[Federal Register Volume 72, Number 180 (Tuesday, September 18, 2007)]
[Rules and Regulations]
[Pages 53161-53165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18234]


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AGENCY FOR INTERNATIONAL DEVELOPMENT

48 CFR Parts 727, 742, and 752

RIN 0412-AA30


Miscellaneous Amendments to Acquisition Regulations (AIDAR 
Circular 2007-02)

AGENCY: U.S. Agency for International Development.

ACTION: Final Rule.

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SUMMARY: This final rule amends the USAID acquisition regulation to add 
two new parts and four new sections in existing parts of the 
regulation, as more fully discussed in the Supplementary Information. 
USAID proposed these amendments in the proposed rule published on 
November 4, 1998, as AIDAR Notice 98-2.

DATES: Effective Date: October 18, 2007.

FOR FURTHER INFORMATION CONTACT: M/OAA/P, Ms. Diane M. Howard, Room 
7.08-31, 1300 Pennsylvania Ave., NW., U.S. Agency for International 
Development, Washington, DC 20523-7801. Telephone (202) 712-0206; 
Internet: [email protected].

SUPPLEMENTARY INFORMATION:

A. Background

    AIDAR Notice 98-2 (63 FR 59501, November 4, 1998) proposed four 
separate items to amend the USAID Acquisition Regulations (48 CFR 
Chapter 7), or AIDAR. The AIDAR is USAID's supplement to the Federal 
Acquisition Regulation (48 CFR Chapter 1), the FAR. The following 
summarizes each item and the final action USAID is taking for each.
    1. Item A of AIDAR Notice 98-2 proposed a new Part 712, 
specifically section 712.101, ``Policy,'' to address a potential 
conflict between an existing AIDAR clause, (48 CFR) 752.7008 ``Use of 
Government Facilities or Personnel (APR 1984)'' and the policy stated 
in (48 CFR) FAR Part 12. The latter states that the government will 
follow customary commercial practice when acquiring commercial items. 
The AIDAR clause prohibits the use of Government facilities or 
personnel in the performance of the contract. The AIDAR clause does not 
recognize situations in which the customary commercial practice may be 
for the purchaser to provide facilities or personnel to the vendor. At 
the time we proposed this new part, we considered the possibility that 
USAID may provide Government facilities, such as office space and 
equipment, to contractor employees providing commercial services such 
as IT support or secretarial/clerical services in USAID facilities. If 
commercial clients typically provide facilities and equipment for 
vendors providing similar services in the private sector, then that 
customary commercial practice would be inconsistent with the policy 
stated in (48 CFR) AIDAR 752.7008. The proposed part 712 would have 
required the contracting officer to comply with customary commercial 
practice unless he or she obtains a waiver in accordance with (48 CFR) 
FAR 12.302. However, the Agency received no comments on this proposed 
rule and we have no indication that if providing facilities and 
equipment is a common commercial practice, it has ever been a problem 
in a USAID commercial contract. Therefore, we are withdrawing the 
proposed new part.
    2. Item B of the Notice proposed removing (48 CFR) Chapter 7 
(AIDAR) Appendix I, ``USAID's Academic Publication Policy'' and adding 
a new part 727 and subpart 727.4 ``Rights in Data and Copyrights.'' The 
intent of this item of the proposed rule was to address four issues: 
(1) To make the clause at (48 CFR) FAR 52.227-14, ``Rights in Data--
General'' apply to USAID's contracts performed overseas and awarded to 
U.S. organizations, (2) to provide an alternate paragraph to add to 
this FAR clause to reserve USAID's right to restrict release of data 
when release may have a negative impact on the Government's development 
or diplomatic relationship with the cooperating country, (3) to provide 
guidance on Rights in Data coverage for overseas contracts with non-
U.S. entities, and (4) to incorporate some of the policies and 
procedures in Appendix I that would be removed with the Appendix but 
that should be retained, as being in the Agency's best interests.
    We are withdrawing the parts of Item B that affected Appendix I and 
retaining the current (48 CFR) Chapter 7, Appendix I in its present 
form. USAID is developing a separate internal policy and regulation on 
intellectual property. If this policy and regulation affects USAID 
contracts, we will determine how the AIDAR should implement it and take 
the appropriate action at that time.
    We are, however, finalizing other sections of the proposed (48 CFR) 
subpart 727.4, but we are amending the language from what appeared in 
the proposed rule. The only commenter on the proposed rule pointed out 
several instances where the wording was unclear about the intent of the 
proposed revision, so we have clarified the wording to address this 
comment.
    We are finalizing the new subpart to address certain FAR 
requirements that must be met in order for USAID to place limits on 
release of data under our contracts, as originally explained in the 
Supplementary Information in the proposed rule.
    First, 48 CFR (FAR) Sec.  27.404(g)(3) states, ``* * * agencies 
may, to the extent provided in their FAR supplements, place limitations 
or restrictions on the contractor's right to use, release to others, 
reproduce, distribute, or publish any data first produced in the 
performance of the

