[Federal Register Volume 81, Number 161 (Friday, August 19, 2016)]
[Proposed Rules]
[Pages 55405-55408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19709]


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AGENCY FOR INTERNATIONAL DEVELOPMENT

48 CFR Parts 701, 722 and Appendix J

RIN 0412-AA80


Agency for International Development Acquisition Regulation 
(AIDAR): Agency Warrant Program for Individual Cooperating Country 
National Personal Services Contractors (CCNPSCs)

AGENCY: U.S. Agency for International Development.

ACTION: Proposed rule.

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SUMMARY: The U.S. Agency for International Development (USAID) proposes 
to amend the Agency for International Development Acquisition 
Regulation (AIDAR) to incorporate a warrant program for cooperating

[[Page 55406]]

country national personal service contractors (CCN PSCs) into the 
regulation. The purpose of the CCN PSC warrant program is not only to 
address a shortage of U.S. direct-hire contracting officers by 
delegating limited contracting officer authorities to a select number 
of Cooperating Country National personal services contractors, but also 
to bolster the Agency to succeed in terms of building long-term, host 
country technical capacity to materially assist the Missions with 
procurement responsibility. In addition, USAID is proposing to clarify 
that third country nationals (TCNs) and cooperating country nationals 
(CCNs) employment requirements, contained in section 722.170, do not 
apply to consultants.

DATES: Comments must be received no later than October 18, 2016.

ADDRESSES: Address all comments concerning this notice to Lyudmila 
Bond, Bureau for Management, Office of Acquisition and Assistance, 
Policy Division (M/OAA/P), Room 867, SA-44, Washington, DC 20523-2052. 
Submit comments, identified by title of the action and Regulatory 
Information Number (RIN) by any of the following methods:
    1. Through the Federal eRulemaking Portal at http://www.regulations.gov by following the instructions for submitting 
comments.
    2. By Mail addressed to: USAID, Bureau for Management, Office of 
Acquisition & Assistance, Policy Division, Room 867J, SA-44, 1300 
Pennsylvania Ave. NW., Washington, DC 20523-2052.

FOR FURTHER INFORMATION CONTACT: Lyudmila Bond, Telephone: 202-567-4753 
or Email: [email protected].

SUPPLEMENTARY INFORMATION: 

A. Instructions

    All comments must be in writing and submitted through one of the 
methods specified in the Addresses section above. All submissions must 
include the title of the action and RIN for this rulemaking. Please 
include your name, title, organization, postal address, telephone 
number, and email address in the text of the message.
    Please note that USAID recommends sending all comments to the 
Federal eRulemaking Portal because security screening precautions have 
slowed the delivery and dependability of surface mail to USAID/
Washington.
    After receipt of a comment and until finalization of the action, 
all comments will be made available at http://www.regulations.gov for 
public review without change, including any personal information 
provided. We recommend you do not submit information that you consider 
Confidential Business Information (CBI) or any information that is 
otherwise protected from disclosure by statute. USAID will only address 
substantive comments on the rule. Comments that are insubstantial or 
outside the scope of the rule may not be considered.

B. Background

    USAID is seeking comments on the proposed rule as described below:

(1) 722.170 Employment of Third Country Nationals (TCN's) and 
Cooperating Country Nationals (CCN's)

    In response to numerous inquiries, USAID is proposing a revision of 
this section of the AIDAR to clarify that employment requirements for 
TCN and CCN employees of a contractor do not apply to consultants. It 
is the responsibility of a contractor to determine whether an 
individual being hired is an employee or a consultant.

