Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Rules and Regulations 40463 

52.222–19 [Amended] 

■ 6. Amend section 52.222–19 by 

removing from the clause heading ‘‘(Feb 

2008)’’ and adding ‘‘(Aug 09)’’ in its 

place; and removing from paragraph 

(a)(4) ‘‘Switzerland,’’ and adding 

‘‘Switzerland, Taiwan,’’ in its place. 

■ 7. Amend section 52.225–5 by 

revising the date of the clause; and in 

paragraph (a), in the definition 

‘‘Designated Country’’, revising 

paragraph (1) to read as follows: 

52.225–5 Trade Agreements. 

* * * * * 

TRADE AGREEMENTS (Aug 09) 

(a) Definitions. * * * 

Designated country * * * 

(1) A World Trade Organization 

Government Procurement Agreement 

country (Aruba, Austria, Belgium, 

Bulgaria, Canada, Cyprus, Czech 

Republic, Denmark, Estonia, Finland, 

France, Germany, Greece, Hong Kong, 

Hungary, Iceland, Ireland, Israel, Italy, 

Japan, Korea (Republic of), Latvia, 

Liechtenstein, Lithuania, Luxembourg, 

Malta, Netherlands, Norway, Poland, 

Portugal, Romania, Singapore, Slovak 

Republic, Slovenia, Spain, Sweden, 

Switzerland, Taiwan (known in the 

World Trade Organization as ‘‘the 

Separate Customs Territory of Taiwan, 

Penghu, Kinmen and Matsu (Chinese 

Taipei))’’, or United Kingdom); 

* * * * * 

52.225–11 [Amended] 

■ 8. Amend section 52.225–11 by 

removing from the clause heading 

‘‘(June 2009)’’ and adding ‘‘(Aug 09)’’ in 

its place; and in paragraph (a), in the 

definition ‘‘Designated country’’, 

removing from paragraph (1) 

‘‘Switzerland,’’ and adding 

‘‘Switzerland, Taiwan,’’ in its place. 

52.225–23 [Amended] 

■ 9. Amend section 52.225–23 by 

removing from the clause heading ‘‘(Mar 

2009)’’ and adding ‘‘(Aug 09)’’ in its 

place; and in paragraph (a), in the 

definition ‘‘Recovery Act designated 

country’’, removing from paragraph (1) 

‘‘Switzerland,’’ and adding 

‘‘Switzerland, Taiwan,’’ in its place. 

[FR Doc. E9–19164 Filed 8–10–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 4, 15, 25, and 52 

[FAC 2005–36; FAR Case 2008–004; Item 

IV; Docket 2008–0001; Sequence 21] 

RIN 9000–AL01 

Federal Acquisition Regulation; FAR 

Case 2008–004, Prohibition on 

Restricted Business Operations in 

Sudan and Imports from Burma 

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 agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to implement Section 

6 of the Sudan Accountability and 

Divestment Act of 2007. Section 6 

requires certification in each contract 

entered into by an Executive Agency 

that the contractor does not conduct 

certain business operations in Sudan. In 

addition, the Councils added Burma to 

the list of countries from which most 

imports are prohibited. This action was 

taken in accordance with Executive 

Order (E.O.) 13310, Blocking Property of 

the Government of Burma and 

Prohibiting Certain Transactions, and 

E.O. 13448, Blocking the Property and 

Prohibiting Certain Transactions Related 

to Burma. 

DATES: Effective Date: August 11, 2009. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Ms. 

Meredith Murphy, Procurement 

Analyst, at (202) 208–6925. For 

information pertaining to status or 

publication schedules, contact the 

Regulatory Secretariat at (202) 501– 

4755. Please cite FAC 2005–36, FAR 

case 2008–004. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule amends the Federal 

Acquisition Regulation (FAR) to 

implement Section 6 of the Sudan 

Accountability and Divestment Act of 

2007, which was signed on December 

31, 2007. 

DoD, GSA, and NASA published an 

interim rule in the Federal Register at 

73 FR 33636 on June 12, 2008. The 

public comment period ended August 

11, 2008. 

