[Federal Register Volume 79, Number 240 (Monday, December 15, 2014)]
[Proposed Rules]
[Pages 74558-74559]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29151]
Federal Register / Vol. 79, No. 240 / Monday December 15, 2014 /
Proposed Rules
[[Page 74558]]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 52
[FAR Case 2015-006; Docket No. 2014-0051; Sequence No. 1]
RIN 9000-AM85
Federal Acquisition Regulation; Prohibition on Contracting With
Inverted Domestic Corporations--Representation and Notification
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to require additional actions by
contractors to assist contracting officers in ensuring compliance with
the Governmentwide statutory prohibition on the use of appropriated (or
otherwise made available) funds for contracts with any foreign
incorporated entity that is an inverted domestic corporation or to any
subsidiary of such entity.
DATES: Interested parties should submit written comments to the
Regulatory Secretariat Division at one of the addresses shown below on
or before February 13, 2015 to be considered in the formation of the
final rule.
ADDRESSES: Submit comments in response to FAR Case 2015-006 by any of
the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2015-006''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2015-006''. Follow the instructions provided at the ``Comment
Now'' screen. Please include your name, company name (if any), and
``FAR Case 2015-006'' on your attached document.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Ms. Hada Flowers, 1800 F Street NW.,
2nd Floor, Washington, DC 20405.
Instructions: Please submit comments only and cite FAR Case 2015-
006, 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. Michael O. Jackson, Procurement
Analyst, at 202-208-4949, for clarification of content. For information
pertaining to status or publication schedules, contact the Regulatory
Secretariat at 202-501-4755. Please cite FAR Case 2015-006.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to revise the provisions of the
FAR that address the continuing Governmentwide statutory prohibition
(in effect since fiscal year 2008) on the use of appropriated (or
otherwise made available) funds for contracts with any foreign
incorporated entity that is an inverted domestic corporation (under
section 835 of the Homeland Security Act of 2002, codified at 6 U.S.C.
395) or any subsidiary of such entity. By separate notice, DOD, GSA,
and NASA have issued an interim rule (FAR Case 2014-017) that more
clearly reflects the ongoing and continuing nature of this statutory
prohibition.
An inverted domestic corporation is a corporation that meets the
criteria specified in 6 U.S.C. 395(b) and (c). To date, an offeror has
been required to include a statement in its offer (found at FAR 52.209-
2(c) and 52.212-3(n)(2)) representing that by signing the offer, the
offeror is representing that it is not an inverted domestic corporation
or a subsidiary of an inverted domestic corporation. To increase the
Government's ability to identify an offeror's status as an inverted
domestic corporation, this rule proposes to change the representation
to require an affirmative act by the offeror to complete two yes/no
check-off boxes on whether it is an inverted domestic corporation, or a
subsidiary of one, so that the Government will know which corporations
are subject to the contracting prohibition. (Contracting officers would
be allowed to continue relying on the offeror's representation unless
there is an independent reason to question it.)
In accordance with FAR 4.1201(b)(1), 52.204-8, and 52.212-3,
offerors would continue to be required to represent their current
status at the earlier of an offer submission or the annual anniversary
of their registration in the System for Award Management (SAM). This
existing requirement, coupled with the proposed new more specific
representation, will better ensure clear, current, accurate, and
complete disclosure by offerors of whether or not they are an inverted
domestic corporation, for consideration by a contracting officer before
making a new contract award.
In addition, the rule proposes to add a new paragraph to FAR clause
52.209-10 that would require the contractor, when the contractor
becomes an inverted domestic corporation during contract performance,
to give written notification of its change in status as an inverted
domestic corporation to the contracting officer within five business
days from the date of the inversion event.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 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). E.O.
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 E.O. 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
DoD, GSA, and NASA do not expect this rule to 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 this rule will only impact an offeror that is an inverted
domestic corporation and wants to do business with the Government. It
is expected that the number of small entities impacted by this rule
will be minimal. Small business concerns are unlikely to have been
incorporated in the United States (or, if a partnership, established in
the United States) and then subsequently incorporated in a foreign
country; the major participants in these transactions are reportedly
large multinational corporations. No domestic entities will be impacted
by this rule. For the definition of ``small business,'' the Regulatory
Flexibility Act refers to the Small Business Act, which in turn allows
the U.S. Small Business Administration (SBA) Administrator to specify
detailed definitions or standards (5 U.S.C. 601(3) and 15 U.S.C.