(2) Cooperating Country National (CCN) Warrant Program

Background
    In 2011, the U.S. Agency for International Development (USAID) 
approved a two-year Worldwide CCN Administrative Contracting and 
Agreement Officer (ACO/AAO) Pilot Warrant Program. The purpose of this 
program was to address the shortage of USAID contracting officers and 
build long-term, host country technical capacity to materially assist 
the Missions with procurement responsibility.
    USAID is located in offices in over 80 countries with programs in 
over 100 nations. USAID operates in a fluid environment responding to a 
myriad of crises such as war, natural disasters, epidemics, as well as 
its long term mission of ending extreme poverty, promoting resilient, 
democratic societies while advancing our security and prosperity. The 
warranted contracting force to manage this effort consists of 150 US 
direct hire foreign service contracting officers overseas, 105 direct 
hire civil service contract officers, 83 warranted foreign service 
executive officers, 3 warranted US personal service contractors 
managing mission's acquisition portfolio, and 4 warranted US personal 
service contractors serving as executive officers. In addition to, and 
perhaps partially because of having such a relatively small warranted 
work force to manage a portfolio that is large and varied with a global 
footprint, the foreign service contracting staff has one of the highest 
attrition rates in USAID's work force.
    USAID made a strategic decision to create a cadre of highly 
qualified Cooperating Country Nationals, who have demonstrated high 
potential for assuming responsibilities to serve as administrative 
contracting officers within designated Missions. The purpose was to 
alleviate some of the workload of our contracting officer staff. During 
the two phases of the program, USAID added 6 warranted CCN 
administrative contracting officers. Currently, by the end of fiscal 
year 2016, we anticipate that there will be approximately 12 warranted 
CCN contracting officers. While a seemingly small number, that would 
represent an 8 percent increase of our overseas US direct hire 
warranted contracting officer staff.
    When designing the CCN Pilot Warrant Program, USAID consulted with 
the Senior Procurement Executive at the State Department and the 
unions. The State Department's SPE advised that State conducted a 
similar pilot several years ago, to great success. They now have a 
permanent program that extends limited authority to their locally-
employed staff in selected countries. The vice president of the 
American Foreign Service Association concurred with the Pilot, and was 
pleased by several of its protections.
    Based on that two-year pilot program, revisions were made to the 
program structure to better suit the Agency's needs before the 
permanent program was launched in September 2014. USAID eliminated the 
portion of the program that allowed for third country nationals to 
receive warrants. A comprehensive review of the CCN Pilot Warrant 
Program underscored a need to broaden participation through among other 
things, revision of qualifications and inclusion of full obligation 
warrant authority up to $150,000 per transaction and an annual 
cumulative amount of $1 million at the CCN Grade 13 Level to assist the 
Missions' procurement function. A better understanding of CCN grades 
and the grading process allowed for better clarity of expectations for 
Missions and warrant applicants. To help mitigate CCN inexperience from 
leading to mistakes or malfeasance, the revised CCN Warrant Program 
includes several levels of obligation authority and non-monetary 
administrative responsibility correlating to CCN grade/experience 
within the acquisition backstop. Increasing degrees of responsibility 
and/or obligation authority, as applicable, are granted.
    The permanent CCN Warrant Program currently establishes three 
levels of

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contracting officer responsibilities that can be designated to a CCN 
personal services contractor depending on the needs of each mission, 
complexity and dollar value of the acquisitions, and the individual's 
experience, training, education, business acumen, judgment, reputation 
and grade level.
    At the first level, a CCN PSC may be delegated authority for select 
contract administration functions listed in (48 CFR) FAR 42.302(a), 
including, for example, conducting post-award orientation conferences, 
approving contractors' requests for payments under the progress 
payments or performance-based payments clauses.
    At the second level, in addition to performing the administrative 
functions discussed above, a CCN PSC contracting officer may be 
delegated authority to obligate incremental funding of any amount 
within the scope and total estimated cost of a contract (to include 
task orders and purchase orders).
    At the third and highest participating grade level, in addition to 
the incremental funding obligation authority and post-award 
administration duties described in levels one and two above, a CCN PSC 
contracting officer may be delegated authority to execute new awards 
for a total award amount not to exceed one hundred fifty thousand 
dollars ($150,000). This authority is further subject to a new award 
cumulative obligation limit of one million dollars ($1 million) per 
Fiscal Year. No deviation from these limitations is authorized.

Regulatory Authorities and Limitations

    (48 CFR) FAR part 1 establishes the authority for Agency heads to 
select and appoint contracting officers and it does not specify that 
contracting officers must be U.S. citizen direct-hire employees of the 
Federal government. (48 CFR) FAR part 7.5 includes contracting officer 
duties in the list of inherently governmental functions or functions 
that must be treated as such, but does not exclude personal services 
contractors hired under a statutory authority from performing such 
functions.
    (48 CFR) AIDAR 701.603-70 currently limits delegations of 
contracting officer authorities to U.S. citizen direct-hire employees 
of the U.S. Government as a matter of Agency policy. However, section 
4(b)(3) of (48 CFR) AIDAR Appendix D and the corresponding section of 
Appendix J contain an exception for PSCs to be delegated contracting 
officer authority with approval from the Assistant Administrator for 
the Bureau of Management.
    In September 2014, USAID issued a two-year class deviation from 48 
CFR) AIDAR 701.603-70 to establish the permanent CCN PSC warrant 
program to allow a limited number of selected and qualified CCN PSCs to 
be delegated contracting officer authorities. In conjunction with the 
approval of the class deviation described above, the Assistant 
Administrator for the Bureau for Management approved a class exception 
to the limitations in (48 CFR) AIDAR Appendix J 4(b)(3). By this rule 
USAID is proposing to revise (48 CFR) AIDAR to permanently authorize 
delegation of contracting officer authorities to a limited number of 
selected and qualified CCN PSCs.

