[Federal Register Volume 74, Number 193 (Wednesday, October 7, 2009)]
[Rules and Regulations]
[Pages 51510-51512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24158]


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GENERAL SERVICES ADMINISTRATION

48 CFR Parts 503 and 552

GSAR Amendment 2009-12; GSAR Case 2008-G502 (Change 40) Docket 2008-
0007; Sequence 7
RIN 3090-AI63


General Services Administration Acquisition Regulation; Rewrite 
of GSAR Part 503; Improper Personal Conflicts of Interest

AGENCIES: General Services Administration (GSA), Office of the 
Acquisition Policy.

ACTION: Final rule.

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SUMMARY: The General Services Administration (GSA) is amending the 
General Services Administration Acquisition Regulation (GSAR) by 
revising the regulations pertaining to Improper Business Practices and 
Personal Conflicts of Interest. This rule is a product of the GSAM 
Rewrite Initiative undertaken by GSA to revise the regulation to 
maintain consistency with the FAR and implement streamlined and 
innovative acquisition procedures for contractors, offerors, and GSA 
contracting personnel. The GSAM incorporates the General Services 
Administration Acquisition Regulation (GSAR) as well as internal agency 
acquisition policy.

DATES: Effective Date: October 7, 2009.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ernest Woodson, Procurement Analyst, at (202) 501-3775. For information 
pertaining to status or publication schedules, contact the Regulatory 
Secretariat (MVR), Room 4041, 1800 F Street, NW, Washington, DC, 20405, 
(202) 501-4755. Please cite Amendment 2009-12, GSAR case 2008-G502 
(Change 40).

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule is a result of the General Services Administration 
Acquisition Manual (GSAM) Rewrite initiative undertaken by GSA to 
revise the GSAM to maintain consistency with the FAR and to implement 
streamlined and innovative acquisition procedures that contractors, 
offerors, and GSA acquisition personnel can use when entering into and 
administering contractual relationships. The GSAM incorporates the 
General Services Administration Acquisition Regulation (GSAR) as well 
as internal agency acquisition policy.
    An Advanced Notice of Proposed Rulemaking was published at 71 FR 
7910, February 15, 2006, for the GSAM Rewrite Projects and public 
comments were received. However, none of the comments were specific to 
Part 503. The case was assigned to GSAM Part 503 Rewrite Team on 
February 18, 2008. A Team report was completed on March 3, 2008.
    To ensure completeness, internal comments were solicited and 
received from GSA Regions 1, 2, 3, 6, 7, 8, 10, and 11, GSA published a 
proposed rule with request for comments in the Federal Register at 73 
FR 45194, August 4, 2008. The public comment period closed October 3, 
2008. One response was received with three comments. This final rule 
reconciles the conclusions from the Team report with the internal 
comments, and public comment as follows:

Public Comments

    Comment: The respondent was concerned that the requirement in 
503.204(c) for an agency fact-finding official to be designated by GSA 
Board of Contract Appeals was not revised to indicate that the Civilian 
Board of Contract Appeals (CBCA) would designate the official as means 
of ensuring that disputes over gratuities violations are handled 
independently and objectively.
    Response: The CBCA will not designate an agency fact-finding 
official for the treatment of violations under 503.204, as its current 
operating procedures do not encompass the activity. The Senior 
Procurement Executive will refer matters under the jurisdiction of GSAR 
503.204 to the Suspension and Debarment Official, in accordance with 
GSAR 509.403, because the Suspension and Debarment Official is the 
individual who can appoint a fact-finding official, should one be 
necessary.
    Comment: The respondent was concerned that 503.1004 does not 
provide a specific rationale for establishing a lower threshold, or why 
that threshold would be $1,000,000. The respondent believes that the 
subsection makes the threshold sound arbitrary.
    Response: FAR 3.1004(b)(1)(i) provides for agencies to establish a 
threshold lower than $5,000,000. Pursuant to FAR 1.302(b), agency 
acquisition regulations may supplement the FAR to include additional 
policies and procedures that satisfy the specific needs of the agency. 
GSA's lower threshold of $1,000,000 is based on GSA's unique 
acquisition mission and the dollar amount of an order that may be 
placed by GSA, under a task and delivery order contract. Further, the 
lower threshold insures greater visibility for the detection of fraud 
in Federal contracts ensuring protection for the taxpayer.
    Comment: 503.1004(b)--The fill-in includes the acronym ``OIG''. 
Spell out as Office of the Inspector General. The FAR does otherwise 
include a reference to OIG.
    Response: GSA concurs with the respondent and will make the change 
accordingly.