This rule amends the FAR to 

implement Section 6 of the Sudan 

Accountability and Divestment Act of 

2007 (the Act), which requires 

certification in each contract entered 

into by an executive agency that the 

contractor does not conduct certain 

business operations in Sudan. In 

addition, the Councils added Burma to 

the list of countries from which most 

imports are prohibited. 

B. Discussion and Analysis. 

The FAR Secretariat received five (5) 

responses to the interim rule. These 

responses included a total of 16 

comments on 11 issues. A sixth 

response was simply a copy of the 

statute and was not counted as a 

comment. All of the responses 

concerned the implementation of the 

Act; there were no comments on the 

addition of Burma to the list of 

prohibited countries. Each issue is 

discussed in the following sections. 

No public comments were received 

regarding the portion of the interim rule 

addressing Burma. Therefore, that part 

of the interim rule is unchanged (see the 

Federal Register at 73 FR 33636 dated 

June 12, 2008). 

1. Delete the definition of ‘‘person’’ 

and other issues with definitions. 

Comment: a. Two respondents 

recommended that the final rule delete 

the definition of ‘‘person.’’ The 

respondents point out that Section 2 of 

the Act, which defines the key terms in 

the Act, does not define ‘‘contractor’’ 

but does define ‘‘person.’’ The term 

person, however, is used frequently in 

Section 3 of the Act, which addresses 

divestiture by State and local 

governments (not a subject of the FAR 

coverage), but it is not used at all in 

Section 6 of the Act, which the FAR is 

implementing. The respondents point 

out that, had the Congress intended 

‘‘person’’ and ‘‘contractor’’ to be 

synonymous, it should have defined 

them so, and one respondent points out 

portions of the legislative history that 

reinforce its conclusion that the 

congressional intent was to have a 

different meaning for each term. 

b. In addition, one respondent 

requested that the definition of 

‘‘restricted business operations’’ at FAR 

sections 25.702–1 and 52.225–20 either 

delete the phrase ‘‘as those terms are 

defined in the Sudan Accountability 

and Divestment Act of 2007 (Pub. L. 

110–174)’’ or replace ‘‘defined in’’ with 

the phrase ‘‘described in Section 3(d) 

of’’. 

c. Last, a respondent reminded the 

Councils that in the ‘‘definition of the 


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40464 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Rules and Regulations 

term ‘business operations’ in Section 

3(d) of the Act, the term means 

‘engaging in commerce in any form in 

Sudan’ (emphasis added).’’ 

Response: a. The Councils have 

deleted the definition of ‘‘person’’. The 

definition of ‘‘person’’ was included at 

FAR 25.702–1, Definitions, and the 

clause at 52.225–20, as well, because 

Section 6 of the Act requires contractors 

to certify that they do not conduct 

business operations as described in 

Section 3(d) of the Act. This description 

of business operations that are restricted 

uses the term ‘‘person’’, which is 

therefore used in the rule within the 

definition of ‘‘restricted business 

operations’’. A cross reference to the 

definition of ‘‘person’’ in the Act is 

included within the definition of 

‘‘restricted business operations,’’ rather 

than including a separate definition of 

‘‘person’’ in the rule. The rule does not 

use the term ‘‘person’’ as synonymous 

with ‘‘contractor’’ or ‘‘offeror’’. 

b. The Councils note that, although 

the statute describes the business 

operations that are restricted and does 

not define the term ‘‘restricted business 

operations,’’ the terms that are used 

within that definition of ‘‘restricted 

business operations’’ in the rule 

(‘‘power production activities,’’ 

‘‘mineral extraction activities,’’ ‘‘oilrelated activities,’’ and ‘‘military 

equipment’’) are all defined in section 2 

of the Act, which is entitled 

‘‘DEFINITIONS’’. 

c. The Councils have not added ‘‘in 

Sudan’’ in the definition of ‘‘business 

operations’’. The Councils defined the 

term ‘‘restricted business operations’’ to 

include any business operations in 

Sudan, which the Councils believe fully 

implements the intent of the statute. In 

addition, the other specific conditions 

regarding what types of business 

operations are restricted are addressed 

at FAR sections 25.702–1, 52.212–3(a), 

and 52.225–20(a). 

