700 feet above the surface within a 8.4-mile radius of the St. Michael Airport area is established by this action. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No public comments have been received, thus, the rule is adopted as proposed.

The area will be depicted on aeronautical charts for pilot reference. The coordinates for this airspace docket are based on North American Datum 83. The Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 6005 of FAA Order 7400.9M, Airspace Designations and Reporting Points, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This revision to 14 CFR part 71 revises Class E airspace at St. Michael, Alaska. Additional Class E airspace is being created to accommodate aircraft executing new instrument procedures and will be depicted on aeronautical charts for pilot reference. The intended effect of this rule is to provide adequate controlled airspace for IFR operations at St. Michael Airport, St. Michael, Alaska.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it creates Class E airspace sufficient in size to contain aircraft executing new and existing instrument procedures for the St. Michael Airport and represents the FAA's continuing effort to safely and efficiently use the navigable airspace.

The FAA published this direct final rule with a request for comments in the Federal Register on March 3, 2005 (70 FR 10318). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 7, 2005. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on March 7, 2005 (70 FR 10862). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 7, 2005. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on March 10, 2005 (70 FR 11855). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit such an adverse comment, were received within the comment period, the regulation would become effective on July 7, 2005. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

The FAA published this direct final rule with a request for comments in the Federal Register on March 7, 2005 (70 FR 10917). The FAA uses the direct final rulemaking procedure for a non-controversial rule where the FAA believes that there will be no adverse public comment. This direct final rule advised the public that no adverse comments were anticipated, and that unless a written adverse comment, or a written notice of intent to submit an adverse comment, were received within the comment period, the regulation would become effective on July 7, 2005. No adverse comments were received, and thus this notice confirms that this direct final rule will become effective on that date.

Background

The temporary regulations (TD 9170) that is the subject of this correction are under section 1374 of the Internal Revenue Code.

As published, the temporary regulations (TD 9170) contain errors that may prove to be misleading and are in need of clarification.

This final rule contains DFARS policy relating to contracts that require contractor personnel to deploy with or otherwise provide support in the theater of operations to U.S. military forces deployed outside the United States in contingency operations, humanitarian or peacekeeping operations, or military operations or exercises designated by the combatant commander. In addition, as a result of the DFARS Transformation initiative, this rule moves text from DFARS 225.802-70 and 225.7401 to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi.

DoD published a proposed rule at 69 FR 13500 on March 23, 2004. Twenty-six sources submitted comments on the proposed rule. This final rule includes changes made as a result of public comments and as a result of comments received from within DoD. In addition, the paragraphs of the new clause have been re-ordered to provide a more logical sequence. The following is a synopsis of DoD's response to the public comments and the changes made to the rule.

a. Too broad.

Comment: Several respondents believe that the rule is too broadly written and that it attempts to cover too many disparate situations. One respondent states that the rule should distinguish between “combat” and “peacekeeping or humanitarian” operations. Another respondent also considers that contingency, humanitarian, peacekeeping, and combat operations are potentially greatly dissimilar.

DoD Response: Nonconcur. The clause language is written in such a way as to allow for its use in a wide range of military operations.

b. Too narrow.

Comment: Several respondents thought that the rule was too narrow. One respondent recommends that the clause cover defense contractors working mission essential services within the United States. The respondent suggests that the clause incorporate the requirements of DoDI 3020.37, Continuation of Essential DoD Contractor Services During Crises. Another respondent believes that the rule should cover “nation-” and “infrastructure-” building.

DoD Response: Out of scope/Concur in part. DoD considers the first comment to be out of scope because most of the requirements of the clause would be inapplicable in the United States. Creation of a new clause to implement DoDI 3020.37 as it applies to crises within the United States is not within the scope of this case. With regard to the second respondent, flexibility has been added to the scope by including other military operations or exercises designated by the combatant commander.

c. Further revision.

DoD has carefully considered how to accurately express the scope of this case and has developed the following scope statement at 225.7402-1:

“This section applies to contracts requiring contractor personnel to deploy with or otherwise provide support in the theater of operations to U.S. military forces deployed outside the United States in—

(a) Contingency operations;

(b) Humanitarian or peacekeeping operations; or

(c) Other military operations or exercises designated by the combatant commander.”

The new clause is intended to apply not only to contractor personnel that “accompany” or “deploy” with the U.S. forces, but to also cover “support in the theater of operations.” On the other hand, it does not apply to contractor personnel providing support from outside the theater of operations or to nation-building efforts such as the reconstruction of Iraq. The term “combat operations” was removed, as it is an undefined term, and “other military operations or exercises designated by the combatant commander” was added to increase flexibility. Application of this scope has caused revisions throughout the rule, particularly in the title of the clause, the clause prescription at 225.7402-4(a), and paragraphs (b) and (q) (as redesignated in the final rule) of the clause (applicability and subcontract flowdown).

Comment: One respondent comments that some of the requirements of the proposed DFARS clause appear not to apply to either host country contractor personnel or third country national contractor personnel.

DoD Response: Concur in part. DoD agrees that some requirements do not apply to host country contractor personnel or third country national contractor personnel. However, DoD considers that, in most cases, the clause is already drafted in such a manner that it specifies, when necessary, any limitations in the application to host country contractor personnel and third country national contractor personnel. With regard to compliance with laws and regulations, DoD has added the word “applicable.” Thus, if a U.S. law is not applicable to host country contractor personnel or third country national contractor personnel, compliance is not required. The paragraphs on pre-deployment and processing and departure point clearly apply only to those employees who are deploying from the United States. The paragraph on evacuation is already focused on employees from the United States and third country national contractor personnel. All the other cited paragraphs would apply equally to United States contractor personnel, host country contractor personnel, and third country national contractor personnel.

Comment: Many respondents brought up the potential need for equitable adjustment due to the perceived risks to contractors in the situations covered by this clause.

DoD Response: The need for equitable adjustment has been addressed in the following specific areas where the respondents raised the issue: government support, compliance with orders of the combatant commander, contractor personnel, insurance, scarce commodities, and changes.

Comment: One respondent suggests that this clause would be beneficial to the civilian side of the Federal Government (GSA, NIH, DOI, etc.) who execute contracts for contractor support to accompany the forces. It would also be beneficial to the Department of State and the U.S. Agency for International Development, who deploy into contingency or humanitarian operations. Therefore, the respondent suggests either including authorization for other Federal agencies procuring on behalf of DoD or other deployed federal agencies to utilize the clause, or including it in the FAR.

DoD Response: Concur in part. We have no objection to any agency using this clause, but it would be up to that agency to make the decision. There is no prohibition against an agency adopting the clause of another agency. It may also be a good idea to eventually include a similar clause in the FAR but, because DoD has an urgent need for the clause, implementation is limited to the DFARS at this time.

Comment: One respondent states that contractor support in theaters of war should be limited to specialties that the military cannot or does not have within its personnel inventory, such as technical support for systems. Several respondents want to leave military operations to military personnel, and recruit more soldiers, if necessary.

DoD Response: Out of scope. The purpose of this DFARS change is to provide a clause to regulate contractor personnel supporting a deployed force, not to determine the policy on which contractors should do so.

Comment: One respondent recommends revising the proposed rule to ensure that other FAR and DFARS clauses that address performance overseas are indicated as mandatory clauses, where applicable.

DoD Response: Concur in part. DoD has included at DFARS 225.7402-4(b) a reference to guidance in PGI on clauses to consider when using the new clause at DFARS 252.225-7040.

Comment: One respondent suggests the rule explain “how” to implement DoDI 3020.37, Continuation of Essential DoD Contractor Services During Crises. The respondent stated that commanders and contracting officers must attend to these questions during acquisition planning.

DoD Response: Concur. A reference to PGI guidance on acquisition planning for crisis situations outside the United States has been added at DFARS 207.105(b)(19)(E).

