[Federal Register Volume 61, Number 228 (Monday, November 25, 1996)]
[Rules and Regulations]
[Pages 59835-59839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29990]


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NATIONAL SCIENCE FOUNDATION

45 CFR Parts 680, 681, 682, 683 and 684

RIN 3145-AA29


Repeal of Standards of Ethical Conduct for Employees of the 
National Science Foundation and Rules of Practice for the Foundation

AGENCY: National Science Foundation.

ACTION: Interim rule, with request for comments.

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SUMMARY: The National Science Foundation is repealing most of its 
conflict-of-interest rules and standards of conduct regulations. This 
action is necessary, because they were largely superseded by the 
Standards of Ethical Conduct for Employees of the Executive Branch 
(Standards) issued by the Office of Government Ethics (OGE) and by the 
NSF's Supplemental Standards of Ethical Conduct for Employees of the 
National Science Foundation (Supplemental Standards), issued by NSF, 
with OGE's concurrence. The NSF is also promulgating rules of practice, 
under authority independent of 5 CFR part 2635, which generally 
maintain and, in some instances, replace current NSF practices. In 
addition the NSF is temporarily retaining its regulatory waivers issued 
under 18 U.S.C. 208(b)(2).

DATES: Interim rule effective November 25, 1996. Comments are invited 
and must be received on or before January 24, 1997. Comments will then 
be evaluated to determine what changes, if any, are needed.

ADDRESSES: Send comments to the Office of the General Counsel, National 
Science Foundation, 4201 Wilson Boulevard, Room 1265, Arlington, VA 
22230.

FOR FURTHER INFORMATION CONTACT: Charles S. Brown, Designated Agency 
Ethics Official, Office of the General

[[Page 59836]]

Counsel, National Science Foundation, telephone (703) 306-1060, FAX 
(703) 306-0149.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 7, 1992, the Office of Government Ethics published 
Standards of Ethical Conduct for Employees of the Executive Branch that 
are now codified at 5 CFR part 2635. Today, with OGE's concurrence, the 
NSF has published in the Federal Register Supplemental Standards of 
Ethical Conduct for Employees of the National Science Foundation. These 
Supplemental Standards are being codified in new chapter XLIII of 5 
CFR, consisting of part 5301.
    The Government-wide Standards and NSF's Supplemental Standards are 
intended to replace most of the NSF's conflict-of-interest rules and 
standards of conduct. Therefore, this interim rule repeals most of 
NSF's previous conflict-of-interest and standards of conduct 
regulations. This interim rule also prescribes additional rules of 
practice necessary to maintain public confidence in the integrity of 
NSF's procedures, as permitted in 5 CFR 2635.105(c)(93). The rules of 
practice are based on authority independent of 5 CFR part 2635.
    Finally, as permitted in 5 CFR 2635.402(d)(1), this interim rule 
retains NSF's regulatory waivers issued under old 18 U.S.C. 208(b)(2) 
(1988 edition).

II. Analysis of the Regulations

    The National Science Foundation is repealing the old subpart A of 
45 CFR part 680, superseded by the Standards and Supplemental 
Standards, and replacing it with rules of agency practice for NSF (new 
45 CFR 680.10-680.13, as discussed below).

