[Federal Register Volume 72, Number 44 (Wednesday, March 7, 2007)]
[Rules and Regulations]
[Pages 10033-10035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-3872]



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 Rules and Regulations
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  Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Rules 
and Regulations  

[[Page 10033]]



DEPARTMENT OF STATE

2 CFR Part 601

22 CFR Parts 133, 137, and 145

[Public Notice 5710]
RIN 1400-AB83


Department of State's Implementation of OMB Guidance on 
Nonprocurement Debarment and Suspension

AGENCY: Department of State.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of State (DOS) is moving its regulations on 
nonprocurement debarment and suspension from their current location in 
title 22 of the Code of Federal Regulations (CFR) to title 2 of the 
CFR, and is adopting the format established by the Office of Management 
and Budget (OMB) in a document of interim final guidance on 
nonprocurement debarment and suspension published in the Federal 
Register on August 31, 2005. In today's rule, DOS establishes a new 2 
CFR part 601 that adopts OMB's final government-wide guidance on 
nonprocurement debarment and suspension and contains supplemental DOS 
nonprocurement debarment and suspension provisions. In addition, this 
rule removes 22 CFR part 137, the existing DOS nonprocurement debarment 
and suspension regulations and updates references to 22 CFR part 137 in 
22 CFR part 145 and 22 CFR part 133 to conform with this change. These 
changes constitute an administrative simplification that makes no 
substantive change in DOS policy or procedures for nonprocurement 
debarment and suspension.

EFFECTIVE DATE: This rule is effective March 7, 2007.

FOR FURTHER INFORMATION CONTACT: Georgia Hubert, Director, Federal 
Assistance Division, Office of the Procurement Executive, A/OPE/FA, 
Department of State, SA-6, Suite 600, Washington, DC 20520; Telephone: 
703-812-2526; e-mail: hubertgk@state.

SUPPLEMENTARY INFORMATION: 

Background

    On May 11, 2004, OMB established title 2 of the CFR with two 
subtitles (69 FR 2627). Subtitle A, ''Government-wide Grants and 
Agreements,'' contains OMB policy guidance to Federal agencies on 
grants and agreements. Subtitle B, ``Federal Agency Regulations for 
Grants and Agreements,'' contains Federal agencies' regulations 
implementing the OMB guidance, as it applies to grants and other 
financial assistance agreements and nonprocurement transactions.
    On August 31, 2005, OMB published interim final guidance for 
government-wide nonprocurement debarment and suspension in the Federal 
Register (70 FR 51863). The guidance was located in title 2 of the CFR 
as new subtitle A, chapter 1, part 180. The interim final guidance 
updated previous OMB guidance that was issued pursuant to Executive 
Order 12549, ``Debarment and Suspension'' (February 18, 1986), which 
gave government-wide effect to each agency's nonprocurement debarment 
and suspension actions.
    Section 6 of the Executive order authorized OMB to issue guidance 
to Executive agencies on nonprocurement debarment and suspension, 
including provisions prescribing government-wide criteria and minimum 
due process procedures.
    Section 3 directed Executive agencies to issue regulations 
implementing the Executive order that are consistent with the OMB 
guidelines. The interim final guidance at 2 CFR part 180 conforms the 
OMB guidance with the Federal agencies' November 26, 2003, update to 
the common rule on nonprocurement debarment and suspension (see 70 FR 
51864). Although substantively the same as the common rule, OMB's 
interim final guidance was published in a form suitable for agency 
adoption, thus eliminating the need for each agency to repeat the full 
text of the OMB government-wide guidance in its implementing 
regulations. This new approach is intended to make it easier for 
recipients of covered transactions or respondents in suspension or 
debarment actions to discern agency-to-agency variations from the 
common rule language; reduce the volume of Federal regulations in the 
CFR; and streamline the process for updating the government-wide 
requirements on nonprocurement debarment and suspension (70 FR 51864).
    On November 15, 2006, OMB published a final rule adopting the 
interim final guidance with changes (71 FR 66431). This final rule 
places DOS's nonprocurement debarment and suspension regulations in 
subtitle B of title 2 of the CFR, along with other agencies' 
nonprocurement debarment and suspension rules. This action was required 
by the OMB interim final guidance, which was made final on November 15, 
2006 (see 2 CFR 180.20, 180.25, 180.30 and 180.35).
    The new CFR part 601 adopts the OMB guidelines with additions and 
clarifications that DOS made to the common rule on nonprocurement 
suspension and debarment in the DOS rule published on November 26, 2003 
(68 FR 66582-84). The substance of DOS's nonprocurement debarment and 
suspension regulations is unchanged. DOS is removing 22 CFR part 137, 
which was added to the CFR as part of the November 2003 common rule. 
DOS is also amending references in both Grants and Agreements with 
Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations (22 CFR part 145) and Government-wide Requirements for 
Drug-Free Workplace (22 CFR part 133) to update the reference to DOS's 
nonprocurement debarment and suspension regulations.

