Federal Register / Vol. 75, No. 238 / Monday, December 13, 2010 / Rules and Regulations 77739 

2010)’’ in its place; revising the date of 

Alternate II; and removing from 

Alternate II, paragraph (e)(1)(ii)(C) 

‘‘(MAY 2004)’’ and adding ‘‘(DEC 2010)’’ 

in its place. 

The revised text reads as follows: 

52.212–5 Contract Terms and Conditions 

Required To Implement Statutes or 

Executive Orders—Commercial Items. 

* * * * * 

Contract Terms and Conditions 

Required To Implement Statutes or 

Executive Orders—Commercial Items 

(DEC 2010) 

* * * * * 

Alternate II (DEC 2010). * * * 

* * * * * 

■ 6. Amend section 52.213–4 by 

revising the date of the clause, and 

paragraph (a)(2)(vii) to read as follows: 

52.213–4 Terms and Conditions— 

Simplified Acquisitions (Other Than 

Commercial Items). 

* * * * * 

Terms and Conditions—Simplified 

Acquisitions (Other Than Commercial 

Items) (DEC 2010) 

(a) * * * 

(2) * * * 

(vii) 52.244–6, Subcontracts for 

Commercial Items (DEC 2010). 

* * * * * 

■ 7. Amend section 52.219–8 by— 

■ a. Revising the date of the clause; and 

■ b. In paragraph (c), in the definition 

‘‘Small disadvantaged business 

concern’’, by redesignating paragraphs 

(1) through (4) as paragraphs (1)(i) 

through (iv), respectively, and revising 

the newly redesignated paragraph 

(1)(iv); and adding paragraph (2). 

The revised and added text reads as 

follows: 

52.219–8 Utilization of Small Business 

Concerns. 

* * * * * 

Utilization of Small Business Concerns 

(DEC 2010) 

* * * * * 

(c) * * * 

* * * * * 

Small disadvantaged business concern 

* * * 

(1)(i) * * * 

(iv) It is identified, on the date of its 

representation, as a certified small 

disadvantaged business in the CCR Dynamic 

Small Business Search database maintained 

by the Small Business Administration, or 

(2) It represents in writing that it qualifies 

as a small disadvantaged business (SDB) for 

any Federal subcontracting program, and 

believes in good faith that it is owned and 

controlled by one or more socially and 

economically disadvantaged individuals and 

meets the SDB eligibility criteria of 13 CFR 

124.1002. 

* * * * * 

■ 8. Amend section 52.219–25 by 

revising the date of the clause; revising 

the second sentence of paragraph (a); 

redesignating paragraph (b) as paragraph 

(c); and adding a new paragraph (b) to 

read as follows: 

52.219–25 Small Disadvantaged Business 

Participation Program—Disadvantaged 

Status and Reporting. 

* * * * * 

Small Disadvantaged Business 

Participation Program—Disadvantaged 

Status and Reporting (DEC 2010) 

(a) * * * The Contractor shall obtain 

representations of small disadvantaged status 

from joint venture partners, teaming 

arrangement members, and subcontractors 

(see exception in paragraph (b) of this 

section) through use of a provision 

substantially the same as paragraph (b)(1)(i) 

of the provision at FAR 52.219–22, Small 

Disadvantaged Business Status. * * * 

(b) For subcontractors that are not certified 

as a small disadvantaged business by the 

Small Business Administration, the 

Contractor shall accept the subcontractor’s 

written self-representation as a small 

disadvantaged business, unless the 

Contractor has reason to question the selfrepresentation. 

* * * * * 

■ 9. Amend section 52.244–6 by 

revising the date of the clause; and 

removing from paragraph (c)(1)(iii) 

‘‘(MAY 2004)’’ and adding ‘‘(DEC 2010)’’ 

in its place. 

The revised text reads as follows: 

52.244–6 Subcontracts for Commercial 

Items. 

* * * * * 

Subcontracts for Commercial Items 

(DEC 2010) 

* * * * * 

[FR Doc. 2010–30563 Filed 12–10–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 9 and 52 

[FAC 2005–47; FAR Case 2009–036; Item 

V; Docket 2010–0109, Sequence 1] 

RIN 9000–AL75 

Federal Acquisition Regulation; 

Uniform Suspension and Debarment 

Requirement 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council (the 

Councils) are issuing an interim rule 

amending the Federal Acquisition 

Regulation (FAR) to implement section 

815 of the National Defense 

Authorization Act for Fiscal Year 2010. 

