[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39199-39200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18500]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 3 and 52

[FAC 90-40; FAR Case 96-300; Item III]
RIN 9000-AH11


Federal Acquisition Regulation; Gratuities

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

ACTION: Interim rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed on an interim rule amending 
the Federal Acquisition Regulation (FAR) to implement Section 801 of 
the National Defense Authorization Act for Fiscal Year 1996 (Public Law 
104-106), which amended 10 U.S.C. 2207, generally referred to as the 
Gratuities Act, to make it applicable only to contracts exceeding the 
simplified acquisition threshold. This regulatory action was not 
subject to Office of Management and Budget review under Executive Order 
12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 
804.

DATES: Effective Date: July 26, 1996.-
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before September 24, 1996 to be 
considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (MVR), 18th & F 
Streets, NW., Room 4037, Washington, DC 20405.
    Please cite FAC 90-40, FAR case 96-300, in all correspondence 
related to this case.

FOR FURTHER INFORMATION CONTACT: Mr. Ralph DeStefano at (202) 501-1758 
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 90-40, FAR case 96-300.

SUPPLEMENTARY INFORMATION:

A. Background

    Section 801 of the National Defense Authorization Act for Fiscal 
Year 1996 (Public Law 104-106), added a subsection (b) to 10 U.S.C. 
2207, Expenditure of appropriations: limitation. Prior to its 
amendment, 10 U.S.C. 2207 prohibited the spending of DoD appropriated 
money (other than under a contract for personal services) unless the 
Government had an express right to terminate the contract if the 
contractor offered or gave a gratuity to a Government employee to 
obtain the contract or to receive favorable treatment under the 
contract. Subsection (b) of 10 U.S.C. 2207 exempts contracts which do 
not exceed the simplified acquisition threshold from this prohibition.-
    FAR Subpart 3.2, Contractor Gratuities to Government Personnel, 
implements 10 U.S.C. 2207 and applies to all executive agencies except 
for that portion concerning exemplary damages, which applies only to 
DOD. FAR Subpart 3.2 prescribed the use of FAR clause 52.203-3, 
Gratuities, in solicitations and contracts, except those for personal 
services and those between military departments or defense agencies and 
foreign governments that do not obligate DOD appropriated funds. This 
interim rule amends FAR Subpart 3.2 to exempt solicitations and 
contracts which do not exceed the simplified acquisition threshold from 
the prescribed use of the clause.

B. Regulatory Flexibility Act

    This interim rule is not expected to have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., because only a 
small number of Federal contractors have been subject to action under 
the Gratuities clause. An Initial Regulatory Flexibility Analysis has, 
therefore, not been performed. Comments from small entities concerning 
the affected FAR subpart will be considered in accordance with section 
610 of the Act. Such comments must be submitted separately and should 
cite 5 U.S.C. 601 et seq. (FAC 90-40, FAR case 96-300), in 
correspondence.

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.

[[Page 39200]]

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
to implement Section 801 of the National Defense Authorization Act for 
Fiscal Year 1996 (Public Law 104-106), which was effective upon 
enactment (February 10, 1996). However, pursuant to Public Law 98-577 
and FAR 1.501, public comments received in response to this interim 
rule will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 3 and 52

    Government procurement.

    Dated: July 16, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Parts 3 and 52 are amended as set forth below:-
    1. The authority citation for 48 CFR Parts 3 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 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST-

    2. Section 3.202 is revised to read as follows:


3.202  Contract clause.-

    The contracting officer shall insert the clause at 52.203-3, 
Gratuities, in solicitations and contracts with a value exceeding the 
simplified acquisition threshold, except those for personal services 
and those between military departments or defense agencies and foreign 
governments that do not obligate any funds appropriated to the 
Department of Defense.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    3. Section 52.203-3 is amended by revising the introductory text to 
read as follows:


52.203-3  Gratuities.

    As prescribed in 3.202, insert the following clause:
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[FR Doc. 96-18500 Filed 7-25-96; 8:45 am]
BILLING CODE 6820-EP-P