[Federal Register Volume 85, Number 40 (Friday, February 28, 2020)]
[Rules and Regulations]
[Pages 11859-11861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03408]


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AGENCY FOR INTERNATIONAL DEVELOPMENT

48 CFR Chapter 7

RIN 0412-AA94


U.S. Agency for International Development Acquisition Regulation 
(AIDAR): Designation of Personal Services Contractors (PSCs) as 
Contracting Officers and Agreement Officers

AGENCY: U.S. Agency for International Development.

ACTION: Final rule.

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SUMMARY: The U.S. Agency for International Development (USAID) is 
issuing a final rule amending the Agency for International Development 
Acquisition Regulation (AIDAR) to streamline the procedures for issuing 
contracting officer and agreement officer warrants to U.S. Personal 
Services Contractors (US PSCs) and Cooperating Country National 
Personal Services Contractors (CCN PSCs).

DATES: This final rule is effective March 30, 2020.

FOR FURTHER INFORMATION CONTACT: Anne Sattgast, Telephone: 202-916-2623 
or Email: [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    The U.S. Agency for International Development (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 working towards its 
long term mission of reducing poverty, strengthening democratic 
governance, and helping people emerge from humanitarian crises and 
progress beyond assistance.
    The Agency's warranted work force is critical to managing these 
efforts. A shortage of warranted contracting/agreement officers 
requires that the Agency be able to designate highly qualified US 
Personal Services Contractors (US PSCs) and Cooperating Country 
National Personal Services Contractors (CCN PSCs) as contracting/
agreement officers in an expeditious manner. The delegation of limited 
contracting/agreement officer authorities to a select number of CCN 
PSCs will also bolster the Agency to succeed in terms of building long-
term, host country technical capacity to materially assist the Missions 
with procurement responsibility.
    Currently, a US PSC can be designated as a contracting officer only 
when a deviation from AIDAR 701.603-70 is approved; and when the 
Assistant Administrator for the Bureau for Management (AA/M) approves 
an exception in accordance with AIDAR Appendix D 4(b)(3)e.
    Additionally, the Agency currently allows for the delegation of 
certain limited contracting officer authorities to highly qualified CCN 
PSCs. The CCN warrant program ran as a pilot from 2011-2014. The 
program became permanent in September 2014, when USAID issued a two-
year class deviation from 48 CFR AIDAR 701.603-70. In conjunction with 
the approval of the class deviation, the Assistant Administrator for 
the Bureau for Management (AA/M) approved a class exception to the 
limitations in AIDAR Appendix J 4(b)(3). Subsequent two-year class 
deviations were issued for the permanent CCN warrant program in 
September 2016 and September 2018.
    USAID published a proposed rule in the Federal Register at 84 FR 
27745 on June 14, 2019, to amend the AIDAR to allow for the designation 
of US PSCs and CCN PSCs as contracting officers and agreement officers. 
The proposed rule's supplementary information contains additional 
background on the designation of US PSCs and CCN PSCs as contracting 
and agreement officers, including more details on the permanent CCN 
warrant program and an analysis of the risks associated with 
designating non-U.S. citizens as contracting and agreement officers.
    This final rule amends the AIDAR to streamline the procedures for 
issuing contracting officer and agreement officer warrants to US PSCs 
and CCN PSCs. Thirteen respondents submitted comments related to the 
proposed rule.

II. Discussion and Analysis

    USAID reviewed and considered the public comments before the 
issuance of this final rule. No changes were made to the proposed rule 
as a result of the comments. A discussion of the comments is provided 
below.

A. General Support for the Rule

    Comment: Eleven of the thirteen respondents expressed explicit 
support for the proposed rule. For example, several respondents stated 
that the rule helps PSCs and highlights their contributions to the 
Agency. Several other respondents noted that the current process for 
securing warrants for PSCs, which requires an exception from AA/M, was 
difficult and cumbersome and that the improvements in the proposed rule 
will result in a more efficient process, allowing the Agency to issue 
warrants to PSCs in a timely manner. Others noted that this rule will 
help address a shortage of contracting officers and is a positive 
change for an overburdened workforce.
    Response: USAID agrees with these comments. PSCs are an important 
part of the Agency's workforce.

