32846 Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules 

List of Subjects in 48 CFR Part 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 252 is 

proposed to be amended as follows: 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

1. The authority citation for 48 CFR 

part 252 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

2. Amend section 252.212–7001 by 

revising the clause date, and paragraphs 

(b)(5)(i), (b)(11)(i), (b)(14)(i), (b)(20), and 

(b)(21) to read as as follows: 

252.212–7001 Contract terms and 

conditions required to implement statutes 

or executive orders applicable to defense 

acquisitions of commercial items. 

* * * * * 

CONTRACT TERMS AND 

CONDITIONS REQUIRED TO 

IMPLEMENT STATUTES OR 

EXECUTIVE ORDERS APPLICABLE TO 

DEFENSE ACQUISITIONS OF 

COMMERCIAL ITEMS (DATE) 

* * * * * 

(b) * * * 

(5)(i)____252.225–7001, Buy American Act 

and Balance of Payments Program (DATE) 

(41 U.S.C. chapter 83, E.O. 10582). 

* * * * * 

(11)(i)____252.225–7021, Trade 

Agreements (DATE) (19 U.S.C. 2501–2518 

and 19 U.S.C. 3301 note) 

* * * * * 

(14)(i)____ 252.225–7036, Buy American 

Act—Free Trade Agreements—Balance of 

Payments Program (DATE) (41 U.S.C. chapter 

83 and 19 U.S.C. 3301 note) 

* * * * * 

(20)____252.237–7010, Prohibition on 

Interrogation of Detainees by Contractor 

Personnel (NOV 2010) (Section 1038 of Pub. 

L. 111–84). 

(21)____252.237–7019, Training for 

Contractor Personnel Interacting with 

Detainees (SEP 2006) (Section 1092 of Public 

Law 108–375). 

* * * * * 

3. Amend section 252.225–7001 by 

revising the clause date, paragraph 

(a)(8), and paragraph (b) to read as 

follows: 

252.225–7001 Buy American Act and 

Balance of Payments Program. 

* * * * * 

BUY AMERICAN ACT AND BALANCE 

OF PAYMENTS PROGRAM (DATE) 

(a) * * * 

(8) Qualifying country end product 

means— 

(i) An unmanufactured end product mined 

or produced in a qualifying country; or 

(ii) An end product manufactured in a 

qualifying country if— 

(A) The cost of the following types of 

components exceeds 50 percent of the cost of 

all its components: 

(1) Components mined, produced, or 

manufactured in a qualifying country. 

(2) Components mined, produced, or 

manufactured in the United States. 

(3) Components of foreign origin of a class 

or kind for which the Government has 

determined that sufficient and reasonably 

available commercial quantities of a 

satisfactory quality are not mined, produced, 

or manufactured in the United States; or 

(B) The end product is a COTS item. 

* * * * * 

(b) This clause implements the Buy 

American Act (41 U.S.C. chapter 83). In 

accordance with 41 U.S.C. 1907, the 

component test of the Buy American Act is 

waived for an end product that is a COTS 

item (see section 12.505(a)(1) of the Federal 

Acquisition Regulation). Unless otherwise 

specified, this clause applies to all line items 

in the contract. 

* * * * * 

4. Amend section 252.225–7021 by 

revising the clause date and paragraph 

(a)(10) to read as follows: 

252.225–7021 Trade agreements. 

* * * * * 

TRADE AGREEMENTS (DATE) 

(a) * * * 

(10) Qualifying country end product 

means— 

(i) An unmanufactured end product mined 

or produced in a qualifying country; or 

(ii) An end product manufactured in a 

qualifying country if— 

(A) The cost of the following types of 

components exceeds 50 percent of the cost of 

all its components: 

(1) Components mined, produced, or 

manufactured in a qualifying country. 

(2) Components mined, produced, or 

manufactured in the United States. 

(3) Components of foreign origin of a class 

or kind for which the Government has 

determined that sufficient and reasonably 

available commercial quantities of a 

satisfactory quality are not mined, produced, 

or manufactured in the United States; or 

(B) The end product is a COTS item. 

* * * * * 

5. Amend section 252.225–7036 by 

revising the clause date and paragraph 

(a)(13) to read as follows: 

252.225–7036 Buy American Act—Free 

Trade Agreements—Balance of Payments 

Program. 

