[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)]
[Proposed Rules]
[Pages 6425-6429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00752]


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DEPARTMENT OF HOMELAND SECURITY

48 CFR Parts 3001, 3002, 3024, and 3052

[Docket No. DHS-2017-0008]
RIN 1601-AA79


Homeland Security Acquisition Regulation (HSAR); Privacy Training 
(HSAR Case 2015-003)

AGENCY: Office of the Chief Procurement Officer, Department of Homeland 
Security (DHS).

ACTION: Proposed rule.

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SUMMARY: DHS is proposing to amend the Homeland Security Acquisition 
Regulation (HSAR) to add a new subpart, update an existing clause, and 
add a new contract clause to require contractors to complete training 
that addresses the protection of privacy, in accordance with the 
Privacy Act of 1974, and the handling and safeguarding of Personally 
Identifiable Information and Sensitive Personally Identifiable 
Information.

DATES: Interested parties should submit written comments to one of the 
addresses shown below on or before March 20, 2017, to be considered in 
the formation of the final rule.

ADDRESSES: Submit comments identified by HSAR Case 2015-003, Privacy 
Training, using any of the following methods:
     Regulations.gov: http://www.regulations.gov.
    Submit comments via the Federal eRulemaking portal by entering 
``HSAR Case 2015-003'' under the heading ``Enter Keyword or ID'' and 
selecting ``Search.'' Select the link ``Submit a Comment'' that 
corresponds with ``HSAR Case 2015-003.'' Follow the instructions 
provided at the ``Submit a Comment'' screen. Please include your name, 
company name (if any), and ``HSAR Case 2015-003'' on your attached 
document.
     Fax: (202) 447-0520
     Mail: Department of Homeland Security, Office of the Chief 
Procurement Officer, Acquisition Policy and Legislation, ATTN: Ms. 
Candace Lightfoot, 245 Murray Drive, Bldg. 410 (RDS), Washington, DC 
20528.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check http://www.regulations.gov, approximately two to three days after submission 
to verify posting (except allow 30 days for posting of comments 
submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Candace Lightfoot, Procurement 
Analyst, DHS, Office of the Chief Procurement Officer, Acquisition 
Policy and Legislation at (202) 447-0882 or email [email protected]. When 
using email, include HSAR Case 2015-003 in the ``Subject'' line.

SUPPLEMENTARY INFORMATION:

I. Background

    DHS contracts currently require contractor and subcontractor 
employees to complete privacy training before accessing a Government 
system of records; handling Personally Identifiable Information (PII) 
or Sensitive PII (SPII); or designing, developing, maintaining, or 
operating a Government system of records. This training is completed 
upon award of the procurement and at least annually thereafter.
    DHS is proposing to (1) include Privacy training requirements in 
the HSAR and (2) make the training more easily accessible by hosting it 
on a public Web site. This approach ensures all applicable DHS 
contractors and subcontractors are subject to the same requirements 
while removing the need for Government intervention to provide access 
to the Privacy training.
    This proposed rule standardizes the Privacy training requirement 
across all DHS contracts by amending the HSAR to:
    (1) Add the terms ``personally identifiable information'' and 
``sensitive personally identifiable information'' at HSAR 3002.1, 
Definitions. The definition of ``personally identifiable information'' 
is taken from OMB Circular A-130 Managing Information as a Strategic 
Resource,\1\ published July 27, 2016. The definition of ``sensitive 
personally identifiable information'' is derived from the DHS lexicon, 
Privacy Incident Handling Guidance, and the Handbook for Safeguarding 
Sensitive Personally Identifiable Information. These definitions are 
necessary because these terms appear in proposed HSAR 3024.70, Privacy 
Training and HSAR 3052.224-7X, Privacy Training.
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    \1\ OMB Circular A-130 Managing Information as a Strategic 
Resource is accessible at https://www.whitehouse.gov/sites/default/files/omb/assets/OMB/circulars/a130/a130revised.pdf.
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    (2) Add a new subpart at HSAR 3024.70, Privacy Training addressing 
the requirements for privacy training. HSAR 3024.7001, Scope identifies 
the applicability of the subpart to contracts and subcontracts. HSAR 
3024.7002, Definitions defines the term ``handling.'' The definition of 
``handling'' was developed based upon a review of definitions for the 
term developed by other Federal agencies. HSAR 3024.7003, Policy 
identifies when contractors and subcontracts are required to complete 
the DHS privacy training. This subsection also requires the submission 
of training completion certificates for all contractor and 
subcontractor employees as a record of compliance. HSAR 3024.7004, 
Contract Clause, identifies when Contracting Officers must insert HSAR 
3052.224-7X Privacy Training in solicitations and contracts. DHS 
welcomes respondents to offer their views on the following questions in 
particular:
    A. What burden, if any, is associated with the requirement to 
complete DHS-developed privacy training?
    B. What value, if any, is associated with providing industry the 
flexibility to develop its own privacy training given a unique set of 
Government requirements?
    (3) Amend sub paragraph (b) of the HSAR 3052.212-70, Contract Terms 
and Conditions Applicable to DHS Acquisition of Commercial Items to add 
HSAR 3052.224-7X, Privacy Training. This change is necessary because 
HSAR 3052.224-7X is applicable to the acquisition of commercial items; 
and
    (4) Add a new subsection at HSAR 3052.224-7X, Privacy Training to 
provide the text of the proposed clause. The proposed clause requires 
contractor and subcontractor employees to complete privacy training 
before accessing a Government system of records; handling Personally 
Identifiable Information (PII) or Sensitive PII (SPII); or designing, 
developing, maintaining, or operating a Government system of records. 
The training shall be completed within thirty (30) days of contract 
award and on an annual basis thereafter. The contractor shall maintain 
copies of training certificates for all contractor and subcontractor 
employees as a record of compliance and provide copies of the training 
certificates to the contracting officer. Subsequent training 
certificates to satisfy the annual privacy training requirement shall 
be submitted via email notification not later than October 31st of each 
year. The contractor shall attach training certificates to the email

[[Page 6426]]

notification and the email notification shall state that the required 
training has been completed for all contractor and subcontractor 
employees.
    These proposed revisions to the HSAR are necessary to ensure 
contractors and subcontractors properly handle PII and SPII. This 
includes PII and SPII contained in a system of records consistent with 
subsection (e) Agency requirements, and subsection (m) Government 
contractors, of the Privacy Act of 1974, Section 552a of title 5, 
United States Code (5 U.S.C. 552a).
    Other applicable authorities that address the responsibility for 
Federal agencies to ensure appropriate handling and safeguarding of PII 
include the following Office of Management and Budget (OMB) memoranda 
and policies: OMB Memorandum M-07-16, ``Safeguarding Against and 
Responding to the Breach of Personally Identifiable Information'' 
issued May 22, 2007; OMB Memorandum M-10-23, ``Guidance for Agency Use 
of Third-Party Web sites and Applications'' issued June 25, 2010 (this 
memorandum contains the most current definition of PII, and clarifies 
the definition provided in M-07-16); OMB Circular No. A-130 ``Managing 
Information as a Strategic Resource,'' which identifies significant 
requirements for safeguarding and handling PII and reporting any theft, 
loss, or compromise of such information. DHS has also developed 
internal guidance that addresses the handling and protection of PII, 
including the DHS Privacy Incident Handling Guidance and the DHS 
Handbook for Safeguarding Sensitive Personally Identifiable 
Information. The DHS Privacy Incident Handling Guidance informs DHS and 
its components, employees, senior officials, and contractors of their 
obligation to protect PII, and establishes policies and procedures 
defining how they must respond to the potential loss or compromise of 
PII. The DHS Handbook for Safeguarding Sensitive Personally 
Identifiable Information sets minimum standards for how DHS personnel 
and contractors should handle SPII in paper and electronic form during 
their work activities.
    This proposed rule is part of a broader initiative within DHS to 
(1) ensure contractors understand their responsibilities with regard to 
safeguarding controlled unclassified information (CUI); (2) contractor 
and subcontractor employees complete information technology (IT) 
security awareness training before access is provided to DHS 
information systems and information resources or contractor-owned and/
or operated information systems and information resources where CUI is 
collected, processed, stored or transmitted on behalf of the agency; 
(3) contractor and subcontractor employees sign the DHS RoB before 
access is provided to DHS information systems, information resources, 
or contractor-owned and/or operated information systems and information 
resources where CUI is collected, processed, stored or transmitted on 
behalf of the agency; and (4) contractor and subcontractor employees 
complete privacy training before accessing a Government system of 
records; handling personally identifiable information (PII) and/or 
sensitive PII information; or designing, developing, maintaining, or 
operating a system of records on behalf of the Government.

II. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is a significant regulatory action and, therefore, was subject to 
review under section 6(b) of E.O. 12866, Regulatory Planning and 
Review, dated September 30, 1993. This rule is not a major rule under 5 
U.S.C. 804. DHS has included a discussion of the estimated costs and 
benefits of this rule in the Paperwork Reduction Act supporting 
statement, which can be found in the docket for this rulemaking.

III. Regulatory Flexibility Act

    DHS expects this proposed rule may 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., because the proposed rule 
requires contractor and subcontractor employees to be properly trained 
on the requirements, applicable laws, and appropriate safeguards 
designed to ensure the security and confidentiality of PII before 
access a Government system of records; handle PII or SPII; or design, 
develop, maintain, or operate a system of records on behalf of the 
Government. Although the Privacy Act of 1974 has been in place for over 
40 years, the rapidly changing information security landscape requires 
the Federal government to strengthen its contracts to ensure that 
contractor and subcontractor employees comply with the Act and are 
aware of their responsibilities for safeguarding PII and SPII. 
Therefore, an Initial Regulatory Flexibility Analysis (IRFA) has been 
prepared consistent with 5 U.S.C. 603, and is summarized as follows:

1. Description of the Reasons Why Action by the Agency Is Being Taken

    DHS is proposing to amend the HSAR to require all contractor and 
subcontractor employees that will have access to a Government system of 
records; handle PII or SPII; or design, develop, maintain, or operate a 
system of records on behalf of the Government, complete training that 
addresses the requirements for the protection of privacy and the 
handling and safeguarding of PII and SPII. The purpose of this proposed 
rule is to require contractors to identify its employees who require 
access, ensure that those employees complete privacy training before 
being granted access and annually thereafter, provide the Government 
evidence of the completed training, and maintain evidence of completed 
training in accordance with the records retention requirements of the 
contract.

2. Succinct Statement of the Objectives of, and Legal Basis for, the 
Rule

    The objective of this rule is to require contractor and 
subcontractor employees to complete Privacy training before accessing a 
Government system of records; handling PII and/or SPII; or designing, 
developing, maintaining, or operating a Government system of records. 
This proposed rule requires contractors to identify who will be 
responsible for completing privacy training, and to emphasize and 
create awareness of the critical importance of privacy training in an 
effort to reduce the occurrences of privacy incidents.
    The training imposed by this proposed rule is required by the 
provisions of the Privacy Act (5 U.S.C. 552a), Title III of the E-
Government Act of 2002 and the Federal Information Security 
Modernization Act (FISMA) of 2014. This proposed rule requires 
contractors to identify its employees and subcontractor employees who 
require access to PII and SPII, ensure that those employees complete 
privacy training before being granted access to such information and 
annually thereafter, provide the Government evidence of the completed 
training, and maintain evidence of completed training.