Regulatory Findings

Executive Order 12866

    OMB has determined this rule non-significant.

Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b))

    This regulatory action will not have a significant adverse impact 
on a substantial number of small entities.

Unfunded Mandates Act of 1995

    This regulatory action does not contain a Federal mandate that will 
result in the expenditure by State, local, and tribal governments, in 
aggregate, or by the private sector of $100 million or more in any one 
year.

[[Page 10034]]

Paperwork Reduction Act of 1995

    This final rule does not impose any additional reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

Federalism (Executive Order 13132)

    This regulatory action does not have Federalism implications, as 
set forth in Executive Order 13132. It will not have substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.

Executive Order 13211

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it is not a 
significant regulatory action under Executive Order 12866.

Congressional Review Act

    The Congressional Review Act, as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, generally provides that 
before a rule may take effect, the agency promulgating the rule must 
submit a rule report, which includes a copy of the rule, to each House 
of the Congress and to the Comptroller General of the United States. 
DOS will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives, and 
the Comptroller General of the United States prior to publication of 
the rule in the Federal Register. A major rule cannot take effect until 
60 days after it is published in the Federal Register. This action is 
not a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be 
effective 30 days from the date of publication in the Federal Register.

List of Subjects

2 CFR Part 601

    Administrative practice and procedure, Debarment and suspension, 
Assistance programs, Reporting and recordkeeping requirements.

22 CFR Part 133

    Administrative practice and procedure, Assistance programs, Drug-
Free Workplace.

22 CFR Part 137

    Administrative practice and procedure, Debarment and suspension, 
Assistance programs, Suspension and Debarment, Reporting and 
recordkeeping requirements.

22 CFR Part 145

    Administrative practice and procedure, Assistance programs, 
Reporting and recordkeeping requirements.


0
For the reasons stated in the preamble, under the authority at 22 
U.S.C. 2658 and 31 U.S.C. 6101, the Department of State amends Title 2, 
subtitle B and Title 22, Parts 133, 137, 145 chapter I of the Code of 
Federal Regulations as follows:


0
1. Add Chapter 6, consisting of Part 601 to Subtitle B to read as 
follows:

Title 2--Grants and Agreements

Chapter 6--Department of State

PART 601--NONPROCUREMENT DEBARMENT AND SUSPENSION

Sec.
601.10 What does this part do?
601.20 Does this part apply to me?
601.30 What policies and procedures must I follow?
Subpart A--General
601.137 Who in the Department of State may grant an exception to let 
an excluded person participate in a covered transaction?
Subpart B--Covered Transactions
601.220 What contracts and subcontracts, in addition to those listed 
in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
601.332 What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?
Subpart D--Responsibilities of Federal Agency Officials Regarding 
Transactions
601.437 What method do I use to communicate to a participant the 
requirements described in the OMB guidance at 2 CFR 180.435?
Subpart E Through H [Reserved]
Subpart I--Definitions
601.930 Debarring Official (Department of State supplement to 
government-wide definition at 2 CFR 180.930.
601.1010 Suspending Official (Department of State supplement to 
government-wide definition at 2 CFR 180.1010
Subpart J [Reserved]

    Authority: Sec. 2455, Pub. L. 103-355, 108; Stat. 3327 (31 
U.S.C. 6101 note); E.O. 12549; (3 CFR, 1986 Comp., p. 189); E.O. 
12689 (3); CFR, 1989 Comp., p. 235).


Sec.  601.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this 
part, as the DOS policies and procedures for nonprocurement debarment 
and suspension. It thereby gives regulatory effect for DOS to the OMB 
guidance as supplemented by this part. This part satisfies the 
requirements in section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189); Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235); and section 
2455 of the Federal Acquisition Streamlining Act of 1994, Pub. L. 103-
355 (31 U.S.C. 6101 note).


Sec.  601.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)) apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' (see 
subpart B of 2 CFR part 180 and the definition of ``nonprocurement 
transaction'' at 2 CFR 180.970);
    (b) Respondent in a DOS suspension or debarment action;
    (c) DOS debarment or suspension official; and
    (d) DOS grants officer, agreements officer, or other official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.


