[Federal Register Volume 74, Number 60 (Tuesday, March 31, 2009)]
[Rules and Regulations]
[Pages 14639-14646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7025]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 4 and 52

[FAC 2005-32; FAR Case 2009-009; Item IV; Docket 2009-0011, Sequence 1]
RIN 9000-AL21


Federal Acquisition Regulation; FAR Case 2009-009, American 
Recovery and Reinvestment Act of 2009 (the Recovery Act)--Reporting 
Requirements

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 (the Councils) are issuing an interim 
rule amending the Federal Acquisition Regulation (FAR) to implement 
section 1512 of Division A of the American Recovery and Reinvestment 
Act of 2009, which requires contractors to report on their use of 
Recovery Act funds.

DATES: Effective Date: March 31, 2009
    Applicability Date: The rule applies to solicitations issued and 
contracts awarded on or after the effective date of this rule. 
Contracting officers shall modify, on a bilateral basis, in accordance 
with FAR 1.108(d)(3), existing contracts to include the FAR clause if 
Recovery Act funds will be used. In the event that a contractor refuses 
to accept such a modification, the contractor will not be eligible for 
receipt of Recovery Act funds.
    Comment Date: Interested parties should submit written comments to 
the FAR Secretariat on or before June 1, 2009 to be considered in the 
formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-32, FAR case 2009-
009, by any of the following methods:
     Regulations.gov: http://www.regulations.gov. Submit 
comments via the Federal eRulemaking portal by inputting ``FAR Case 
2009-009'' under the heading ``Comment or Submission''. Select the link 
``Send a Comment or Submission'' that corresponds with FAR Case 2009-
009. Follow the instructions provided to complete the ``Public Comment 
and Submission Form''. Please include your name, company name (if any), 
and ``FAR Case 2009-009'' on your attached document.
     Fax: 202-501-4067.
     Mail: General Services Administration, FAR Secretariat 
(VPR), 1800 F Street, NW., Room 4041, Attn: Hada Flowers, Washington, 
DC 20405.
    Instructions: Please submit comments only and cite FAC 2005-32, FAR 
case 2009-009, in all correspondence related to this case. All comments 
received will be posted without change to http://www.regulations.gov, 
including any personal and/or business confidential information 
provided.

FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement 
Analyst, at (202) 501-3775 for clarification of content. Please cite 
FAC 2005-32, FAR case 2009-009. For information pertaining to status or 
publication schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

    On February 17, 2009, the President signed Public Law 111-5, the 
American Recovery and Reinvestment Act of 2009 (the ``Recovery Act''), 
including a number of provisions to be implemented in Federal 
Government contracts. This interim rule implements section 1512, which 
is also known as the ``Jobs Accountability Act.'' Subsection (c) of 
section 1512 requires contractors that receive awards (or modifications 
to existing awards) funded, in whole or in part, by the Recovery Act to 
report quarterly on the use of the funds.
    This FAR case adds a new subpart 4.15, and a new clause, 52.204-11. 
Contracting officers must include the new clause in solicitations and 
contracts funded in whole or in part with Recovery Act funds, except 
classified solicitations and contracts. Commercial item contracts and 
Commercially Available Off-The-Shelf (COTS) item contracts are covered, 
as well as actions under the simplified acquisition threshold.
    Contracting officers who obligate Recovery Act funds on existing 
contracts or orders must modify those contracts to add the new clause.

[[Page 14640]]

Contracting officers shall ensure that the contractor complies with the 
reporting requirements of the new clause. Contracting officers are not 
responsible for validating report content, only that a report was 
submitted as required. The online reporting tool will allow the 
contracting officer to monitor this as a matter of contract 
performance.
    Reports from contractors for all work funded, in whole or in part, 
by the Recovery Act, and for which an invoice is submitted prior to 
June 30, 2009, are due no later than July 10, 2009. Thereafter, reports 
shall be submitted no later than the 10th day after the end of each 
calendar quarter. Contractors will report the information, using the 
online reporting tool available at http://www.FederalReporting.gov, 
using instructions at that Web site. The online reporting tool is being 
developed for use by the July 10th timeframe. The data elements to be 
reported are outlined in the clause 52.204-11, in paragraph (d).
    The Government intends to pre-populate as many data elements as 
possible to reduce the burden on contractors and first-tier 
subcontractors by using information available in other Government 
systems. For instance, the Government is considering pre-populating 
congressional districts based on nine-digit zip codes, funding agency, 
North American Industry Classification System (NAICS) code, and parent 
DUNS.
    While Section 1512(c)(4) requires reporting on all Federal 
Financial Accountability and Transparency Act (FFATA) data elements, 
including the compensation information, it limits the reporting to 
first-tier subcontractors that meet the applicability requirements. The 
FAR clause requires this compensation disclosure for prime contractors, 
because to exclude prime contractors while requiring disclosure for 
first-tier subcontractors would be unsupportable given the transparency 
goals of both FFATA and the Recovery Act.

