46342 Federal Register / Vol. 72, No. 159 / Friday, August 17, 2007 / Rules and Regulations 

(1) Notify its employees of—

(i) The United States Government’s 

zero tolerance policy described in 

paragraph (b) of this clause; and 

(ii) The actions that will be taken 

against employees for violations of this 

policy. Such actions may include, but 

are not limited to, removal from the 

contract, reduction in benefits, or 

termination of employment; and 

(2) Take appropriate action, up to and 

including termination, against 

employees or subcontractors that violate 

the policy in paragraph (b) of this 

clause. 

(d) Notification. The Contractor shall 

inform the Contracting Officer 

immediately of—

(1) Any information it receives from 

any source (including host country law 

enforcement) that alleges a Contractor 

employee, subcontractor, or 

subcontractor employee has engaged in 

conduct that violates this policy; and 

(2) Any actions taken against 

Contractor employees, subcontractors, 

or subcontractor employees pursuant to 

this clause. 

(e) Remedies. In addition to other 

remedies available to the Government, 

the Contractor’s failure to comply with 

the requirements of paragraphs (c), (d), 

or (f) of this clause may render the 

Contractor subject to—

(1) Required removal of a Contractor 

employee or employees from the 

performance of the contract; 

(2) Required subcontractor 

termination; 

(3) Suspension of contract payments; 

(4) Loss of award fee, consistent with 

the award fee plan, for the performance 

period in which the Government 

determined Contractor non–compliance; 

(5) Termination of the contract for 

default or cause, in accordance with the 

termination clause of this contract; or 

(6) Suspension or debarment. 

(f) Subcontracts. The Contractor shall 

include the substance of this clause, 

including this paragraph (f), in all 

subcontracts. 

(End of clause) 

Alternate I (AUG 2007). As prescribed 

in 22.1705(b), substitute the following 

paragraph in place of paragraph (c)(1)(i) 

of the basic clause: 

(i)(A) The United States Government’s 

zero tolerance policy described in 

paragraph (b) of this clause; and 

(B) The following directive(s) or 

notice(s) applicable to employees 

performing work at the contract place(s) 

of performance as indicated below: 

Document Title Document may be obtained from: Applies Performance to in/at: 

llllllll llllllll ............................................................................................. llllllll 

llllllll llllllll ............................................................................................. llllllll 

[Contracting Officer shall insert title 

of directive/notice; indicate the 

document is attached or provide source 

(such as website link) for obtaining 

document; and, indicate the contract 

performance location outside the U.S. to 

which the document applies.] 

[FR Doc. 07–3796 Filed 8–16–07; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 18 

[FAC 2005–19; FAR Case 2005–038; Item 

VI; Docket 2006–0020; Sequence 5] 

RIN 9000–AK50 

Federal Acquisition Regulation; FAR 

Case 2005–038, Emergency 

Acquisitions 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed to adopt the 

interim rule published in the Federal 

Register at 71 FR 38247 on July 5, 2006, 

as a final rule with changes. The final 

rule amends the Federal Acquisition 

Regulation (FAR) to provide a single 

reference to acquisition flexibilities that 

may be used to facilitate and expedite 

acquisitions of supplies and services 

during emergency situations. 

DATES: Effective Date: September 17, 

2007. 

FOR FURTHER INFORMATION CONTACT Mr. 

William Clark, Procurement Analyst, at 

(202) 219–1813 for clarification of 

content. For information pertaining to 

status or publication schedules, contact 

the FAR Secretariat at (202) 501–4755. 

Please cite FAC 2005–19, FAR case 

2005–038. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This final rule amends the FAR to 

provide a single reference to acquisition 

flexibilities that may be used to 

facilitate and expedite acquisitions of 

supplies and services during emergency 

situations. 

DoD, GSA, and NASA published an 

interim rule in the Federal Register at 

71 FR 38247 on July 5, 2006, that 

created a new FAR Part 18 to provide 

a single reference to acquisition 

flexibilities available to facilitate 

contracting during emergencies. Five 

sources submitted comments on the 

interim rule. A discussion of those 

comments is provided below. 

(1) More detailed approach. Two 

commenters were very supportive of the 

rule. However, one of those commenters 

recommended developing a more 

detailed, comprehensive approach. The 

commenter also said including the full 

text of every associated emergency 

authority could be unwieldy and might 

be counterproductive to the ‘‘ease of 

use’’ goal. Another commenter 

expressed support for the interim rule 

but recommended developing more 

detailed, comprehensive coverage, 

including guidance related to the proper 

administration and oversight of federal 

spending. 

