This section of the FEDERAL REGISTER

contains documents other than rules or

proposed rules that are applicable to the

public. Notices of hearings and investigations,

committee meetings, agency decisions and

rulings, delegations of authority, filing of

petitions and applications and agency

statements of organization and functions are

examples of documents appearing in this

section.

Notices Federal Register

48789 

Vol. 76, No. 153 

Tuesday, August 9, 2011 

1Cary Coglianese, E-Rulemaking: Information 

Technology and the Regulatory Process at 2 (2004) 

(working paper), http://lsr.nellco.org/upenn_wps/

108. 

ADMINISTRATIVE CONFERENCE OF 

THE UNITED STATES 

Adoption of Recommendations 

AGENCY: Administrative Conference of 

the United States. 

ACTION: Notice. 

SUMMARY: The Administrative 

Conference of the United States adopted 

four recommendations at its Fifty-fourth 

Plenary Session. The appended 

recommendations address electronic 

rulemaking, rulemaking comments, 

contractor ethics, and video hearings. 

FOR FURTHER INFORMATION CONTACT: For 

Recommendation 2011–1, Emily 

Schleicher Bremer, Attorney Advisor; 

for Recommendations 2011–2 and 

2011–3, Reeve Bull, Attorney Advisor; 

and for Recommendation 2011–4, 

Funmi Olorunnipa, Attorney Advisor. 

For all four recommendations the 

address and phone number is: 

Administrative Conference of the 

United States, Suite 706 South, 1120 

20th Street, NW., Washington, DC 

20036; Telephone 202–480–2080. 

SUPPLEMENTARY INFORMATION: The 

Administrative Conference Act, 5 U.S.C. 

591–596, established the Administrative 

Conference of the United States. The 

Conference studies the efficiency, 

adequacy, and fairness of the 

administrative procedures used by 

Federal agencies and makes 

recommendations for improvements to 

agencies, the President, Congress, and 

the Judicial Conference of the United 

States (5 U.S.C. 594(1)). For further 

information about the Conference and 

its activities, see http://www.acus.gov. 

At its Fifty-fourth Plenary Session, 

held June 16–17, 2011, the Assembly of 

the Conference adopted four 

recommendations. Recommendation 

2011–1, ‘‘Legal Considerations in 

e-Rulemaking,’’ provides guidance on 

issues that have arisen in light of the 

change from paper to electronic 

rulemaking procedures. It recommends 

that agencies (1) consider using content 

analysis software to reduce the need for 

agency staff to spend time reading 

identical or nearly identical comments, 

(2) provide timely, online access to all 

studies and reports upon which they 

rely, (3) implement appropriate 

procedures for the handling of 

confidential, trade secret, or other 

protected information, (4) consider the 

potential need to revise Privacy Act 

notices and recordkeeping schedules to 

accommodate e-Rulemaking, and (5) 

replace paper files with electronic 

records in the rulemaking docket and in 

the record for appellate review. 

Recommendation 2011–2, 

‘‘Rulemaking Comments,’’ recognizes 

innovations in the commenting process 

that could promote public participation 

and improve rulemaking outcomes. The 

recommendation encourages agencies 

(1) to provide public guidance on how 

to submit effective comments, (2) to 

leave comment periods open for 

sufficient periods, generally at least 60 

days for significant regulatory actions 

and 30 days for other rulemakings, (3) 

to post comments received online 

within a specified period after 

submission, (4) to announce policies for 

anonymous and late-filed comments, 

and (5) to consider when reply and 

supplemental comment periods are 

useful. 

Recommendation 2011–3, 

‘‘Compliance Standards for Government 

Contractor Employees—Personal 

Conflicts of Interest and Use of Certain 

Non-Public Information’’ responds to 

agencies’ need to protect integrity and 

the public interest when they rely on 

contractors. The Conference 

recommends that the Federal 

Acquisition Regulatory Council provide 

model language for agency contracting 

officers to use when negotiating or 

administering contracts that pose 

particular risks that employees of 

contractors could have personal 

conflicts of interest or could misuse 

non-public information. 

Recommendation 2011–4, ‘‘Agency 

Use of Video Hearings: Best Practices 

and Possibilities for Expansion,’’ 

encourages agencies, especially those 

with a high volume of cases, to consider 

the use of video teleconferencing 

technology for hearings and other 

administrative proceedings. The 

recommendation sets forth factors 

agencies should consider when deciding 

whether to use video teleconferencing 

and best practices for the 

implementation of this technology. 

The Appendix (below) sets forth the 

full text of these four recommendations. 

The Conference will transmit them to 

affected agencies, to appropriate 

committees of the United States 

Congress, and (in the case of 2011–1) to 

the Judicial Conference of the United 

States. The recommendations are not 

binding, so the relevant agencies, the 

Congress and the courts will make 

decisions on their implementation. 

The Conference based these 

recommendations on research reports 

that it has posted at: http:// 

www.acus.gov/events/54th-plenarysession/. The transcript of the Plenary 

Session is available at the same web 

address. 

Dated: August 4, 2011. 

Paul R. Verkuil, 

Chairman. 

Appendix—Recommendations of the 

Administrative Conference of the 

United States 

Administrative Conference Recommendation 

2011–1 

Legal Considerations in e-Rulemaking 

Adopted June 16, 2011 

Agencies are increasingly turning to 

e-Rulemaking to conduct and improve 

regulatory proceedings. ‘‘E-Rulemaking’’ has 

been defined as ‘‘the use of digital 

technologies in the development and 

implementation of regulations’’ 1 before or 

during the informal rulemaking process, i.e., 

notice-and-comment rulemaking under the 

Administrative Procedure Act (APA). It may 

include many types of activities, such as 

posting notices of proposed and final 

rulemakings, sharing supporting materials, 

accepting public comments, managing the 

rulemaking record in electronic dockets, and 

hosting public meetings online or using 

social media, blogs, and other web 

applications to promote public awareness of 

and participation in regulatory proceedings. 

A system that brings several of these 

activities together is operated by the 

eRulemaking program management office 

(PMO), which is housed at the 

Environmental Protection Agency and 

funded by contributions from partner Federal 

agencies. This program contains two 

components: Regulations.gov, which is a 

public Web site where members of the public 


sroberts on DSK5SPTVN1PROD with NOTICES
48790 Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 

2Office of Mgmt. & Budget, Executive Office of 

the President, FY 2009 Report to Congress on the 

Implementation of the E-Government Act of 2002, 

at 10 (2009), http://www.whitehouse.gov/sites/

default/files/omb/assets/egov_docs/2009_egov_

report.pdf. 

3See Public Law 107–347 § 206. 

4 Improving Electronic Dockets on 

Regulations.gov and the Federal Docket 

Management System: Best Practices for Federal 

Agencies, p. D–1 (Nov. 30, 2010), http:// 

www.regulations.gov/exchange/sites/default/files/

doc_files/20101130_eRule_Best_Practices_

Document_rev.pdf. Some agencies rely on their own 

electronic docketing systems, such as the Federal 

Trade Commission (which uses a system called 

CommentWorks) and the Federal Communications 

Commission, which has its own electronic 

comment filing system (http://fjallfoss.fcc.gov/ 

ecfs/). 

5This report follows up on previous work of the 

Administrative Conference. On October 19, 1995, 

Professor Henry H. Perritt, Jr. delivered a report 

entitled ‘‘Electronic Dockets: Use of Information 

Technology in Rulemaking and Adjudication.’’ 

Although never published, the Perritt Report 

continues to be a helpful resource and is available 

at: http://www.kentlaw.edu/faculty/rstaudt/classes/

oldclasses/internetlaw/casebook/electronic

_dockets.htm. 

6The Conference has a concurrent 

recommendation which focuses on issues relating 

to the comments phase of the notice-and-comment 

process independent of the innovations introduced 

by e-Rulemaking. See Administrative Conference of 

the United States, Recommendation 2011–2, 

Rulemaking Comments. 