B. Determinations

    The Councils provide the following determinations with respect to 
the rule's applicability to contracts and subcontracts in amounts not 
greater than the simplified acquisition threshold, commercial items, 
and commercially available off-the-shelf (COTS) items.
    1. Applicability to contracts at or below the simplified 
acquisition threshold. Section 4101 of Public Law 103-355, the Federal 
Acquisition Streamlining Act (FASA) (41 U.S.C. 429), governs the 
applicability of laws to contracts or subcontracts in amounts not 
greater than the simplified acquisition threshold. It is intended to 
limit the applicability of laws to them. FASA provides that if a 
provision of law contains criminal or civil penalties, or if the 
Federal Acquisition Regulatory Council makes a written determination 
that it is not in the best interest of the Federal Government to exempt 
contracts or subcontracts at or below the simplified acquisition 
threshold, the law will apply to them. Therefore, given section 1512 of 
the Recovery Act which requires that prime contractors report 
information on their use of Recovery funds, and the initial 
implementing guidance for the Recovery Act issued on February 18, 2009 
by the Director of the Office of Management and Budget (OMB) committing 
to an unprecedented level of transparency and accountability for 
taxpayer dollars, the FAR Council has determined that it is in the best 
interest of the Federal Government to apply this rule to contracts or 
subcontracts at or below the simplified acquisition threshold, as 
defined at 2.101.
    2. Applicability to Commercial Item contracts. Section 8003 of 
Public Law 103-355, the Federal Acquisition Streamlining Act (FASA) (41 
U.S.C. 430), governs the applicability of laws to commercial items, and 
is intended to limit the applicability of laws to commercial items. 
FASA provides that if a provision of law contains criminal or civil 
penalties, or if the Federal Acquisition Regulatory Council makes a 
written determination that it is not in the best interest of the 
Federal Government to exempt commercial item contracts, the provision 
of law will apply to contracts for commercial items. The same applies 
for subcontracts for commercial items.
    Therefore, given section 1512, of the Recovery Act, which requires 
that prime contractors report information on their use of recovery 
funds, and the initial implementing guidance for the Recovery Act 
issued on February 18, 2009 by the Director of the Office of Management 
and Budget (OMB) committing to an unprecedented level of transparency 
and accountability for taxpayer dollars, the FAR Council has determined 
that it is in the best interest of the Federal Government to apply the 
rule to commercial items, as defined at 2.101, both at the prime and 
subcontract levels.
    3. Applicability to Commercially Available Off-The-Shelf (COTS) 
item contracts. Section 4203 of Public Law 104-106, the Clinger-Cohen 
Act of 1996 (41 U.S.C. 431), governs the applicability of laws to the 
procurement of commercially available off-the-shelf (COTS) items, and 
is intended to limit the applicability of laws to them. Clinger-Cohen 
provides that if a provision of law contains criminal or civil 
penalties, or if the Administrator for Federal Procurement Policy makes 
a written determination that it is not in the best interest of the 
Federal Government to exempt COTS item contracts, the provision of law 
will apply. The same applies for subcontracts for COTS items.
    Therefore, given section 1512, of the Recovery Act which requires 
that prime contractors report information on their use of recovery 
funds, and the initial implementing guidance for the Recovery Act 
issued on February 18, 2009 by the Director of the Office of Management 
and Budget (OMB) committing to an unprecedented level of transparency 
and accountability for taxpayer dollars, the Administrator, Office of 
the Federal Procurement Policy, has determined that it is in the best 
interest of the Federal Government to apply the rule to Commercially 
Available Off-The-Shelf (COTS) item contracts and subcontracts, as 
defined at FAR 2.101.

C. Request for Public Comments

    The Councils ask for public comments on the interim rule, and the 
following additional issues:
    1. The statute requires a description of the work (implemented at 
52.204-11(d)(5)). Should the Government provide a list of broad 
categories of work under the Recovery Act from which the contractor 
would select and, if so, what should these be?
    2. The definitions of ``jobs created'' and ``jobs retained'' are 
currently based on a conversion of part-time or temporary jobs into 
``full-time equivalent'' (FTE) jobs. In order to do such a conversion, 
these part-time hours must be divided by the number of hours in a full-
time schedule. This interim rule leaves the definition of full-time 
schedule to each individual company's discretion based on its existing 
practices. With respect to the methodology described in the interim 
rule for estimating jobs created or retained:

--Is the use of FTE and the description provided consistent with 
existing business practices and systems?
--Is a standardized methodology based on FTE necessary or do 
contractors have existing practices that adequately address other than 
full-time jobs to avoid inflating estimated numbers for jobs created 
and jobs retained? Should the Government allow contractors to use any 
method consistent with their existing practice as long as the 
contractor provides an

[[Page 14641]]

explanation of the methodology, including a description of how part-
time and temporary employees are addressed?
--If the Government were to standardize the number of hours in a 
``full-time schedule,'' would this increase the burden of reporting on 
jobs created or retained?

    3. If the Government were to require companies to separately 
invoice for all supplies or services funded by the Recovery Act, what 
challenges would this pose? Are there any benefits?
    4. Is there information not customarily provided that would make it 
easier for companies to segregate their invoices to separately identify 
items funded by the Recovery Act?
    5. Are there challenges to obtaining the information required from 
first-tier subcontractors? If so, how could the rule be changed to ease 
the submission of this information from both a prime contractor and 
subcontractor perspective?
    6. Does the definition of ``Total compensation'' used in the clause 
provide sufficient clarity? If not, what specifically should be 
clarified?
    7. Would it be useful to provide an Alternate clause that would 
allow agencies to identify meaningful distinct ``projects'' within the 
contract for the purpose of requiring the contractor to report 
employment impact and progress by ``project'' rather than for the 
contract as a whole? For example, if the contract called for work in 
distinct geographic areas, the report might provide more meaningful 
information if the contractor were to report employment impact and 
progress separately by geographic area. This would not require 
individual reports but rather separate sections within the quarterly 
report.
    8. Currently, this rule requires contractors to report on invoiced 
amounts because the Government assumed that it would be extremely 
difficult for the contractor employee responsible for report 
submission, to report on ``receipt of funds.'' Would a contractor be 
able to separately identify when Recovery Act funds were received and 
be able to identify the payment to particular deliverables? How 
difficult would this be to track and report on a quarterly basis?
    This is a significant regulatory action and, therefore, was subject 
to Office of Management and Budget (OMB) 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.

