[Federal Register Volume 64, Number 162 (Monday, August 23, 1999)]
[Proposed Rules]
[Pages 46104-46107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21078]



[[Page 46103]]

_______________________________________________________________________

Part V





Department of Housing and Urban Development





_______________________________________________________________________



48 CFR Part 2403 et al.



HUD Acquisition Regulation; Miscellaneous Revisions; Proposed Rule

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

[[Page 46104]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

48 CFR Parts 2403, 2409, 2436, 2439, 2442, 2452 and 2453

[Docket No. FR-4291-P-01]
RIN 2535-AA25


HUD Acquisition Regulation; Miscellaneous Revisions

AGENCY: Office of the Chief Procurement Officer (CPE).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the Department of Housing and 
Urban Development (HUD) Acquisition Regulation (HUDAR) to implement 
changes applicable to HUD's procurement activities made in the Federal 
Acquisition Regulation since the HUDAR's last issuance. It would also 
implement miscellaneous HUD procurement rules as described in the 
Supplementary Information below.

DATES: 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. Facsimile comments will not be 
accepted. 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.

FOR FURTHER INFORMATION CONTACT: Frederick Graves, Policy and Field 
Operations Division, Office of Procurement and Contracts (Seattle 
Outstation), U.S. Department of Housing and Urban Development, Seattle 
Federal Office Building, 909 1st Avenue, Seattle, WA 98104-1000, (206) 
220-5122, ext. 3450. Hearing or speech-impaired individuals may call 
(206) 220-5185 (TTY) or 1-800-877-8339 (Federal Information Relay 
Service TTY). (Other than the ``800'' number, 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 
54723); 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). This proposed rule amends the HUDAR to 
reflect HUD's implementation of changes in the FAR and Federal statutes 
applicable to HUD's procurement activities. Please note that the 
Department is also publishing, elsewhere in this issue of the Federal 
Register, an interim rule for comment making other changes to the 
HUDAR.
    Section 2403.670 is revised pursuant to section 4301 of the Federal 
Acquisition Reform Act of 1996, (Public Law 104-106, 110 Stat. 642, 
approved February 10, 1996) (1996 FAR Act) to delete the requirement 
for a certification regarding Federal employment by offerors and 
contractors.
    In accordance with Section 4301 of the 1996 FAR Act, the Department 
is removing, via this proposed rule, two of its three previously 
existing regulatory certification requirements that are not statutorily 
based, viz., 2452.203-71, ``Certification Regarding Federal 
Employment'' and 2452.209-71, ``Organizational Conflicts of Interest 
Certification.'' The Chief Procurement Officer has made a determination 
to retain the certification requirement at Section 2426.703 and the 
related solicitation provision at 2452.226-70, Certification of Status 
as a Minority Business Enterprise. The CPE has determined that the 
Department needs to maintain its capability to provide accurate, timely 
reporting on its minority contracting activity statistics. This 
certification is the most efficient means for obtaining the data needed 
for making such reports.
    In section 2439.107 a new paragraph (b) is added to prescribe the 
use of a computer virus security clause in contracts for information 
technology.
    Section 2442.1106 is revised to replace the Department's current 
requirement for the use of a specific project planning and monitoring 
process for certain technical services contracts with a generic 
requirement for an acceptable planning and monitoring system. The 
revision allows contractors to develop their own system or use 
commercially available systems that are acceptable to the contracting 
officer. This also permits the use of automated planning and monitoring 
systems to streamline those functions. HUD's current system is not 
automated.
    Section 2452.203-71 is removed to delete the requirement for the 
non-statutory certification (see comments under 2403.670 above).
    Section 2452.209-70 is replaced with a new version of the 
solicitation provision in which the contracting officer identifies the 
potential areas for organizational conflicts of interest. This reflects 
the guidance provided in FAR Subpart 9.5.
    Section 2452.209-71 is revised to better conform to the 
requirements of FAR Subpart 9.5, viz., to place the burden on the 
contracting officer of describing any potential organizational conflict 
of interest in the contract. The revised clause also prohibits the 
contractor's performance under future contracts of work using 
specifications developed by the contractor under the immediate 
contract. The contracting officer may also impose additional 
restrictions via this clause. Section 2452.209-71 is also revised 
pursuant to section 4301 of the 1996 FAR Act to delete the existing 
requirement for the submission of an organizational conflict of 
interest certification by all offerors.
    In section 2452.215-70, an Alternate III is added to obtain 
information required of offerors by the provision at 2452.209-72.
    Section 2452.239-71 is added in accordance with 2439.107(b). The 
clause seeks to prevent the knowing submission by a contractor of 
information technology containing viruses that the contractor should 
have detected before such submission.
    Section 2452.242-71 is revised to describe in generic terms the 
Department's requirements for project planning and monitoring systems 
to be used under contracts exceeding $500,000 for technical or 
professional services for work of a developmental or advisory nature. 
This eliminates the requirement for HUD's previous system which was not 
automated and permits the use of contractors' own automated planning 
and monitoring systems to streamline those functions. The forms related 
to the previous system at 2453.242-70 and 2453.242-71 are removed.