Section 815 extends the flowdown of 

the restriction on subcontracting to 

lower tier subcontractors that have been 

suspended or debarred, with some 

exceptions for contracts for the 

acquisition of commercial items and 

commercially available off-the-shelf 

items. 

DATES: Effective Date: December 13, 

2010. 

Comment Date: Interested parties 

should submit written comments to the 

Regulatory Secretariat on or before 

February 11, 2011 to be considered in 

the formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAC 2005–47, FAR Case 

2009–036, by any of the following 

methods: 

• Regulations.gov: http:// 

www.regulations.gov. Submit comments 

via the Federal eRulemaking portal by 

inputting ‘‘FAR Case 2009–036’’ under 

the heading ‘‘Enter Keyword or ID’’ and 

selecting ‘‘Search’’. Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘FAR Case 2009–036’’. Follow the 

instructions provided at the ‘‘Submit a 

Comment’’ screen. Please include your 

name, company name (if any), and ‘‘FAR 

Case 2009–036’’ on your attached 

document. 

• Mail: General Services 

Administration, Regulatory Secretariat 

(MVCB), ATTN: Hada Flowers, 1275 

First Street, NE., Washington, DC 20417. 

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77740 Federal Register / Vol. 75, No. 238 / Monday, December 13, 2010 / Rules and Regulations 

Instructions: Please submit comments 

only and cite FAC 2005–47, FAR Case 

2009–036, in all correspondence related 

to this case. All comments received will 

be posted without change to http:// 

www.regulations.gov, including any 

personal and/or business confidential 

information provided. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Ms. 

Millisa Gary, Procurement Analyst, at 

(202) 501–0699. Please cite FAC 2005– 

47, FAR Case 2009–036. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat at (202) 501–4755. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This interim rule revises the FAR to 

implement section 815 of the National 

Defense Authorization Act for Fiscal 

Year 2010 (Pub. L. 111–84). Section 815 

amends section 2455(c)(1) of the Federal 

Acquisition Streamlining Act of 1994 

(31 U.S.C. 6101 note) by amending the 

definition of ‘‘procurement activities’’ to 

include subcontracts at any tier, 

except— 

• It does not include subcontracts for 

commercially available off-the-shelf 

(COTS) items; and 

• In the case of commercial items, 

such term includes only the first-tier 

subcontracts. 

This has the effect, except for COTS 

items, of expanding the requirement of 

2455(a), which states that ‘‘No agency 

shall allow a party to participate in any 

procurement * * * activity if any 

agency has debarred, suspended, or 

otherwise excluded * * * that party 

from participation in a procurement 

* * * activity.’’ 

Prime contractors will not be 

restricted from subcontracts with 

suspended or debarred entities for 

COTS items; subcontractors for COTS 

items will not be required to disclose to 

the prime contractor whether the 

subcontractor, or any of its principals, is 

debarred, suspended, or proposed for 

debarment at the time of subcontract 

award. 

This interim rule amends— 

(1) FAR 9.405–2 to exclude COTS 

items from the restrictions on 

subcontracting with contractors that 

have been debarred, suspended, or 

proposed for debarment; 

(2) The clause at FAR 52.209–6, 

Protecting the Government’s Interest 

When Subcontracting with Contractors 

Debarred, Suspended, or Proposed for 

Debarment, by flowing down the 

requirements to check whether a 

subcontractor is suspended or debarred 

beyond the first-tier, with the stated 

exceptions for COTS items; and 

(3) The clause at FAR 52.212–5, 

Contract Terms and Conditions 

Required to Implement Statutes or 

Executive Orders—Commercial Items, 

because the requirement that 

commercial contracts must flow the 

requirement down to the first-tier is 

now statutory. 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

The Councils do not expect this 

interim rule to have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act. The rule removes the current 

requirements relating to subcontracts for 

COTS items, and in the case of 

commercial items, the requirement 

extends only to the first-tier 

subcontracts. This rule will impact 

small entities that are awarded a lowertier subcontract for a non-COTS item 

that exceeds $30,000, in that these 

entities must now disclose to the highertier subcontractor whether they are 

suspended, debarred, or proposed for 

suspension. Although a substantial 

number of small entities may be 

impacted by this rule, the impact is not 

significant. It will likely only take one 

minute to include the required 

information with an offer. For the other 

impact of the rule, which will require 

the higher-tier subcontractor to provide 

an explanation if desiring to subcontract 

with an entity that has been debarred, 

suspended, or proposed for debarment, 

the Councils do not expect this 

requirement to impact a substantial 

number of small entities, because it 

would only be in rare circumstances 

that a subcontractor would potentially 

jeopardize performance or integrity by 

knowingly contracting with an entity 

that is debarred, suspended or proposed 

for debarment. Therefore, an Initial 

Regulatory Flexibility Analysis has not 

been performed. The Councils invite 

comments from small business concerns 

and other interested parties on the 

expected impact of this rule on small 

entities. 

