[Federal Register Volume 81, Number 50 (Tuesday, March 15, 2016)]
[Rules and Regulations]
[Pages 13747-13762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05212]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

48 CFR Parts 2404, 2406, 2408, 2409, 2411, 2415, 2427, 2428, 2432, 
2437, 2444, and 2452

[Docket No. FR-5814-F-02]
RIN 2501-AD73


Amendments to the HUD Acquisition Regulation (HUDAR)

AGENCY: Office of the Chief Procurement Officer, HUD.

ACTION: Final rule.

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SUMMARY: This final rule amends the HUDAR to implement miscellaneous 
changes necessary to update the HUDAR. These changes include a 
correction to the designation of Source Selection Authorities, limited 
delegation of Head of Contracting Activity authorities, incorporation 
of the HUDAR Matrix, addition of new clauses including clauses relating 
to labor categories and prices per hour, and post-award conferences. 
HUD is transitioning to the Department of Treasury's Bureau of Fiscal 
Services' Invoice Platform Processing System (IPP), and this final rule 
revises clauses related to payments and invoicing to take into account 
both the situations where invoicing and payment will not be made 
through the IPP and where invoices are required to be submitted 
electronically through the IPP. This final rule also clarifies that 
where funding has been made available for a contract, and the limit of 
the

[[Page 13748]]

funding has been reached or the necessary funding modification is not 
in place, the contractor must stop performing work and may not start 
again until notified through a contract funding modification that funds 
are available to continue work. This final rule also modifies the 
proposed provision on post-award conferences to limit the clause to 
cases where a conference is required, and provides an alternate clause 
for attendance at such conferences via telephone or video conference. 
The rule makes certain administrative corrections, and incorporation of 
alternates to various clauses to allow for electronic invoicing.

DATES: Effective: April 14, 2016.

FOR FURTHER INFORMATION CONTACT: Lisa D. Maguire, Assistant Chief 
Procurement Officer for Policy, Systems and Risk Management, Office of 
the Chief Procurement Officer, Department of Housing and Urban 
Development, 451 7th Street SW., Washington, DC 20410; telephone number 
202-708-0294 (this is not a toll-free number) and fax number 202-708-
8912. Persons with hearing or speech impairments may access Ms. 
Maguire's telephone number via TTY by calling the toll-free Federal 
Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION: 

I. Background

A. The May 28, 2015, Proposed Rule

    The Federal Acquisition Regulation (FAR), which governs the 
procurement of property and nonpersonal services by the government, is 
authorized by the Federal Property and Administrative Services Act of 
1949, 40 U.S.C. 101 et seq. Pursuant to regulations of the General 
Services Administration under the authority of 40 U.S.C. 121(c) of the 
same Act, the FAR provides at 48 CFR 1.301 for agencies to issue their 
own acquisition regulations to implement or supplement the FAR. HUD's 
acquisition regulation (HUDAR) is found at 48 CFR chapter 24.
    On May 28, 2015, HUD proposed revising certain sections prescribing 
contract clauses, and certain of the clauses and alternates, in the 
HUDAR (80 FR 30416). Many of these corrections were administrative or 
technical in nature, such as correcting references to contract clauses, 
designating certain forms to be used for specific purposes, and 
delegating certain functions to specific positions within the agency.
    For example, the rule proposed designating the Deputy Chief 
Procurement Officer as the responsible official with the authority to 
approve, in writing, justifications for other than full and open 
procurements for proposed contracts over $13.5 million, but not 
exceeding $68 million (2406.304(a)(3)); and justifications for Limited 
Source considerations for proposed Federal Supply Schedule order or 
Blanket Purchase Agreement (BPA) in the same estimated contract price 
range (2408.405-6(d)(3)). The rule also proposed designating HUD 
Assistant Secretaries, or their equivalent, as the Source Selection 
Authorities for selections made using the tradeoff process 
(2415.303(a)(1)) and to allow Assistant Secretaries to delegate this 
function to other departmental officials. There is an exception for 
procurements of legal services, in which case the General Counsel is 
designated as the source selection authority (2415.303(a)(2)).
    The rule proposed adding requirements concerning information to be 
collected by the Contracting Officer to determine a contractor's 
financial responsibility. The rule proposed adding a clause on consent 
to subcontract, applicable to contracts and task orders exceeding 
$10,000,000 in value (2452.244-70).
    The rule proposed several administrative corrections, including: 
revising section 2404.7001 to refer to the correct contract clause 
2452.204-70, ``Preservation of, and Access to, Contract Records 
(Tangible and Electronically Stored Information (ESI) Formats),'' and 
removing the title and redesignating the clause that is codified at 
section 2432.705-70 as 2432.705-70(a).
    In part 2406, the rule proposed adding section 2406.303 which 
requires the use of HUD Form 24012 \1\ for justifications for other 
than full and open competition.
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    \1\ See http://portal.hud.gov/hudportal/documents/huddoc?id=24012.pdf.
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    The rule also proposed to:

    Clarify section 2415.305(a)(5) to apply to Best Value Tradeoff 
technical evaluations;
    Codify a class deviation approved by HUD's Chief Procurement 
Officer dated April 10, 2013 to add Alternate 1 to clauses 2452.232-
70 and 2452.232-71. These alternate clauses would provide for 
electronic invoicing by email;
    Add clause 2452.232-74, entitled ``Not to Exceed Limitation,'' 
and, in part 2432, add a reference to that clause and requirements 
regarding its use at section 2432.705;
    Revise clause 2452.237-77(c)(1)(A) to change ``21 days per 
month'' to ``number of business days in the month'', and to make a 
technical fix;
    Add clause 2452.237-79, ``Post-Award Conference,'' and a 
reference to that clause and requirements regarding its use at 
section 2437.110(e)(5). The clause as proposed would have been 
required in all contracts for services;
    Add clause 2452.237-81, ``Labor Categories, Unit Prices Per Hour 
and Payment,'' and a reference to that clause and requirements 
regarding its use at section 2437.110(e)(6). This clause would 
specify the types of labor to be supplied by the contractor and the 
price per hour.

    Finally, the proposed rule incorporated a new HUDAR matrix under 
subpart 2452.3. The matrix provides a quick reference for information 
about each clause or provision, including whether it is required, 
required when applicable, or optional for the various types of 
contracts.

B. This Final Rule

    This final rule follows publication of the May 28, 2015 proposed 
rule. HUD received no public comments on the proposed rule. However, 
HUD is making two related changes to the post-award conference 
provision and contract clause.
    This final rule clarifies a point that was unclear as to 
incremental funding. In section 2432.703-1, as it currently is 
codified, the HUDAR regulation states that a fixed-price contract may 
be funded incrementally if the conditions in paragraph (b)(1)(i) and 
(b)(1)(ii)(A), (B), and (C) are met, or if the condition in (b)(1)(iii) 
is met (that the contract uses funds available from 2 or more fiscal 
years and Congress has otherwise authorized incremental funding). This 
is actually not quite correct. While it is correct that the conditions 
in (b)(1)(i) and (ii) and their subordinate paragraphs apply, if the 
condition in (b)(1)(iii) is applicable, it applies as well; in other 
words, where (b)(1)(iii) is applicable, it and all the other conditions 
apply; it is not an alternative to the other clauses. This final rule 
makes this applicability of (b)(1)(iii) more clear.
    In the provision at 2437.110(e)(5), where the proposed rule 
required the post-award conference clause to be used in all contracts 
for services, the final rule modifies this provision so that the clause 
will be used only when the contractor will be required to attend a 
post-award conference. In other cases, the clause is unnecessary, and 
this change will reduce burden in those cases. The clause itself, at 
2452.237-79, is revised to add an alternate clause for use when the 
post-award conference will be conducted via telephone or video 
conferencing. This is consistent with other revisions to provide for 
the use of electronic communications in this rule (such as the 
alternate clauses for electronic invoicing) and recognizes

