[Federal Register Volume 64, Number 162 (Monday, August 23, 1999)]
[Rules and Regulations]
[Pages 46092-46101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21077]


      

[[Page 46091]]

_______________________________________________________________________

Part IV





Department of Housing and Urban Development





_______________________________________________________________________



48 CFR Part 2401 et al.



HUD Acquisition Regulation; Miscellaneous Revisions; Interim Rule

  Federal Register / Vol. 64, No. 162 / Monday, August 23, 1999 / Rules 
and Regulations  

[[Page 46092]]



DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

48 CFR Parts 2401, 2402, 2403, 2409, 2413, 2414, 2415, 2416, 2419, 
2424, 2425, 2426, 2428, 2432, 2433, 2436, 2437, 2439, 2442, 2446, 
2451, 2452 and 2453

[Docket No. FR-4115-I-01]
RIN 2535-AA24


HUD Acquisition Regulation; Miscellaneous Revisions

AGENCY: Office of the Chief Procurement Officer, HUD.

ACTION: Interim rule.

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SUMMARY: This rule amends the Department of Housing and Urban 
Development (HUD) Acquisition Regulation (HUDAR) to implement changes 
made to the Federal Acquisition Regulation since the HUDAR's last 
issuance, and implement requirements of the Federal Acquisition Reform 
Act of 1996.

DATES: Effective Date: September 22, 1999.
    Comment Due Date: October 22, 1999.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Rules Docket Clerk, Office of the General Counsel, 
Room 10276, Department of Housing & Urban Development, 451 Seventh 
Street, SW., Washington, DC 20410-8000. Communication should refer to 
the above docket number and title. A copy of each communication 
submitted will be available for public inspection and copying between 
7:30 am and 5:30 pm weekdays at the above address. Facsimile comments 
will not be accepted.

FOR FURTHER INFORMATION CONTACT: Edward L. Girovasi, Jr., Director, 
Policy and Field Operations Division, Office of Procurement and 
Contracts, Room 5262, 451 Seventh Street, SW., Washington, DC 20410-
3000 (voice (202) 708-0294, TDD (202) 708-1112). (These are not toll-
free numbers.)

SUPPLEMENTARY INFORMATION:

Background

    The uniform regulation for the procurement of supplies and services 
by Federal departments and agencies, the Federal Acquisition Regulation 
(FAR), was promulgated on September 19, 1983 (48 FR 42102). The FAR is 
codified in title 48, chapter 1, of the Code of Federal Regulations. 
HUD promulgated its regulation to implement the FAR on March 1, 1984 
(49 FR 7696).
    The HUDAR (title 48, chapter 24 of the Code of Federal Regulations) 
is prescribed by the Chief Procurement Officer under section 7(d) of 
the Department of HUD Act (42 U.S.C. 3535(d)); section 205(c) of the 
Federal Property and Administrative Services Act of 1949 (40 U.S.C. 
486(c)); the Secretary's delegation effective October 6, 1998, (63 FR 
54722); and the general authorization in FAR 1.301.
    The most recent version of the HUDAR was published as a final rule 
on May 1, 1996 (61 FR 19467). Since then, the FAR has undergone 
numerous revisions. This interim rule amends the HUDAR to conform to 
the current FAR numbering, correct FAR citations and references, 
correct or remove obsolete text, clauses and provisions, and make other 
changes to comply with current FAR requirements. Please note that the 
Department is also publishing a proposed rule containing additional 
revisions to the HUDAR.
    Section 2401.103 is revised to reflect Departmental reassignment of 
responsibility for prescribing the HUD Acquisition Regulation from the 
Assistant Secretary for Administration to the Chief Procurement 
Officer.
    Section 2401.601 is revised to reflect the change in the 
designation of the Department's Senior Procurement Executive from the 
Assistant Secretary for Administration to the Chief Procurement Officer 
and related changes to the contracting authority of Departmental 
components.
    Section 2401.603-2 is revised to delete obsolete language regarding 
the appointment of persons other than full-time Contracting Officers 
and the maintenance of certificates of appointment.
    Section 2401.603-3 is revised to delete language redundant to the 
FAR and obsolete language concerning waivers to the selection criteria. 
Paragraph (b), which contained a requirement that the appointing 
official execute a separate statement that a selectee meets the 
Contracting Officer selection criteria, is deleted. The execution of 
the SF 1402, Certificate of Appointment, by the selecting official is 
sufficient evidence of the official's determination that an individual 
has met the selection criteria.
    Section 2402.101 is revised to: change the definition of 
``Accounting Office'' and ``Senior Procurement Executive'' to reflect 
changes in HUD's organization; delete definitions for ``best value,'' 
``lowest-priced technically acceptable proposal'' and ``source 
selection official,'' which are redundant to definitions now in the 
FAR; and add definitions for ``Government technical representative'' 
and ``Government technical monitor,'' HUD's terminology for Contracting 
Officer's (technical) representative.
    Section 2403.101 is amended to correct citations of Federal 
standards of conduct rules and to redesignate sections to reflect 
current FAR section numbering.
    Section 2403.502 is revised to delete the obsolete revision number 
and date of the cited Departmental handbook and to eliminate the need 
to revise this provision when and if the handbook is revised in the 
future.
    Section 2409.500 and 2409.504 are removed. The Department believes 
that adequate guidance and procedures are contained in FAR 9.5.
    Numerous sections in Part 2413 are redesignated and retitled to 
reflect changes in section numbering and titles in FAR Part 13.
    Section 2414.407-4 is revised to reflect changes in FAR section 
numbering.
    A new section 2415.204 is added to designate the cognizant HCA as 
the responsible official for making exemptions pursuant to FAR 
15.204(e).
    Section 2415.413 is removed to reflect related changes in FAR Part 
15.
    Section 2415.506 is redesignated as 2415.606 and revised to reflect 
current Departmental policy concerning the receipt of unsolicited 
proposals.
    Section 2415.604 is redesignated as 2415.303. A new paragraph (a) 
is added to implement the Departmental policy that the heads of 
requiring activities (i.e., program offices) serve as the source 
selection authorities for selections made using the trade-off approach 
and that the General Counsel or his/her designee serve as the selection 
authority for procurements for the performance of legal services by 
outside counsel.
    A new section 2416.505 is added to designate the Departmental and 
contracting activity task order and delivery order ombudsmen.
    Section 2415.613 is removed. Federal Acquisition Circular 97-2 
removed the provision at FAR 15.613 permitting the use of alternative 
source selection procedures previously used by NASA and the Defense 
Department. Given the authority now contained in FAR 15.306(c)to limit 
the competitive range, the Department has determined that its 
alternative selection process is no longer needed.
    In section 2419.503, the words ``Acquired Property'' are replaced 
with ``Real Estate Owned'' to reflect a change in Departmental 
terminology.
    Section 2419.708 is revised to add a prescription for the use of a 
new clause at 2452.219-71.
    The clause prescription at section 2424.202-70 and the relevant 
clause at

[[Page 46093]]