[[Page 6427]]

3. Description of and, Where Feasible, Estimate of the Number of Small 
Entities To Which the Rule Will Apply

    This proposed rule will apply to contractor and subcontractor 
employees who require access to a Government system of records; handle 
PII or Sensitive PII; or design, develop, maintain, or operate a system 
of records on behalf of the Government. The estimated number of small 
entities to which the rule will apply is 6,628 respondents of which 
4,162 are projected to be small businesses.
    This estimate is based on a review and analysis of internal DHS 
contract data and Fiscal Year (FY) 2014 data reported to the Federal 
Procurement Data System (FPDS). It is anticipated that this rule will 
be primarily applicable to procurement actions with a Product and 
Service Code (PSC) of ``D'' Automatic Data Processing and 
Telecommunication and ``R'' Professional, Administrative and Management 
Support. PSCs will be adjusted as additional data becomes available 
through HSAR clause implementation to validate future burden 
projections.

4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Rule, Including an Estimate of the 
Classes of Small Entities Which Will Be Subject to the Requirement and 
the Type of Professional Skills Necessary

    The projected reporting and recordkeeping associated with this 
proposed rule is kept to the minimum necessary to meet the overall 
objectives. DHS minimized the burden associated with this proposed rule 
by developing the training and making it publicly accessible at http://www.dhs.gov/dhs-security-and-training-requirements-contractors. DHS has 
also minimized burden by providing automatically generated certificates 
at the conclusion of the training. Training shall be completed within 
thirty (30) days of contract award and on an annual basis thereafter. 
Initial training certificates for each contractor and subcontractor 
employee shall be provided to the Government not later than thirty (30) 
days after contract award. Subsequent training certificates to satisfy 
the annual privacy training requirement shall be submitted via email 
notification not later than October 31st of each year. The contractor 
shall attach training certificates to the email notification and the 
email notification shall state that the required training has been 
completed for all contractor and subcontractor employees and include 
copies of the training certificates.

5. Identification, to the Extent Practicable, of All Relevant Federal 
Rules Which May Duplicate, Overlap, or Conflict With the Rule

    There are no rules that duplicate, overlap or conflict with this 
rule.

6. Description of Any Significant Alternatives to the Rule Which 
Accomplish the Stated Objectives of Applicable Statutes and Which 
Minimize Any Significant Economic Impact of the Rule on Small Entities

    There are no practical alternatives that will accomplish the 
objectives of the proposed rule.
    DHS will be submitting a copy of the IRFA to the Chief Counsel for 
Advocacy of the Small Business Administration. A copy of the IRFA may 
be obtained from the point of contact specified herein. DHS invites 
comments from small business concerns and other interested parties on 
the expected impact of this rule on small entities.
    DHS will also consider comments from small entities concerning the 
existing regulations in subparts affected by this rule in accordance 
with 5 U.S.C. 610. Interested parties must submit such comments 
separately and should cite 5 U.S.C. 610 (HSAR Case 2015-003), in 
correspondence.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies because 
this proposed rule contains information collection requirements. 
Accordingly, DHS will be submitting a request for approval of a new 
information collection requirement concerning this rule to the Office 
of Management and Budget under 44 U.S.C. 3501, et seq.
    A. Public reporting burden for this collection of information is 
estimated to be approximately 30 minutes (.50 hours) per response to 
comply with the requirements, including time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The total annual projected number of 
responses per respondent is estimated at four (4). The estimated annual 
total burden hours are as follows:
    Title: Homeland Security Acquisition Regulation: Privacy Training.
    Type of Request: New Collection.
    Number of Respondents: 6,628.
    Responses per Respondent: 4.
    Annual Responses: 26,512.
    Average Burden per Response: Approximately 0.50.
    Annual Burden Hours: 13,256.
    Needs and Uses: DHS needs the information required by 3052.224-7X, 
Privacy Training to properly track contractor compliance with the 
training requirements identified in the clause.
    Affected Public: Businesses or other for-profit institutions.
    Respondent's Obligation: Required to obtain or retain benefits.
    Frequency: Upon award of procurement and annually thereafter.
    B. Request for Comments Regarding Paperwork Burden.
    You may submit comments identified by DHS docket number [DHS-2017-
0008], including suggestions for reducing this burden, not later than 
March 20, 2017 using any one of the following methods:
    (1) Via the internet at Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
    (2) Via email to the Department of Homeland Security, Office of the 
Chief Procurement Officer, at [email protected].
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the HSAR, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    Requesters may obtain a copy of the supporting statement from the 
Department of Homeland Security, Office of the Chief Procurement 
Officer, Acquisition Policy and Legislation, via email to 
[email protected]. Please cite OMB Control No. 1600-0022 Privacy Training 
and Information Security Training, in the ``Subject'' line.