* * * * * 

BUY AMERICAN ACT—FREE TRADE 

AGREEMENTS—BALANCE OF 

PAYMENTS PROGRAM (DATE) 

(a) * * * 

(13) Qualifying country end product 

means— 

(i) An unmanufactured end product mined 

or produced in a qualifying country; or 

(ii) An end product manufactured in a 

qualifying country if— 

(A) The cost of the following types of 

components exceeds 50 percent of the cost of 

all its components: 

(1) Components mined, produced, or 

manufactured in a qualifying country. 

(2) Components mined, produced, or 

manufactured in the United States. 

(3) Components of foreign origin of a class 

or kind for which the Government has 

determined that sufficient and reasonably 

available commercial quantities of a 

satisfactory quality are not mined, produced, 

or manufactured in the United States; or 

(B) The end product is a COTS item. 

* * * * * 

[FR Doc. 2011–13367 Filed 6–3–11; 8:45 am] 

BILLING CODE 5001–08–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 203, 204, and 252 

RIN 0750–AG99 

Defense Federal Acquisition 

Regulation Supplement; 

Representation Relating to 

Compensation of Former DoD Officials 

(DFARS Case 2010–D020) 

AGENCY: Defense Acquisition 

Regulations System; Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to 

require that offerors represent whether 

former DoD officials employed by the 

offeror are in compliance with postemployment restrictions. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before 

August 5, 2011, to be considered in the 

formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2010–D020, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting 

‘‘DFARS Case 2010–D020’’ under the 

heading ‘‘Enter keyword or ID’’ and 

selecting ‘‘Search.’’ Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘DFARS Case 2010–D020.’’ Follow 

the instructions provided at the ‘‘Submit 

a Comment’’ screen. Please include your 

name, company name (if any), and 

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Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules 32847 

‘‘DFARS Case 2010–D020’’ on your 

attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2010–D020 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Ms. Meredith 

Murphy, OUSD (AT&L) DPAP/DARS, 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check http://www.regulations.gov 

approximately two to three days after 

submission to verify posting (except 

allow 30 days for posting of comments 

submitted by mail). 

FOR FURTHER INFORMATION CONTACT: Ms. 

Meredith Murphy, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP/DARS, 3060 Defense Pentagon, 

Room 3B855, Washington, DC 20301– 

3060. Telephone 703–602–1302; 

facsimile 703–602–0350. Please cite 

DFARS Case 2010–D020. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Statutory Requirements 

The principal statutory restrictions 

concerning post-government 

employment for DoD and other Federal 

employees after leaving Government 

employment are found in 18 U.S.C. 207 

and 41 U.S.C. 2104 (formerly, 41 U.S.C. 

423), and 5 CFR parts 2637 and 2641. 

1. 18 U.S.C. 207 

18 U.S.C. 207 prohibits an individual 

from representing a contractor to their 

former agency on particular matters 

involving specific parties that they 

handled while working for the Federal 

Government for defined cooling-off 

periods that vary according to the 

former official’s involvement and 

position: 

a. Former personnel are permanently 

barred from representing their new 

employer to their former agencies for 

matters on which they were personally 

and substantially involved. 

b. Even if the former officials were not 

directly involved in the matter, former 

personnel may not represent their new 

employer to their former agency on 

matters that were pending under their 

official responsibility in their last year 

of service for two years after leaving 

Federal service. 

c. Former senior-level officers and 

employees may not contact their former 

agency on particular government 

matters that are pending or are of 

substantial interest to the former agency 

for one year after leaving Federal 

service. 

2. 41 U.S.C. 2104 (Formerly, 41 U.S.C. 

423) 

DoD and other Government 

acquisition officials may not accept 

compensation from a defense contractor 

during a one year cooling-off period if 

the official performed certain duties at 

DoD involving the contractor and a 

contract valued in excess of $10 million. 

However, the individual may accept 

employment from a division or affiliate 

that does not produce the same or 

similar items. 

3. Section 847 of the National Defense 

Authorization Act (NDAA) for Fiscal 

Year (FY) 2008 

Section 847 requires that senior DoD 

officials who have been personally and 

substantially involved in contracts over 

$10 million request a written postemployment ethics opinion before 

receiving compensation from a 

contractor. It also applies to the 

employees who are affected by the oneyear compensation ban of 41 U.S.C. 

