Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / Rules and Regulations 31177 

ENVIRONMENTAL PROTECTION 

AGENCY 

48 CFR Parts 1503 and 1552 

[EPA–HQ–OARM–2015–0662; FRL 9943–61– 

OARM] 

Environmental Protection Agency 

Acquisition Regulation; Improper 

Business Practices and Personal 

Conflicts of Interest, Solicitation 

Provisions and Contract Clauses 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Direct final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is issuing a final rule to 

make administrative changes to the 

Environmental Protection Agency 

Acquisition Regulation (EPAAR). EPA 

does not anticipate any adverse 

comments. 

DATES: This rule is effective on July 18, 

2016 without further action, unless EPA 

receives adverse comment by June 17, 

2016. If EPA receives adverse comment, 

a timely withdrawal will be published 

in the Federal Register informing the 

public that the rule will not take effect. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OARM–2015–0662, at http://

www.regulations.gov. Follow the online 

instructions for submitting comments. 

Once submitted, comments cannot be 

edited or removed from Regulations.gov. 

The EPA may publish any comment 

received to its public docket. Do not 

submit electronically any information 

you consider to be Confidential 

Business Information (CBI) or other 

information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. The EPA will generally not 

consider comments or comment 

contents located outside of the primary 

submission (i.e. on the web, cloud, or 

other file sharing system). For 

additional submission methods, the full 

EPA public comment policy, 

information about CBI or multimedia 

submissions, and general guidance on 

making effective comments, please visit 

http://www2.epa.gov/dockets/

commenting-epa-dockets. 

FOR FURTHER INFORMATION CONTACT: 

Julianne Odend’hal, Policy, Training, 

and Oversight Division, Acquisition 

Policy and Training Service Center 

(3802R), Environmental Protection 

Agency, 1200 Pennsylvania Avenue 

NW., Washington, DC 20460; telephone 

number: (202) 564–5218; email address: 

odend’hal.julianne@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Why is EPA using a direct final rule? 

EPA is publishing this rule without a 

prior proposed rule because EPA views 

this as a noncontroversial action and 

anticipates no adverse comment. 

EPAAR parts 1503 and 1552 are 

amended to conform to the format of the 

Federal Acquisition Regulation (FAR) 

and to correct, clarify and update 

information. If EPA receives adverse 

comment, a timely withdrawal will be 

published in the Federal Register 

informing the public that the rule will 

not take effect. Any parties interested in 

commenting must do so at this time. 

II. Does this action apply to me? 

The EPAAR applies to contractors 

who have a contract with the EPA. 

III. What should I consider as I prepare 

my comments for EPA? 

A. Submitting CBI. Do not submit this 

information to EPA through http://

www.regulations.gov or email. Clearly 

mark the part or all of the information 

that you claim to be CBI. For CBI 

information in a disk or CD–ROM that 

you mail to EPA, mark the outside of the 

disk or CD–ROM as CBI, and then 

identify electronically within the disk or 

CD–ROM the specific information that 

is claimed as CBI. In addition to one 

complete version of the comment that 

includes information claimed as CBI, a 

copy of the comment that does not 

contain the information claimed as CBI 

must be submitted for inclusion in the 

public docket. Information so marked 

will not be disclosed except in 

accordance with procedures set forth in 

40 CFR part 2. 

B. Tips for Preparing Your Comments. 

When submitting comments, remember 

to: 

• Identify the rulemaking by docket 

number and other identifying 

information (subject heading, Federal 

Register date and page number). 

• Follow directions—The agency may 

ask you to respond to specific questions 

or organize comments by referencing a 

Code of Federal Regulations (CFR) part 

or section number. 

• Explain why you agree or disagree, 

suggest alternatives, and substitute 

language for your requested changes. 

• Describe any assumptions and 

provide any technical information and/ 

or data that you used. 

• If you estimate potential costs or 

burdens, explain how you arrived at 

your estimate in sufficient detail to 

allow for it to be reproduced. 

• Provide specific examples to 

illustrate your concerns, and suggest 

alternatives. 

• Explain your views as clearly as 

possible, avoiding the use of profanity 

or personal threats. 

• Make sure to submit your 

comments by the comment period 

deadline identified. 

