[Federal Register Volume 71, Number 207 (Thursday, October 26, 2006)]
[Rules and Regulations]
[Pages 62560-62565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17984]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212, 222, and 252

RIN 0750-AF11


Defense Federal Acquisition Regulation Supplement; Combating 
Trafficking in Persons (DFARS Case 2004-D017)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Interim rule with request for comments.

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SUMMARY: DoD has issued an interim rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement DoD policy 
prohibiting activities on the part of DoD contractors and contractor 
employees that support or promote trafficking in persons. The rule 
contains a clause for use in contracts performed outside the United 
States.

DATES: Effective date: October 26, 2006.
    Comment date: Comments on the interim rule should be submitted to 
the address shown below on or before December 26, 2006, to be 
considered in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2004-D017, 
using any of the following methods:
    [cir] Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    [cir] E-mail: [email protected]. Include DFARS Case 2004-D017 in the 
subject line of the message.
    [cir] Fax: (703) 602-0350.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
Williams, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, 
Washington, DC 20301-3062.
    [cir] Hand Delivery/Courier: Defense Acquisition Regulations 
System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 
22202-3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

    This interim rule implements (1) a memorandum issued by the 
Secretary of Defense on September 16, 2004, which states that 
trafficking practices will not be tolerated in DoD contractor 
organizations or their subcontractors in supporting DoD operations, and 
(2) a memorandum issued by the Deputy Secretary of Defense on January 
30, 2004, which states as an objective that, consistent with U.S. and 
host-nation law, provisions should be incorporated in overseas service 
contracts that prohibit any activities on the part of contractor 
employees that support or promote trafficking in persons and that 
impose suitable penalties on contractors who fail to monitor the 
conduct of their employees. The January 30, 2004, memorandum cites 
National Security Presidential Directive/NSPD-22, which decrees that 
all departments of the U.S. Government will take a ``zero tolerance'' 
approach to trafficking in persons.
    DoD published a proposed rule at 70 FR 35603 on June 21, 2005, to 
implement the DoD policy prohibiting trafficking in persons in all 
contracts performed outside the United States. Two respondents 
submitted comments on the proposed rule. Subsequently, on April 19, 
2006 (71 FR 20301), an interim rule amending the Federal Acquisition 
Regulation (FAR) was published to implement 22 U.S.C. 7104, as amended 
by the Trafficking Victims Protection Reauthorization Act of 2003 (Pub. 
L. 108-193) and the Trafficking Victims Protection Reauthorization Act 
of 2005 (Public Law 109-164). The FAR rule contains a new Subpart 
22.17, Combating Trafficking in Persons, with an associated contract 
clause, and prohibits severe forms of trafficking in persons, 
procurement of commercial sex acts, and the use of forced labor by 
Government contractors or subcontractors or their employees. The FAR 
rule applies to service contracts, other than commercial service 
contracts awarded under FAR Part 12.
    This interim DFARS rule supplements the interim FAR rule published 
on April 19, 2006, and also contains changes made as a result of public 
comments received on the proposed DFARS rule published on June 21, 
2005. The DFARS rule extends the FAR prohibitions on severe forms of 
trafficking in persons and use of forced labor to all DoD contracts 
performed outside the United States, and extends the FAR prohibition on 
the procurement of commercial sex acts to all DoD service and 
construction contracts performed outside the United States.
    Many of DoD's contracts performed outside the United States are 
susceptible to trafficking in persons due to the difficult working 
conditions (e.g., war zones, extreme climate). Also, DoD has 
significant numbers and varying types of contracts and subcontracts 
being performed outside the United States (e.g., supplies, food 
services, logistics services, guard services, maintenance services, 
construction) and seeks to prevent instances of trafficking in persons 
in all such contracts. For example, if a contract or subcontract has 
been awarded for cleaning services and the contracting officer 
discovers that the contractor is using forced labor, DoD wants to be 
able to take action against the contractor. As another example, if a 
contractor employee working on a DoD logistics support contract 
``purchases'' an individual (i.e., slavery/indentured servitude), DoD 
wants the contractor to take action against that employee.
    The DFARS text is included in Part 222, instead of the proposed 
rule location of Part 225, for consistency with the location of the 
corresponding FAR text. The new clause at DFARS 252.222-7006, Combating 
Trafficking in Persons, requires DoD contractors performing outside the 
United States to take appropriate action against employees who engage 
in activities prohibited by the clause; to include the substance of the 
clause in all subcontracts performed outside the United States; and to 
include the substance of the clause in subcontracts performed in the 
United States when both the contract and the subcontract are for 
services (other than commercial services).
    The following is a discussion of the public comments received in 
response to the proposed rule published on June 21, 2005, and the 
resulting changes included in this interim rule.

