[Federal Register Volume 85, Number 61 (Monday, March 30, 2020)]
[Rules and Regulations]
[Pages 17504-17506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05962]
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ENVIRONMENTAL PROTECTION AGENCY
48 CFR Parts 1516 and 1552
[EPA-HQ-OARM-2018-0610; FRL-10006-81-OMS]
Environmental Protection Agency Acquisition Regulation (EPAAR);
Award Term Incentive
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is issuing a final
rule to amend EPA Acquisition Regulation (EPAAR) award term incentive
policy, procedures, and clauses to remove ambiguity and provide clarity
with respect to what is required for a contractor to successfully earn
award terms.
DATES: This final rule is effective on March 30, 2020.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OARM-2018-0610. All documents in the docket are
listed on the http://www.regulations.gov website. Although listed in
the index, some information is not publicly available, e.g., CBI or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
internet and will be publicly available only in hard copy form.
Publicly available docket materials are available electronically
through http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Shakethia Allen, Policy, Training, and
Oversight Division, Acquisition Policy and Training Branch (3802R),
Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington,
DC 20460; telephone number: 202-564-5157; email address:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Award terms are a form of incentive contract, offering additional
periods of performance without a new competition, rather than
additional profit or fee as a reward for achieving prescribed
performance measures. Award term incentives were developed in 1997 by
the Department of the Air Force and are not described in the Federal
Acquisition Regulation (FAR). In order to assist EPA contracting
officers seeking to use award term incentives, it is necessary to amend
the EPAAR to provide clear language of the requirements needed to
successfully award and earn award terms.
The proposed rule was published in the Federal Register (84 FR
11920) on March 29, 2019, providing for a 60-day comment period.
Interested parties were afforded the opportunity to participate in the
making of this rule. There was one comment received during the 60-day
period, but it is was unrelated to the subject procurement.
II. Final Rule
The final rule amends EPAAR Part 1516--Types of Contracts, Subpart
1516.4--Incentive Contracts, 1516.406 Contract Clauses, 1516.401-70
Award Term Incentives, and 1516.401-270 Definition. The final rule also
amends EPAAR Part 1552--Solicitation Provisions and Contract Clauses,
1552.216-78 --Award Term Incentive Plan.
1. EPAAR 1516.406 establishes the prescription for use of related
EPAAR clauses, including 1552.216-77, Award Term Incentive, 1552.216-
78, Award Term Incentive Plan, and 1552.216-79, Award Term Availability
of Funds, in solicitations and contracts when award term incentives are
contemplated.
2. EPAAR 1516.401-270 defines Acceptable Quality Level (AQL) as the
minimum percent of deliverables which are compliant with a given
performance standard that would permit a contractor to become eligible
for an award term incentive.
3. EPAAR 1516.401-70 sets forth the overall framework governing
award term incentives including the prescribed performance measures;
i.e., the acceptable quality levels (AQL) which must be achieved by a
contractor to become eligible for an award term.
4. EPAAR 1552.216-78 sets forth the performance criteria and
evaluation periods which will serve as the basis for the EPA's decision
on whether the contractor is eligible for an award term incentive.
III. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a ``significant regulatory action'' under the
terms of Executive Order (E.O.) 12866 (58 FR 51735, October 4, 1993)
and is therefore not subject to review under the E.O.
B. Paperwork Reduction Act
This action does not impose an information collection burden, as
defined at 5 CFR 1320.3(b), under the provisions of the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq.
C. Regulatory Flexibility Act (RFA), as Amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et.
seq.
The Regulatory Flexibility Act generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedure
Act or any other statute; unless the agency certifies that the rule
will not have a significant economic impact on a substantial number of
small entities. Small entities include small businesses, small
organizations, and small governmental jurisdictions. For purposes of
assessing the impact of this final rule on small entities, ``small
entity'' is defined as: (1) A small business that meets the definition
of a small business found in the Small Business Act and codified at
[[Page 17505]]
13 CFR 121.201; (2) a small governmental jurisdiction that is a
government of a city, county, town, school district or special district
with a population of less than 50,000; or (3) a small organization that
is any not-for-profit enterprise which is independently owned and
operated and is not dominant in its field. After considering the
economic impacts of this rule on small entities, I certify that this
action will not have a significant economic impact on a substantial
number of small entities. An agency may certify that a rule will not
have a significant economic impact on a substantial number of small
entities if the rule relieves regulatory burden, or otherwise has a
positive economic effect on all of the small entities subject to the
rule. Award term incentives will be available equally to large and
small entities, so this rule will not have a significant economic
impact on small entities. Also, this rule seeks to only clarify
existing regulations. We continue to be interested in the potential
impacts of the rule on small entities and welcome comments on issues
related to such impacts.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L.
104-4), establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, Local, and Tribal
governments and the private sector. This rule contains no Federal
mandates (under the regulatory provisions of the Title II of the UMRA)
for State, Local, and Tribal governments or the private sector. The
rule imposes no enforceable duty on any State, Local or Tribal
governments or the private sector. Thus, the rule is not subject to the
requirements of sections 202 and 205 of the UMRA.