2452.224-70 are removed. The clause, which permitted the disclosure of 
proposals, is contradictory to the prohibition against such disclosure 
at FAR 24.202.
    Numerous revisions are made to Parts 2425 and 2426 to align section 
numbering with the current FAR.
    Section 2428.106-6 is revised to designate the Contracting Officer 
as the authorized Departmental official to furnish bonding information 
requested in accordance with FAR 28.106-6.
    In section 2432.402, paragraph (c)(1) is revised to designate the 
HCAs as the Departmental officials authorized to make required 
determinations and findings with regard to advance payments. This is a 
change in terminology. The field contracting directors and Director, 
Office of Procurement and Contracts, currently the authorized 
officials, are HCAs.
    In section 2432.908, the prescription for the use of alternates to 
the clauses at 2452.232-70 and 2452.232-71 is removed to reflect the 
Department's standardization contract payment invoicing procedures.
    Part 2433 is revised to implement Departmental rules for agency-
level protests in accordance with FAR 33.103(d)(4).
    Section 2433.101-70 is removed. FAR 33.101 defines ``day'' for the 
purposes of this subpart.
    Section 2433.102-70 is revised to clarify that HUD's Office of 
General Counsel has responsibility for handling protests filed with the 
GAO or other external adjudicating body, but not for agency-level 
protests made to the Contracting Officer.
    Section 2433.103 is revised to establish a ten (10) day limit on 
requests for reviews of Contracting Officer decisions in agency-level 
protests. The ten (10) day period begins with the protestor's receipt 
of the decision. This section further designates the Head of the 
Contracting Activity as the Departmental official authorized to review 
the Contracting Officer's protest decision and approve any 
determination to award, or not suspend, a contract pending resolution 
of the protest.
    Section 2433.103-70 is removed. The Department will use the 
standard time frame for responses to agency-level protests provided at 
FAR 33.103(g).
    Section 2433.105 is deleted to reflect deletion of this coverage 
from the FAR.
    Section 2437.110 is revised to redesignate paragraphs to reflect 
the consolidation of clauses at 2452.237-73 and 2452.237-74 into a 
single clause and the redesignation of paragraph (g). Paragraph (e) is 
revised to better clarify the applicability of the clause at 2452.237-
75.
    Section 2437.110, paragraph (g), which prescribes the use of a 
clause for background investigations of personnel who work on sensitive 
automated systems, is redesignated as 2439.107(a). As this requirement 
concerns information technology systems, it is more appropriately 
located in Part 2439.
    A new Section 2442.1502 is added to designate the Chief Procurement 
Officer as the Departmental official responsible for implementing 
procedures for evaluating contractor performance in accordance with FAR 
42.1502 and 42.1503.
    Subpart 2446.6 is removed. The requirement for use of a the form 
HUD-9519 for property inspections is not appropriately promulgated via 
the HUDAR. Where applicable for individual contracts, the use of this 
form may be expressed in the special provisions.
    Section 2451.303 is redesignated as 2451.7001 to reflect the 
deletion of such instruction from the FAR. The section is revised to 
clarify that contractors under cost reimbursement contracts should make 
use of all available travel discounts; that the contractor is 
responsible for providing his/her employees with documentation required 
by vendors to obtain discounts; and to delete guidance in paragraph (c) 
which is redundant to FAR Part 31.
    In section 2452.216-73, paragraph (b) is revised to clarify the 
original intent of the clause, i.e., that HUD may unilaterally revise 
performance evaluation plans (for award fee contracts) prior to the 
beginning of each contract period within the overall contract term.
    A new section 2452.219-71 is added to require contractors to submit 
one copy of all required subcontracting reports (i.e., SF 294 and SF 
295) to the Department's Office of Small and Disadvantaged Business 
Utilization (OSDBU).
    Section 2452.232-70 is revised in accordance with revisions made to 
section 2432.908 and to comply with the electronic funds payment 
information requirements in FAR clauses 52.232-33 and 52.232-34.
    Section 2452.232-71 is revised to comply with the electronic funds 
payment information requirements in FAR clauses 52.232-33 and 52.232-
34; and to reflect changes in Departmental invoicing procedures.
    Section 2452.233-70 is added to implement HUD's rules on internal 
reviews of HUD Contracting Officers' decisions on agency-level 
protests.
    Section 2452.237-73 is revised to consolidate in it the former 
clauses at 2452.237-73 and 2452.237-74 regarding the provision of 
technical guidance to contractors by HUD technical staff. Section 
2452.237-74 is removed.
    Section 2452.237-75 is revised to clarify HUD's clearance 
requirements for contractor personnel who work on-site in HUD 
facilities.
    Section 2452.237-76 is redesignated 2452.239-70 in accordance with 
changes made to section 2437 described above. The clause is also 
revised to reflect changes in HUD's requirements for background 
investigations for contractor employees who have access to Departmental 
information systems.
    Section 2452.237-77 is revised to correct the prescriptive 
reference and to clarify the treatment of costs of salaries and wages 
of contractor personnel when HUD facilities are closed for 
administrative leave.
    Part 2453 is revised to make miscellaneous corrections in 
terminology (e.g., changing ``HUD Form'' to ``form HUD-'') and remove 
obsolete forms.

Findings and Certifications

Justification for Interim Rulemaking

    In general, the Department publishes a rule for public comment 
before issuing a rule for effect, in accordance with its own 
regulations on rulemaking, 24 CFR part 10. However, part 10 does 
provide for exceptions from that general rule where the agency finds 
good cause to omit advance notice and public participation. The good 
cause requirement is satisfied when prior public procedure is 
``impracticable, unnecessary, or contrary to the public interest.'' (24 
CFR 10.1) The Department finds that good cause exists to publish this 
rule for effect without first soliciting public comment, in that prior 
public procedure is unnecessary because this interim rule amends the 
HUDAR to conform to the current FAR numbering, correct FAR citations 
and references, correct or remove obsolete text, clauses and 
provisions, and make other changes to comply with current FAR 
requirements. In addition, these amendments do not have a significant 
effect beyond the internal operating procedures of the agency, or a 
significant cost or administrative impact on contractors or offerors, 
which would have subjected them to the FAR 1.301(c) requirement that 
agency acquisition regulations be published for comment in the Federal 
Register in conformance with the procedures of FAR subpart 1.5. The 
Department invites public comment on the rule, however, to assure that

[[Page 46094]]

consideration is given to the full range of views that may be presented 
in the development of a final rule that will supersede this interim 
rule.

Unfunded Mandates Reform Act

    The Secretary has reviewed this rule before publication and by 
approving it certifies, in accordance with the Unfunded Mandates Reform 
Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal 
mandate that will result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this rule, and in so doing 
certifies that this interim rule will not have a significant economic 
impact on a substantial number of small entities. Small businesses are 
specifically invited, however, to comment on whether this rule will 
significantly affect them, and persons are invited to submit comments 
according to the instructions in the DATES and COMMENTS sections in the 
preamble of this interim rule.

Environmental Impact

    In accordance with 40 CFR 1508.4 of the regulations of the Council 
on Environmental Quality and 24 CFR 50.19(c)(1) of the HUD regulations, 
the policies and procedures in this document are not subject to the 
individual compliance requirements of the authorities cited in 24 CFR 
50.4, and, therefore, are categorically excluded from the requirements 
of the National Environmental Policy Act of 1969. Accordingly, a 
Finding of No Significant Impact is not required.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this rule 
will not have substantial direct effects on States or their political 
subdivisions, or the relationship between the Federal Government and 
the States, or on the distribution of power and responsibilities among 
the various levels of Government. No programmatic or policy changes 
will result from this document's promulgation that would affect the 
relationship between the Federal Government and State and local 
governments.