1. Comments Related to Policy and Clause Prescription

    a. Comment: One respondent recommended that DoD withhold any 
further action on this DFARS rule pending completion of the FAR rule on 
this subject.
    DoD Response: DoD has incorporated most of the language of the FAR 
interim rule into this interim DFARS rule. The DFARS rule implements 
DoD policy and has broader application than the FAR rule. Therefore, it 
is not necessary for the FAR rule to be finalized prior to proceeding 
with this DFARS rule.
    b. Comment: One respondent expressed concerns about imposing the 
``full brunt'' of the contract clause in all

[[Page 62561]]

commercial item and service procurements, and recommended narrowly 
tailoring the clause and revising flow-down requirements for commercial 
items.
    DoD Response: DoD recognizes the difficulty in fully applying the 
clause to the purchase of commercial items, and acknowledges the intent 
of Public Law 103-355 to limit provisions and clauses in contracts for 
commercial items to those implementing statute or Executive order. 
However, DoD policy for zero tolerance requires application of the 
clause to all contractors and subcontractors performing contracts 
outside the United States, including those performing under contracts 
for commercial items. DoD also believes that contracts for supplies or 
services that rely upon unskilled labor, including contracts for 
commercial items, present the greatest risk for severe forms of 
trafficking in persons or use of forced labor. Therefore, the interim 
rule prohibits contractors performing outside the United States from 
engaging in trafficking and requires appropriate action against any 
employee found to be in violation of the policy, but limits the mandate 
to train and monitor the conduct of employees to those contractors 
performing under service and construction contracts, since those 
employees are generally providing direct support to DoD operations and 
their behavior can more reasonably be monitored.
    c. Comment: One respondent recommended that DoD clarify that the 
scope of the rule extends beyond service contracts, specifically 
referencing the memorandum of the Deputy Secretary of Defense that 
addressed combating trafficking in overseas service contracts.
    DoD Response: DoD developed the rule with the belief that the 
intent of the Deputy Secretary's memorandum of January 30, 2004, was to 
ensure adequate application of the policy to DoD service contract 
employees, but not necessarily limit the application to service 
contract employees. This belief was supported by National Security 
Presidential Directive/NSPD-22 and the Secretary of Defense memorandum 
of September 16, 2004, both of which indicate a broader application to 
contracts performed outside the United States. The Secretary's 
memorandum specifically states: ``* * * trafficking practices will not 
be tolerated in DoD contractor organizations or their subcontractors in 
supporting DoD operations.'' Therefore, the interim rule applies to all 
contracts performed outside the United States.
    d. Comment: One respondent questioned application of the rule to 
non-U.S. contractors and subcontractors.
    DoD Response: One of the examples leading to the development of the 
DoD policy involved a non-U.S. subcontractor. Zero tolerance within DoD 
extends to all contractors and subcontractors, whether or not based in 
the United States. The application of the rule to both U.S. and non-
U.S. firms is necessary to fully implement the DoD policy.