IV. Background 

EPAAR parts 1503 and 1552 are 

amended to conform to the format of the 

Federal Acquisition Regulation (FAR) 

and to correct, clarify and update 

information. 

V. Final Rule 

This direct final rule makes the 

following changes: (1) Updates the title 

and clarifies the information in section 

1503.101–370 including correcting 

statute citations; (2) corrects section 

number ‘‘1503.104–5’’ to read 

‘‘1503.104–4’’ and corrects the reference 

to ‘‘FAR 3.104–5’’ to read ‘‘FAR 3.104– 

4’’; (3) removes section 1503.408, 

Evaluation of the SF 119, because the 

form no longer exists; (4) updates the 

subpart number and title of ‘‘1503.5’’ 

including ‘‘1503.500–70’’, ‘‘1503.500– 

71’’ and ‘‘1503.500–72’’ to read 

‘‘1503.10 Contractor Code of Business 

Ethics and Conduct’’, ‘‘1503.1002 

Policy’’, ‘‘1503.1003 Requirements’’, 

and ‘‘1503.1004 Contract clause’’ to 

conform to the FAR, updates the 

reference to ‘‘EPAAR 1503.500–71(b)’’ 

to read ‘‘EPAAR 1503.1003(b)’’; (5) 

replaces the term ‘‘regular employee’’ 

with ‘‘employee’’ which is defined at 5 

U.S.C. 2505, and replaces the term 

‘‘special employee’’ with ‘‘special 

government employee’’ which is 

defined at 18 U.S.C. 202 in sections 

1503.600–71, 1503.601, and 1552.203– 

70; and (6) updates the EPA OIG contact 

information in section 1552.203–71. 

VI. 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 and was therefore not 

submitted to the Office of Management 

and Budget (OMB) for review. 

B. Paperwork Reduction Act 

This action does not impose an 

information collection burden under the 

PRA because it does not contain any 

information collection activities. 


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31178 Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / Rules and Regulations 

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. 

I certify that this action will not have 

a significant economic impact on a 

substantial number of small entities 

under the RFA. In making this 

determination, the impact of concern is 

any significant adverse economic 

impact on 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, has 

no net burden or otherwise has a 

positive economic effect on the small 

entities subject to the rule. This action 

amends EPAAR parts 1503 and 1552 to 

conform to the format of the Federal 

Acquisition Regulation (FAR) and to 

correct, clarify and update information. 

We have therefore concluded that this 

action will have no net regulatory 

burden for all directly regulated small 

entities. 

D. Unfunded Mandates Reform Act 

This action does not contain an 

unfunded mandate of $100 million or 

more as described in UMRA, 2 U.S.C. 

1531–1538, and does not significantly or 

uniquely affect small governments. The 

action imposes no enforceable duty on 

any state, local or tribal governments or 

the private sector. 

E. Executive Order 13132: Federalism 

This action 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. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications, as specified in Executive 

Order 13175 (65 FR 67249, November 9, 

2000). Thus, Executive Order 13175 

does not apply to this action. In the 

spirit of Executive Order 13175, and 

consistent with EPA policy to promote 

communication between EPA and Tribal 

governments, EPA specifically solicits 

additional comment on this proposed 

rule from Tribal officials. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

EPA interprets Executive Order 13045 

(62 FR 19885, April 23, 1997) as 

applying only to those regulatory 

actions that concern health or safety 

risks, such that the analysis required 

under section 5–501 of the Executive 

Order has the potential to influence the 

regulation. This action is not subject to 

Executive Order 13045 because it does 

not establish an environmental standard 

intended to mitigate health or safety 

risks. 

H. Executive Order 13211: Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not subject to Executive 

Order 13211 (66 FR 28355 (May 22, 

2001)), because it is not a significant 

regulatory action under Executive Order 

12866. 

I. National Technology Transfer and 

Advancement Act of 1995 

This rulemaking does not involve 

technical 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 final 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. 

K. Congressional Review 

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 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 

exempts from section 801 the following 

types of rules (1) rules of particular 

applicability; (2) rules relating to agency 

management or personnel; and (3) rules 

of agency organization, procedure, or 

practice that do not substantially affect 

the rights or obligations of non-agency 

parties. 5 U.S.C. 804(3). EPA is not 

required to submit a rule report 

regarding this action under section 801 

because this is a rule of agency 

organization, procedure, or practice that 

does not substantially affect the rights or 

obligations of non-agency parties. 