Findings and Certifications

Paperwork Reduction Act Statement

    The information collection requirements contained in the HUDAR,

[[Page 46105]]

as described in the table below, have been submitted to the Office of 
Management and Budget for review under section 3507(d) of the Paperwork 
Reduction Act of 1995 (44 U.S.C. Chapter 35).
    Estimate of the total reporting and recordkeeping burden that will 
result from the collection of information:
    REPORTING AND RECORDKEEPING BURDEN:

----------------------------------------------------------------------------------------------------------------
                                                                              Annual     Est. avg.
                                                               Number of     freq. of     time for   Est. annual
                      Section reference                         parties    requirement  requirement     burden
                                                                             (annum)      (hours)      (hours)
----------------------------------------------------------------------------------------------------------------
HUDAR:
    2452.209-70.............................................          350            1          0.5          175
    2452.209-72.............................................            5            1          1.0            5
    2452.215-70.............................................          350            1        120.0       42,000
    2452.216-72.............................................            2            4          2.0           16
    2452.219-70.............................................           30            1          0.5           15
    2452.219-71.............................................           30            4          0.1           12
    2452.237-70.............................................           30            1          4.0          120
    2452.237-75.............................................            5            1          5.0           25
    2452.239-70.............................................           40            1          1.0           40
    2452.242-71 (initial plan)..............................           40            1          8.0          320
    2452.242-71 (reports)...................................           40           12          8.0        2,880
    HUD 770.................................................            2            1          0.5            1
                                                             ---------------------------------------------------
      Total Reporting and Recordkeeping Burden (Hours)......  ...........  ...........  ...........       45,609
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond; including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this proposal. Comments must be 
received within sixty (60) days from the date of this proposal. 
Comments must refer to the proposal by name (HUDAR) and must be sent 
to:

Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and 
Budget, New Executive Office Building, Washington, DC 20503
and
Antoinette Henry, Reports Liaison Officer, Office of the Chief 
Procurement Officer, Department of Housing & Urban Development, 451--
7th Street, SW, Room 5262, Washington, DC 20410.

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 proposed 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 proposed rule.

Environmental Impact

    This rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition or new construction, or establish, revise or provide for 
standards for construction or construction materials, manufactured 
housing or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule 
is categorically excluded from environmental review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321). 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 48 CFR Parts 2403, 2409, 2436, 2439, 2442, 2452 
and 2453.

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

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

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


[[Page 46106]]


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

    2. Section 2403.670 is revised to read as follows:


2403.670  Solicitation provision and contract clause.

    Insert the clause at 48 CFR 2452.203-70 in all solicitations and 
contracts.

PART 2409--CONTRACTOR QUALIFICATIONS

    3. 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).

    4. Section 2409.507-1 is revised to read as follows:


2409.507-1  Solicitation provisions.

    The Contracting Officer shall insert a provision substantially the 
same as the provision at 48 CFR 2452.209-70, Potential Organizational 
Conflicts of Interest, in all solicitations over the simplified 
acquisition limitation when the Contracting Officer has reason to 
believe that a potential organizational conflict of interest exists. 
The Contracting Officer shall describe the nature of the potential 
conflict in the provision.
    5. Section 2409.507-2 is revised to read as follows:


2409.507-2  Contract clauses.

    The Contracting Officer shall insert a clause substantially the 
same as the clause at 48 CFR 2452.209-71, Limitation on Future 
Contracts, in all contracts above the simplified acquisition threshold. 
The Contracting Officer shall describe in the clause the nature of the 
potential conflict, and the negotiated terms and the duration of the 
limitation.