The Councils will also consider 

comments from small entities 

concerning the existing regulations in 

parts affected by this rule in accordance 

with 5 U.S.C. 610. Interested parties 

must submit such comments separately 

and should cite 5 U.S.C. 610 (FAC 

2005–47, FAR Case 2008–036) in 

correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

apply; however, these changes to the 

FAR only impose minimal additional 

information collection requirements to 

the paperwork burden previously 

approved under OMB Control Number 

9000–0094. Because the change in 

burden hours is so slight, no new 

approval by OMB is required. 

D. Determination to Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of 

Defense, the Administrator of General 

Services, and the Administrator of the 

National Aeronautics and Space 

Administration that urgent and 

compelling reasons exist to promulgate 

this interim rule without prior 

opportunity for public comment. This 

action is necessary to implement the 

changes resulting from the enactment of 

Section 815 of the National Defense 

Authorization Act for Fiscal Year 2010 

(Pub. L. 111–84), effective October 28, 

2009. However, pursuant to 41 U.S.C. 

418b and FAR 1.501–3(b), the Councils 

will consider public comments received 

in response to this interim rule in the 

formation of the final rule. 

List of Subjects in 48 CFR Parts 9 and 

52 

Government procurement. 

Dated: November 24, 2010. 

Millisa Gary, 

Acting Director, Acquisition Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 9 and 52 as set 

forth below: 

■ 1. The authority citation for 48 CFR 

parts 9 and 52 continues to read as 

follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 9—CONTRACTOR 

QUALIFICATIONS 

■ 2. Amend section 9.405–2 by revising 

paragraph (b) introductory text to read 

as follows: 

9.405–2 Restrictions on subcontracting. 

* * * * * 

(b) The Government suspends or 

debars contractors to protect the 

Government’s interests. By operation of 

the clause at 52.209–6, Protecting the 

Government’s Interests When 

Subcontracting with Contractors 

Debarred, Suspended or Proposed for 

Debarment, contractors shall not enter 

into any subcontract in excess of 

$30,000, other than a subcontract for a 

commercially available off-the-shelf 

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Federal Register / Vol. 75, No. 238 / Monday, December 13, 2010 / Rules and Regulations 77741 

item, with a contractor that has been 

debarred, suspended, or proposed for 

debarment unless there is a compelling 

reason to do so. If a contractor intends 

to subcontract, other than a subcontract 

for a commercially available off-theshelf item, with a party that is debarred, 

suspended, or proposed for debarment 

as evidenced by the parties’ inclusion in 

the EPLS (see 9.404), a corporate officer 

or designee of the contractor is required 

by operation of the clause at 52.209–6, 

Protecting the Government’s Interests 

when Subcontracting with Contractors 

Debarred, Suspended, or Proposed for 

Debarment, to notify the contracting 

officer, in writing, before entering into 

such subcontract. For contracts for the 

acquisition of commercial items, the 

notification requirement applies only 

for first-tier subcontracts. For all other 

contracts, the notification requirement 

applies to subcontracts at any tier. The 

notice must provide the following: 

* * * * * 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 3. Amend section 52.209–6 by— 

■ a. Revising the date of the clause; 

■ b. Redesignating paragraphs (a) 

through (c) as paragraphs (b) through 

(d), respectively; and adding a new 

paragraph (a); 

■ c. Revising the newly designated 

paragraphs (b), (c), and (d) introductory 

text; and 

■ d. Adding paragraph (e). 

The revised and added text reads as 

follows: 

52.209–6 Protecting the Government’s 

Interest When Subcontracting With 

Contractors Debarred, Suspended, or 

Proposed for Debarment. 

* * * * * 

Protecting the Government’s Interest 

When Subcontracting With Contractors 

Debarred, Suspended, or Proposed for 

Debarment (DEC 2010) 

(a) Definition. Commercially available offthe-shelf (COTS) item, as used in this 

clause— 

(1) Means any item of supply (including 

construction material) that is— 

(i) A commercial item (as defined in 

paragraph (1) of the definition in FAR 2.101); 

(ii) Sold in substantial quantities in the 

commercial marketplace; and 

(iii) Offered to the Government, under a 

contract or subcontract at any tier, without 

modification, in the same form in which it 

is sold in the commercial marketplace; and 

(2) Does not include bulk cargo, as defined 

in section 3 of the Shipping Act of 1984 (46 

U.S.C. App. 1702), such as agricultural 

products and petroleum products. 

