[Federal Register Volume 64, Number 57 (Thursday, March 25, 1999)]
[Rules and Regulations]
[Pages 14397-14398]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7135]


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DEPARTMENT OF DEFENSE

48 CFR Parts 203 and 252

[DFARS Case 97-D020]


Defense Federal Acquisition Regulation Supplement; Employment 
Prohibition on Persons Convicted of Fraud or Other Defense-Contract-
Related Felonies

AGENCY: Department of Defense (DoD).

ACTION: Final rule.

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SUMMARY: The Director of Defense Procurement has issued a final rule 
amending the Defense Federal Acquisition Regulation Supplement (DFARS) 
to expand the list of positions in which contractors may not allow 
persons convicted of fraud or other defense-contract-related felonies 
to serve, and to provide that the period of such a prohibition on 
service may exceed 5 years.

EFFECTIVE DATE: March 25, 1999.

FOR FURTHER INFORMATION CONTACT:
Mr. Michael Pelkey, Defense Acquisition Regulations Council, PDUSD 
(A&T) DP (DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-
3062. Telephone (703) 602-0131; telefax (703) 602-0350. Please cite 
DFARS Case 97-D020.

SUPPLEMENTARY INFORMATION: 

A. Background

    This final rule amends DFARS 203.570-2 and 252.203-7001 to expand 
the list of positions in which a person convicted of a felony arising 
out of a DoD contract may not serve, and to provide that the period of 
such a prohibition on service may exceed 5 years.
    A proposed rule with request for comments was published in the 
Federal Register on October 2, 1997 (62 FR 51623). Two sources 
submitted comments on the proposed rule. All comments were considered 
in the development of the final rule.

B. Regulatory Flexibility Act

    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 the rule applies only to the employment of persons convicted of 
a felony arising out of a DoD contract.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any information collection requirements that require the 
approval

[[Page 14398]]

of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Parts 203 and 252

    Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulation Council.

    Therefore, 48 CFR Parts 203 and 252 are amended as follows:
    1. The authority citation for 48 CFR Parts 203 and 252 continue to 
read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

    2. Section 203.570 is revised to read as follows:


203.570  Prohibition on persons convicted of frauds or other defense-
contract-related felonies.


203.570-2  Policy.

    (a) A contractor or subcontractor shall not knowingly allow a 
person, convicted after September 29, 1988, of fraud or any other 
felony arising out of a contract with the DoD, to serve--
    (1) In a management or supervisory capacity on any DoD contract or 
first-tier subcontract;
    (2) On its board of directors;
    (3) As a consultant, agent, or representative; or
    (4) In any capacity with the authority to influence, advise, or 
control the decisions of any DoD contractor or subcontractor with 
regard to any DoD contract or first-tier subcontract.
    (b) DoD has sole responsibility for determining the period of the 
prohibition described in paragraph (a) of this subsection. The 
prohibition period--
    (1) Shall not be less than 5 years from the date of conviction 
unless the agency head or a designee grants a waiver in the interest of 
national security; and
    (2) May be more than 5 years from the date of conviction if the 
agency head or a designee makes a written determination of the need for 
the longer period. The agency shall provide a copy of the determination 
to the Bureau of Justice Assistance, U.S. Department of Justice, 810 
Seventh Street, NW, Washington, DC 20531.
    4. Section 203.570-5 is revised to read as follows:


203.570-5  Contract clause.

    Use the clause at 252.203-7001, Prohibition on Persons Convicted of 
Fraud or Other Defense-Contract-Related Felonies, in all solicitations 
and contracts exceeding the simplified acquisition threshold, except 
solicitations and contracts for commercial items.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    5. Section 252.203-7001 is amended by revising the section heading, 
clause title and date, and paragraphs (b) and (c); in paragraphs 
(a)(1)(i) and (ii) by removing the comma and adding in its place a 
semicolon; in paragraph (d) introductory text by removing the word 
``further''; in paragraph (f) introductory text by removing the word 
``prohibitions'' and adding in its place the world ``prohibition''; in 
paragraph (f)(3) by removing the comma; and in paragraph (h) by adding, 
before the world ``Benefits'', the world ``Federal''. The revised text 
reads as follows:


252.203-7001  Prohibition on persons convicted of fraud or other 
defense-contract-related felonies.

* * * * *

PROHIBITION ON PERSONS CONVICTED OF FRAUD OR OTHER DEFENSE-CONTRACT-
RELATED FELONIES (MARCH 1999)

* * * * *
    (b) Any individual who is convicted after September 29, 1988, of 
fraud or any other felony arising out of a contract with the DoD is 
prohibited from serving--
    (1) In a management or supervisory capacity on any DoD contract 
or first-tier subcontract;
    (2) On the board of directors of any DoD contractor or first-
tier subcontractor;
    (3) As a consultant, agent, or representative for any DoD 
contractor or first-tier subcontractor; or
    (4) In any other capacity with the authority to influence, 
advise, or control the decisions of any DoD contractor or 
subcontractor with regard to any DoD contract or first-tier 
subcontract.
    (c) Unless waived, the prohibition in paragraph (b) of this 
clause applies for not less than 5 years from the date of 
conviction.
* * * * *
[FR Doc. 99-7135 Filed 3-24-99; 8:45 am]
BILLING CODE 5000-04-M