[Federal Register Volume 84, Number 169 (Friday, August 30, 2019)]
[Rules and Regulations]
[Pages 45679-45683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18524]



[[Page 45679]]

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DEPARTMENT OF VETERANS AFFAIRS

48 CFR Parts 801, 823, 824, 826, 836, 843, and 852

RIN 2900-AQ24


VA Acquisition Regulation: Environment, Energy and Water 
Efficiency, Renewable Energy Technologies, Occupational Safety, and 
Drug-Free Workplace; Protection of Privacy and Freedom of Information; 
Other Socioeconomic Programs; and Contract Modifications

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending and 
updating its VA Acquisition Regulation (VAAR) in phased increments to 
revise or remove any policy superseded by changes in the Federal 
Acquisition Regulation (FAR), to remove procedural guidance internal to 
VA into the VA Acquisition Manual (VAAM), and to incorporate any new 
agency specific regulations or policies. These changes seek to align 
the VAAR with the FAR and remove outdated and duplicative requirements 
and reduce burden on contractors. The VAAM incorporates portions of the 
removed VAAR as well as other internal agency acquisition policy. VA 
will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are 
rewritten, VA will publish them in the Federal Register. In particular, 
this rulemaking adds or revises VAAR coverage concerning Environment, 
Energy and Water Efficiency, Renewable Energy Technologies, 
Occupational Safety, and Drug-Free Workplace; Protection of Privacy and 
Freedom of Information; Other Socioeconomic Programs; and Contract 
Modifications, as well as affected parts covering Department of 
Veterans Affairs Acquisition Regulation System, Construction and 
Architect-Engineer Contracts and Solicitation Provisions and Contract 
Clauses.

DATES: This rule is effective on September 30, 2019.

FOR FURTHER INFORMATION CONTACT: Mr. Rafael N. Taylor, Senior 
Procurement Analyst, Procurement Policy and Warrant Management 
Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-
2787. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On November 29, 2018, VA published a 
proposed rule in the Federal Register (83 FR 61365) which announced 
VA's intent to amend regulations for VAAR Case RIN 2900-AQ24--
Environment, Energy and Water Efficiency, Renewable Energy 
Technologies, Occupational Safety, and Drug-Free Workplace; Protection 
of Privacy and Freedom of Information; Other Socioeconomic Programs; 
and Contract Modifications. VA provided a 60-day comment period for the 
public to respond to the proposed rule and submit comments. The comment 
period for the proposed rule ended on January 28, 2019 and VA received 
3 comments from two commenters. This rule adopts as a final rule, with 
changes, the proposed rule published in the Federal Register on 
November 29, 2018, with minor formatting and/or grammatical edits, as 
well as the non-substantive changes described below.
    In particular, this final rule adds part 823, Environment, Energy 
and Water Efficiency, Renewable Energy Technologies, Occupational 
Safety, and Drug-Free Workplace. This final rule adds 823.103-70, 
Policy, to give contracting officers the option to include an 
evaluation factor for an offeror's Sustainable Action Plan when 
acquiring products and services.
    This rule adds 823.103-71, Solicitation provision, which prescribes 
use of a new provision at 852.223-70, Instruction to Offerors--
Sustainable Acquisition Plan, when the contracting officer requires an 
offeror to submit a Sustainable Action Plan with its proposal.
    In subpart 823.3, Hazardous Material Identification and Material 
Safety Data, this regulatory action adds 823.300, Scope of subpart, and 
823.303-70, Contract clause, to prescribe the use of clause 852.223-71, 
Safety and Health, for use in administering safety and health 
requirements in solicitations and contracts for research, development, 
or test projects; transportation of hazardous materials; and 
construction.
    This rule, under VAAR part 824, Protection of Privacy and Freedom 
of Information, adds 824.103, Procedures, to implement the procedures 
in FAR 24.103, by citing specific VA Handbooks in solicitations and 
contracts that require the design, development, or operation of a 
system of records; and by requiring the contracting officer to include 
in Statements of Work and Performance Work Statements procedures to 
follow in the event of a Personally Identifiable Information (PII) 
breach.
    This final rule revises 824.203, Policy, to add coverage advising 
the public that the VA FOIA Service Office handles all Freedom of 
Information Act (FOIA) requests, and to provide the centralized website 
and a link to the list of FOIA contacts where FOIA requests can be 
submitted electronically.
    This rule adds part 826--Other Socioeconomic Programs, with a 
single subpart 826.2, Disaster or Emergency Assistance Activities. This 
part includes 826.202-1, Local area set-aside, to require the 
contracting officer to determine whether a local area set-aside should 
be further restricted to verified Service-Disabled Veteran-Owned Small 
Businesses (SDVOSB) or Veteran-Owned Small Businesses (VOSB), because, 
while the FAR allows further restriction to socioeconomic programs in 
FAR part 19, it does not mention the VA specific requirements under 38 
U.S.C. 8127 and 8128. This regulatory action also adds 826.202-2, 
Evaluation preference, which has been revised on the basis of a public 
comment as described below.
    This rule adds part 843, Contract Modifications, with a single 
subpart 843.2, Change Orders. This final rule adds 843.205, Contract 
clauses, which provides contracting officers with guidance for 
establishing the number of days (up to 60 days), the contractor may be 
granted to assert its right to an equitable adjustment within the 
Changes clause. This rule also adds 843.205-70, Contract changes--
supplement, which prescribes the use of the clause 852.243-70, 
Construction Contract Changes--Supplement, (formerly numbered 852.236-
88), which has been revised and moved to this part from VAAR 836.578.