Executive Order 13045, Protection of Children From Environmental Health 
Risks and Safety Risks

    This rule will not pose an environmental health risk or safety risk 
to children.

List of Subjects in 24 CFR Parts 2401, 2402, 2403, 2409, 2413, 
2414, 2415, 2416, 2419, 2424, 2425, 2426, 2428, 2432, 2433, 2436, 
2437, 2439, 2442, 2446, 2451, 2452 and 2453

    Government procurement, HUD acquisition regulations.
    Accordingly, title 48, Chapter 24 of the Code of Federal 
Regulations, is amended as follows:

PART 2401--FEDERAL ACQUISITION REGULATION SYSTEM

    1. The authority citation for part 2401 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

2401.103  [Amended]

    2. In Sec. 2401.103, the words ``Assistant Secretary for 
Administration'' are revised to read ``Chief Procurement Officer.''


2401.105-2  [Amended]

    3. In Sec. 2401.105-2(c) all references to ``2401.104-2'' are 
revised to read ``2401.105-2''.
    4. In Sec. 2401.601-70, the first sentence is revised to read as 
follows.


2401.601-70   Senior Procurement Executive.

    The Chief Procurement Officer is the Department's Senior 
Procurement Executive and is responsible for all Departmental 
procurement policy, regulations, and procedures. * * *
    5. Section 2401.601-71 is revised to read as follows:


2401.601-71   Office of Procurement and Contracts.

    The Office of Procurement and Contracts, within the Office of the 
Chief Procurement Officer, including its Field Contracting Operations, 
is responsible for all Departmental procurement.


2401.601-72  [Removed]

    6. Section 2401.601-72 is removed.


2401.601-73  [Removed]

    7. Section 2401.601-73 is removed.
    8. In Sec. 2401.603-2, the first paragraph and paragraph (d) are 
revised to read as follows:


2401.603-2  Selection.

    In selecting Contracting Officers, the appointing authorities shall 
consider the experience, education, training, business acumen, 
judgment, character, reputation and ethics of the individual to be 
appointed. The appointing authorities shall also consider the size and 
complexity of contracts the individual will be required to execute and/
or administer, and any other limitations on the scope of the authority 
to be exercised. In the area of experience, education and training, the 
following shall be required, unless contracting authority is limited to 
simplified acquisition procedures:
* * * * *
    (d) The selection requirements specified in paragraphs (a) through 
(c) of this section are applicable to all personnel whose primary 
duties are performed as a Contracting Officer.
    9. Section 2401.603-3 is revised to read as follows:


2401.603-3  Appointment.

    (a) Appointments to officials not expressly delegated procurement 
authority by a published departmental delegation of authority shall be 
made in writing by the Head of the Contracting Activity. The 
Certificate of Appointment (SF 1402) shall constitute the appointing 
official's determination that the appointee meets the selection 
requirements set forth at 2401.603-2.

PART 2402--DEFINITIONS OF WORDS AND TERMS

    10. The authority citation for part 2402 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    11. Section 2402.101 is revised to read as follows:


2402.101  Definitions.

    Accounting Office means the Office of Accounting Operations within 
the Office of the Chief Financial Officer and includes that Office's 
field components.
    Chief Procurement Officer means the HUD official having authority 
for all of the Department's procurement activities.
    Department means the Department of Housing and Urban Development, 
which may also be designated as HUD.
    Government Technical Monitor (GTM) means the individual responsible 
for assisting a Government Technical Representative in the latter's 
performance of his/her duties.
    Government Technical Representative (GTR) means the individual 
serving as the Contracting Officer's representative responsible for 
monitoring the technical aspects of a contract, including guidance, 
oversight, and evaluation of the Contractor's performance and 
deliverables.
    Head of Contracting Activity (HCA) is defined in accordance with 
the FAR. The following HUD officials are designated HCAs:

[[Page 46095]]

    (1) Director, Office of Procurement and Contracts, for HUD 
Headquarters procurement; and
    (2) The Directors, Field Contracting Operations, for field 
procurement.
    Legal Counsel means the Office of General Counsel in Headquarters, 
or the cognizant Assistant General Counsel in the field.
    Primary Organization Heads are those officials of the Department 
who are responsible for the major organizational components of HUD and 
who report directly to the Secretary or Deputy Secretary. The Primary 
Organization Heads of HUD include the Assistant Secretaries and 
equivalent Departmental management (e.g., President, GNMA, Inspector 
General, General Counsel, Chief Procurement Officer, etc.).
    Secretary means the Secretary of the Department of Housing and 
Urban Development, or his or her designee.
    Senior Procurement Executive means the Chief Procurement Officer.

PART 2403--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

    12. The authority citation for part 2403 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d).

    13. Section 2403.101 is revised to read as follows:


2403.101  Standards of conduct.

    Detailed rules which apply to the conduct of HUD employees are set 
forth in 5 CFR part 2635 and 5 CFR part 7501.


2403.408-1  [Removed]

    14. Section 2403.408-1 is removed.


2403.409  [Redesignated]

    15. Section 2403.409 is redesignated as 2403.405.


2403.502-70  [Redesignated]

    16. Section 2403.502 is redesignated as 2403.502-70 and revised to 
read as follows:


2403.502-70  Subcontractor kickbacks.

    Contracting Officers shall report suspected violations of the Anti-
Kickback Act through the Head of the Contracting Activity to the Office 
of the Inspector General consistent with the procedures for reporting 
any violation of law contained in the current HUD Handbook 2000.3, 
Office of Inspector General Activities.


2403.601  [Redesignated]

    17. Section 2403.601 is redesignated as 2403.602.

Part 2409--Contractor Qualifications

    18. The authority citation for part 2409 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); and 42 U.S.C. 3535(d).

    19. The title of Subpart 2409.5 is amended to add the words ``and 
Consultant'' after the word ``Organizational.''


2409.500  [Removed]

    20. Section 2409.500 is removed.


2409.502  [Removed]

    21. Section 2409.502 is removed.


2409.504  [Removed]

    22. Section 2409.504 is removed.


2409.701  [Redesignated]

    23. Section 2409.701 is redesignated as 2409.7001.

PART 2413--SIMPLIFIED ACQUISITION PROCEDURES

    24. The authority citation for part 2413 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); and 42 U.S.C. 3535(d).


2413.106-2  [Removed]

    25. Section 2413.106-2 is removed.


2413.402  [Redesignated]

    26. Section 2413.402 is redesignated as 2413.305-2 and a new 
subpart 2413.3 are added to read as follows:

Subpart 2413.3--Simplified Acquisition Methods


2413.403  [Redesignated]

    27. Section 2413.403 is redesignated as 2413.305-3, and the FAR 
reference in the text is revised from ``13.403(a)'' to read ``13.305-
3''.


2413.505-1  [Redesignated]

    28. Section 2413.505-1 is redesignated as 2413.307 and retitled, 
``Forms.''


2413.601  [Redesignated]

    29. Section 2413.601 is redesignated as 2413.301 and retitled 
``Governmentwide commercial purchase card'', subpart heading 2413.6 is 
removed.