List of Subjects in 48 CFR Parts 1503 

and 1552 

Government procurement. 

Dated: May 2, 2016. 

John R. Bashista, 

Director, Office of Acquisition Management. 

For the reasons stated in the 

preamble, 48 CFR parts 1503 and 1552 

are amended as set forth below: 

■ 1. Revise part 1503 to read as follows: 

PART 1503—IMPROPER BUSINESS 

PRACTICES AND PERSONAL 

CONFLICTS OF INTEREST 

Sec. 

1503.000 Scope of part. 

Subpart 1503.1 Safeguards 

1503.101–370 Financial conflicts of interest 

and loss of impartiality. 

1503.104–4 Disclosure, protection, and 

marking of contractor bid or proposal 

information and source selection 

information. 

Subpart 1503.6 Contracts With 

Government Employees or Organizations 

Owned or Controlled by Them 

1503.600–70 Scope of subpart. 

1503.600–71 Definitions. 

1503.601 Policy. 

1503.602 Exceptions. 

1503.670 Disclosure provision. 

Subpart 1503.9 Whistleblower Protections 

for Contractor Employees 

1503.905 Procedures for investigating 

complaints. 

Subpart 1503.10 Contractor Code of 

Business Ethics and Conduct 

1503.1002 Policy. 

1503.1003 Requirements. 

1503.1004 Contract clause. 

Authority: 5 U.S.C. 301 and 41 U.S.C. 

418b. 

1503.000 Scope of part. 

This part implements FAR part 3, 

cites EPA regulations on employee 

responsibilities and conduct, establishes 

responsibility for reporting violations 

and related actions, and provides for 

authorization of exceptions to policy. 

Subpart 1503.1—Safeguards 

1503.101–370 Financial conflicts of 

interest and loss of impartiality. 

(a) Each EPA employee (including 

special government employees as 

defined by 18 U.S.C. 202 and 1503.600– 

71(b)) engaged in source evaluation and 

selection is required to abide by and be 


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Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / Rules and Regulations 31179 

familiar with the conflict of interest 

statutes codified in Title 18 of the 

United States Code, as well as the 

Standards of Ethical Conduct for 

Employees of the Executive Branch, 5 

CFR part 2635. 

(b) Pursuant to the financial conflict 

of interest statute, 18 U.S.C. 208 and 5 

CFR part 2635, subparts D and E, each 

employee must abide by ethics 

requirements regarding financial 

conflict of interest and impartiality in 

performing official duties. The 

employee shall inform his or her Deputy 

Ethics Official and the Source Selection 

Authority (SSA) in writing if his/her 

participation in the source evaluation 

and selection process may raise possible 

or apparent conflict of interest or 

impartiality concerns. The employee 

must cease work on the source 

evaluation and selection process until 

the appropriate ethics official makes a 

determination. Please note that only the 

Office of General Counsel can direct 

employees to divest of financial 

interests or to recommend any waivers 

of the financial conflict of interest 

standards. 

1503.104–4 Disclosure, protection, and 

marking of contractor bid or proposal 

information and source selection 

information. 

(a)(1) The Chief of the Contracting 

Office (CCO) is the designated official to 

make the decision whether support 

contractors are used in proposal 

evaluation (as authorized at FAR 

15.305(c) and restricted at FAR 

37.203(d)). 

(2) The following written certification 

and agreement shall be obtained from 

non-Government evaluator prior to the 

release of any proposal to that evaluator: 

‘‘Certification on the Use and Disclosure 

of Proposals’’ 

RFP #: 

Offeror: 

1. I hereby certify that to the best of my 

knowledge and belief, no conflict of interest 

exists that may diminish my capacity to 

perform an impartial, technically sound, 

objective review of this proposal(s) or 

otherwise result in a biased opinion or unfair 

competitive advantage. 

2. I agree to use any proposal information 

only for evaluation purposes. I agree not to 

copy any information from the proposal(s), to 

use my best effort to safeguard such 

information physically, and not to disclose 

the contents of nor release any information 

relating to the proposal(s) to anyone outside 

of the evaluation team assembled for this 

acquisition or individuals designated by the 

Contracting Officer. 