[[Page 53162]]

contract, including a requirement to assign copyright to the Government 
or another party, either by adding a paragraph (d)(3) to the Rights in 
Data--General clause at 52.227-14, or by express limitations or 
restrictions in the contract.'' Pursuant to (48 CFR) 27.404(g)(3), the 
final rule also includes new language, at (48 CFR) 727.404(g) and (48 
CFR) 752.227-14(d)(3), under which USAID asserts the right to require 
contractors to assign copyright to the Government or another party. 
USAID contracting officers will only assert such a right in accordance 
with the principles as stated in (48 CFR) 27.402.
    Second, the prescription for the FAR Rights in Data--General clause 
(48 CFR 52.227-14) does not require its use in contracts ``to be 
performed outside the United States, its possessions, and Puerto Rico, 
in which cases agencies may prescribe different clauses (see paragraph 
(n) of this section.'' 48 CFR 27.409(a)(1)(ii). Paragraph (n) states, 
``Agencies may prescribe in their procedures, as appropriate, a clause 
consistent with the policy of 27.402 in contracts to be performed 
outside the United States, its possessions, and Puerto Rico.'' 48 CFR 
27.409(n). Most USAID contracts are, in fact, performed overseas. 
USAID's FAR supplement, the AIDAR, does not address either of these 
requirements.
    The proposed rule's new subpart, (48 CFR) 727.4, was intended to 
address these deficiencies in the AIDAR. The commenter pointed out that 
the wording of the proposed (48 CFR) 727.409(a) appeared to restrict 
USAID contracting officers to using only (48 CFR) FAR 52.227-14, even 
if another clause, such as (48 CFR) FAR 52.227-17 ``Rights in Data--
Special Works,'' may apply. Since the proposed rule's intent was not to 
impose this kind of limitation, Sec.  727.409 in the final rule more 
clearly states that contracting officers are to use whichever FAR 
``Rights in Data'' clause best applies.
    The prescriptions in the proposed rule also made distinctions 
between U.S. entities and non-U.S. entities, in that the proposed rule 
authorized contracting officers to adapt the FAR clause as necessary in 
contracts with the latter and performed overseas, to comply with 
applicable laws in the country of performance. The final rule removes 
any distinctions between U.S. entities and non-U.S. entities, and 
applies the FAR prescriptions to all contracts. The final rule 
constitutes Agency procedures pursuant to (48 CFR) FAR 27.409(n).
    When the contracting officer incorporates (48 CFR) FAR 52.227-14, 
and if release, reproduction, distribution, or publication of data 
first produced or specifically used by the contractor may be sensitive 
to U.S. Government relations with the cooperating country, the new 
subpart also prescribes an AIDAR clause contracting officers must use. 
This new clause, at (48 CFR) 752.227-14, replaces the FAR clause's 
paragraph (d) and requires contracting officer approval before the 
contractor may release or reproduce such data.
    3. Item C proposed a new section (48 CFR) 742.1170, ``Performance 
monitoring and progress reporting'' and clause at (48 CFR) 752.242-70, 
entitled ``Periodic Progress Reports.'' As explained in the 
supplementary information in the proposed rule, the purpose of the 
proposed sections was to provide USAID cognizant technical officers 
(CTOs) with a means to tailor contractors' progress reporting 
requirements so that the CTOs can best ensure that contractors are 
performing in accordance with the contract's requirements and achieving 
planned results. These AIDAR sections supplement (48 CFR) FAR Subpart 
42.11 and internal Agency policies and procedures for monitoring the 
results of our implementing partners.
    The Agency implemented these new sections after approving a class 
deviation to the AIDAR, through issuance of an internal directive, a 
Contract Information Bulletin (CIB) 98-21, ``Contractor Progress 
Reports--New AIDAR Coverage,'' on August 12, 1998. Since then, we have 
identified some areas where the language can be improved for clarity. 
We also received several comments on this item of the proposed rule, so 
this final rule includes a few non-substantive wording changes from the 
proposed rule.
    One non-substantive comment asked that we ensure that the language 
in Sec.  742.1170 and the clause at Sec.  752.242-70 are consistent 
with each other and that the clause itself clearly states the 
Government's rights. Another commenter pointed out that in Sec.  
742.1170-4(b), the cognizant technical officer must advise the 
contracting officer of any ``required'' action, and recommended 
changing ``required'' to ``recommended'' to be consistent with the next 
sentence. We agree with this recommendation. The same commenter went on 
to point out that in the same section, the cognizant technical officer 
must provide recommendations to the contracting officer in sufficient 
time for the contracting officer to take necessary action, but the 
regulation doesn't include a definition of what is a reasonable 
timeframe, and recommended that we add a definition. We are including 
additional language to establish a typical (but non-binding) timeframe. 
In the same sentence, we also changed ``necessary'' to ``appropriate'' 
to more accurately reflect the nature of the kinds of recommendations 
that are likely to result from this report (the last sentence of this 
section makes clear that the contractor must comply with other 
notification requirements in the contract).
    Finally, the same commenter recommended adding language to 
paragraph (b) in the new clause at Sec.  752.242-70 to make clear that 
any withholding due to contractor delay in furnishing a progress report 
also ends when the contractor submits the report. We accept this 
recommendation.
    Because none of these changes are substantive, we are finalizing 
the rule with minor editorial changes reflecting the above comments, as 
well as other minor changes from passive to active voice and for 
clarity.
    4. Item D proposed revisions to (48 CFR) Sec.  752.232-7, 
``Payments under Time-and-Materials and Labor-Hour Contracts.'' The 
current version of this AIDAR clause is a preamble to the FAR clause of 
the same name, at (48 CFR) Sec.  52.232-7. We proposed to revise the 
AIDAR section to (a) clarify certain terms used in the FAR clause and 
(b) revise the clause to allow for a different withholding methodology 
than the FAR clause at the time allowed. Task orders were and continue 
to be issued by USAID contracting officers around the world and are 
paid by paying offices also located around the world. Because the 
Agency's financial management and contracting systems at that time were 
not able to easily support the coordinated tracking of cumulative 
withholdings per contract among several task order contracting officers 
and their respective paying offices, we determined that a new 
withholding methodology was in the Agency's best interests. The new 
methodology proposed limited the withholding to one percent per task 
order up to a maximum of $50,000 per task order, but with no limit for 
the basic contract. We received no comments about this proposed 
revision during the comment period, but we have received comments about 
the ambiguity of the existing AIDAR clause, both before and after we 
published the proposed rule.
    The corresponding section of the FAR, (48 CFR) 52.232-7 was revised 
in August 2005 (Federal Acquisition Circular 2005-05, 70 FR 43580, Item 
III ``Payment Withholding''). After considering the discussion in the 
supplementary information for this Item