PART 2414--SEALED BIDDING

    30. The authority citation for part 2414 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).


2414.407-4  [Amended]

    31. Section 2414.407-4 is amended by deleting ``(1) and (2)'' from 
the FAR citation in the text.

PART 2415--CONTRACTING BY NEGOTIATION

    32. The authority citation for part 2415 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).

    33. A new subpart 2415.2 and a new section 2415.204 are added to 
read as follows:

Subpart 2415.2--Solicitation and Receipt of Proposals and 
Information


2415.204  Contract format.

    (e) The cognizant HCA shall be responsible for making exemptions 
pursuant to FAR 15.204(e).


2415.407  [Redesignated]

    34. Subpart 2415.4 is removed and section 2415.407 is redesignated 
as 2415.209 and revised to read as follows:


2415.209  Solicitation provisions.

    (a) The Contracting Officer shall insert a provision substantially 
the same as the provision at 48 CFR 2452.215-70, Proposal Content, in 
all solicitations for negotiated procurements using the trade-off 
selection process expected to exceed the simplified acquisition 
threshold. The Contracting Officer shall adapt paragraph (c) of the 
provision (i.e., include, delete or further supplement subparagraphs) 
to address the particular requirements of the immediate solicitation. 
The provisions may be used in simplified acquisitions when it is 
necessary to obtain technical and management information in making the 
award selection. When award selection will be made through the lowest 
price technically acceptable method, the provision shall be used with 
its Alternate I. If the proposed contract requires work on or access to 
sensitive automated systems or applications (see the clause at 48 CFR 
2452.239-70), the provision shall be used with its Alternate II.


2415.413  [Removed]

    35. Section 2415.413 is removed.


2415.413-1  [Removed]

    36. Section 2415.413-1 is removed.


2415.413-2  [Removed]

    37. Section 2415.413-2 is removed.


2415.505 and 2415.605  [Redesignated]

    38. Section 2415.605 is redesignated as 2415.304 and section 
2415.505 is redesignated as 2415.605.


2415.505-70  [Redesignated]

    39. Section 2415.505-70 is redesignated as 2415.605-70, and in the 
first sentence the number ``15.5'' is revised to read ``15.6''.

[[Page 46096]]

2415.506  [Redesignated]

    40. Section 2415.506 is redesignated as 2415.606 and is revised to 
read as follows:


2415.606  Agency procedures.

    (a) The contact points shall ensure that unsolicited proposals are 
controlled, evaluated, safeguarded and disposed of in accordance with 
FAR subpart 15.6. Proposals, as used in this section shall mean 
proposals for procurement contracts with the Department and shall not 
include proposals or applications for assistance, including grants or 
cooperative agreements.
    (b) Unless otherwise specified in a Federal Register announcement, 
unsolicited proposals should be submitted to--
    (1) For research--Department of Housing and Urban Development, 
Office of Policy Development and Research, PD&R Correspondence Unit 
(Room 8228), 451 7th Street, SW, Washington, DC 20410.
    (2) For all others--Department of Housing and Urban Development, 
Director, Office of Procurement and Contracts (NC), 451 7th Street, SW, 
Washington, DC 20410.


2415.604  [Redesignated]

    41. A new subpart 2415.3 is added and section 2415.604 is 
redesignated as 2415.303 and revised to read as follows:

Subpart 2415.3--Source Selection


2415.303  Responsibilities.

    (a) In accordance with FAR 15.303, the source selection authorities 
are designated as follows:
    (1) The Contracting Officer, for contracts awarded using the 
``lowest-priced technically-acceptable proposal'' process; and,
    (2) The head of the office initiating the procurement, or his/her 
designee, for contracts awarded using the ``trade-off'' process. The 
head of the initiating office may also delegate this function to the 
Contracting Officer.
    (3) For procurements for the performance of legal services by 
outside counsel, using either the ``lowest-price technically 
acceptable'' or ``tradeoff'' approach, the General Counsel or his/her 
designee.
    (b) The technical requirements related to source selection shall be 
performed by a Technical Evaluation Panel (TEP). Generally, a TEP will 
consist of three to five members, with one member serving as the 
chairperson. For procurements involving technical complexity, the TEP 
may include advisors and committees to focus on specific technical 
areas or concerns. For relatively low dollar value and routine 
acquisitions of equipment, supplies or services, the TEP may consist of 
one technical representative. The TEP is responsible for documenting 
the evaluation of all proposals as appropriate to the source selection 
approach in use and for making the source selection recommendation to 
the source selection authority.


2415.605  [Redesignated]

    42. Newly redesignated section 2415.304 is revised to read as 
follows:


2415.304  Evaluation factors.

    (d)(1) The solicitation shall state the basis for the source 
selection decision as either ``lowest-price technically acceptable'' 
process (LPTA) or ``trade-off process'' (as defined at FAR subpart 
15.1).
    (2) When using the trade-off process, each technical evaluation 
factor and subfactor shall be assigned a numerical weight (except for 
pass-fail factors) which shall appear in the RFP. When using LPTA, each 
evaluation factor is applied on a ``pass-fail'' basis; numerical scores 
are not assigned. ``Pass-fail'' evaluation factors define a standard of 
comparison for solicitation/contract requirements which proposals 
either completely satisfy or fail to meet.
    (3) For procurements for the performance of legal services by 
outside counsel, using either the ``lowest-price technically 
acceptable'' or ``tradeoff'' approach, the General Counsel or his/her 
designee.


2415.608  [Redesignated]

    43. Section 2415.608 is redesignated as 2415.305; the reference to 
``FAR 15.608(a)(3)'' in paragraph (3) is revised to ``FAR 
15.305(a)(3)''; the words ``best value approach'' in paragraph (3) are 
revised to read ``trade-off process''; and paragraph (b) is removed.


2415.610  [Removed]

    44. Section 2415.610 is removed.


2415.611  [Redesignated]

    45. Section 2415.611 is redesignated as 2415.308 and revised to 
read as follows:


2415.308  Source selection decision.

    After receipt and evaluation of final proposal revisions, the TEP 
shall document its selection recommendation(s) in a final written 
report. The final report shall include sufficient information to 
support the recommendation(s) made, appropriate to the source selection 
approach and type and complexity of the acquisition.


2415.613  [Removed]

    46. Section 2415.613 is removed.


2415.613-70  [Removed]

    47. Section 2415.613-70 is removed.


2415.613-71  [Removed]

    48. Section 2415.613-71 is removed.


2415.1005  [Redesignated]

    49. Section 2415.1005 is redesignated as 2415.507.

PART 2416--TYPES OF CONTRACTS

    50. The authority citation for part 2416 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 41 U.S.C. 253; 42 U.S.C. 3535(d).


2416.405  [Redesignated]

    51. Section 2416.405 is redesignated as 2416.406.
    52. A new subpart 2416.5 and a new section 2416.505 are added to 
read as follows:

Subpart 2416.5--Indefinite-Delivery Contracts


2416.505  Ordering.

    (b)(6) The Departmental competition advocate also serves as the 
Departmental ombudsman for task and delivery order contracts in 
accordance with FAR 16.505(b)(6).
    (i) Each HCA shall designate a contracting activity ombudsman for 
task and delivery order contracts.
    (ii) The contracting activity ombudsman shall:
    (A) Review complaints from contractors concerning task or delivery 
orders placed by the contracting activity;
    (B) Be independent of the contracting officer who awarded or is 
administering the contract under which a complaint is submitted;
    (C) Recommend any corrective action to the cognizant contracting 
officer; and
    (D) Refer to the Departmental ombudsman issues which cannot be 
resolved.
    (iii) Contractors may request that the Departmental Ombudsman 
review complaints when they disagree with the contracting activity 
ombudsman's review.
    53. Section 2416.603-2 is revised to read as follows:


2416.603-2  Application.

