[Federal Register Volume 87, Number 74 (Monday, April 18, 2022)]
[Proposed Rules]
[Pages 22843-22847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07786]


=======================================================================
-----------------------------------------------------------------------

AGENCY FOR INTERNATIONAL DEVELOPMENT

48 CFR Parts 726, 729, 731 and 752

RIN 0412-AB04


United States Agency for International Development (USAID) 
Acquisition Regulation (AIDAR): Foreign Tax Reporting, Conference 
Planning, and Trade and Investment Activities

AGENCY: U.S. Agency for International Development.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The United States Agency for International Development (USAID) 
proposes to amend its Acquisition Regulation (AIDAR) regarding 
contractor requirements on foreign tax reporting, conference planning, 
and trade and investment activities. These revisions are intended to 
bring the AIDAR into compliance with revised Agency policies and 
procedures and statutory requirements.

DATES: Interested parties should submit written comments at one of the 
addresses shown below on or before June 17, 2022 to be considered in 
the formation of the final rule.

ADDRESSES: Submit comments, identified by the title of the action and 
Regulatory Information Number (RIN) through the Federal eRulemaking 
Portal at https://www.regulations.gov by following the instructions for 
submitting comments. Please include your name, company name (if any), 
and ``0412-AB04'' on any attachments. If your comment cannot be 
submitted using https://www.regulations.gov, please email the point of 
contact in the FOR FURTHER INFORMATION CONTACT section of this document 
for alternate instructions.

FOR FURTHER INFORMATION CONTACT: Kelly Miskowski, USAID/M/OAA/P, 
[email protected].

SUPPLEMENTARY INFORMATION:

A. Instructions

    All comments must be in writing and submitted through the method 
specified in the Addresses section above. All submissions must include 
the title of the action and RIN for this rulemaking. Please include 
your name, title, organization, postal address, telephone number, and 
email address in the text of the message.
    All comments will be made available at http://www.regulations.gov 
for public review without change, including any personal information 
provided. We recommend that you do not submit information that you 
consider Confidential Business Information (CBI) or any information 
that is otherwise protected from disclosure by statute.
    USAID will only address substantive comments on the rule. USAID may 
not consider comments that are insubstantial or outside the scope of 
the proposed rule.

B. Background

    Several parts in the AIDAR are outdated and no longer comply with 
statutory requirements or current agency policies and procedures. USAID 
proposes to amend the AIDAR as follows:
    1. 48 CFR part 726, subpart 726.71 Relocation of U.S. Businesses, 
Assistance to Export Processing Zones, Internationally Recognized 
Workers' Rights refers to agency Policy Determination (PD) 20, 
``Guidelines to Assure USAID Programs do not Result in the Loss of Jobs 
in the U.S.'' PD 20 was replaced in agency policy by Automated 
Directives System (ADS) Chapter 225, Program Principles for Trade and 
Investment Activities and the ``Impact on U.S. Jobs'' and ``Workers' 
Rights.'' ADS 225 is available at https://www.usaid.gov/ads/policy/200/225. USAID proposes amending the AIDAR to revise subpart 726.71 to 
prescribe when to include a new clause in section 752.226-70 in a 
solicitation and contract.
    ADS 225 mandates that requiring offices and planners perform the 
necessary analyses to ensure that USAID-funded ``trade and investment'' 
activities do not: (a) Provide financial incentives and other 
assistance for U.S. companies to relocate operations abroad if it is 
likely to result in the loss of U.S. jobs; (b) Contribute to violations 
of internationally recognized workers' rights defined in 19 U.S.C. 
2467(4); (c) Provide financial incentives for entities located outside 
the United States to relocate or transfer jobs from the United States 
to other countries or provide financial incentives that would adversely 
affect the labor force in the United States; and/or (d) Provide 
assistance for enforcement of certain rules if the enforcement would 
prohibit certain coal-fired or other power-generation projects. If the 
analyses conclude that the activity is a ``gray-area'' as described in 
that chapter, and the contract statement of work includes either gray-
area activities or investment-related activities where specific 
activities are not identified at the time of obligation but could be 
for investment-related activities, as described in ADS Chapter 225, 
then the requiring office will provide the contracting officer with a 
clause substantially the same as new section 752.226-70 to include in 
the solicitation and resulting contract.
    2. USAID proposes to amend AIDAR Section 729.402-70 and the 
corresponding clause in 752.229-71 to update them to comply with 
current statutory requirements. The annual Department of State, Foreign 
Operations, and Related Programs Appropriations Act (SFOAA) mandates 
that agencies take certain actions to prevent taxation of foreign 
assistance provided with funds appropriated in an SFOAA, or to obtain 
full reimbursement of all taxes paid.

