[Federal Register Volume 64, Number 12 (Wednesday, January 20, 1999)]
[Proposed Rules]
[Pages 3060-3062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1128]


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ENVIRONMENTAL PROTECTION AGENCY

48 CFR Parts 1537 and 1552

[FRL-6220-9]


Acquisition Regulation: Service Contracting--Avoiding Improper 
Personal Services Relationships

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is issuing this 
proposed rule to amend the EPA Acquisition Regulation (EPAAR) (48 CFR 
Chapter 15) to emphasize the proper relationship between the Government 
and its contractors in its non-personal services contracts. The Agency 
recognizes that regardless of the express terms of its contracts, if a 
contract is administered improperly, an improper personal services 
relationship can be the result. This proposed rule is designed to 
ensure that the manner in which contracts are administered will not 
create an improper employer-employee relationship.


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DATES: Comments should be submitted no later than March 22, 1999.

ADDRESSES: Written comments should be submitted to the contact listed 
below at the following address: U.S. Environmental Protection Agency, 
Office of Acquisition Management (3802R), 401 M Street, SW, Washington, 
D.C. 20460. Comments and data may also be submitted by sending 
electronic mail (e-mail) to: Senzel.L[email protected]. Electronic 
comments must be submitted as an ASCII file avoiding the use of special 
characters and any form of encryption. Comments and data will also be 
accepted on disks in WordPerfect in 6.1 format or ASCII file format. No 
Confidential Business Information (CBI) should be submitted through e-
mail. Electronic comments on this rule may be filed on-line at many 
Federal Depository Libraries.

FOR FURTHER INFORMATION CONTACT: Louise Senzel, U.S. EPA, Office of 
Acquisition Management, (3802R), 401 M Street, SW, Washington, D.C. 
20460, Telephone: (202) 564-4367.

SUPPLEMENTARY INFORMATION:

A. Background

    Recent Agency audits have indicated a vulnerability in the manner 
in which Agency contracts have been administered which could create the 
existence of improper personal services relationships. The proposed 
rule will amend the EPAAR to emphasize the proper relationship between 
the Government and its contractors in the Government's non-personal 
services contracts. The Agency recognizes that regardless of the 
express terms of its contracts, if a contract is administered 
improperly, improper personal services relationship can be the result. 
Accordingly, the Agency is trying to highlight the nature of the proper 
relationship to ensure that the manner in which contracts are 
administered will not create an improper employer-employee 
relationship.

B. Executive Order 12866

    The proposed rule is not a significant regulatory action for the 
purposes of E.O. 12866; therefore, no review is required by the Office 
of Information and Regulatory Affairs within the Office of Management 
and Budget (OMB).

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because this proposed 
rule does not contain information collection requirements that require 
the approval of OMB under the Paperwork Reduction Act of 1980 (44 
U.S.C. 3501 et seq.)

D. Regulatory Flexibility Act

    The EPA certifies that this proposed rule does not exert a 
significant economic impact on a substantial number of small entities. 
The requirements to contractors under the rule impose no reporting, 
record-keeping, or any compliance costs.

E. Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
impact of their regulatory actions on State, local, and tribal 
governments, and the private sector. This proposed rule does not 
contain a Federal mandate that may result in expenditures of $100 
million or more for State, local, and tribal governments, in the 
aggregate, or the private sector in one year. Any private sector costs 
for this action relate to paperwork requirements and associated 
expenditures that are far below the level established for UMRA 
applicability. Thus, the rule is not subject to the requirements of 
sections 202 and 205 of the UMRA.

F. Executive Order 13045

    E.O. 13045, Protection of Children from Environmental Health Risks 
and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule 
that: (1) is determined to be economically significant as defined under 
E.O. 12866, and (2) concerns an environmental health or safety risk 
that EPA has reason to believe may have a disproportionate effect on 
children. If the regulatory action meets both criteria, the Agency must 
evaluate the environmental health or safety effects of the planned rule 
on children, and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    EPA interprets E.O. 13045 as applying only to those regulatory 
actions that are based on health or safety risks, such that the 
analysis required under section 5-501 of the Order has the potential to 
influence the regulation. This rule is not subject to E.O. 13045 
because it does not establish an environmental standard intended to 
mitigate health or safety risks.

G. Executive Order 12875

    Under E.O. 12875, EPA may not issue a regulation that is not 
required by statute and creates a mandate upon a State, local or tribal 
government, unless the Federal government provides the funds necessary 
to pay the direct compliance costs incurred by those governments, or 
EPA consults with those governments. If EPA complies by consulting, 
E.O. 12875 requires EPA to provide to the OMB a description of the 
extent of EPA's prior consultation with representatives of affected 
State, local and tribal governments, the nature of their concerns, 
copies of any written communications from the governments, and a 
statement supporting the need to issue the regulation. In addition, 
E.O. 12875 requires EPA to develop an effective process permitting 
elected officials and other representatives of State, local and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.''
    Today's rule does not create a mandate on State, local or tribal 
governments. The rule does not impose any enforceable duties on these 
entities. Accordingly, the requirements of section 1(a) of E.O. 12875 
do not apply to this rule.

H. Executive Order 13084

    Under E.O. 13084, EPA may not issue a regulation that is not 
required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with these 
governments. If EPA complies by consulting EPA must provide to the OMB, 
in a separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected and other representatives of 
Indian tribal governments ``to provide meaningful and timely input in 
the development of regulatory policies on matters that significantly or 
uniquely affect their communities.''
    Today's rule does not significantly or uniquely affect the 
communities of Indian tribal governments. Accordingly, the requirements 
of section 3(b) of E.O. 13084 do not apply to this rule.