PART 2436--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

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

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

    7. Paragraph (a)(2) of section 2436.602-2 is revised to read as 
follows:


2436.602-2  Evaluation boards.

    (a) * * *
    (2) The cognizant program office head for boards appointed at the 
field level.
* * * * *
    8. Section 2436.602-4 is revised to read as follows:


2436.602-4  Selection authority.

    (a) The final selection decision shall be made by the cognizant 
Primary Organization Head in headquarters, or field program office 
head.

PART 2439--ACQUISITION OF INFORMATION TECHNOLOGY

    9. The authority citation for part 2439 continues to read as 
follows:

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

    10. In section 2439.107, a new paragraph (b) is added to read as 
follows:


2439.107  Contract clauses.

* * * * *
    (b) The contracting officer shall insert the clause at 48 CFR 
2452.239-71, Information Technology Virus Security, in solicitations 
and contracts under which the contractor will provide information 
technology hardware, software or data products.

PART 2442--CONTRACT ADMINISTRATION

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

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

    12. Section 2442.1106 is revised to read as follows:


2442.1106  Reporting requirements.

    (a) All contracts for professional or technical services of a 
developmental or advisory nature exceeding $500,000 shall include a 
requirement for the use of systematic project planning and progress 
reporting. The Contracting Officer may require the use of such project 
planning and reporting systems for contracts below the above threshold.
    13. Section 2442.1107 is revised to read as follows:


2442.1107  Contract clause.

    The Contracting Officer shall insert a clause substantially the 
same as the clause at 48 CFR 2452.242-71, Project Management System, in 
solicitations and contracts for services as described in 2442.1106 
expected to exceed $500,000. Use of this clause below the stated 
threshold is at the discretion of the Contracting Officer.

PART 2452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

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

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


2452.203-71  [Removed]

    15. Section 2452.203-71 is removed.
    16. Section 2452.209-70 is revised to read as follows:


2452.209-70  Potential organizational conflicts of interest.

    As prescribed in 2409.507-1, the Contracting Officer may insert a 
provision substantially the same as follows in solicitations:

Potential Organizational Conflicts of Interest (*** 1999)

    (a) The Contracting Officer has determined that the proposed 
contract contains a potential organizational conflict of interest. 
Offerors are directed to FAR subpart 9.5 for detailed information 
concerning organizational conflicts of interest.
    (b) The nature of the potential conflict of interest is 
[Contracting Officer insert description]:
    (c) Offerors shall provide a statement which describes concisely 
all relevant facts concerning any past, present or planned interest 
(financial, contractual, organizational, or otherwise) relating to 
the work to be performed under the proposed contract and bearing on 
whether the offeror has a possible organizational conflict of 
interest with respect to:
    (1) Being able to render impartial, technically sound, and 
objective assistance or advice, or
    (2) Being given an unfair competitive advantage. The offeror may 
also provide relevant facts that show how its organizational 
structure and/or management systems limit its knowledge of possible 
organizational conflicts of interest relating to other divisions or 
sections of the organization and how that structure or system would 
avoid or mitigate such organizational conflict.
    (d) No award shall be made until any potential conflict of 
interest has been neutralized or mitigated to the satisfaction of 
the Contracting Officer.
    (e) Refusal to provide the requested information or the willful 
misrepresentation of any relevant information by an offeror shall 
disqualify the offeror from further consideration for award of a 
contract under this solicitation.
    (f) If the Contracting Officer determines that a potential 
conflict can be avoided, effectively mitigated, or otherwise 
resolved through the inclusion of a special contract clause, the 
terms of the clause will be subject to negotiation.

(End of provision)

    17. Section 2452.209-71 is revised to read as follows:


2452.209-71  Limitation on future contracts.

    As prescribed in 2409.507-2, the Contracting Officer may insert a 
clause substantially the same as follows in solicitations and contracts 
for services:

Limitation on Future Contracts (**** 1999)

    (a) The Contracting Officer has determined that this contract 
may give rise to potential organizational conflicts of interest as 
defined at FAR subpart 9.5.
    (b) The nature of the potential conflict of interest is 
[Contracting Officer insert description]:

[[Page 46107]]

    (c) If the contractor, under the terms of this contract or 
through the performance of tasks pursuant to this contract, is 
required to develop specifications or statements of work that are to 
be incorporated into a solicitation, the contractor shall be 
ineligible to perform the work described in that solicitation as a 
prime or first-tier subcontractor under any ensuing HUD contract.
    (d) Other restrictions--[Contracting Officer insert description]
    (e) The restrictions imposed by this clause shall remain in 
effect until [Contracting Officer insert period or date].