E. Executive Order 13132: Federalism
Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and Local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.'' This rule
does not have federalism implications. It will not have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government as specified in
Executive Order 13132.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This rule does not have
tribal implications as specified in Executive Order 13175.
G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
Executive Order 13045, entitled ``Protection of Children from
Environmental Health and Safety Risks'' (62 FR 19885, April 23, 1997),
applies to any rule that: (1) Is determined to be economically
significant as defined under E.O. 12886, and (2) concerns an
environmental health or safety risk that may have a proportionate
effect on children. This rule is not subject to E.O. 13045 because it
is not an economically significant rule as defined by Executive Order
12866, and because it does not involve decisions on environment health
or safety risks.
H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution or Use'' (66 FR 28335 (May 22, 2001), because it is not a
significant regulatory action under Executive Order 12866.
I. National Technology Transfer and Advancement Act of 1995 (NTTAA)
Section 12(d) (15 U.S.C. 272 note) of the National Technology
Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113,
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures and business practices) that are developed or adopted by
voluntary consensus standards bodies. The NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards. This action
does not involve technical standards. Therefore, EPA is not considering
the use of any voluntary consensus standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898 (59 FR 7629 (February 16, 1994) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States. EPA has determined that this proposed
rule will not have disproportionately high and adverse human health or
environmental effects on minority or low-income populations because it
does not affect the level of protection provided to human health or the
environment in the general public.
K. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a major rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. Section 804(2) defines a ``major rule''
as any rule that the Administrator of the Office of Information and
Regulatory Affairs of the Office of Management and Budget finds has
resulted in or is likely to result in (1) an annual effect on the
economy of $100,000,000 or more; (2) a major increase in costs or
prices for consumers, individual industries, Federal, State, or local
government agencies, or geographic regions; or (3) significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export markets.
EPA is not required to submit a rule report regarding this action under
section 801 as this is not a major rule by definition.
[[Page 17506]]
List of Subjects in 48 CFR Parts 1516 and 1552
Environmental Protection, Government procurement, Reporting and
recordkeeping requirements.
Dated: February 24, 2020.
Kimberly Y. Patrick,
Director, Office of Acquisition Solutions.
Therefore, 48 CFR parts 1516 and 1552 are amended as set forth
below:
PART 1516--TYPES OF CONTRACTS
0
1. The authority citation for part 1516 continues to read as follows:
Authority: The provisions of this regulation are issued under 5
U.S.C. 301; Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c);
and 41 U.S.C. 418b.
0
2. Revise 1516.401-270 to read as follows:
1516.401-270 Definition.
Acceptable quality level (AQL) as used in this subpart means the
minimum percent of deliverables which are compliant with a given
performance standard that would permit a contractor to become eligible
for an award term incentive. The performance necessary for eligibility
for the award term incentive must be in excess of that necessary for
the Government acceptance of contract deliverables. The AQLs associated
with the award term incentive shall exceed the AQLs associated with the
acceptance of contract deliverables. For example, under contract X,
acceptable performance is 75 percent of reports submitted to the
Government within five days. However, to be eligible for an award term
incentive, 85 percent of reports must be submitted to the Government
within five days.
0
3. In 1516.401-70, revise paragraph (b) to read as follows:
1516.401-70 Award term incentive.
* * * * *
(b) Award term incentives are designed to motivate contractors to
provide superior performance. Superior performance must be defined in
the Award Term Incentive Plan. Accordingly, the prescribed performance
measures, i.e., acceptable quality levels (AQL), which must be achieved
by a contractor to become eligible for an award term will be in excess
of the AQLs necessary for Government acceptance of contract
deliverables, unless rationale is documented that such service is
beyond the contractor's capability or control.
* * * * *
0
4. In 1516.406, revise paragraphs (c) and (d) to read as follows:
1516.406 Contract clauses.
* * * * *
(c) The Contracting Officer shall insert the clauses at 1552.216-
77, Award Term Incentive, 1552.216-78, Award Term Incentive Plan, and
1552.216-79, Award Term Availability of Funds, in solicitations and
contracts when award term incentives are contemplated. The clauses at
1552.216-77 and 1552.216-78 may be used on substantially the same-as
basis.
(d) If the Contracting Officer wishes to use the ratings set forth
in the Department of Defense Contractor Performance Assessment
Reporting System on the contract at hand as the basis for contractor
eligibility for an award term incentive, the Contracting Officer shall
insert the clause at 1552.216-78.
PART 1552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
5. The authority citation for part 1552 continues to read as follows:
Authority: 5 U.S.C. 301; Sec. 205(c), 63 Stat. 390, as amended,
40 U.S.C. 486(c); and 41 U.S.C. 418b.
0
6. In 1552.216-78, revise paragraph (e) to read as follows:
1552.216-78 Award term incentive plan.
* * * * *
(e) [If the contract will contain a quality assurance surveillance
plan (QASP), reference the QASP, e.g., attachment 2. Typically, the
performance standards and AQLs will be defined in the QASP]
(End of clause)
* * * * *
[FR Doc. 2020-05962 Filed 3-27-20; 8:45 am]
BILLING CODE 6560-50-P