Sec.  601.30  What policies and procedures must I follow?

    The DOS policies and procedures that you must follow are the 
policies and procedures specified in each applicable section of the OMB 
guidance in subparts A through I of 2 CFR part 180 and any supplemental 
policies and procedures set forth in this part.

Subpart A--General


Sec.  601.137  Who in the Department of State may grant an exception to 
let an excluded person participate in a covered transaction?

    The Procurement Executive, Office of the Procurement Executive, 
DOS, may grant an exception permitting an excluded person to 
participate in a particular covered transaction. If the Procurement 
Executive, Office of the Procurement Executive, DOS, grants an 
exception, the exception must be in writing and state the reason(s) for 
deviating from the government-wide policy in Executive Order 12549.

Subpart B--Covered Transactions


Sec.  601.220  What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b) of the 
OMB

[[Page 10035]]

guidance, this part applies to any contract, regardless of tier, that 
is awarded by a contractor, subcontractor, supplier, consultant, or its 
agent or representative in any transaction, if the contract is to be 
funded or provided by the DOS under a covered nonprocurement 
transaction and the amount of the contract is expected to equal or 
exceed $25,000. This extends the coverage of the DOS nonprocurement 
suspension and debarment requirements to all lower tiers of 
subcontracts under covered nonprocurement transactions, as permitted 
under the OMB guidance at 2 CFR 180.220(c) (see optional lower tier 
coverage in the figure in the appendix to 2 CFR part 180).

Subpart C--Responsibilities of Participants Regarding Transactions


Sec.  601.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    You, as a participant, must include a term or condition in lower-
tier transactions requiring lower-tier participants to comply with 
subpart C of the OMB guidance in 2 CFR part 180, as supplemented by 
this subpart.

Subpart D--Responsibilities of Federal Agency Officials Regarding 
Transactions


Sec.  601.437  What method do I use to communicate to a participant the 
requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435 of the OMB guidance, you must include a term or condition in 
the transaction that requires the participant's compliance with subpart 
C of 2 CFR part 180, as supplemented by subpart C of this part, and 
requires the participant to include a similar term or condition in 
lower-tier covered transactions.

Subpart E Through H [Reserved]

Subpart I--Definitions


Sec.  601.930  Debarring official (Department of State supplement to 
government-wide definition at 2 CFR 180.930).

    The Debarring Official for the Department of State is the 
Procurement Executive, Office of the Procurement Executive (A/OPE).


Sec.  601.1010  Suspending official (Department of Energy supplement to 
government-wide definition at 2 CFR 180.1010).

    The Debarring Official for the Department of State is the 
Procurement Executive, Office of the Procurement Executive (A/OPE).

Subpart J [Reserved]

Title 22--Foreign Relations

Chapter I--Department of State

PART 133--[AMENDED]

0
2. The authority citation for part 133 continues to read as follows:

    Authority: 22 U.S.C. 2658; 41 U.S.C. 701, et seq.


Sec.  133.510  [Amended]

0
3. Section 133.510, paragraph (c) is amended by revising the citation, 
``22 CFR part 137'' to read: ``2 CFR Part 601.''

PART 137 [Removed]

0
4. Part 137 is removed.

PART 145 [Amended]

0
5. The authority citation for part 145 continues to read as follows:

    Authority: 22 U.S.C. 2658.1; OMB Circular A-110 (64 FR 54926, 
October 8, 1999).


Sec.  145.13  [Amended]

0
4. Section 145.13 is amended by revising the citation, ``22 CFR part 
137'' to read, ``2 CFR 601.''


Sec.  145.44  [Amended]

0
5. Section 145.44 is amended by revising the citation, ``22 CFR part 
137'' to read, ``2 CFR 601.''


Sec.  145.62  [Amended]

0
6. Section 145.62 paragraph (d) is amended by revising the citation, 
``22 CFR part 137'' to read, ``2 CFR 601.''

Appendix A to Part 145 [Amended]

0
7. Appendix A to part 145 is amended by revising the second sentence of 
paragraph (8) to read, ``No contract shall be made to parties listed on 
the General Services Administration's Excluded Parties List System 
(http://www.epls.gov) from Federal Procurement or Nonprocurement 
Programs in accordance with Executive Orders 12549 and 12689, 
`Debarment and Suspension.' ''

    Dated: February 26, 2007.
Georgia Hubert,
Director, Office of the Procurement Executive, Federal Assistance 
Division, Department of State.
 [FR Doc. E7-3872 Filed 3-6-07; 8:45 am]
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