632(a)). The SBA regulations at 13 CFR 121.105 discuss who is a small
business: ``(a)(1) Except for small agricultural
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cooperatives, a business concern eligible for assistance from SBA as a
small business is a business entity organized for profit, with a place
of business located in the United States, and which operates primarily
within the United States or which makes a significant contribution to
the U.S. economy through payment of taxes or use of American products,
materials or labor.'' Therefore, an Initial Regulatory Flexibility
Analysis has not been performed. DoD, GSA, and NASA invite comments
from small business concerns and other interested parties on the
expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C 610 (FAR Case 2015-006), in
correspondence.
IV. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. Chapter 35) applies because
the proposed rule contains information collection requirements.
Accordingly, the Regulatory Secretariat Division will submit a request
for approval of a new information collection requirement concerning
Prohibition on Contracting with Inverted Domestic Corporations to the
Office of Management and Budget.
A. Public Reporting Burden
The public reporting burden for this collection of information is
estimated to average .2 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The annual reporting burden estimated as follows:
Respondents: 352,000.
Responses per respondent: Approximately 1.
Total annual responses: 352,002.
Preparation hours per response: Approximately .2.
Total response Burden Hours: 70,410.
B. Request for Comments Regarding Paperwork Burden.
Submit comments, including suggestions for reducing this burden,
not later than February 13, 2015 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, Regulatory Secretariat Division (MVCB), ATTN: Ms. Hada
Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405.
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.
Requesters may obtain a copy of the supporting statement from the
General Services Administration, Regulatory Secretariat Division
(MVCB), ATTN: Ms. Hada Flowers, 1800 F Street NW., 2nd Floor,
Washington, DC 20405.
Please cite OMB Control Number 9000-00XX, Prohibition on
Contracting with Inverted Domestic Corporations, in all correspondence.
List of Subject in 48 CFR Part 52
Government procurement.
Dated: December 5, 2014.
William Clark,
Acting Director, Office of Government-wide Acquisition Policy, Office
of Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR part 52
as set forth below:
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
1. The authority citation for 48 CFR part 52 continues to read as
follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
0
2. Amend section 52.209-2 by revising the date of the provision and
paragraph (c) to read as follows:
52.209-2 Prohibition on Contracting with Inverted Domestic
Corporations--Representation.
* * * * *
Prohibition on Contracting With Inverted Domestic Corporations--
Representation (Date)
* * * * *
(c) Representation. The offeror represents that--
(1) It [shabox1] is, [shabox1] is not an inverted domestic
corporation; and
(2) It [shabox1] is, [shabox1] is not a subsidiary of an
inverted domestic corporation.
(End of Provision)
0
3. Amend section 52.209-10 by revising the date of the clause; and
adding paragraph (d) to read as follows:
52.209-10 Prohibition on Contracting with Inverted Domestic
Corporations.
* * * * *
Prohibition on Contracting With Inverted Domestic Corporations (DATE)
* * * * *
(d) In the event the Contractor becomes either an inverted
domestic corporation, or a subsidiary of an inverted domestic
corporation during contract performance, the Contractor shall give
written notice to the Contracting Officer within five business days
from the date of the inversion event.
* * * * *
0
4. Amend section 52.212-3 by revising the date of the provision; and
paragraph (n)(2) to read as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (DATE)
* * * * *
(n) * * *
(2) Representation. The offeror represents that--
(i) It [shabox1] is, [shabox1] is not an inverted domestic
corporation; and
(ii) It [shabox1] is, [shabox1] is not a subsidiary of an
inverted domestic corporation.
* * * * *
0
5. Amend section 52.212-5 by revising the date of the clause and
paragraph (a)(1) 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 (DATE)
(a) * * *
(1) 52.209-10, Prohibition on Contracting with Inverted Domestic
Corporations (DATE)(section 745 of Division D of Pub. L. 110-161 and
its successor provisions in subsequent appropriations acts and
continuing resolutions).
* * * * *
[FR Doc. 2014-29151 Filed 12-12-14; 8:45 am]
BILLING CODE 6820-EP-P