(End of clause)

    18. A new section 2452.239-71 is added to read as follows:


2452.239-71  Information technology virus security.

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

Information Technology Virus Security (****, 1999)

    (a) The contractor hereby agrees to make every reasonable effort 
to deliver information technology products to HUD free of known 
computer viruses. The contractor shall be responsible for examining 
all such products prior to their delivery to HUD using software 
tools and processes capable of detecting all known viruses.
    (b) The contractor shall include the following statement on 
deliveries of hardware, software, and data products, including 
diskettes, made under this contract:
    [product description, part/catalog number, other identifier, and 
serial number, if any]
    ``This product has been scanned for known viruses using [name of 
virus-screening product, including version number, if any] and is 
certified to be free of known viruses at the time of delivery.''
    (c) The Contracting Officer may assess monetary damages against 
the contractor sufficient to compensate HUD for actual or estimated 
costs resulting from computer virus damage or malicious destruction 
of computer information arising from the contractor's failure to 
take adequate precautions to preclude delivery of virus-containing 
products in the delivery of hardware, software, or data on diskettes 
under this contract.
    (d) This clause shall not subrogate the rights of the Government 
under any other clause of this contract.

(End of clause)

    19. Section 2452.242-71 is revised to read as follows:


2452.242-71  Project management system.

    As prescribed in 2442.1107, insert the following clause:

Project Management System (**** 1999)

    (a) Within the time period specified elsewhere in this contract, 
or as directed by the Contracting Officer, the Contractor shall 
provide to the GTR and Contracting Officer a project management 
baseline plan and routine reports showing the Contractor's actual 
progress against the baseline plan.
    (b) The project management system shall consist of two parts:
    (1) Baseline plan. The baseline plan shall consist of--
    (i) A narrative portion that:
    (A) Identifies each task and significant activity required for 
completing the contract work, critical path activities, task 
dependencies, task milestones, and related deliverables;
    (B) Describes the project schedule, including the period of time 
needed to accomplish each task and activity (see i(B));
    (C) Describes staff (e.g., hours per individual), financial, and 
other resources allocated to each task and significant activity; and
    (D) Provides the rationale for project organization and resource 
allocation.
    (ii) A graphic portion showing:
    (A) Cumulative planned or budgeted costs of work scheduled for 
each reporting period over the life of the contract; and
    (B) The planned start and completion dates of all planned and 
budgeted tasks and activities.
    (2) Progress reports. Progress reports shall consist of:
    (i) A narrative portion that:
    (A) Provides a brief, concise summary of technical progress made 
and the costs incurred for each task during the reporting period; 
and
    (B) Identifies significant problems, or potential problems, 
their causes, proposed corrective actions, and the net effect on 
contract completion.
    (ii) A graphic portion showing:
    (A) The schedule status and degree of completion of the tasks, 
activities and deliverables shown in the baseline plan for the 
reporting period, including actual start and completion dates for 
all tasks and activities in the baseline plan;
    (B) The costs incurred during the reporting period, the current 
total amount of costs incurred through the end date of the reporting 
period for budgeted work, and the projected costs required to 
complete the work under the contract.
    (c) The formats, forms and/or software to be used for the 
project management system under this contract shall be [Contracting 
Officer insert appropriate language--``as prescribed in the 
schedule;'' ``a format, forms and/or software designated by the 
GTR;'' or, ``the contractor's own format, forms and/or software, 
subject to the approval of the GTR.'']

(End of clause)

PART 2453--FORMS

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

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


2453.242-70  [Removed]

    21. Section 2453.242-70 is removed.


2453.242-71  [Removed]

    22. Section 2453.242-71 is removed.

    Dated: June 7, 1999.
V. Stephen Carberry,
Chief Procurement Officer.
[FR Doc. 99-21078 Filed 8-20-99; 8:45 am]
BILLING CODE 4210-01-P