Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 82575 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 4 and 52 

[FAC 2005–48; FAR Case 2009–027; Item 

II; Docket 2010–0091, Sequence 1] 

RIN 9000–AL60 

Federal Acquisition Regulation; 

Personal Identity Verification of 

Contractor Personnel 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: DoD, GSA, and NASA are 

issuing a final rule amending the 

Federal Acquisition Regulation (FAR) to 

provide additional regulatory coverage 

to reinforce the requirement of 

collecting from contractors all forms of 

Government-provided identification 

once they are no longer needed to 

support a contract. 

DATES: Effective Date: January 31, 2011. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Mr. 

Michael Jackson, Procurement Analyst, 

at (202) 208–4949. For information 

pertaining to status or publication 

schedules, contact the Regulatory 

Secretariat at (202) 501–4755. Please 

cite FAC 2005–48, FAR Case 2009–027. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD Inspector General Audit Report 

No. D–2009–005, entitled ‘‘Controls 

Over the Contractor Common Access 

Card Life Cycle,’’ addressed whether 

Government controls over contractor 

Common Access Cards (CAC) were in 

place and worked as intended. A ‘‘CAC’’ 

is the DoD term for a Personal Identity 

Verification (PIV) card. A PIV card is 

required in order to gain access to a 

Federal facility. The most prevalent 

issue of the audit report, and the one 

that DoD, GSA, and NASA are 

undertaking to resolve with this case, 

was that the CACs were not adequately 

accounted for after contract performance 

or completion. 

DoD, GSA, and NASA are amending 

the FAR by inserting new paragraphs 

(d)(1) and (d)(2) under FAR 4.1301, 

Policy. Paragraph (d)(1) provides policy 

on recovering PIVs. Paragraph (d)(1) 

requires that agency procedures ensure 

that Government contractors account for 

all forms of Government-provided 

identification issued to Government 

contractors under a contract, and return 

such identification to the issuing agency 

at the earliest of any of the following, 

unless otherwise determined by the 

agency: When no longer needed for 

contract performance; upon completion 

of a contractor employee’s employment; 

or upon contract completion or 

termination. Paragraph (d)(2) authorizes 

the contracting officer to delay final 

payment under a contract if the 

contractor fails to comply with these 

requirements. 

DoD, GSA, and NASA are also 

modifying FAR clause 52.204–9, 

Personal Identity Verification of 

Contractor Personnel, to be consistent 

with FAR part 4. 

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

75 FR 28771 on May 24, 2010. Three 

respondents submitted four comments 

on the proposed rule, which are 

addressed below. 

Although none of the public 

comments received caused a change in 

the FAR text, the FAR text is changed 

in the final rule as follows: 

• FAR 4.1301(d)(1) is revised to 

clarify that this section applies to 

agency procedures related to PIV card 

return. 

• FAR 4.1301(d)(1) and 52.204–9(b) 

are revised to clarify that the rule 

applies when PIV cards are issued to 

contractor employees. 

• FAR 52.204–9(d) is revised to 

clarify that the rule flows down to all 

subcontractor employees when they are 

required to have access to a Federallycontrolled facility and/or routine access 

to a Federally-controlled information 

system. 

• FAR 52.204–9(d) is also revised to 

clarify that the prime contractor is 

responsible for returning all 

subcontractor PIV cards that have been 

issued by an agency. 

II. Discussion of Public Comments 

A. Lost Cards 

Comment: Two respondents stated 

that they have concerns over what 

happens when a contractor claims to 

have lost an identity card and therefore 

cannot return it. 

Response: Each agency will establish 

policies for control of PIV cards. Some 

agencies, for example, may replace a 

lost card once, but costs for replacement 

of any subsequent lost PIV cards may be 

borne by the contractor. The respondent 

may be voicing concern that there is a 

potential for misuse and fraud with lost 

cards. DoD, GSA, and NASA 

recommend that agencies program the 

PIV cards to become inactive if they 

have not been used after a prolonged 

period of time. 

B. Timing 

Comment: Another respondent 

expressed concern with waiting until 

the closeout period instead of taking 

care of the PIV cards at contract 

completion. 

Response: The FAR rule does not 

authorize waiting until the closeout 

period, but instead requires the 

contractor to take action as its 

employees leave, and again at contract 

completion. If the contractor fails to take 

action as its employees leave or at 

contract completion and the contracting 

officer does not follow up, then the 

contracting officer must reconcile the 

matter at contract closeout. 

C. Contractor Involvement in Issuance 

Process 

Comment: Another respondent stated 

that contractor companies are not 

typically involved in the PIV card 

issuance process. Further, contractor 

responsibility for PIV card retrieval 

could be improved through involving 

the contractor/subcontractor in the PIV 

card issuance process. 

Response: The Defense Acquisition 

Regulation Council and the Civilian 

Agency Acquisition Council agree that 

PIV card retrieval could be improved if 

the contractor was notified when an 

employee is issued a PIV card. DoD, 

GSA, and NASA recommend that 

agencies amend their PIV card 

procedures, if they are not doing so 

already, to notify the contractor 

company when an agency issues a PIV 

card to a contractor employee. In 

addition, the rule has been revised to 

state that the prime contractor is 

responsible for the return of all PIV 

cards that have been issued to the 

subcontractor’s employees by the 

agency. 