45 CFR 680.10  Definitions; Cross-References to Employee Ethical 
Conduct Standards and Financial Disclosure Regulations

    Section (a) sets forth definitions that apply to the interim rule. 
For purposes of this final rule, paragraph (a)(2) defines ``employee'' 
to include anyone working at NSF under the Intergovernmental Personnel 
Act. But the definition excludes special Government employees, 
recognizing that Sec. 680.11 of the final rule does not apply to 
special Government employees (as that term is defined in 18 U.S.C. 
202(a)), and that Sec. 680.12 applies differently to former special 
Government employees who worked for NSF on no more than sixty days in 
the previous year.
    The definition of ``award'' in paragraph (a)(1) of Sec. 680.10 is 
intended to make it clear that, for purposes of interpreting the 
restrictions contained in Secs. 680.11 and 680.12 of the interim rule, 
the term is to be broadly construed to cover financial arrangements 
made by the Government including, but not limited to, those that are in 
the nature of a grant, contract, cooperative agreement, or loan. The 
definition of ``proposal'' in paragraph (a)(4) of Sec. 680.10 is 
include to make it clear that, for similar purposes, the term covers 
any application for such a financial arrangement, even though it is not 
technically denominated a ``bid'' or ``proposal.''
    A definition of ``institution'' is provided in Sec. 680.10(a)(3), 
since NSF awards are ordinarily made to ``institutions.'' Paragraph 
(a)(3) makes it clear that the term is to be interpreted broadly, but 
the definition treats consortia as separate ``institutions'' from the 
individual universities that belong to them.
    Paragraph (b) of Sec. 608.10 is a cross referencing provision. It 
reminds employees of the need to refer to the OGE Standards (5 CFR part 
2635), NSF's supplemental Standards (5 CFR part 5301), and the OGE 
financial disclosure regulations (5 CFR part 2634).

45 CFR 680.11  Staff Involvement With NSF Proposals and Awards

    Section 680.11(a)(1) recognizes that many scientists, engineers, 
and educators interrupt active research and teaching careers to spend a 
year or two at NSF. They then return to research and teaching, usually 
at the same institution from which they came. Many of them, and a few 
NSF permanent employees, retain some interest or association with the 
NSF-supported work--for example, an employee may continue supervising 
the work of a graduate student who is completing a thesis or may retain 
intellectual connection with a laboratory or project to which he or she 
will be returning. Section 680.11 codifies current NSF rules of 
practice designed to prevent conflicts of interest in such situations. 
Section 680.11(a)(2) requires that a ``substitute principal 
investigator'' be appointed to take responsibility for the work and 
equipment and for representing the institution in dealings with NSF. 
Section 680.11(a)(3) provides that a substitute principal investigator 
need not be appointed when work on an award is to be suspended while an 
individual is employed at NSF.
    Section 680.11(b) also codifies current restrictions on employee 
involvement in certain NSF proposals. It avoids asking active 
investigators to sacrifice established support for their work in 
research or education as a price of public service. However, it also 
avoids any actuality or appearance that such service is undertaken in 
the expectation that it will result in new or increased support or 
favored treatment from NSF. Section 680.11(b)(1) requires that NSF not 
entertain any proposal in which a current NSF employee would be a 
senior investigator or the like, unless the proposal is for 
continuation or extension of work on which the employee was involved 
before coming to NSF. Section 681(b)(2) requires that any such proposal 
for continuation or extension of previous work be submitted by someone 
other than an NSF employee.
    Sections 680.11(a) and (b) are published as part of 45 CFR part 680 
rather than as part of the NSF's supplemental agency regulations at 5 
CFR part 5301 because the limitations and obligations imposed apply 
mainly to grantees. They complement restrictions on employee conduct 
imposed by 5 CFR part 5301. Section 680.11(c) cross-references a 
provision in 5 CFR part 5301 barring employee receipt of compensation 
or reimbursements from NSF awards. The cross-referenced provision is 
contained in NSF's Supplemental Standards.

45 CFR 680.12  One-Year NSF Post-Employment Restrictions

    Section 680.12(a) reaffirms NSF's longstanding one-year post-
employment restriction on dealings with NSF officials on proposals, 
projects, and other particular matters. This prohibition also applies 
to former special Government employees who worked for NSF on more than 
60 days in the previous twelve months.
    Section 680.12(b) makes it clear that NSF's post-employment 
restriction is in addition to any statutory post-employment 
restrictions. This restriction is imposed on the basis of NSF's 
authority to regulate practice before it with respect to grants and 
other matter. This section permits the NSF General Counsel to grant 
limited exceptions to the rule, when such post-employment 
representation would not be barred by statute.
    Section 680.12(c) makes it clear that the NSF post-employment 
restriction applies to all ``particular matters,'' not just to those 
involving specific parties.
    Section 680.12(d) explains that certain types of contacts by former 
NSF employees do not violate NSF's post-employment restriction--
expression of personal views on policy issues, communications of a 
personal nature, litigation appearances on the former employee's own 
behalf, and

[[Page 59837]]

presentations of scientific or technical information.
    Section 680.12(e) provides for appointment of a substitute 
negotiator to perform representational functions when a former employee 
is disqualified from doing so.