The Rewrite of Part 503

    This final rule contains revisions to Part 503, Improper Business 
Practices and Personal Conflicts of Interest. There are no substantive 
changes to the policies. The rule revises GSAR Subpart 503.1 
Safeguards; deletes 503.104-1 and 503.104-9, to ensure consistency with 
the GSAM that provides that the acquisition of leasehold interests in 
real property is established by GSAM Part 570; deletes 503.104-4, 
because post employment restrictions are covered under Federal 
conflicts of interest laws and the Procurement Integrity Act that every 
employee has a responsibility to know; adds 503.104-2, to indicate that 
acquisition officials are responsible for knowing the post-employment 
restrictions in FAR 3.104-2(b)(3) and in the Procurement Integrity Act; 
renumbers 503.104-5 to 503.104-4 and revises 503.104-4, adds 
appropriate GSAM and FAR references for the release of information to 
outside evaluators and deletes inappropriate forms and language already 
addressed in other GSAM subsections; and renumbers 503.104-10 to 
503.104-7, for consistency with the FAR numbering sequence.

[[Page 51511]]

    Revises Subpart 503.2 Contractor Gratuities to Government 
Personnel; revises 503.203(a) by deleting the reference to the Code of 
Federal Regulations and relocating the reference at the end of 
503.203(c) in order to ensure the integrity of the subsection; revises 
503.204(a)(2), by deleting the phrase ``joint venture'' in order to 
ensure grammatical and structural clarity; revises 503.204(c), by 
replacing ``the Chairman of the GSA Board of Contract Appeals'' with 
``the Suspension and Debarment Official in accordance with FAR 
509.403,'' because the GSA Board of Contract Appeals no longer exists; 
and revises 503.204(f), to ensure consistency with FAR 3.204(f).
    Revises Subpart 503.3 Reports of Suspected Antitrust Violations; 
revises 503.303, to ensure grammatical and structural clarity.
    Revises Subpart 503.4 Contingents Fees; by deleting 503.404, in 
order to ensure consistency with the GSAM which provides that the 
acquisition of leasehold interests in real property is established by 
GSAM Part 570, and revises 503.405 to ensure grammatical and structural 
clarity.
    Revises Subpart 503.5 Other Improper Business Practices; revises 
503.570-1 to delete the term ``referring'' and add ``making 
references'' for clarity.
    Revises Subpart 503.7 Voiding and Rescinding Contracts; revises 
503.702 to delete the definition for ``Notice'' and ``Voiding and 
rescinding official'' as the terms do not require definition; adds a 
new section 503.703 in order to identify the Senior Procurement 
Executive as having the authority to void and rescind contracts 
pursuant to FAR 3.703 and 3.705(b); relocates 503.705 from the GSAR to 
the manual part of the GSAM, because it relates to internal 
administrative procedures; revises 503.705 by revising 503.705(a)(1) to 
add ``the contracting officer shall'' to ensure clarity; revises 
503.705(a)(2), to delete ``you may'' and ``voiding and rescinding 
official'' and add ``the contracting officer shall,'' ``Senior 
Procurement Executive,'' and ``and shall,'' to ensure clarity and 
continuity; revises 503.705(a)(2)(i) to add ``Identify'' to ensure 
clarity; revises 503.705(2) by adding paragraphs (ii) and (iii) to 
ensure grammatical and structural integrity; deletes 503.705(a)(3) 
because the contracting officer does not have the authority cited in 
the subsection; revises 503.705(b) to delete ``Voiding and rescinding 
official's,'' and add ``Senior Procurement Executive'' to ensure 
continuity; revises 503.705(b)(1), to delete ``the voiding and 
rescinding official'' to ensure continuity; revises 503.705(b)(2) to 
ensure grammatical and structural integrity; revises 503.705(b)(3) to 
ensure grammatical and structural integrity; revises 503.705(b)(4) to 
delete ``voiding and rescinding official'' and add ``Senior Procurement 
Executive,'' in order to ensure continuity; revises 503.705(b)(5), to 
delete ``The official'' to ensure clarity; and revises 503.705(c)(5), 
to ensure clarity.
    Revises Subpart 503.8 Limitation on the Payment of Funds to 
Influence Federal Transactions; revises 503.806 to ensure grammatical 
and structural integrity, and deletes ``Inspector General for 
Investigation'' and adds ``Special Agent in Charge,'' to ensure 
clarity.
    Adds a new Subpart 503.10 Contractor Code of Business Ethics and 
Conduct; establishes a lower threshold for the inclusion of FAR 52.203-
14 Display of Hotline Poster(s) at 503.1004(a) and includes the name of 
the poster and where the poster may be obtained at 503.1004(b)(i) and 
(ii), pursuant to FAR 52.203-14(b)(3).
    Deletes GSAR 552.203-5 Covenant Against Contingent Fees; in order 
to ensure consistency with the GSAM that provides that the acquisition 
of leasehold interests in real property is established by GSAM Part 
570, and deletes GSAR 552.203-70 to ensure consistency with the GSAM 
requirements that leasehold interests in real property is established 
by GSAM Part 570.
    This is not a significant regulatory action and, therefore, was not 
subject to review under Section 6(b) of Executive Order 12866, 
Regulatory Planning and Review, dated September 30, 1993. This rule is 
not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The General Services Administration 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 no new requirements are being placed on 
the vendor community. No comments on this issue were received from 
small business concerns or other interested parties.

