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                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
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###### General Services Administration

          - 48 CFR Parts 503 and 552
          - GSAR Amendment 2009-12; GSAR Case 2008-G502 (Change 40) Docket 2008-0007; Sequence 7
          - RIN 3090-AI63

# AGENCIES:

General Services Administration (GSA), Office of the Acquisition Policy.

# ACTION:

Final rule.

# SUMMARY:

The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) by revising the regulations pertaining to Improper Business Practices and Personal Conflicts of Interest. This rule is a product of the GSAM Rewrite Initiative undertaken by GSA to revise the regulation to maintain consistency with the FAR and implement streamlined and innovative acquisition procedures for contractors, offerors, and GSA contracting personnel. The GSAM incorporates the General Services Administration Acquisition Regulation (GSAR) as well as internal agency acquisition policy.

# DATES:

*Effective Date*: October 7, 2009.                    

# FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact Ernest Woodson, Procurement Analyst, at (202) 501-3775. For information pertaining to status or publication schedules, contact the Regulatory Secretariat (MVR), Room 4041, 1800 F Street, NW, Washington, DC, 20405, (202) 501-4755. Please cite Amendment 2009-12, GSAR case 2008-G502 (Change 40).

# SUPPLEMENTARY INFORMATION: 

## A. Background

This final rule is a result of the General Services Administration Acquisition Manual (GSAM) Rewrite initiative undertaken by GSA to revise the GSAM to maintain consistency with the FAR and to implement streamlined and innovative acquisition procedures that contractors, offerors, and GSA acquisition personnel can use when entering into and administering contractual relationships. The GSAM incorporates the General Services Administration Acquisition Regulation (GSAR) as well as internal agency acquisition policy. 

An Advanced Notice of Proposed Rulemaking was published at 71 FR 7910, February 15, 2006, for the GSAM Rewrite Projects and public comments were received. However, none of the comments were specific to Part 503. The case was assigned to GSAM Part 503 Rewrite Team on February 18, 2008. A Team report was completed on March 3, 2008.

                    To ensure completeness, internal comments were solicited and received from GSA Regions 1, 2, 3, 6, 7, 8, 10, and 11, GSA published a proposed rule with request for comments in the                     **Federal Register**                     at 73 FR 45194, August 4, 2008. The public comment period closed October 3, 2008. One response was received with three comments. This final rule reconciles the conclusions from the Team report with the internal comments, and public comment as follows:                 

## Public Comments 

*Comment*: The respondent was concerned that the requirement in 503.204(c) for an agency fact-finding official to be designated by GSA Board of Contract Appeals was not revised to indicate that the Civilian Board of Contract Appeals (CBCA) would designate the official as means of ensuring that disputes over gratuities violations are handled independently and objectively.                 

*Response:*                     The CBCA will not designate an agency fact-finding official for the treatment of violations under 503.204, as its current operating procedures do not encompass the activity. The Senior Procurement Executive will refer matters under the jurisdiction of GSAR 503.204 to the Suspension and Debarment Official, in accordance with GSAR 509.403, because the Suspension and Debarment Official is the individual who can appoint a fact-finding official, should one be necessary.                

*Comment*: The respondent was concerned that 503.1004 does not provide a specific rationale for establishing a lower threshold, or why that threshold would be $1,000,000. The respondent believes that the subsection makes the threshold sound arbitrary.                 

*Response:*                     FAR 3.1004(b)(1)(i) provides for agencies to establish a threshold lower than $5,000,000. Pursuant to FAR 1.302(b), agency acquisition regulations may supplement the FAR to include additional policies and procedures that satisfy the specific needs of the agency. GSA’s lower threshold of $1,000,000 is based on GSA’s unique acquisition mission and the dollar amount of an order that may be placed by GSA, under a task and delivery order contract. Further, the lower threshold insures greater visibility for the detection of fraud in Federal contracts ensuring protection for the taxpayer.                

*Comment*: 503.1004(b)—The fill-in includes the acronym “OIG”. Spell out as Office of the Inspector General. The FAR does otherwise include a reference to OIG.                