Comment: One respondent suggests that the final rule add to DFARS 212.301 the authority to use the clause at DFARS 252.225-7043, Antiterrorism/Force Protection Policy for Defense Contractors Outside the United States, in commercial item contracts awarded under FAR Part 12.

DoD Response: Concur. DoD has revised DFARS 212.301 to prescribe use of the clause at DFARS 252.225-7043, Antiterrorism/Force Protection Policy for Defense Contractors Outside the United States, in commercial item contracts that include the clause at DFARS 252.225-7040. Although the intent of FAR Part 12 is to keep contract requirements that are not standard commercial practices to a minimum, authorizing inclusion of this clause in commercial contracts when contractor personnel are providing support in the theater of operations will minimize the risk to personnel safety and the organization and, at the same time, make completion of contract performance more efficient and effective. This is important in contracts for acquisitions in high risk situations, whether the items are commercial or noncommercial.

Comment: One respondent questions why the rule only specifically addresses Germany. Several respondents request specific reference to bilateral agreements with Japan and Korea and policies that have application to contractor employees.

DoD Response: Concur. DoD has added 225.7401(c), with a reference to PGI 225.7401(c) for work performed in Japan or Korea.

a. “Combatant commander.”

Comment: Several respondents discuss the use of the term “combatant commander,” which was defined in the proposed rule to include subordinate commanders given authority by the combatant commander to issue direction to contractors in a specified geographical area or for a specific functional area.

DoD Response: Concur in part. Subordinate commanders have been removed from the definition of “combatant commander.” It is still possible for the combatant commander to delegate authority to a subordinate commander. According to FAR 1.108(b), each authority in the FAR (or DFARS) is delegable unless specifically stated otherwise. Furthermore, paragraph (p) of the clause in the proposed rule has been substantially modified, and paragraph (q) of the clause in the proposed rule has been deleted, which will remove the conflicts regarding contractors receiving direction from unidentified subordinate commanders.

b. “Combat operations.”

Comment: One respondent observes that in the prescription the term “combat operations” is used but no definition is provided.

DoD Response: Concur. “Combat operations” is not a defined term in the DoD Dictionary of Military and Associated Terms, and has been deleted from the final rule.

c. “Contractors accompanying the force.”

Comment: Several respondents request the definition for “accompanying a force.” One respondent questions whether it is applicable strictly to contractors accompanying a force on the move or whether it also covers contractors situated in an area where military forces are deployed.

DoD Response: The term “accompanying the force” is no longer used. The phrase “deploy with or otherwise provide support in the theater of operations” should answer the issues raised by the respondents. It applies to contractor personnel situated in an area where military forces are deployed, and to some extent, contractor personnel in-transit, although some provisions would be applicable only in the theater of operations. DoD uses the term “in the theater of operations” rather than “in country” as the theater of operations may not be restricted to a single country.

d. Further revision.

DoD has not included definitions for “contingency operation” and “humanitarian or peacekeeping operation” in the clause as they are now automatically incorporated from FAR Part 2 by the new clause at FAR 52.202-1, Definitions (July 2004).

Comment: Several respondents comment that the proposed rule appeared to shift too much risk to contractors. One respondent comments that the use of the term “inherently dangerous” in paragraph (b) of the clause could jeopardize a contractor's ability to obtain insurance coverage under the Defense Base Act and other provisions.

DoD Response: Concur in part. The term “inherently dangerous” overstates the intent of the rule. There was no intent to change the law or to affect coverage under the Defense Base Act, the War Hazards Compensation Act, or any other provision of law or regulation. Paragraph (b)(2) of the clause has been changed to state that contract performance in support of military forces may require work in dangerous or austere conditions. If an independent contractor volunteers or agrees to perform work in such a setting, the contractor must assume responsibility to supervise its employees and to train and prepare them to behave in as safe a mode as possible. Contractors must not directly participate in hostilities against an armed enemy. The risk associated with inherently Governmental functions will remain with the Government. Contractors should resolve concerns about a specific contract during pre-award negotiations.

a. Government-provided support should be set forth in contract.

Comment: Several respondents comment that a contractor would not be able to ascertain what is in an individual operation order.

DoD Response: Concur. The language stating “or in the operation order of the combatant commander” has been removed.

Comment: Several respondents have concern about the effect of paragraph (c)(2) of the clause in the proposed rule. They believe that the Government should be required to specify in the solicitation and resulting contract the types of Government-provided support, if any, that will be required or authorized.

DoD Response: Concur in part. DoD concurs that Government-provided support should be specified in the contract. Paragraph (c)(2) of the clause has been deleted.

b. Changes in available support.

Comment: One respondent expresses concern relative to any deficit (or unanticipated availability) that might arise between support authorized in a contract and actual support available in a particular theater. A second respondent notes that the combatant commander would make the ultimate decision on providing resources to a contractor regardless of what is in the contract. Another respondent recommends adoption of additional language that will provide a mechanism for handling delays or non-delivery of promised Government-provided support similar to that utilized in the Government property clauses. The respondent also recommends the adoption of language substantially similar to that in the FAR Government property clauses that would provide for equitable adjustment in the case of late or non-delivery of promised support on commercial contracts under FAR Part 12, since such contracts do not normally contain a Government property clause.

DoD Response: Concur in part. The rule should address potential differences between Government-provided support anticipated at time of contract/task/option award and actual support made available in the theater of operations. Changes will be handled as specified in the Changes clause of the contract, which will also cover changes in Government-furnished facilities, equipment, material, services, or site, as specified in paragraph (p) of the clause at 252.225-7040 in the final rule. DoD does not concur with the recommendation to outline the scope of any adjustment necessitated by changes in Government support, since there is no intent to modify the already-existing procedures inherent in any changes clause.

c. Lack of sufficient detail defining variety of support functions.

Comment: Several respondents believe that the subject provision is lacking in sufficient detail on defining a variety of support functions.

DoD Response: Partially concur. The final rule now implements DoD policy that the combatant commander will develop a security plan to provide protection, through military means, of contractor personnel engaged in the theater of operations unless the terms of the contract place the responsibility with another party. In addition, the clause states that all contractor personnel engaged in the theater of operations are authorized resuscitative care, stabilization, hospitalization at level III military treatment facilities, and assistance with patient movement in emergencies where loss of life, limb, or eyesight could occur. Hospitalization will be limited to stabilization and short-term medical treatment, with an emphasis on return to duty or placement in the patient movement system. However, the contractor is responsible for ensuring that the Government is reimbursed for any costs associated with such treatment or transportation.

The remaining language is deliberately non-specific in outlining available Government support, since that can only be ascertained after consultation with the relevant combatant command and service components. The general types of support that should be considered are outlined in the corresponding PGI coverage. Once adequate research regarding availability of Government support is accomplished, the contracting officer can then provide for such support in the resulting contract.

d. Difficulty in ascertaining available support.

Comment: Several respondents suggest that DoD inform users how to obtain the information necessary to specify support in a contract. This will require a high degree of coordination between a contracting officer and military organizations that would be responsible for providing resources in an area of operations.

DoD Response: Partially concur. The new PGI guidance on acquisition planning specifies that the requiring activity is responsible for obtaining pertinent operation plans, operation orders, and annexes from the affected combatant command or military service element, so that the contract will be consistent.

e. Support should be commensurate with military personnel.

Comment: One respondent expresses concern that companies in many cases do not, and cannot, provide in-country support for deployed employees. They note that contractor personnel have received, and should receive, support commensurate with the uniformed members with whom they serve.

DoD Response: Nonconcur. The Government will only provide support services that are available in the theater of operations concerned. To the extent that such support is identifiable and known at time of solicitation and award, it can be specified in the solicitation and resulting contract. However, where unavailable from Government sources, such support can only be provided by the contractor. Any contractor can base its decision to submit a proposal on its own assessment of ability to provide and price personnel support.

f. Contracting officer must communicate support requirements to combatant commander.