2. Apply the certification requirement 

only to offerors that would be in privity 

of contract with the U.S. Government. 

Comment: a. Effectively, this 

recommendation is a logical outcome of 

the comment immediately above. Two 

respondents believed that, given the 

words the Congress chose, the way in 

which the law is structured, and the 

legislative history of the statute, it is 

clear that Congress intended the 

certification requirement to apply to the 

business operations of contractors 

themselves and not the business 

operations of other entities in their 

corporate families. One respondent 

quoted the report of the Senate Banking, 

Housing, and Urban Affairs Committee, 

in the section discussing divestment, 

not in the discussion of Section 6, says 

that ‘‘(i)mplicit in this definition (of 

‘‘person’’) is the requirement that parent 

companies to subsidiaries, or 

subsidiaries that share the same parent 

company, may be targeted for 

divestment as long as there is credible 

evidence linking their affiliates to 

business operations in key sectors of 

Sudan’’ (emphasis added). In addition, 

the corporate entity that is submitting 

the proposal may not have any control 

over, or insight into, an affiliate or 

subsidiary of a shared corporate parent. 

In support of this position, another 

respondent states that ‘‘(c)learly, only 

the offeror making the certification 

required under the interim regulation is 

the party that will be in privity of 

contract.’’ 

b. In addition, a respondent claimed 

that, because the statute used the term 

‘‘contractor’’ rather than ‘‘offeror,’’ the 

certification should be restructured so 

that not every offeror has to certify and 

the certification will be required only of 

the successful offeror. This change, 

according to the respondent, will 

substantially reduce the scope of the 

certification in terms of the number of 

companies it impacts. 

Response: a. The Councils note that 

the plain words of the Act, Section 6, 

require each ‘‘contractor,’’ not each 

‘‘person,’’ to certify, and only the 

definition of ‘‘person’’ includes the 

highly inclusive elements of affiliates, 

subsidiaries, and so forth. The interim 

rule has plainly implemented this, 

except that the term ‘‘contractor’’ has 

been changed to ‘‘offeror’’ due to the 

timing of the certification. The 

certification requires the offeror to 

certify that ‘‘it’’ does not conduct any 

restricted business operations in Sudan. 

This has been made even clearer by 

substituting ‘‘the offeror’’ for ‘‘it’’. 

b. With regard to the timing of the 

certification requirement, however, the 

Councils do not agree that it should be 

delayed from proposal submission to a 

time immediately prior to award (when 

the Government knows which is the 

presumptive successful offeror) or 

should be limited solely to the 

successful offeror. The Government’s 

solicitation and contract award process 

does not contemplate a second 

certification round wherein only the 

successful offeror is required to 

complete a certification(s). A failure to 

certify that it does not conduct 

restricted business operations in Sudan 

should remove an offeror from 

consideration for award. If an offeror is 

unable to certify, then it will not qualify 

for award, and the Government should 

not be expending time and money 

evaluating that offeror’s proposal. 

3. Apply the certification requirement 

to affiliated companies. 

Comment: Two respondents were 

concerned that the interim rule does not 

explicitly extend to affiliated 

companies. One of these respondents 

notes that the report accompanying the 

Act specifically ‘‘defines ‘persons’ to 

include ‘parent companies to 

subsidiaries, or subsidiaries that share 

the same parent company’ in addition to 

‘successors, subunits, or subsidiaries’’’, 

and the respondent encourages the 

Councils to interpret the legislation to 

include affiliated companies in the 

contract certification requirement. 

Another respondent quotes the same 

language from the report in requesting 

that affiliates be included. 

Response: In response to the first 

comment above, the Councils 

attempted, in the interim rule, to stay as 

close as possible to the literal 

requirements in terms of the statute. 

Given that the statute does not use the 

term ‘‘person,’’ with its expansive 

definition, in Section 6 of the Act, the 

Councils do not agree that the 

certification requirement should be 

expanded to include affiliates. Please 

see also the response at Section 2 above. 

4. Don’t apply the certification 

requirement to affiliated companies. 