Response: Repeating the full text of 

every emergency acquisition flexibility 

in Part 18 would be redundant and 

difficult to maintain. More detailed, 

comprehensive procedures are better 

suited to guidebooks, not the acquisition 

regulations. The Councils note OFPP 

has updated its guidance on emergency 

acquisition flexibilities. That guidance 

includes more detailed, comprehensive 

procedures for emergency acquisitions. 

(2) Stress small business 

participation. Two commenters 

recommended that the rule address the 

overall opportunities for small 

businesses in emergency acquisitions 

instead of just addressing the additional 

flexibilities unique to certain categories 

of small businesses (i.e., ability to award 

on a sole source basis to 8(a) firms, 

Historically Underutilized Business 

Zone (HUBZone) small business 


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concerns, and service-disabled veteranowned small business). The commenter 

stated that all small businesses should 

enjoy the same preferences under the 

rule to ensure the Government has 

access to the broadest base of qualified 

small businesses, and recommended 

revising the rule to encourage agencies 

to provide the maximum practicable 

opportunities to all small businesses as 

required by Part 19. 

Response: The rule is not intended to 

give preference to any category of small 

businesses. However, it is intended to 

specify contracting tools available in 

emergencies and lists those applicable 

to certain small business categories. The 

Councils do not have the authority to 

extend these preferences to all small 

business categories. 

(3) Additional acquisition flexibilities. 

Two commenters recommended 

referencing the additional flexibilities 

authorized by the Local Community 

Recovery Act of 2006 (Pub. L. 109–218) 

in FAR Part 18, noting that the Councils 

implemented the Local Community 

Recovery Act of 2006 at 70 FR 44546 on 

August 4, 2006. One of those 

commenters also recommended 

identifying the exceptions for 

mandatory sources of supplies and 

services for Federal Prison Industries, 

Inc. (FPI) at FAR 8.605 because FPI is 

not a mandatory source when public 

exigency requires immediate delivery or 

performance and certain other 

conditions are met. The commenter also 

recommended identifying the 

exceptions for Trade Agreements 

because the requirements of FAR 25.4, 

Trade Agreements, do not apply to 

acquisitions awarded using other than 

full and open competition (FAR 

Subparts 6.2 and 6.3) when the 

limitation of competition would 

preclude use of the Free Trade 

procedures or sole source acquisitions 

justified in accordance with FAR 

13.501(a). 

Response: The final rule addresses 

these additional acquisition flexibilities. 

(4) Reference Buy American Act. One 

commenter recommended revising the 

rule to include a reference to the Buy 

American Act so contracting officers 

have a ready reference to the 

requirements even though emergency 

acquisitions are not exempt from the 

Buy American Act. 

Response: The rule highlights 

additional acquisition flexibilities that 

can be used to facilitate and expedite 

emergency acquisitions. The rule is not 

intended to identify the acquisition 

policies and procedures that are not 

unique to emergency acquisitions. 

(5) Leasing motor vehicles. One 

commenter recommended revising the 

rule to identify the ability to lease motor 

vehicles for a period of less than 60 days 

without obtaining the certification 

required by FAR 8.1102(a) since this 

flexibility may be of interest in the 

immediate response to an emergency. 

Response: The rule does not identify 

the exception to the certification 

because the exception is not affected by 

urgency. The referenced certification is 

required unless the lease is for types of 

motor vehicles that have been defined 

as fuel efficient or an agency has 

established procedures for advance 

approvals for leases of larger vehicles on 

a case-by-case basis. 

(6) Javits-Wagner-O’Day. One 

commenter recommended revising FAR 

18.106, Javits-Wagner-O’Day (JWOD) 

specification changes, to say 

‘‘contracting officers need not comply 

with the notification requirements’’

instead of ‘‘contracting officers are not 

held to the notification required.’’

Response: The commenter provided 

no rationale to justify the recommended 

change. The Councils believe the 

terminology used in the rule sufficiently 

conveys the intent of the requirement 

and therefore, did not revise the 

terminology. 