2104. 

B. Current Acquisition Regulations 

1. FAR 3.104 implements 41 U.S.C 

2104 and 18 U.S.C. 207. 

2. DFARS 203.104 implements 

procurement integrity for DoD. 

3. DFARS 203.171–3 is an 

implementation of section 847 of the 

NDAA for FY 2008. Pursuant to DFARS 

203.171–3, defense contractors may not 

knowingly provide compensation to 

‘‘covered DoD officials’’ (as defined by a 

January 2009 DFARS Clause 252.203– 

7000, Requirements Relating to 

Compensation of Former DoD Officials) 

who left Government employment on or 

after January 28, 2008, unless the 

contractor first determines that the 

former employee has received, or has 

requested at least 30 days prior to 

receiving compensation from the 

contractor, the post-employment ethics 

opinion regarding post-employment 

restrictions. DFARS 252.203–7000 

incorporates this prohibition of 

knowingly compensating former DoD 

‘‘covered officials,’’ into DoD contracts. 

The DFARS does not require additional 

action from the DoD contractor or 

covered employee in the event that the 

covered employee has not received an 

opinion on post-employment 

restrictions. In addition, the clause does 

not cover DoD employees who left the 

Government prior to January 28, 2008. 

C. General Accountability Office (GAO) 

Study GAO–08–485 

Congress included a provision in the 

National Defense Authorization Act for 

Fiscal Year 2007 (Pub. L. 109–364, 

section 851) requiring GAO to report on 

recent employment of former DoD 

Officials by major defense contractors. 

In May 2008, the GAO issued a report, 

‘‘Defense Contracting: Post-Government 

Employment of Former DoD Officials 

Needs Greater Transparency’’ (GAO–08– 

485). GAO auditors focused on 52 major 

defense contractors. 

The GAO found that contractors 

under-reported the employment of 

former DoD officials to the extent that 

they employed almost twice as many 

they reported. 

GAO estimated that approximately 

422 former DoD officials (postGovernment employment) were working 

on defense contracts under the 

responsibility of their former agency. At 

least nine of those individuals could 

have been performing services under the 

same contract for which they had prior 

program responsibility. GAO concluded 

that the results of the study indicated 

that defense contractors may employ a 

substantial number of former DoD 

officials on assignments related to their 

former positions. 

According to GAO, DoD does not have 

a mechanism for monitoring former 

senior officials and acquisition officials 

when they begin their new jobs with 

defense contractors. DoD’s practice of 

providing written ethics opinions to 

senior and acquisition officials who 

request them provides only limited 

transparency, although DoD is in the 

process of implementing a single 

database for collecting and retaining this 

information. 

The GAO report showed that major 

defense contractors are not currently 

ensuring that former DoD senior 

officials and acquisition executives 

working on contracts are in compliance 

with post-employment restrictions. 

GAO concluded that greater 

transparency is needed by DoD with 

respect to former senior and acquisition 

executives (i.e., DoD ‘‘covered officials’’) 

to ensure compliance with applicable 

post-employment restrictions. 

D. Proposed Rule 

The proposed provision will remedy 

this deficiency by requiring offerors to 

submit representations at the time of 

contract award that all former DoD 

officials that are covered by the 

Procurement Integrity Act are in 

compliance with post-employment 

restrictions set forth in DFARS 203.171– 

3 and DFARS 252.203–7000. The 

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32848 Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules 

representation goes further in also 

requiring a representation that former 

DoD employees employed by the 

contractor are also in compliance with 

additional post-employment restrictions 

of 18 U.S.C. 207 and 5 CFR parts 2637 

and 2631, including FAR 3.104–2. 

This representation will be required 

in contracts for commercial items. This 

representation is an enforcement 

mechanism for DFARS clause 252.203– 

7000, which is required in contracts for 

commercial items (see 252.212– 

7001(b)(1)). Therefore, the 

representation has been added to 

252.212–7000. 

II. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 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 is not a significant 

regulatory action and, therefore, was not 

subject to review under Section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

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

804. 