Technical Non-Substantive Change to the Proposed Rule

    This final rule makes three technical non-substantive changes:
    At section 823.103-70, Policy, VA has removed specific examples of 
the types of products or services which might be classified 
``sustainable'' products and services as it is unnecessary to list out 
all the possible types of products or services and FAR subpart 23.1 
provides sufficient guidance.
    Under sections 823.303-70, Contract clause, and 852.223-71, Safety 
and Health, VA has removed the term ``hazardous operations'' because 
the term is unnecessary.
    VA is no longer proposing to add section 823.103-72, Contract file, 
which would have required the contracting officer to place the 
contractor's final Sustainable Acquisition Plan, if one is required, 
into the official contract file. This information is procedural in 
nature and has been moved to the VAAM.
    VA provided a 60-day comment period for the public to respond to 
the proposed rule. As stated previously, VA received 3 comments from 
two

[[Page 45680]]

commenters. The issues raised in the comments as well as the changes 
made to the proposed rule based on those comments are provided as 
follows:
    The commenter believes the proposed language in VAAR 826.202-2 
creates confusion regarding the contracting officer's obligations to 
evaluate and give preference to SDVOSBs and VOSBs in procurements not 
set aside for SDVOSBs or VOSBs. The commenter states that ``VA should 
not use the phrase ``shall consider'' because this suggests that VA 
contracting officers have discretion in whether to provide evaluation 
preferences for SDVOSBs and VOSBs, which they do not.'' The commenter 
recommends that the VA change the language at 826.202-2 to alleviate 
any confusion it may cause.
    VA concurs with the recommendation and has revised 826.202-2, 
Evaluation preference, to reflect that contracting officers shall 
include evaluation factors in accordance with VAAR 815.304 and the 
evaluation criteria clause prescribed at 815.304-71(a): 852.215-70, 
Service-Disabled Veteran-Owned and Veteran-Owned Small Business 
Evaluation Factors.
    The commenter also recommends that VA should revise the proposed 
VAAR 815.304-71(a), which currently states that contracting officers 
shall insert VAAR 852.215-70, SDVOSB and VOSB Evaluation Factors, in 
competitively negotiated solicitations that are not set aside for 
SDVOSBs or VOSBs.
    VA appreciates the comment and it is VA policy that SDVOSBs have 
priority over VOSBs when contracting under the authority of 38 U.S.C. 
8127(i). However, the intent of the evaluation preference is to provide 
additional preference to veteran-owned small businesses when a 
procurement is performed outside of the authority under 38 U.S.C. 8127. 
This is in recognition of the requirement in 38 U.S.C. 8128(a) that 
small business concerns ``owned and controlled by veterans'' have a 
priority over other small businesses. 38 U.S.C. 8128(a) does not make a 
distinction between SDVOSB or VOSB. Therefore, the proposed language 
will remain unchanged.
    Another commenter takes exception to the coverage at 843 pertaining 
to undefinitized change orders. The commenter expressed concern that 
the proposed coverage would have allowed contracting officers to 
obligate funds in an amount less than the legal obligation created when 
a contract modification is issued and requested that VA provide 
clarification on this matter.
    VA appreciates the comment and after careful consideration, VA has 
removed 843.204-70, Definitization of unpriced change orders, on the 
basis that the FAR has sufficient coverage in this area and to 
alleviate any confusion.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal Governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal Governments or on the private sector.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507) requires 
