[Federal Register Volume 76, Number 125 (Wednesday, June 29, 2011)]
[Rules and Regulations]
[Pages 38047-38048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16315]


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

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 212 and 222

RIN 0750-AH34


Defense Federal Acquisition Regulation Supplement; Extension of 
Restrictions on the Use of Mandatory Arbitration Agreements (DFARS Case 
2011-D035)

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

ACTION: Final rule.

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

SUMMARY: DoD is issuing a final rule to implement section 8102 of the 
DoD and Full-Year Continuing Appropriations Act, 2011 and similar 
sections in subsequent appropriations acts, to extend the restriction 
on the use of mandatory arbitration agreements, when awarding contracts 
that exceed $1 million, to use of 2011 and subsequent fiscal year funds 
appropriated or otherwise made available by this Act or any subsequent 
DoD appropriation act. Section 8102 allows the Secretary of Defense to 
waive applicability to a particular contractor or subcontractor, if 
determined necessary to avoid harm to national security.

DATES: Effective date: June 29, 2011.

FOR FURTHER INFORMATION CONTACT: Mr. Julian Thrash, 703-602-0310.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 8102 of the DoD and Full-Year Continuing Appropriations, 
2011 (Pub. L. 112-10), prohibits the use of Fiscal Year (FY) 2011 funds 
for any contract (including task or delivery orders and bilateral 
modifications adding new work) in excess of $1 million, if the 
contractor restricts its employees to arbitration for claims under 
title VII of the Civil Rights Act of 1964, or tort related to or 
arising out of sexual assault or harassment, including assault and 
battery, intentional infliction of emotional distress, false 
imprisonment, or negligent hiring, supervision, or retention.
    This rule does not apply to the acquisition of commercial items. 
Section 8102(b) requires the contractor to certify compliance by 
subcontractors.
    Additionally, enforcement of the mandatory arbitration provisions 
related to the covered areas, does not affect the enforcement of other 
aspects of an agreement that is not related to those areas.
    This rule allows the Secretary of Defense to waive applicability to 
a particular contract or subcontract, if determined necessary to avoid 
harm to national security.
    Section 8102 of the DoD and Full-Year Continuing Appropriations, 
2011, extends the restrictions of section 8116 of the Defense 
Appropriations Act for Fiscal Year 2010 (Pub. L. 111-118). In 
implementing section 8116, public comments were obtained under DFARS 
Case 2010-D004.
    This final rule does not constitute a significant DFARS revision as 
defined at FAR 1.501-1 because the requirements are already in place 
and this final rule merely extends the existing DFARS coverage. 
Therefore, there is no significant cost or administrative impact on 
contractors or offerors resulting from issuance of this rule and public 
comment is not required in accordance with 41 U.S.C. 1707(a).
    Since DoD anticipates that this will be an ongoing requirement, 
this rule applies to use of all subsequent fiscal year funds 
appropriated or otherwise made available under subsequent DoD 
appropriations acts. If the restriction is removed at a future date, 
DoD will amend the DFARS accordingly.

II. Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This is a significant regulatory action and, therefore, 
was 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.

III. Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule. This 
final rule does not constitute a significant DFARS revision within the 
meaning of FAR 1.501 and public comment is not required in accordance 
with 41 U.S.C. 1707.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the rule does 
not impose any information collection requirements that require the 
approval of the Office of Management and Budget under 44 U.S.C. 3501, 
et seq.

List of Subjects in 48 CFR Parts 212 and 222

    Government procurement.

Mary Overstreet,
Editor, Defense Acquisition Regulations System.
    Therefore, 48 CFR parts 212 and 222 are amended as follows:

0
1. The authority citation for 48 CFR parts 219 and 252 continues to 
read as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

0
2. Amend section 212.503 by revising paragraph (a)(xi) to read as 
follows:


212.503  Applicability of certain laws to Executive Agency contracts 
for the acquisition of commercial items.

    (a) * * *
    (xi) Section 8116 of the Defense Appropriations Act for Fiscal Year 
2010

[[Page 38048]]

(Pub. L. 111-118) and similar sections in subsequent DoD appropriations 
acts.
* * * * *

0
3. Amend section 212.504 by revising paragraph (a)(xix) to read as 
follows:


212.504  Applicability of certain laws to subcontracts for the 
acquisition of commercial items.

    (a) * * *
    (xix) Section 8116 of the Defense Appropriations Act for Fiscal 
Year 2010 (Pub. L. 111-118) and similar sections in subsequent DoD 
appropriations acts.
* * * * *

Subpart 222.74--Restrictions on the Use of Mandatory Arbitration 
Agreements

0
4. Revise section 222.7400 to read as follows:


222.7400  Scope of subpart.

    This subpart implements section 8116 of the Defense Appropriations 
Act for Fiscal Year 2010 (Pub. L. 111-118) and similar sections in 
subsequent DoD appropriations acts.

0
5. Amend section 222.7402 as follows:
0
(a) Revise the introductory text to paragraph (a) as set forth below; 
and
0
(b) Revise paragraph (b) as set forth below.


222.7402  Policy.

    (a) Departments and agencies are prohibited from using funds 
appropriated or otherwise made available by the Fiscal Year 2010 
Defense Appropriations Act (Pub. L. 111-118) or subsequent DoD 
appropriations acts for any contract (including task or delivery orders 
and bilateral modifications adding new work) in excess of $1 million, 
unless the contractor agrees not to--
* * * * *
    (b) No funds appropriated or otherwise made available by the Fiscal 
Year 2010 Defense Appropriations Act (Pub. L. 111-118) or subsequent 
DoD appropriations acts may be expended unless the contractor certifies 
that it requires each covered subcontractor to agree not to enter into, 
and not to take any action to enforce, any provision of any agreement, 
as described in paragraph (a) of this section, with respect to any 
employee or independent contractor performing work related to such 
subcontract.

0
6. Revise section 222.7405 as follows:


222.7405  Contract clause.

    Use the clause at 252.222-7006, Restrictions on the Use of 
Mandatory Arbitration Agreements, in all solicitations and contracts 
(including task or delivery orders and bilateral modifications adding 
new work) valued in excess of $1 million utilizing funds appropriated 
or otherwise made available by the Defense Appropriations Act for 
Fiscal Year 2010 (Pub. L. 111-118) or subsequent DoD appropriations 
acts, except in contracts for the acquisition of commercial items, 
including commercially available off-the-shelf items.

[FR Doc. 2011-16315 Filed 6-28-11; 8:45 am]
BILLING CODE 5001-08-P