III. Regulatory Flexibility Act 

DoD 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. Nevertheless, an initial 

regulatory flexibility analysis has been 

prepared, and is summarized as follows: 

This proposed rule is in response to 

a study by the General Accountability 

Office, ‘‘Defense Contracting: PostGovernment Employment of Former 

DoD Officials Needs Greater 

Transparency’’ (GAO–08–485), issued in 

May 2008. The GAO found that 

contractors under-reported the 

employment of former DoD officials to 

the extent that they employed almost 

twice as many as they reported. The 

GAO report showed that major defense 

contractors are not currently ensuring 

that former DoD senior officials and 

acquisition executives working on 

contracts are in compliance with postemployment restrictions. 

The objective of the proposed rule is 

to remedy this deficiency reported by 

the GAO by requiring offerors to submit 

representations at the time of contract 

award that all former DoD officials that 

are covered by the Procurement 

Integrity Act are in compliance with 

post-employment restrictions set forth 

in DFARS 203.171–3 and DFARS 

252.203–7000, as required by section 

847 of the National Defense 

Authorization Act for Fiscal Year 2008. 

The representation goes further in also 

requiring a representation that former 

DoD employees employed by the 

contractor are also in compliance with 

additional post-employment restrictions 

of 18 U.S.C. 207 and 5 CFR parts 2637 

and 2631, including FAR 3.104–2. 

The rule requires a representation 

from all offerors that respond to a DoD 

solicitation. However, the 

representation will only require 

preparatory effort if the offeror employs 

or otherwise provides compensation to 

former DoD officials covered by the 

Procurement Integrity Act. There is no 

impact on the offeror unless the former 

DoD officials covered by the 

Procurement Integrity Act are not in 

compliance with the post-employment 

restrictions. A covered DoD official is 

already defined in the clause at DFARS 

252.203–7000, Requirements Relating to 

Compensation of Former DoD 

Employees. In the period of 2001–2006, 

1.85 million former military and civilian 

personnel left DoD service. A ‘‘covered 

DoD official’’ only includes former DoD 

officials holding certain positions and 

who left within the past two years. The 

GAO found that the 1.85 million 

personnel who had left DoD service over 

a six-year period included only 35,192 

who had served in the type of senior or 

acquisition official positions that made 

them subject to post-government 

employment restrictions, if they were 

subsequently hired by defense 

contractors. Dividing by 35,192 (to 

reduce the six-year period to a two-year 

period), we estimate that 11,730 of those 

officials would have left within the last 

two years. We estimate that 7,635 of 

these former officials may accept 

employment with a defense contractor 

(about 65 percent). The GAO study 

found 2,435 of these covered officials 

employed by 52 major defense 

contractors. Of the remaining 5,200 

former officials covered by the 

Procurement Integrity Act, we estimate 

that 3,900 (75 percent) of them may 

work for small business concerns. 

There is no information collection 

requirement associated with this 

proposed rule. Offerors make the 

representation by submission of an 

offer. They are not allowed to submit an 

offer if they can not make the 

representation. In order to submit an 

offer, small entities that hire a former 

DoD official covered by the Procurement 

Integrity Act will have to check the 

compliance of such employees with 

various applicable post-employment 

restrictions. DFARS 252.203–7000, 

Requirements Relating to Compensation 

of Former DoD Officials, already 

requires contractors to determine that a 

covered DoD official has sought and 

received, or has not received after 30 

days of seeking, a written opinion from 

the appropriate DoD ethics counselor, 

regarding the applicability of postemployment restrictions to the activities 

that the official is expected to undertake 

on behalf of the contractor. Therefore, 

this representation of compliance does 

not impose an additional burden on the 

offeror. 

The rule does not duplicate, overlap, 

or conflict with any other Federal rules. 

There are no known significant 

alternatives to the rule that would 

achieve the objectives of the rule. 

DoD invites comments from small 

business concerns and other interested 

parties on the expected impact of this 

rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by the rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (DFARS Case 2010–D020) in 

correspondence. 