[[Page 13749]]

the increasing use of such communications. The matrix is also revised 
to reflect these changes.
    Because HUD is now transitioning to the Department of Treasury's 
Bureau of Financial Services Invoice Processing Platform (IPP) system, 
clauses 2452.232-70 and 2452.232-71 are revised to add material 
relevant to the IPP in this final rule. In clause 2452.232-70, which 
covers invoice submission for fixed price contracts, the first clause 
listed is for the case where invoicing and payments will not be made 
through the IPP system, and this clause is similar to the proposed main 
clause through paragraph (d). Alternate I, as proposed, is for 
electronic submission of invoices via email in fixed price contracts 
other than performance-based contracts under which performance based 
payments will be used. Alternate I in this final rule covers the same 
subject, and is similar to the proposed rule, where the invoices will 
be submitted electronically by email but not submitted through the IPP 
system. New in this final rule is Alternate II, which covers the 
situation where, in all fixed price solicitations and contracts, 
invoices are required to be submitted electronically through the IPP 
system.
    A similar change to account for the transition to the IPP system is 
also made in this final rule to clause 2452.232-71, which covers 
voucher submission for cost reimbursement, time-and-materials, and 
labor-hour contracts. As with the previous clause, the main clause and 
Alternate I deal, respectively with paper submission and electronic 
submission in cases where the IPP is not being used, and are 
essentially similar to the same clauses as proposed with the exception 
that the proviso that it applies where vouchering and payments will not 
be made through the IPP. This final rule adds Alternate II to cover all 
cost-reimbursement, time-and-materials, and labor-hour type 
solicitations and contracts when requiring vouchers to be submitted 
electronically to the IPP system. These transitional provisions simply 
update procedures to allow contracting to continue as HUD transitions 
to the IPP.
    The proposed clause 2452.232-74, entitled ``Not to Exceed 
Limitation,'' is revised to clarify a particular point. The proposed 
rule provided that a contract states a specific amount of funding 
available for the performance of work, and that the government shall 
not order, nor the contractor be required, to perform work that exceeds 
the funding limit, and that the government may unilaterally increase 
the amount of funding obligated through contract modifications until 
the full contract value has been obligated. The proposed rule did not 
state what is required in the case where all the contract funding is 
not yet obligated but a particular funding limit has been reached and a 
contract modification is needed to provide additional funding. This 
final rule clarifies that if a necessary modification is not yet in 
place, or the work has reached the stated funding limit, the contractor 
must stop performance and may not start again until notified through a 
contract funding modification that funds are available.
    The rule is being made final with no other changes from the 
proposed rule.

II. Findings and Certifications

Paperwork Reduction Act Statement
    The information collection requirements contained in this final 
rule are currently approved by the Office of Management and Budget 
(OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520) and assigned OMB control number 2535-0091. The information 
collection requirements for the HUDAR are currently approved by OMB 
under control number 2535-0091. In accordance with the Paperwork 
Reduction Act, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information, unless the 
collection displays a currently valid OMB control number.
Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531- 1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This rule does not impose 
any federal mandate on any state, local, or tribal government or the 
private sector within the meaning of UMRA.
Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
This final rule makes technical changes to existing contracting 
procedures and does not make any major changes that would significantly 
impact businesses. Accordingly, the undersigned certifies that this 
rule will not have a significant economic impact on a substantial 
number of small entities.
Environmental Impact
    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
final rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).
Executive Order 13132, Federalism
    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This final rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive Order.

List of Subjects

48 CFR Part 2404

    Government procurement.

48 CFR Part 2406

    Government procurement.

48 CFR Part 2408

    Government procurement.

48 CFR Part 2409

    Government Procurement.

48 CFR Part 2411

    Government Procurement.

48 CFR Part 2415

    Government procurement.

48 CFR Part 2432

    Government procurement.

48 CFR Part 2437

    Government procurement.

48 CFR Part 2444

    Government procurement.

48 CFR Part 2452

    Government procurement.
    For the reasons discussed in the preamble, and pursuant to the 
authority

[[Page 13750]]

under 42 U.S.C. 3535(d), HUD amends 48 CFR chapter 24 as follows:

PART 2404--ADMINISTRATIVE MATTERS

0
1. The authority citation for part 2404 continues to read as follows:

    Authority:  42 U.S.C. 3535(d).

Subpart 2404.7--Contractor Records Retention

0
2. Revise section 2404.7001 to read as follows:


2404.7001  Contract clause.

    The Contracting Officer shall insert the clause at 2452.204-70, 
``Preservation of, and Access to, Contract Records (Tangible and 
Electronically Stored Information (ESI) Formats),'' in all 
solicitations and contracts exceeding the simplified acquisition 
threshold. The Contracting Officer shall use the basic clause with its 
Alternate I in cost-reimbursement type contracts. The Contracting 
Officer shall use the basic clause with its Alternate II in labor-hour 
and time-and-materials contracts.

PART 2406--COMPETITION REQUIREMENTS

0
3. The authority citation for part 2406 is revised to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 3301 et seq.; 42 U.S.C. 
3535(d).

Subpart 2406.3--Other Than Full and Open Competition

0
4. Add section 2406.303 to read as follows:


2406.303  Justifications.

    Justifications for Other Than Full and Open Competition must be 
prepared and approved using the latest version of HUD Form 24012.
0
5. In section 2406.304. add paragraph (a)(3) to read as follows:


2406.304  Approval of the justification.

    (a)(3) HUD's Chief Procurement Officer, as the Head of Contracting 
Activity, has delegated the authority to the Deputy Chief Procurement 
Officer to approve, in writing, justifications for other than full and 
open competition procurements for proposed contracts over $13.5 
million, but not exceeding $68 million.
* * * * *

PART 2408--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
6. The authority citation for part 2408 is revised to read as follows:

    Authority:  40 U.S.C. 121(c); 42 U.S.C. 3535(d).


0
7. Add subpart 2408.4 to read as follows:
Subpart 2408.4--Federal Supply Schedules
Sec.
2408.404 Pricing.
2408.405-6 Limiting sources.
2408.404 Pricing.
    (d) Supplies offered on the schedule are listed at fixed prices. 
Services offered on the schedule are priced either at hourly rates, or 
at fixed price for performance of a specific task (e.g., installation, 
maintenance, and repair). GSA has determined the prices of supplies and 
fixed-price services, and rates for services offered at hourly rates, 
to be fair and reasonable for the purpose of establishing the schedule 
contract. GSA's determination does not relieve the ordering activity 
Contracting Officer from the responsibility of making a determination 
of fair and reasonable pricing for individual orders, BPAs, and orders 
under BPAs. Contracting Officers shall follow the general principles 
and techniques outlined in FAR Section 15.404-1, Proposal Analysis 
Techniques, to ensure that the final agreed-to price is fair and 
reasonable, keeping in mind that the complexity and circumstances of 
each acquisition should determine the level of detail of the analysis 
required.


2408.405-6  Limiting sources.

    (c)(2) Justifications for limiting sources, under the Federal 
Supply Schedules when exceeding the simplified acquisition threshold, 
must be prepared and approved using the latest version of HUD Form 
24013.
    (d)(3) HUD's Chief Procurement Officer, as the Head of Contracting 
Activity, has delegated the authority to the Deputy Chief Procurement 
Officer to approve, in writing, justifications for limited source 
considerations for a proposed Federal Supply Schedule order or Blanket 
Purchase Agreement (BPA) with an estimated value exceeding $13.5 
million, but not exceeding $68 million.