[[Page 22844]]

    Consistent with the statutory requirements, the AIDAR includes a 
clause requiring contractors to annually report the amount of foreign 
taxes assessed against foreign assistance funding during the preceding 
fiscal year and not reimbursed. The AIDAR reporting requirement has not 
been updated to reflect the changes Congress made to the foreign tax 
provision in 2014, specifically the revisions to the definition of 
``foreign taxes'' and the types of transactions subject to the 
reporting requirements. The statutory definition of that term now 
includes all types of taxes imposed by the foreign government, 
including but not limited to value added taxes (VAT) and customs 
duties, but excluding individual income taxes assessed to local staff. 
Consistent with the current version of the SFOAA, the types of 
reportable transactions are expanded from ``commodity purchase 
transactions'' to all taxes assessed, with the exception of any foreign 
tax of a de minimis nature.
    3. Section 731.205-43 and the corresponding clause in 752.231-72 
are amended to include the current agency policy and procedures for 
funding conference costs in USAID contracts. USAID proposes adding new 
sections 731.374 and 731.775 to include these approval policies and 
procedures in the cost principles for contracts with educational 
institutions and nonprofit organizations, respectively. USAID policy on 
conferences is in ADS 580 Conference Planning and Attendance, which is 
available at https://www.usaid.gov/ads/policy/500/580. USAID has 
revised ADS 580 several times since the AIDAR was initially amended to 
add these two sections; the most recent revision was in February 2021 
and reduced the number of USAID employees attending a conference that 
triggers the requirement for the contractor to obtain the agency's 
prior approval from 20 to 10. This proposed rule includes this number, 
retains the current requirement for the contractor to obtain approval 
when the net conference expenses by USAID will exceed $100,000, and 
revises both sections for clarity.

C. Regulatory Planning and Review

    Executive Orders (E.O.s) 12866, Regulatory Planning and Review, and 
13563, Improving Regulation and Regulatory Review, 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 rule has been determined ``nonsignificant'' under 
E.O. 12866. This rule is not a major rule under 5 U.S.C. 804.

D. Regulatory Flexibility Act

    USAID does not expect this proposed rule to have a significant 
economic impact on a substantial number of small entities within the 
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
Therefore, an Initial Regulatory Flexibility Analysis has not been 
performed.

E. Paperwork Reduction Act

    The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The 
proposed rule contains information collection requirements. 
Accordingly, USAID has submitted a request for approval of a new 
information collection requirement concerning this rule to the Office 
of Management and Budget.
    The outlined information collections are an element of a proposed 
rule that implements USAID requirements for reporting foreign tax and 
conference planning. The proposed rule will amend AIDAR Section 
729.402-70 and the corresponding clause in 752.229-71 to align foreign 
tax reporting requirements with relevant statutory requirements 
(Collection 1); Section 731.205-43 and the corresponding clause in 
752.231-72; and add new sections 731.374 and 731.775 (Collection 2). 
These last two revisions are to align the AIDAR with USAID's conference 
planning policy.

1. Request for Comments Regarding Paperwork Burden

    Submit comments, including suggestions for reducing this burden, 
not later than June 17, 2022 using the method specified in the 
Addresses section above.
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the AIDAR, 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 by 
contacting [email protected]. Please cite RIN Number 0412-AB04 in 
all correspondence.

2. Abstract for Collection

Collection 1
    The public reporting burden for this collection of information is 
estimated as follows:
    Respondents: 900.
    Responses per respondent: 1.
    Total annual responses: 900.
    Preparation hours per response: 1.
    Total response burden hours: 900.
Collection 2
    The public reporting burden for this collection of information is 
estimated as follows:
    Respondents: 20.
    Responses per respondent: 1.
    Total annual responses: 20.
    Preparation hours per response: 2.
    Total response burden hours: 40.

List of Subjects in 48 CFR Chapter 7 Parts 726, 729, 731 and 752

    Government procurement.

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

0
1. The authority citation for 48 CFR Chapter 7 parts 726, 729, 731, and 
752 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.

0
2. The authority citation for 48 CFR Chapter 7 part 729 is revised 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 726-OTHER SOCIOECONOMIC PROGRAMS

Subpart 726.71--Trade and Investment Activities, the ``Impact on 
U.S. Jobs'' and ``Workers' Rights''.