D. Regulatory Flexibility Act

    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 it requires 
contractors to report on their use of Recovery Act funds. An Initial 
Regulatory Flexibility Analysis has been prepared and the results of 
the analysis show that the direct cost of this rule on an average cost-
per-contractor basis does not appear to rise to the level of being 
economically significant (i.e. $100,000,000); however, the Councils 
request comments on this finding.
    Therefore, the Councils have prepared an Initial Regulatory 
Flexibility Analysis (IRFA) for public comment that is summarized as 
follows:

    This Initial Regulatory Flexibility Analysis has been prepared 
consistent with 5 U.S.C. 603.
    1. Reasons for the action.
    This action implements section 1512 of the American Recovery and 
Reinvestment Act of 2009 (Recovery Act), which requires contractors 
to report quarterly on their use of Recovery Act funds.
    2. Objectives of, and legal basis for, the rule.
    The objective of the Recovery Act is to create jobs, restore 
economic growth, and strengthen America's middle class through 
measures that modernize the nation's infrastructure, enhance 
America's energy independence, expand educational opportunities, 
preserve and improve affordable health care, provide tax relief, 
protect those in greatest need, and provide for other purposes. This 
rule implements section 1512 of the Recovery Act which requires 
contractors, as a condition of receipt of funds, to report quarterly 
on their use of those funds. These reports will be made available to 
the public. The Recovery Act is designed to provide unprecedented 
transparency to the American taxpayer.
    3. Description and estimate of the number of small entities to 
which the rule will apply.
    The rule imposes a clause in any award document funded by the 
Recovery Act, requiring the contractor to publicly disclose 
information related to the use of funds and specific information 
about first-tier subcontract awards. This clause requires 
contractors to report on use of Recovery Act funds. The clause 
imposes a public reporting burden on prime contractors and, in a 
more limited way, on their first-tier subcontractors. According to 
the Federal Procurement Data System (FPDS), there are 129,331 active 
and unique prime Federal contractors. The estimate for the number of 
active and unique prime federal contractors that will participate in 
awards funded by the Recovery Act is 20,013, of which 4,003 or 20 
percent are estimated to be small businesses. It is also noted that 
this is 20 percent of prime contractors, which should not be 
confused with the 23 percent small business contracting goal which 
is based on dollars and that continues to apply to both Recovery Act 
spending and agencies' ongoing procurement spending.
    The number of first-tier subcontractors estimated to participate 
in Recovery Act awards is 60,039 or three times the number of prime 
contractors. Of these 60,039 Recovery Act first-tier subcontractors, 
it is estimated that 25 percent, or 15,010, will be small 
businesses.
    Based on the above, the estimated total number of small 
businesses, prime and subcontractors, to which this rule will apply 
is 19,013 and the estimated total number of other than small 
businesses to which this rule will apply is 61,039.
    4. Description of projected reporting, recordkeeping, and other 
compliance requirements of the rule, including an estimate of the 
classes of small entities which will be subject to the requirement 
and the type of professional skills necessary for preparation of the 
report or record.
    The rule requires Federal prime contractors, both small and 
other than small businesses, to report quarterly on their use of 
funds received under the Recovery Act. The rule applies to all 
Federal contractors regardless of size or business ownership. Such a 
report would probably be prepared by a company contract 
administrator or contract manager or a company subcontract 
administrator. The information required in the report is primarily 
information that companies would maintain for their own business 
purposes including, but not limited to, contract or other award 
number, the dollar amount of invoices, the supplies or services 
delivered, a broad assessment of progress towards completion, the 
estimated number of new jobs created or retained resulting from the 
award, and first-tier subcontract information (or aggregate 
information if the subcontract is less than $25,000, or the 
subcontractor is an individual or had gross income in the previous 
tax year of less than $300,000). While most of the data elements 
impose only one-time burden collection, some will require quarterly 
updates.
    There are three data elements required in the report that will 
likely require some additional effort: (1) Estimating the cumulative 
number of jobs created each calendar quarter, (2) estimating the 
cumulative number of jobs retained each calendar quarter, and (3) 
providing the name and total compensation of each of the five most 
highly compensated officers of the contractor for the calendar year 
in which the contract is awarded, which applies at both the prime 
and first-tier subcontract level. The rule also requires the prime 
contractor to report certain information, required by the Federal 
Funding Accountability and Transparency Act of 2006 (FFATA), about 
first-tier subcontracts (though all awards under $25,000 will be 
aggregated, eliminating the need to report transaction-level data). 
The prime contractor will have most of this information in the 
subcontract award document, such as the name of the subcontractor, 
award number, and date of award. However, the prime contractor will 
have to obtain four of the elements directly from the first-tier 
subcontractor: (1) The unique identifier (DUNS Number) ``for awards 
of $25,000 or more'' as well as for the