PART 2409--CONTRACTOR QUALIFICATIONS

0
8. The authority citation for part 2409 continues to read as follows:

    Authority:  40 U.S.C. 121(c); 42 U.S.C. 3535(d).


0
9. Add subpart 2409.1, consisting of section 2409.105, to read as 
follows:

Subpart 2409.1--Responsible Prospective Contractors


2409.105  Procedures.

    (a) The Contracting Officer shall perform a financial review when 
the Contracting Officer does not otherwise have sufficient information 
to make a positive determination of financial responsibility. In 
addition, the Contracting Officer shall consider performing a financial 
review--
    (1) Prior to award of a contract, when--
    (i) The contractor is on a list requiring pre-award clearance or 
other special clearance before award;
    (ii) The contractor is listed on the Consolidated List of 
Contractors Indebted to the Government, or is otherwise known to be 
indebted to the Government;
    (iii) The contractor may receive Government assets such as contract 
financing payments or Government property;
    (iv) The contractor is experiencing performance difficulties on 
other work; or
    (v) The contractor is a new company or a new supplier of the item.
    (2) At periodic intervals after award of a contract, when--
    (i) Any of the conditions in paragraphs (a)(1)(ii) through (v) of 
this section are applicable; or
    (ii) There is any other reason to question the contractor's ability 
to finance performance and completion of the contract.
    (b) The Contracting Officer shall obtain the type and depth of 
financial and other information that is required to establish a 
contractor's financial capability or disclose a contractor's financial 
condition. While the Contracting Officer should not request information 
that is not necessary for protection of the Government's interests, the 
Contracting Officer must insist upon obtaining the information that is 
necessary. The unwillingness or inability of a contractor to present 
reasonably requested information in a timely manner, especially 
information that a prudent business person would be expected to have 
and to use in the professional management of a business, may be a 
material fact in the determination of the contractor's responsibility 
and prospects for contract completion.
    (c) The Contracting Officer shall obtain the following information 
to the extent required to protect the Government's interest. In 
addition, if the Contracting Officer concludes that information not 
listed herein is required to determine financial responsibility,

[[Page 13751]]

that information should be requested. The information must be for the 
person(s) who are legally liable for contract performance. If the 
contractor is not a corporation, the Contracting Officer shall obtain 
the required information for each individual/joint venturer/partner:
    (1) Balance sheet and income statement--
    (i) For the current fiscal year (interim);
    (ii) For the most recent fiscal year and, preferably, for the 2 
preceding fiscal years. These should be certified by an independent 
public accountant or by an appropriate officer of the firm; and
    (iii) Forecasted for each fiscal year for the remainder of the 
period of contract performance.
    (2) Summary history of the contractor and its principal managers, 
disclosing any previous insolvencies--corporate or personal, and 
describing its products or services.
    (3) Statement of all affiliations disclosing--
    (i) Material financial interests of the contractor;
    (ii) Material financial interests in the contractor;
    (iii) Material affiliations of owners, officers, members, 
directors, major stockholders; and
    (iv) The major stockholders if the contractor is not a widely-
traded, publicly-held corporation.
    (4) Statement of all forms of compensation to each officer, 
manager, partner, joint venturer, or proprietor, as appropriate--
    (i) Planned for the current year;
    (ii) Paid during the past 2 years; and
    (iii) Deferred to future periods.
    (5) Business base and forecast that--
    (i) Shows, by significant markets, existing contracts and 
outstanding offers, including those under negotiation; and
    (ii) Is reconcilable to indirect cost rate projections.
    (6) Cash forecast for the duration of the contract.
    (7) Financing arrangement information that discloses--
    (i) Availability of cash to finance contract performance;
    (ii) Contractor's exposure to financial crisis from creditor's 
demands;
    (iii) Degree to which credit security provisions could conflict 
with Government title terms under contract financing;
    (iv) Clearly stated confirmations of credit with no unacceptable 
qualifications; and
    (v) Unambiguous written agreement by a creditor if credit 
arrangements include deferred trade payments or creditor 
subordinations/repayment suspensions.
    (8) Statement of all state, local, and Federal tax accounts, 
including special mandatory contributions, e.g., environmental 
superfund.
    (9) Description and explanation of the financial effect of issues 
such as--
    (i) Leases, deferred purchase arrangements, or patent or royalty 
arrangements;
    (ii) Insurance, when relevant to the contract;
    (iii) Contemplated capital expenditures, changes in equity, or 
contractor debt load;
    (iv) Pending claims either by or against the contractor;
    (v) Contingent liabilities such as guarantees, litigation, 
environmental, or product liabilities;
    (vi) Validity of accounts receivable and actual value of inventory, 
as assets; and
    (vii) Status and aging of accounts payable.
    (10) Significant ratios such as--
    (i) Inventory to annual sales;
    (ii) Inventory to current assets;
    (iii) Liquid assets to current assets;
    (iv) Liquid assets to current liabilities;
    (v) Current assets to current liabilities; and
    (vi) Net worth to net debt.

PART 2411--[REMOVED AND RESERVED]

0
10. Under the authority of 40 U.S.C. 121(c), part 2411 is removed and 
reserved.

PART 2415--CONTRACTING BY NEGOTIATION

0
11. The authority citation for part 2415 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 41 U.S.C. 3301-3306 and 3105; 42 
U.S.C. 3535(d).

Subpart 2415.2--Solicitation and Receipt of Proposals and 
Quotations

0
12. In section 2415.209, revise paragraph (a)(1) to read as follows:


2415.209  Solicitation provisions and contract clauses.

    (a)(1) The Contracting Officer shall insert a provision 
substantially the same as the provision at 2452.215-70, Proposal 
Content, in all solicitations for negotiated procurements expected to 
exceed the simplified acquisition limit. The provision may be used in 
simplified acquisitions when it is necessary to obtain business 
proposal information in making the award selection. If the proposed 
contract requires work on, or access to, HUD systems or applications 
(see the clause at 2452.239-70), the provision shall be used with its 
Alternate I. When the Contracting Officer has determined that it is 
necessary to limit the size of the technical and management portion of 
offers submitted by offerors, the provision shall be used with its 
Alternate II.
* * * * *

Subpart 2415.3--Source Selection

0
13. In section 2415.303, revise paragraph (a) to read as follows:


2415.303  Responsibilities.

    (a)(1) Except as identified in paragraph (a)(2) of this section, 
HUD's Chief Procurement Officer, as the Senior Procurement Executive, 
designates Assistant Secretaries, or their equivalent, for requiring 
activities as the Source Selection Authorities for selections made 
using the tradeoff process. Assistant Secretaries may delegate this 
function to other departmental officials. This designation also applies 
to acquisitions not performed under the requirements of FAR part 15, 
but utilizing tradeoff analysis.
    (2) HUD's Chief Procurement Officer, as the Senior Procurement 
Executive, designates HUD's Office of General Counsel (OGC) as the 
Source Selection Authority, regardless of contract amount, in all 
Headquarters procurements for legal services, unless (s)he specifically 
designates another agency official to perform that function. Any 
Headquarters office desiring to procure outside legal services for the 
Department shall obtain OGC approval before advertising or soliciting 
proposals for such services. OGC shall determine whether the services 
are necessary and the extent of OGC involvement in the procurement.
* * * * *

0
14. In section 2415.305, revise paragraph (a)(3) to read as follows:


2415.305  Proposal evaluation.

    (a) * * *
    (3) Technical evaluation when tradeoffs are performed. The TEP 
shall rate each proposal based on the evaluation factors specified in 
the solicitation. The TEP shall identify each proposal as being 
acceptable, unacceptable but capable of being made acceptable, or 
unacceptable. A proposal shall be considered unacceptable if it is so 
clearly deficient that it cannot be corrected through written or oral 
discussions. Under the tradeoff process, predetermined threshold levels 
of technical acceptability for proposals

[[Page 13752]]

shall not be employed. A technical evaluation report, which complies 
with FAR 15.305(a)(3), shall be prepared and signed by the technical 
evaluators, furnished to the Contracting Officer, and maintained as a 
permanent record in the official procurement file.