0
3. Revise Sec.  726.7101 to read as follows:


726.7101   Trade and Investment Activities and the ``Impact on U.S. 
Jobs''.

    (a) Policy. USAID policy and required procedures in ADS 225 Program 
Principles for Trade and Investment Activities and the ``Impact on U.S. 
Jobs'' and ``Workers' Rights'' implement statutory prohibitions on 
obligation and expenditure of appropriated funds. ADS 225 requires 
Agency operating units to analyze a project or activity to ensure

[[Page 22845]]

compliance with U.S. foreign policy objectives as stated in Section 601 
of the Foreign Assistance Act (FAA) of 1961, as amended; the U.S. 
Government's trade and development objectives set forth in trade 
legislation; and related policy documents. If the analysis concludes 
that the project or activity meets the criteria for what the ADS 
chapter describes as ``gray-area activities'' or if the contract 
statement of work has the potential to evolve into what the chapter 
defines as a prohibited activity, then the planner must include in the 
procurement request language appropriately tailored to the specific 
circumstances for the contract statement of work.
    (b) Special contract requirement. The contracting officer must 
insert in Section H of the uniform contract format a clause 
substantially the same as the clause in 752.226-70 when informed by the 
requesting operating unit that the statement of work or statement of 
objectives includes gray-area activities or investment-related 
activities where specific activities are not identified at the time of 
obligation but could be for investment-related activities, as described 
in ADS Chapter 225.


Sec.  726.7102   [Removed]

0
4. Remove Sec.  726.7102.

PART 729--TAXES

Subpart 729.4--Contract Clauses

0
5. Revise Sec.  729.402-70 to read as follows:


729.402-70   Foreign contracts.

    (a) The annual Department of State, Foreign Operations, and Related 
Programs Appropriations Act (SFOAA) requires USAID to take certain 
steps to prevent countries from imposing taxes, including value added 
tax (VAT) and customs duties, on U.S. foreign assistance, or if 
imposed, requires the countries to reimburse the assessed taxes or 
duties. The SFOAA also requires certain reporting to Congress on host 
country taxation. Because countries imposing such taxes assess them 
directly on contractors, USAID requires contractors to report annually 
on whether taxes have been imposed and, if so, whether the foreign 
government reimbursed the taxes.
    (b) The contracting officer must insert the clause at Sec.  
752.229-71, Reporting of Foreign Taxes in solicitations and resulting 
contracts when:
    (1) A contract is fully or partially funded with funds appropriated 
under titles III through VI of an SFOAA making appropriations for the 
Department of State, foreign operations, and related programs, and
    (2) the contract is to be performed wholly or partly in a foreign 
country.

PART 731--CONTRACT COST PRINCIPLES AND PROCEDURES

Subpart 731.2--Contracts with Commercial Organizations

0
6. Revise Sec.  731.205-43 to read as follows:


731.205-43   Trade, business, technical and professional activity 
costs--USAID conference approval requirements.

    (a) Definitions. As used in this section--
    Conference means a seminar, meeting, retreat, symposium, workshop, 
training activity or other such event that is funded in whole or in 
part by USAID.
    Net conference expense means the total conference expenses 
excluding: Any fees or revenue received by the Agency through the 
conference, costs to ensure the safety of attending governmental 
officials, and salary of USAID employees and USAID personal services 
contractors.
    Personal Services Contractor (PSC) means any individual who is 
awarded a personal services contract in accordance with AIDAR 
appendices D or J.
    Temporary duty (TDY) travel means official travel at least fifty 
(50) miles from both the traveler's home and duty station for a period 
exceeding twelve (12) hours.
    USAID employee means a USAID direct-hire employee or a direct-hire 
federal employee from another U.S. government agency detailed to USAID.
    (b) Prior Approval. USAID policy requires contractors to obtain 
contracting officer approval of the following, unless an exception in 
paragraph (c) of the clause at 752.231-72 applies:
    (1) A conference funded in whole, or in part, by USAID when ten 
(10) or more USAID employees or personal services contractors are 
required to travel on temporary duty status to attend the conference; 
or
    (2) A conference funded in whole, or in part, by USAID when the net 
conference expense funded by USAID is expected to exceed $100,000, 
regardless of the number of USAID employees or USAID personal services 
contractors who will participate in the conference.
    (c) Allowability of Cost. Costs associated with a conference that 
meets the criteria above, incurred without USAID prior written 
approval, are unallowable.
    (d) Solicitation Provision and Contract Clause. Contracting 
officers must insert the clause at 752.231-72 in all USAID-funded 
solicitations and contracts anticipated to include a requirement for a 
USAID-funded conference.