    (c) The HCA shall approve additional time periods for 
definitization of letter contracts authorized by the Contracting 
Officer pursuant to FAR 16.603-2(c).

PART 2419--SMALL BUSINESS PROGRAMS

    54. The authority citation for part 2419 continues to read as 
follows:


[[Page 46097]]


    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2419.503  [Amended]

    55. In Sec. 2419.503, the words ``Acquired Property'' are revised 
to read ``Real Estate Owned.''
    56. In Sec. 2419.708, footnote 3 is removed and a new paragraph (f) 
is added to read as follows:


2419.708  Solicitation provisions and contract clauses.

* * * * *
    (f) The Contracting Officer shall insert the clause at 48 CFR 
2452.219-71 in solicitations exceeding $500,000 that are not set aside 
for small businesses or to be accomplished under the 8(a) program. The 
Contracting Officer shall insert the clause in all contracts exceeding 
$500,000 ($1,000,000 for construction) that are not awarded to small 
businesses or to 8(a) business concerns.

PART 2424--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

    57. The authority citation for part 2424 is revised to read as 
follows:

    Authority: 5 U.S.C. 552, 552a; 40 U.S.C. 486(c); 42 U.S.C. 
3535(d).

    58. The heading for subpart 2424.1 is revised to read as follows:

Subpart 2424.1--Protection of Individual Privacy


2424.202  [Redesignated]

    59. Section 2424.202 is redesignated as 2424.203.


2424.202-70  [Removed]

    60. Section 2424.202-70 is removed.

PART 2425--FOREIGN ACQUISITION

    61. The authority citation for part 2425 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d).


2425.402  [Amended]

    62. Section 2425.402 is amended by adding the paragraph designation 
``(a)(1)'' to the beginning of the text.

PART 2426--OTHER SOCIOECONOMIC PROGRAMS

    63. The authority citation for part 2426 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2426.701  [Redesignated]

    64. Section 2426.701 is redesignated as 2426.7001.


2426.702  [Redesignated]

    65. Section 2426.702 is redesignated as 2426.7002.

PART 2428--BONDS AND INSURANCE

    66. The authority citation for part 2428 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    67. Section 2428.106-6 is revised to read as follows:


2428.106-6  Furnishing information.

    (c) The Contracting Officer shall furnish the certified copy of the 
bond and the contract for which it was given to any person who requests 
them in accordance with FAR 28.106-6.

PART 2432--CONTRACT FINANCING

    68. The authority citation for part 2432 continues to read as 
follows:

    Authority: 31 U.S.C. 3901-3906; 40 U.S.C. 486(c); 42 U.S.C. 
3535(d).

    69. The heading for subpart 2432.4 is revised to read as follows:

Subpart 2432.4--Advance Payments for Non-Commercial Items

    70. In Sec. 2432.402 paragraph (e)(1) is revised to read as 
follows:


2432.402  General.

    (e)(1) The determination and findings required by FAR 
32.402(c)(1)(iii) shall be made by the HCA.
* * * * *


2432.906  [Amended]

    71. Section 2432.906 is amended by adding the paragraph designation 
``(a)'' to the beginning of the text.
    72. Section 2432.908 is revised to read as follows:


2432.908  Contract clauses.

    (c)(1) The Contracting Officer shall insert a clause substantially 
the same as provided at 48 CFR 2452.232-70, Payment Schedule and 
Invoice Submission (Fixed-Price), in all fixed-price solicitations and 
contracts except those for commercial services awarded pursuant to FAR 
part 12.
    (2) The Contracting Officer shall insert a clause substantially the 
same as provided at 48 CFR 2452.232-71, Voucher Submission (Cost-
Reimbursement), in all cost-reimbursement solicitations and contracts 
when vouchers are to be sent directly to the paying office.

PART 2433--PROTESTS, DISPUTES AND APPEALS

    73. The authority citation for part 2433 continues to read as 
follows:

    Authority: 31 U.S.C. 3551-3556; 40 U.S.C. 486(c); 42 U.S.C. 
3535(d).


2433.101-70  [Removed]

    74. Section 2433.101-70 is removed.
    75. Section 2433.102-70 is revised to read as follows:


2433.102-70  Responsibility.

    With the exception of protests filed directly with the Department 
pursuant to FAR 33.103, the Office of General Counsel has 
responsibility for handling matters relating to protests against award 
of contracts by the Department. All written communications from the 
Department to the GAO or other adjudicating body shall be made by the 
Office of General Counsel. The Contracting Officer has responsibility 
for furnishing the Office of General Counsel with all information 
relating to a protest.
    76. Section 2433.103 is revised to read as follows:


2433.103  Protests to the agency.

    (d)(2) Appeals of Contracting Officer protest decisions shall 
include the information required at FAR 33.103(d)(2)(i), (ii), (iii), 
(iv), (v) and (vi).
    (d)(4)(i) Protesters may request an appeal of the Contracting 
Officer's decision on a protest. Such requests shall be made in writing 
to the cognizant HCA not later than 10 days after receipt of the 
Contracting Officer's decision.
    (ii) The HCA, in consultation with the Office of General Counsel, 
shall make all independent reviews of the Contracting Officer's 
decision requested by protesters in accordance with FAR 33.103(d)(4) 
and provide the protester with the HCA's decision on the appeal.
    (f)(1) A determination by the Contracting Officer to award a 
contract pending resolution of a protest as authorized by FAR 33.103 
shall be approved by the HCA in consultation with the Office of General 
Counsel.
    (f)(3) A determination by the Contracting Officer to not suspend 
performance of a contract pending resolution of a protest as authorized 
by FAR 33.103 shall be approved by the HCA in consultation with the 
Office of General Counsel.


2433.103-70  [Removed]

    77. Section 2433.103-70 is removed.


2433.105  [Removed]

    78. Section 2433.105 is removed.
    79. A new section 2433.106 is added to read as follows:


2433.106  Solicitation provision.

    The Contracting Officer shall insert the provision at 2452.233-70, 
Review of Contracting Officer Protest Decisions, in all solicitations 
for contracts expected to

[[Page 46098]]

exceed the simplified acquisition threshold.

PART 2436--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

    80. The authority citation for part 2436 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2436.602-5  [Amended]

    81. In Sec. 2436.602-5, the words ``small purchase limitation'' are 
revised to read ``simplified acquisition threshold.''