3. I agree to return to the Government all 

copies of proposals, as well as any abstracts, 

upon completion of the evaluation. 

Name and Organization: 

Date of Execution: 

(End of certificate) 

(b) Information contained in 

proposals will be protected and 

disclosed to the extent permitted by 

law, and in accordance with FAR 3.104– 

4, 15.207, and Agency procedures at 40 

CFR part 2. 

Subpart 1503.6—Contracts With 

Government Employees or 

Organizations Owned or Controlled by 

Them 

1503.600–70 Scope of subpart. 

This subpart implements and 

supplements FAR subpart 3.6 and sets 

forth EPA policy and procedures for 

identifying and dealing with conflicts of 

interest and improper influence or 

favoritism in connection with contracts 

involving current or former EPA 

employees. This subpart does not apply 

to agreements with other departments or 

agencies of the Federal Government, nor 

to contracts awarded to State or local 

units of Government. 

1503.600–71 Definitions. 

(a) Employee means an EPA officer 

and an individual who is appointed in 

the civil service and engaged in the 

performance of a Federal function under 

authority of law or an Executive act. See 

5 U.S.C. 2105. 

(b) Special government employee 

means an officer or employee of EPA 

who is retained, designated, appointed 

or employed to perform, with or without 

compensation, for not to exceed 130 

days during any period of 365 

consecutive days, temporary duties 

either on a full-time or intermittent 

basis. See 18 U.S.C. 202. 

1503.601 Policy. 

(a) No contract may be awarded 

without competition to a former 

employee or special government 

employee (or to a business concern or 

other organization owned or 

substantially owned or controlled by a 

former employee) whose employment 

terminated within 365 calendar days 

before submission of a proposal to EPA. 

(b) No contract shall be awarded 

without competition to a firm which 

employs, or proposes to employ, a 

current employee or special government 

employee, or a former EPA employee or 

special government employee, whose 

employment terminated within 365 

calendar days before submission of a 

proposal to EPA, if either of the 

following conditions exists: 

(1) The current or former EPA 

employee or special government 

employee is or was involved in 

development or negotiating the proposal 

for the prospective contractor; or 

(2) The current or former EPA 

employee or special government 

employee will be involved directly or 

indirectly in the management, 

administration, or performance of the 

contract. 

1503.602 Exceptions. 

The Assistant Administrator for the 

Office of Administration and Resources 

Management may authorize an 

exception, in writing, to the policy in 

FAR 3.601 and 1503.601 for the reasons 

stated in FAR 3.602, if the exception 

would not involve a violation of 18 

U.S.C. 203, 18 U.S.C. 205, 18 U.S.C. 207, 

18 U.S.C. 208, the Standards of Ethical 

Conduct for Employees of the Executive 

Branch at 5 CFR part 2635, or the EPA 

supplemental regulations at 5 CFR part 

6401. The Assistant Administrator shall 

consult with the Designated Agency 

Ethics Official before authorizing any 

exceptions. 

1503.670 Disclosure provision. 

The Contracting Officer shall insert 

the provision at 1552.203–70, Current/

Former Agency Employee Involvement 

Certification, in all solicitations for solesource acquisitions. 

Subpart 1503.9—Whistleblower 

Protections for Contractor Employees 

1503.905 Procedures for investigating 

complaints. 

The Assistant Administrator for the 

Office of Administration and Resources 

Management is designated as the 

recipient of the written report of 

findings by the Inspector General. The 

Assistant Administrator shall ensure 

that the report of findings is 

disseminated in accordance with FAR 

3.905(c). 

Subpart 1503.10—Contractor Code of 

Business Ethics and Conduct 

1503.1002 Policy. 

Government contractors must conduct 

themselves with the highest degree of 

integrity and honesty. Contractors 

should have standards of conduct and 

internal control systems that: 

(a) Are suitable to the size of the 

company and the extent of their 

involvement in Government contracting; 

(b) Promote such standards; 

(c) Facilitate timely discovery and 

disclosure of improper conduct in 

connection with Government contracts; 

and 

(d) Ensure corrective measures are 

promptly instituted and carried out. 