2. Comments Related to Notification Requirements

    a. Comment: One respondent recommended that the clause provide 
flexibility in both the timing and the nature of the disclosure to be 
required. Another respondent recommended that violations be reported to 
the contracting officer and the Combatant Commander within 24 hours of 
receiving or learning of any information relating to trafficking.
    DoD Response: DoD recognizes the need to report infractions in a 
timely manner, but is concerned with stating a specific time period. 
While requiring that contractors report trafficking activities to the 
contracting officer within a certain time period may assist in 
promoting the U.S. policy, it may also raise issues with host nation 
criminal or international laws (e.g., permitting 24 hours to elapse 
before reporting a crime). Therefore, the clause has been amended to 
require ``immediate'' notification by the contractor to the contracting 
officer. The text at DFARS 222.1704-70 (previously DFARS 225.7404-3) 
also has been amended to require the contracting officer to 
``immediately'' notify the Combatant Commander.
    b. Comment: One respondent requested inclusion of a requirement to 
notify relevant law enforcement authorities.
    DoD Response: DFARS 222.1704-70 requires the contracting officer to 
immediately notify the Combatant Commander, who will handle alleged 
violations in accordance with established theater policy and practices 
and U.S. and host nation laws.

3. Comments Related to Procedures and Training

    a. Comment: One respondent recommended deleting the requirement for 
the contractor to obtain copies of referenced legal and regulatory 
documents, and expressed concerns with requirements for providing legal 
guidance and interpretations of non-U.S. host nation laws and policies 
to employees regarding trafficking laws and regulations, especially for 
small businesses and contractors providing commercial items.
    DoD Response: Contractors operating overseas are expected to be 
knowledgeable of a host nation's policies, laws, regulations, and 
directives. DoD acknowledges that the intent of the clause is for 
contractors operating in a foreign country to know (not necessarily 
acquire copies of) host nation, as well as U.S., laws applicable to the 
instant contract. Therefore, the clause has been revised, indicating a 
requirement for the contractor to be knowledgeable (rather than obtain 
copies) of policies, laws, regulations, and directives. However, 
contractors performing under service and construction contracts must 
provide employees with guidance on trafficking policies, laws, 
regulations, and directives as part of efforts to increase awareness 
and must ensure that employees do not engage in trafficking activities.
    b. Comment: One respondent recommended clarifying the actions that 
contractors must take relative to developing policy and procedures that 
prohibit employee activities supporting or promoting trafficking in 
persons.
    DoD Response: DoD has revised the rule at 222.1703(2)(ii) 
(previously 225.7404-2(b)) and in paragraph (d) of the clause to 
incorporate the changes recommended by the respondent.
    c. Comment: One respondent proposed that outside experts provide 
the training specified in the contract clause.
    DoD Response: The clause neither precludes nor requires the use of 
outside experts in a training capacity. The clause has been drafted to 
give contractors maximum flexibility to use those resources that are 
deemed appropriate, based on location, workforce composition, and other 
factors, to ensure adequate training.
    d. Comment: One respondent recommended that the contractor be 
permitted to tailor its training program to the size and nature of the 
overseas work.
    DoD Response: The clause has been revised to require only those 
contractors (if other than an individual) performing service and 
construction contracts to fully train and monitor employees regarding 
severe forms of trafficking in persons, procurement of commercial sex 
acts, and use of forced labor, since those employees are generally 
providing direct support to DoD operations and their behavior can more 
reasonably be monitored. However, all DoD contractors and 
subcontractors are required to take action against any of their 
employees who engage in severe

[[Page 62562]]