Subpart 731.3--Contracts With Educational Institutions

0
7. Add Sec.  731.374 to read as follows:


731.374   Conference approval requirements.

    USAID's policies regarding conference approval requirements are set 
forth in (48 CFR) AIDAR 731.205-43. These policies are also applicable 
to contracts with an educational institution.

Subpart 731.7--Contracts With Nonprofit Organizations

0
8. Add Sec.  731.775 to read as follows:


731.775   Conference approval requirements.

    USAID's policies regarding conference approval requirements are set 
forth in (48 CFR) AIDAR 731.205-43. These policies are also applicable 
to contracts with an educational institution.

PART 752--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 752.2--Text of Provisions and Clauses

0
9. Add Sec.  752.226-70 to read as follows:


752.226-70   Trade and Investment. Activities, the ``Impact on U.S. 
Jobs'' and ``Workers' Rights''.

    As prescribed in 48 CFR 726.7101(b), insert a clause substantially 
as follows:

Trade and Investment Activities and the ``Impact on U.S. Jobs'' (Date 
TBD)

    (a) Except as specifically set forth in this contract or otherwise 
authorized by USAID in writing, no funds or other support provided 
under this contract may be used for any activity that: Provides 
financial incentives and other assistance for U.S. companies to 
relocate operations abroad if it is likely to result in the loss of 
U.S. jobs; contributes to violations of internationally recognized 
workers' rights defined in 19 U.S.C. 2467(4); or provides financial 
incentives for entities located outside the United States to relocate 
or transfer jobs from the United States to other countries or provide 
financial incentives that would adversely affect the labor force in the 
United States.
    (b) In the event the Contractor is requested to provide services in 
any of

[[Page 22846]]

the above areas or requires clarification from USAID as to whether an 
activity would be consistent with the limitation set forth above, the 
Contractor must notify the contracting officer and provide a detailed 
description of the expected impact of the proposed activity. The 
Contractor must not proceed with the activity until advised by USAID in 
writing that it may do so.
    (c) The Contractor must ensure that its employees and 
subcontractors providing trade and investment support services are made 
aware of the restrictions set forth in this clause and must include 
this clause in all subcontracts.


[END OF CLAUSE]

0
10. Revise Sec.  752.229-71 to read as follows:


752.229-71   Reporting of Foreign Taxes.

    As prescribed in (48 CFR) AIDAR 729.402-70(b), insert the following 
clause in applicable solicitations and resulting contracts. The 
contracting officer must insert the address and point of contact at the 
Embassy, Mission, or M/CFO/CMP as appropriate under paragraph (d) of 
this clause.

Reporting of Foreign Taxes (Date TBD)

    (a) Definitions. As used in this clause--
    Foreign government includes any foreign governmental entity.
    Foreign taxes include value-added taxes and customs duties but not 
individual income taxes assessed to local staff.
    Local Staff means Cooperating Country National employees.
    (b) Annual report. (1) The Contractor must submit a report 
detailing foreign taxes assessed under this contract during the prior 
U.S. government fiscal year. The report must be submitted annually by 
April 16.
    (2) A report is required even if the Contractor did not pay any 
foreign taxes during the reporting period. A cumulative report may be 
provided if the Contractor is performing more than one award in the 
foreign country.
    (c) Contents of report. The report must contain:
    (1) Contractor name.
    (2) Contact name with phone number and email address.
    (3) Contract number(s).
    (4) Amount of foreign taxes assessed by each foreign government 
(listed separately) under this contract during the prior U.S. 
Government fiscal year.
    (i) Taxes assessed on any individual transaction of less than $500 
should not be reported.
    (ii) The contractor must report only foreign taxes assessed by a 
foreign government receiving U.S. assistance under this contract. The 
Contractor must not report on foreign taxes assessed by a third-party 
foreign government.
    (5) Any reimbursements of foreign taxes received by the Contractor 
on the taxes reported in paragraph (c)(4) of this clause received 
through the date of the report.
    (d) Submission of report. The Contractor must submit the report to: 
[Contracting Officer must insert address and point of contact at the 
Embassy or Mission in the country in which the contract will be 
performed, or CFO/CMP for USAID/W-issued contracts, as appropriate], 
with a copy to the Contracting Officer's Representative.
    (e) Subcontracts. The Contractor must include this reporting 
requirement in all subcontracts issued under this contract. The 
Contractor shall collect and incorporate into the Contractor's report 
all information received from subcontractors pursuant to this clause.