7See also Exec. Order No. 13,563, § 2(b), 76 FR 

3,821 (Jan. 18, 2011) (requiring agencies to provide 

timely online access to ‘‘relevant scientific and 

technical findings’’ in the rulemaking docket on 

regulations.gov). 

can view and comment on regulatory 

proposals, and the Federal Docket 

Management System (FDMS), which includes 

FDMS.gov, a restricted-access Web site 

agency staff can use to manage their internal 

files and the publicly accessible content on 

Regulations.gov. According to the Office of 

Management and Budget, FDMS ‘‘provides 

* * * better internal docket management 

functionality and the ability to publicly post 

all relevant documents on regulations.gov 

(e.g., Federal Register documents, proposed 

rules, notices, supporting analyses, and 

public comments).’’ 2 Electronic docketing 

also provides significant costs savings to the 

Federal government, while enabling agencies 

to make proposed and final regulations, 

supplemental materials, and public 

comments widely available to the public. 

These incentives and the statutory prompt of 

the E-Government Act of 2002, which 

required agencies to post rules online, accept 

electronic comments on rules, and keep 

electronic rulemaking dockets,3 have helped 

ensure that over 90% of agencies post 

regulatory material on Regulations.gov.4

Federal regulators, looking to embrace the 

benefits of e-Rulemaking, face uncertainty 

about how established legal requirements 

apply to the web. This uncertainty arises 

because the APA, enacted in 1946, still 

provides the basic framework for notice-andcomment rulemaking. While this framework 

has gone largely unchanged, the 

technological landscape has evolved 

dramatically. 

The Conference has therefore examined 

some of the legal issues agencies face in eRulemaking and this recommendation 

provides guidance on these issues. The 

Conference has examined the following 

issues: 

• Processing large numbers of similar or 

identical comments. The Conference has 

considered whether agencies have a legal 

obligation to ensure that a person reads every 

individual comment received, even when 

comment-processing software reports that 

multiple comments are identical or nearly 

identical. 

• Preventing the publication of 

inappropriate or protected information. The 

Conference has considered whether agencies 

have a legal obligation to prevent the 

publication of certain types of information 

that may be included in comments submitted 

in e-Rulemaking. 

• Efficiently compiling and maintaining a 

complete rulemaking docket. The Conference 

has considered issues related to the 

maintenance of rulemaking dockets in 

electronic form, including whether an agency 

is obliged to retain paper copies of comments 

once they are scanned to electronic format 

and how an agency that maintains its 

comments files electronically should handle 

comments that cannot easily be reduced to 

electronic form, such as physical objects. 

• Preparing an electronic administrative 

record for judicial review. The Conference 

has considered issues regarding the record on 

review in e-Rulemaking proceedings. 

This recommendation seeks to provide all 

agencies, including those that do not 

participate in Regulations.gov, with guidance 

to navigate some of the issues they may face 

in e-Rulemaking.5 With respect to the issues 

addressed in this recommendation, the APA 

contains sufficient flexibility to support eRulemaking and does not need to be 

amended for these purposes at the present 

time. Although the primary goal of this 

recommendation is to dispel some of the 

legal uncertainty agencies face in eRulemaking, where the Conference finds that 

a practice is not only legally defensible, but 

also sound policy, it recommends that 

agencies use it. It bears noting, however, that 

agencies may face other legal issues in eRulemaking, particularly when using wikis, 

blogs, or similar technological approaches to 

solicit public views, that are not addressed in 

this recommendation. Such issues, and other 

broad issues not addressed herein, are 

beyond the scope of this recommendation, 

but warrant further study.6

Recommendation 

Considering Comments 

1. Given the APA’s flexibility, agencies 

should: 

(a) Consider whether, in light of their 

comment volume, they could save substantial 

time and effort by using reliable comment 

analysis software to organize and review 

public comments. 

(1) While 5 U.S.C. 553 requires agencies to 

consider all comments received, it does not 

require agencies to ensure that a person reads 

each one of multiple identical or nearly 

identical comments. 

(2) Agencies should also work together and 

with the eRulemaking program management 

office (PMO), to share experiences and best 

practices with regard to the use of such 

software. 

(b) Work with the eRulemaking PMO and 

its interagency counterparts to explore 

providing a method, including for members 

of public, for flagging inappropriate or 

protected content, and for taking appropriate 

action thereon. 

(c) Work with the eRulemaking PMO and 

its interagency counterparts to explore 

mechanisms to allow a commenter to 

indicate prior to or upon submittal that a 

comment filed on Regulations.gov contains 

confidential or trade secret information. 

(d) Confirm they have procedures in place 

to review comments identified as containing 

confidential or trade secret information. 

Agencies should determine how such 

information should be handled, in 

accordance with applicable law. 

Assessing Privacy Concerns 

2. Agencies should assess whether the 

Federal Docket Management System (FDMS) 

System of Records Notice provides sufficient 

Privacy Act compliance for their uses of 

Regulations.gov. This could include working 

with the eRulemaking PMO to consider 

whether changes to the FDMS System of 

Records Notice are warranted. 

Maintaining Rulemaking Dockets in 

Electronic Form 

3. The APA provides agencies flexibility to 

use electronic records in lieu of paper 

records. Additionally, the National Archives 

and Records Administration has determined 

that agencies are not otherwise legally 

required, at least under certain 

circumstances, to retain paper copies of 

comments properly scanned and included in 

an approved electronic recordkeeping 

system. The circumstances under which such 

destruction is permitted are governed by each 

agency’s records schedules. Agencies should 

examine their record schedules and maintain 

electronic records in lieu of paper records as 

appropriate. 

4. To facilitate the comment process, 

agencies should include in a publicly 

available electronic docket of a rulemaking 

proposal all studies and reports on which the 

proposal for rulemaking draws, as soon as 

practicable, except to the extent that they 

would be protected from disclosure in 

response to an appropriate Freedom of 

Information Act request.7

5. Agencies should include in the 

electronic docket a descriptive entry or 

photograph for all physical objects received 

during the comment period. 

Providing Rulemaking Records to Courts for 

Judicial Review 

6. In judicial actions involving review of 

agency regulations, agencies should work 

with parties and courts early in litigation to 

provide electronic copies of the rulemaking 

record in lieu of paper copies, particularly 

where the record is of substantial size. Courts 

should continue their efforts to embrace 

electronic filing and minimize requirements 

to file paper copies of rulemaking records. 


sroberts on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 48791 

1 5 U.S.C. 553; see also Antonin Scalia, Judicial 

Deference to Administrative Interpretations of Law, 

1989 Duke L.J. 511, 514 (1989) (describing the 

‘‘notice-and-comment procedures for rulemaking’’ 

under the APA as ‘‘probably the most significant 

innovation of the legislation’’). 

2Subcomm. on Commercial & Admin. Law of the 

Comm. on the Judiciary, 109th Cong., Interim Rep. 

on the Admin. Law, Process and Procedure Project 

for the 21st Century at 3–5 (Comm. Print 2006). 

3See also Administrative Conference of the 

United States, Recommendation 93–4, Improving 

the Environment for Agency Rulemaking (1993) 

(‘‘Congress should consider amending section 553 

of the APA to * * * [s]pecify a comment period of 

‘no fewer than 30 days.’ ’’); Exec. Order No. 13,563, 

76 FR 3,821, 3,821–22 (Jan. 18, 2011) (‘‘To the 

extent feasible and permitted by law, each agency 

shall afford the public a meaningful opportunity to 

comment through the Internet on any proposed 

regulation, with a comment period that should 

generally be at least 60 days.’’). 

4See also Office of Information & Regulatory 

Affairs, Memorandum for the President’s 

Management Council on Increasing Openness in the 

Rulemaking Process—Improving Electronic Dockets 

at 2 (May 28, 2010) (‘‘OMB expects agencies to post 

public comments and public submissions to the 

electronic docket on Regulations.gov in a timely 

manner, regardless of whether they were received 

via postal mail, email, facsimile, or web form 

documents submitted directly via 

Regulations.gov.’’). 

5See, e.g., Highway-Rail Grade Crossing; Safe 

Clearance, 76 Fed. Reg. 5,120, 5,121 (Jan. 28, 2011) 

(Department of Transportation notice of proposed 

rulemaking announcing that ‘‘[c]omments received 

after the comment closing date will be included in 

the DOCKET, and we will consider late comments 

to the extent practicable’’). 