PART 2432--CONTRACT FINANCING

0
15. The authority citation for part 2432 continues to read as follows:

    Authority:  31 U.S.C. 3901-3905; 40 U.S.C. 121(c); 42 U.S.C. 
3535(d).

Subpart 2432.7--Contract Funding

0
16. In section 2432.703, revise paragraph (b)(1) to read as follows:


2432.703-1  General.

    (b)(1) Except as described herein, a fixed-price contract may be 
funded incrementally only if--
    (i) Sufficient funds are not available to the Department at the 
time of contract award or exercise of option to fully fund the contract 
or option; and
    (ii) The contract (excluding any options) or any exercised option--
    (A) Is for severable services; and
    (B) Does not exceed one year in length; and
    (C) Is incrementally funded using funds available (unexpired) as of 
the date the funds are obligated; and
    (iii) If applicable, the contract uses funds available from 
multiple (2 or more) fiscal years and Congress has otherwise authorized 
incremental funding.
* * * * *

0
17. Revise section 2432.705 to read as follows:


2432.705  Contract clauses.

    (a) The Contracting Officer shall insert the clause at 2452.232-72, 
``Limitation of Government's Obligation,'' in solicitations and 
resultant incrementally funded fixed-price contracts as authorized by 
2432.703-1. The Contracting Officer shall insert the information 
required in the table in paragraph (b) and the notification period in 
paragraph (c) of the clause.
    (b) The Contracting Officer shall insert the clause at 2452.232-74, 
``Not To Exceed Limitation'' in all solicitations and contracts where 
the total estimated funds needed for the performance period are not yet 
obligated.


2432.705-70  [Removed]

0
18. Remove section 2432.705-70.

PART 2437--SERVICE CONTRACTING

0
19. The authority citation for part 2437 continues to read as follows:

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2437.1--Service Contracts--General

0
20. In section 2437.110, revise paragraph (e)(2) and add paragraphs 
(e)(5) and (6) to read as follows:
    2437.110 Solicitation provisions and contract clauses.
    (e) * * *
    (2) The Contracting Officer shall insert the clause at 2452.237-73, 
``Conduct of Work and Technical Guidance,'' in all solicitations and 
contracts for services.
* * * * *
    (5) The Contracting Officer shall insert the clause at 2452.237-79, 
``Post Award Conference,'' in all solicitations and contracts for 
services when the contractor will be required to attend a post-award 
orientation conference. The Contracting Officer shall indicate whether 
the contractor must attend the conference in person or via electronic 
communication. The Contracting Officer shall use Alternate I when the 
Post Award Conference will be conducted by telephone or video 
conferencing.
    (6) The Contracting Officer shall insert the clause at 2452.237-81, 
``Labor Categories, Unit Prices Per Hour and Payment,'' in all 
indefinite quantity and requirements solicitations and contracts when 
level of effort task orders will be issued.
0
21. Add part 2444, consisting of subpart 2444.2, to read as follows:

PART 2444--SUBCONTRACTING POLICIES AND PROCEDURES

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2444.2--Contract Clauses


2444.204  Contract clauses.

    (a) Insert HUDAR clause 2452.244-70 Consent to Subcontract, in 
contracts and task orders with an estimated value exceeding 
$10,000,000.

PART 2452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
22. The authority citation for part 2452 continues to read as follows:

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2452.2--Texts of Provisions and Clauses


Sec.  2452.211-70  [Removed]

0
23. Remove section 2452.211-70.
0
24. Revise section 2452.215-70 to read as follows:


2452.215-70  Proposal content.

    As prescribed in 2415.209(a), insert a provision substantially the 
same as the following:

    PROPOSAL CONTENT (MAR 2016)
    (a) Proposals shall be submitted in two parts as described in 
paragraphs (c) and (d) below. Each of the parts must be complete in 
itself so that evaluation of each part may be conducted 
independently, and so the identified parts of each proposal may be 
evaluated strictly on its own merit. Proposals shall be submitted in 
the format, if any, prescribed elsewhere in this solicitation. 
Proposals shall be enclosed in sealed packaging and addressed to the 
office specified in the solicitation. The offeror's name and 
address, the solicitation number and the date and time specified in 
the solicitation for proposal submission must appear in writing on 
the outside of the package.
    (b) The number of proposals required is an original and [insert 
number] copies of Part I, and [insert number] copies of Part II.
    (c) Part I--Technical Proposal. (1) The offeror shall submit the 
information required in Instructions to Offerors designated under 
Part I--Technical Proposal.
    (d) Part II--Business Proposal. (1) The offeror shall complete 
the Representations and Certifications provided in Section K of this 
solicitation and include them in Part II, Business Proposal.
    (2) The offeror shall provide information to support the 
offeror's proposed costs or prices as prescribed elsewhere in 
Instructions to Offerors for Part II--Business Proposal.
    (3) The offeror shall submit any other information required in 
Instructions to Offerors designated under Part II--Business 
Proposal.
(End of provision)

    Alternate I (MAR 2016)
    As prescribed in 2415.209(a), if the proposed contract requires 
work on, or access to, sensitive automated systems as described in 
2452.239-70, add the following subparagraph, numbered sequentially, 
to paragraph (d):
    The offeror shall describe in detail how the offeror will 
maintain the security of automated systems as required by clause 
2452.239-70 in Section I of this solicitation and include it in Part 
II, Business Proposal.
(End of Provision)

    Alternate II (MAR 2016)
    As prescribed in 2415.209(a), add the following paragraph (e) 
when the size of any proposal Part I or Part II will be limited:
    (e) Size limits of Parts I and II. (1) Offerors shall limit 
submissions of Parts I and II of their initial proposals to the page 
limitations identified in the Instructions to Offerors. Offerors are 
cautioned that, if any Part of their proposal exceeds the stipulated 
limits for that Part, the Government will evaluate only the 
information contained in the pages up through the permitted number. 
Pages beyond that limit will not be evaluated.
    (2) A page shall consist of one side of a single sheet of 8\1/
2\' x 11'' paper, single spaced, using not smaller than 12 point 
type font, and having margins at the top, bottom,

[[Page 13753]]

and sides of the page of no less than one inch in width.
    (3) Any exemptions from this limitation are stipulated under the 
Instructions to Offerors.
    (4) Offerors are encouraged to use recycled paper and to use 
both sides of the paper (see the FAR clause at 52.204-4).
(End of Provision)


0
25. Revise section 2452.232-70 to read as follows:


2452.232-70  Payment schedule and invoice submission (Fixed-Price).