[[Page 53163]]

of FAC 2005-05, we concluded that the need for withholding per task 
order is no longer necessary. Any withholding should be the exception, 
not the rule, and done only when the contracting officer must take this 
step to protect the Government's interests. Also, the Agency has a 
worldwide financial management system and is in the process of 
acquiring a new contracting system, and these systems are better able 
to track withholding at the contract level, regardless of where task 
orders are issued or paid. For these reasons, we determined this item 
in the proposed rule to be unnecessary.
    Further, we now consider the existing AIDAR section to be 
unnecessary as a supplementary preamble to the FAR clause, since the 
prescription for the FAR clause addresses how USAID has traditionally 
used this clause for payments under time-and-material and labor-hour 
contracts. We are therefore removing the existing AIDAR clause through 
this final rule.

B. Regulatory Planning and Review

    This is not a significant regulatory action and, therefore, is 
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.

C. Regulatory Flexibility Act

    The U.S. Agency for International Development certifies 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 the rule does not 
impose any costs on either small or large businesses; therefore, an 
Initial Regulatory Flexibility Analysis has not been performed. This 
final rule revises (48 CFR) AIDAR parts 712, 727, 742, and 752 to 
require contracting officers to comply with customary commercial 
practice or to obtain a waiver pursuant to (48 CFR) FAR Part 12 in 
order to prohibit contractors from using government facilities or 
personnel in a commercial services contract; allows contracting 
officers to require contractors to obtain contracting officer approval 
before releasing or publishing data first produced in the performance 
of the contract, if the release or publication may have a negative 
effect on the Government's development objectives or diplomatic 
relationship with the cooperating country; and to specify progress 
reporting requirements in contracts.

D. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the AIDAR do not impose any additional information collection 
requirements that require the approval of the Office of Management and 
Budget under 44 U.S.C. 3501, et seq. AIDAR Subpart 742 and the clause 
at Sec.  752.242-70 supplement the progress reporting requirements 
already included in (48 CFR) FAR Subpart 42.11 and are consistent with 
any information collection requirements in the FAR.