6See also Administrative Conference of the 

United States, Recommendation 76–3, Procedures 

in Addition to Notice & the Opportunity for 

Comment in Informal Rulemaking (1976) 

(recommending a second comment period in 

proceedings in which comments or the agency’s 

responses thereto ‘‘present new and important 

issues or serious conflicts of data’’); Administrative 

Conference of the United States, Recommendation 

72–5, Procedures for the Adoption of Rules of 

General Applicability (1972) (recommending that 

agencies consider providing an ‘‘opportunity for 

parties to comment on each other’s oral or written 

submissions); Office of Information & Regulatory 

Affairs, Memorandum for the Heads of Executive 

Departments and Agencies, and of Independent 

Regulatory Agencies, on Executive Order 13,563, 

M–11–10, at 2 (Feb. 2, 2011) (‘‘[Executive Order 

13,563] seeks to increase participation in the 

regulatory process by allowing interested parties the 

opportunity to react to (and benefit from) the 

comments, arguments, and information of others 

during the rulemaking process itself.’’). 

The Judicial Conference should consider 

steps to facilitate these efforts. 

Complying With Recordkeeping 

Requirements in e-Rulemaking 

7. In implementing their responsibilities 

under the Federal Records Act, agencies 

should ensure their records schedules 

include records generated during eRulemaking. 

Administrative Conference Recommendation 

2011–2 

Rulemaking Comments 

Adopted June 16, 2011 

One of the primary innovations associated 

with the Administrative Procedure Act 

(‘‘APA’’) was its implementation of a 

comment period in which agencies solicit the 

views of interested members of the public on 

proposed rules.1 The procedure created by 

the APA has come to be called ‘‘notice-andcomment rulemaking,’’ and comments have 

become an integral part of the overall 

rulemaking process. 

In a December 2006 report titled ‘‘Interim 

Report on the Administrative Law, Process 

and Procedure Project for the 21st Century,’’ 

the Subcommittee on Commercial and 

Administrative Law of the United States 

House of Representatives’ Committee on the 

Judiciary identified a number of questions 

related to rulemaking comments as areas of 

possible study by the Administrative 

Conference.2 These questions include: 

• Should there be a required, or at least 

recommended, minimum length for a 

comment period? 

• Should agencies immediately make 

comments publicly available? Should they 

permit a ‘‘reply comment’’ period? 

• Must agencies reply to all comments, 

even if they take no further action on a rule 

for years? Do comments eventually become 

sufficiently ‘‘stale’’ that they could not 

support a final rule without further 

comment? 

• Under what circumstances should an 

agency be permitted to keep comments 

confidential and/or anonymous? 

• What effects do comments actually have 

on agency rules? 

The Conference has studied these 

questions and other, related issues 

concerning the ‘‘comment’’ portion of the 

notice-and-comment rulemaking process. 

The Conference also has a concurrent 

recommendation that deals with separate 

matters, focusing specifically on legal issues 

implicated by the rise of e-rulemaking. See 

Administrative Conference of the United 

States, Recommendation 2011–1, Legal 

Considerations in e-Rulemaking. 

The Conference believes that the comment 

process established by the APA is 

fundamentally sound. Nevertheless, certain 

innovations in the commenting process could 

allow that process to promote public 

participation and improve rulemaking 

outcomes more effectively. In this light, the 

Conference seeks to highlight a series of ‘‘best 

practices’’ designed to increase the 

opportunities for public participation and 

enhance the quality of information received 

in the commenting process. The Conference 

recognizes that different agencies have 

different approaches to rulemaking and 

therefore recommends that individual 

agencies decide whether and how to 

implement the best practices addressed. 

In identifying these best practices, the 

Conference does not intend to suggest that it 

has exhausted the potential innovations in 

the commenting process. Individual agencies 

and the Conference itself should conduct 

further empirical analysis of notice-andcomment rulemaking, should study the 

effects of the proposed recommendations to 

the extent they are implemented, and should 

adjust and build upon the proposed 

processes as appropriate. 

Recommendation 

1. To promote optimal public participation 

and enhance the usefulness of public 

comments, the eRulemaking Project 

Management Office should consider 

publishing a document explaining what 

types of comments are most beneficial and 

listing best practices for parties submitting 

comments. Individual agencies may publish 

supplements to the common document 

describing the qualities of effective 

comments. Once developed, these documents 

should be made publicly available by posting 

on the agency Web site, Regulations.gov, and 

any other venue that will promote 

widespread availability of the information. 

2. Agencies should set comment periods 

that consider the competing interests of 

promoting optimal public participation while 

ensuring that the rulemaking is conducted 

efficiently. As a general matter, for 

‘‘[s]ignificant regulatory action[s]’’ as defined 

in Executive Order 12,866, agencies should 

use a comment period of at least 60 days. For 

all other rulemakings, they should generally 

use a comment period of at least 30 days. 

When agencies, in appropriate 

circumstances, set shorter comment periods, 

they are encouraged to provide an 

appropriate explanation for doing so.3

3. Agencies should adopt stated policies of 

posting public comments to the Internet 

within a specified period after submission. 

Agencies should post all electronically 

submitted comments on the Internet and 

should also scan and post all comments 

submitted in paper format.4

4. The eRulemaking Project Management 

Office and individual agencies should 

establish and publish policies regarding the 

submission of anonymous comments. 

5. Agencies should adopt and publish 

policies on late comments and should apply 

those policies consistently within each 

rulemaking. Agencies should determine 

whether or not they will accept late 

submissions in a given rulemaking and 

should announce the policy both in publicly 

accessible forums (e.g., the agency’s Web site, 

Regulations.gov) and in individual Federal 

Register notices including requests for 

comments. The agency may make clear that 

late comments are disfavored and will only 

be considered to the extent practicable.5

6. Where appropriate, agencies should 

make use of reply comment periods or other 

opportunities for receiving public input on 

submitted comments, after all comments 

have been posted. An opportunity for public 

input on submitted comments can entail a 

reply period for written comments on 

submitted comments, an oral hearing, or 

some other means for input on comments 

received.6

7. Although agencies should not 

automatically deem rulemaking comments to 

have become stale after any fixed period of 

time, agencies should closely monitor their 

rulemaking dockets, and, where an agency 

believes the circumstances surrounding the 

rulemaking have materially changed or the 

rulemaking record has otherwise become 

stale, consider the use of available 


sroberts on DSK5SPTVN1PROD with NOTICES
48792 Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 

1The FAR is a set of uniform policies and 

procedures that all executive agencies must use in 

procurements from sources outside of the 

government. 48 CFR 1.101. All executive agencies 

must comply with the FAR when purchasing from 

contractors, though individual agencies can also 

adopt agency-specific supplements to the FAR by 

regulation or provide additional requirements in 

individual contracts. See, e.g., 48 CFR ch. 2 

(Defense Federal Acquisition Regulation 

Supplement for the Department of Defense). The 

FAR Council consists of the Administrator for 

Federal Procurement Policy, the Secretary of 

Defense, the Administrator of National Aeronautics 

and Space, and the Administrator of General 

Services. See 41 U.S.C. 1102, 1302. 

2Specifically, Federal spending on service 

contracts increased by 85% in inflation adjusted 

dollars between 1983 and 2007. Kathleen Clark, 

Ethics for an Outsourced Government Table 3 

(forthcoming), available at http://www.acus.gov/

research/the-conference-current-projects/

government-contractor-ethics. Over the same 

period, the number of executive branch employees 

declined by 18%. Id. In this light, the relative 

significance of the contractor workforce vis-a`-vis 

the Federal employee workforce has increased 

substantially in the last few decades. 

3 Id. at 7. 

4 18 U.S.C. 201(b)–(c). 

5 Id. § 219. 

6 41 U.S.C. § 2102. 

7 Id. §§ 8701–07 (prohibiting kickbacks to 

contractors, subcontractors, and their employees). 

8 48 CFR 9.500 et seq. The FAR provision applies 

only to organizational conflicts of interest, wherein 

the firm itself possesses such business interests, and 

not to personal conflicts of interest, wherein one of 

the firm’s employees has a business or financial 

interest that could influence his or her 

decisionmaking in performing a contract. 

9 Id. §§ 3.1000–04. These codes must ensure that 

the firm has adequate systems for detecting, 

preventing, and reporting illegal conduct and 

violations of the civil False Claims Act and that it 

‘‘[o]therwise promote[s] an organizational culture 

that encourages ethical conduct.’’ Id. § 52.203–13. 