[[Page 14642]]

subcontractor's parent company, if the subcontractor has a parent 
company, (2) subcontractor's physical address, (3) subcontract 
primary performance location, and (4) the compensation information 
described earlier as required by FFATA and reflected in section 1512 
of the Recovery Act.
    With respect to the DUNS Number, we anticipate that most first-
tier subcontractors have a DUNS Number as it is a requirement for 
receipt of any Government contract. However, a company that never 
received nor anticipated a Government contract might not have a DUNS 
number and will have to register for one with Dunn and Bradstreet. 
The registration process is not burdensome, can be done online or by 
phone, and requires only information any company would have on hand 
for business purposes. First-tier subcontractors are not required to 
register in the Central Contractor Registration (CCR) as a 
consequence of this rule.
    With respect to compensation information, this requirement 
results from FFATA and will not apply if the public has access to 
information about compensation of the senior executives through 
periodic reports filed under section 13(a) or 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or 
section 6104 of the Internal Revenue Code of 1986. Otherwise, each 
prime contractor and first-tier subcontractors will have to disclose 
the compensation information if it received (1) 80 percent or more 
of annual gross revenues in Federal awards; and (2) $25M or more in 
annual gross revenue from Federal awards. Because this requirement 
of FFATA became law on December 26, 2007, we anticipate that those 
companies to which it applies are aware of the requirement and have 
been preparing to provide this information.
    5. Relevant Federal rules which may duplicate, overlap, or 
conflict with the rule.
    The rule includes the reporting requirements stipulated by FFATA 
in FAR Case 2008-039 FFATA flow-down and 2008-037 Financial 
Disclosure.
    These cases are in process and as they are finalized, they will 
be amended to ensure that they do not duplicate, overlap, or 
conflict with the requirements of this interim rule.
    6. Description of any significant alternatives to the rule which 
accomplish the stated objectives of applicable statutes and which 
minimize any significant economic impact of the rule on small 
entities.
    The rule requires Federal prime contractors to respond to all of 
the reporting requirements, eliminating some of the reporting burden 
on first-tier subcontractors despite the fact that they will have to 
provide some information to the prime contractor. Also, all of the 
reporting elements applied to first-tier subcontractors, a 
significant percentage of which will be small businesses, are one-
time collection burdens. The Government believes that the rule will 
further minimize the reporting burden on Government contractors, 
including all small businesses, as well as other businesses, by 
using existing Federal acquisition/registration systems to pre-
populate certain data elements.

    The FAR Secretariat will be submitting a copy of the IRFA to the 
Chief Counsel for Advocacy of the Small Business Administration. 
Interested parties may obtain a copy from the FAR Secretariat. The 
Councils will consider comments from small entities concerning the 
affected FAR Parts 4 and 52 in accordance with 5 U.S.C. 610. Interested 
parties must submit such comments separately and should cite 5 U.S.C. 
601, et seq. (FAC 2005-32, FAR case 2009-009), in all correspondence.

E. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 104-13) applies because the 
interim rule contains information collection requirements. Accordingly, 
the FAR Secretariat forwarded an emergency information collection 
request for approval of new information collection requirements to the 
Office of Management and Budget (OMB) under 44 U.S.C. Chapter 35, et 
seq. OMB approved the new information collection requirements as 
follows:
    1. OMB Control No. 9000-0166--One Time Reporting Requirements for 
Prime Contractors.
    2. OMB Control No. 9000-0167--One Time Reporting for First-tier 
Subcontractors.
    3. OMB Control No. 9000-0168--One Time Reporting, Compensation 
Requirements.
    4. OMB Control No. 9000-0169--Quarterly Reporting for Prime 
Contractors.
    Comments on the interim rule as well as the collection will be 
considered in the revisions to both the rule and the collection.
    Any award funded by the Recovery Act will contain the clause at 
52.204-11. This clause requires contractors to report on use of 
Recovery Act funds. The clause imposes public reporting burden on prime 
contractors and, in a more limited way, on their first-tier 
subcontractors. According to the Federal Procurement Data System 
(FPDS), there are 129,331 active and unique prime Federal contractors 
as of February 2009. The estimate for the number of active and unique 
prime Federal contractors that will participate in awards funded by the 
Recovery Act is 20,013. This is based on using a factor of .16 of 
129,331, derived by dividing 129,331 by $517B in procurement 
obligations for fiscal year 2008 or by dividing estimated Recovery Act 
dollars for contracts ($80B: Government's best estimate of Recovery Act 
dollars to be obligated by contracts is between $60 and $80 billion; 
using $80 billion for calculation purposes) by $517B. Of the estimated 
20,013 Recovery Act prime contractors, it is estimated that 20 percent, 
or 4,003, will be small businesses. It should be noted that this is 20 
percent of prime contractors; this should not be confused with the 23 
percent small business contracting goal which is based on dollars and 
that continues to apply to both Recovery Act spending and agencies' 
ongoing procurement spending.
    The number of first-tier subcontractors estimated to participate in 
Recovery Act awards is 60,039. This was derived by estimating three 
first-tier subcontractors for each prime contractor. Of these 60,039 
Recovery Act first-tier subcontractors, it is estimated that 25 
percent, or 15,010, will be small businesses.
    Based on the above, the estimated total number of small businesses, 
prime and subcontractors, to which this rule will apply is 19,013 and 
the estimated total number of other than small businesses to which this 
rule will apply is 61,039.
    Though Section 1512 requires that the reports be completed by the 
prime contractor for all data elements, for practical purposes, the 
prime contractor will have to obtain certain information from their 
first-tier subcontractors, hence the flow-down requirements of 
paragraph (d)(10) of the clause. Additionally, the information required 
on the prime contractor award varies from that required for the first-
tier subcontract awards. For instance, the elements at paragraphs 
(d)(1) through (9) are collection burdens associated with the prime 
contract award while the elements in (d)(10)(i) through (ix) are 
associated with first-tier subcontracts.
    Finally, the elements required by Section 1512 of the Recovery Act 
are a combination of those that will be updated in each quarterly 
report, such as jobs created and retained and progress towards 
completion of the overall purpose and expected outcomes or results of 
the contract and those that are one-time collection burdens, such as 
award number and date and all of the reporting requirements for first-
tier subcontracts. Therefore, the following analysis separately 
estimates the burden associated with the one-time reporting elements 
and those that are updated quarterly. The parenthetical reference after 
the description of each reporting element refers to the FAR clause. The 
hours estimated per response include the time for reviewing 
instructions, searching existing data sources, gathering the data, and 
completing the collection of information. The estimated total annual 
burden associated with reporting requirements of FAR 52.204-