Comment: One respondent presumes that the contracting officer would have to communicate the support requirements to the combatant commander for incorporation into an operation order.

DoD Response: Nonconcur. The contracting officer can only provide for Government resources that are available to a combatant commander. The language referring to support outlined in operation orders has been deleted in response to another comment to avoid contractor confusion.

g. Which military organization will provide the support?

Comment: One respondent recommends adding a requirement for the contracting officer to specify in the contract or task order the military organizations that will provide support to a contractor, with further description in PGI.

DoD Response: Nonconcur. It is unlikely that the annexes will be specific in describing the individual military organizations that would provide any contractor with support in defined areas. Hence, the suggested additional language would be unworkable, particularly when specifying Government-provided resources too far in advance of an actual deployment.

h. Effect on Defense Base Act.

Comment: One respondent argues that the requirement for contractors to generally provide their own in-theater support would make it even more difficult for contractors to obtain Defense Base Act coverage.

DoD Response: The DAR Council believes that the type of support the respondent is concerned about is force protection. It is DoD policy that the combatant commander will develop a security plan to provide protection through military means unless valid contract terms, approved by the combatant commander, place the responsibility with another party. DoD has modified 225.7402-3(a) and paragraph (c) of the clause at 252.225-7040 to state this policy and to emphasize the fact that the Government may provide the other types of support listed in PGI 225.7402-3(a) and that such support to be provided will be specified in the contract. Also see the responses at paragraph 12.c and the responses regarding insurance issues in paragraph 22.

i. Force protection.

Comment: One respondent expresses concern that the rule permits contractors to hire other contractors who, in turn, will hire armies of mercenaries (frequently local mercenaries) to provide force protection. The respondent foresees that such mercenaries will attempt control of the protection market, may be likely to put intelligence information at risk, and will contribute to “power politics” in the particular theater.

DoD Response: Nonconcur. As stated in the previous paragraph, it is DoD policy to provide force protection to contractor employees providing support in the theater of operations to U.S. military forces unless valid contract terms, approved by the combatant commander, place that responsibility with another party. Even though in some instances contractors may be required to hire security and force protection, this does not equate to “armies of mercenaries.” Every contractor will be required to adhere to laws and regulations of the United States, the host country, and third country laws, as well as orders, directives, and instructions issued by the combatant commander relating to various topics, including force protection. This requirement effectively permits Government control over and minimization of the types of excesses foreseen by this respondent.

a. Inaccessibility of information on applicable laws and regulations.

Comment: Some respondents consider paragraph (d) of the clause to be an unreasonable requirement because there is no reliable and accessible source of information for contractors regarding all of the laws (particularly host country and local laws) that may be applicable to a contractor supporting a contingency or humanitarian effort. A contractor may be asked to deploy to countries or areas of the world on short notice without extended advance notice and without meaningful access to information on relevant foreign and local laws. Contractors are often denied access to the very information that would be required to comply with this requirement because it is classified. One respondent wants the Government to notify contractors in writing of all the requirements with which the contractors are expected to comply, other than laws and international treaties. The respondents are concerned that internal Government policies, procedures, and directives and instructions would not always be communicated by the Government to the contractor.

DoD Response: Generally nonconcur. Paragraph (d) of the clause is a reminder of the existing obligation for contractor personnel to comply with the laws and regulations applicable to a contract. Contractors have access to all of these laws and regulations and are bound to comply with them. For example, analysis of the host country law is an existing aspect of acquisition planning under FAR Part 7. Country studies are available online at http://www.state.gov. Such available online resources indicate that a contractor may independently ascertain the laws and regulations necessary to comply with paragraph (d) of the clause. A single resource for the laws and regulations enumerated in paragraph (d) would be convenient to the contractor, but it would need to be specific to each contract, it could easily inadvertently omit an applicable law or regulation, and is in large part redundant to available resources. However, DoD concurs that it needs to make organizational improvements to improve the accessibility of contractors to nonclassified portions of classified documents and orders of the combatant commanders.

b. Conflicting requirements.

Comment: One respondent is concerned that it may be impossible to comply with every applicable law, treaty, agreement, regulation, directive, and instruction simultaneously because they are inconsistent and contain conflicting provisions.

DoD Response: Nonconcur. Again, paragraph (d) of the clause is a reminder of the existing obligation. Regardless of paragraph (d), it is incumbent upon the contractor to make the best possible judgment in deciding which law or regulation takes precedence in the case of conflict.

c. Employees do not need to know.

Comment: One respondent notes that, while there may be a reason for a contractor to have a basic understanding of the special laws and policies related to performance of a contingency contract, there is little need for all employees to have such comprehensive knowledge.

DoD Response: Concur in part. The contractor personnel need to have sufficient knowledge of the laws and regulations that are applicable to them, to avoid violating them in a foreign country. DoD has added a qualifying phrase to focus the applicability to personnel “supporting a force deployed outside the United States as specified in paragraph (b)(1)” of the clause.

d. The contractor cannot verify compliance by individual employees.

Comment: One respondent comments that private business has no ability to verify compliance with local law when its individual employees are assigned to classified locations.

DoD Response: Nonconcur. The contractor is still responsible for its employees.

e. Paragraph (d)(2) of the clause, Treaties and international agreements (e.g., Status of Forces Agreements, Host Nation Support Agreement, and Defense Technical Agreements).

Comment: The Geneva and Hague Conventions should be added to the parenthetical.

DoD Response: Nonconcur. The treaties and international agreements that are listed are some examples, not an exhaustive list. The problem with examples is that they are not all inclusive, but are often misinterpreted (i.e., if it is not listed, it doesn't apply). Therefore, DoD has deleted the examples.

f. Paragraph (d)(4) of the clause, Orders, directives, and instructions issued by the Combatant Commander relating to force protection, security, health, safety, or relations and interaction with local nationals.

Comment: One respondent states that the mandate in paragraph (d)(4) that contractors comply with the “orders, directives, and instructions issued by the Combatant Commander” puts the Commander in a position of directing contract performance without actual contracting authority. Another respondent suggests that a new subparagraph be added to read as follows: “The Government Contracting Officer or the Combatant Commander is responsible for communicating to the Contractor any applicable instructions, orders, directives, etc. to the Contractor and Contractor's personnel. To the extent that compliance requirements change after contract award, the contractor shall be entitled to an equitable adjustment for any increased costs associated with those costs.”

DoD Response: Nonconcur. The combatant commander acts in a position of sovereign authority for issues relating to force protection, security, health, and safety. If a contractor were driving a vehicle on a street in the United States and a fire marshal directed the contractor to take a detour because of a fire, the contractor would be required to obey that order. The combatant commander has the authority to serve as the single point of contact for such areas in the theater of operations, since the combatant commander is in the best position to anticipate the needs of the force and how it will operate in the field. Any claim to equitable adjustment as the result of a change in the orders, directions, or instructions of the combatant commander will be handled in accordance with the terms of the contract.

g. Paragraph (d)(5) of the clause, Applicability of the Uniform Code of Military Justice (UCMJ).

Comment: Some respondents request more specific delineation of the applicability of the UCMJ. One respondent comments that paragraph (d)(5) should be deleted because the UCMJ will never, as a practical matter, be applicable under the clause because contractor employees are not subject to the UCMJ except during a declared war.

DoD Response: Concur. Paragraph (d)(5) has been deleted in its entirety. To the extent that it is applicable, it is covered by paragraph (d)(1) of the clause.

a. Role of the combatant commander.

Comment: One respondent recommends that paragraph (1) should reference paragraphs (p) and (q) because combatant commanders can also take action to remove contractor personnel without the involvement of the contracting officer.

DoD Response: Paragraph (p) has been substantially modified and paragraph (q) of the clause has been deleted. (See paragraph 25 of this section.)

b. Notification to contractor.