The FAR does not dictate, however, what types of 

potential ethical misconduct the internal corporate 

codes must address. 

10Agencies that have adopted ethics regimes 

supplementing those contained in the FAR include 

the Department of Energy, Department of Health 

and Human Services, Department of the Treasury, 

Environmental Protection Agency, Nuclear 

Regulatory Commission, and United States Agency 

for International Development. Clark, supra note 2, 

Table VII. These supplemental regimes are not 

comprehensive, however, and generally apply only 

to specific types of contracts. By contrast, the 

Federal Deposit Insurance Corporation, though it is 

not covered by the FAR, has implemented a 

comprehensive ethics system that applies to all of 

its contractor employees. Id.; see also 12 CFR 366.0 

et seq. 

11See, e.g., USAID Acquisition Regulation 148, 

available at http://www.usaid.gov/policy/ads/300/ 

aidar.pdf. 

12See generally Def. Indus. Initiative on Bus. 

Ethics & Conduct, Public Accountability Report 

(2009), available at http://www.dii.org/files/annualreport-2008.pdf. Many of the most extensive 

internal codes are implemented by companies that 

are members of the Defense Industry Initiative 

(‘‘DII’’), which includes 95 defense contractors that 

agree to implement such ethics codes and comply 

with certain values in maintaining an ethical 

workplace. Contractor employees can be 

disciplined internally for violating their company’s 

ethics code, and companies commit to disclose 

violations of the law and ‘‘instances of significant 

employee misconduct’’ to the contracting agency. 

Id. at 49. 

13See id. at 49–50 (contractors are only required 

to report those violations covered by FAR § 52.203– 

13). 

14See id. at 33 (noting that DII member company 

codes require them to protect government property). 

15See id. at 34 (‘‘Employees are prohibited from 

having personal, business, or financial interests that 

are incompatible with their responsibility to their 

employer.’’); see also U.S. Gov’t Accountability 

Office, GAO–08–169, Additional Personal Conflict 

of Interest Safeguards Needed for Certain DOD 

Contractor Employees 3 (2008) (‘‘Most of the 

contractor firms have policies requiring their 

employees to avoid a range of potential interests— 

such as owning stock in competitors—that conflict 

with the firm’s interest. However, only three of 

these contractors’ policies directly require their 

employees to disclose potential personal conflicts 

of interest with respect to their work at DOD so they 

can be screened and mitigated by the firms.’’). 

mechanisms such as supplemental notices of 

proposed rulemaking to refresh the 

rulemaking record. 

Administrative Conference Recommendation 

2011–3 

Compliance Standards for Government 

Contractor Employees—Personal Conflicts of 

Interest and Use of Certain Non-Public 

Information 

Adopted June 17, 2011 

The Conference believes that it is 

important to ensure that services provided by 

government contractors—particularly those 

services that are similar to those performed 

by government employees—are performed 

with integrity and that the public interest is 

protected. In that light, the Conference 

recommends that the Federal Acquisition 

Regulatory Council (‘‘FAR Council’’) 

promulgate model language in the Federal 

Acquisition Regulation (‘‘FAR’’) 1 for agency 

contracting officers to use when negotiating 

or administering contracts that pose 

particular risks of government contractor 

employee personal conflicts of interest or 

misuse of non-public information. In order to 

ensure that, in its effort to protect the public 

interest, this recommendation does not create 

excessive compliance burdens for contractors 

or unnecessary monitoring costs for agencies, 

the Conference is limiting its 

recommendation to those areas that it has 

identified as the top priorities—contractor 

employees who perform certain activities 

identified as posing a high risk of personal 

conflicts of interest or misuse of non-public 

information. 

Background 

In recent years, the Federal government has 

increasingly relied upon private contractors 

to perform services previously provided inhouse by civil servants.2 Despite this 

expansion in the use of government 

contractors, there continues to be a 

substantial disparity between the ethics rules 

regulating government employees and those 

applicable to government contractor 

employees. Whereas an array of statutes and 

regulations creates an extensive ethics regime 

for government employees, the rules 

currently applicable to contractor employees 

vary significantly by agency. 

Government employees are subject to 

various statutes and regulations that create a 

comprehensive ethics regime governing, 

among other things, their financial interests, 

use of government resources, outside 

activities, and activities in which they may 

engage after leaving government.3 By 

contrast, the compliance standards 

applicable to contractor employees are much 

less comprehensive and can vary 

significantly from contract to contract. A 

handful of statutes apply to contractor 

employees and prohibit their offering bribes 

or illegal gratuities,4 serving as foreign 

agents,5 disclosing procurement 

information,6 or offering or receiving 

kickbacks.7 The FAR requires contracting 

officers to identify organizational conflicts of 

interest (in which the contractor has a 

corporate interest that may bias its judgment 

or the advice it provides to the government) 

and either address or waive such conflicts.8

The FAR also requires that contracting firms 

that have entered into one or more 

government contracts valued in excess of $5 

million and requiring 120 days or more to 

perform have in place ‘‘codes of business 

ethics and conduct.’’ 9 A handful of agencies 

have adopted ethics regulations 

supplementing the FAR,10 and still other 

agencies impose additional ethics 

requirements by contract.11

Finally, certain contracting firms, most 

notably some performing work for the 

Department of Defense, have voluntarily 

adopted internal ethics codes, some of which 

provide fairly detailed rules relating to such 

important ethical issues as personal conflicts 

of interest, confidentiality, gifts and 

gratuities, protection of government property, 

and other major ethical areas, and that 

establish internal disciplinary processes for 

employee violations of such codes.12

Nevertheless, the corporate codes do not 

generally require that unethical conduct that 

is not otherwise illegal or unlawful be 

reported to the contracting agency.13

Furthermore, though the corporate codes 

provide certain protections for the 

government,14 they generally only require 

contractor employees to protect against 

personal conflicts with their employer’s 

interest rather than the government’s 

interest.15 Finally, many contractors 

(particularly those outside of the defense 

setting) do not have internal ethics codes. 

Scope of the Problem 

By dint of their work for and as part of the 

government, contractors performing certain 

services, particularly those that can influence 

government decisions or have access to nonpublic information, are in a position of 

public trust and responsibility for the 

protection of public resources, as is the 

government itself. It is therefore critical that 

their employees behave with the same high 

degree of integrity as government employees 

and do not exploit positions of public trust 

for improper personal gain. Whether or not 

there is any widespread pattern of ethical 

abuses, the existence of significant ethical 

risks can erode public confidence in the 

government procurement process and in the 

government itself. Accordingly, it is entirely 

appropriate to hold those contractors and 

their employees to a high ethical standard of 

conduct. 


sroberts on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 48793 

16There are pending FAR rules relating to 

protection of non-public information, 76 FR 23,236 

(Apr. 26, 2011), and preventing personal conflicts 

of interest for contractor employees performing 

acquisition activities closely related to inherently 

governmental functions, 74 FR 58,584 (Nov. 13, 

2009), but these proposed rules are not yet adopted 

and also cover only some of the topics addressed 

in this recommendation. 

17See generally Def. Indus. Initiative on Bus. 

Ethics & Conduct, supra note 12. 

18Report of the Acquisition Advisory Panel 418 

(Jan. 2007). Various agencies have extended certain 

aspects of the ethics standards applicable to 

government employees to contractor employees, 

see, e.g., 12 CFR 366.0 et seq. (FDIC contractor 

regulations), and their decision to do so has not 

necessarily created excessive compliance or 

monitoring costs. Nevertheless, extending all 

government employee ethics rules to all contractor 

employees serving all agencies, without 

consideration of the specific ethical risks presented, 

would likely impose costs that are excessive in 

relation to the benefits received. Accordingly, the 

Conference believes that the FAR Council and 

individual agencies should proceed carefully in 

ensuring that any expansion of the current ethics 

regime is cost-effective, while at the same time 

protecting the government’s interests. 

19See id.; Kathleen Clark, supra note 2, Table VII; 

Marilyn Glynn, Public Integrity & the Multi-Sector 

Workforce, 52 Wayne L. Rev. 1433, 1436–38 (2006); 

Def. Indus. Initiative on Bus. Ethics & Conduct, 

supra note 12, at 29–60. 