PART 2437--SERVICE CONTRACTING

    82. The authority citation for part 2437 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).


2437.101  [Removed]

    83. Section 2437.101 is removed.
    84-85. Section 2437.110 is amended by removing footnote 4; 
redesignating paragraph (g) as 2439.107(a); removing paragraph (e); 
redesignating paragraphs (f) and (h) as paragraphs (e) and (f); 
revising paragraphs (d) and redesignated paragraph (e) to read as 
follows:


2437.110  Solicitation provisions and contract clauses.

* * * * *
    (d) The Contracting Officer shall insert the clause at 48 CFR 
2452.237-73, Conduct of Work and Technical Guidance, in all service 
contracts other than contracts for commercial services awarded pursuant 
to FAR Part 12.
    (e) The Contracting Officer shall insert the clause at 48 CFR 
2452.237-75, Clearance of Contractor Personnel, in solicitations and 
contracts when contractor personnel will be required to work in and/or 
will have access to HUD facilities on a routine, ongoing basis and/or 
at all hours, e.g., performing custodial, building operations, 
maintenance, or security services. The clause shall be inserted in all 
solicitations and contracts for building/facility management and 
operations services. The clause may be used for other types of 
contracts (e.g., information technology services) when suitable as 
determined by the Contracting Officer.
* * * * *


2437.205  [Removed]

    86. Section 2437.205 is removed.

PART 2439--ACQUISITION OF INFORMATION TECHNOLOGY

    87. The authority citation for part 2439 reads as follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    88. Newly designated section 2439.107 is revised to read as 
follows:


2439.107  Contract clauses.

    (a) The Contracting Officer shall insert the clause at 48 CFR 
2452.239-70, Background Investigations for Sensitive Automated Systems/
Applications, in solicitations and contracts that involve work on, or 
access to, sensitive Departmental automated information systems or 
applications as they are defined in the clause.

PART 2442--CONTRACT ADMINISTRATION

    89. The authority citation for part 2442 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    90. A new subpart 2442.15 and a new section 2442.1502 are added to 
read as follows:

Subpart 2442.15--Contractor Performance Information


2442.1502  Policy.

    The Chief Procurement Officer is responsible for establishing past 
performance evaluation procedures and systems as required by FAR 
42.1502 and 42.1503.

PART 2446--QUALITY ASSURANCE

    91. The authority citation for part 2446 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

Subpart 2446.6--[Removed]

    92. Subpart 2446.6 is removed.

PART 2451--USE OF GOVERNMENT SOURCES BY CONTRACTORS

    93. The authority citation for part 2451 is revised to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

Subpart 2451.3--[Redesignated]

    94. Subpart 2451.3 is redesignated as subpart 2451.70.


2451.303  [Redesignated]

    95. Section 2451.303 is redesignated as 2451.7001 and revised to 
read as follows:


2451.7001  Contract clause.

    The Contracting Officer shall insert the clause at 48 CFR 2452.251-
70, Contractor Employee Travel, in cost-reimbursement solicitations and 
contracts involving contractor travel.

PART 2452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    96. The authority citation for part 2452 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

    97-98. In section 2452.215-70, the date and the first paragraph of 
Alternate I is revised and Alternate II is revised to read as follows:


2452.215-70  Proposal Content.

* * * * *

Alternate I (Oct 1999)

    As prescribed in 2415.209(a), if the award selection will be 
made through the lowest-priced technically acceptable proposal 
method, substitute paragraph (c) with the following:
* * * * *

Alternate II (Oct 1999)

    As prescribed in 2415.209(a), if the proposed contract requires 
work on, or access to, sensitive automated systems as described in 
2452.239-70, add the following subparagraph, numbered sequentially, 
to paragraph (c):
    The offeror shall describe in detail how the offeror will 
maintain the security of automated systems as required by clause at 
48 CFR 2452.239-70 in Section I of this solicitation.

(End of Provision)

    99. In Sec. 2452.216-73 paragraph (b) is revised to read as 
follows:


2452.216-73  Performance evaluation plan.

* * * * *
    (b) The Government may unilaterally change the award fee plan prior 
to the beginning of subsequent evaluation periods. The Contracting 
Officer will provide such changes in writing to the Contractor prior to 
the beginning of the applicable evaluation period.
    100. A new section 2452.219-71 is added to read as follows:


2452.219-71  Submission of subcontracting reports.

    As prescribed in 2419.708(f) insert the following clause:

Submission of Subcontracting Reports (Oct 1999)

    The Contractor shall submit the Standard Form (SF) 294, 
Subcontracting Report for Individual Contracts and SF 295, Summary 
Subcontract Report, in accordance with the instructions on the 
forms, except that, one copy of each form and any attachments shall 
be submitted to: Director, Office of Small and Disadvantaged 
Business Utilization, U.S. Department of HUD, 451 Seventh Street, 
SW, Room 3130 (SS), Washington, DC 20410-1000.

(End of clause)


2452.224-70  [Removed]

    101. Section 2452.224-70 is removed.

[[Page 46099]]

    102. Section 2452.232-70 is revised to read as follows:


2452.232-70  Payment schedule and invoice submission (fixed-price).

    As prescribed in 2432.908(a), insert a clause substantially the 
same as the following in all fixed-price solicitations and contracts:

Payment Schedule and Invoice Submission (Fixed-Price) (Oct 1999)

    (a) General. The Government shall pay the Contractor as full 
compensation for all work required, performed and accepted under 
this contract, inclusive of all costs and expenses, the firm fixed-
price stated in Part I, Section B of this contract.
    (b) Payment Schedule. Payment of the contract price will be made 
upon completion and acceptance of all work unless a partial payment 
schedule is included below [Contracting Officer insert schedule 
information]:

----------------------------------------------------------------------------------------------------------------
                                         Applicable contract
        Partial payment number               deliverable             Delivery date            Payment amount
----------------------------------------------------------------------------------------------------------------
1. [  ]
2. [  ]
3. [  ]
(Continue as necessary)
----------------------------------------------------------------------------------------------------------------

    (c) Submission of Invoices. Invoices shall be submitted as 
follows--original to the payment office identified on the award 
document (e.g., in Block 12 on the SF-26 or Block 25 on the SF-33, 
or elsewhere in the contract) and one copy each to the Government 
Technical Representative and Contracting Officer. To constitute a 
proper invoice, the invoice must include all items required by FAR 
clause 52.232-25, ``Prompt Payment.''
    To assist the Government in making timely payments, the 
Contractor is also requested to include on each invoice the 
appropriation number shown on the contract award document (e.g., in 
Block 14 on the SF-26 or Block 21 on the SF-33). The Contractor is 
also requested to clearly indicate on the mailing envelope that an 
invoice is enclosed.
    (d) Contractor Remittance Information. The contractor shall 
provide the payment office with all information required by FAR 
clause 52.232-33, ``Mandatory Information for Electronic Funds 
Transfer Payment,'' 52.232.34, ``Optional Information for Electronic 
Funds Transfer Payment,'' or other supplemental information 
(contracts for commercial services) as applicable.

    103. Section 2452.232-71 is revised to read as follows:


2452.232-71  Voucher submission (cost-reimbursement).

    As prescribed in 2432.908(b), insert a clause substantially the 
same as the following in all cost-reimbursement solicitations and 
contracts:

Voucher Submission (Cost-Reimbursement) (Oct 1999)

    (a) The Contractor shall submit, on a monthly basis [Contracting 
Officer may substitute a different time frame, if appropriate], an 
original and two (2) copies of each voucher. In addition to the 
items necessary per FAR 52.232-25, ``Prompt Payment,'' the voucher 
shall show the elements of cost for the billing period and the 
cumulative costs to date. All vouchers shall be distributed as 
follows, except for the final voucher which shall be submitted in 
all copies to the Contracting Officer--original to the payment 
office (e.g., in Block 12 on the SF-26 or Block 25 on the SF-33, or 
elsewhere in the contract) and one copy each to the Government 
Technical Representative and the Contracting Officer identified on 
the award document.
    To assist the Government in making timely payments, the 
Contractor is requested to include on each voucher the appropriation 
number shown on the award document (e.g., Block 14 of the SF-26 or 
Block 21 of the SF-33). The Contractor is also requested to clearly 
indicate on the mailing envelope that a payment voucher is enclosed.
    (b) Contractor Remittance Information. The contractor shall 
provide the payment office with all information required by FAR 
clause 52.232-33, ``Mandatory Information for Electronic Funds 
Transfer Payment'' or 52.232.34, ``Optional Information for 
Electronic Funds Transfer Payment,'' as applicable.