[[Page 14643]]

11 is $31,725,468, based on the following:

One-Time Reporting Elements

    1. OMB Control No. 9000-0166--One Time Reporting Requirements for 
Prime Contractors. One-time reporting elements for which the burden is 
imposed on the prime contractor include the following:
    a. The award number for both its Government contract and first-tier 
subcontracts ((d)(1) and (d)(10)(viii));
    b. Program or project title, if any, for its Government contract 
((d)(4));
    c. A description of the overall purpose and expected outcomes or 
results of the contract and first-tier subcontracts, including 
significant deliverables and, if appropriate, units of measure ((d)(5) 
and (d)(10)(vii));
    d. Name of the first-tier subcontractor ((d)(10)(ii));
    e. Amount of the first-tier subcontract award ((d)(10)(iii));
    f. Date of the first-tier subcontract award ((d)(10)(iv));
    g. Applicable North American Industry Classification System (NAICS) 
code ((d)(10)(v)); and
    h. Funding agency ((d)(10)(vi)).
    We estimate the total annual public cost burden for these elements 
to be $850,544 based on the following:
    Respondents: 20,013.
    Responses per respondent: 1.25 (reflects estimate that 25 percent 
of contractors will have more than one Recovery Act funded award on 
which to report).
    Total annual responses: 25,016.
    Preparation hours per response: .5.
    Total response burden hours: 12,508.
    Average hourly wages ($50.00+36.35 percent overhead): 68.00.
    Estimated cost to the public: $850,544.
    2. OMB Control No. 9000-0168--One Time Reporting, Compensation 
Requirements. A one-time reporting element for which the burden is 
imposed on certain prime contractors and first-tier subcontractors to 
publicly disclose the names and total compensation of each of the 
contractor's or first-tier subcontractor's five most highly compensated 
officers, for the calendar year in which the award was made ((d)(8) and 
(d)(10)(xi)) (see applicability requirements in the clause at (d)(8) 
and (d)(10)).
    While Section 1512(c)(4) of the Recovery Act requires reporting on 
all FFATA data elements, including the compensation information, it 
limits the prime's reporting responsibility to first-tier 
subcontractors that meet the applicability requirements. The FAR clause 
requires this compensation disclosure for prime contractors as well 
because to exclude prime contractors while requiring disclosure for 
first-tier subcontractors would be unsupportable given the transparency 
goals of both FFATA and the Recovery Act.
    There are likely to be some prime contractors that already provide 
public access to the compensation of senior executives through periodic 
reports filed under section 13(a) or 15(d) of the Securities Exchange 
Act of 1934 or section 6104 of the Internal Revenue Code of 1986. For 
purposes of this analysis, the Government estimates that 5 percent of 
prime contractors already provide such public access. There are also 
likely to be some first-tier subcontractors that do not meet either of 
the revenue thresholds for applicability. For purposes of this 
analysis, the Government estimates that 5 percent of first-tier 
subcontractors will not have to disclose compensation information 
because they do not meet the revenue thresholds.
    We estimate the total annual public cost burden for these elements 
to be $19,392,444, based on the following:
    Respondents: 76,049 (20,013 primes-5 percent=19,012+60,039 first-
tier subcontractors-5 percent=57,037).
    Responses per respondent: 1.25 (reflects estimate that 25 percent 
of all respondents will have more than one Recovery Act funded award on 
which to report).
    Total annual responses: 95,061.
    Preparation hours per response: 3.
    Total response burden hours: 285,183.
    Average hourly wages ($50.00+36.35 percent overhead): $68.00.
    Estimated cost to the public: $19,392,444.
    3. OMB Control No. 9000-0167--One Time Reporting for First-tier 
Subcontractors.
    One-time reporting elements for which the burden is imposed only on 
the first-tier subcontractor include the following:
    a. Unique identifier (DUNS Number) for the subcontractor receiving 
the award and for the subcontractor's parent company, if the 
subcontractor has a parent company ((d)(10)(i));
    b. Subcontractor's physical address including street address, city, 
state, and country. Also include the nine-digit zip code and 
congressional district if applicable((d)(10)(ix)); and
    c. Subcontract primary performance location including street 
address, city, state, and country. Also include the nine-digit zip code 
and congressional district if applicable ((d)(10)(x)).
    The Government expects that most first-tier subcontractors will 
have a DUNS number. However, if a company has never received nor 
anticipated a Government contract, it would be required to register for 
a DUNS number which is not an onerous process and can be done online or 
by phone using information a company would have on hand for business 
purposes.
    We estimate the total annual public cost burden for these elements 
to be $1,275,816, based on the following:
    Respondents: 60,039.
    Responses per respondent: 1.25 (reflects estimate that 25 percent 
of first-tier subcontractors will have more than one Recovery Act 
funded award on which to report).
    Total annual responses: 75,049.
    Preparation hours per response: .25.
    Total response burden hours: 18,762.
    Average hourly wages ($50.00+36.35 percent overhead):$68.00.
    Estimated cost to the public: $1,275,816.
    4. OMB Control No. 9000-0169--Quarterly Reporting for Prime 
Contractors. Elements updated quarterly for which the burden is imposed 
on the prime contractor include the following:
    a. The amount of Recovery Act funds invoiced by the contractor, 
cumulative since the beginning of the contract ((d)(2));
    b. A list of all significant services performed or supplies 
delivered, including construction, for which the contractor has 
invoiced ((d)(3));
    c. An assessment of the contractor's progress towards the 
completion of the overall purpose and expected outcomes or results of 
the contract (i.e., not started, less than 50 percent completed, 
completed 50 percent or more, or fully completed). This covers the 
contract (or portion thereof) funded by the Recovery Act ((d)(6));
    d. A narrative description of the employment impact of the Recovery 
Act funded work ((d)(7)(i) through (ii)); and
    e. For subcontracts valued at less than $25,000 or any subcontracts 
awarded to an individual, or subcontracts awarded to a subcontractor 
that in the previous tax year had gross income under $300,000, the 
contractor shall only report the aggregate number of such first tier 
subcontracts awarded in the quarter and their aggregate total dollar 
amount ((d)(9)).
    We estimate the total annual public cost burden for these elements 
to be $10,206,664, based on the following:
    Respondents: 20,013.
    Responses per respondent: 1.25 (reflects 4 reports multiplied by a 
factor of 1.25 to reflect Government's estimate that 25 percent of 
contractors will have more than one Recovery Act funded award on which 
to report).
    Total annual responses: 100,065.