forms of trafficking activities or the use of forced labor, regardless 
of the size or nature of the overseas work.
    e. Comment: One respondent recommended deletion of the requirement 
for the contractor to develop policy and training relating to the 
Military Extraterritorial Jurisdiction Act (MEJA).
    DoD Response: DoD has amended the rule to clarify this requirement. 
Contractors must train their employees about MEJA, not every possible 
felony committed in the host nation for which MEJA would confer 
jurisdiction on the United States.
    f. Comment: One respondent recommended revision of the phrase 
``including removal'' to ``up to and including removal,'' to 
demonstrate that there is a range of personnel actions that the 
contractor could take if there is a violation.
    DoD Response: Paragraph (d)(1) of the clause incorporates this 
recommendation by stating ``Such actions may include, but are not 
limited to * * *''.
    g. Comment: One respondent expressed concern that the rule makes no 
mention of whether employees terminated for trafficking may be rehired 
or transferred to another location for additional service.
    DOD Response: Existing laws and regulatory procedures address this 
issue with regard to employees who are found to be guilty of 
trafficking. For example, 10 U.S.C. 2408 provides for a fine of up to 
$500,000 to be assessed against a contractor that employs (in certain 
positions) a person convicted of fraud or any other felony arising out 
of a DoD contract. These individuals are listed in the Excluded Parties 
List System, available to the public at http://www.epls.gov/.
    h. Comment: One respondent was concerned with the use of suspension 
of payments as a remedy, and recommended that DFARS Procedures, 
Guidance, and Information (PGI) address procedures that the contracting 
officer must follow before concluding that there is a failure to 
comply.
    DOD Response: The authority to suspend payments is modeled after 
the penalties in paragraph (d) of clause at FAR 52.223-6, Drug-Free 
Workplace. Guidance for contracting officers regarding use of this 
authority has been added at PGI 222.1704.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD does not expect this rule to have a significant economic impact 
on a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule 
applies only to contracts performed outside the United States, and 
reinforces existing laws and policies prohibiting trafficking in 
persons. Therefore, DoD has not performed an initial regulatory 
flexibility analysis. DoD invites comments from small businesses and 
other interested parties. DoD also will consider comments from small 
entities concerning the affected DFARS subparts in accordance with 5 
U.S.C. 610. Such comments should be submitted separately and should 
cite DFARS Case 2004-D017.

C. Paperwork Reduction Act

    This interim rule contains DFARS policy to supplement the interim 
FAR rule published at 71 FR 20301 on April 19, 2006. The interim FAR 
rule established a new contract clause, 52.222-50, Combating 
Trafficking in Persons, to implement 22 U.S.C. 7104(g), which requires 
that Federal contracts provide for termination of a contract if the 
contractor or a subcontractor engages in severe forms of trafficking in 
persons, the use of forced labor, or procures a commercial sex act 
during the period of contract performance. The FAR clause applies to 
contracts for services (other than commercial service contracts under 
FAR Part 12), and requires the contractor to notify the contracting 
officer of any information alleging employee misconduct under the 
clause and any resulting action taken against employees. Comments 
concerning the information collection requirements of the FAR clause 
were solicited in the preamble to the interim FAR rule published on 
April 19, 2006, for submission to the FAR Secretariat in accordance 
with the procedures specified at 71 FR 20301.
    This interim rule contains a new clause at DFARS 252.222-7006, 
Combating Trafficking in Persons, which expands the requirement for 
contractors to notify the contracting officer of employee misconduct 
and the resulting action, to all DoD contracts performed outside the 
United States, including those for supplies, construction, and 
commercial services. The Office of Management and Budget (OMB) has 
approved the information collection requirements of the interim DFARS 
rule for use through January 31, 2007, under OMB Control Number 0704-
0440, in accordance with the emergency processing procedures of 5 CFR 
1320.13. DoD invites comments on the following aspects of the interim 
DFARS rule: (a) Whether the collection of information is necessary for 
the proper performance of the functions of DoD, including whether the 
information will have practical utility; (b) the accuracy of the 
estimate of the burden of the information collection; (c) ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the information 
collection on respondents, including the use of automated collection 
techniques or other forms of information technology.
    The following is a summary of the additional information collection 
requirements that will result from inclusion of the clause at DFARS 
252.222-7006 in DoD contracts performed outside the United States for 
supplies, construction, and commercial services.
    Title: Defense Federal Acquisition Regulation Supplement (DFARS) 
Subpart 222.17, Combating Trafficking in Persons.
    Type of Request: New collection.
    Number of Respondents: 30.
    Responses Per Respondent: 2.
    Annual Responses: 60.
    Average Burden Per Response: 1 hour.
    Annual Burden Hours: 60.
    Needs and Uses: DoD contracting officers will use this information 
to monitor contractor compliance with DoD policy for zero tolerance of 
trafficking in persons.
    Affected Public: Businesses or other for-profit and not-for-profit 
institutions.
    Frequency: On occasion.
    Written comments and recommendations on the proposed information 
collection should be sent to Ms. Hillary Jaffe at the Office of 
Management and Budget, Desk Officer for DoD, Room 10236, New Executive 
Office Building, Washington, DC 20503, with a copy to the Defense 
Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD (AT&L) 
DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-
3062. Comments can be received from 30 to 60 days after the date of 
this notice, but comments to OMB will be most useful if received by OMB 
within 30 days after the date of this notice.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to Defense Acquisition Regulations System, 
Attn: Ms. Amy Williams, OUSD (AT&L) DPAP (DARS),