    As prescribed in HUDAR Section 2432.908(c)(2), insert the following 
clause in all fixed price solicitations and contracts where invoicing 
and payments will NOT be made through the Department of Treasury's 
Bureau of Fiscal Services Invoice Processing Platform (IPP) system:

    PAYMENT SCHEDULE AND INVOICE SUBMISSION (FIXED-PRICE) (MAR 2016)
    (a) Payment schedule. Payment of the contract price (see Section 
B of the contract) will be made upon completion and acceptance of 
all work unless a partial payment schedule is included below.
    [Contracting Officer insert schedule information]:

----------------------------------------------------------------------------------------------------------------
                                         Applicable contract
        Partial payment number               deliverable             Delivery date            Payment amount
----------------------------------------------------------------------------------------------------------------
1. [ ]...............................
2. [ ]...............................
3. [ ]...............................
----------------------------------------------------------------------------------------------------------------

    [Continue as necessary]
    (b) Submission of invoices. (1) The Contractor shall submit 
invoices as follows: original to the payment office and one copy 
each to the Contracting Officer and a copy to the Government 
Technical Representative (GTR) identified in the contract. To 
constitute a proper invoice, the invoice must include all items 
required by the FAR clause at 52.232-25, ``Prompt Payment.''
    (2) To assist the government in making timely payments, the 
contractor is also requested to include on each invoice the 
appropriation number shown on the contract award document (e.g., 
block 14 of the Standard Form (SF) 26, block 21 of the SF-33, or 
block 25 of the SF-1449). The contractor is also requested to 
clearly indicate on the mailing envelope that an invoice is 
enclosed.
    (c) Contractor remittance information. The contractor shall 
provide the payment office with all information required by other 
payment clauses or other supplemental information (e.g., contracts 
for commercial services) contained in this contract.
    (d) Final invoice payment. The final invoice will not be paid 
prior to certification by the Contracting Officer that all work has 
been completed and accepted.
(End of clause)

    Alternate I (MAR 2016).
    As prescribed in HUDAR section 2432.908(c)(2), replace paragraph 
(b)(1) and (b)(2) with the following Alternate I paragraphs to HUDAR 
Clause 2452.232-70 Payment Schedule and Invoice Submission (Fixed-
price) for fixed price solicitations and contracts other than 
performance-based under which performance-based payments will be 
used and where invoices are to be submitted electronically by email 
but will not be paid through the Department of Treasury's Bureau of 
Fiscal Services Invoice Processing Platform (IPP) system:
    (b) Submission of invoices. (1) The contractor shall submit 
invoices electronically via email to the email addresses shown on 
the contract award document (e.g., block 12 of the Standard Form 
(SF) 26, block 25 of the SF-33, or block 18a of the SF-1449) and 
carbon copy the Contracting Officer and the Government Technical 
Representative (GTR). To constitute a proper invoice, the invoice 
must include all items required by the FAR clause at 52.232-25, 
``Prompt Payment.'' The contractor shall clearly include in the 
Subject line of the email: INVOICE INCLUDED; CONTRACT/ORDER #: ___, 
INVOICE NUMBER ___ and Contract Line Item Number(s) ___.
    (2) To assist the government in making timely payments, the 
contractor is also requested to include on each invoice the 
appropriation number shown on the contract award document (e.g., 
block 14 of the Standard Form (SF) 26, block 21 of the SF-33, or 
block 25 of the SF-1449).
(End of Alternate I)

    Alternate II (MAR 2016).
    As prescribed in HUDAR Section 2432.908(c)(2), replace 
paragraphs (b)(1) and (2) of the HUDAR Clause 2452.232-70 Payment 
Schedule and Invoice Submission (Fixed-price) with the following 
Alternate II language in all fixed price solicitations and contracts 
when requiring invoices to be submitted electronically to the 
Department of Treasury's Bureau of Fiscal Services Invoice 
Processing Platform (IPP) system:
    (b) Submission of invoices. (1) The Contractor shall obtain 
access and submit invoices to the Department of Treasury Bureau of 
Fiscal Services' Invoice Platform Processing System via the Web at 
URL: https://arc.publicdebt.treas.gov/ipp/fsippqrg.htm in accordance 
with the instructions on the Web site. To constitute a proper 
invoice, the invoice must include all items required by the FAR 
clause at 52.232-25, ``Prompt Payment.''
    (2) To assist the government in making timely payments, the 
contractor is also requested to include on each invoice the 
appropriation number shown on the contract award document (e.g., 
block 14 of the Standard Form (SF) 26, block 21 of the SF-33, or 
block 25 of the SF-1449).
(End of Alternate II)


0
26. Revise section 2452.232-71 to read as follows:


2452.232-71  Voucher submission (cost-reimbursement, time-and-
materials, and labor-hour).

    As prescribed in HUDAR Section 2432.908(c)(3), insert the following 
clause in all cost reimbursable, time-and-materials, and labor-hour 
solicitations and contracts where vouchering and payments will NOT be 
made through the Department of Treasury's Bureau of Fiscal Services 
Invoice Processing Platform (IPP) system:

VOUCHER SUBMISSION (COST-REIMBURSEMENT, TIME-AND-MATERIALS, AND 
LABOR HOUR) (MAR 2016)
    (a) Voucher submission. (1) The contractor shall submit, ___ 
[Contracting Officer insert billing period, e.g., monthly], an 
original and two copies of each voucher. In addition to the items 
required by the clause at FAR 52.232-25, Prompt Payment, the voucher 
shall show the elements of cost for the billing period and the 
cumulative costs to date. The Contractor shall submit all vouchers, 
except for the final voucher, as follows: original to the payment 
office and one copy each to the Contracting Officer and the 
Government Technical Representative (GTR) identified in the 
contract. The contractor shall submit all copies of the final 
voucher to the Contracting Officer.
    (2) To assist the government in making timely payments, the 
contractor is requested to include on each voucher the applicable 
appropriation number(s) shown on the award or subsequent 
modification document (e.g., block 14 of the Standard Form (SF) 26, 
or block 21 of the SF-33). The contractor is also requested to 
clearly indicate on the mailing envelope that a payment voucher is 
enclosed.
    (b) Contractor remittance information. (1) The Contractor shall 
provide the payment office with all information required by other 
payment clauses contained in this contract.
    (2) For time-and-materials and labor-hour contracts, the 
Contractor shall aggregate vouchered costs by the individual task 
for which the costs were incurred and clearly identify the task or 
job.
    (c) Final Payment. The final payment shall not be made until the 
Contracting Officer has certified that the contractor has complied 
with all terms of the contract.
(End of clause)

    Alternate I (MAR 2016).
    As prescribed in HUDAR section 2432.908(c)(3), replace 
paragraphs (a)(1) and (2) with the following Alternate I paragraphs 
to HUDAR Clause 2452.232-71, Voucher Submission in time and 
material, cost-reimbursable and labor hour solicitations and 
contracts other than performance-based under which performance-based 
payments will be used and where invoices are to be submitted 
electronically by email but will not be paid through the Department 
of Treasury's Bureau of Fiscal Services Invoice Processing Platform 
(IPP) system:
    (a) Voucher submission. (1) The contractor shall submit vouchers 
electronically via email to the email addresses shown on the 
contract award document (e.g., block 12 of the Standard Form (SF) 
26, block 25 of the SF-33, or block 18a of the SF-1449) and carbon 
copy the Contracting Officer and the Government Technical 
Representative (GTR). In addition to the items required by the 
clause at FAR 52.232- 25, Prompt Payment, the voucher shall show the 
elements of cost for the billing period and the cumulative

[[Page 13754]]

costs to date. The contractor shall clearly include in the Subject 
line of the email: VOUCHER INCLUDED; CONTRACT/ORDER #: ___, VOUCHER 
NUMBER ___ and Contract Line Item Number(s) ___.
    (2) To assist the government in making timely payments, the 
contractor is requested to include on each voucher the applicable 
appropriation number(s) shown on the award or subsequent 
modification document (e.g., block 14 of the Standard Form (SF) 26, 
or block 21 of the SF-33).
(End of Alternate I)