that VA consider the impact of paperwork and other information 
collection burdens imposed on the public. Under 44 U.S.C. 3507(a), an 
agency may not collect or sponsor the collection of information, nor 
may it impose an information collection requirement unless it displays 
a currently valid Office of Management and Budget (OMB) control number. 
See also 5 CFR 1320.8(b)(3)(vi).
    The information collection requirements for 852.236-88, which is 
currently prescribed by 836.578, is currently approved by OMB and has 
been assigned OMB control number 2900-0422. As a part of this final 
rule, this information collection has been submitted to OMB to revise 
the title, redesignate the collection and renumber the clause currently 
numbered as section 852.236-88, Contract Changes--Supplement. 
Accordingly, if approved, the clause would reflect the new designation 
and revised title as set forth in the preamble and the amendatory 
language of this final rule to read: 852.243-70, Construction Contract 
Changes--Supplement, as prescribed by 843.205-70, Contract changes--
supplement, under the associated OMB control number 2900-0422. The 
reference to the old number--852.236-88, would accordingly be removed. 
As required by the Paperwork Reduction Act of 1995 (at 44 U.S.C. 
3507(d)), VA has submitted these information collection amendments to 
OMB for its review and approval.

Regulatory Flexibility Act

    This final rule does not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. The overall impact of the 
rule is of benefit to small businesses owned by Veterans or service-
disabled Veterans as the VAAR is being updated to remove extraneous 
procedural information that applies only to VA's internal operating 
processes or procedures. VA estimates no cost impact to individual 
businesses will result from these rule updates. On this basis, the 
final rule does not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), 
this regulatory action is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Executive Orders 12866, 13563 and 13771

    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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866.
    VA's impact analysis can be found as a supporting document at 
http://www.regulations.gov, usually within 48 hours after the 
rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's website at 
http://www.va.gov/orpm by following the link for VA Regulations 
Published from FY 2004 Through Fiscal Year to Date. This final rule is 
not an E.O. 13771 regulatory action because this rule is not 
significant under E.O. 12866.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

List of Subjects

48 CFR Part 801

    Administrative practice and procedure, Government procurement, 
Reporting and recordkeeping requirements.

48 CFR Part 823

    Air pollution control, Drug abuse, Energy conservation, Government

[[Page 45681]]

procurement, Hazardous substances, Recycling, Water pollution control.

48 CFR Part 824

    Freedom of information, Government procurement, Privacy.

48 CFR Part 826

    Disaster assistance, Government procurement, Indians.

48 CFR Part 836

    Government procurement, Reporting and recordkeeping requirements.

48 CFR Part 843

    Government procurement.

48 CFR Part 852

    Government procurement, Reporting and recordkeeping requirements.

Signing Authority

    The Secretary of Veterans Affairs approved this document and 
authorized the undersigned to sign and submit the document to the 
Office of the Federal Register for publication electronically as an 
official document of the Department of Veterans Affairs. Robert L. 
Wilkie, Secretary, Department of Veterans Affairs, approved this 
document on August 23, 2019, for publication.