[[Page 62563]]

IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense that urgent and compelling reasons exist to publish an 
interim rule prior to affording the public an opportunity to comment on 
the rule. This interim DFARS rule supplements the interim FAR rule 
published in the Federal Register on April 19, 2006, regarding 
combating severe forms of trafficking in persons, the use of forced 
labor, and procurement of commercial sex acts by contractors performing 
under Federal contracts for services (other than commercial services). 
The supplemental DFARS coverage is needed to ensure that all DoD 
contracts performed outside the United States, including those for 
supplies, construction, and commercial services, address DoD zero-
tolerance policy regarding these prohibited activities and provide for 
suitable penalties on contractors that fail to monitor the conduct of 
their employees. Comments received in response to this interim rule 
will be considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 212, 222, and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR parts 212, 222, and 252 are amended as follows:
0
1. The authority citation for 48 CFR parts 212, 222, and 252 continues 
to read as follows:

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

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Section 212.301 is amended by adding paragraph (f)(x) to read as 
follows:


212.301  Solicitation provisions and contract clauses for the 
acquisition of commercial items.

    (f) * * *
    (x) Use the clause at 252.222-7006, Combating Trafficking in 
Persons, as prescribed in 222.1705.

PART 222--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0
3. Subpart 222.17 is added to read as follows:
Subpart 222.17--Combating Trafficking in Persons
Sec.
222.1700 Scope of subpart.
222.1701 Applicability.
222.1702 Definitions.
222.1703 Policy.
222.1704 Violations and remedies.
222.1704-70 Notification to Combatant Commander.
222.1705 Contract clause.

Subpart 222.17--Combating Trafficking in Persons


222.1700  Scope of subpart.

    This subpart also implements DoD policy for combating trafficking 
in persons in contracts performed outside the United States.


222.1701  Applicability.

    This subpart also applies to all DoD contracts performed outside 
the United States.


222.1702  Definitions.

    Combatant Commander, construction, employee, service contract, 
severe forms of trafficking in persons, and United States, as used in 
this subpart, have the meaning given in the clause at 252.222-7006, 
Combating Trafficking in Persons.


222.1703  Policy.

    (1) Contracts performed outside the United States shall--
    (i) Prohibit any activities on the part of the contractor that 
support or promote severe forms of trafficking in persons or use of 
forced labor;
    (ii) Impose suitable penalties on contractors that--
    (A) Engage in activities that support or promote severe forms of 
trafficking in persons or use forced labor; or
    (B) Fail to take appropriate action against their employees and 
subcontractors that engage in or support severe forms of trafficking in 
persons or use forced labor.
    (2) In addition to the prohibitions and penalties stated in 
paragraph (1) of this section, contracts performed outside the United 
States for services or construction shall--
    (i) Prohibit any activities on the part of the contractor that 
promote or support the procurement of commercial sex acts;
    (ii) Require contractors to develop policy and procedures that 
prohibit any activities on the part of contractor employees that 
support or promote severe forms of trafficking in persons, procurement 
of commercial sex acts, or use of forced labor; and
    (iii) Impose suitable penalties on contractors that--
    (A) Fail to monitor the conduct of their employees and 
subcontractors with regard to severe forms of trafficking in persons, 
procurement of commercial sex acts, or use of forced labor; or
    (B) Fail to take appropriate action against their employees and 
subcontractors that engage in or support the procurement of commercial 
sex acts.
    (3) See PGI 222.1703 for additional information regarding DoD 
policy for combating trafficking in persons outside the United States.