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31180 Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / Rules and Regulations 

1503.1003 Requirements. 

(a) A contractor’s system of 

management controls should provide 

for: 

(1) A written code of business ethics 

and conduct and an ethics training 

program for all employees; 

(2) Periodic reviews of company 

business practices, procedures, policies 

and internal controls for compliance 

with standards of conduct and the 

special requirements of Government 

contracting; 

(3) A mechanism, such as a hotline, 

by which employees may report 

suspected instances of improper 

conduct, and instructions that 

encourage employees to make such 

reports; 

(4) Internal and/or external audits, as 

appropriate; 

(5) Disciplinary action for improper 

conduct; 

(6) Timely reporting to appropriate 

Government officials of any suspected 

or possible violation of law in 

connection with Government contracts 

or any other irregularities in connection 

with such contracts; and 

(7) Full cooperation with any 

Government agencies responsible for 

either investigation or corrective 

actions. 

(b) Contractors who are awarded an 

EPA contract of $1 million or more must 

display EPA Office of Inspector General 

Hotline Posters unless the contractor 

has established an internal reporting 

mechanism and program as described in 

paragraph (a) of this section. 

1503.1004 Contract clause. 

As required by EPAAR 1503.1003(b), 

the contracting officer shall insert the 

clause at 1552.203–71, Display of EPA 

Office of Inspector General Hotline 

Poster, in all contracts valued at 

$1,000,000 or more, including all 

contract options. 

PART 1552—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 2. The authority citation for part 1552 

is revised to read as follows: 

Authority: 5 U.S.C. 301 and 41 U.S.C. 

418b. 

■ 3. Revise section 1552.203–70 to read 

as follows: 

1552.203–70 Current/former agency 

employee involvement certification. 

As prescribed in 1503.670, insert the 

following provision in all EPA 

solicitations for sole-source 

acquisitions. 

Current/Former Agency Employee 

Involvement Certification Jul 2016 

The offeror (quoter) hereby certifies that: 

(a) He/She is [ ] is not [ ] a former employee 

or special government employee whose EPA 

employment terminated within one year 

prior to submission of this offer (quote). 

(b) He/She does [ ] does not [ ] employ or 

propose to employ a current/former 

employee or special government employee 

whose EPA employment terminated within 

one year prior to submission of this offer 

(quote) and who has been or will be 

involved, directly or indirectly, in 

developing or negotiating this offer (quote) 

for the offeror (quoter), or in the 

management, administration or performance 

of any contract resulting from this offer 

(quote). 

(c) He/She does [ ] does not [ ] employ or 

propose to employ as a consultant or 

subcontractor under any contract resulting 

from this offer (quote) a current/former 

employee or special government employee 

whose EPA employment terminated within 

one year prior to submission of this offer 

(quote). 

(d) A former employee or special 

government employee whose EPA 

employment terminated within one year 

prior to submission of this offer (quote) or 

such former employee’s spouse or minor 

child does [ ] does not [ ] own or substantially 

own or control the offeror’s (quoter’s) firm. 

(e) See EPAAR part 1503.600–71 for 

definitions of the terms ‘‘employee’’ and 

‘‘special government employee.’’ 

(End of provision) 

■ 4. Revise section 1552.203–71 to read 

as follows: 

1552.203–71 Display of EPA Office of 

Inspector General Hotline poster. 

As prescribed in 1503.1004, insert the 

following clause in all contracts valued 

at $1,000,000 or more including all 

contract options. 

Display of EPA Office of Inspector 

General Hotline Poster Jul 2016 

(a) For EPA contracts valued at $1,000,000 

or more including all contract options, the 

contractor shall prominently display EPA 

Office of Inspector General Hotline posters in 

contractor facilities where the work is 

performed under the contract. 

(b) Office of Inspector General hotline 

posters may be obtained from the EPA Office 

of Inspector General, ATTN: OIG Hotline 

(2443), 1200 Pennsylvania Avenue NW., 

Washington, DC 20460, or by accessing the 

OIG Web site at: http://www.epa.gov/oig/ 

hotline.html. 

(c) The Contractor need not comply with 

paragraph (a) of this clause if it has 

established a mechanism, such as a hotline, 

by which employees may report suspected 

instances of improper conduct, and has 

provided instructions that encourage 

employees to make such reports. 

(End of clause) 

[FR Doc. 2016–11509 Filed 5–17–16; 8:45 am] 

BILLING CODE 6560–50–P 


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