    Dated: August 23, 2019.
Michael P. Shores,
Director, Office of Regulation Policy & Management, Office of the 
Secretary, Department of Veterans Affairs.
    For the reasons set out in the preamble, VA amends 48 CFR parts 
801, 824, 836 and 852 and adds parts 823, 826, and 843 as follows:

PART 801--DEPARTMENT OF VETERANS AFFAIRS ACQUISITION REGULATION 
SYSTEM

0
1. The authority citation for part 801 continues to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1121; 41 U.S.C. 1303; 41 
U.S.C. 1702; and 48 CFR 1.301-1.304.

Subpart 801.1--Purpose, Authority, Issuance


801.106   [Amended]

0
2. In 801.106, in the table, under the columns titled ``48 CFR part or 
section where identified and described'' and ``Current OMB Control 
Number'':
    Revise the reference to ``852.236-88'' to read ``852.243-70''. The 
corresponding OMB Control Number 2900-0422 remains unchanged.

0
3. Part 823 is added to read as follows:

PART 823--ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE 
ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

Sec.
Subpart 823.1--Sustainable Acquisition Policy
823.103-70 Policy.
823.103-71 Solicitation provision.
Subpart 823.3--Hazardous Material Identification and Material Safety 
Data
823.300 Scope of subpart.
823.303-70 Contract clause.

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1702; and 48 CFR 1.301-
1.304.

Subpart 823.1--Sustainable Acquisition Policy


823.103-70   Policy.

    (a) For new contracts and orders above the micro-purchase 
threshold, contracting officers may insert a solicitation provision to 
include an evaluation factor for an offeror's Sustainable Acquisition 
Plan.
    (b) When a solicitation includes the provision at 852.223-70, 
Instruction to Offerors--Sustainable Acquisition Plan, offerors shall 
include a Sustainable Acquisition Plan in their technical proposal 
addressing the sustainable products and services for delivery under any 
resulting contract.


823.103-71   Solicitation provision.

    The contracting officer shall insert the provision at 852.223-70, 
Instruction to Offerors--Sustainable Acquisition Plan, in solicitations 
above the micro-purchase threshold.

Subpart 823.3--Hazardous Material Identification and Material 
Safety Data


823.300   Scope of subpart.

    This subpart provides a contract clause for use in administering 
safety and health requirements.


823.303-70   Contract clause.

    Contracting officers shall insert clause 852.223-71, Safety and 
Health, in solicitations and contracts that involve hazardous materials 
for the following types of requirements:
    (a) Research, development, or test projects.
    (b) Transportation of hazardous materials.
    (c) Construction.

PART 824--PROTECTION OF PRIVACY AND FREEDOM OF INFORMATION

0
4. The authority citation for part 824 is revised to read as follows:

    Authority:  5 U.S.C. 552a; 40 U.S.C. 121(c); 41 U.S.C. 1121(c); 
41 U.S.C. 1702; 38 CFR 1.550-1.562 and 1.575-1.584; and 48 CFR 
1.301-1.304.

0
5. Section 824.102 is revised to read as follows:


824.102   General.

    VA rules implementing the Privacy Act of 1974 are in 38 CFR 1.575 
through 1.584, Safeguarding Personal Information in Department of 
Veterans Affairs Records.

0
6. Section 824.103 is added to subpart 824.1 to read as follows:


824.103   Procedures.

    (c) The contracting officer shall reference the following documents 
in solicitations and contracts that require the design, development, or 
operation of a system of records--
    (1) VA Handbook 6500.6, Contract Security;
    (2) VA Handbook 6508.1, Procedures for Privacy Threshold Analysis 
and Privacy Impact Assessment;
    (3) VA Handbook 6510, VA Identity and Access Management--
    (i) The contracting officer will ensure that statements of work or 
performance work statements that require the design, development, or 
operation of a system of records include procedures to follow in the 
event of a Personally Identifiable Information (PII) breach; and
    (ii) The contracting officer shall ensure that Government 
surveillance plans for contracts that require the design, development, 
or operation of a system of records include monitoring of the 
contractor's adherence to Privacy Act/PII regulations. The assessing 
official should document contractor-caused breaches or other incidents 
related to PII in past performance reports. Such incidents include 
instances in which the contractor did not adhere to Privacy Act/PII 
contractual requirements.