(End of clause)

    104. A new Section 2452.233-70 is added to read as follows:


2452.233-70  Review of Contracting Officer protest decisions.

    As prescribed in 2433.106, insert the following provision:

Review of Contracting Officer Protest Decisions (Oct 1999)

    (a) In accordance with FAR 33.103 and HUDAR 2433.103, a 
protester may request an appeal of the Contracting Officer's 
decision concerning a protest initially made by the protester to the 
Contracting Officer. Such requests shall be made in writing to the 
cognizant Head of the Contracting Activity (HCA, see definition at 
HUDAR subpart 2402.1) within 10 days (see FAR 33.101 for the 
definition of ``days'') of the protestor's notification of the 
Contracting Officer's decision.
    (b) The cognizant HCA shall make an independent review of the 
Contracting Officer's decision and provide the protester with the 
HCA's decision on the appeal.

(End of clause)

    105. Section 2452.237-73 is revised to read as follows:


2452.237-73   Conduct of work and technical guidance.

    As prescribed in 2437.110(d), insert the following clause in all 
contracts for services:

Conduct of Work and Technical Guidance (Oct 1999)

    (a) The Government Technical Representative (GTR) for liaison 
with the Contractor as to the conduct of work is [insert name] or a 
successor designated by the Contracting Officer. The Contracting 
Officer will notify the contractor in writing of any change to the 
current GTR's status or the designation of a successor GTR.
    (b) The GTR will provide guidance to the contractor on the 
technical performance of the contract. Such guidance shall not be of 
a nature which:
    (1) Causes the Contractor to perform work outside the scope of 
the contract;
    (2) Constitutes a change as defined in FAR 52.243-1;
    (3) Causes an increase or decrease in the cost of the contract;
    (4) Alters the period of performance or delivery dates; or,
    (5) Changes any of the other express terms or conditions of the 
contract.
    (c) The GTR will issue technical guidance in writing or, if 
issued orally, he/she will confirm such direction in writing within 
five calendar days after oral issuance. The GTR may issue such 
guidance via telephone facsimile or electronic mail.

(End of clause)


2452.237-74   [Removed]

    106. Section 2452.237-74 is removed.
    107. Section 2452.237-75 is revised to read as follows:


2452.237-75   Clearance of contractor personnel.

    As prescribed in 2437.110(e), insert the following clause in 
solicitations and contracts.

Clearance of Contractor Personnel (Oct 1999)

    (a) General. This contract requires contractor employees to work 
in, and have access to, a HUD facility. All such employees shall be 
required to provide background information and obtain a HUD building 
pass prior to working in the HUD facility.
    (b) Background information. (1) For each contractor employee 
subject to the requirements of this clause, the contractor shall 
complete and deliver to the Government Technical Representative 
(GTR) the following forms: Form FD-258,

[[Page 46100]]

``Fingerprinting Charts'' (original and one copy); and GSA Form 176, 
``Statement of Personal History'' (original and one copy). The GTR 
will provide the contractor with blank forms upon request.
    (2) The contractor shall deliver the forms required by paragraph 
(b)(1) to the GTR within five (5) calendar days after contract award 
or not later than five (5) calendar days before a covered employee 
will begin work at the HUD facility.
    (3) The information provided in accordance with paragraph (b)(1) 
will be used to perform a background check to determine the 
eligibility of the contractor employees to work in the HUD facility. 
After completion of such review, the GTR shall notify the contractor 
in writing of any contractor employees' ineligibility to work in the 
HUD facility. The contractor shall immediately remove such employees 
from work on this contract which requires the employees' physical 
presence in the HUD facility.
    (c) Building passes. (1) HUD will issue a building pass to each 
contractor employee determined to be eligible pursuant to the 
background check in paragraph (b). The Contractor shall provide the 
GTR with the names and Social Security numbers of all such 
employees. Contractor employees shall have their building passes on 
their persons at all times while working on HUD premises and shall 
present passes for inspection upon request by HUD officials or HUD 
security personnel.
    (2) Building passes shall identify individuals as contractor 
employees and shall have an expiration date not exceeding the 
current term of the contract. Passes shall be renewed for each 
succeeding contract period, if any.
    (3) The contractor shall return a contractor employee's pass to 
the GTR when the employment of any such employee is terminated, or 
when the employee no longer has a need for access to the HUD 
facility. Upon expiration of this contract, the contractor shall 
return to the GTR all building passes issued by HUD and not 
previously returned. The contractor is responsible for accounting 
for all passes issued to the contractor's employees.
    (d) Control of access. HUD shall have and exercise full and 
complete control over granting, denying, withholding, and 
terminating access of contractor employees to HUD facilities. The 
GTR will notify the contractor immediately when HUD has determined 
that an employee is unsuitable or unfit for his/her assigned 
contractual duties, and therefore will no longer be permitted access 
to the HUD facility. The contractor shall take immediate steps to 
remove such an employee from working on this contract and provide a 
suitable replacement.
    (e) Subcontracts. The contractor shall incorporate this clause 
in all subcontracts where the requirements specified in paragraph 
(a) of this section are applicable to performance of the 
subcontract.

(End of clause)


2452.237-76   [Redesignated]

    108. Section 2452.237-76 is redesignated as 2452.239-70 and is 
revised to read as follows:


2452.239-70   Background investigations for sensitive automated 
systems/applications.

    As prescribed in 2439.107(a), insert the following clause:

Background Investigations for Sensitive Automated Systems/Applications 
(Oct 1999)