45 CFR 680.13  Purposes for ``Substitute'' Requirements

    Section 680.13 explains the purposes underlying the requirements 
for appointment of substitute principal investigators and substitute 
negotiators. The requirements flag the proposals or awards affected by 
the applicable restrictions, and identify individuals with whom the NSF 
staff can appropriately deal. Designation of a substitute principal 
investigator to replace a current NSF employee also identifies an 
individual responsible for the work and equipment, and reminds all 
concerned that the NSF employee so replaced will be devoting his or her 
primary energy to the performance of his or her NSF duties.

Other Regulatory Actions

    The National Science Foundation is also repealing one interpretive 
section in Subpart B of 45 CFR (old Sec. 680.20), but leaving in 
effect, as newly redesignated Sec. 680.20, NSF's current regulatory 
waivers issued under 18 U.S.C. 208(b)(2), as permitted in 5 CFR 
2635.402(d)(1).
    The National Science Foundation is also repealing the remaining 
former NSF conflict-of-interests rules and standards of conduct in 
parts 681, 682, 683, and 684. The Foundation expects to revise 
procedural and interpretive provisions and incorporate them as 
appropriate into internal NSF explanatory issuances as permitted in 5 
CFR 2635.105(c).

III. Matters of Regulatory Procedure

Administrative Procedure Act

    Pursuant to section 553 (b) and (d) of title 5 of the United States 
Code, the National Science Foundation has found that good cause exists 
for waiving the general requirements of notice of proposed rulemaking 
and delayed effective date. These requirements are being waived because 
the interim regulations are rules of agency organization, procedure, 
and practice and because it is in the public interest that these new 
rules, which continue existing NSF restrictions and practices in many 
respects, become effective as soon as possible.

Executive Order 12866

    In promulgating this interim rule, the National Science Foundation 
has adhered to the regulatory philosophy and the applicable principles 
of regulation set forth in section 1 of Executive order 12866, 
Regulatory Planning and Review. This regulation has not been reviewed 
by the Office of Management and Budget under that Executive Order, as 
it deals with agency organization, management, and personnel matters 
and is not, in any event, deemed a significant rule thereunder.

Regulatory Flexibility Act

    The National Science Foundation has determined under the Regulatory 
Flexibility Act (5 U.S.C. chapter 6) that this regulation will not have 
significant economic impact on a substantial number of small entities 
because it primarily affects NSF employees, as well as prospective and 
former NSF employees.

Paperwork Reduction Act

    The National Science Foundation has determined that the Paperwork 
Reduction Act (44 U.S.C. chapter 35) does not apply, because this 
regulation does not contain any information collection requirements 
that require the approval of the Office of Management and Budget.

List of Subjects in 45 CFR Parts 680, 681, 682, 683, and 684

    Conduct standards, Conflict of interests, Ethical standards, 
Executive Branch Standards of Conduct, Government employees, National 
Science Foundation, Rules of practice.

    Dated: November 14, 1996.
Lawrence Rudolph,
General Counsel, National Science Foundation.

    For the reasons set forth in the preamble, the National Science 
Foundation is amending chapter VI of title 45 of the Code of Federal 
Regulations as follows:
    1. The authority citation for part 680 is revised to read as 
follows:

    Authority: 5 U.S.C. 7301; 18 U.S.C. 208 (1988); 42 U.S.C. 
1870(a); 5 CFR 2635.105(c)(3), 2635.402(d)(1).

    2. The heading of part 680 is revised to read as follows:

PART 680--NATIONAL SCIENCE FOUNDATION RULES OF PRACTICE AND 
STATUTORY CONFLICT-OF-INTEREST EXEMPTIONS

    3. Subpart A of part 680 is revised to read as follows:

Subpart A--Rules of Practice for the National Science Foundation

Sec.
680.10  Definitions; cross-references to employee ethical conduct 
standards and financial disclosure regulations.
680.11  Staff involvement with NSF proposals and awards.
680.12  One-year NSF post-employment restrictions.
680.13  Purposes for ``substitute'' requirements.