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the GSAR do not impose recordkeeping or information collection 
requirements, or otherwise collect information from offerors, 
contractors, or members of the public that require approval of the 
Office of Management and Budget under 44 U.S.C. Chapter 35, et seq.

List of Subjects in 48 CFR Parts 503 and 552

    Government procurement.

    Dated: September 30, 2009
David A. Drabkin,
Senior Procurement Executive, Office of Acquisition Policy, General 
Services Administration.

0
Therefore, GSA amends 48 CFR parts 503 and 552 as set forth below:

PART 503--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST

0
1. The authority citation for 48 CFR part 503 is revised to read as 
follows:

    Authority: 40 U.S.C. 121(c).


503.104-3 and 503.104-9  [Removed]

0
2. Remove sections 503.104-3 and 503.104-9.
0
3. Amend section 503.204 by--
0
a. Removing the period at the end of paragraph (a)(1) and adding ``;'' 
in its place;
0
b. Removing from paragraph (a)(2) ``or joint venture'' and adding ``; 
and'' in its place;
0
c. Revising the first sentence of the introductory text of paragraph 
(c); removing the period at the end of paragraphs (c)(1) and (c)(2) and 
adding ``;'' in its place; and removing the period at the end of 
paragraph (c)(3) and adding ``; and'' in its place; and
0
d. Revising the first sentence of paragraph (f).
     The revised text reads as follows:


503.204  Treatment of violations.

* * * * *
    (c) If there is a dispute of fact material to making a 
determination, the Senior Procurement Executive, or designee, may refer 
the matter to an agency fact-finding official, designated by the 
Suspension and Debarment Official, in accordance with GSAR 509.403. * * 
*
* * * * *
    (f) If the Gratuities clause was violated, the contractor may 
present evidence of mitigating factors to the Senior Procurement 
Executive, or designee, in accordance with FAR 3.204(b) either orally 
or in writing, consistent with a schedule the Senior Procurement 
Executive, or designee, establishes. * * *


503.404  [Removed]

0
4. Remove section 503.404.


503.570-1  [Amended]

0
5. Amend section 503.570-1 by removing ``referring'' and adding 
``making references'' in its place.


503.702  [Removed]

0
6. Remove section 503.702.

[[Page 51512]]

503.703  [Added]

0
7. Add section 503.703 to read as follows:


503.703  Authority.

    Pursuant to FAR 3.703 and 3.705(b), the authority to void or 
rescind contracts resides with the Senior Procurement Executive.


503.705  [Removed]

0
8. Remove section 503.705.
0
9. Add Subpart 503.10 to read as follows:

Subpart 503.10--Contractor Code of Business Ethics and Conduct


503.1004  Contract clauses.

    (a) The FAR threshold for the clause at 52.203-14, Display of 
Hotline Poster(s), is $5,000,000. However, GSA has exercised the 
authority provided at FAR 3.1004(b)(1)(i) to establish a lower 
threshold, $1,000,000, for inclusion of the clause when the contract or 
order is funded with disaster assistance funds.
    (b) The information required to be inserted in the clause at FAR 
52.203-14, Display of Hotline Poster(s), is as follows:
    (1) Poster: GSA Office of Inspector General ``FRAUDNET HOTLINE''; 
and
    (2) Obtain from: Contracting Officer.

PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
10. The authority citation for 48 CFR part 552 continues to read as 
follows:

    Authority: 40 U.S.C. 121(c).


552.203-5 and 552.203-70  [Removed]

0
11. Remove sections 552.203-5 and 552.203-70.

[FR Doc. E9-24158 Filed 10-6-09; 8:45 am]
BILLING CODE 6820-61-S