    Alternate II (MAR 2016).
    As prescribed in HUDAR section 2432.908(c)(3), replace 
paragraphs (a)(1) and (2) of the HUDAR Clause 2452.232-71 Voucher 
Submission with the following Alternate II language in all cost-
reimbursement, time-and-materials, and labor-hour type solicitations 
and contracts when requiring vouchers to be submitted electronically 
to the Department of Treasury's Bureau of Fiscal Services Invoice 
Processing Platform (IPP) system:
    (a) Voucher submission. (1) The Contractor shall obtain access 
and submit invoices to the Department of Treasury Bureau of Fiscal 
Services' Invoice Platform Processing System via the Web at URL: 
https://arc.publicdebt.treas.gov/ipp/fsippqrg.htm in accordance with 
the instructions on the Web site. To constitute a proper voucher, in 
addition to the items required by the clause at FAR 52.232-25, 
Prompt Payment, the voucher shall show the elements of cost for the 
billing period and the cumulative costs to date.
    (2) To assist the government in making timely payments, the 
contractor is requested to include on each voucher the applicable 
appropriation number(s) shown on the award or subsequent 
modification document (e.g., block 14 of the Standard Form (SF) 26, 
or block 21 of the SF-33).
    (End of Alternate II)


0
27. Add section 2452.232-74 to read as follows:


2452.232-74  Not to exceed limitation.

    As prescribed in 2432.705(b), insert the following clause in all 
solicitations and contracts where the total estimated funds needed for 
the performance of the contract are not yet obligated.

    NOT TO EXCEED LIMITATION (MAR 2016)
    (a) The total estimated funds needed for the performance of this 
contract are not yet obligated. The total obligation of funds 
available at this time for performance of work or deliveries is 
[insert amount]. The Government shall not order, nor shall the 
contractor be authorized or required to accept orders for, or 
perform work on such orders (or perform any other work on this 
contract) or make deliveries that exceed the stated funding limit.
    (b) When funding is available, the Government may unilaterally 
increase the amount obligated through contract funding 
modification(s) until the full contract value has been obligated. If 
a contract funding modification is not in place by the time the 
performance of the work or deliveries have reached the stated 
funding limit, the contractor must stop performing services and 
deliveries and may not start again until the contractor is notified 
through a contract funding modification that funds are available to 
continue services and deliveries.
(End of clause)

0
28. Revise section 2452.237-73 to read as follows:


2452.237-73  Conduct of work and technical guidance.

    As prescribed in 2437.110(e)(2), insert the following clause in all 
contracts for services:

    CONDUCT OF WORK AND TECHNICAL GUIDANCE (MAR 2016)
    (a) The Contracting Officer will provide the contractor with the 
name and contact information of the Government Technical 
Representative (GTR) assigned to this contract. The GTR will serve 
as the contractor's liaison with the Contracting Officer with regard 
to the conduct of work. The Contracting Officer will notify the 
contractor in writing of any change to the current GTR's status or 
the designation of a successor GTR.
    (b) The GTR for liaison with the contractor as to the conduct of 
work is [to be inserted at time of award] or a successor designated 
by the Contracting Officer. The Contracting Officer will notify the 
contractor in writing of any change to the current GTR's status or 
the designation of a successor GTR.
    (c) The GTR will provide guidance to the contractor on the 
technical performance of the contract. Such guidance shall not be of 
a nature which:
    (1) Causes the contractor to perform work outside the statement 
of work or specifications of the contract;
    (2) Constitutes a change as defined in FAR 52.243 1;
    (3) Causes an increase or decrease in the cost of the contract;
    (4) Alters the period of performance or delivery dates; or
    (5) Changes any of the other express terms or conditions of the 
contract.
    (d) The GTR will issue technical guidance in writing or, if 
issued orally, he/she will confirm such direction in writing within 
five calendar days after oral issuance. The GTR may issue such 
guidance via telephone, facsimile (fax), or electronic mail.
    (e) Other specific limitations [to be inserted by Contracting 
Officer]:
    (f) The contractor shall promptly notify the Contracting Officer 
whenever the contractor believes that guidance provided by any 
government personnel, whether or not specifically provided pursuant 
to this clause, is of a nature described in paragraph (b) above.
(End of clause)

0
29. In section 2452.237-77, revise the introductory text, add paragraph 
(a)(1), and revise paragraph (c)(1)(A) to read as follows:


2452.237-77  Temporary closure of HUD facilities.

    As prescribed in 2437.110(e)(4), insert the following clause:

    Temporary Closure of HUD Facilities (MAR 2016)
    (a)(1) The Department of Housing and Urban Development observes 
the following days as holidays--
New Year's Day
Martin Luther King's Birthday
Washington's Birthday
Memorial Day
Independence Day
Labor Day
Columbus Day
Veterans Day
Thanksgiving Day
Christmas Day
    Any other day designated by Federal law, Executive Order or 
Presidential Proclamation.
* * * * *
    (c) * * *
    (1) * * *
    (A) The deduction rate in dollars per day will be equal to the 
per month contract price divided by the number of business days in 
each month.
* * * * *

0
30. Add section 2452.237-79 to read as follows:


2452.237-79  Post award conference.

    As prescribed in 2437.110(e)(5), insert the following clause in all 
contracts for services:

    POST AWARD CONFERENCE (MAR 2016)
    The Contractor shall be required to attend a post-award 
conference on DATE___ to be held at ADDRESS___, unless other 
arrangements are made. All Contractors must have a valid ID for 
security clearance into the building.
(End of clause)

    POST AWARD CONFERENCE (MAR 2016)
    Alternate I
    If the conference will be conducted via telephone or video 
conferencing, substitute the following for the first and second 
sentences:
    The conference will be conducted via [telephone, video 
conferencing]. The Contracting Officer or designee will provide the 
contractor with the date, time and contact information for the 
conference.
(End of Alternate I)


0
31. Add section 2452.237-81 to read as follows:


2452.237-81  Labor categories, unit prices per hour and payment.

    As prescribed in 2437.110(e)(6), insert the following clause in all 
indefinite quantity and requirements solicitations and contracts when 
level of effort task orders will be issued.

    LABOR CATEGORIES, UNIT PRICES PER HOUR AND PAYMENT (MAR 2016)
    The contractor shall provide the following types of labor at the 
corresponding unit price

[[Page 13755]]

per hour in accordance with the terms of this contract:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

    The unit price per hour is inclusive of the hourly wage plus any 
applicable labor overhead, General and Administrative (G&A) 
expenses, and profit. Payment shall be made to the contractor upon 
delivery to, and acceptance by, the Government office requesting 
services. The total amounts billed shall be derived by multiplying 
the actual number of hours worked per category by the corresponding 
price per hour.
(End of clause)

0
32. Revise section 2452.239-70 to read as follows:


2452.239-70  Access to HUD systems.