Comment: One respondent recommends rewording paragraph (e)(1) of the clause to require notification and an opportunity to resolve the matter with the contracting officer.

DoD Response: Nonconcur. Contracting officers must have the ability to summarily direct the removal of personnel perceived as jeopardizing or interfering with the mission. It is reasonable to assume that, prior to directing removal, the contracting officer would have already made efforts to resolve the matter with the contractor.

c. Reasonable opportunity to replace/equitable adjustment.

Comment: Several respondents recommend that contractors be given a reasonable opportunity to replace any personnel removed from the force and be given an equitable adjustment for any additional expenses that may be compensable under the contract.

DoD Response: Nonconcur. Contractors, in accordance with requirements of the contract, must have a plan for immediate replacement of employees removed from the theater of operations. Contractors must replace and, where applicable, repatriate any contractor personnel at its own expense.

Further revision: DoD has revised paragraph (e)(1) of the clause (redesignated as paragraph (h)(1) in the final rule) as follows: “(1) The Contracting Officer may direct the Contractor, at its own expense, to remove and replace any contractor personnel who jeopardize or interfere with mission accomplishment or who fail to comply with or violate applicable requirements of this clause. Such action may be taken at the Government's discretion without prejudice to its rights under any other provision of this contract, including the Termination for Default clause.” This language was adopted from the Army interim rule (48 CFR 5152.225-74-9000, Contractors Accompanying the Force, 68 FR 66740, November 28, 2003).

d. Provide the plan to the contracting officer.

Comment: One respondent recommends revising the last sentence of paragraph (e)(2) of the clause to read: “This plan shall be provided to the Contracting Officer upon request and shall be made available for review by the Contracting Officer's Representative.”

DoD Response: Partially concur. DoD concurs that the plan should be made available to the contracting officer upon request. Since the FAR defines “contracting officer” to include authorized representatives of the contracting officer when acting within the limits of their authority as delegated by the contracting officer, the phrase “shall be made available for review by the Contracting Officer's Representative” has been deleted from the clause.

e. Data item description for the plan.

Comment: One respondent recommends that the Government provide a data item description for the desired unavailable employee replacement plan and list the plan on the contract data requirements list.

DoD Response: Nonconcur. It is not necessary to establish a data item description in order to request that the contractor have a plan for replacing employees. This allows the contractor more flexibility in determining the format and content of the plan.

f. Further revision. DoD has also added a requirement to keep the plan current.

a. “Theater of operations” not defined.

Comment: One respondent believes “theater of operations” (not the term used in the proposed rule) is not a specifically defined term and could create confusion as to which employees are in a given geographic location supporting specific activities. The respondent recommends revising paragraph (1) to require the contractor to maintain information on all employees deployed into a theater of operation as defined by the contracting officer for each covered contingency operation.

DoD Response: Concur in part. A definition of “theater of operations” has been added in paragraph (a) of the clause. In accordance with the scope of this case, DoD has substituted the following language: “current list of all contractor personnel that deploy with, or otherwise provide support in the theater of operations to the U.S. military forces as specified in paragraph (b)(1) of this clause.”

b. Cost of performance.

Comment: Several respondents express concern over the time and expense for contractors to prepare and maintain the information.

DoD Response: Nonconcur. As the system is currently envisioned, this requirement is incidental to contract performance and it is not expected to place an unreasonable cost burden on the contractors. It would appear to be a normal prudent business practice to be able to identify which employees are working in high risk areas.

c. Specifically priced contract deliverable.

Comment: One respondent recommends making the contractual obligation to maintain and/or provide the data a specifically priced contract deliverable.

DoD Response: Nonconcur. Contractors should consider the work involved and price their proposal accordingly. As the system is currently envisioned, this requirement is incidental to contract performance and it is not expected to place an unreasonable cost burden on the contractors.

a. Information from operation plans and operation orders may not be available to contractor.

Comment: Several respondents suggest deleting the verbiage about “contract annex to the operation order” and including requirements from the operation order in the contract. One respondent further recommends that the clause language require compliance “to the best of the contractor's knowledge.”

DoD Response: Concur in part. DoD has deleted “contract annex to the operation order” from the clause. It is the responsibility of the requiring activity to ensure that specific operational requirements are deciphered, and the contracting officer must incorporate them into the contract. DoD does not agree that the clause language should be changed to require compliance “to the best of the contractor's knowledge,” as language of this nature would be unenforceable. Specific requirements of each element of this clause paragraph will be sufficiently spelled out so contractors know exactly what is required.

b. Specific number of employees.

Comment: Several respondents believe that this clause should be revised to refer to a specific number of employees a contractor can provide to meet desired qualifications, to permit advance negotiations between contractors and customers to avoid lag times once operations begin.

DoD Response: Nonconcur. This clause puts contractors on notice that they may need to deploy and, therefore, they need to ensure they have qualified or qualifiable personnel to meet contract requirements.

c. Security and background checks (para. (1)).

Comment: One respondent notes that the Government must specify security requirements on the DD Form 254, Access to National Security Information, if the contractor and its employees may be required to have access to certain national security information. Another respondent recommends deleting “All applicable specified” and replacing it with “Applicable.” A respondent also recommends adding “and acceptable” at the end of the paragraph to ensure security and background checks were accomplished and are acceptable.

DoD Response: Concur in part. A DD Form 254 is used when a contractor will require access to or will generate classified information, so it may or may not be applicable in a contract. Background checks may also be required and, if so, should be specified in the contract. DoD has changed “All applicable specified” to “All required” and “and acceptable” has been added at the end.

d. Medical requirements (para. (2)).

Comment: Several comments were received regarding the fact that no specific minimum medical standards were included in the clause; thus, contractors do not know what constitutes “medically and physically fit.” Specific readiness requirements and required vaccinations must be set forth in the contract. An appeal procedure should be included to preclude forcing contractors to submit to potentially hazardous, experimental, or untested vaccinations. DoD should provide any vaccines that are only available to federal providers. This requirement has the potential to significantly increase cost of performance to establish and maintain a system concerning health and level of physical readiness for contractor employees. Another respondent is concerned that contractors are dependent upon the Government to provide certain vaccines because only the Government has access to those vaccines.

DoD Response: Concur in part. The clause has been revised to state that contractor personnel must meet the minimum medical screening requirements as set forth in the contract. The Government will provide contractors with theater-specific medical supplies or medications.

The term “vaccinations” has been changed to “immunizations” to be consistent with terminology in DoD policy. The Combatant Command Surgeon establishes immunization requirements for the area of operations and maintains a listing of them. The immunization listing will also need to be incorporated in contracts. DoD does not agree with establishment of appeal procedures for immunizations for contractors. If contractor personnel are not willing to receive the required immunizations, the contractor will be required to provide other personnel who are willing to meet the contractual requirements.

e. Vehicle or equipment licenses (para. (3)).

Comment: One respondent recommends adding “United States” before “licenses” to clarify that there is no obligation for contractors to search out or comply with any foreign requirements to operate vehicles or equipment.

DoD Response: Nonconcur. Although contractor personnel may not be able to obtain foreign licenses prior to deployment, contractors may be required to obtain foreign licenses at the deployed location. Paragraph (3) has been relocated from pre-deployment requirements to a separate paragraph (k).

Comment: Another respondent states that the clause should address ownership of vehicles and equipment necessary to perform the contract in the theater of operations and requests that the contractor and its employees not be held liable for damages, of any kind, resulting from the operation of Government owned or leased equipment, and shall be indemnified and held harmless against all losses, costs, claims, causes of action, damages, liabilities, and expenses arising directly or indirectly from any act or omission relating to the operation of such equipment by contractor or contractor's employees, agents, subcontractors, or suppliers.