    (a) General. This contract involves work on, or access to, 
[insert name or other identifier], a HUD information resource that 
is either a major application system or any general support system. 
A major application system is a mission critical system, a system or 
information resource which has high investment cost, or any system 
which contains Privacy Act-covered data. A general support system is 
any computer facility or major component thereof, or any network or 
telecommunications resource. All contractor employees working on 
this contract in positions which HUD has determined to have 
sensitive access to the information resource(s) identified above are 
required to have a background investigation. The investigation shall 
be commensurate with the risk and security controls involved in 
managing, using or operating the resources identified above, 
consistent with 5 CFR part 731. HUD may bar contractor employees 
from working on this contract for failing to meet or maintain the 
applicable suitability standards administered by the Department's 
Personnel Security Branch.
    (b) Citizenship-related requirements. All contractor employees 
as described in paragraph (a) shall: (1) be United States (U.S.) 
citizens living in the U.S.; or (2) owe allegiance to the U.S.
    (c) Background investigation process. (1) The GTR shall notify 
the contractor of those contractor employee positions requiring 
background investigations. For each contractor employee in such a 
position, the contractor shall submit the following completed forms: 
Standard Form (SF) 85P, Questionnaire for Public Trust Positions; 
FD-258, Fingerprint Chart; Fair Credit Reporting Act authorization 
form; and other information as may be necessary. The contractor 
shall submit an original and one copy of the SF 85P.
    (2) The contractor shall deliver the forms and information 
required in paragraph (c)(1) to the GTR as soon as practicable once 
the contractor knows that the employee will be assigned to this 
contract, and no later than seven (7) calendar days after the 
employee begins work on this contract.
    (3) The investigation process shall consist of a range of 
personal background inquiries and contacts (written and personal) 
and verification of the information provided on the security forms 
described in paragraph (c)(1).
    (4) Upon completion of the investigation process, the GTR shall 
notify the contractor in writing of any contractor employees' 
ineligibility to work on this contract. The contractor shall 
immediately remove such employees from work on this contract.
    (5) The contractor shall notify the GTR in writing whenever a 
contractor employee for whom a background investigation package was 
required and submitted to HUD terminates employment or otherwise is 
no longer performing work under this contract. The contractor shall 
provide a copy of the written notice to the Contracting Officer.
    (d) Security breach notification. The contractor shall 
immediately notify the GTR and the Contracting Officer of any breach 
or suspected breach of security or any unauthorized disclosure of 
the information contained in the automated system specified in this 
contract.
    (e) Nondisclosure of information. (1) Neither the contractor nor 
any of its employees shall divulge or release data or information 
developed or obtained during performance of this contract, except to 
authorized Government personnel with an established need to know or 
upon written approval of the Contracting Officer. Information 
contained in all source documents and other media provided by HUD 
are the sole property of HUD.
    (2) The contractor shall require that any employees who may have 
access to the automated systems identified in paragraph (a) sign a 
pledge of nondisclosure of information. These pledges shall be 
signed by the employees before they are permitted to perform work 
under this contract. The contractor shall maintain the signed 
pledges for a period of three years after final payment under this 
contract.
    (f) Security procedures. The contractor shall establish 
personnel security procedures that meet, as a minimum, the 
requirements of HUD Handbook 2400.24. The contractor shall provide a 
copy of such procedures and any revisions made to them during the 
period of the contract to the GTR.
    (g) Contractor compliance. Failure on the part of the contractor 
to comply with the terms of this clause may result in termination of 
this contract for default.
    (h) Other clearance requirements. When any work performed by 
contractor personnel on-site in a HUD facility meets the criteria 
set forth in HUDAR 2437.110(e), the contractor shall also comply 
with the requirements of the clause at 48 CFR 2452.237-75, Clearance 
of Contractor Personnel.
    (i) Subcontracts. The contractor shall incorporate this clause 
in all subcontracts where the requirements specified in paragraph 
(a) of this section are applicable to performance of the 
subcontract.

(End of clause)

    109. Section 2452.237-77 is revised to read as follows:


2452.237-77  Observance of legal holidays and administrative leave.

    As prescribed in 2437.110(f), insert the following clause:

Observance of Legal Holidays and Administrative Leave (Oct 1999)

    (a)(1) The Department of Housing and Urban Development observes 
the following days as holidays--

New Year's Day
Martin Luther King's Birthday

[[Page 46101]]

Washington's Birthday
Memorial Day
Independence Day
Labor Day
Columbus Day
Veterans Day
Thanksgiving Day
Christmas Day

    Any other day designated by Federal law, Executive Order, or 
Presidential Proclamation.
    (2) When any holiday specified in (a)(1) falls on a Saturday, 
the preceding Friday shall be observed. When any such holiday falls 
on a Sunday, the following Monday shall be observed. Observances of 
such days by Government personnel shall not be cause for additional 
period of performance or entitlement to compensation except as set 
forth in the contract. If the contractor's personnel work on a 
holiday, no form of holiday or other premium compensation will be 
reimbursed either as a direct or indirect cost, unless authorized 
pursuant to an overtime clause elsewhere in this contract.
    (b)(1) HUD may close a HUD facility for all or a portion of a 
business day as a result of--
    (A) Granting administrative leave to non-essential HUD employees 
(e.g., unanticipated holiday);
    (B) Inclement weather;
    (C) Failure of Congress to appropriate operational funds;
    (D) Or any other reason.
    (2) In such cases, contractor personnel not classified as 
essential, i.e., not performing critical round-the-clock services or 
tasks, who are not already on duty at the facility shall not report 
to the facility. Such contractor personnel already present shall be 
dismissed and shall leave the facility.
    (3) The contractor agrees to continue to provide sufficient 
personnel to perform round-the-clock requirements of critical tasks 
already in operation or scheduled for performance during the period 
in which HUD employees are dismissed, and shall be guided by any 
specific instructions of the Contracting Officer or his/her duly 
authorized representative.
    (c) When contractor personnel services are not required or 
provided due to closure of a HUD facility as described in this 
clause, the contractor shall be compensated as follows--
    (1) For fixed-price contracts, deductions in the contractor's 
price will be computed as follows--
    (A) The deduction rate in dollars per day will be equal to the 
per month contract price divided by 21 days per month.
    (B) The deduction rate in dollars per day will be multiplied by 
the number of days services are not required or provided.
    If services are provided for portions of days, appropriate 
adjustment will be made by the Contracting Officer to ensure that 
the contractor is compensated for services provided.
    (2) For cost-reimbursement, time-and-materials and labor-hour 
type contracts, HUD shall not reimburse as direct costs, the costs 
of salaries or wages of contractor personnel for the period during 
which such personnel are dismissed from, or do not have access to, 
the facility.
    (d) If administrative leave is granted to contractor personnel 
as a result of conditions stipulated in any ``Excusable Delays'' 
clause of this contract, it will be without loss to the contractor. 
The cost of salaries and wages to the contractor for the period of 
any such excused absence shall be a reimbursable item of direct cost 
hereunder for employees whose regular time is normally charged, and 
a reimbursable item of indirect cost for employees whose time is 
normally charged indirectly in accordance with the contractor's 
accounting policy.

(End of clause)

    110. Section 2452.251-70 is revised to read as follows:


2452.251-70  Contractor employee travel.

    As prescribed in 2451.7001, insert the following clause in all 
cost-reimbursement solicitations and contracts involving travel:

Contractor Employee Travel (Oct 1999)

    (a) To the maximum extent practical, the Contractor shall make 
use of travel discounts which are available to Federal employees 
while traveling in the conduct of official Government business. Such 
discounts may include, but are not limited to, lodging and rental 
car rates.
    (b) The Contractor shall be responsible for obtaining and/or 
providing to his/her employees written evidence of their status with 
regard to their performance of Government contract work needed to 
obtain such discounts.

(End of clause)

Part 2453--Forms

    111. The authority citation for part 2453 continues to read as 
follows:

    Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

PART 2453--[AMENDED]

    112. The words ``HUD Form'' are replaced with ``form HUD-'' 
throughout part 2453.


2453.213  [Removed]

    113. Section 2453.213 is removed.


2453.213-70  [Removed]

    114. Section 2453.213-70 is removed.


2453.213-71  [Removed]

    115. Section 2453.213-71 is removed.


2453.215-70  [Removed]

    116. Section 2453.215-70 is removed.


2453.237-70  [Removed]

    117. Section 2453.237-70 is removed.


2453.246-70  [Removed]

    118. Section 2453.246-70 is removed.

    Dated: July 16, 1999.
V. Stephen Carberry,
Chief Procurement Officer.
[FR Doc. 99-21077 Filed 8-20-99; 8:45 am]
BILLING CODE 4210-01-P