*Response:*                     GSA concurs with the respondent and will make the change accordingly.                

## The Rewrite of Part 503 

                    This final rule contains revisions to Part 503, Improper Business Practices and Personal Conflicts of Interest. There are no substantive changes to the policies. The rule revises GSAR Subpart 503.1 Safeguards; deletes 503.104-1 and 503.104-9, to ensure consistency with the GSAM that provides that the acquisition of leasehold interests in real property is established by GSAM Part 570; deletes 503.104-4, because post employment restrictions are covered under Federal conflicts of interest laws and the Procurement Integrity Act that every employee has a responsibility to know; adds 503.104-2, to indicate that acquisition officials are responsible for knowing the post-employment restrictions in FAR 3.104-2(b)(3) and in the Procurement Integrity Act; renumbers 503.104-5 to 503.104-4 and revises 503.104-4, adds appropriate GSAM and FAR references for the release of information to outside evaluators and deletes inappropriate forms and language already addressed in other GSAM subsections; and renumbers 503.104-10 to 503.104-7, for consistency with the FAR numbering sequence.                           ( print page 51511)    

Revises Subpart 503.2 Contractor Gratuities to Government Personnel; revises 503.203(a) by deleting the reference to the Code of Federal Regulations and relocating the reference at the end of 503.203(c) in order to ensure the integrity of the subsection; revises 503.204(a)(2), by deleting the phrase “joint venture” in order to ensure grammatical and structural clarity; revises 503.204(c), by replacing “the Chairman of the GSA Board of Contract Appeals” with “the Suspension and Debarment Official in accordance with FAR 509.403,” because the GSA Board of Contract Appeals no longer exists; and revises 503.204(f), to ensure consistency with FAR 3.204(f).

Revises Subpart 503.3 Reports of Suspected Antitrust Violations; revises 503.303, to ensure grammatical and structural clarity. 

Revises Subpart 503.4 Contingents Fees; by deleting 503.404, in order to ensure consistency with the GSAM which provides that the acquisition of leasehold interests in real property is established by GSAM Part 570, and revises 503.405 to ensure grammatical and structural clarity. 

Revises Subpart 503.5 Other Improper Business Practices; revises 503.570-1 to delete the term “referring” and add “making references” for clarity.

Revises Subpart 503.7 Voiding and Rescinding Contracts; revises 503.702 to delete the definition for “Notice” and “Voiding and rescinding official” as the terms do not require definition; adds a new section 503.703 in order to identify the Senior Procurement Executive as having the authority to void and rescind contracts pursuant to FAR 3.703 and 3.705(b); relocates 503.705 from the GSAR to the manual part of the GSAM, because it relates to internal administrative procedures; revises 503.705 by revising 503.705(a)(1) to add “the contracting officer shall” to ensure clarity; revises 503.705(a)(2), to delete “you may” and “voiding and rescinding official” and add “the contracting officer shall,” “Senior Procurement Executive,” and “and shall,” to ensure clarity and continuity; revises 503.705(a)(2)(i) to add “Identify” to ensure clarity; revises 503.705(2) by adding paragraphs (ii) and (iii) to ensure grammatical and structural integrity; deletes 503.705(a)(3) because the contracting officer does not have the authority cited in the subsection; revises 503.705(b) to delete “Voiding and rescinding official’s,” and add “Senior Procurement Executive” to ensure continuity; revises 503.705(b)(1), to delete “the voiding and rescinding official” to ensure continuity; revises 503.705(b)(2) to ensure grammatical and structural integrity; revises 503.705(b)(3) to ensure grammatical and structural integrity; revises 503.705(b)(4) to delete “voiding and rescinding official” and add “Senior Procurement Executive,” in order to ensure continuity; revises 503.705(b)(5), to delete “The official” to ensure clarity; and revises 503.705(c)(5), to ensure clarity. 

Revises Subpart 503.8 Limitation on the Payment of Funds to Influence Federal Transactions; revises 503.806 to ensure grammatical and structural integrity, and deletes “Inspector General for Investigation” and adds “Special Agent in Charge,” to ensure clarity. 