Discussion

    Prior to establishing the permanent CCN warrant program, the Agency 
reviewed the risks associated with issuing CO warrants to Non-U.S. 
citizens who are not direct-hire employees of USAID. In particular, 
such factors as proper accountability, adequate security 
considerations, conflicts of interest, and appropriate legal 
jurisdiction over the employee were considered. Adequate management 
controls and warrant limitations established under the CCN PSC warrant 
program, as discussed below, were established to mitigate such risks.
    To address the risks associated with adequate accountability and 
conflict of interest, the warrant program requires candidates for the 
CCN PSC warrant program to show commitment to the profession by meeting 
stringent acquisition competencies, education and training 
requirements. In addition to meeting these requirements, potential 
candidates must have extensive experience in Direct U.S. Federal 
Government Contracting and clearly demonstrate professional and ethical 
behavior. When reviewing applications for a CCN PSC warrant, the agency 
contacts past performance references (typically, the candidate's last 
three Supervisory Contracting Officers) and any other sources deemed 
appropriate for signs of potential risks or cautions that may be 
detrimental to the responsibilities inherent in this Program. The 
candidate's supervisor must also attest to the candidate's education, 
training, experience, business acumen, judgment, character, reputation 
and ethical behavior.
    Additionally, the Program requires the CCN contracting officer's 
supervisor to closely and frequently monitor the CCN PSC's work and 
review performance and progress every six months. This review is 
followed by periodic reviews conducted by the Bureau for Management, 
Office of Acquisition and Assistance, Evaluation Division, which is 
responsible for the program implementation.
    CCN PSC contracting officers will support the functions of the 
overseas Mission's Office of Acquisition & Assistance (A&A), which 
typically include acquisition and assistance awards implementing the 
Agency's foreign assistance programs and activities. CCN PSC 
contracting officers are currently not delegated authority to award any 
personal services contracts. The program also limits delegated 
authority for select contract administration functions listed in (48 
CFR) FAR 42.302(a), specifically, the contracting officer functions in 
which disputes or possible legal challenges may arise due to decisions 
of the contracting officer, functions related to novation and 
contractor name changes, which may be a result of changes in a 
contractor's business structure as governed under applicable U.S. state 
law and other functions based on U.S. state laws, functions related to 
small business contracting matters and those requiring extensive 
knowledge of specific U.S. laws and government-wide policies not 
specifically related to contracting. Accordingly, the functions 
specified in items 5-7, 9-12, 18, 21-26, 29, 32,50, 52-55, 62-63, 66 
and 68-71 of (48 CFR) FAR 42.302(a) will not be redelegated to CCN PSC 
contracting officers.
    To address conflict of interest concerns, the program relies on the 
standard clause entitled ``Compliance with Laws and Regulations 
Applicable Abroad'', included in all personal services contracts with 
CCNs, that mandates compliance with the Standards of Conduct for 
Executive Branch Employees. These standards, available at https://www2.oge.gov/web/oge.nsf/All%20Documents/5D633072D0B2DB5085257E96006A90E7?opendocument, contain two provisions 
addressing financial interests that conflict with an individual's 
official duties. The first provision, entitled ``Disqualifying 
financial interests,'' prohibits an employee from participating in an 
official government capacity in a matter in which he has a financial 
interest or in which his spouse, minor child, employer, or any one of 
several other specified persons has a financial interest. The second 
provision, entitled ``Prohibited financial interests,'' contains 
authority by which agencies may prohibit employee from acquiring or 
retaining certain financial interests. To address the security 
concerns, the Program uses the current process, in which the USAID 
Office of

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Security and Department of State, Office of Security conduct background 
checks on potential personal service contractors. Recognizing the fact 
that some countries may not have adequate legal systems or may be 
unwilling to provide assistance in prosecuting their citizens for U.S. 
procurement infractions, the CCN PSC Warrant Program established the 
following management controls designed to minimize the risk that such 
legal actions might be necessary:

--Stringent eligibility criteria,
--Reasonable single purchase and cumulative annual limits for new 
awards.
--CCN participation in this program is limited to one candidate per 
contracting officer warrant level per overseas mission. This limitation 
may be expanded only if it is deemed by the Senior Procurement 
Executive to be in the best interest of the Agency.
--Ongoing risk assessments are performed throughout the Program 
implementation to assure compliance with the program requirements.