B. Designating CCN PSCs as Contracting Officers

    Comment: One respondent was concerned that the delegation of 
warrant CCN PSCs would be in conflict with regulations relating to 
inherently governmental functions.
    Response: USAID CCN PSCs are able to perform inherently 
governmental functions under federal law and USAID policy. (48 CFR) FAR 
subpart 7.5 exempts PSCs from the restrictions on

[[Page 11860]]

contracts for inherently governmental functions. (48 CFR) FAR does not 
specify that contracting officers must be U.S. citizen direct-hire 
employees of the Federal government.
    Comment: One respondent stated that providing CCN warrants was an 
inherent conflict, given that USAID is distributing US taxpayer funds 
in a foreign environment and the possibility for corruption when 
approving subcontracts.
    Response: USAID has had a permanent CCN warrant program in place 
for five years, and over that time period, the program has been 
extensively reviewed on multiple occasions. This final rule streamlines 
warrant issuance procedures. The Agency does not view the issuance of 
administrative warrants with limited authorities to CCN PSCs as a 
conflict. Concerning the possibility for corruption, warranted CCN PSCs 
do not provide subcontract approvals in isolation, as the Agency's 
procurement systems have a built-in segregation of duties, even for 
administrative contracting duties. When approving subcontracts, the 
Contracting Officer's Representative (COR) initiates the process and 
provides technical clearance. The warranted CCN PSC then reviews and 
executes the COR's request. This system applies to all staff, including 
US direct hires, US PSCs, and CCN PSCs, and is an important risk 
mitigation measure against fraud, waste, and abuse in USAID's 
procurement system.
    Comment: Two respondents expressed concerns relating to the 
training, certification, and oversight of CCN PSCs.
    Response: The Agency has built stringent qualifications and 
oversight measures into the warrant program to mitigate risk. The 
current training, certification and experience requirements for CCN 
PSCs to receive a limited, administrative warrant exceed those required 
for US citizens to receive a warrant to ensure that CCN PSCs understand 
the complexities associated with U.S. regulations and policies. CCN 
PSCs are required to have a Federal Acquisition Certification--
Contracting (FAC-C) Level II certification along with seven years of 
Agency experience, and at least five years of that experience must be 
in the area of acquisition and assistance. As noted in the preamble to 
the proposed rule, the CCN warrant 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. The review 
includes an assessment of all actions where the warrant was used. 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.
    Comment: One respondent expressed a desire for more information 
about the CCN warrant program, including information relating to the 
design, scope, duration, and results of the program, including 
information related to the State Department's program.
    Response: This comment is outside the scope of the streamlined 
warrant issuance procedures in the final rule. The Agency provided some 
historical information in the preamble of the proposed rule to provide 
context for the rule. However, the warrant program is internal to the 
Agency and not contained in federal regulation.

C. Recommendation of an Independent Ombudsman

    Comment: One respondent recommended an independent Ombudsman to 
investigate complaints related to the behavior of CCN PSCs and their 
ability to manage US funds.
    Response: USAID agrees that an independent Ombudsman is important 
to support the integrity of its procurement system. The Agency has had 
a Personal Services Contractor Ombudsman since 2016.

D. Support for a ``Limited'' Program

    Comment: One respondent provided support of a limited program to 
provide a temporary alternative solution to the direct-hire of full-
time USAID employees as contracting and agreement officers, with 
appropriate limitations on the scope of warrants issued to these 
individuals.
    Response: USAID agrees that certain limitations on PSC warrants are 
appropriate. US PSCs must meet the same requirements as US direct hires 
to receive a warrant. The CCN PSC warrant program has more stringent 
training, certification, and experience requirements than those 
required for US citizens and only allows for the delegation of limited 
contract administration functions. Warranted CCN PSCs are not delegated 
authority to make new awards or execute any actions or awards related 
to personal services contracts or public international organizations 
(PIOs). 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) are not 
redelegated to CCN PSC contracting officers.
    Comment: One respondent expressed concern that issuing warrants to 
PSCs would dilute the Agency's position in advocating for increasing 
funding for direct-hire contracting staff.
    Response: USAID continues to advocate strongly for more operational 
expense funding for direct-hire staff. The US PSC and CCN PSC warrant 
programs could not and are not intended to be a permanent solution to 
the shortage of direct-hire contracting staff. These warrant programs 
are significantly limited in scope and are only available to overseas 
Missions with a demonstrated need for additional warranted individuals. 
The Agency does not view the issuance of these warrants to PSCs as 
diluting the argument for both a larger direct-hire acquisition 
workforce and the funding necessary to support that workforce.

E. Number of PSCs at USAID Missions

    Comment: One respondent commented on the number of PSCs with 
warrants and inquired if the positions noted in the preamble of the 
proposed rule were a fixed number designated to be filled or if they 
were the only ones that the Agency was able to fill.
    Response: This comment is outside the scope of the streamlined 
warrant issuance procedures in the rule. At the time of the issuance of 
the proposed rule, there were 21 PSCs with warrants. However, this is 
not a fixed number. The Agency only issues warrants to US PSCs and CCN 
PSCs when there is a demonstrated need for such warrants.