222.1704  Violations and remedies.

    (a) Violations.
    (i) The Government may impose the remedies set forth in paragraph 
(b) of this section if, during performance of the contract--
    (A) The contractor or any contractor employee engages in severe 
forms of trafficking in persons;
    (B) The contractor or any contractor employee uses forced labor; or
    (C) The contractor fails to comply with the requirements of the 
clause at 252.222-7006, Combating Trafficking in Persons.
    (ii) In addition to the violations stated in paragraph (a)(i) of 
this section, the Government may impose the remedies specified in 
paragraph (b) of this section if, during performance of a service or 
construction contract, the contractor or any contractor employee 
procures a commercial sex act.
    (b) Remedies. After determining in writing that adequate evidence 
exists to suspect any of the violations stated in paragraph (a) of this 
section, the contracting officer may pursue any of the remedies 
specified in paragraph (f) of the clause at 252.222-7006, Combating 
Trafficking in Persons. These remedies are in addition to any other 
remedies available to the Government (see PGI 222.1704 for procedures 
and guidance regarding imposition of such remedies).


222.1704-70  Notification to Combatant Commander.

    If the contracting officer receives information indicating that the 
contractor or its subcontractors have failed to comply with paragraph 
(c), (d), or (e) of the clause at 252.222-7006, the contracting officer 
shall, through the contracting officer's local commander or other 
designated representative, immediately notify the Combatant Commander 
responsible for the geographical area in which the incident has 
occurred (see PGI 222.1704-70 for assistance in contacting the 
responsible Combatant Commander).


222.1705  Contract clause.

    (1) Use the clause at 252.222-7006, Combating Trafficking in 
Persons, in

[[Page 62564]]

solicitations and contracts when contract performance will be outside 
the United States.
    (2) Do not use the clause at FAR 52.222-50, Combating Trafficking 
in Persons, in solicitations and contracts that include the clause at 
252.222-7006, Combating Trafficking in Persons.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Section 252.222-7006 is added to read as follows:


252.222-7006  Combating Trafficking in Persons.

    As prescribed in 222.1705, use the following clause:

Combating Trafficking in Persons (OCT 2006)