Adds a new Subpart 503.10 Contractor Code of Business Ethics and Conduct; establishes a lower threshold for the inclusion of FAR 52.203-14 Display of Hotline Poster(s) at 503.1004(a) and includes the name of the poster and where the poster may be obtained at 503.1004(b)(i) and (ii), pursuant to FAR 52.203-14(b)(3).

Deletes GSAR 552.203-5 Covenant Against Contingent Fees; in order to ensure consistency with the GSAM that provides that the acquisition of leasehold interests in real property is established by GSAM Part 570, and deletes GSAR 552.203-70 to ensure consistency with the GSAM requirements that leasehold interests in real property is established by GSAM Part 570.

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 General Services Administration certifies 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 no new requirements are being placed on the vendor community. No comments on this issue were received from small business concerns or other interested parties.                

## C. Paperwork Reduction Act

                    The Paperwork Reduction Act does not apply because the changes to the GSAR do not impose recordkeeping or information collection requirements, or otherwise collect information from offerors, contractors, or members of the public that require approval of the Office of Management and Budget under 44 U.S.C. Chapter 35,                     *et seq.*

# List of Subjects in 48 CFR Parts 503 and 552

      - Government procurement

Dated: September 30, 2009

David A. Drabkin,

Senior Procurement Executive, Office of Acquisition Policy, General Services Administration.

Therefore, GSA amends 48 CFR parts 503 and 552 as set forth below: 

# PART 503—IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST 

1. The authority citation for 48 CFR part 503 is revised to read as follows: 

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

503.104-3 and 503.104-9 

2. Remove sections 503.104-3 and 503.104-9. 

3. Amend section 503.204 by— 

a. Removing the period at the end of paragraph (a)(1) and adding “;” in its place; 

b. Removing from paragraph (a)(2) “or joint venture” and adding “; and” in its place; 

c. Revising the first sentence of the introductory text of paragraph (c); removing the period at the end of paragraphs (c)(1) and (c)(2) and adding “;” in its place; and removing the period at the end of paragraph (c)(3) and adding “; and” in its place; and 

d. Revising the first sentence of paragraph (f). 

 The revised text reads as follows: 

503.204 

* * * * *

(c) If there is a dispute of fact material to making a determination, the Senior Procurement Executive, or designee, may refer the matter to an agency fact-finding official, designated by the Suspension and Debarment Official, in accordance with GSAR 509.403. * * *

* * * * *

(f) If the Gratuities clause was violated, the contractor may present evidence of mitigating factors to the Senior Procurement Executive, or designee, in accordance with FAR 3.204(b) either orally or in writing, consistent with a schedule the Senior Procurement Executive, or designee, establishes. * * *

503.404 

4. Remove section 503.404. 

503.570-1

5. Amend section 503.570-1 by removing “referring” and adding “making references” in its place. 

503.702 

6. Remove section 503.702. 

      ( print page 51512)    
503.703 

7. Add section 503.703 to read as follows: 

503.703 

Pursuant to FAR 3.703 and 3.705(b), the authority to void or rescind contracts resides with the Senior Procurement Executive.

503.705 

8. Remove section 503.705. 

9. Add Subpart 503.10 to read as follows: 

# Subpart 503.10—Contractor Code of Business Ethics and Conduct 

503.1004 

(a) The FAR threshold for the clause at 52.203-14, Display of Hotline Poster(s), is $5,000,000. However, GSA has exercised the authority provided at FAR 3.1004(b)(1)(i) to establish a lower threshold, $1,000,000, for inclusion of the clause when the contract or order is funded with disaster assistance funds.

(b) The information required to be inserted in the clause at FAR 52.203-14, Display of Hotline Poster(s), is as follows:

(1) Poster: GSA Office of Inspector General “FRAUDNET HOTLINE”; and 

(2) Obtain from: Contracting Officer.

# PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 

10. The authority citation for 48 CFR part 552 continues to read as follows: 

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

552.203-5 and 552.203-70 

11. Remove sections 552.203-5 and 552.203-70. 

[FR Doc. E9-24158 Filed 10-6-09; 8:45 am]

BILLING CODE 6820-61-S