[[Page 14644]]

    Preparation hours per response: 1.5.
    Total response burden hours: 150,098.
    Average hourly wages ($50.00+36.35 percent overhead): $68.00.
    Estimated cost to the public: $10,206,664.

F. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than June 1, 2009 to: FAR Desk Officer, OMB, Room 10102, 
NEOB, Washington, DC 20503, and a copy to the General Services 
Administration, FAR Secretariat (VPR), 1800 F Street, NW., Room 4041, 
Washington, DC 20405. Please cite the applicable OMB Control No.: 9000-
0166; 9000-0167; 9000-0168; or 9000-0169, and FAR Case 2009-009, 
American Recovery and Reinvestment Act--Reporting Requirements, in all 
correspondence.
    Public comments are particularly invited on: whether this 
collection of information is necessary for the proper performance of 
functions of the FAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    Requester may obtain a copy of the justification from the General 
Services Administration, FAR Secretariat (VPR), Room 4041, Washington, 
DC 20405, telephone (202) 501-4755. Please cite the applicable OMB 
Control No.: 9000-0166, 9000-0167; 9000-0168; or 9000-0169, and FAR 
Case 2009-009, American Recovery and Reinvestment Act--Reporting 
Requirements, in all correspondence.
    The Paperwork Reduction Act applies to this interim rule.

G. 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 because the American Recovery and Reinvestment Act of 2009 
became effective on enactment on February 17, 2009, and agencies are 
ready to award contracts using funds appropriated by the Act. Without a 
FAR clause, agencies will be forced to develop their own clause, which 
would (1) significantly increase the costs for Government as well as 
contractors who may have to comply with varied clauses and reporting 
mechanisms, (2) increase the risk of non-compliance, and (3) degrade 
transparency and public understanding. Waiting for public comment prior 
to issuing a clause will require resource-intensive and costly post-
award bilateral negotiations and may hinder recovery. However, pursuant 
to Public Law 98-577 and FAR 1.501, the Councils will consider public 
comments received in response to this interim rule in the formation of 
the final rule.

List of Subjects in 48 CFR Parts 4 and 52

    Government procurement.

    Dated: March 25, 2009.
Al Matera,
Director, Office of Acquisition Policy.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4 and 52 as set forth 
below:
0
1. The authority citation for 48 CFR parts 4 and 52 continues to read 
as follows:

    Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 4--ADMINISTRATIVE MATTERS

0
2. Add subpart 4.15 to read as follows:

Subpart 4.15-American Recovery and Reinvestment Act--Reporting 
Requirements

Sec.
4.1500 Scope of subpart.
4.1501 Procedures.
4.1502 Contract clause.


4.1500  Scope of subpart.

    This subpart implements section 1512(c) of Division A of the 
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5) 
(Recovery Act), which requires, as a condition of receipt of funds, 
quarterly reporting on the use of funds. The subpart also implements 
the data elements of the Federal Funding Accountability and 
Transparency Act of 2006, as amended (Pub. L. 109-282). Contractors 
that receive awards (or modifications to existing awards) funded, in 
whole or in part by the Recovery Act, must report information 
including, but not limited to--
    (a) The dollar amount of contractor invoices;
    (b) The supplies delivered and services performed;
    (c) An assessment of the completion status of the work;
    (d) An estimate of the number of jobs created and the number of 
jobs retained as a result of the Recovery Act funds;
    (e) Names and total compensation of each of the five most highly 
compensated officers for the calendar year in which the contract is 
awarded; and
    (f) Specific information on first-tier subcontractors.