DoD Response: Nonconcur. Generally, contractors are required to provide their own vehicles and equipment to meet the terms of their contract. Vehicle requirements should be specified elsewhere in the contract and any contract that provides government furnished equipment (GFE) will include a GFE clause in the contract to cover liability for damages. This paragraph only covers required licenses to operate vehicles and equipment.

f. Visas.

Comment: One respondent does not believe it is in the best interest of the United States to impose a requirement that a contractor obtain a foreign Government's approval through entrance or exit visas before implementing a U.S. Government contract.

DoD Response: Nonconcur. Contractors must coordinate through the State Department and ensure their personnel meet all requirements for entering and exiting the deployed location. The mere fact that a contractor has a contract with the U.S. Government does not absolve the contractor from meeting foreign entry and exit requirements.

g. Geneva Conventions identification card.

Comment: One respondent recommends issuing Geneva Conventions identification cards to contractor employees.

DoD Response: Concur. The clause has been revised to clarify that deploying contractor personnel should receive a Geneva Conventions identification card from the deployment center.

h. Country and theater clearance (para. (5)).

Comment: Several respondents comment that the clause should specify what country and theater clearances are required and where to obtain them.

DoD Response: Concur. The clause has been revised to cite DoD Directive 4500.54, Official Temporary Duty Abroad, and DoD 4500.54-G, DoD Foreign Clearance Guide.

a. Authorization to wear military clothing (para (1)).

Comment: One respondent commented that “specifically authorized by the Combatant Commander” should be changed to “required by the Combatant Commander.” They recommended changing “military clothing” to “military uniforms” and they believe wearing of military uniforms by contractor personnel should require consent of the contractor.

DoD Response: Nonconcur. The combatant commander does not require the wearing of military clothing but may authorize, in writing, certain contractor personnel to wear standard military clothing for operational reasons on a case-by-case basis. “Uniforms” implies military uniforms with appropriate rank, decorations, etc., which are only authorized for uniformed military personnel. Clothing denotes uniform items worn without specific military insignia.

b. Need for distinctive insignia.

Comment: If contractor personnel are authorized by the combatant commander to wear military clothing (and are not carrying firearms), they should be required to wear distinctive civilian insignia to keep non-combatant civilian status clear under the Geneva Conventions.

DoD Response: Concur. DoD has added to the clause language pertaining to distinctive insignia.

c. Organizational clothing and equipment.

Comment: Change “specific items” to “military-unique organizational clothing and individual equipment (OCIE).” The Government should inform the contractor of necessary clothing and protective equipment and provide OCIE to the contractor when such equipment is only available from the Government.

DoD Response: Concur. Use of term OCIE instead of “specific items” adds clarification and consistency. The clause, as written, already provides for Government issuance of military-unique OCIE. Necessary clothing and protective equipment should be spelled out elsewhere in the contract.

d. Return of OCIE.

Comment: Several respondents recommend changing the clause to allow the return of OCIE to places other than the original point of issue, as directed by the contracting officer or contracting officer's representative (COR). Another respondent states that contracting officers are geographically separated from the place of performance and do not have visibility over equipment issued to contractor employees in the theater. This respondent recommends adding language to make contractors directly responsible to the issuing organization for equipment that needs to be returned.

DoD Response: Concur in part. Concur with changing the language to allow the return of OCIE to places other than the original point of issue, as directed by the contracting officer, to provide for flexibility at the deployed location. Concur in theory with the recommendation to have contractors directly responsible to the issuing organization. However, the COR is usually in the theater of operations and would have visibility over equipment that is issued in the theater of operations. The COR can direct the contractor to return the equipment to the desired location if given the authority to do so. The language “In accordance with Government-Furnished Property clauses specified elsewhere in this contract” is redundant and unnecessary so it has been deleted.

a. Contractor personnel must be able to protect themselves.

Comment: Many respondents feel strongly that contractor personnel must be able to protect themselves in dangerous situations and seem to think that the proposed rule bans contractors from carrying weapons. There are fears that commanders could easily depend upon contractor labor, transportation of heavy equipment, or civil engineering services, but will not be manned to a level necessary to protect them.

DoD Response: Partially nonconcur. The clause does not require contractors to be unarmed in all cases. The clause states that the combatant commander will make a determination whether contractors can be armed, and the type of arms allowed, in any particular situation. The clause allows the combatant commander, who is responsible for military control in the region, to determine on a case-by-case basis whether arms are necessary.

b. Privately owned weapons.

Comment: Several respondents object that allowing contractors to carry privately owned weapons is a major policy shift and should not be allowed. Authorizing private firearms carries a great risk of a political/military occurrence that can negatively impact the overall mission and national security and is not outweighed by the benefit of private firearms, since there is authority for military issuance already. Several respondents believe that employee- or other privately-owned firearms should be prohibited in all cases, but wants a distinction made between “Government-furnished firearms” and “contractor-provided” firearms.

DoD Response: Concur in part. The language specifically allowing the combatant commander to authorize the carrying of privately-owned weapons has been deleted from the clause. However, as the DoD policy is not yet established, the clause leaves the decision to the combatant commander, to be made in conformity with treaties, laws, regulations, and policies that are in effect at the time of the decision.

c. Status as noncombatant civilians.

Comment: Several respondents are concerned that contractor personnel should not be armed except in extremely limited circumstances when necessary for self-defense. The Government actions of arming the contractor under certain circumstances places the contractor at risk of forfeiting their status as noncombatant civilians, subjecting a contractor captured by the enemy to be deemed an unlawful combatant or a mercenary, thereby losing POW status and treatment. If contractor employees are armed, the respondent recommends that the Government provide training to contractor personnel regarding when the weapons can be used, not just how to use them.

DoD Response: Concur in part. DoD understands the potential risk in allowing contractors to carry and use weapons in a hostile environment, which may arise in some of the situations covered by this clause. However, since the clause will be used for a variety of situations and circumstances, the most practical approach is to give the combatant commander the final decision as to whether to allow contractors to carry and use weapons and the types of weapons that will be authorized. The clause has been amended to caution that contractor personnel are not combatants and shall not undertake any role that would jeopardize that status. The clause already requires the Contractor to ensure that its personnel who are authorized to carry weapons are adequately trained. That should include training not only on how to use a weapon, but when to use a weapon.

d. Contractor and contractor employees must agree to accept weapons.

Comment: Several respondents want the rule to clarify that acceptance of weapons by contractor employees is strictly voluntary and must be explicitly authorized by the contractor.

DoD Response: Concur in part. The clause has been amended to explicitly state that the contractor must request authorization for its employees to carry weapons before the combatant commander authorizes such activity. It is the contractor's responsibility to determine whether to request authorization and for which employees to request such authorization. The employer-employee relationship is the responsibility of the contractor and its employees and should be dealt with in the employment agreement, not through the contract clause, as the Government has no privity of contract directly with the employees.

e. Contractor liability.

Comment: Several respondents are concerned about unmitigated liability for contractors in the event of injury or loss of life resulting from intentional use or accidental discharge of such weapons. The Government should indemnify and hold harmless the contractor against all losses, costs, claims, and causes of action relating to the use of Government-furnished weapons by contractor and/or contractor's employees. Unless the Government has and exercises authority to indemnify contractors and their employees against all claims for damage or injury and to ensure immunity from criminal prosecution associated with the use of weapons during deployment operations, the proposed clause should be modified to prohibit the issuance of weapons to contractor personnel.

DoD Response: Nonconcur. The clause in no way obligates contractors to allow their employees to carry weapons. Contractor personnel will only carry weapons if the contractor requests that its employees be allowed to carry weapons and the combatant commander authorizes the carrying of weapons. DoD cannot indemnify contractors and their personnel against all claims for damage or injury or ensure immunity from criminal prosecution associated with the use of weapons. Decisions to indemnify are made in accordance with FAR 50.403-1.

f. Specified contractor employees.

Comment: The word “specified” is not clear and could be interpreted to mean the Government specifies which contractor personnel would be issued the firearm, which the Government is not allowed to do.

