[Federal Register Volume 60, Number 122 (Monday, June 26, 1995)]
[Rules and Regulations]
[Pages 33064-33066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14726]



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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 9, 22, 28, 44, and 52

[FAC 90-28; FAR Case 94-801]
RIN 9000-AG22


Federal Acquisition Regulation; Debarment, Suspension, and 
Ineligibility (Ethics)

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

ACTION: Final rule.

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SUMMARY: This final rule is issued pursuant to the Federal Acquisition 
Streamlining Act of 1994, Public Law 103-355 (the Act). The Federal 
Acquisition Regulatory Council is amending the Federal Acquisition 
Regulation (FAR) to reflect the policy of ensuring that suspensions, 
debarments, and other exclusions from procurement and nonprocurement 
activities receive reciprocal Government-wide effect as directed by 
Executive Order (E.O.) 12689, dated August 16, 1989, and Section 2455, 
Uniform Suspension and Debarment, of the Act. This regulatory action 
was subject to Office of Management and Budget review under Executive 
Order 12866, dated September 30, 1993.

EFFECTIVE DATE: August 25, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Julius Rothlein, Ethics Team 
Leader, at (703) 697-4349 in reference to this FAR case. For general 
information, contact the FAR Secretariat, Room 4037, GS Building, 
Washington, DC 20405, (202) 501-4755. Please cite FAC 90-28, FAR case 
94-801.

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Acquisition Streamlining Act (FASA) of 1994, Pub. L. 
103-355 (the Act), provides authorities that streamline the acquisition 
process and minimize burdensome Government-unique requirements. Major 
changes in the acquisition process as a result of the Act's 
implementation include changes in the areas of Commercial Item 
Acquisition, Simplified Acquisition Procedures, the Truth in 
Negotiations Act, and introduction of the Federal Acquisition Computer 
Network (FACNET). In order to promptly achieve the benefits of the 
provisions of the Act, the Government is issuing implementing 
regulations on an expedited basis.
    FAR case 94-801 originated because Section 2455 of Public Law 103-
355 was enacted to remedy the current situation where suspensions, 
debarments, and other exclusions from procurement and nonprocurement 
activities do not have reciprocal Government-wide effect. The concept 
of reciprocity for procurement and nonprocurement suspension and 
debarment actions is not new. Since August 1989 there has been an 
effort to do by executive order (i.e., E.O. 12689), what section 2455 
now prescribes by law. That earlier effort was worked on by a committee 
known as the ``Interagency Committee on Debarment and Suspension.'' 
This Interagency Committee is made up of 16 of the Federal executive 
agencies that impose nonprocurement suspensions and debarments. By 
October 1994 the agencies in an ad hoc group reached agreement on the 
language that would implement the concept of reciprocity and be 
consistent with the principles of the National Performance Review. The 
language in FAR 9.401, Applicability, has been coordinated with the ad 
hoc group of agencies. The changes to the procurement and 
nonprocurement rules implement Section 2455 and E.O. 12689 by ensuring 
that suspensions, debarments, and other exclusions from procurement and 
nonprocurement activities have reciprocal Government-wide effect.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities under the Regulatory Flexibility Act, 5 U.S.C. 
601, et seq., because only a very small percentage of Federal 
contractors are debarred or suspended.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collections of information from offerors, contractors, 
or members of the public which require the approval of the Office of 
Management and Budget under 44 U.S.C. 3501, et seq.