I. National Technology Transfer and Advancement Act of 1995

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Pub. L. No. 104-113, Sec. 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus

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standards in its regulatory activities unless to do so would be 
inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) that are developed or adopted by voluntary consensus 
standards bodies. The NTTAA directs EPA to provide Congress, through 
OMB, explanations when the Agency decides not to use available and 
applicable voluntary consensus standards.
    The proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards. EPA welcomes comments on this aspect of the proposed 
rulemaking and, specifically, invites the public to identify 
potentially-applicable voluntary consensus standards and to explain why 
such standards should be used in this regulation.

List of Subjects in 48 CFR Parts 1537 and 1552

    Government procurement.

    Authority: The provisions of this regulation are issued under 5 
U.S.C. 301; Sec. 205(c), 63 Stat. 390.

    Therefore, 48 CFR Chapter 15 is proposed to be amended as set forth 
below:
    1. The authority citation for Parts 1537 and 1552 continues to read 
as follows:

    Authority: Sec. 205(c), 63 Stat. 390, as amended.

PART 1537--[AMENDED]

    2. Section 1537.110 is amended to add paragraph (g) to read as 
follows:


Sec. 1537.110  Solicitation provisions and contract clauses.

* * * * *
    (g) To ensure that Agency contracts are administered so as to avoid 
creating an improper employer-employee relationship, contracting 
officers shall insert the contract clause at 48 CFR 1552.237-76, 
``Government-Contractor Relations'', in all solicitations and contracts 
for non-personal services.

PART 1552--[AMENDED]

    3. Add 1552.237-76 to read as follows:


Sec. 1552.237-76  Government-contractor relations.

    As prescribed in 1537.110(g), insert the following clause:

GOVERNMENT-CONTRACTOR RELATIONS

(month and year of publication in the Federal Register)

    (a) The Government and the contractor understand and agree that 
the services to be delivered under this contract by the contractor 
to the Government are non-personal services and the parties 
recognize and agree that no employer-employee relationship exists or 
will exist under the contract between the Government and the 
contractor's personnel. It is, therefore, in the best interest of 
the Government to afford both parties a full understanding of their 
respective obligations.
    (b) Contractor personnel under this contract shall not:
    (1) Be placed in a position where they are under the 
supervision, direction, or evaluation of a Government employee.
    (2) Be placed in a position of command, supervision, 
administration or control over Government personnel, or over 
personnel of other contractors under other EPA contracts, or become 
a part of the Government organization.
    (3) Be used in administration or supervision of Government 
procurement activities.
    (c) Employee Relationship:
    (1) The services to be performed under this contract do not 
require the Contractor or his/her personnel to exercise personal 
judgment and discretion on behalf of the Government. Rather the 
Contractor's personnel will act and exercise personal judgment and 
discretion on behalf of the Contractor.
    (2) Rules, regulations, directives, and requirements that are 
issued by the U.S. Environmental Protection Agency under its 
responsibility for good order, administration, and security are 
applicable to all personnel who enter the Government installation or 
who travel on Government transportation. This is not to be construed 
or interpreted to establish any degree of Government control that is 
inconsistent with a non-personal services contract.
    (d) Inapplicability of Employee Benefits: This contract does not 
create an employer-employee relationship. Accordingly, entitlements 
and benefits applicable to such relationships do not apply.
    (1) Payments by the Government under this contract are not 
subject to Federal income tax withholdings.
    (2) Payments by the Government under this contract are not 
subject to the Federal Insurance Contributions Act.
    (3) The Contractor is not entitled to unemployment compensation 
benefits under the Social Security Act, as amended, by virtue of 
performance of this contract.
    (4) The Contractor is not entitled to workman's compensation 
benefits by virtue of this contract.
    (5) The entire consideration and benefits to the Contractor for 
performance of this contract is contained in the provisions for 
payment under this contract.
    (e) Notice. It is the Contractor's, as well as, the Government's 
responsibility to monitor contract activities and notify the 
Contracting Officer if the Contractor believes that the intent of 
this clause has been or may be violated.
    (1) The Contractor should notify the Contracting Officer in 
writing promptly, within ______ (to be negotiated) calendar days 
from the date of any incident that the Contractor considers to 
constitute a violation of this clause. The notice should include the 
date, nature and circumstance of the conduct, the name, function and 
activity of each Government employee or Contractor official or 
employee involved or knowledgeable about such conduct, identify any 
documents or substance of any oral communication involved in the 
contact, and the estimate in time by which the Government must 
respond to this notice to minimize cost, delay or disruption of 
performance.
    (2) The Contracting Officer will promptly, within ______ (to be 
negotiated) calendar days after receipt of notice, respond to the 
notice in writing. In responding, the Contracting Officer will 
either:
    (i) Confirm that the conduct is in violation and when necessary 
direct the mode of further performance,
    (ii) Countermand any communication regarded as a violation,
    (iii) Deny that the conduct constitutes a violation and when 
necessary direct the mode of further performance; or
    (iv) In the event the notice is inadequate to make a decision, 
advise the Contractor what additional information is required, and 
establish the date by which it should be furnished by the Contractor 
and the date thereafter by which the Government will respond.
(End of clause)

    Dated: December 9, 1998.
Betty L. Bailey,
Director, Office of Acquisition Management.
[FR Doc. 99-1128 Filed 1-19-99; 8:45 am]
BILLING CODE 6560-50-P