Comment: A respondent stated that 

requiring companies to certify more 

broadly about the activities of their 

affiliates would require them to attest to 

factual matters typically beyond their 

reach. As a practical and legal matter, 

according to the respondent, offerors 

often do not have the right to access 

information about the activities of their 

affiliates, particularly of their parent or 

subsidiaries of that parent. 

Response: The Councils agree that it 

is unlikely that most prospective 

Government contractors would be able 

to access the information needed to 

certify to the activities of their affiliates, 

parents, or parent-company 

subsidiaries. Please see responses to 

Comments 2 and 3 above. 

5. Apply the requirement to all 

subcontractors. 

Comment: A respondent believed that 

the rule could be improved by 

extending the contract prohibition to all 

subcontractors of companies that 

receive Federal contracts. Another 

respondent, also, was concerned that 

the exclusion of subcontractors would 

result in the exclusion of a significant 

portion of entities seeking to carry out 

work for the U.S. Government. 

Response: In the Preamble to the 

interim rule, the Councils noted that the 

Act does not require flow down of the 

certification provision to subcontractors 

but only addresses contracts entered 


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Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Rules and Regulations 40465 

into by executive agencies, i.e., prime 

contracts. The Councils do not think it 

appropriate to exceed the limits of the 

statute. 

6. Apply the certification requirement 

only to future contracts. 

Comment: The interim rule requested 

comments on whether the law should 

also be applied to existing contracts to 

ensure compliance with the overall 

intent of the law. Two respondents were 

against extending the certification 

requirement ‘‘retroactively,’’ and they 

noted that there is no indication in the 

Act’s legislative history to indicate any 

such intention on the part of the 

Congress. 

Further, one respondent 

recommended that the certification not 

be required (1) under the annual Online 

Representations and Certifications 

(ORCA) update, (2) upon the exercise of 

an option or issuance of a task or 

delivery order under an existing 

contract, or (3) pursuant to the 

performance of warranty work or safetyrelated repair work for an otherwise 

completed project in Sudan. 

Response: The Councils have resisted 

applying new requirements to existing 

contracts, and the Councils do not 

recommend doing so now. This final 

rule will have normal effective date 

(prospective) language, as set forth in 

FAR 1.108(d). 

This rule does not require the new 

certification upon exercise of options or 

issuance of a task or delivery order. 

With regard to annual update of the 

Online Representations and 

Certifications (ORCA), that has no 

impact on an existing contract. Annual 

updates to ORCA are only applicable to 

future contracts. 

With regard to the third situation 

posed by the respondent above, this 

seems to be an extreme situation and 

should be treated by the contracting 

officer, if it occurs, under the FAR 

deviation process. 

7. Ensure that contract extensions are 

covered. 

Comment: A respondent was 

concerned that ‘‘under existing practice, 

Federal contracts may be extended in 

some cases without being formally 

renewed and thus would not be subject 

to the contract prohibition rule.’’ The 

respondent encouraged the Councils to 

‘‘address this potential loophole’’ and 

ensure that contract extensions are 

covered by the certification 

requirement. 

Response: The Councils are unaware 

of any circumstances under which the 

FAR sanctions the informal extension of 

contracts. 

8. Require certification in ORCA and 

each individual offer. 

Comment: A respondent encouraged a 

final rule that requires certification in 

both the ‘‘ORCA Application’’ and each 

individual proposal. 

Response: The final rule does not 

change the interim rule’s requirement to 

include the certification in each new 

procurement. In addition, the 

certification will be part of ORCA, and 

it will be considered in the contractor’s 

annual ORCA certification. Annual 

updates to ORCA are only applicable to 

future contracts. 

9. Require contractors to certify that 

they will not engage in targeted 

business operations during contract 

performance. 

Comment: One respondent wanted 

the FAR to require companies that are 

awarded contract extensions to disclose 

any potential targeted business 

operations with Sudan and to explicitly 

require that companies certify they will 

not engage in targeted business 

operations for the duration of the 

contract. 

Response: The statute does not 

require that the certification apply to 

future (targeted) business operations or 

include a promise not to engage in 

restricted business operations in Sudan 

for the duration of the company’s 

contract with the U.S. Government. 