(End of clause)

0
11. Revise Sec.  752.231-71 to read as follows:


752.231-72   Conference planning and required approval.

    As prescribed in (48 CFR) AIDAR 731.205-43(d), insert the following 
clause in section H of all USAID-funded solicitations and contracts 
anticipated to include a requirement for a USAID-funded conference.

Conference Planning and Required Approval (Date TBD)

    (a) Definitions. As used in this clause--
    Conference means a seminar, meeting, retreat, symposium, workshop, 
training activity or other such event that is funded in whole or in 
part by USAID.
    Net conference expense means the total conference expenses 
excluding: Any fees or revenue received by the Agency through the 
conference, costs to ensure the safety of attending governmental 
officials, and salary of USAID employees and USAID personal services 
contractors.
    Personal Services Contractor (PSC) means any individual who is 
awarded a personal services contract in accordance with AIDAR 
appendices D or J.
    Temporary duty (TDY) travel means official travel at least fifty 
(50) miles from both the traveler's home and duty station for a period 
exceeding twelve (12) hours.
    USAID employee means a USAID direct-hire employee or a direct-hire 
federal employee from another U.S. government agency detailed to USAID.
    (b) Prior Approval. Unless an exception in paragraph (c) applies, 
the Contractor must obtain prior written approval from the contracting 
officer at least 30 days prior to committing costs, for the following:
    (1) A conference funded in whole or in part by USAID when ten (10) 
or more USAID employees or Personal Services Contractors are required 
to travel on temporary duty status to attend the conference; or
    (2) A conference funded in whole or in part by USAID and attended 
by USAID employees or USAID Personal Services Contractors, when the net 
conference expense funded by USAID is expected to exceed $100,000, 
regardless of the number of USAID participants.
    (c) Exceptions. Prior USAID approval is not required for the 
following:
    (1) Co-creation conferences to facilitate the design of programs or 
procurements.
    (2) Events funded and scheduled by the Center for Professional 
Development within the USAID Office of Human Capital and Talent 
Management.
    (3) A single course presented by an instructor conducted at a U.S. 
Government training facility (including the Washington Learning Center 
or other USAID training facilities), a commercial training facility, or 
other venue if a U.S. Government training facility is not available.
    (4) Conferences conducted at a U.S. Government facility or other 
venue not paid directly or indirectly by USAID, when travel of USAID 
employees or USAID Personal Services Contractors, light refreshments 
and, if applicable, costs associated with participation of the 
contractor's staff are the only direct costs associated with the event.
    (d) Allowability of Cost. Costs associated with a conference that 
meet the criteria above, incurred without USAID prior written approval, 
are unallowable.
    (e) Post-Award. Conferences approved at the time of award will be 
incorporated into the contract. The contractor must submit subsequent 
requests for approval of conferences on a case-by-case basis, or 
requests for multiple conferences may be submitted at one time.
    (f) Documentation. Requests for approval of a conference that meets 
the criteria in paragraphs (b) of this section must include:
    (1) A brief summary of the proposed event;
    (2) A justification for the conference and alternatives considered, 
e.g., teleconferencing and video-conferencing;

[[Page 22847]]

    (3) The estimated budget by line item (e.g., travel and per diem, 
venue, facilitators, meals, equipment, printing, access fees, ground 
transportation);
    (4) A list of USAID employees or PSCs attending and a justification 
for each, and the number of other USAID-funded participants (e.g., 
contractor personnel);
    (5) A cost comparison for at least three potential venues 
(including a U.S. Government owned or leased facility) and a 
justification if the lowest cost facility is not selected;
    (6) If meals will be provided to local USAID employees or PSCs (a 
local employee would not be in travel status), a statement on whether 
the meals are a necessary expense to support the conference objectives; 
and
    (7) A statement signed by an employee of the Contractor with 
authority to bind the Contractor, confirming that strict fiscal 
responsibility has been exercised in making decisions regarding 
conference expenditures, the proposed costs are comprehensive and 
represent the greatest cost advantage to the U.S. Government, and that 
the proposed conference representation has been limited to the minimum 
number necessary to support the conference objectives.


(End of clause)

Luis Rivera,
Acting Senior Procurement Executive, U.S. Agency for International 
Development.
[FR Doc. 2022-07786 Filed 4-15-22; 8:45 am]
BILLING CODE 6116-01-P