4.1501  Procedures.

    (a) In any contract action funded in whole or in part by the 
Recovery Act, the contracting officer shall indicate that the contract 
action is being made under the Recovery Act, and indicate which 
products or services are funded under the Recovery Act. This 
requirement applies whenever Recovery Act funds are used, regardless of 
the contract instrument.
    (b) To maximize transparency of Recovery Act funds that must be 
reported by the contractor, the contracting officer shall structure 
contract awards to allow for separately tracking Recovery Act funds. 
For example, the contracting officer may consider awarding dedicated 
separate contracts when using Recovery Act funds or establishing 
contract line item number (CLIN) structures to mitigate commingling of 
Recovery funds with other funds.
    (c) Contracting officers shall ensure that the contractor complies 
with the reporting requirements of 52.204-11, American Recovery and 
Reinvestment Act--Reporting Requirements. If the contractor fails to 
comply with the reporting requirements, the contracting officer shall 
exercise appropriate contractual remedies.
    (d) The contracting officer shall make the contractor's failure to 
comply with the reporting requirements a part of the contractor's 
performance information under Subpart 42.15.


4.1502  Contract clause.

    Insert the clause at 52.204-11, American Recovery and Reinvestment 
Act--Reporting Requirements in all solicitations and contracts funded 
in whole or in part with Recovery Act funds, except classified 
solicitations and contracts. This includes, but is not limited to, 
Governmentwide Acquisition Contracts (GWACs), multi-agency contracts 
(MACs), Federal Supply Schedule (FSS) contracts, or agency indefinite-
delivery/indefinite-quantity (ID/IQ) contracts that will be funded with 
Recovery Act funds. Contracting officers shall ensure that this clause 
is included in any existing contract or

[[Page 14645]]

order that will be funded with Recovery Act funds. Contracting officers 
may not use Recovery Act funds on existing contracts and orders if the 
clause at 52.204-11 is not incorporated.


PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Add section 52.204-11 to read as follows:


52.204-11  American Recovery and Reinvestment Act--Reporting 
Requirements

    As prescribed in 4.1502, insert the following clause:

American Recovery and Reinvestment Act--Reporting Requirements (MAR 
2009)

    (a) Definitions. As used in this clause--
    Contract, as defined in FAR 2.101, means a mutually binding 
legal relationship obligating the seller to furnish the supplies or 
services (including construction) and the buyer to pay for them. It 
includes all types of commitments that obligate the Government to an 
expenditure of appropriated funds and that, except as otherwise 
authorized, are in writing. In addition to bilateral instruments, 
contracts include (but are not limited to) awards and notices of 
awards; job orders or task letters issued under basic ordering 
agreements; letter contracts; orders, such as purchase orders, under 
which the contract becomes effective by written acceptance or 
performance; and bilateral contract modifications. Contracts do not 
include grants and cooperative agreements covered by 31 U.S.C. 6301, 
et seq. For discussion of various types of contracts, see FAR Part 
16.
    First-tier subcontract means a subcontract awarded directly by a 
Federal Government prime contractor whose contract is funded by the 
Recovery Act.
    Jobs created means an estimate of those new positions created 
and filled, or previously existing unfilled positions that are 
filled, as a result of funding by the American Recovery and 
Reinvestment Act of 2009 (Recovery Act). This definition covers only 
prime contractor positions established in the United States and 
outlying areas (see definition in FAR 2.101). The number shall be 
expressed as ``full-time equivalent'' (FTE), calculated cumulatively 
as all hours worked divided by the total number of hours in a full-
time schedule, as defined by the contractor. For instance, two full-
time employees and one part-time employee working half days would be 
reported as 2.5 FTE in each calendar quarter.
    Jobs retained means an estimate of those previously existing 
filled positions that are retained as a result of funding by the 
American Recovery and Reinvestment Act of 2009 (Recovery Act). This 
definition covers only prime contractor positions established in the 
United States and outlying areas (see definition in FAR 2.101). The 
number shall be expressed as ``full-time equivalent'' (FTE), 
calculated cumulatively as all hours worked divided by the total 
number of hours in a full-time schedule, as defined by the 
contractor. For instance, two full-time employees and one part-time 
employee working half days would be reported as 2.5 FTE in each 
calendar quarter.
    Total compensation means the cash and noncash dollar value 
earned by the executive during the contractor's past fiscal year of 
the following (for more information see 17 CFR 229.402(c)(2)):
    (1) Salary and bonus.
    (2) Awards of stock, stock options, and stock appreciation 
rights. Use the dollar amount recognized for financial statement 
reporting purposes with respect to the fiscal year in accordance 
with the Statement of Financial Accounting Standards No. 123 
(Revised 2004) (FAS 123R), Shared Based Payments.
    (3) Earnings for services under non-equity incentive plans. Does 
not include group life, health, hospitalization or medical 
reimbursement plans that do not discriminate in favor of executives, 
and are available generally to all salaried employees.
    (4) Change in pension value. This is the change in present value 
of defined benefit and actuarial pension plans.
    (5) Above-market earnings on deferred compensation which is not 
tax-qualified.
    (6). Other compensation. For example, severance, termination 
payments, value of life insurance paid on behalf of the employee, 
perquisites or property if the value for the executive exceeds 
$10,000.
    (b) This contract requires the contractor to provide products 
and/or services that are funded under the American Recovery and 
Reinvestment Act of 2009 (Recovery Act). Section 1512(c) of the 
Recovery Act requires each contractor to report on its use of 
Recovery Act funds under this contract. These reports will be made 
available to the public.
    (c) Reports from contractors for all work funded, in whole or in 
part, by the Recovery Act, and for which an invoice is submitted 
prior to June 30, 2009, are due no later than July 10, 2009. 
Thereafter, reports shall be submitted no later than the 10th day 
after the end of each calendar quarter.
    (d) The Contractor shall report the following information, using 
the online reporting tool available at http://www.FederalReporting.gov.
    (1) The Government contract and order number, as applicable.
    (2) The amount of Recovery Act funds invoiced by the contractor 
for the reporting period. A cumulative amount from all the reports 
submitted for this action will be maintained by the government's on-
line reporting tool.
    (3) A list of all significant services performed or supplies 
delivered, including construction, for which the contractor invoiced 
in this calendar quarter.
    (4) Program or project title, if any.
    (5) A description of the overall purpose and expected outcomes 
or results of the contract, including significant deliverables and, 
if appropriate, associated units of measure.
    (6) An assessment of the contractor's progress towards the 
completion of the overall purpose and expected outcomes or results 
of the contract (i.e., not started, less than 50 percent completed, 
completed 50 percent or more, or fully completed). This covers the 
contract (or portion thereof) funded by the Recovery Act.
    (7) A narrative description of the employment impact of work 
funded by the Recovery Act. This narrative should be cumulative for 
each calendar quarter and only address the impact on the 
contractor's workforce. At a minimum, the contractor shall provide--
    (i) A brief description of the types of jobs created and jobs 
retained in the United States and outlying areas (see definition in 
FAR 2.101). This description may rely on job titles, broader labor 
categories, or the contractor's existing practice for describing 
jobs as long as the terms used are widely understood and describe 
the general nature of the work; and
    (ii) An estimate of the number of jobs created and jobs retained 
by the prime contractor, in the United States and outlying areas. A 
job cannot be reported as both created and retained.
    (8) Names and total compensation of each of the five most highly 
compensated officers of the Contractor for the calendar year in 
which the contract is awarded if--
    (i) In the Contractor's preceding fiscal year, the Contractor 
received--
    (A) 80 percent or more of its annual gross revenues from Federal 
contracts (and subcontracts), loans, grants (and subgrants) and 
cooperative agreements; and
    (B) $25,000,000 or more in annual gross revenues from Federal 
contracts (and subcontracts), loans, grants (and subgrants) and 
cooperative agreements; and
    (ii) The public does not have access to information about the 
compensation of the senior executives through periodic reports filed 
under section 13(a) or 15(d) of the Securities Exchange Act of 1934 
(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue 
Code of 1986.
    (9) For subcontracts valued at less than $25,000 or any 
subcontracts awarded to an individual, or subcontracts awarded to a 
subcontractor that in the previous tax year had gross income under 
$300,000, the Contractor shall only report the aggregate number of 
such first tier subcontracts awarded in the quarter and their 
aggregate total dollar amount.
    (10) For any first-tier subcontract funded in whole or in part 
under the Recovery Act, that is over $25,000 and not subject to 
reporting under paragraph 9, the contractor shall require the 
subcontractor to provide the information described in (i), (ix), 
(x), and (xi) below to the contractor for the purposes of the 
quarterly report. The contractor shall advise the subcontractor that 
the information will be made available to the public as required by 
section 1512 of the Recovery Act. The contractor shall provide 
detailed information on these first-tier subcontracts as follows:
    (i) Unique identifier (DUNS Number) for the subcontractor 
receiving the award and for the subcontractor's parent company, if 
the subcontractor has a parent company.
    (ii) Name of the subcontractor.