    (a) Definitions. As used in this clause--
    Coercion means--
    (1) Threats of serious harm to or physical restraint against any 
person;
    (2) Any scheme, plan, or pattern intended to cause a person to 
believe that failure to perform an act would result in serious harm 
to or physical restraint against any person; or
    (3) The abuse or threatened abuse of the legal process.
    Commercial sex act means any sex act on account of which 
anything of value is given to or received by any person.
    Construction means construction, alteration, or repair 
(including dredging, excavating, and painting) of buildings, 
structures, or other real property. For purposes of this definition, 
the terms ``buildings, structures, or other real property'' include, 
but are not limited to, improvements of all types, such as bridges, 
dams, plants, highways, parkways, streets, subways, tunnels, sewers, 
mains, power lines, cemeteries, pumping stations, railways, airport 
facilities, terminals, docks, piers, wharves, ways, lighthouses, 
buoys, jetties, breakwaters, levees, canals, and channels. 
Construction does not include the manufacture, production, 
furnishing, construction, alteration, repair, processing, or 
assembling of vessels, aircraft, or other kinds of personal 
property.
    Debt bondage means the status or condition of a debtor arising 
from a pledge by the debtor of his or her personal services or of 
those of a person under his or her control as a security for debt, 
if the value of those services as reasonably assessed is not applied 
toward the liquidation of the debt or the length and nature of those 
services are not respectively limited and defined.
    Employee means an employee of a contractor directly engaged in 
the performance of work under a Government contract, including all 
direct cost employees and any other contractor employee who has 
other than a minimal impact or involvement in contract performance.
    Individual means a contractor that has no more than one employee 
including the contractor.
    Involuntary servitude includes a condition of servitude induced 
by means of--
    (1) Any scheme, plan, or pattern intended to cause a person to 
believe that, if the person did not enter into or continue in such 
conditions, that person or another person would suffer serious harm 
or physical restraint; or
    (2) The abuse or threatened abuse of the legal process (22 
U.S.C. 7102(5)).
    Service contract means a contract that directly engages the time 
and effort of a contractor whose primary purpose is to perform an 
identifiable task rather than to furnish an end item of supply.
    Service (other than commercial) means a service that does not 
meet the definition of commercial item in section 2.101 of the 
Federal Acquisition Regulation.
    Severe forms of trafficking in persons means--
    (1) Sex trafficking in which a commercial sex act is induced by 
force, fraud, or coercion, or in which the person induced to perform 
such act has not attained 18 years of age; or
    (2) The recruitment, harboring, transportation, provision, or 
obtaining of a person for labor or services, through the use of 
force, fraud, or coercion for the purpose of subjection to 
involuntary servitude, peonage, debt bondage, or slavery.
    Sex trafficking means the recruitment, harboring, 
transportation, provision, or obtaining of a person for the purpose 
of a commercial sex act.
    United States means the 50 States, the District of Columbia, and 
outlying areas.
    (b) Policy. It is the policy of the Department of Defense (DoD) 
that trafficking in persons will not be facilitated in any way by 
the activities of DoD contractors or contractor personnel. DoD will 
not tolerate severe forms of trafficking in persons or use of forced 
labor by DoD contractors, DoD subcontractors, or DoD contractor or 
subcontractor personnel during the period of contract performance. 
Furthermore, DoD will not tolerate the procurement of commercial sex 
acts by DoD contractors, DoD subcontractors, or DoD contractor or 
subcontractor personnel, during the period of performance of service 
or construction contracts. As delineated in National Security 
Presidential Directive 22, the United States has adopted a zero 
tolerance policy regarding contractor personnel who engage in or 
support trafficking in persons.
    (c) Contractor compliance.
    (1) During the performance of this contract, the Contractor 
shall comply with the policy of DoD and shall not engage in or 
support severe forms of trafficking in persons or use forced labor. 
The Contractor is responsible for knowing and adhering to United 
States Government zero-tolerance policy and all host nation laws and 
regulations relating to trafficking in persons and the use of forced 
labor.
    (2) Additionally, if this contract is a service or construction 
contract, the Contractor shall not engage in or support the 
procurement of commercial sex acts during the performance of this 
contract and is responsible for knowing and adhering to United 
States Government policy and all host nation laws and regulations 
relating thereto.
    (d) Contractor responsibilities for employee conduct--service or 
construction contracts. If this contract is a service or 
construction contract, the Contractor, if other than an individual, 
shall establish policies and procedures for ensuring that during the 
performance of this contract, its employees do not engage in or 
support severe forms of trafficking in persons, procure commercial 
sex acts, or use forced labor. At a minimum, the Contractor shall--
    (1) Publish a statement notifying its employees of the United 
States Government policy described in paragraph (b) of this clause 
and specifying the actions that will be taken against employees for 
violations of this policy. Such actions may include, but are not 
limited to, removal from the contract, reduction in benefits, 
termination of employment, or removal from the host country;
    (2) Establish an awareness program to inform employees 
regarding--
    (i) The Contractor's policy of ensuring that employees do not 
engage in severe forms of trafficking in persons, procure commercial 
sex acts, or use forced labor;
    (ii) The actions that will be taken against employees for 
violation of such policy; and
    (iii) Laws, regulations, and directives that apply to conduct 
when performance of the contract is outside the United States, 
including--
    (A) All host country Government laws and regulations relating to 
severe forms of trafficking in persons, procurement of commercial 
sex acts, and use of forced labor;
    (B) All United States laws and regulations on severe forms of 
trafficking in persons, procurement of commercial sex acts, and use 
of forced labor that may apply to its employees' conduct in the host 
nation, including those laws for which jurisdiction is established 
by the Military Extraterritorial Jurisdiction Act of 2000 (18 U.S.C. 
3261-3267) and 18 U.S.C. 3271, Trafficking in persons offenses 
committed by persons employed by or accompanying the Federal 
Government outside the United States; and
    (C) Directives on trafficking in persons from the Combatant 
Commander, or the Combatant Commander's designated representative, 
that apply to contractor employees, such as general orders and 
military listings of ``off-limits'' local establishments; and
    (3) Provide all employees directly engaged in performance of the 
contract with--
    (i) Any necessary legal guidance and interpretations regarding 
combating trafficking in persons policies, laws, regulations, and 
directives applicable to performance in the host country; and
    (ii) A copy of the statement required by paragraph (d)(1) of 
this clause. If this contract is for services (other than 
commercial), the Contractor shall obtain written agreement from the 
employee that the employee shall abide by the terms of the 
statement.
    (e) Employee violations--notification and action. The Contractor 
shall--
    (1) Inform the Contracting Officer immediately of any 
information it receives from any source (including host country law 
enforcement) that alleges a contractor or subcontractor employee has 
engaged in conduct that violates the policy in paragraph (b) of this 
clause. Notification to the

