[Federal Register Volume 66, Number 95 (Wednesday, May 16, 2001)]
[Rules and Regulations]
[Pages 27414-27416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12245]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 17, 22, and 36

[FAC 97-26; FAR Case 2001-016; Item II]
RIN 9000-AJ14


Federal Acquisition Regulation; Executive Order 13202, 
Preservation of Open Competition and Government Neutrality Towards 
Government Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement 
Executive Order (E.O.) 13202, Preservation of Open Competition and 
Government Neutrality Towards Government Contractors' Labor Relations 
on Federal and Federally Funded Construction Projects, which prohibits 
including requirements for affiliation with a labor organization as a 
condition for award of any contract or subcontract for construction or 
construction management services.

DATES: Effective Date: May 16, 2001.
    Applicability Date: This rule applies to contracts awarded after 
February 17, 2001.
    Comment Date: Interested parties must submit comments to the FAR 
Secretariat at the address shown below on or before July 16, 2001 to be 
considered in the formulation of a final rule.

ADDRESSES: Submit written comments to: General Services Administration, 
FAR Secretariat (MVP), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie 
Duarte, Washington, DC 20405.
    Submit electronic comments via the Internet to: farcase.2001-016@gsa.gov.
    Please submit comments only and cite FAC 97-26, FAR case 2001-016 
in all correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC, 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Ms. Linda Nelson, Procurement Analyst, at (202) 501-
1900. Please cite FAC 97-26, FAR case 2001-016.

SUPPLEMENTARY INFORMATION:

A. Background

    On February 17, 2001, President George W. Bush signed E.O. 13202 
revoking E.O. 12836 of February 1, 1993, and Presidential Memorandum of 
June 5, 1997, entitled ``Use of Project Labor Agreements for Federal 
Construction Projects.'' The E.O. was published in the Federal Register 
at 66 FR 11225, February 22, 2001, and amended by E.O. 13208 published 
in the Federal Register at 66 FR 18717, April 11, 2001. The E.O. 13202 
is intended to improve the internal management of the Executive branch 
by--
     Promoting and ensuring open competition on Federal and 
federally funded or assisted construction projects;
     Maintaining Government neutrality towards Government 
contractors' labor relations on Federal and federally funded or 
assisted construction projects;
     Reducing construction costs to the Government and to the 
taxpayers;
     Expanding job opportunities, especially for small and 
disadvantaged businesses;
     Preventing discrimination against Government contractors 
or their employees based upon labor affiliation or lack thereof, 
thereby promoting the economical, nondiscriminatory, and efficient 
administration and completion of Federal and federally funded or 
assisted construction projects; and

[[Page 27415]]

     Preventing the inefficiency that may result from the 
disruption of a previously established contractual relationship in 
particular cases.
    The interim rule amends the FAR to provide language in Part 36 on 
the new E.O. The E.O. provides that agencies may not require or 
prohibit offerors, contractors, or subcontractors from entering into or 
adhering to agreements with one or more labor organizations. It also 
permits agency heads to exempt a project from the requirements of the 
E.O. under special circumstances, but the exemption may not be related 
to the possibility of or an actual labor dispute. The amended E.O. also 
allows for exemption of a project governed by a project labor agreement 
in place as of February 17, 2001, which had a construction contract 
awarded as of February 17, 2001.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The Department of Defense, the General Services Administration, and 
the National Aeronautics and Space Administration believe that this 
interim rule may have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because the rule will assist in 
expanding job opportunities for small and small disadvantaged 
businesses in Federal and federally funded construction projects. 
Therefore, we have prepared an Initial Regulatory Flexibility Analysis 
that is summarized as follows:

    The rule amends FAR Parts 17, 22, and 36 to implement Executive 
Order 13202 that requires that any construction contract awarded 
after February 17, 2001, or any obligation of funds pursuant to such 
contract, must not require or prohibit offerors, contractors, or 
subcontractors to enter into or adhere to agreements with one or 
more labor organizations on the same or other related construction 
project(s); or otherwise discriminate against offerors, contractors, 
or subcontractors for becoming or refusing to become or remaining 
signatories or otherwise adhering to agreements with one or more 
organizations, on the same or other related construction projects. 
The rule will apply to all large and small entities that seek 
Federal construction contracts. The rule should have a positive 
economic impact on those small businesses that are not union shops, 
and that want to bid on Federal construction contracts, because it 
may provide additional opportunities for work on Federal 
construction projects by non-union small businesses.