List of Subjects in 48 CFR Parts 3001, 3002, 3024 and 3052

    Government procurement.

    Therefore, DHS proposes to amend 48 CFR parts 3001, 3002, 3024 and 
3052 to read as follows:

0
1. The authority citation for 48 CFR parts 3001, 3002, 3024, and 3052 
is revised to read as follows:

    Authority:  5 U.S.C. 301-302, 41 U.S.C. 1707, 41 U.S.C. 1702, 41 
U.S.C. 1303(a)(2), 48 CFR part 1, subpart 1.3, and DHS Delegation 
Number 0702.

[[Page 6428]]

PART 3001--FEDERAL ACQUISITION REGULATIONS SYSTEM

Subpart 3001.1--Purpose, Authority, Issuance

0
2. Amend section 3001.106 by revising paragraph (a) to add a new OMB 
Control Number as follows:


3001.106   OMB Approval under the Paperwork Reduction Act.

    (a) * * *

OMB Control No. 1600-0022 (Privacy Training)
* * * * *

PART 3002--DEFINITIONS OF WORDS AND TERMS

0
3. Amend section 3002.101 by adding, in alphabetical order, the 
definitions: for ``Personally Identifiable Information (PII),'' and 
``Sensitive Personally Identifiable Information (SPII)'' to read as 
follows:
* * * * *
    ``Personally Identifiable Information (PII)'' means information 
that can be used to distinguish or trace an individual's identity, 
either alone or when combined with other information that is linked or 
linkable to a specific individual.
* * * * *
    ``Sensitive Personally Identifiable Information (SPII)'' is a 
subset of PII, which if lost, compromised or disclosed without 
authorization, could result in substantial harm, embarrassment, 
inconvenience, or unfairness to an individual. Some forms of PII are 
sensitive as stand-alone elements.
    (1) Examples of stand-alone SPII include: Social Security numbers 
(SSN), driver's license or state identification number, Alien 
Registration Numbers (A-number), financial account number, and 
biometric identifiers such as fingerprint, voiceprint, or iris scan.
    (2) Additional examples of SPII include any groupings of 
information that contain an individual's name or other unique 
identifier plus one or more of the following elements:
    (i) Truncated SSN (such as last 4 digits)
    (ii) Date of birth (month, day, and year)
    (iii) Citizenship or immigration status
    (iv) Ethnic or religious affiliation
    (v) Sexual orientation
    (vi) Criminal history
    (vii) Medical information
    (viii) System authentication information such as mother's maiden 
name, account passwords or personal identification numbers (PIN)
    (3) Other PII may be SPII depending on its context, such as a list 
of employees and their performance ratings or an unlisted home address 
or phone number. In contrast, a business card or public telephone 
directory of agency employees contains PII but is not SPII.

PART 3024--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

0
4. Amend part 3024 by adding subpart 3024.70:

Subpart 3024.70--Privacy Training

3024.7001 Scope.
3024.7002 Definitions.
3024.7003 Policy.
3024.7004 Contract Clause.


3024.7001   Scope.

    This section applies to contracts and subcontracts where contractor 
and subcontractor employees require access to a Government system of 
records; handle Personally Identifiable Information (PII) or Sensitive 
PII (SPII); or design, develop, maintain, or operate a Government 
system of records.