List of Subjects, in 48 CFR Parts 727, 742, and 752.

    Government procurement.


0
For the reasons set forth in the Preamble, 48 CFR Chapter 7 is amended 
as set forth below.

0
1. Add part 727 to subchapter E to read as follows:

PART 727--PATENTS, DATA, AND COPYRIGHTS

Subpart 727.4--Rights in Data and Copyrights
Sec.
727.404 Basic Rights in Data Clause.
727.409 Solicitation provisions and contract clauses.

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 
2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 
1979 Comp., p. 435.

Subpart 727.4--Rights in Data and Copyrights


727.404  Basic Rights in Data Clause.

    (a) through (f) [Reserved]
    (g) When the contract includes a requirement for the contractor to 
assign copyright to the government or another party, the contracting 
officer shall incorporate (48 CFR) 752.227-14 and/or include an express 
limitation or restriction in the contract. USAID contracting officers 
will assert such a right in limited circumstances in accordance with 
the principles as stated in (48 CFR) 27.402.


727.409  Solicitation provisions and contract clauses.

    (a) When the contracting officer incorporates (48 CFR) FAR 52.227-
14, and if the release or publication of data first produced in the 
performance of the contract may be sensitive to U.S. Government 
relations with the cooperating country, the contracting officer must 
use the clause at (48 CFR) 752.227-14.
    (b) through (m) [Reserved]
    (n) The prescriptions for provisions and clauses in (48 CFR) FAR 
27.409 apply to all USAID contracts regardless of place of performance.

PART 742--CONTRACT ADMINISTRATION

0
2. The authority citation for part 742 continues to read as follows:

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 
2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 
1979 Comp., p. 435.


0
3. Add subpart 742.11 to read as follows:

Subpart 742.11--Production, Surveillance, and Reporting
Sec.
742.1170 Performance monitoring and progress reporting.
742.1170-1 General.
742.1170-2 Applicability.
742.1170-3 Policy.
742.1170-4 Progress reporting requirements and contract clause.

Subpart 742.11--Production, Surveillance, and Reporting


742.1170  Performance monitoring and progress reporting.


742.1170-1  General.

    Performance monitoring is a function of contract administration 
used to determine contractor progress towards achieving the goals and 
objectives of the contract and to identify any factors that may delay 
or prevent the accomplishment of those goals and objectives. 
Performance monitoring requires USAID personnel, particularly the 
cognizant technical officer, to maintain adequate knowledge of the 
contractor's activities and progress in order to ensure that USAID's 
objectives, as stated in the contract's Statement of Work, will be 
achieved.


742.1170-2  Applicability.

    (a) This section applies to USAID non-personal, professional/
technical services contracts exceeding the simplified acquisition 
threshold, but may be applied to other USAID contracts, if the 
contracting officer and requiring office determine that doing so is in 
the best interests of the Agency. The contracting officer must ensure 
that this determination is documented in the contract file. This 
section does not apply to personal services contracts.
    (b) The underlying principles of FAR 48 CFR subpart 42.11 apply to 
USAID contracts and are inherent to this section. However, not all of 
the specific requirements and terminology in FAR 48 CFR subpart 42.11 
are compatible with the types of technical assistance contracts usually 
awarded by USAID.

[[Page 53164]]

Therefore, this section 742.1170 applies when the requirements of FAR 
48 CFR subpart 42.11 do not meet USAID requirements or are otherwise 
not appropriate.
    (c) The progress reports discussed in this section are separate 
from the performance evaluation reports prepared in accordance with FAR 
48 CFR subpart 42.15 and internal Agency procedures, although they may 
be used by USAID personnel or their authorized representatives when 
evaluating the contractor's performance. Furthermore, the policies, 
procedures, and limitations of this section do not apply to technical 
reports, studies, papers, etc., the acquisition of which may be part of 
or even the sole purpose of the contract.


742.1170-3  Policy.

    (a) The contractor is responsible for timely contract performance. 
Performance monitoring by USAID does not obviate this responsibility.
    (b) The requiring office, particularly the cognizant technical 
officer and the contracting officer, will determine how to monitor the 
contractor's performance to protect the Government's interests, by 
considering:
    (1) The contract requirements for reporting progress;
    (2) The contract performance schedule;
    (3) The contractor's implementation plan or workplan;
    (4) The contractor's history of contract performance;
    (5) The contractor's experience with the services or supplies being 
provided under the contract;
    (6) The contractor's financial capability;
    (7) Any other factors the requiring office, particularly the 
cognizant technical officer and the contracting officer, considers 
appropriate and necessary to adequately monitor contractor performance 
(for example, the day-to-day working proximity of the cognizant 
technical officer or contracting officer to the contractor's place of 
performance).
    (c) In monitoring contractor performance, the requiring office 
(particularly the cognizant technical officer and contracting officer) 
must utilize any of the contractor's existing systems or processes for 
monitoring progress, provided that doing so is not contrary to the 
terms of the contract. The requiring officer or cognizant technical 
officer must not require anything from the contractor that is outside 
the scope or terms of the contract or may result in claims of waivers, 
of changes, or of other contract modifications. Further, progress 
reports shall not require information already available from other 
sources.