D. Withholding Payment 

Comment: The same respondent had 

concerns about how long the 

Government may withhold payment for 

non-compliance. The respondent stated 

that the period of time that final 

payment may be delayed should be 

specified, e.g., ‘‘not to exceed 30 days’’ 

or ‘‘pending satisfactory resolution of 

the non-compliance.’’ 

Response: It would be unwise to state 

a specific date such as ‘‘not to exceed 30 

days’’ because the contractor may need 

a longer time to return the PIV card. 

Adding language like ‘‘pending 

satisfactory resolution of the noncompliance’’ is superfluous, as it is a 

given that the Government would only 


emcdonald on DSK2BSOYB1PROD with RULES4
82576 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Proposed Rules 

hold final payment until the noncompliance has been resolved. 

III. Executive Order 12866 

This is not a significant regulatory 

action and, therefore, is 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. 

IV. Regulatory Flexibility Act 

DoD, GSA, and NASA certify that this 

final rule will not 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., because the 

requirements of the actions required and 

the clause are not significantly 

burdensome. Currently, it is a common 

business practice to have procedures in 

place to revoke and return PIV cards 

when no longer in use by the contractor. 

V. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. chapter 35. 

List of Subjects in 48 CFR Parts 4 and 

52 

Government procurement. 

Dated: December 22, 2010. 

Millisa Gary, 

Acting Director, Federal Acquisition Policy 

Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 4 and 52 as set 

forth below: 

■ 1. The authority citation for 48 CFR 

parts 4 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 4–ADMINISTRATIVE MATTERS 

■ 2. Amend section 4.1301 by adding 

paragraph (d) to read as follows: 

4.1301 Policy. 

* * * * * 

(d)(1) Agency procedures for the 

return of Personal Identity Verification 

(PIV) products shall ensure that 

Government contractors account for all 

forms of Government-provided 

identification issued to Government 

contractor employees under a contract, 

i.e., the PIV cards or other similar 

badges, and shall ensure that contractors 

return such identification to the issuing 

agency as soon as any of the following 

occurs, unless otherwise determined by 

the agency: 

(i) When no longer needed for 

contract performance. 

(ii) Upon completion of a contractor 

employee’s employment. 

(iii) Upon contract completion or 

termination. 

(2) The contracting officer may delay 

final payment under a contract if the 

contractor fails to comply with these 

requirements. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 3. Amend section 52.204–9 by 

revising the date of the clause; 

redesignating paragraph (b) as paragraph 

(d); adding a new paragraph (b); adding 

paragraph (c); and revising newly 

redesignated paragraph (d) to read as 

follows: 

52.204–9 Personal Identity Verification of 

Contractor Personnel. 

* * * * * 

Personal Identity Verification of 

Contractor Personnel (JAN 2011) 

* * * * * 

(b) The Contractor shall account for all 

forms of Government-provided identification 

issued to the Contractor employees in 

connection with performance under this 

contract. The Contractor shall return such 

identification to the issuing agency at the 

earliest of any of the following, unless 

otherwise determined by the Government: 

(1) When no longer needed for contract 

performance. 

(2) Upon completion of the Contractor 

employee’s employment. 

(3) Upon contract completion or 

termination. 

(c) The Contracting Officer may delay final 

payment under a contract if the Contractor 

fails to comply with these requirements. 

(d) The Contractor shall insert the 

substance of this clause, including this 

paragraph (d), in all subcontracts when the 

subcontractor‘s employees are required to 

have routine physical access to a Federallycontrolled facility and/or routine access to a 

Federally-controlled information system. It 

shall be the responsibility of the prime 

Contractor to return such identification to the 

issuing agency in accordance with the terms 

set forth in paragraph (b) of this section, 

unless otherwise approved in writing by the 

Contracting Officer. 

(End of Clause) 

[FR Doc. 2010–32895 Filed 12–29–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 49 

[FAC 2005–48; FAR Case 2009–031; Item 

III; Docket 2010–0090, Sequence 1] 

RIN 9000–AL56 

Federal Acquisition Regulation; 

Terminating Contracts 

AGENCY: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: DoD, GSA, and NASA are 

issuing a final rule amending the 

Federal Acquisition Regulation (FAR) to 

clarify the applicability of procedures 

regarding the termination of contracts to 

the acquisition of commercial items. 

DATES: Effective Date: January 31, 2011. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Ms. 

Jeritta Parnell, at (202) 501–4082. For 

information pertaining to status or 

publication schedules, contact the 

Regulatory Secretariat at (202) 501– 

4755. Please cite FAC 2005–48, FAR 

Case 2009–031. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD, GSA, and NASA published a 

proposed rule with request for 

comments in the Federal Register on 

May 20, 2010 (75 FR 28228). This rule 

clarifies that FAR part 49, Termination 

of Contracts, does not apply to the 

acquisition of commercial items when 

using FAR part 12 procedures. 

Discussion of Public Comments 

One respondent provided two 

comments. A discussion of the 

comments and the changes made to the 

proposed rule are summarized as 

follows: 

1. Comment: The respondent 

recommended clarifying the coverage at 

FAR 49.501 by moving the existing 

language to FAR 49.002. This language 

clarifies that FAR part 49 does not apply 

to commercial item contracts awarded 

using FAR part 12 procedures. 

Response: The Defense Acquisition 

Regulation Council and the Civilian 

Agency Acquisition Council (Councils) 

agree. The language at FAR 49.501, 

pertaining to the applicability of FAR 

part 49 to commercial item contracts has 


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