3024.7002   Definitions.

As used in this subpart--
    ``Handling'' means any use of Personally Identifiable Information 
(PII) or Sensitive PII (SPII), including but not limited to marking, 
safeguarding, transporting, disseminating, re-using, storing, 
capturing, and disposing of the information.


3024.7003   Policy.

    (a) Contractors are responsible for ensuring that contractor and 
subcontractor employees complete DHS privacy training initially upon 
award of the procurement, and at least annually thereafter, before 
contractor and subcontractor employees--
    (1) Access to a Government system of records;
    (2) Handle PII or SPII; or
    (3) Design, develop, maintain, or operate a system of records on 
behalf of the Government.
    (b) The contractor shall ensure employees identified in paragraph 
(a) of this section complete the required training, maintain evidence 
that the training has been completed and provide copies of the training 
completion certificates to the Contracting Officer and/or Contracting 
Officer's Representative for inclusion in the contract file.
    (c) Each contractor and subcontractor employee who requires access 
to a Government system of records; handles PII or SPII; or designs, 
develops, maintains, or operates a Government system of records, shall 
be granted access or allowed to retain such access only if the 
individual has completed Department of Homeland Security privacy 
training requirements.


3024.7004   Contract Clause.

    Contracting officers shall insert the clause at (HSAR) 48 CFR 
3052.224-7X, Privacy Training, in solicitations and contracts when 
contractor and subcontractor employees may have access to a Government 
system of records; handle PII or SPII; or design, develop, maintain, or 
operate a system of records on behalf of the Government.

PART 3052--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
5. Amend paragraph (b) of section 3052.212-70 to add 3052.224-7X 
Privacy Training as follows:


3052.212-70   Contract terms and conditions applicable to DHS 
acquisition of commercial items.

Contract Terms and Conditions Applicable to DHS Acquisition of 
Commercial Items (DATE)

* * * * *
    (b) * * *

    ___3052.224-7X Privacy Training

0
6. Amend part 3052 by adding section 3052.224-7X Privacy Training, to 
read as follows:


3052.224-7X   Privacy training.

    As prescribed in (HSAR) 48 CFR 3024.7004 contract clause, insert 
the following clause:

Privacy Training (DATE)

    (a) The Contractor shall ensure that all Contractor and 
subcontractor employees complete the Department of Homeland Security 
(DHS) training titled, Privacy at DHS: Protecting Personally 
Identifiable Information accessible at http://www.dhs.gov/dhs-security-and-training-requirements-contractors, before such 
employees--
    (1) Access a Government system of records;
    (2) Handle personally identifiable information or sensitive 
personally identifiable information; or
    (3) Design, develop, maintain, or operate a system of records on 
behalf of the Government.
    (b) Training shall be completed within thirty (30) days of 
contract award and be completed on an annual basis thereafter not 
later than October 31st of each year. Any new Contractor or 
subcontractor employees assigned to the contract shall complete the 
training before accessing the information identified in paragraph 
(a) of this clause. The Contractor shall maintain copies of the 
training certificates for all Contractor and subcontractor employees 
as a record of compliance. Initial training certificates for each 
Contractor and subcontractor employee

[[Page 6429]]

shall be provided to the Contracting Officer and/or Contracting 
Officer's Representative (COR) via email notification not later than 
thirty (30) days after contract award or assignment to the contract. 
Subsequent training certificates to satisfy the annual training 
requirement shall be submitted to the Contracting Officer and/or COR 
via email notification not later than October 31st of each year. The 
Contractor shall attach training certificates to the email 
notification and the email notification shall list all Contractor 
and subcontractor employees required to complete the training and 
state the required Privacy training has been completed for all 
Contractor and subcontractor employees.
    (c) The Contractor shall insert the substance of this clause in 
all subcontracts and require subcontractors to include this clause 
in all lower-tier subcontracts.


(End of clause)

Soraya Correa,
Chief Procurement Officer, Department of Homeland Security.
[FR Doc. 2017-00752 Filed 1-18-17; 8:45 am]
 BILLING CODE 9110-9B-P