Sec. 680.10  Definitions; Cross-references to employee ethical conduct 
standards and financial disclosure regulations.

    (a) Definitions. Under this subpart, unless a provision plainly 
indicates otherwise:
    (1) Award means any grant, contract, cooperative agreement, loan, 
or other arrangement made by the Government.
    (2) Employee includes, in addition to any individual defined in 5 
CFR 2635.102(h), any individual working at NSF under the 
Intergovernmental Personnel Act. It includes any part-time or 
intermittent employee, temporary consultant; but not a special 
Government employee, as defined in 18 U.S.C. 202(a).
    (3) Institution means any university, college, business firm, 
research institute, professional society, or other organization. It 
includes all parts of a university or college, including all 
institutions in a multi-institution State or city system. It includes 
any university consortium or joint corporation; but not the 
universities that belong to such a consortium. Those universities shall 
be considered separate institutions for purposes of this part.
    (4) Proposal means an application for an award and includes a bid.
    (b) Cross-references to employee ethical conduct standards and 
financial disclosure regulations. Members of the National Science Board 
and other employees of the National Science Foundation (NSF), including 
special Government employees, should refer to the Standards of Ethical 
Conduct for Employees of the Executive Branch at 5 CFR part 2635, the 
National Science Foundation's regulations at 5 CFR part 5301 which 
supplement the executive branch Standards, and the executive branch 
financial disclosure regulations at 5 CFR part 2634.


Sec. 680.11  Staff involvement with NSF proposals and awards.

    (a)(1) Many scientists, engineers, and educators interrupt active 
research and teaching careers to spend a year or two at NSF and then 
return to research and teaching, usually at the same institution from 
which they came. Many such visiting scientists, engineers, and

[[Page 59838]]

educators (and a few permanent employees) who have been principal 
investigators under NSF awards before coming to NSF, retain some 
interest or association with the work. If an individual is a principal 
investigator under an NSF award, the individual is not precluded from 
retaining ties to the work after becoming an NSF employee. The employee 
may stay in contact with those who are continuing the work in the 
employee's laboratory or on his or her project. The employee may 
continue to supervise graduate students. And the employee may visit and 
work in the laboratory on his or her own time for these and related 
purposes.
    (2) Before a prospective employee comes to NSF, the prospective 
employee and the grantee institution must designate, subject to NSF 
approval, a ``substitute principal investigator''--i.e., another 
scientist who will be responsible for the work and equipment and will 
represent the institution in any dealings with NSF officials while the 
prospective employee is at NSF.
    (3) Appointment of a substitute principal investigator is 
unnecessary if all work under an award is to be completely suspended 
while the employee is at NSF. If the work is to be suspended, the 
employee and the grantee institution must inform the NSF in writing 
before the employee's employment begins. Work under the award may be 
resumed when the employee completes his or her NSF employment, and its 
term may be extended to account for the time lost during the employee's 
NSF employment.
    (b)(1) NSF will entertain no proposal on which a current NSF 
employee would be a senior investigator or equivalent, unless it is a 
proposal for continuation or extension of support for work on which the 
employee served in that capacity before coming to NSF. Any proposal for 
continuation of NSF support at essentially the same level (with 
reasonable allowance for inflation) will normally be considered a 
proposal for continuation or extension if it would support the work of 
the same investigator and his or her laboratory or group (if any) in 
the same general field of science, engineering, or education, 
notwithstanding that the focus of the work may change in response to 
research opportunities or educational needs.
    (2) Someone other than the current NSF employee must submit any 
such proposal for continuation or extension of work NSF previously 
supported and handle all negotiations with NSF, but the capacity in 
which the current NSF employee will serve should be clearly spelled out 
in the proposal.
    (c) In accordance with 5 CFR 5301.103(a)(1), an NSF employee may 
not receive, directly or indirectly, any salary, consulting fee, 
honorarium, or other form of compensation for services, or 
reimbursement of expenses, from an NSF award.


Sec. 680.12  One-year NSF post-employment restrictions.