DoD Response: Concur in part. The clause has been amended to clearly state that it is the contractor's responsibility to request that its personnel in the theater of operations be authorized to carry weapons. Therefore, it would be up to the contractor to determine which specific employees will be authorized to carry weapons and the criteria for that authorization.

g. Redeployment or revocation.

Comment: Upon termination of the commander's authority, the contractor is required to return any Government-issued firearms according to the direction given by the contracting officer. One respondent requests that, if the employee is permitted to carry contractor-issued firearms, the employee must cease carrying those firearms and must follow contractor-provided direction for their disposition.

DoD Response: Nonconcur in part. It is the contractor's responsibility to direct the disposition of contractor-provided weapons.

h. DD Form 2760.

Comment: One respondent recommends required use of DD Form 2760 when weapons are issued, to ensure compliance with the Lautenberg amendment regarding domestic violence convictions.

DoD Response: Partially concur. The clause requires the contractor to ensure that its personnel who are authorized to carry weapons are not barred from possession of a firearm by 18 U.S.C. 922. The draft DoD Instruction on Procedures for the Management of Contingency Contractor Personnel During Contingency Operations proposes additional requirements for contracted security services, including submission of a DD Form 2760 (Qualification to Possess Firearms and Ammunition) for each individual employee that will be providing the security services.

a. “In-person notification.”

Comment: Several respondents have concerns about the requirement for in-person notification.

DoD Response: Concur. It is the responsibility of the contractor to determine how to notify its employee's next of kin.

b. Notify the contracting officer.

Comment: One respondent also suggests adding a requirement that the contractor inform the contracting officer if the contractor is informed through other than Government channels of the death, injury, or capture of one of its employees, or if the employee appears to be missing, so the Government can take action to verify and provide support as appropriate.

DoD Response: Concur in part. The contractor is already required to notify the contracting officer, because the contractor has a responsibility to keep current personnel data in accordance with paragraph (g) of the clause.

c. Point of contact for continuing support.

Comment: Personnel Recovery Policy OSD/Defense requires that, in the case of a missing or captured contractor, the Government will assign an official point of contact to the next of kin for continuing support, and provision of information, as appropriate and proper.

DoD Response: Concur. In the case of missing, captured, or abducted contractor personnel, the Government will assist in personnel recovery actions in accordance with DoD Directive 2310.2, Personnel Recovery.

Comment: Several respondents believe that the clause places an undue burden on the contractor and does not adequately address Government responsibilities or procedures; question the meaning of “point of identification”; and request that the clause be in accordance with DoDD 1300.22, Mortuary Affairs Policy.

DoD Response: Concur. DoD has modified the clause to state that mortuary affairs will be handled in accordance with DoD Directive 1300.22.

a. Mandatory evacuation.

Comment: Some respondents want to add, after “Combatant Commander,” the phrase “or other competent authority” or “or other authority over the U.S. Forces.”

DoD Response: Nonconcur. The combatant commander has the authority to delegate within the military chain of command. If the ambassador orders an evacuation, that is the intervention of a sovereign authority and the obligation to comply is not created by the contract. Procedures for evacuation are provided for in other regulations and are outside the scope of this rule.

Comment: Another respondent states that if the Government decides to evacuate contractor personnel, the Government should furnish transportation to do so.

DoD Response: Concur in part. The clause provides that the Government will provide assistance to the extent feasible to United States and third country national contractor personnel. Government guaranteed evacuation may or may not be possible in a fluid situation. Setting forth a promise that the Government may not be able to meet would be misleading to potential employees.

b. Nonmandatory evacuation—continued contract performance.

Comment: One respondent wants evacuation of contractor personnel and their dependents whenever conditions cause the United States to issue travel warnings or permit voluntary evacuation of non-essential U.S. Government personnel and dependants.

DoD Response: Nonconcur. The situations covered by this clause are not the type of situations in which DoD envisions that contractor personnel would have dependents with them. The Contractor has been warned in paragraph (b) about the risks of supporting the force in such operations, and contractor personnel who are unwilling to accept these risks should not be in these positions.

Comment: Another respondent requests modification of paragraph (l) to allow for evacuation of contractor employees due to the inherent dangers associated with job performance during deployment. This change is necessary to meet legal requirements that an employer provide a safe workplace for employees. Any clause governing deployment of contractor personnel should contain language excusing contractor performance in the event of refusal of contractor personnel to accompany the force or to perform work upon deployment.

DoD Response: Nonconcur. Since these are contracts to support the war fighter, by their nature these contracts are likely to involve some risk. It is the contractor's responsibility to ensure that it has willing personnel to fulfill the contract terms.

Comment: Several respondents recommend inserting “essential” between “meet” and “contractual” in the final sentence.

DoD Response: Nonconcur. A nonmandatory evacuation will not necessarily constitute a crisis situation as defined in DoDI 3020.37. DoD has added PGI guidance regarding identification in the contract of mission essential services that would require continued performance during crisis situations outside the United States. If the contract specifies which mission essential services must be continued during a crisis situation, and the non-mandatory evacuation order is during a crisis situation, then meeting the contractual obligations will only entail the continued performance of mission essential services. If the contract does not specify which services are mission essential, or the situation is not a crisis, the contracting officer can still designate that certain contractor personnel may leave.

a. Contractor responsibility for employee's personal insurance policies.

Comment: Several respondents object to this paragraph in the proposed rule, finding that it is confusing. One respondent finds an erroneous inference that contractors will or do provide employees with personal insurance policies over and above company-sponsored coverage, or that the contractor is responsible for any gaps that may exist in personal coverage. Several respondents believe that paragraph (m), placing responsibility on the contractor for all issues dealing with the exclusions contained in an employee's personal insurance policies, conflicts with the statutory requirements and protections of the Defense Base Act, 42 U.S.C. 1651 et seq., and the War Hazards Compensation Act, 42 U.S.C. 1701 et seq.

DoD Response: Concur in part. DoD agrees that the language is somewhat confusing and open to misinterpretation, and has therefore removed this paragraph in the final rule.

b. Defense Base Act, War Hazards Compensation Act, and other workers' compensation programs.

Comment: Some respondents recommend that the clause make reference to existing FAR and DFARS clauses regarding the Defense Base Act clauses and various workers' compensation programs. In doing so, contractors may avoid purchasing unnecessary coverage, the cost of which is passed to the Government. One respondent recommends that each of the clauses implementing the Defense Base Act and the War Hazards Compensation Act be identified for mandatory inclusion in contracts covered by this clause.

DoD Response: Concur in part. DoD has included guidance in PGI regarding additional clauses to consider when using the clause at DFARS 252.225-7040. The PGI guidance recommends consideration of either the clause at FAR 52.228-3, Worker's Compensation Insurance (Defense Base Act), or the clause at FAR 52.228-4, Worker's Compensation and War Hazard Insurance, in accordance with the clause prescriptions at FAR 28.309(a) and (b); use of the clause at FAR 52.228-7, Insurance-Liability to Third Persons, in cost-reimbursement contracts as prescribed at DFARS 228.311-1; and use of the clauses at FAR 52.251-1, Government Supply Sources, as prescribed at FAR 51.107, and DFARS 252.251-7000, Ordering from Government Supply Sources, as prescribed at DFARS 251.107.

Additionally, all other appropriate FAR and DFARS clauses will be included in the contract consistent with the prescriptions as to situations where they are applicable. This clause does not need to repeat the prescriptions for use of clauses that are already in the FAR and DFARS.

c. Government should facilitate larger risk pool.

Comment: One respondent believes that additional insurance coverage for war hazards, normally excluded from group life insurance policies, should be an allowable cost and recommends that the Government establish a mechanism for facilitating that coverage on an industry-wide basis in order to allow contractors to pool purchasing power.