(b) The Government suspends or debars 

Contractors to protect the Government’s 

interests. Other than a subcontract for a 

commercially available off-the-shelf item, the 

Contractor shall not enter into any 

subcontract, in excess of $30,000 with a 

Contractor that is debarred, suspended, or 

proposed for debarment by any executive 

agency unless there is a compelling reason to 

do so. 

(c) The Contractor shall require each 

proposed subcontractor whose subcontract 

will exceed $30,000, other than a 

subcontractor providing a commercially 

available off-the-shelf item, to disclose to the 

Contractor, in writing, whether as of the time 

of award of the subcontract, the 

subcontractor, or its principals, is or is not 

debarred, suspended, or proposed for 

debarment by the Federal Government. 

(d) A corporate officer or a designee of the 

Contractor shall notify the Contracting 

Officer, in writing, before entering into a 

subcontract with a party (other than a 

subcontractor providing a commercially 

available off-the-shelf item) that is debarred, 

suspended, or proposed for debarment (see 

FAR 9.404 for information on the Excluded 

Parties List System). The notice must include 

the following: 

* * * * * 

(e) Subcontracts. Unless this is a contract 

for the acquisition of commercial items, the 

Contractor shall include the requirements of 

this clause, including this paragraph (e) 

(appropriately modified for the identification 

of the parties), in each subcontract that— 

(1) Exceeds $30,000 in value; and 

(2) Is not a subcontract for commercially 

available off-the-shelf items. 

(End of clause) 

■ 4. Amend section 52.212–5 by— 

■ a. Revising the date of the clause; and 

■ b. Redesignating paragraphs (b)(6) 

through (b)(44) as paragraphs (b)(7) 

through (b)(45), respectively; and 

adding a new paragraph (b)(6). 

The revised and added text reads as 

follows: 

52.212–5 Contract Terms and Conditions 

Required To Implement Statutes or 

Executive Orders—Commercial Items. 

* * * * * 

Contract Terms and Conditions 

Required To Implement Statutes or 

Executive Orders—Commercial Items 

(DEC 2010) 

(b) * * * 

(6) 52.209–6, Protecting the Government’s 

Interest When Subcontracting with 

Contractors Debarred, Suspended, or 

Proposed for Debarment (DEC 2010) (31 

U.S.C. 6101 note). (Applies to contracts over 

$30,000). (Not applicable to subcontracts for 

the acquisition of commercially available offthe-shelf items). 

* * * * * 

■ 5. Amend section 52.213–4 by 

revising the date of the clause and 

paragraph (b)(2)(i) to read as follows: 

52.213–4 Terms and Conditions— 

Simplified Acquisitions (Other Than 

Commercial Items). 

* * * * * 

Terms and Conditions—Simplified 

Acquisitions (Other Than Commercial 

Items) (DEC 2010) 

(b) * * * 

(2) * * * 

(i) 52.209–6, Protecting the Government’s 

Interest When Subcontracting with 

Contractors Debarred, Suspended, or 

Proposed for Debarment (DEC 2010) (Applies 

to contracts over $30,000). (Not applicable to 

subcontracts for the acquisition of 

commercially available off-the-shelf items). 

* * * * * 

[FR Doc. 2010–30565 Filed 12–10–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 15, 31, and 52 

[FAC 2005–47; FAR Case 2008–031; Item 

VI; Docket 2009–0034, Sequence 2] 

RIN 9000–AL27 

Federal Acquisition Regulation; 

Limitation on Pass-Through Charges 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have adopted as final, with 

changes, the interim rule amending the 

Federal Acquisition Regulation (FAR) to 

implement section 866 of the Duncan 

Hunter National Defense Authorization 

Act (NDAA) for Fiscal Year (FY) 2009, 

which applies to executive agencies 

other than DoD. DoD is subject to 

section 852 of the John Warner NDAA 

for FY 2007, which is also implemented 

in this final rule. Section 866 requires 

the Councils to amend the FAR, and 

section 852 requires the Secretary of 

Defense to prescribe regulations to 

minimize excessive pass-through 

charges by contractors from 

subcontractors, or from tiers of 

subcontractors, that add no or negligible 

value, and to ensure that neither a 

contractor nor a subcontractor receives 

indirect costs or profit/fee (i.e., passthrough charges) on work performed by 

mstockstill on DSKH9S0YB1PROD with RULES3