Subpart 824.2--Freedom of Information Act

0
7. Section 824.203 is revised to read as follows:


824.203   Policy.

    (a) VA rules implementing the Freedom of Information Act (FOIA) are 
in 38 CFR 1.550 through 1.562.
    (b) Upon receipt of a request, the contracting officer shall 
provide the requester with the name of the cognizant VA FOIA Service 
Office. The VA FOIA Service Office (see http://www.oprm.va.gov/foia/) 
is the focal point for all FOIA requests and official information may 
only be released

[[Page 45682]]

through the cognizant FOIA Service or their authorized designee.

0
8. Part 826 is added to read as follows:

PART 826--OTHER SOCIOECONOMIC PROGRAMS

Sec.
Subpart 826.2--Disaster or Emergency Assistance Activities
826.202-1 Local area set-aside.
826.202-2 Evaluation preference.

    Authority:  38 U.S.C. 8127-8128; 40 U.S.C. 121(c); 41 U.S.C. 
1702; 38 CFR 1.550-1.562 and 1.575-1.584; and 48 CFR 1.301-1.304.

Subpart 826.2--Disaster or Emergency Assistance Activities


826.202-1   Local area set-aside.

    (c) The contracting officer shall determine whether a local area 
set-aside should be further restricted to verified Service-Disabled 
Veteran-Owned Small Businesses (SDVOSBs) or Veteran-Owned Small 
Businesses (VOSBs) pursuant to subpart 819.70.


826.202-2   Evaluation preference.

    Pursuant to 38 U.S.C. 8128, the contracting officer shall include 
evaluation factors in accordance with 815.304 and the evaluation 
criteria clause prescribed at 815.304-71(a), 852.215-70, Service-
Disabled Veteran-Owned and Veteran-Owned Small Business Evaluation 
Factors.

PART 836--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
9. The authority citation for part 836 continues to read as follows:

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3), 1303(a)(2) 
and 1702; and 48 CFR 1.301-1.304.


836.578   [Removed]

0
10. Section 836.578 is removed.

0
11. Part 843 is added to read as follows:

PART 843--CONTRACT MODIFICATIONS

Sec.
Subpart 843.2--Change Orders
843.205 Contract clauses.
843.205-70 Contract changes--supplement.

    Authority:  40 U.S.C. 121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 
1702; and 48 CFR 1.301-1.304.

Subpart 843.2--Change Orders


843.205   Contract clauses.

    As authorized in the introductory text of clauses FAR 52.243-1, 
Changes--Fixed-Price; FAR 52.243-2, Changes--Cost-Reimbursement; and 
FAR 52.243-4, Changes, and in the prescription at FAR 43.205(c) for FAR 
52.243-3, Changes--Time-and-Materials or Labor-Hours, the contracting 
officer may vary the period within which a contractor must assert its 
right to an equitable adjustment but the extended period shall not 
exceed 60 calendar days.


843.205-70   Contract changes--supplement.

    The contracting officer shall insert the clause at 852.243-70, 
Construction Contract Changes--Supplement, in solicitations and 
contracts for construction that are expected to exceed the micro-
purchase threshold for construction.

PART 852--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
12. The authority citation for part 852 is revised to read as follows:

    Authority:  38 U.S.C. 8127-8128, and 8151-8153; 40 U.S.C. 
121(c); 41 U.S.C. 1121(c)(3); 41 U.S.C. 1303; 41 U.S.C. 1702; and 48 
CFR 1.301-1.304.

0
13. Section 852.223-70 is added to read as follows:


852.223-70   Instructions to offerors--Sustainable Acquisition Plan.

    As prescribed in 823.103-71, when the Contracting Officer deems a 
Sustainable Acquisition Plan necessary, the Contracting Officer shall 
insert the following provision:

Instructions to Offerors--Sustainable Acquisition Plan (SEP 2019)

    Offerors shall include a Sustainable Acquisition Plan in their 
technical proposals. The plan must describe the approach and quality 
assurance mechanisms for applying FAR subpart 23.1, Sustainable 
Acquisition Policy and other Federal laws, regulations and Executive 
Orders governing sustainable acquisition. The plan shall clearly 
identify those products and services included in the proposal.
    (End of provision)

0
14. Section 852.223-71 is added to read as follows:


852.223-71   Safety and Health.