20 18 U.S.C. 201(c). 

21 41 U.S.C. 8702. Of course, in light of the 

severity of criminal sanctions, many instances of 

misconduct are likely to go unpunished under the 

current regime. For instance, resource constraints 

may make it unlikely that a United States Attorney 

would prosecute a contractor employee for 

accepting a lavish meal from a prospective subcontractor. Nevertheless, the mere threat of criminal 

prosecution may deter potential misconduct. 

22 18 U.S.C. 641; Morissette v. United States, 

342 U.S. 246, 272 (1952). In addition, agencies often 

stipulate by contract that government property may 

not be used for personal benefit (e.g., a contractor 

employee’s using government computers for 

personal use). Glynn, supra note 19, at 1437. 

23 41 U.S.C. 8702. 

24 Dirks v. Sec. Exch. Comm’n, 463 U.S. 646, 655 

n.14 (1983); 17 CFR 240.10b5–2(b). 

25See, e.g., Preventing Personal Conflicts of 

Interest for Contractor Employees Performing 

Acquisition Functions, 74 FR 58,584, 58,588–89 

(proposed Nov. 13, 2009) (setting forth proposed 

FAR rules regulating personal conflicts of interest 

and use of non-public information for private gain 

in the case of contractors performing acquisition 

activities closely related to inherently governmental 

functions); Glynn, supra note 19, at 1436–37 (article 

by general counsel of the Office of Government 

Ethics recommending, inter alia, extending ethics 

rules to include contractor employee conflicts of 

interest and misuse of non-public information); U.S. 

Gov’t Accountability Office, supra note 15, at 31 

(‘‘We recommend * * * personal conflict of 

interest contract clause safeguards for defense 

contractor employees that are similar to those 

required for DOD’s Federal employees.’’); U.S. Gov’t 

Accountability Office, GAO–10–693, Stronger 

Safeguards Needed for Contractor Access to 

Sensitive Information 30 (2010) (recommending 

that the FAR Council provide guidance on the use 

of non-disclosure agreements as a condition to 

contractors’ accessing sensitive information and on 

‘‘establishing a requirement for prompt notification 

to appropriate agency officials of a contractor’s 

unauthorized disclosure or misuse of sensitive 

information’’); Office of Gov’t Ethics, Report to the 

President & to Congressional Committees on the 

Conflict of Interest Laws Relating to Executive 

Branch Employment 38–39 (2006) (noting 

‘‘expressions of concern’’ the Office has received 

regarding personal conflicts of interest and 

highlighting the possibility of agencies’ including 

contract clauses to deal with such issues); Report 

of the Acquisition Advisory Panel, supra note 18, 

at 423–25 (concluding that additional safeguards 

were necessary in order to protect against contractor 

employee personal conflicts of interest and misuse 

of confidential or proprietary information). 

As noted above, a significant disparity 

currently exists between the ethical 

standards applicable to government 

employees, which are comprehensive and 

consist predominantly of specific rules, and 

those applicable to contractor employees, 

which are largely developed and applied on 

an ad hoc basis and involve significantly 

vaguer standards.16 Many contractors have 

undertaken laudable efforts to promote a 

culture of compliance through the 

implementation of company-specific ethics 

standards,17 but not every contractor has 

such internal standards. The Conference 

believes that adoption of contractor ethics 

standards applicable to certain high-risk 

activities would protect the public interest 

and promote integrity in government 

contracting. In addition, the Conference aims 

to promote public confidence in the system 

of government contracting and in the 

integrity of the government. 

Of course, the mere existence of a disparity 

between government employee and 

contractor ethics standards is not itself 

conclusive evidence that contractor 

employee ethics standards should be 

expanded. Indeed, simply applying the rules 

governing the ethics of government 

employees (particularly those dealing with 

financial disclosures to guard against 

personal conflicts of interest) directly to 

contractors could create excessive and 

unnecessary compliance burdens for 

contractors and monitoring costs for 

agencies.18 To address this concern, the 

Conference has focused on the most 

significant ethical risks that arise in 

government contracts as well as the activities 

most likely to implicate those risks. 

Specifically, the Conference has identified 

contractor employees’ personal conflicts of 

interest and use of non-public information as 

two areas calling for greater measures to 

prevent misconduct. Of course, those are not 

necessarily the only risks in the current 

system, and individual agencies have chosen 

or may hereafter choose to impose ethics 

requirements in other areas as well. The 

Conference, however, believes those two 

identified areas warrant more comprehensive 

measures to prevent misconduct. The 

Conference believes those two identified 

areas call for ethics standards, although 

agencies should be mindful of risks requiring 

more particularized treatment that may be 

present in their specific contexts. 

Personal Conflicts of Interest and Misuse of 

Certain Non-Public Information 

The most common ethical risks currently 

addressed in specific agency supplements to 

the FAR (as well as in contractors’ own 

internal codes of conduct) include personal 

conflicts of interest, gifts, misuse of 

government property, and misuse of nonpublic information.19 Of these major ethical 

risks, existing criminal laws regulate 

contractors’ offering or receipt of gifts and 

misuse of government property. With respect 

to gifts, criminal bribery laws would prohibit 

a contractor employee’s offering anything of 

value to a Federal employee to obtain 

favorable treatment,20 and the Anti-Kickback 

Act would prohibit a contractor employee 

from accepting gifts from a potential subcontractor or other party that are aimed at 

improperly obtaining favorable treatment 

under the contract.21 With respect to misuse 

of property, traditional criminal laws against 

larceny and embezzlement would prohibit a 

contractor employee’s misappropriating 

public property, and Federal criminal law 

prohibits a contractor employee’s misusing or 

abusing government property.22

On the other hand, a contractor employee 

is less likely to face sanctions under existing 

laws if he or she acts despite a personal 

conflict of interest or exploits non-public 

information for personal gain. Though the 

Anti-Kickback Act would prevent a 

contractor employee’s directing business to a 

third party in exchange for an actual 

payment,23 nothing under current law would 

prevent a contractor employee from directing 

business towards a company in which he or 

she owns stock (i.e., a personal conflict of 

interest). Similarly, though insider trading 

laws would apply if a contractor employee 

bought securities based upon information 

learned from government contracts,24

nothing under current law would prevent a 

contractor employee from purchasing other 

items, such as land that will appreciate upon 

announcement of construction of a military 

base, on the basis of information learned 

while performing his or her contractual 

duties. 

In this light, various governmental entities 

that have studied issues of contractor ethics 

have singled out preventing personal 

conflicts of interest and misuse of non-public 

information as areas that need to be 

strengthened.25 By focusing on these two 

areas of risk, the Conference does not intend 

to discourage agencies from adopting 

additional ethics requirements regarding 

procurement activities by regulations or 

contract. Indeed, some agencies may choose 

to adopt rules regulating ethical risks such as 

contractor employee receipt of gifts or misuse 

of property as an additional prophylactic 

measure, notwithstanding the existence of 

criminal penalties covering similar conduct. 

Rather, the Conference believes that personal 

conflicts of interest and protection of nonpublic information are two areas for which 

greater measures to prevent misconduct are 

particularly appropriate, and it therefore 

recommends targeted measures designed to 

address those risks. The recommendation 

would serve as a floor upon which agencies 

could build and would not be intended to 

deter adoption of a more expansive ethics 

regime, either individually or through the 

FAR Council, to the extent the agencies find 

it appropriate. 

‘‘High Risk’’ Contracts 

PCI-Risk Contracts: The Conference has 

sought to identify those types of activities 

most likely to create risks of personal 


sroberts on DSK5SPTVN1PROD with NOTICES
48794 Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 

26Federal Activities Inventory Reform Act of 

1998, Public Law 105–270, § 5(2)(A), 112 Stat. 2382, 

2384; 48 CFR 2.101; OMB, Circular A–76, 

Performance of Commercial Activities, Attachment 

A § B.1.a. Though each of these authorities uses 

slightly different wording in defining ‘‘inherently 

governmental function,’’ the differences are 

apparently of no legal significance. Office of 

Management & Budget, Work Reserved for 

Performance by Federal Government Employees, 

75 FR 16,188, 16,190 (proposed Mar. 31, 2010). 

27 48 CFR 7.503(d). 