D. Public Comments

    A proposed rule was published on December 20, 1994, at 59 FR 65623. 
Ten substantive comments were received from six commenters. The FASA 
Implementation Team fully considered all comments received. However, no 
changes to the case were considered necessary as a result of the public 
comments. The team's full analysis and disposition of the comments may 
be obtained from the FAR Secretariat. The most significant comment and 
its disposition follows:
    Comment: One commenter recommended the deletion of the category 
``proposed for debarment'' from the FAR procurement procedures, in 
order to ensure consistency with the nonprocurement rule which does not 
place that category on the GSA List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs.
    Response: Disagree. The agencies do not believe there is a need to 
change the rule so that the effect of a proposed debarment is the same 
under both debarment and suspension systems. The request to make the 
two rules the same on this matter misconstrues the purpose and effect 
of the reciprocity effort.
    The purpose of the proposed reciprocity rule is to ensure that, 
once one agency takes action to exclude a person and that person is 
placed on the List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs, all agencies will honor that determination. In 
deciding whether to take an action to exclude a person, the agency 
considers whether a person's present responsibility is affected such 
that the person poses a risk to the [[Page 33065]] Federal Government. 
It was not the intent that the decision to give reciprocity would 
require the agencies to change the two debarment and suspension systems 
and establish identical procedures for excluding persons under both the 
FAR and the Common Rule.
    Finally, to ensure uniformity with the Nonprocurement Common Rule 
(published at 59 FR 65607, December 20, 1994), other technical changes 
were made to section 9.401.

List of Subjects in 48 CFR Parts 9, 22, 28, 44, and 52

    Government procurement.

    Dated: May 30, 1995.
Capt. Barry L. Cohen, SC, USN,
Project Manager for the Implementation of the Federal Acquisition 
Streamlining Act of 1994.
Federal Acquisition Circular

    Federal Acquisition Circular (FAC) 90-28 is issued under the 
authority of the Secretary of Defense, the Administrator of General 
Services, and the Administrator for the National Aeronautics and Space 
Administration.
    Unless otherwise specified, all Federal Acquisition Regulation 
(FAR) and other directive material contained in FAC 90-28 is effective 
August 25, 1995.
Eleanor R. Spector,
Director, Defense Procurement.
Ada M. Ustad,
Associate Administrator for Acquisition Policy, General Services 
Administration.
Tom Luedtke,
Deputy Associate Administrator for Procurement, NASA, May 18, 1995.

    Therefore, 48 CFR Parts 9, 22, 28, 44, and 52 are amended as set 
forth below:
    1. The authority citation for 48 CFR Parts 9, 22, 28, 44, and 52 
continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 9--CONTRACTOR QUALIFICATIONS

    2. Section 9.105-1(c)(1) is revised to read as follows:


9.105-1  Obtaining information.

* * * * *
    (c) * * *
    (1) The List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs maintained in accordance with subpart 9.4.
* * * * *
    3. Section 9.207(a)(9) is revised to read as follows:


9.207  Changes in status regarding qualification requirements.

* * * * *
    (a) * * *
    (9) The source is on the List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs (see subpart 9.4); or
* * * * *
    4. Section 9.401 is revised to read as follows:


9.401  Applicability.

    In accordance with Public Law 103-355, Section 2455 (31 U.S.C. 
6101, note), and Executive Order 12689, any debarment, suspension or 
other Government-wide exclusion initiated under the Nonprocurement 
Common Rule implementing Executive Order 12549 on or after August 25, 
1995 shall be recognized by and effective for Executive Branch agencies 
as a debarment or suspension under this subpart. Similarly, any 
debarment, suspension, proposed debarment or other Government-wide 
exclusion initiated on or after August 25, 1995 under this subpart 
shall also be recognized by and effective for those agencies and 
participants as an exclusion under the Nonprocurement Common Rule.
    5. Section 9.403 is amended by removing the definition Parties 
Excluded from Procurement Programs and adding, in alphabetical order, 
the definitions List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs and Nonprocurement Common Rule to read as 
follows:


9.403  Definitions.

* * * * *
    List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs means a list compiled, maintained and 
distributed by the General Services Administration (GSA) containing the 
names and other information about parties debarred, suspended, or 
voluntarily excluded under the Nonprocurement Common Rule or the 
Federal Acquisition Regulation, parties who have been proposed for 
debarment under the Federal Acquisition Regulation, and parties 
determined to be ineligible.
    Nonprocurement Common Rule means the procedures used by Federal 
Executive Agencies to suspend, debar, or exclude individuals or 
entities from participation in nonprocurement transactions under 
Executive Order 12549. Examples of nonprocurement transactions are 
grants, cooperative agreements, scholarships, fellowships, contracts of 
assistance, loans, loan guarantees, subsidies, insurance, payments for 
specified use, and donation agreements.
* * * * *
    6. Section 9.404 is amended--