742.1170-4  Progress reporting requirements and contract clause.

    (a) When the requiring office needs information on contract 
performance status on a regular basis, the contracting officer may 
require the contractor to submit periodic progress reports, tailored to 
address specific contract requirements but limited to only that 
information essential to USAID's needs in monitoring the contractor's 
progress.
    (b) Because the cognizant technical officer is the individual most 
familiar with the contractor's performance, the contractor must submit 
the progress reports directly to the cognizant technical officer. The 
cognizant technical officer must review the reports and advise the 
contracting officer, in writing, of any recommended action, including 
any action needed to address potential or actual delays in performance. 
The cognizant technical officer must so advise the contracting officer 
in sufficient time, typically thirty days, for him or her to take any 
action that the contracting officer determines is appropriate. The 
requirements of this paragraph do not relieve the contractor of 
notification requirements identified elsewhere in the contract.
    (c) The contracting officer must insert the clause at 752.242-70, 
Periodic Progress Reports, in solicitations and contracts that require 
progress reporting, as specified in this section. The contracting 
officer must include specific reporting instructions in the Schedule.

PART 752--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. The authority citation for Part 752 continues to read as follows:

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 
2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 
1979 Comp., p. 435.


0
5. Add section 752.227-14 to read as follows:


752.227-14  Rights in Data--General.

    As prescribed in 727.409(b), insert the following clause:
    Rights in Data--

General (OCT 2007)

    The following paragraph (d) replaces paragraph (d) of (48 CFR) 
FAR 52.227-14 Rights in Data--General.
    (d) Release, publication and use of data.
    (1) For all data first produced or specifically used by the 
Contractor in the performance of this contract in the United States, 
its territories, or Puerto Rico, the Contractor shall have the right 
to use, release to others, reproduce, distribute, or publish such 
data, except to the extent such data may be subject to the Federal 
export control or national security laws or regulations, or unless 
otherwise provided in this paragraph of this clause or expressly set 
forth in this contract [see paragraph (d)(3) for limitations on 
contracts performed outside of the US].
    (2) The Contractor agrees that to the extent it receives or is 
given access to data necessary for the performance of this contract 
which contain restrictive markings, the Contractor shall treat the 
data in accordance with such markings unless otherwise specifically 
authorized in writing by the Contracting Officer.
    (3) For all data first produced or specifically used by the 
Contractor in the overseas performance of this contract, the 
Contractor shall not release, reproduce, distribute, or publish such 
data without the written permission of the Contracting Officer. The 
government also may require the contractor to assign copyright to 
the government or another party as circumstances warrant or as 
specifically stated elsewhere in the contract.


752.232-7  [Removed]

0
6. Remove section 752.232-7.

0
7. Add section 752.242-70 to read as follows:


752.242-70   Periodic progress reports.

    As prescribed in 742.1170-3(c), insert the following clause in 
contracts for which periodic progress reports are required from the 
contractor. The term ``contract'' shall be interpreted as ``task 
order'' or ``delivery order'' when this clause is used in an 
indefinite-delivery contract.

Periodic Progress Reports (OCT 2007)

    (a) The contractor shall prepare and submit progress reports as 
specified in the contract schedule. These reports are separate from the 
interim and final performance evaluation reports prepared by USAID in 
accordance with FAR 42.15 and internal Agency procedures, but they may 
be used by USAID personnel or their authorized representatives when 
evaluating the contractor's performance.
    (b) During any delay in furnishing a progress report required under 
this contract, the contracting officer may withhold from payment an 
amount not to exceed US$25,000 (or local currency equivalent) or 5 
percent of the amount of this contract, whichever is less, until such 
time as the contractor submits the report or the contracting officer 
determines that the delay no longer has a detrimental effect on the

[[Page 53165]]

Government's ability to monitor the contractor's progress.

Lynn Kopala,
Acting Procurement Executive.
 [FR Doc. E7-18234 Filed 9-17-07; 8:45 am]
BILLING CODE 6116-01-P