III. Regulatory Findings

Executive Orders 12866, 13563, and 13771

    This final rule has been drafted in accordance with Executive 
Orders (E.O.s) 12866 and 13563, which 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

[[Page 11861]]

economic, environmental, public health and safety effects, distributive 
impacts, and equality). E.O. 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. USAID has reviewed the regulation 
to ensure its consistency with the regulatory philosophy and principles 
set forth in E.O.s 12866 and 13563 and finds that the benefits of 
issuing this rule outweigh any costs, which the Agency assesses to be 
minimal. The Office of Management and Budget's Office of Information 
and Regulatory Affairs (OMB/OIRA) has determined that this regulatory 
action is ``significant'' and therefore subject to the requirements of 
the E.O. and subject to review by OMB. OMB/OIRA has determined that 
this rule is not an ``economically significant regulatory action'' 
under Section 3(f)(1) of E.O. 12866. This final rule is not subject to 
the requirements of E.O. 13771 because this rule is related to agency 
organization, management, or personnel.

Regulatory Flexibility Act

    USAID certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. Consequently, the 
Agency has not prepared a regulatory flexibility analysis.

Small Business Regulatory Enforcement Fairness Act

    This is not a major rule under 5 U.S.C. 804(2), the Small Business 
Regulatory Enforcement Fairness Act.

Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to OMB under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501 et seq.) is not required.

List of Subjects in 48 CFR Part 701

    Government procurement.

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

0
1. The authority citation for 48 CFR part 701 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. Revise 701.603-70 to read as follows:


701.603-70   Designation of contracting officers.

    A contracting officer represents the U.S. Government through the 
exercise of his/her delegated authority to negotiate, sign, and 
administer contracts on behalf of the U.S. Government. The contracting 
officer's duties are sensitive, specialized, and responsible. To ensure 
proper accountability, and to preclude possible security, conflict of 
interest, or jurisdiction problems, USAID contracting officers must be 
U.S. citizen direct-hire employees of the U.S. Government. However, 
Director, Bureau for Management, Office of Acquisition and Assistance 
(M/OAA Director) may also designate a U.S. Personal Services Contractor 
(USPSC) or a Cooperating Country National Personal Services Contractor 
(CCNPSC) as a contracting officer with a specific level of warrant 
authority. To qualify for a designation as a contracting officer, an 
individual must meet the requirements in FAR subpart 1.6 and the 
Agency's applicable warrant program.


0
3. In appendix D to chapter 7, in section 4 ``Policy'', revise 
paragraph (b)(3)b. and add paragraph (b)(4) and revise the authority 
citation at the end of the appendix to read as follows:

Appendix D to Chapter 7--Direct USAID Contracts With a U.S. Citizen or 
a U.S. Resident Alien for Personal Services Abroad

* * * * *
    4. Policy
* * * * *
    (b) * * *
    (3) * * *
    b. They may not be delegated authority to sign obligating or 
subobligating documents except when specifically designated as a 
contracting officer or an agreement officer in accordance with FAR 
subpart 1.6 and the Agency's applicable warrant program.
* * * * *
    (4) Exceptions. The Assistant Administrator, Bureau for 
Management (AA/M) must approve exceptions to the limitations in 
(b)(3). Approval of an exception by the AA/M is not required when 
the Director, Bureau for Management, Office of Acquisition and 
Assistance (M/OAA Director) designates a USPSC as a contracting 
officer or an agreement officer.
* * * * *

    Authority: (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)


0
4. In appendix J to chapter 7, in section 4 ``Policy'', revise 
paragraphs (b)(3)b. and (b)(4) and the authority citation at the end of 
the appendix 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) * * *
    (3) * * *
    b. They may not be delegated authority to sign obligating or 
subobligating documents except when a cooperating country national 
personal services contractor is specifically designated as a 
contracting officer or an agreement officer in accordance with FAR 
subpart 1.6 and the Agency's applicable warrant program.
* * * * *
    (4) Exceptions. The Assistant Administrator, Bureau for 
Management (AA/M) must approve exceptions to the limitations in 
(b)(3). Approval of an exception by the AA/M is not required when 
the Director, Bureau for Management, Office of Acquisition and 
Assistance (M/OAA Director) designates a cooperating country 
national personal services contractor as a contracting officer or an 
agreement officer.
* * * * *

    Authority: (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)

Mark Walther,
Acting Chief Acquisition Officer.
[FR Doc. 2020-03408 Filed 2-27-20; 8:45 am]
 BILLING CODE 6116-01-P