    As prescribed in 2439.107(a), insert the following clause:

    ACCESS TO HUD SYSTEMS (MAR 2016)
    (a) Definitions: As used in this clause--
    ``Access'' means the ability to obtain, view, read, modify, 
delete, and/or otherwise make use of information resources.
    ``Application'' means the use of information resources 
(information and information technology) to satisfy a specific set 
of user requirements (see OMB Circular A-130).
    ``Contractor employee'' means an employee of the prime 
contractor or of any subcontractor, affiliate, partner, joint 
venture, or team members with which the contractor is associated. It 
also includes consultants engaged by any of those entities.
    ``Mission-critical system'' means an information technology or 
telecommunications system used or operated by HUD or by a HUD 
contractor, or organization on behalf of HUD, that processes any 
information, the loss, misuse, disclosure, or unauthorized access 
to, or modification of which would have a debilitating impact on the 
mission of the agency.
    ``NACI'' means a National Agency Check with Inquiries, the 
minimum background investigation prescribed by OPM.
    ``PIV Card'' means the Personal Identity Verification (PIV) 
Card, the Federal Government-issued identification credential (i.e., 
identification badge).
    ``Sensitive information'' means any information of which the 
loss, misuse, or unauthorized access to, or modification of, could 
adversely affect the national interest, the conduct of federal 
programs, or the privacy to which individuals are entitled under 
section 552a of title 5, United States Code (the Privacy Act), but 
which has not been specifically authorized under criteria 
established by an Executive Order or an Act of Congress to be kept 
secret in the interest of national defense or foreign policy.
    ``System'' means an interconnected set of information resources 
under the same direct management control, which shares common 
functionality. A system normally includes hardware, software, 
information, data, applications, communications, and people (see OMB 
Circular A-130). System includes any system owned by HUD or owned 
and operated on HUD's behalf by another party.
    (b) General. (1) The performance of this contract requires 
contractor employees to have access to a HUD system or systems. All 
such employees who do not already possess a current PIV Card 
acceptable to HUD shall be required to provide personal background 
information, undergo a background investigation (NACI or other OPM-
required or approved investigation), including an FBI National 
Criminal History Fingerprint Check, and obtain a PIV Card prior to 
being permitted access to any such system in performance of this 
contract. HUD may accept a PIV Card issued by another Federal 
Government agency but shall not be required to do so. No contractor 
employee will be permitted access to any HUD system without a PIV 
Card.
    (2) All contractor employees who require access to mission-
critical systems or sensitive information contained within a HUD 
system or application(s) are required to have a more extensive 
background investigation. The investigation shall be commensurate 
with the risk and security controls involved in managing, using, or 
operating the system or applications(s).
    (c) Citizenship-related requirements. Each affected contractor 
employee as described in paragraph (b) of this clause shall be:
    (1) A United States (U.S.) citizen; or,
    (2) A national of the United States (see 8 U.S.C. 1408); or,
    (3) An alien lawfully admitted into, and lawfully permitted to 
be employed in the United States, provided that for any such 
individual, the Government is able to obtain sufficient background 
information to complete the investigation as required by this 
clause. Failure on the part of the contractor to provide sufficient 
information to perform a required investigation or the inability of 
the Government to verify information provided for affected 
contractor employees will result in denial of their access.
    (d) Background investigation process. (1) The Government 
Technical Representative (GTR) shall notify the contractor of those 
contractor employee positions requiring background investigations.
    (i) For each contractor employee requiring access to HUD 
information systems, the contractor shall submit the following 
properly completed forms: Standard Form (SF) 85, ``Questionnaire for 
Non-Sensitive Positions,'' FD 258 (Fingerprint Chart), and a partial 
Optional Form (OF) 306 (Items 1, 2, 6, 8-13, 16, and 17).
    (ii) For each contractor employee requiring access to mission-
critical systems and/or sensitive information contained within a HUD 
system and/or application(s), the contractor shall submit the 
following properly completed forms: SF-85P, ``Questionnaire for 
Public Trust Positions;'' FD 258; and a Fair Credit Reporting Act 
form (authorization for the credit-check portion of the 
investigation). Contractor employees shall not complete the Medical 
Release behind the SF-85P.
    (iii) The SF-85, 85P, and OF-306 are available from OPM's Web 
site, http://www.opm.gov. The GTR will provide all other forms that 
are not obtainable via the Internet.
    (2) The contractor shall deliver the forms and information 
required in paragraph (d)(1) of this clause to the GTR.
    (3) Affected contractor employees who have had a federal 
background investigation without a subsequent break in federal 
employment or federal contract service exceeding 2 years may be 
exempt from the investigation requirements of this clause subject to 
verification of the previous investigation. For each such employee, 
the contractor shall submit the following information in lieu of the 
forms and information listed in paragraph (d)(1) of this clause: 
employee's full name, Social Security number, and place and date of 
birth.
    (4) The investigation process shall consist of a range of 
personal background inquiries and contacts (written and personal) 
and verification of the information provided on the investigative 
forms described in paragraph (d)(1) of this clause.
    (5) Upon completion of the investigation process, the GTR will 
notify the contractor if any contractor employee is determined to be 
unsuitable to have access to the system(s), application(s), or 
information. Such an employee may not be given access to those 
resources. If any such employee has already been given access 
pending the results of the background investigation, the contractor 
shall ensure that the employee's access is revoked immediately upon 
receipt of the GTR's notification.
    (6) Failure of the GTR to notify the contractor (see 
subparagraph (d)(1)) of any employee who should be subject to the 
requirements of this clause and is known, or should reasonably be 
known, by the contractor to be subject to the requirements of this 
clause, shall not excuse the contractor from making such employee(s) 
known to the GTR. Any such employee who is identified and is working 
under the contract, without having had the appropriate background 
investigation or furnished the required forms for the investigation, 
shall cease to perform such work immediately and shall not be given 
access to the system(s)/application(s) described in paragraph (b) of 
this clause until the contractor has provided the investigative 
forms required in paragraph (d)(1) of this clause for the employee 
to the GTR.
    (7) The contractor shall notify the GTR in writing whenever a 
contractor employee for whom a background investigation package was 
required and submitted to HUD, or for whom a background 
investigation was completed, terminates employment with the 
contractor or otherwise is no longer performing work under this 
contract that requires access to the system(s), application(s), or 
information. The contractor shall provide a copy of the written 
notice to the Contracting Officer.
    (e) PIV Cards. (1) HUD will issue a PIV Card to each contractor 
employee who is to be given access to HUD systems and does not 
already possess a PIV Card acceptable to HUD (see paragraph (b) of 
this clause). HUD will not issue the PIV Card until the contractor 
employee has successfully cleared an FBI National Criminal History 
Fingerprint Check, and HUD has initiated the background 
investigation for the contractor employee. Initiation is defined to 
mean that

[[Page 13756]]