    (a) For one year after leaving NSF employment, a former NSF 
employee, including a special Government employee who has performed 
work for NSF on more than 60 days in the previous twelve months, shall 
not represent himself, herself, or any other person in dealings with 
any NSF official on any proposal, project, or other particular matter.
    (b) The one-year restriction contained in paragraph (a) of this 
section is in addition to any post-employment restriction imposed by 
statute, including 18 U.S.C. 207 and 41 U.S.C. 423. To the extent that 
any disqualification required by paragraph (a) of this section is not 
also required by statute, written exceptions may be granted by the 
NSF's General Counsel, whose decisions shall be final. Exceptions will 
be rare and will be granted only where strict application of the rules 
would result in undue hardship for former short-term employees or for 
other former employees, and when granting an exception would not result 
in an unfair advantage to the former employee.
    (c)(1) Paragraph (a) of this section applies to particular matters 
involving specific parties, such as grants, contracts, or other 
agreements; applications for permits, licenses, or the like; requests 
for rulings or similar official determinations; claims; investigations 
or audits; charges or accusations against individuals or firms; 
adjudicatory hearings; and court cases.
    (2) For former employees, other than special Government employees, 
paragraph (a) of this section also applies to particular matters that 
do not involve specific parties, such as:
    (i) Determinations to establish or dis-establish a particular 
program or set its budget level for a particular fiscal year;
    (ii) Decisions to undertake or terminate a particular project;
    (iii) Decisions to open or not open a contract to competitive 
bidding;
    (iv) General policy or rulemaking--including, for example, 
decisions on particular NSF rules or formal policy, such as adoption or 
amendment of a resolution by the National Science Board, promulgation 
or amendment of an NSF regulation or circular, amendment of standard 
grant or contract terms, or changes to NSF manuals or policy documents; 
and
    (v) Agency positions on particular legislative or regulatory 
proposals.
    (d) Paragraph (a) of this section does not apply to:
    (1) Any expression of a former employee's views on policy issues 
where the circumstances make it obvious that the former employee is 
only speaking as an informed and interested citizen, not representing 
any financial or other interests of his or her own or of any other 
person or institution with which he or she is associated;
    (2) Any appearance or communication concerning matters of a 
personal or individual nature, such as the former employee's taxes, 
salary, benefits, possible Federal employment, rights as a former 
employee, or the application of conflict-of-interest rules to something 
the former employee proposes to do;
    (3) Any appearance on the former employee's own behalf in any 
litigation or administrative proceeding; or
    (4) Any presentation of scientific or technical information (at a 
site visit, for example) or any other communication of scientific or 
technical information on work being proposed or conducted.
    (e) As soon as his or her NSF employment ceases, a former NSF 
employee (including any former special Government employee described in 
paragraph (a) of this section) may again be listed as principal 
investigator on an NSF award, may be listed as principal investigator 
in any proposal or award, and may sign a proposal as principal 
investigator. However, the former employee and the grantee institution 
shall formally designate, subject to NSF approval, a ``substitute 
negotiator'' who, though not principally responsible for the work, will 
represent the former employee and the institution in dealings with NSF 
officials on any proposal or project for as long as the former employee 
would be barred from representational contacts with NSF by paragraph 
(a) of this section or by statute.


Sec. 680.13  Purposes for ``substitute'' requirements.

    Appointment of a ``substitute principal investigator'' or 
``substitute negotiator'' ensures against unthinking violation of the 
restrictions on dealings with NSF officials. It serves this purpose by 
flagging proposals or awards affected by the restrictions and by 
identifying someone else with whom NSF officials can properly discuss 
them or negotiate over them. Designation of a substitute principal 
investigator while an

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employee is at NSF has two additional functions: it identifies another 
person to be responsible for the work and equipment, and it reminds all 
concerned that during an employee's NSF service his or her attentions 
should focus on NSF duties.
    4. Subpart B of part 680 is amended by removing Sec. 680.20 and 
redesignating Sec. 680.21 as Sec. 680.20.
    5. Under the authority of 42 U.S.C. 1870(a), parts 681, 682, 683, 
and 684 are removed.

[FR Doc. 96-29990 Filed 11-22-96; 8:45 am]
BILLING CODE 7555-01-M