    We invite comments from small businesses and other interested 
parties. We will consider comments from small entities concerning the 
affected FAR Parts in accordance with 5 U.S.C. 610. Small entities must 
submit such comments separately and should cite 5 U.S.C. 601, et seq. 
(FAC 97-26, FAR Case 2001-016), in correspondence.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the interim rule 
does not impose or remove information collection requirements that 
require the approval of the Office of Management and Budget under 44 
U.S.C. 3501, et seq.

D. Determination to Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DoD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that urgent and compelling reasons exist to promulgate this 
interim rule without prior opportunity for public comment. This action 
is necessary to implement Executive Order (E.O.) 13202, Preservation of 
Open Competition and Government Neutrality Towards Government 
Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects, dated February 17, 2001. Section 7 of the E.O. 
directed that, within 60 days of the E.O. the Federal Acquisition 
Regulations Council amend the FAR to implement the provisions of the 
E.O. However, pursuant to Public Law 98-577 and FAR 1.501, public 
comments received in response to this interim rule will be considered 
in formulating the final rule.

List of Subjects in 48 CFR Parts 17, 22, and 36

    Government procurement.

    Dated: May 10, 2001.
Al Matera,
Director, Acquisition Policy Division.


    Therefore, DoD, GSA, and NASA amend 48 CFR parts 17, 22, and 36 as 
set forth below:
    1. The authority citation for 48 CFR parts 17, 22, and 36 continues 
to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 17--SPECIAL CONTRACTING METHODS

    2. Amend section 17.603 by adding paragraph (c) to read as follows:


17.603  Limitations.

* * * * *
    (c) For use of project labor agreements, see 36.202(d).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

    3. Amend section 22.101-1 by removing the paragraph designation 
``(b)'' and adding ``(b)(1)'' in its place, and adding a new paragraph 
(b)(2) to read as follows:


22.101-1  General.

* * * * *
    (b)(1) * * *
    (2) For use of project labor agreements, see 36.202(d).
* * * * *

PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

    4. Amend section 36.202 by adding paragraph (d) to read as follows:


36.202  Specifications.

* * * * *
    (d) In accordance with Executive Order 13202, of February 17, 2001, 
Preservation of Open Competition and Government Neutrality Towards 
Government Contractors' Labor Relations on Federal and Federally Funded 
Construction Projects, as amended on April 6, 2001--
    (1) The Government, or any construction manager acting on behalf of 
the Government, must not--
    (i) Require or prohibit offerors, contractors, or subcontractors to 
enter into or adhere to agreements with one or more labor organizations 
(as defined in 42 U.S.C. 2000e(d)) on the same or other related 
construction projects; or
    (ii) Otherwise discriminate against offerors, contractors, or 
subcontractors for becoming, refusing to become, or remaining 
signatories or otherwise adhering to agreements with one or more labor 
organizations, on the same or other related construction projects.
    (2) Nothing in this paragraph prohibits offerors, contractors, or 
subcontractors from voluntarily entering into project labor agreements.
    (3) The head of the agency may exempt a construction project from 
this policy if the agency head finds that, as of February 17, 2001--
    (i) The agency or a construction manager acting on behalf of the

[[Page 27416]]

Government had issued or was a party to bid specifications, project 
agreements, agreements with one or more labor organizations, or other 
controlling documents with respect to that particular project, which 
contained any of the requirements or prohibitions in paragraph (d)(1) 
of this section; and
    (ii) One or more construction contracts subject to such 
requirements or prohibitions had been awarded.
    (4) The head of the agency may exempt a particular project, 
contract, or subcontract from this policy upon a finding that special 
circumstances require an exemption in order to avert an imminent threat 
to public health or safety, or to serve the national security. A 
finding of ``special circumstances'' may not be based on the 
possibility or presence of a labor dispute concerning the use of 
contractors or subcontractors who are nonsignatories to, or otherwise 
do not adhere to, agreements with one or more labor organizations, or 
concerning employees on the project who are not members of or 
affiliated with a labor organization.

[FR Doc. 01-12245 Filed 5-15-01; 8:45 am]
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