28Work Reserved for Performance by Federal 

Government Employees, 75 FR at 16,193–94. 

29Report of the Acquisition Advisory Panel, 

supra note 18, at 411. 

30 48 CFR 7.503(d). 

31 Id. § 2.101. 

32 Id. § 17.601. 

33The Conference believes that these activities 

are particularly likely to pose a risk of personal 

conflicts of interest. To the extent that the FAR 

Council or individual agencies believe that other 

activities pose similar risks, they should remain free 

to regulate contracts for such activities. 

34The FAR Council has issued a proposed rule 

that would establish personal conflict of interest 

standards for contractor employees performing 

acquisition activities closely associated with 

inherently governmental functions. Preventing 

Personal Conflicts of Interest for Contractor 

Employees Performing Acquisition Functions, 

74 FR at 58,588. To the extent it is ultimately 

implemented, this rule would obviate the need for 

any additional FAR contract clause with respect to 

these contracts. 

35U.S. Gov’t Accountability Office, Stronger 

Safeguards Needed for Contractor Access to 

Sensitive Information, supra note 25, at 30 

(recommending that the FAR Council provide 

guidance on the use of non-disclosure agreements 

as a condition to contractors’ accessing sensitive 

information and on ‘‘establishing a requirement for 

prompt notification to appropriate agency officials 

of a contractor’s unauthorized disclosure or misuse 

of sensitive information’’). 

36The Conference believes that these activities 

are particularly likely to pose a risk of disclosure 

or misuse of non-public information. This 

recommendation does not define the term ‘‘nonpublic information;’’ the FAR Council would be 

responsible for drafting language more precisely 

defining the types of information and services 

covered. In doing so, the FAR Council could choose 

to draw on existing definitions created for similar 

purposes. See, e.g., 5 CFR 2635.703 (defining 

‘‘nonpublic information’’ and prohibiting 

government employees from misusing such 

information, including information routinely 

withheld under 5 U.S.C. § 552(b) (FOIA 

exemptions)); U.S. Gov’t Accountability Office, 

Stronger Safeguards Needed for Contractor Access 

to Sensitive Information, supra note 25, at 4–5 

(defining a category of information that requires 

safeguards against unauthorized disclosure). To the 

extent that the FAR Council or individual agencies 

believe that other activities pose similar risks, they 

should remain free to regulate such activities 

through appropriate solicitation provisions or 

contract clauses. 

37For instance, if an employee of a contractor 

performing auditing functions for the government 

were to learn that a large manufacturing firm 

intends to open a new plant in coming months, the 

employee could purchase property near the plant 

and reap a substantial financial windfall. The 

contemplated regime would require that the 

contractor train employees privy to such 

information on their obligations to keep the 

information confidential and to avoid transacting 

business on the basis of such information, penalize 

employees who violate such obligations, and report 

any employee violations to the contracting agency. 

38U.S. Gov’t Accountability Office, Stronger 

Safeguards Needed for Contractor Access to 

Sensitive Information, supra note 24, at 6. 

39The Conference takes no position on whether 

the contractual language adopted in individual 

contracts should ‘‘flow down’’ to sub-contractors 

and other persons besides prime contractors 

performing work on government contracts. That 

issue is best left to the discretion of the FAR 

Council. 

40The draft language would appear in part 52 of 

the FAR and would consist of draft solicitation 

provisions (which are used in soliciting contracts) 

and contract clauses (which are integrated into 

negotiated contracts). The use of the plural forms 

‘‘provisions’’ and ‘‘clauses’’ is not intended to 

exclude the possibility that the FAR Council could 

implement the recommendations with a single 

conflicts of interest, situations in which a 

contractor employee may have some interest 

that may bias his or her judgment. Several 

statutes and regulations prohibit contractors 

from performing ‘‘inherently governmental 

functions,’’ which are defined as functions 

‘‘so intimately related to the public interest’’ 

as to require performance by government 

employees.26 The FAR also contains a list of 

activities that ‘‘approach’’ being classified as 

‘‘inherently governmental functions.’’ 27 As a 

recent proposed policy letter from the Office 

of Federal Procurement Policy recognizes, 

contractors performing activities that are 

similar to ‘‘inherently governmental 

functions’’ should be subject to close 

scrutiny, given that the work that they 

perform is near the heart of the traditional 

role of the Federal government.28 Several of 

the functions listed as ‘‘approach[ing] * * * 

inherently governmental functions’’ involve 

activities wherein the contractor either 

advises in agency policymaking or 

participates in procurement functions, which 

raise particular risks of employee personal 

conflicts of interest. Other activities 

identified as raising particular risks of 

employee personal conflicts of interest 

include ‘‘advisory and assistance services’’ 

and ‘‘management and operating’’ 

functions.29

The FAR contains provisions identifying 

activities that ‘‘approach’’ being ‘‘inherently 

governmental functions,’’ 30 feature ‘‘advisory 

and assistance services,’’31 or involve 

‘‘management and operating’’ functions.32

Many of these activities, such as those in 

which a contractor employee performs tasks 

that can influence government action, 

including the expenditure of agency funds, 

may pose a significant risk of personal 

conflicts of interest. Several contracting 

tasks, by their nature, elevate the risk of such 

conflicts. Those include substantive (as 

compared to administrative or processoriented) contract work (hereinafter referred 

to as ‘‘PCI-Risk’’ contracts 33) such as: 

• Developing agency policy or regulations. 

• Providing alternative dispute resolution 

services on contractual matters; legal advice 

involving interpretation of statutes or 

regulations; significant substantive input 

relevant to agency decision-making; or 

professional advice for improving the 

effectiveness of Federal management 

processes and procedures. 

• Serving as the primary authority for 

managing or administering a project or 

operating a facility. 

• Preparing budgets, and organizing and 

planning agency activities. 

• Supporting substantive acquisition 

planning 34 or research and development 

activities. 

• Evaluating another contractor’s 

performance or contract proposal. 

• Assisting in the development of a 

statement of work or in contract 

management. 

• Participating as a technical advisor to a 

source selection board or as a member of a 

source evaluation board (i.e., boards designed 

to select or evaluate bids or proposals for 

procurement contracts). 

Information-Risk Contracts: Existing 

regulations also do not comprehensively 

protect against contractor employees’ 

disclosure or misuse of non-public 

governmental, business, or personal 

information learned while performing 

government contracts.35 As with personal 

conflicts of interest, specific activities pose a 

grave risk of contractor disclosure or misuse 

of non-public information, which include 

(hereinafter referred to as ‘‘Information-Risk’’ 

contracts 36): 

• Contracts in which certain employees 

will receive access to information relating to 

an agency’s deliberative processes, 

management operations, or staff that is not 

generally released to the public. 

• Contracts in which certain employees 

will have access to certain business-related 

information, including trade secrets, nonpublic financial information, or other nonpublic information that could be exploited 

for financial gain.37

• Contracts in which certain employees 

will have access to personally identifying or 

other non-public personal information, such 

as social security numbers, bank account 

numbers, or medical records.38

Recommendation 

1. The Federal Acquisition Regulatory 

Council (‘‘FAR Council’’) should promulgate 

model language for use in contracts posing a 

high risk of either personal conflicts of 

interest or misuse of certain non-public 

information.39 Current law does not 

adequately regulate against the risks of 

contractor employee personal conflicts of 

interest and misuse of non-public 

information. On occasion certain agencies 

impose additional ethics requirements by 

supplemental regulation or contract. In 

addition, certain contractors, especially large 

companies, have adopted and enforced 

internal ethics codes. Nevertheless, coverage 

varies significantly from agency to agency 

and contract to contract. In order to bring 

consistency to this process and ensure that 

the government’s interests are adequately 

protected, the FAR Council should draft 

model language in the Federal Acquisition 

Regulation (‘‘FAR’’) for agency contracting 

officers to use, with modifications 

appropriate to the nature of the contractual 

services and risks presented, when soliciting 

and negotiating contracts that are particularly 

likely to raise issues of personal conflicts of 

interest or misuse of non-public information. 

2. The model FAR provisions or clauses 

should apply to PCI-Risk and InformationRisk Contracts.40 The proposed FAR 


sroberts on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 48795 

provision or clause. See the Preamble for the 

definition of ‘‘PCI-Risk’’ and ‘‘Information-Risk’’ 

contracts. 