[[Page 62565]]

Contracting Officer does not alleviate the Contractor's 
responsibility to comply with applicable host nation laws;
    (2) In accordance with its own operating procedures and 
applicable policies, laws, regulations, and directives, take 
appropriate action, up to and including removal from the host nation 
or dismissal, against any of its employees who violate the policy in 
paragraph (b) of this clause; and
    (3) Inform the Contracting Officer of any actions taken against 
employees pursuant to this clause.
    (f) Remedies. In addition to other remedies available to the 
Government, the Contractor's failure to comply with the requirements 
of paragraphs (c), (d), (e), or (g) of this clause may render the 
Contractor subject to--
    (1) Required removal of a Contractor employee or employees from 
the performance of the contract;
    (2) Required subcontractor termination;
    (3) Suspension of contract payments;
    (4) Loss of award fee, consistent with the award fee plan, for 
the performance period in which the Government determined Contractor 
non-compliance;
    (5) Termination of the contract for default, in accordance with 
the Termination clause of this contract; or
    (6) Suspension or debarment.
    (g) Subcontracts.
    (1)(i) The Contractor shall include the substance of this 
clause, including this paragraph (g), in all subcontracts performed 
outside the United States; and
    (ii) If this contract is for services (other than commercial), 
the Contractor shall include the substance of this clause, including 
this paragraph (g), in all subcontracts performed in the United 
States for the acquisition of services (other than commercial).
    (2) If this contract is a service or construction contract, the 
Contractor shall conduct periodic reviews of its service and 
construction subcontractors to verify compliance with their 
obligations pursuant to paragraph (d) of this clause.
    (3) The Contractor shall--
    (i) Immediately inform the Contracting Officer of any 
information it receives from any source (including host country law 
enforcement) that alleges a subcontractor has engaged in conduct 
that violates the policy in paragraph (b) of this clause. 
Notification to the Contracting Officer does not alleviate the 
Contractor's responsibility to comply with applicable host nation 
laws;
    (ii) Take appropriate action, including termination of the 
subcontract, when the Contractor obtains sufficient evidence to 
determine that the subcontractor is in non-compliance with its 
contractual obligations pursuant to this clause; and
    (iii) Inform the Contracting Officer of any actions taken 
against subcontractors pursuant to this clause.


(End of Clause)

 [FR Doc. E6-17984 Filed 10-25-06; 8:45 am]
BILLING CODE 5001-08-P