all background information required in paragraph (d)(1) of this 
clause has been delivered to HUD. The employee may not be given 
access prior to those two events. HUD may issue a PIV Card and grant 
access pending the completion of the background investigation. HUD 
will revoke the PIV Card and the employee's access if the background 
investigation process (including adjudication of investigation 
results) for the employee has not been completed within 6 months 
after the issuance of the PIV Card.
    (2) PIV Cards shall identify individuals as contractor 
employees. Contractor employees shall display their PIV Cards on 
their persons at all times while working in a HUD facility, and 
shall present cards for inspection upon request by HUD officials or 
HUD security personnel.
    (3) The contractor shall be responsible for all PIV Cards issued 
to the contractor's employees and shall immediately notify the GTR 
if any PIV Card(s) cannot be accounted for. The contractor shall 
promptly return PIV Cards to HUD as required by the FAR clause at 
52.204-9. The contractor shall notify the GTR immediately whenever 
any contractor employee no longer has a need for his/her HUD-issued 
PIV Card (e.g., the employee terminates employment with the 
contractor, the employee's duties no longer require access to HUD 
systems). The GTR will instruct the contractor as to how to return 
the PIV Card. Upon expiration of this contract, the GTR will 
instruct the contractor as to how to return all HUD-issued PIV Cards 
not previously returned. Unless otherwise directed by the 
Contracting Officer, the contractor shall not return PIV Cards to 
any person other than the GTR.
    (f) Control of access. HUD shall have and exercise full and 
complete control over granting, denying, withholding, and 
terminating access of contractor employees to HUD systems. The GTR 
will notify the contractor immediately when HUD has determined that 
an employee is unsuitable or unfit to be permitted access to a HUD 
system. The contractor shall immediately notify such employee that 
he/she no longer has access to any HUD system, physically retrieve 
the employee's PIV Card from the employee, and provide a suitable 
replacement employee in accordance with the requirements of this 
clause.
    (g) Incident response notification. An incident is defined as an 
event, either accidental or deliberate, that results in unauthorized 
access, loss, disclosure, modification, or destruction of 
information technology systems, applications, or data. The 
contractor shall immediately notify the GTR and the Contracting 
Officer of any known or suspected incident, or any unauthorized 
disclosure of the information contained in the system(s) to which 
the contractor has access.
    (h) Nondisclosure of information. (1) Neither the contractor nor 
any of its employees shall divulge or release data or information 
developed or obtained during performance of this contract, except to 
authorized government personnel with an established need to know, or 
upon written approval of the Contracting Officer. Information 
contained in all source documents and other media provided by HUD is 
the sole property of HUD.
    (2) The contractor shall require that all employees who may have 
access to the system(s)/applications(s) identified in paragraph (b) 
of this clause sign a pledge of nondisclosure of information. The 
employees shall sign these pledges before they are permitted to 
perform work under this contract. The contractor shall maintain the 
signed pledges for a period of 3 years after final payment under 
this contract. The contractor shall provide a copy of these pledges 
to the GTR.
    (i) Security procedures. (1) The Contractor shall comply with 
applicable federal and HUD statutes, regulations, policies, and 
procedures governing the security of the system(s) to which the 
contractor's employees have access including, but not limited to:
    (i) The Federal Information Security Management Act (FISMA) of 
2002;
    (ii) OMB Circular A-130, Management of Federal Information 
Resources, Appendix III, Security of Federal Automated Information 
Resources;
    (iii) HUD Handbook 2400.25, Information Technology Security 
Policy;
    (iv) HUD Handbook 732.3, Personnel Security/Suitability;
    (v) Federal Information Processing Standards 201 (FIPS 201), 
Sections 2.1 and 2.2;
    (vi) Homeland Security Presidential Directive 12 (HSPD-12); and
    (vii) OMB Memorandum M-05-24, Implementing Guidance for HSPD-12. 
The HUD Handbooks are available online at: http://www.hud.gov/offices/adm/hudclips/ or from the GTR.
    (2) The contractor shall develop and maintain a compliance 
matrix that lists each requirement set forth in paragraphs, (b) 
through (h), (i)(1), and (m) of this clause with specific actions 
taken, and/or procedures implemented, to satisfy each requirement. 
The contractor shall identify an accountable person for each 
requirement, the date upon which actions/procedures were initiated/
completed, and certify that information contained in this compliance 
matrix is correct. The contractor shall ensure that information in 
this compliance matrix is complete, accurate, and up-to-date at all 
times for the duration of this contract. Upon request, the 
contractor shall provide copies of the current matrix to the 
Contracting Officer and/or government technical representative.
    (3) The Contractor shall ensure that its employees, in 
performance of the contract, receive annual training (or once if the 
contract is for less than one year) in HUD information technology 
security policies, procedures, computer ethics, and best practices 
in accordance with HUD Handbook 2400.25.
    (j) Access to contractor's systems. The Contractor shall afford 
authorized personnel, including the Office of Inspector General, 
access to the Contractor's facilities, installations, operations, 
documentation (including the compliance matrix required under 
paragraph (i)(2) of this clause), databases, and personnel used in 
performance of the contract. Access shall be provided to the extent 
required to carry out, but not limited to, any information security 
program activities, investigation, and audit to safeguard against 
threats and hazards to the integrity, availability, and 
confidentiality of HUD data and systems, or to the function of 
information systems operated on behalf of HUD, and to preserve 
evidence of computer crime.
    (k) Contractor compliance with this clause. Failure on the part 
of the contractor to comply with the terms of this clause may result 
in termination of this contract for default.
    (l) Physical access to Federal Government facilities. The 
contractor and any subcontractor(s) shall also comply with the 
requirements of HUDAR clause 2452.237-75 when the contractor's or 
subcontractor's employees will perform any work under this contract 
on site in a HUD or other Federal Government facility.
    (m) Subcontracts. The contractor shall incorporate this clause 
in all subcontracts where the requirements specified in paragraph 
(b) of this section are applicable to performance of the 
subcontract.

(End of clause)


0
33. Add section 2452.244-70 to read as follows:


2452.244-70  Consent to subcontract.

    As prescribed in HUDAR Section 2444.204(a), insert the following 
clause in contracts and task orders with an estimated value exceeding 
$10,000,000.

Consent to Subcontract (Mar 2016)

    (a) Due to the substantive nature of subcontracting that may be 
necessary during performance of this contract, the Contracting 
Officer has determined that a consent for individual subcontracts is 
required to adequately protect the Government. Consent is required 
for -
    (1) Cost-reimbursement, time-and-materials, or labor-hour 
subcontracts, or combination of such, in excess of $150,000 per year 
to a single subcontractor or consultant;
    (2) Fixed price subcontracts in excess of 25% of the annual 
contract value to a single subcontractor or consultant.
    (b) If subcontracts meeting the above parameters were not 
provided during the negotiation of the original contract award, the 
Contractor shall obtain post award consent and provide signed copies 
of the subcontract agreements within 10 days of consent.
    (c) The Contractor shall provide the Contracting Officer with 30 
days advance notification prior to changing subcontractors or 
existing subcontracting agreements, unless precluded due to 
circumstances beyond the control of the contractor. If advance 
notification is not feasible, the Contractor shall provide 
notification to the Contracting Officer no later than 10 days after 
the Contractor identifies the need to replace a subcontractor. The 
notification shall include a copy of the proposed new subcontracting 
agreement. Upon consent and finalization of the final subcontract 
agreement, the Contractor shall provide a copy of the signed 
agreement to the Contracting Officer.

[[Page 13757]]

    (d) The Contracting Officer's consent to a subcontract does not 
constitute a determination of the acceptability of the subcontract 
terms or price, or of the allowability of costs.
    (e) If not required elsewhere in the contract, no more than 30 
calendar days after award, the Contractor shall provide a separate 
continuity of services plan to the Contracting Officer that will 
ensure services performed by subcontractors that cost more than 25% 
of the cost/price of the contract will continue uninterrupted in the 
event of performance problems or default by the subcontractor.

(End of clause)

Subpart 2452.3--Matrix

0
34. Add subpart 2452.3, consisting of section 2452.3, to read as 
follows:


2452.3  Provision and clause matrix.

BILLING CODE 4210-67-P

[[Page 13758]]

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[[Page 13759]]


[GRAPHIC] [TIFF OMITTED] TR15MR16.001


[[Page 13760]]


[GRAPHIC] [TIFF OMITTED] TR15MR16.002


[[Page 13761]]


[GRAPHIC] [TIFF OMITTED] TR15MR16.003


[[Page 13762]]


[GRAPHIC] [TIFF OMITTED] TR15MR16.004


    Dated: March 1, 2016.
Nani A. Coloretti,
Deputy Secretary.
[FR Doc. 2016-05212 Filed 3-14-16; 8:45 am]
BILLING CODE 4210-67-C