[[Page 14646]]

    (iii) Amount of the subcontract award.
    (iv) Date of the subcontract award.
    (v) The applicable North American Industry Classification System 
(NAICS) code.
    (vi) Funding agency.
    (vii) A description of the products or services (including 
construction) being provided under the subcontract, including the 
overall purpose and expected outcomes or results of the subcontract.
    (viii) Subcontract number (the contract number assigned by the 
prime contractor).
    (ix) Subcontractor's physical address including street address, 
city, state, and country. Also include the nine-digit zip code and 
congressional district if applicable.
    (x) Subcontract primary performance location including street 
address, city, state, and country. Also include the nine-digit zip 
code and congressional district if applicable.
    (xi) Names and total compensation of each of the subcontractor's 
five most highly compensated officers, for the calendar year in 
which the subcontract is awarded if--
    (A) In the subcontractor's preceding fiscal year, the 
subcontractor received--
    (l) 80 percent or more of its annual gross revenues in Federal 
contracts (and subcontracts), loans, grants (and subgrants), and 
cooperative agreements; and
    (2) $25,000,000 or more in annual gross revenues from Federal 
contracts (and subcontracts), loans, grants (and subgrants), and 
cooperative agreements; and
    (B) The public does not have access to information about the 
compensation of the senior executives through periodic reports filed 
under section 13(a) or 15(d) of the Securities Exchange Act of 1934 
(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue 
Code of 1986.

    (End of clause)

0
4. Amend section 52.212-5 by revising the date of the clause; and 
redesignating paragraphs (b)(4) through (b)(42) as (b)(5) through 
(b)(43), respectively, and adding a new paragraph (b)(4) to read as 
follows:


52.212-5   Contract Terms and Conditions Required to Implement Statutes 
or Executive Orders--Commercial Items.

Contract Terms and Conditions Required to Implement Statutes or 
Executive Orders--Commercial Items (MAR 2009)

* * * * *
    (b) * * *
    -- (4) 52.204-11, American Recovery and Reinvestment Act--
Reporting Requirements (MAR 2009) (Pub. L. 111-5).
* * * * *
 [FR Doc. E9-7025 Filed 3-30-09; 8:45 am]
BILLING CODE 6820-EP-P