DoD Response: Outside scope. The suggestions set forth, even if they were beneficial, are beyond the charter and authority of the DAR Council. DoD is participating in an interagency group, chaired by the Department of State, that is looking into insurance issues related to the Iraqi reconstruction.

a. Purpose of deployment processing.

Comment: One respondent recommended adding a sentence to state the purpose of deployment processing.

DoD Response: Concur. DoD has added language stating the purpose of deployment processing.

b. Joint Reception Center.

Comment: Another respondent suggests adding language about the Government notifying contractor personnel of all specific policies and requirements for personnel operating within the theater of deployment (IAW Joint Pub 4-0, Doctrine for Logistics Support of Joint Operations, Chapter V, Contractors in Theater).

DoD Response: Concur. The requirement to process through a Joint Reception Center in the theater of operations has been added to the clause.

a. Afford excusable delay relief and equitable adjustment allowance.

Comment: One respondent expresses a concern that, if a contractor is not able to obtain scarce items in order to meet contract performance, this will impact the ability of the contractor to meet the terms and conditions of the contract, and that a contractor should be afforded an excusable delay and allowance for an equitable adjustment.

DoD Response: Concur in part. DoD has revised the clause language to provide greater latitude to contractors for acquiring goods and services, so that they are not put in an untenable position. However, the processes and procedures for an equitable adjustment are already sufficiently covered under existing acquisition rules and regulations.

b. Let contractor know about scarce commodities prior to contract formation.

Comment: Such requirements to obtain approval of scarce commodities from the combatant commander's purchase review committee should be provided to the contractor prior to contract formation.

DoD Response: Concur in part. It is a good idea to provide this information in advance when available, but it is impossible to know all of the military operations that will occur during the period of performance on any specific contract, and it is not possible for the Government to provide contractors an advance listing of all those commodities that will be considered scarce.

c. Acquisition of weapons, ammunition, and personal protective gear.

Comment: One respondent is concerned that this language could prohibit or impede Private Security Companies from meeting their contract requirements and could compromise the physical safety of personnel.

DoD Response: Nonconcur. This paragraph in the clause covers local purchases of scarce goods such as clean water, fresh food, or building materials that might be in scarce supply in the local area, not weapons, ammunition, and personal protective gear. The clause has been revised to clarify that the contractor must coordinate local purchases of goods and services.

d. Further revision.

In addition, DoD has expanded the clause to cover scarce services, such as translators.

a. Object to paragraphs (p) and (q) of 252.225-70XX.

Comment: Many respondents had concerns about paragraphs (p) and (q). They are concerned that these paragraphs went beyond the “Changes” clause, to include what the contractor may consider out-of-scope changes. This could lead to the appearance of a personal services contract. Paragraph (p) could violate the Competition in Contracting Act and may lead to unauthorized commitments. The language raises questions about the Antideficiency Act in situations where the emergency exception may not apply. The contractor should not be put in position of determining whose orders take precedence (contracting officer or combatant commander) or whether a commander giving an order has appropriate authority.

DoD Response: Concur. The proposed language is not consistent with existing procurement law and policy. DoD has substantially revised paragraph (p) and deleted the paragraph (q) that was in the clause in the proposed rule.

b. Generally support the inclusion of (p) and (q), but recommended clarifying or expanding.

Comment: Some respondents support providing authority for the military commander to have the flexibility to direct contractors, recommend expanding it to make it available to the lowest level of military command, and recommend expanding it beyond its limitations to “all transportation, logistical and support requirements.” They recommend inclusion of a provision that prevents combatant commanders from ordering contractors to engage in armed conflict; recommend that paragraph (q) address all changes in emergency situations; and recommend that contractors be excused from complying with any order or directive that the contractor reasonably believes is contrary to law or international treaty. It is imperative that actions by commanders that are inconsistent with the contract be recognized as changes. The rule should make clear what types of direction a combatant commander may issue and should add language that requires 48-hour notification by the contractor to the contracting officer's representative.

DoD Response: Nonconcur. DoD does not recommend any revisions or expansions to the authorities of the combatant commander in paragraphs (p) and (q) of the clause in the proposed rule. The authority of combatant commanders to issue instructions is not dependent on contract provisions. Therefore, it is out of scope to address in this rule their authorities relative to hostile or non-hostile environments, or to address any documentation requirements flowing from their exercising such authority.

Instead of paragraphs (p) and (q) of the clause in the proposed rule, DoD has added a new paragraph (p) that refers to the Changes clause of the contract, but adds provision for coverage of changes in Government-furnished facilities, equipment, material, services, or site.

c. Generally agree with equitable adjustment for changes but recommend changes in wording or scope.

Comment: Several respondents request revision of the proposed clause to address the fundamental issue of reimbursement to the contractor for additional costs and risks associated with deployment of contractor personnel. One respondent requests an equitable adjustment for continued contract performance, which would require segregation of all costs incurred in support of deployed military forces involved in humanitarian, peacekeeping, contingency, or combat operations.

Another respondent recommends addition of language that would require the contracting officer to approve requests for equitable adjustment, absent fraud, falsehood, or willful misconduct on the contractor's part. One respondent recommends addition of a new paragraph allowing the contractor to request equitable adjustment for unexpected costs beyond their reasonable control. Another respondent is concerned that the proposed rule would limit the ability of a contractor to submit a request for equitable adjustment to the situations described in (p) and (q). Therefore, other types of claims such as for delay and disruption or for third-party liability not covered by insurance appear to be proscribed.

DoD Response: Nonconcur. The authority of a combatant commander to issue orders is not a function of contract language, and remedies for additional costs incurred, if they exist, are either addressed by existing procurement laws and regulations (e.g., constructive changes doctrine) or found in non-contractual remedies. As already stated, DoD has substantially modified paragraph (p) and deleted paragraph (q) in its entirety, and reaffirmed reliance on the Changes clause of the contract.

Comment: Some respondents are concerned about the impact this paragraph would have on subcontracts if the whole clause is flowed down. There is concern that this paragraph commits the Government to undertake affirmative support of such subcontractors. Some respondents question how privity of contract between the prime and their subcontracts will be handled when combatant commanders or senior military personnel give directions to subcontract personnel.

DoD Response: The intent of most of the areas addressed under this clause is to ensure that all contractor personnel, prime and subcontract personnel, who accompany and support the force have the kind of support they need to ensure their safety and security. The intent is not for the Government to establish a privity of contract relationship with the subcontractors. Furthermore, paragraph (p) has been substantially modified and (q) of the clause in the proposed rule has been deleted.

Comment: Only one respondent commented on the information collection requirements of the proposed rule. That respondent considers that the proposed rule constitutes an information collection requirement which imposes a burden on contractors because, in the event of direction issued to a contractor by a Government official other than a contracting officer, the contractor must comply with FAR 43.104, Notification of contract changes. The respondent contends that the proposed clause provides authority for combatant commanders and hundreds of subordinate military commanders to issue orders to the contractor, for which the contractor must execute notices and records as required by FAR 43.104.

DoD Response: Nonconcur. The clause at 52.243-7, Notification of Changes, already has an approved information collection requirement burden under OMB Clearance Number 9000-026, which covers all Government agencies that use the FAR clause. Moreover, with the removal of paragraph (q) from the final clause, there should no more than an average number of such notifications required.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not 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 does not impose economic burdens on contractors. The purpose and effect of this rule is to relieve the current perceived burden on contractors operating in a contingency environment without consistent DoD guidance or a standardized clause. By establishing a standardized clause, spelling out the standardized rules such as the need for a Letter of Authorization, and providing specific guidelines on force protection and resuscitative medical care, this rule effectively reduces the burden on small businesses. It establishes a framework within which it will be easier for contractors to operate overseas. In addition, the availability of Government deployment centers in the United States will make it easier for small businesses to meet all deployment requirements. DoD did not receive any comments with regard to the Regulatory Flexibility Act or the impact of the proposed rule on small businesses.