    USAID is seeking public comments on the proposed changes to the 
AIDAR to implement the agency CCN PSC Warrant Program.

C. Impact Assessment

    (1) Regulatory Planning and Review. Under E.O. 12866, USAID must 
determine whether a regulatory action is ``significant'' and therefore 
subject to the requirements of the E.O. and subject to review by the 
Office of Management and Budget (OMB). USAID has determined that this 
Rule is not an ``economically significant regulatory action'' under 
Section 3(f)(1) of E.O. 12866. This proposed rule is not a major rule 
under 5 U.S.C. 804.
    (2) Regulatory Flexibility Act. The rule will not have an impact on 
a substantial number of small entities within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Therefore, an Initial 
Regulatory Flexibility Analysis has not been performed.
    (3) Paperwork Reduction Act. The proposed rule does not establish a 
new collection of information that requires the approval of the Office 
of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 
chapter 35).

List of Subjects in 48 CFR Chapter 7 Parts 701, 722 and Appendix J

    Government procurement.

    For the reasons discussed in the preamble, USAID amends 48 CFR 
Chapter 7 as set forth below:

0
1. The authority citation for 48 CFR Chapter 7 parts 701, 722 and 
Appendix J continues to read as follows:

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 
2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3 CFR 
1979 Comp., p. 435.

PART 701--FEDERAL ACQUISITION REGULATION SYSTEM

Subpart 701.6--Career Development, Contracting Authority, And 
Responsibilities

0
2. Amend 701.603-70 by adding two sentences to the end to read as 
follows:


701.603-70  Designation of contracting officers.

     * * * However, upon approval of an exception by the Assistant 
Administrator for the Bureau for Management (AA/M), in accordance with 
the limitations in AIDAR Appendix D, the Senior Procurement Executive 
may designate a USPSC as a Contracting Officer or delegate the USPSC 
authority to sign obligating and subobligating documents. The Senior 
Procurement Executive may also delegate limited contracting officer 
authority to Cooperating Country National personal service contractors 
(CCN PSCs) who meet the requirements in the Agency's warrant program 
for CCN PSCs, as specified in Appendix J.

PART 722--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION

Subpart 722.1--Basic Labor Policies

0
3. Amend 722.170 by adding two sentences at the end of paragraph(a) to 
read as follows:


722.170  Employment of third country nationals (TCN's) and cooperating 
country nationals (CCN's).

    (a) * * * This policy does not apply to consultants, as defined in 
AIDAR Clause 752.202-1(e), who are engaged to advise the contractor on 
a temporary or intermittent basis and do not receive standard benefits 
available to the contractor's employees. It is the contractor's 
responsibility to identify if the individual being hired is an employee 
or a consultant.
* * * * *
0
4. Revise paragraphs (b)(3)b. and (b)(4) to read as follows:

Appendix J to Chapter 7--Direct USAID Contracts With a Cooperating 
Country National and With a Third Country National for Personal 
Services Abroad

4--Policy

* * * * *
    (b) Limitations on Personal Services Contracts.
    (3) * * *
    b. They may not be designated as Contracting Officers or 
delegated authority to sign obligating or subobligating documents, 
unless specifically delegated limited contracting officer authority 
by the Senior Procurement Executive. In order to be delegated 
limited contracting officer authority, Cooperating Country National 
PSCs (CCN PSCs) must meet the requirements in the Agency's warrant 
program for CCN PSCs.
* * * * *
    (4) Exceptions. Exceptions to the limitations in (b)(3)(a), (c), 
(d) and (e) must be approved by the Assistant Administrator for 
Management (AA/M).
* * * * *

    Dated: July 27, 2016.
Roy Plucknett,
Chief Acquisition Officer.

[FR Doc. 2016-19709 Filed 8-18-16; 8:45 am]
 BILLING CODE 6116-01-P