    As prescribed by 823.303-70, the Contracting Officer shall insert 
the following clause:

Safety and Health (SEP 2019)

    (a) To help ensure the protection of the life and health of all 
persons, and to help prevent damage to property, the Contractor 
shall comply with all Federal, State, and local laws and regulations 
applicable to the work being performed under this contract. These 
laws are implemented or enforced by the Environmental Protection 
Agency (EPA), Occupational Safety and Health Administration (OSHA) 
and other regulatory/enforcement agencies at the Federal, State, and 
local levels.
    (1) Additionally, the Contractor shall comply with the following 
regulations when developing and implementing health and safety 
operating procedures and practices for both personnel and facilities 
involving the use or handling of hazardous materials and the conduct 
of research, development, or test projects:
    (i) 29 CFR 1910.1030, Bloodborne pathogens; 29 CFR 1910.1450, 
Occupational exposure to hazardous chemicals in laboratories. These 
regulations are available at https://www.osha.gov/.
    (ii) Nuclear Regulatory Commission Standards and Regulations, 
pursuant to the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et 
seq.) Copies are available from the U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001.
    (2) The following Government guidelines are recommended for 
developing and implementing health and safety operating procedures 
and practices for both personnel and facilities:
    (i) Biosafety in Microbiological and Biomedical Laboratories, 
Centers for Disease Control and Prevention (CDC), available at 
http://www.cdc.gov/biosafety/publications/index.htm.
    (ii) Prudent Practices in the Laboratory, National Research 
Council, National Academy Press, Washington, DC 20001, available at 
http://www.nap.edu.
    (b)(1) The Contractor shall maintain an accurate record of, and 
promptly report to the Contracting Officer, all accidents or 
incidents resulting in the exposure of persons to toxic substances, 
hazardous materials; the injury or death of any person; or damage to 
property incidental to work performed under the contract resulting 
from toxic or hazardous materials and resulting in any or all 
violations for which the Contractor has been cited by any Federal, 
State or local regulatory/enforcement agency.
    (2) The report shall include a copy of the notice of violation 
and the findings of any inquiry or inspection, and an analysis 
addressing the impact these violations may have on the work 
remaining to be performed. The report shall also state the required 
action(s), if any, to be taken to correct any violation(s) noted by 
the Federal, State, or local regulatory/enforcement agency and the 
time frame allowed by the agency to accomplish the necessary 
corrective action.
    (c) If the Contractor fails or refuses to comply with the 
Federal, State or local regulatory/enforcement agency's directive(s) 
regarding any violation(s) and prescribed corrective action(s), the 
Contracting Officer may issue an order stopping all or part of the 
work until satisfactory corrective action (as approved by the 
Federal, State, or local regulatory/enforcement agencies) has been 
taken and documented to the Contracting Officer. No part of the time 
lost due to any such stop work order shall form the basis for a 
request for extension or costs or damages by the Contractor.
    (d) The Contractor shall insert this clause in each subcontract 
involving toxic substances or hazardous materials. The

[[Page 45683]]

Contractor is responsible for the compliance of its subcontractors 
with the provisions of this clause.
    (End of clause)


852.236-88   [Removed and Reserved]

0
15. Section 852.236-88 is removed and reserved.

0
16. Section 852.243-70 is added to read as follows:


852.243-70   Construction Contract Changes--Supplement.

    As prescribed in 843.205-70, the Contracting Officer shall insert 
this clause in solicitations and contracts for construction that are 
expected to exceed the micro-purchase threshold. The Contracting 
Officer shall fill in the number of days in which a Contractor must 
assert its right to an equitable adjustment; however, such amount shall 
not exceed 60 calendar days.