IV. Paperwork Reduction Act 

The rule does not impose any new 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Parts 203 and 

252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR parts 203, 204, and 

252 are proposed to be amended as 

follows: 

1. The authority citation for 48 CFR 

parts 203, 204, and 252 continues to 

read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

PART 203—IMPROPER BUSINESS 

PRACTICES AND PERSONAL 

CONFLICTS OF INTEREST 

2. Revise section 203.171–4 to read as 

follows: 

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Federal Register / Vol. 76, No. 108 / Monday, June 6, 2011 / Proposed Rules 32849 

203.171–4 Solicitation provisions and 

contract clause. 

(a) Use the clause at 252.203–7000, 

Requirements Relating to Compensation 

of Former DoD Officials, in all 

solicitations and contracts. 

(b) Use the provision at 252.203– 

70XX, Representation Relating to 

Compensation of Former DoD Officials, 

in all solicitations. 

PART 204—ADMINISTRATIVE 

MATTERS 

3. Amend section 204.1202 by 

redesignating paragraphs (2)(i) through 

(xii) as paragraphs (2)(ii) through (xiii) 

and adding new paragraph (2)(i) to read 

as follows, 

204.1202 Solicitation provision and 

contract clause. 

* * * * * 

(2) * * * 

(i) 252.203–70XX, Representation 

Relating to Compensation of Former 

DoD Officials. 

* * * * * 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

4. Add section 252.203–70XX to read 

as follows: 

252.203–70XX Representation Relating to 

Compensation of Former DoD Officials. 

As prescribed in 203.171–4(b), insert 

the following provision: 

REPRESENTATION RELATING TO 

COMPENSATION OF FORMER DOD 

OFFICIALS (DATE) 

(a) Definition. Covered DoD official is 

defined in the clause at 252.203–7000, 

Requirements Relating to Compensation of 

Former DoD Officials. 

(b) By submission of this offer, the offeror 

represents, to the best of its knowledge and 

belief, that all covered DoD officials 

employed by or otherwise receiving 

compensation from the offeror are presently 

in compliance with— 

(1) Defense Federal Acquisition Regulation 

Supplement (DFARS) 203.171–3 and DFARS 

252.203–7000; and 

(2) Other post-employment restrictions 

covered by 18 U.S.C. 207 and 5 CFR parts 

2637 and 2631, including Federal 

Acquisition Regulation 3.104–2. 

(End of provision) 

5. Amend section 252.212–7000 by 

revising the clause date, revising 

paragraph (a), and adding paragraph (d) 

to read as follows: 

252.212–7000 Offeror Representations and 

Certifications—Commercial Items. 

* * * * * 

OFFEROR REPRESENTATIONS AND 

CERTIFICATIONS—COMMERCIAL ITEMS 

(JUN 2011) 

(a) Definitions. As used in this clause— 

Covered DoD official is defined in the 

clause at 252.203–7000, Requirements 

Relating to Compensation of Former DoD 

Officials. Foreign person means any person 

other than a United States person as defined 

in Section 16(2) of the Export Administration 

Act of 1979 (50 U.S.C. App. Sec. 2415). 

United States means the 50 States, the 

District of Columbia, outlying areas, and the 

outer Continental Shelf as defined in 43 

U.S.C. 1331. 

United States person is defined in section 

16(2) of the Export Administration Act of 

1979 and means any United States resident 

or national (other than an individual resident 

outside the United States and employed by 

other than a United States person), any 

domestic concern (including any permanent 

domestic establishment of any foreign 

concern), and any foreign subsidiary or 

affiliate (including any permanent foreign 

establishment) of any domestic concern 

which is controlled in fact by such domestic 

concern, as determined under regulations of 

the President. 

* * * * * 

(d) Representation Relating to 

Compensation of Former DoD Officials. By 

submission of this offer, the offeror 

represents, to the best of its knowledge and 

belief, that all covered DoD officials 

employed by or otherwise receiving 

compensation from the offeror, are presently 

in compliance with— 

(1) Defense Federal Acquisition Regulation 

Supplement (DFARS) 203.171–3 and DFARS 

252.203–7000, Requirements Relating to 

Compensation of Former DoD Officials; and 

(2) Other post-employment restrictions 

covered by 18 U.S.C. 207 and 5 CFR parts 

2637 and 2631, including Federal 

Acquisition Regulation 3.104–2. 

(End of provision) 

[FR Doc. 2011–13365 Filed 6–3–11; 8:45 am] 

BILLING CODE 5001–08–P 

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