41The FAR should include a certification 

requirement rather than a disclosure process in 

order to minimize the burden on contractors. In 

order to fully perform their contractual obligations, 

contractors should be required to train their key 

personnel on recognizing and disclosing personal 

conflicts of interest. In the case of an anticipated 

conflict, a contractor employee should disclose the 

issue to the contractor, who must screen the 

employee from performing under the contract. The 

contractor should be responsible for disciplining 

employees who fail to disclose conflicts or honor 

a screening policy, and for disclosing such 

violations to the government. 

42Every employee performing under the contract 

need not certify that he or she does not possess 

conflicting financial interests. For instance, in the 

case of a contractor assisting in the development of 

agency policy (a function falling within one of the 

‘‘high risk’’ categories), employees performing 

administrative or other non-discretionary 

(particularly ministerial) tasks, such as those 

making copies of the report that the contractor will 

submit, need not perform such a certification. 

1See, e.g., Robert Anderson, The Impact of 

Information Technology on Judicial Administration: 

A Research Agenda for the Future, 66 S. Cal. L. Rev. 

1762, 1770 (1993). 

2See, e.g., Richard K. Sherwin, Neal Feigenson, 

& Christina Spiesel, Law in the Digital Age: How 

Visual Communication Technologies are 

Transforming the Practice, Theory, and Teaching of 

Law, 12 B.U. J. Sci. & Tech. L. 227, 229 (2006); 

Cathy Catterson, Changes in Appellate Caseload 

and Its Processing, 48 Ariz. L. Rev. 287, 295 (2006); 

Fredric Lederer, The Road to the Virtual 

Courtroom? A Consideration of Today’s—and 

Tomorrow’s—High Technology Courtrooms, (State 

Justice Inst. 1999), reprinted in 50 S.C. L. Rev. 799, 

801 (2000). 

3See, e.g., 20 CFR 260.5; 39 CFR 966.9; and 42 

CFR 405. 

4See, e.g., 5 U.S.C. 1204(a)(1) and 37 CFR 

2.129(a). 

provisions or clauses would apply only to 

PCI-Risk and Information-Risk contracts (or 

solicitations for such contracts). At the same 

time, contracting agencies should remain free 

to incorporate contract language (or to 

promulgate agency-specific supplemental 

regulations) dealing with other ethical risks 

they deem important whether or not the 

contract at issue qualifies as a PCI-Risk or 

Information-Risk contract. Thus, the model 

FAR provisions or clauses adopted in 

response to this recommendation would 

serve as a floor upon which agencies could 

build if they deemed it appropriate, but 

would not supplant existing programs that 

now provide or may in the future provide 

more demanding or expansive ethical 

protections. 

3. Agencies should have the discretion 

whether to use or modify the model FAR 

provisions or clauses. An agency contracting 

officer would have the option to use the 

model FAR provisions or clauses when 

soliciting and/or contracting for activities 

falling into the PCI-Risk or Information-Risk 

categories. Because the provisions or clauses 

would be optional, the contracting agency 

would enjoy the discretion to modify the 

FAR language on a case-by-case basis to fit 

the circumstances, and to decide to forego 

including any such language if it deems that 

the particular contract at issue is unlikely to 

pose a significant risk of personal conflicts of 

interest or misuse of non-public information 

by contractor personnel. Nevertheless, the 

FAR Council should encourage contracting 

officers to use the model FAR language when 

applicable. 

4. The FAR should include model 

provisions or clauses for use in PCI-Risk 

procurements. The FAR Council should 

encourage agencies to include these model 

provisions or clauses in contracting actions 

involving PCI–Risk procurements. 

The proposed FAR provisions or clauses 

should require the contractor to certify 41 that 

none of its employees who is in a position 

to influence government actions 42 has a 

conflict of interest or that conflicted 

employees will be screened from performing 

work under any contract. Once a contractor 

is selected, the contract itself should include 

a clause requiring the contractor to train 

employees on recognizing conflicts, to 

implement a system for employees who can 

influence government action to report 

conflicts to the contractor, to screen any 

conflicted employees from contract 

performance, to report to the agency 

periodically on its efforts to protect against 

employee conflicts, and to disclose to the 

agency any instances of employee 

misconduct (as well as disciplinary action 

taken against any offending employee). A 

contractor’s failure to implement an adequate 

system for employee conflict certification, to 

disclose or correct instances of employee 

misconduct, or to take appropriate 

disciplinary measures against employees 

who commit misconduct may be grounds for 

contract termination. In addition, a 

contractor that repeatedly proves incapable 

or unwilling to honor such contractual 

obligations may be subject to suspension or 

debarment in appropriate circumstances. 

5. The FAR should include model 

provisions or clauses for use in InformationRisk procurements. The FAR Council should 

encourage agencies to include these model 

provisions or clauses in contracting actions 

involving Information-Risk procurements. 

The FAR language should require the 

contractor to ensure that its employees who 

have access to certain non-public information 

identified as posing an information risk are 

made aware of their duties to maintain the 

secrecy of such information and to avoid 

using it for personal gain. To the extent an 

employee breaches either of these 

obligations, the contractor should be 

responsible for reporting the breach to the 

government, minimizing the effects of the 

breach, and, where appropriate, disciplining 

the offending employee. A contractor’s 

failure to observe these contractual 

requirements may be grounds for contract 

termination. In addition, a contractor that 

proves repeatedly incapable or unwilling to 

fulfill its duties may be subject to suspension 

or debarment in appropriate circumstances. 

6. Agencies not covered by the FAR also 

should consider using or modifying the 

model FAR provisions or clauses when 

negotiating contracts for activities falling in 

either of the ‘‘high risk’’ categories. Agencies 

and government instrumentalities not 

covered by the FAR should nevertheless 

familiarize themselves with the FAR 

language promulgated in response to this 

recommendation. To the extent that they 

plan to enter into contracts for activities 

listed in the PCI-Risk or Information-Risk 

categories, they should consider employing 

or, if necessary, modifying these solicitation 

provisions and/or contract clauses. 

Administrative Conference Recommendation 

2011–4 

Agency Use of Video Hearings: Best 

Practices and Possibilities for Expansion 

Adopted June 17, 2011 

Since the early 1990s, video 

teleconferencing technology (‘‘VTC’’) has 

been explored by various entities in the 

public and private sectors for its potential 

use in administrative hearings and other 

adjudicatory proceedings.1 In the last 10 

years, advances in technology and carrier 

services coupled with reduced personnel and 

increased travel costs have made the use of 

VTC more attractive to local, state and 

Federal governments. The rise in the use of 

VTC by Federal and state courts has also 

been noted by academics.2 Similarly, in the 

past 10 years, there has been an increase in 

the use of video hearings by Federal agencies 

with high volume caseloads. Since pilot 

programs for video hearings at agencies first 

began in the early 1990s, VTC technology has 

become more advanced, more readily 

available and less expensive. 

Certain Federal agencies, such as the Social 

Security Administration’s Office of Disability 

Adjudication and Review (‘‘ODAR’’), the 

Department of Veteran Affairs’ Board of 

Veteran Appeals (‘‘BVA’’) and the 

Department of Justice’s Executive Office for 

Immigration Review (‘‘EOIR’’) have taken 

advantage of VTC for various adjudicatory 

proceedings. For example, in 2010, ODAR 

conducted a total of 120,624 video hearings, 

and a cost-benefit analysis conducted for the 

agency by outside consultants found that 

ODAR’s current use of video hearings saves 

the agency a projected estimated amount of 

approximately $59 million dollars annually 

and $596 million dollars over a 10-year 

period. A study by the agency has also 

determined that the use of VTC has no effect 

on the outcome of cases. 