Construction Contract Changes--Supplement (SEP 2019)

    The FAR clauses 52.236-2, Differing Site Conditions; 52.243-4, 
Changes; and 52.243-5, Changes and Changed Conditions, are 
supplemented as follows:
    (a) Submission of request for equitable adjustment proposals. 
When directed by the Contracting Officer or requested by the 
Contractor, the Contractor shall, in accordance with FAR 15.403-5, 
submit proposals for changes in the work exceeding $500,000 in 
writing to the Contracting Officer or Administrative Contracting 
Officer (ACO), and to the resident engineer.
    (1) The Contractor must provide an itemized breakdown for 
changes exceeding the micro-purchase threshold (see FAR 2.101).
    (2) The itemized breakdown shall include materials, quantities, 
unit prices, labor costs (separated into trades), construction 
equipment, etc. Labor costs shall be identified with specific 
material placed or operation performed.
    (3) Proposals shall be submitted to the Contracting Officer or 
ACO and the resident engineer as expeditiously as possible, but not 
later than [fill-in] calendar days, after receipt of a written 
change order by the Contracting Officer.
    (4) Proposals shall be signed by each subcontractor 
participating in the change.
    (5) The Contracting Officer will consider issuing a settlement 
by determination to the contract if the Contractor's proposal 
required by paragraph (a)(3) of this clause is not received within 
the time period specified in paragraph (a)(3), or if agreement has 
not been reached.
    (b) Paragraphs (a)(1) through (5) of this clause and the 
following paragraphs (b)(1) and (2) apply to proposals for changes 
in the work $500,000 or less:
    (1) As a basis for negotiation, allowances not to exceed 10 
percent each for overhead and profit for the party performing the 
work will be based on the value of labor, material, and equipment 
required to accomplish the change. As the value of the change 
increases, a declining scale will be used in negotiating the 
percentage of overhead and profit. This declining scale will also be 
used to negotiate the prime Contractor's or upper-tier 
subcontractor's fee when work is performed by lower-tier 
subcontractors (to a maximum of three tiers) and will be based on 
the net increased cost to the prime or upper-tier subcontractor, as 
applicable. Profit (fee) shall be computed by multiplying the profit 
percentage by the sum of the direct costs and computed overhead 
costs. Allowable percentages on changes will not exceed the 
following:
    (i) 10 percent overhead and/or 10 percent profit (fee) on the 
first $20,000.
    (ii) 7.5 percent overhead and/or 7.5 percent profit (fee) on the 
next $30,000.
    (iii) 5 percent overhead and/or 5 percent profit (fee) on a 
balance over $50,000.
    (2) The Contracting Officer will consider issuing a settlement 
by determination to the contract if the Contractor's proposal 
required by paragraph (3) is not received within 30 calendar days, 
or if agreement has not been reached.
    (c)(1) Overhead and Contractor's fee percentages shall be 
considered to include insurance other than mentioned herein, field 
and office supervisors and assistants, security police, use of small 
tools, incidental job burdens, and general home office expenses and 
no separate allowance will be made. Assistants to office supervisors 
include all clerical, stenographic and general office help. 
Incidental job burdens include, but are not necessarily limited to, 
office equipment and supplies, temporary toilets, telephone and 
conformance to OSHA requirements. Items such as, but not necessarily 
limited to, review and coordination, estimating and expediting 
relative to contract changes are associated with field and office 
supervision and are considered to be included in the Contractor's 
overhead and/or fee percentage.
    (2) Where the Contractor's or subcontractor's portion of a 
change involves credit items, such items must be deducted prior to 
adding overhead and profit for the party performing the work. The 
Contractor's fee is limited to the net increase to Contractor or 
subcontractors' portions of cost computed in accordance with this 
clause.
    (3) Where a change involves credit items only, a proper measure 
of the amount of downward adjustment in the contract price is the 
reasonable cost to the Contractor if it had performed the deleted 
work. A reasonable allowance for overhead and profit are properly 
includable as part of the downward adjustment for a deductive 
change. The amount of such allowance is subject to negotiation.

    (End of clause)

[FR Doc. 2019-18524 Filed 8-29-19; 8:45 am]
 BILLING CODE 8320-01-P