Therefore, the Councils do not think 

that it would be appropriate to 

substitute their judgment for the 

language of the statute. 

10. Make certification into a checkthe-box certification. 

Comment: A respondent 

recommended that the final rule change 

the certification to a check-the-box 

certification. The respondent said that, 

‘‘(g)iven that the certification 

requirement may only be incorporated 

by reference into a solicitation, the FAR 

could create a substantial risk to 

offerors’’ because offerors that are 

unaware of the content of the 

certification provision may 

unknowingly, and falsely, certify 

compliance. The respondent argued, 

also, that an explicit, check-the-box 

certification requirement would 

eliminate a potential defense to a falsely 

certifying contractor that it did not 

realize it was certifying at all. 

Response: The respondent is incorrect 

in claiming that the certification may 

only be incorporated by reference. 

Incorporation by reference is the case 

for commercial items in the clause at 

52.212–5; it is not the case for 52.225– 

20, Prohibition on Conducting 

Restricted Business Operation in 

Sudan—Certification, or 52.212–1, 

Instructions to Offerors—Commercial 

Items. In any case, a company signs and 

is responsible for complying with all 

requirements of the contract, whether a 

provision is reproduced in full or by 

reference. 

This is a significant regulatory action 

and, therefore, was 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 Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration 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 this 

rule will only impact an offeror that is 

conducting restricted business 

operations in Sudan and wants to do 

business with the U.S. Government 

because there are already numerous 

sanctions against dealing with Sudan 

(e.g., E.O.s 13412, 13400, and 13067, 

and 31 CFR Part 538), the number of 

entities impacted will be minimal. No 

comments to the contrary were received 

from small entities in response to the 

interim rule. 

C. 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, 

et seq. 

List of Subjects in 48 CFR Parts 25 and 

52 

Government procurement. 

Dated: August 4, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

Interim Rule Adopted as Final With 

Changes 

■ Accordingly, the interim rule 

amending 48 CFR parts 4, 15, 25, and 

52 which was published in the Federal 

Register at 73 FR 33636 on June 12, 

2008, is adopted as a final rule with the 

following changes: 

■ 1. The authority citation for 48 CFR 

parts 25 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 25—FOREIGN ACQUISITION 

■ 2. Amend section 25.702–1 by 

removing the definition ‘‘Person’’; and 

in the definition ‘‘Restricted business 


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40466 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Rules and Regulations 

operations’’ revising the introductory 

text of paragraph (2) to read as follows: 

25.702–1 Definitions. 

* * * * * 

Restricted business operations— * * * 

(2) Does not include business 

operations that the person (as that term 

is defined in Section 2 of the Sudan 

Accountability and Divestment Act of 

2007) conducting the business can 

demonstrate— 

* * * * * 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 3. Amend section 52.212–3 by— 

■ a. Revising the date of the provision; 

■ b. Revising in paragraph (a), in the 

definition ‘‘Restricted business 

operations’’ the second sentence of the 

introductory text; and 

■ c. Removing from paragraph (m) ‘‘that 

it’’ and adding ‘‘that the offeror’’ in its 

place. 

■ The revised text reads as follows: 

52.212–3 Offeror Representations and 

Certifications—Commercial Items. 

* * * * * 

OFFEROR REPRESENTATIONS AND 

CERTIFICATIONS—COMMERCIAL ITEMS 

(Aug 2009) 

* * * * * 

(a) Definitions. * * * 

Restricted business operations * * * 

Restricted business operations do not 

include business operations that the 

person (as that term is defined in 

Section 2 of the Sudan Accountability 

and Divestment Act of 2007) conducting 

the business can demonstrate— 

* * * * * 

■ 4. Amend section 52.225–20 by— 

■ a. Revising the date of the provision; 

■ b. Removing from paragraph (a) the 

definition ‘‘Person’’, and revising the 

second sentence in the introductory text 

of the definition ‘‘Restricted business 

operations’’; and 

■ c. Removing from paragraph (b) ‘‘that 

it’’ and adding ‘‘that the offeror’’ in its 

place. 

■ The revised text reads as follows: 

52.225–20 Prohibition on Conducting 

Restricted Business Operations in Sudan— 

Certification. 