Other agencies, such as the Railroad 

Retirement Board, the United States Postal 

Service, the Department of Health and 

Human Services’ Office of Medicare Hearings 

and Appeals, specifically have regulations 

allowing for the use of video 

teleconferencing.3 Similarly, agencies such as 

the U.S. Merit Systems Protection Board and 

the Commerce Trademark Trial and Appeal 

Board use VTC to conduct administrative 

hearings and other adjudicatory proceedings 

as a matter of practice under the broad 

statutory and/or regulatory discretion given 

to them.4

Despite the fact that some agencies within 

the Federal government have been using VTC 

to conduct mass adjudications for years, 

other agencies have yet to employ such 

technology. This may be because the use of 

VTC for administrative hearings is not 

without controversy. Some applaud the use 

of VTC by administrative agencies because it 

offers potential efficiency benefits, such as 


sroberts on DSK5SPTVN1PROD with NOTICES
48796 Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 

5See Meghan Dunn & Rebecca Norwick, Federal 

Judicial Center Report of a Survey of 

Videoconferencing in the Court of Appeals (2006), 

pp. 1–2, available at http://www.fjc.gov/public/ 

pdf.nsf/lookup/vidconca.pdf/$file/vidconca.pdf. 

6See American Bar Association’s Commission on 

Immigration Report entitled ‘‘Reforming the 

Immigration System’’ (2010), pp. 2–26–2–27. 

7See Roger C. Cramton, A Comment on TrialType Hearings in Nuclear Power Plant Siting, 58 

Va. L. Rev. 585, 591–93 (1972) (Professor Cramton 

is a former Chairman of the Conference); see also 

Paul R. Verkuil, A Study of Informal Adjudication 

Procedures, 43 U. Chi. L. Rev. 739 (1976) 

(describing the values of efficiency, fairness and 

satisfaction) (Mr. Verkuil is the current Chairman of 

the Conference). The balancing of these procedural 

values was undertaken in Mathews v. Eldridge, 424 

U.S. 319 (1976). 

reducing the need for travel and the costs 

associated with it, reducing caseload backlog, 

and increasing scheduling flexibility for 

agencies and attorneys as well as increasing 

access for parties.5 Critics, however, have 

suggested that hearings and other 

adjudicatory proceedings conducted by video 

may hamper communication between a party 

and the decision-maker; may hamper 

communication between parties and their 

attorneys or representatives; and/or may 

hamper a decision-maker’s ability to make 

credibility determinations.6

Recognizing both the praise for and 

critique of the use of VTC in administrative 

hearings and other adjudicatory proceedings, 

the Administrative Conference issues this 

Recommendation regarding the use of VTC in 

Federal agencies with high volume caseloads. 

The Conference has a long standing 

commitment to the values inherent in the 

agency adjudicatory process: Efficiency, 

fairness and acceptability/satisfaction.7

These values should drive decisions to use 

VTC. Therefore, this Recommendation 

suggests that agencies should use VTC only 

after conducting an analysis of the costs and 

benefits of VTC use and determining that 

such use would improve efficiency (i.e., 

timeliness and costs of adjudications) and 

would not impair the fairness of the 

proceedings or the participants’ satisfaction 

with them. In addition, this Recommendation 

supports the Conference’s statutory mandate 

of making improvements to the regulatory 

and adjudicatory process by improving the 

effectiveness and fairness of applicable laws. 

See generally Administrative Conference Act, 

5 U.S.C §§ 591–596. 

Accordingly, this Recommendation is 

directed at those agencies with high volume 

caseloads that do not currently use VTC as 

a regular practice in administrative hearings 

and/or other adjudicatory proceedings and 

that may benefit from the use of it to improve 

efficiency and/or reduce costs. Agencies with 

high volume caseloads are likely to receive 

the most benefit and/or cost savings from the 

use of VTC. However, the Conference 

encourages all agencies (including those with 

lower volume caseloads) to consider whether 

the use of VTC would be beneficial as a way 

to improve efficiency and/or reduce costs 

while also preserving the fairness and 

participant satisfaction of proceedings. This 

Recommendation sets forth some nonexclusive criteria that agencies should 

consider. For those agencies that determine 

that the use of VTC would be beneficial, this 

Recommendation also sets forth best 

practices provided in part by agencies 

currently using VTC. 

Recommendation 

1. Federal agencies with high volume 

caseloads should consider using video 

teleconferencing technology (‘‘VTC’’) to 

conduct administrative hearings and other 

aspects of adjudicatory proceedings. 

Agencies with lower volume caseloads may 

also benefit from this recommendation. 

2. Federal agencies with high volume 

caseloads should consider the following nonexclusive criteria when determining whether 

to use video teleconferencing technology in 

administrative hearings and other 

adjudicatory proceedings: 

(a) Whether an agency’s use of VTC is 

legally permissible under its organic 

legislation and other laws; 

(b) Whether the nature and type of 

administrative hearings and other 

adjudicatory proceedings conducted by the 

agency are conducive to the use of VTC; 

(c) Whether VTC can be used without 

affecting the outcome of cases heard by the 

agency; 

(d) Whether the agency’s budget would 

allow for investment in appropriate and 

secure technology given the costs of VTC; 

(e) Whether the use of VTC would create 

cost savings, such as savings associated with 

reductions in personnel travel and with 

increased productivity resulting from 

reductions in personnel time spent on travel; 

(f) Whether the use of VTC would result in 

a reduction of the amount of wait time for an 

administrative hearing; 

(g) Whether users of VTC, such as 

administrative law judges, hearing officers 

and other court staff, parties, witnesses and 

attorneys (or other party representatives), 

would find the use of such technology 

beneficial; 

(h) Whether the agency’s facilities and 

administration, both national and regional (if 

applicable), can be equipped to handle the 

technology and administration required for 

use of VTC; 

(i) Whether the use of VTC would 

adversely affect the representation of a party 

at an administrative hearing or other 

adjudicatory proceeding; and 

(j) Whether the communication between 

the various individuals present at a hearing 

or proceeding (including parties, witnesses, 

judges, hearing officers and other agency 

staff, translators and attorneys (or other party 

representatives)) would be adversely affected. 

3. Federal agencies with high volume 

caseloads that decide to use video 

teleconferencing technology to conduct 

administrative hearings and other 

adjudicatory proceedings should consider the 

following best practices: 

(a) Use VTC on a voluntary basis and allow 

a party to have an in-person hearing or 

proceeding if the party chooses to do so. 

(b) Periodically evaluate the use of VTC to 

make sure that the use is outcome-neutral 

(i.e., does not affect the decision rendered) 

and that the use is meeting the needs of its 

users. 

(c) Solicit feedback and comments 

(possibly through notice-and-comment 

rulemaking) about VTC from those who 

would use it regularly (e.g., administrative 

law judges, hearing officers and other 

administrative staff, parties, witnesses and 

attorneys (or other party representatives)). 

(d) Begin the use of VTC with a pilot 

program and then evaluate the pilot program 

before moving to wider use. 

(e) Structure training at the outset of 

implementation of VTC use and have 

technical support available for 

troubleshooting and implementation 

questions. 

(f) Consult the staff of the Administrative 

Conference of the United States and/or 

officials at other agencies that have used VTC 

for best practices, guidance, advice, and the 

possibilities for shared resources and 

collaboration. 

[FR Doc. 2011–20138 Filed 8–8–11; 8:45 am] 

BILLING CODE 6110–01–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

[Doc. No. AMS–LS–11–0065] 

Plan for Estimating Daily Livestock 

Slaughter Under Federal Inspection; 

Request for Extension of a Currently 

Approved Information Collection 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Request for comments. 

SUMMARY: In accordance with the 

Paperwork Reduction Act of 1995 (44 

U.S.C. chapter 35), this document 

announces the Agricultural Marketing 

Service’s (AMS) intention to request 

approval from the Office of Management 

and Budget, for an extension of the 

currently approved information 

collection used to compile and generate 

the Federally Inspected Estimated Daily 

Slaughter Report. 

DATES: Comments must be received by 

October 11, 2011. 

ADDRESSES: Comments should be 

submitted electronically at http:// 

www.regulations.gov. Comments may 

also be submitted to Jennifer Porter, 

Deputy Director, Livestock and Grain 

Market News Division, Livestock and 

Seed Program, Agricultural Marketing 

Service, U.S. Department of Agriculture; 

Stop 0252; 1400 Independence Avenue 

SW.; Room 2619–S; Washington, DC 

20250–0252. All comments should 

reference document number AMS–LS– 

11–0065 and note the date and page 

number of this issue of the Federal 

Register. 

Submitted comments will be available 

for public inspection at http:// 

www.regulations.gov or at the above 

address during regular business hours. 

Comments submitted in response to this 


sroberts on DSK5SPTVN1PROD with NOTICES