--by revising the section heading to read as set forth below;
--by revising paragraphs (a)(1), (b) introductory text, (c)(5), (d) 
introductory text, (d)(3); and
--in paragraph (c)(3) by removing the word ``consolidated''. The 
revised text reads as follows:


9.404  List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs.

    (a) * * *
    (1) Compile and maintain a current list of all parties debarred, 
suspended, proposed for debarment, or declared ineligible by agencies 
or by the General Accounting Office;
* * * * *
    (b) The List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs shall indicate--
* * * * *
    (c) * * *
    (5) Establish procedures to provide for the effective use of the 
List of Parties Excluded from Federal Procurement and Nonprocurement 
Programs, including internal distribution thereof, to ensure that the 
agency does not solicit offers from, award contracts to, or consent to 
subcontracts with contractors on the List of Parties Excluded from 
Federal Procurement and Nonprocurement Programs, except as otherwise 
provided in this subpart; and
* * * * *
    (d) Information on the List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs is available as follows:
* * * * *
    (3) A telephone inquiry service to answer general questions about 
entries on the List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs is also available by calling GSA at (202) 501-
4873 or 501-4740. The inquiry will be answered within one working day.


9.405  [Amended]

    7. Section 9.405 is amended--

--in paragraph (b) by removing the phrase ``Parties Excluded from 
Procurement Programs'' and inserting in its place ``List of Parties 
Excluded from Federal Procurement and Nonprocurement Programs'';
--in paragraph (d)(1) by removing the phrase ``Procurement Programs'' 
and inserting in its place ``Federal [[Page 33066]] Procurement and 
Nonprocurement Programs''.


9.405-2  [Amended]

    8. Section 9.405-2 is amended--

--in the third sentence of paragraph (b) introductory text by removing 
the phrase ``parties' inclusion on the list of Parties Excluded from 
Procurement Programs'' and inserting in its place ``party's inclusion 
on the List of Parties Excluded from Federal Procurement and 
Nonprocurement Programs'';
--in paragraphs (b)(2) and (b)(3) by removing the phrase ``list of 
Parties Excluded from Procurement Programs'' and inserting in its place 
``List of Parties Excluded from Federal Procurement and Nonprocurement 
Programs''.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS


22.1025  [Amended]

    9. Section 22.1025 is amended in the first sentence by removing the 
phrase ``lists of Parties Excluded from Federal Procurement or'' and 
inserting in its place ``List of Parties Excluded from Federal 
Procurement and''.

PART 28--BONDS AND INSURANCE


28.203-7  [Amended]

    10. Section 28.203-7 is amended in paragraphs (c) and (d) by 
removing the phrase ``list entitled Parties Excluded from Procurement 
Programs'' and inserting in its place ``List of Parties Excluded from 
Federal Procurement and Nonprocurement Programs''.

PART 44--SUBCONTRACTING POLICIES AND PROCEDURES


44.202-2  [Amended]

    11. Section 44.202-2 is amended in paragraph (a)(13) by removing 
the phrase ``Consolidated List of Debarred, Suspended, and Ineligible 
Contractors'' and inserting in its place ``List of Parties Excluded 
from Federal Procurement and Nonprocurement Programs''.


44.303  [Amended]

    12. Section 44.303 is amended in paragraph (c) by removing the 
phrase ``list of Parties Excluded from Procurement Programs'' and 
inserting in its place ``List of Parties Excluded from Federal 
Procurement and Nonprocurement Programs''.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


52.209-6  [Amended]

    13. Section 52.209-6 is amended by revising the date in the heading 
of the clause to read ``(AUG 1995)'' and in paragraphs (c) introductory 
text, (c)(2), and (c)(3) by removing the phrase ``Procurement 
Programs'' and inserting in its place ``Federal Procurement and 
Nonprocurement Programs''.

[FR Doc. 95-14726 Filed 6-23-95; 8:45 am]
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