* * * * * 

PROHIBITION ON CONDUCTING 

RESTRICTED BUSINESS OPERATIONS IN 

SUDAN—CERTIFICATION (Aug 2009) 

(a) Definitions. * * * 

Restricted business operations * * * 

Restricted business operations do not 

include business operations that the 

person (as that term is defined in 

Section 2 of the Sudan Accountability 

and Divestment Act of 2007) conducting 

the business can demonstrate— 

* * * * * 

[FR Doc. E9–19165 Filed 8–10–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 28 and 52 

[FAC 2005–36; FAR Case 2006–013; Item 

V; Docket 2006–0033; Sequence 1] 

RIN 9000–AK71 

Federal Acquisition Regulation; FAR 

Case 2006–013, List of Approved 

Attorneys, Abstractors, and Title 

Companies 

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 agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to update the 

procedures for the acceptance of a bond 

with a security interest in real property. 

DATES: Effective Date: September 10, 

2009. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Mr. 

Edward N. Chambers, Procurement 

Analyst, at (202) 501–3221. For 

information pertaining to status or 

publication schedules, contact the 

Regulatory Secretariat at (202) 501– 

4755. Please cite FAC 2005–36, FAR 

case 2006–013. 

SUPPLEMENTARY INFORMATION: 

A. Background 

FAR Subpart 28.2 requires agencies to 

obtain adequate security for bonds when 

bonds are used with a contract. A 

corporate or individual surety is an 

acceptable form of security for a bond. 

FAR Subpart 28.2 provides that when 

an individual surety secures a bond 

with an interest in real estate, the surety 

must provide evidence of title (i.e., 

ownership) in the form of a certificate 

of title prepared by a qualified title 

attorney or abstractor, or a title 

insurance policy issued by title 

insurance company that has been 

approved by the Department of Justice 

(DOJ). Since DOJ no longer maintains a 

list of approved title insurance 

companies, agency contracting officers 

must now take other steps to ensure the 

adequacy of the title evidence or ensure 

the surety obtains a title insurance 

policy for the full amount of the 

Government’s lien interest from a 

qualified title insurance company. 

This FAR rule revises the types of 

acceptable title evidence by individual 

sureties to include mortgagee title 

insurance or other evidence of title 

consistent with Section 2 of the DOJ 

Title Standards 2001, maintained on a 

DOJ website. FAR clause 52.228–11, 

Pledges of Assets, is also updated with 

this new reference. 

The rule also provides that 

contracting officers should request the 

assistance of agency legal counsel in 

determining if title evidence from 

individual sureties is consistent with 

the Justice Department Standards. 

PUBLIC COMMENTS 

DoD, GSA, and NASA published a 

proposed rule in the Federal Register at 

72 FR 12584 on March 16, 2007. The 

Councils received a single comment on 

the proposed rule. The Councils have 

partially adopted this comment and 

revised the final rule accordingly. 

Comment: For those cases where real 

property is pledged to secure a bond, 

the proposed rule provided that 

‘‘depending on the value of the 

property, contracting officers should 

consider requesting assistance from 

agency designated legal counsel to 

determine if the evidence of title is 

adequate.’’ The commenter believes this 

legal consultation should be mandatory. 

Response: Partially adopted. The final 

rule drops the qualifier ‘‘depending on 

the value of the property’’ on seeking 

legal counsel when real property is 

pledged to secure a bond. However, the 

term ‘‘should’’ has been retained to 

provide contracting officers with the 

discretion to use their business 

judgment. 

In considering the public comment, 

the Government revisited the proposed 

rule in total. In consultation with the 

Department of Justice, it was decided 

that when real property is pledged to 

secure a bond, instead of only allowing 

evidence of title that is consistent with 

DOJ standards as set forth in the 

proposed rule, that sureties could 

provide a mortgagee title insurance 

policy in an insurance amount equal to 

the amount of the lien. The Department 

of Justice observed that mortgagee title 

insurance is the most common form of 

title evidence in the commercial 

marketplace. 


srobinson on DSKHWCL6B1PROD with RULES5