This rule does not impose any new information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. Although the clause requires contractors to maintain (1) a current plan on file showing how the contractor would replace employees who are unavailable for deployment or who need to be replaced during deployment, and (2) a current list of all employees in the area of operations in support of the military force, DoD believes that these requirements are usual and customary and do not exceed what a contractor would maintain in the normal course of business.

This emergency rule is accessible via the Internet at the Office of the Federal Register's website at www.gpoaccess.gov/fr/index.html. Background information and documents are available at the NMFS Northwest Region website at www.nwr.noaa.gov/1sustfsh/gdfsh01.htm. and at the Council's website at www.pcouncil.org.

Federal regulations at 50 CFR 660.370(c) authorize the use of routine management measures in the groundfish fishery off Washington, Oregon, and California for the purpose of rebuilding and protecting overfished or depleted stocks. This action is consistent with the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) requirements on the protection and rebuilding of overfished species.

In mid-April 2005, a representative of a Seattle-based fishing company contacted NMFS about the possibility of using one of its vessels to operate off Washington State in the West Coast open access fishery for spiny dogfish, Squalus acanthias. The vessel in question is a freezer-longliner 124.5 ft (38.3 m) in length. Vessel operators were intending to both catch and process dogfish and other groundfish species at sea in May-June 2005. The West Coast open access groundfish fishery is open to any vessel that is otherwise authorized to fish under U.S. Coast Guard safety, registration, and other requirements. Under the 2005-2006 groundfish fishery specifications and management measures, dogfish is part of the “other fish” complex. Dogfish is an unassessed species; NMFS anticipates that there will be adequate data available for its first assessment in time for the 2007 assessment season. There is no limit on the amount of dogfish that may be taken in either the limited entry or open access fisheries (69 FR 77012, December 23, 2004.) NMFS's normal preference would be to coordinate with the Council on accommodating this vessel into the West Coast groundfish fisheries management. Because the Council does not meet again until June 13-17, 2005, the agency believes that it must take action in advance of any formal coordination with the Council. In developing this emergency rule, NMFS consulted with representatives from the three West Coast states, the Council chair and staff, and with representatives from the groundfish treaty tribes.

Under Federal groundfish regulations at 50 CFR 660.314(c), an at-sea catcher-processor shorter than 125 ft (38.4 m) in length must carry one NMFS-certified observer for each day that the vessel is used to take, retain, receive, land, process, or transport groundfish. Pursuant to § 660.314(e), NMFS may additionally require such vessels to carry NMFS staff or individuals authorized by NMFS, in addition to an observer provided by a permitted observer provider. The freezer-longliner intending to fish in the open access fishery has made plans to carry and pay for one observer pursuant to § 660.314(c) and has been cooperating with NMFS in its request that the vessel carry an additional NMFS West Coast Groundfish Observer Program (WCGOP) staff observer. These observers will allow NMFS to monitor the fishing and processing activities of this vessel on a daily basis, providing valuable bycatch data on this fishery.

The freezer-longliner intending to fish in the open access fishery for dogfish is of a notably larger harvest capacity than the West Coast vessels that traditionally participate in the longline dogfish fishery. Traditional West Coast longline dogfish vessels use 1-2,000 hooks per longline set, whereas freezer-longliners of this vessel's class will use 10-20,000 hooks per set. NMFS reviewed observer data from this and similar vessels in their operations off Alaska in order to compare their catch capabilities against that of vessels in the West Coast longline dogfish fleet. Vessels of this class routinely take 200 mt or more of groundfish per month. In 2004, the West Coast dogfish longline fleet landed 205 mt of dogfish, with vessels taking a high of 40-50 mt each of landed groundfish catch per month. These numbers are not a straight comparison because the freezer-longliner catch is in total (landed + discard) catch, whereas the traditional dogfish longliner boat catch is in landed catch. There is, however, a clear disparity between the amount of groundfish that a freezer-longliner of this vessel's class is able to take when compared against the amount of groundfish that a traditional West Coast longline vessel is able to take.

In the preamble to its proposed rule to implement the 2005-2006 groundfish harvest specifications and management measures, NMFS discussed its three-part strategy to meet Magnuson-Stevens Act mandates on minimizing and monitoring bycatch: (1) Gather data through a standardized reporting methodology on the amount and type of bycatch occurring in the fishery; (2) assess this data through bycatch models to estimate when, where, and with which gear types bycatch of varying species occurs; and (3) implement management measures through Federal fisheries regulations that minimize bycatch and bycatch mortality (69 FR 56550, September 21, 2004). Bycatch management and monitoring in the West Coast groundfish fisheries is particularly focused on monitoring the total catch of overfished groundfish species. There are eight overfished groundfish species, several of which are taken in a broad array of commercial and recreational fisheries with a wide variety of gear types. Based on observer, survey, and exempted fishing permit data, NMFS believes that canary and yelloweye rockfish are the overfished species most likely to be negatively affected by an increase in open access dogfish fishing effort off the northern West Coast. Under Federal regulations at § 660.383(a), retention of canary and yelloweye rockfish is prohibited in the open access fisheries. Current NMFS data systems are already capable of swiftly receiving and aggregating the observer data that will be generated through a freezer-longliner's operating in West Coast water, thus incorporating this vessel into the first part of NMFS's bycatch strategy can be accommodated through regular NMFS programs.

NMFS plans to provide its first release of WCGOP data on the open access fisheries in time for the June 13-17, 2005, Council meeting in Foster City, CA. For the 2005-2006 management cycle, NMFS and the Council developed estimates of total overfished species catch for the directed open access fisheries based on historic catch levels during years when fishing was less constrained by overfished species rebuilding efforts. Overfished species total catch estimates for the incidental open access fisheries, those fisheries that do not target groundfish directly but which may take groundfish incidentally, were derived from a combination of historic catch and state observation data. The combined estimated effects of all of the fisheries known to take groundfish either directly or incidentally is summarized in Table 2-13a and 2-13b of the FEIS for the 2005-2006 groundfish harvest specifications and management measures. This table, informally known in the Council process as the “bycatch scorecard,” is used to both provide a baseline for expected effects of the different fisheries on overfished species and to track those effects during a fishing year, as they may be affected by new data.

In the bycatch scorecard, 1.0 mt of canary rockfish and 0.6 mt of yelloweye rockfish are expected to be taken in the 2005 directed open access fisheries. An additional 1.8 mt of canary rockfish and 0.8 mt of yelloweye rockfish are expected to be taken in the 2005 incidental open access fisheries, those fisheries that do not target groundfish but which may take groundfish incidentally. Both of these species also have unassigned amounts of fish that are not currently expected to be taken in any fishery. The bycatch scorecard did not anticipate the entrance of a vessel like a 124.5 ft (38.3 m) freezer-longliner into the open access fisheries. There are no Federal fishery regulations, however, prohibiting such a vessel from entrance into the open access fishery. Barring further recommendations from the Council, any bycatch of canary and yelloweye rockfish taken in the open access longline dogfish fishery would need to be accommodated within the current bycatch scorecard amounts of 1.0 mt of canary rockfish and 0.6 mt of yelloweye rockfish for the directed open access fisheries. Constraining the freezer-longliner to the directed open access fishery's bycatch scorecard amounts would meet the second part of NMFS's bycatch strategy of managing fisheries to attribute bycatch estimates of overfished species to their appropriate fishery sectors and gear types.

Without the action finalized in this emergency rule, NMFS does not believe that it would have adequate Federal regulations to accommodate the entrance of a freezer-longliner into the open access dogfish fishery while minimizing bycatch and preventing overfished species optimum yields (OYS) from being exceeded. NMFS is implementing this emergency rule to ensure that the third part of NMFS's bycatch strategy of minimizing bycatch through appropriate regulatory measures is met for this and any other similar entrants to the open access fishery.