[Federal Register Volume 68, Number 238 (Thursday, December 11, 2003)]
[Rules and Regulations]
[Pages 69250-69251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30476]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 9

[FAC 2001-18; FAR Case 2002-010; Item V]
RIN 9000-AJ48


Federal Acquisition Regulation; Debarment and Suspension--Order 
Placement and Option Exercise

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

ACTION: Final rule.

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[[Page 69251]]

SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council (Councils) have agreed on a final rule 
amending the Federal Acquisition Regulation (FAR) to address the 
placement of orders under existing contracts and agreements with 
contractors that have been debarred, suspended, or proposed for 
debarment.

DATES: Effective Date: January 12, 2004.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat at (202) 501-4755 
for information pertaining to status or publication schedules. For 
clarification of content, contact Mr. Craig R. Goral, Procurement 
Analyst, at (202) 501-3856. Please cite FAC 2001-18, FAR case 2002-010.

SUPPLEMENTARY INFORMATION:

A. Background

    DoD, GSA, and NASA published a proposed rule in the Federal 
Register at 67 FR 67282, November 4, 2002, to require that 
discretionary actions on the part of agencies meet the same standards 
as agencies would have to meet in awarding new contracts. The rule 
prohibited agencies from placing orders exceeding the guaranteed 
minimum against existing contracts, placing orders against optional 
Federal Supply Schedule contracts, adding new work, exercising options 
or otherwise extending the duration of contracts with contractors that 
are debarred, suspended or proposed for debarment unless the agency 
head makes a determination that there are compelling reasons for doing 
so.
    Two comments from two commenters were received in response to the 
proposed rule. The first commenter strongly supported the rule. The 
second commenter suggested that the rule be clarified to indicate 
whether it applies to credit card purchases or blanket purchase 
agreements (BPAs), Memorandums of Agreement (MOAs), Military 
Interdepartmental Purchase Requests (MIPRs), or Governmentwide 
acquisition contracts (GWACs). A change was made to the rule to address 
BPAs and Basic Ordering Agreements (BOAs) based on this recommendation. 
It was not appropriate to address MOAs or MIPRs because they are not 
entered into under the FAR. GWACs are indefinite delivery contracts and 
are, therefore, already covered by the rule. BPAs and BOAs are 
agreements rather than contracts. However, they should contain the 
basic clauses that will apply to orders placed under them. Therefore, 
the Councils revised the rule to address BPAs and BOAs. The requirement 
that contractors must be responsible is statutory. Contractors 
debarred, suspended, or proposed for debarment are excluded from doing 
business with the Government unless there is a compelling reason to 
conduct business with such a contractor.
    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 certify that this 
final rule will not have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601, et seq., because it only affects orders 
placed by civilian agencies against existing contracts with contractors 
that are debarred, suspended or proposed for debarment. The Defense FAR 
Supplement already prohibits the placement of such orders.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose information collection requirements that require 
the approval of the Office of Management and Budget under 44 U.S.C. 
3501, et seq.

List of Subjects in 48 CFR Part 9

    Government procurement.

    Dated: December 4, 2003.
Laura Auletta,
Director, Acquisition Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR part 9 as set forth below:

PART 9--CONTRACTOR QUALIFICATIONS

0
1. The authority citation for 48 CFR part 9 is revised to read as 
follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).
0
2. Amend section 9.405 by revising paragraph (a); and removing from 
paragraphs (d)(2) and (d)(3) the words ``or a designee''. The revised 
text reads as follows:


9.405  Effect of listing.

    (a) Contractors debarred, suspended, or proposed for debarment are 
excluded from receiving contracts, and agencies shall not solicit 
offers from, award contracts to, or consent to subcontracts with these 
contractors, unless the agency head determines that there is a 
compelling reason for such action (see 9.405-1(b), 9.405-2, 9.406-1(c), 
9.407-1(d), and 23.506(e)). Contractors debarred, suspended, or 
proposed for debarment are also excluded from conducting business with 
the Government as agents or representatives of other contractors.
* * * * *

0
3. Amend section 9.405-1 by removing from the first sentence of 
paragraph (a) the words ``or a designee''; revising paragraph (b); and 
removing paragraph (c). The revised text reads as follows:


9.405-1  Continuation of current contracts.

* * * * *
    (b) For contractors debarred, suspended, or proposed for debarment, 
unless the agency head makes a written determination of the compelling 
reasons for doing so, ordering activities shall not--
    (1) Place orders exceeding the guaranteed minimum under indefinite 
quantity contracts;
    (2) Place orders under optional use Federal Supply Schedule 
contracts, blanket purchase agreements, or basic ordering agreements; 
or
    (3) Add new work, exercise options, or otherwise extend the 
duration of current contracts or orders.


9.405-2  [Amended]

0
4. Amend section 9.405-2 by removing from the first sentence of 
paragraph (a) the words ``or a designee''.

[FR Doc. 03-30476 Filed 12-10-03; 8:45 am]
BILLING CODE 6820-EP-P