(7) Other acquisition flexibilities. One 

commenter recommended revising the 

rule to also address the following in 

FAR Part 18—

(a) FAR 6.302–1, Only One 

Responsible Source and No Other 

Supplies or Services Will Satisfy 

Agency Requirements, 

(b) FAR Part 12, Acquisition of 

Commercial Items, 

(c) FAR Part 13, Simplified 

Acquisition Procedures, 

(d) FAR Part 14, Sealed Bidding, 

(e) FAR 16.505(a)(3), Use of 

performance based acquisition methods 

to the maximum extent possible for 

orders under indefinite delivery 

contracts, 

(f) Applicable provisions of the 

Homeland Security Act of 2002, and 

(g) Modification of existing contracts. 

Response: The commenter did not 

specify why these items should be 

addressed in FAR Part 18. The Councils 

are unaware of any additional 

flexibilities in the referenced parts and 

sections that should be addressed in 

Part 18. The authority under ‘‘Only One 

Responsible Source and No Other 

Supplies or Services Will Satisfy 

Agency Requirements’’ is a valid 

exception to competition whether an 

emergency is declared or not. The use 

of FAR Part 12 procedures is not 

dependent on urgency. FAR Part 13 is 

addressed in 18.109. FAR Part 14 would 

not lend itself to Part 18, since sealed 

bidding procedures are extremely 

inflexible. Performance based orders 

could be issued under indefinite 

delivery contracts whether an 

emergency was declared or not. The 

Homeland Security Act is addressed in 

FAR 18.204(a). Finally, modifying a 

contract is not dependent on an 

emergency or public exigency. 

(8) FAR supplements. One commenter 

asked whether DoD and the military 

departments will need to develop 

supplemental coverage for their FAR 

supplements. 

Response: DOD and civilian agencies 

that have additional acquisition 

flexibilities should address those in 

their FAR supplements in accordance 

with agency procedures. 

(9) DoD unique statutory acquisition 

limitations. One commenter asked how 

DoD will ensure less experienced 

contracting officers are aware of, and 

will follow, the DoD unique statutory 

acquisition limitations such as the 

requirement imposed by Section 854 of 

the National Defense Authorization Act 

for Fiscal Year 2005 (Public Law 107–

107) which requires DoD agencies to 

comply with certain review and 

approval requirements before using a 

non-DoD contract to procure supplies or 

services in amounts exceeding the 

simplified acquisition threshold. The 

commenter said contracting officers may 

rely on FAR Part 18 unaware that the 

Defense Federal Acquisition Regulation 

Supplement (DFARS) includes 

additional statutory limitations on the 

acquisition of supplies and services. 

Response: FAR Part 18 is not a standalone document. Contracting officers 

must follow all the applicable 

requirements in the parts and sections 

cross referenced in Part 18. 

(10) Emergency acquisition 

flexibilities not covered in FAR. One 

commenter recommended modifying 

Part 18 to also address the emergency 

acquisition flexibilities that are 

available to the United States Agency 

International Development (USAID) and 

other civilian agencies with foreign 

emergency responsibilities. 

Response: As stated in the preamble 

to the interim rule, the rule provides a 

single reference to the acquisition 

flexibilities already available in the 

FAR. The international humanitarian 

and contingency operation flexibilities 

are not already available in the FAR. 

Any proposed FAR revisions to 

incorporate foreign emergency 

acquisition flexibilities should be 

prepared and forwarded to the Civilian 

Agency Acquisition Council in 

accordance with agency procedures. 

(11) Defense Production Act and the 

Defense Priorities and Allocations 

System. One commenter supported the 


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46344 Federal Register / Vol. 72, No. 159 / Friday, August 17, 2007 / Rules and Regulations 

reference to the Defense Production Act 

and the Defense Priorities and 

Allocations System (DPAS) in 

connection with emergency acquisitions 

because contracting officers are not 

aware of this flexibility. The commenter 

also recommended revising the rule to 

advise contracting officers that DPAS 

can also be used for protection and 

restoration of critical infrastructure 

pursuant to 50 U.S.C. App. 2152(14). 

Response: The rule provides a single 

reference to the acquisition flexibilities 

already available in the FAR. The 

changes referenced above are not 

already available in the FAR and are 

therefore, beyond the scope of this rule. 

However, the Councils will consider 

whether additional changes are needed 

to implement the amended DPAS 

Regulations. 

(12) Miscellaneous. (a) One 

commenter recommended revising the 

thresholds for the Davis Bacon Act and 

Service Contract Act to be consistent 

with other emergency threshold 

increases instead of waiving the 

requirements of these Acts during 

emergencies. The commenter said 

increasing the thresholds would not 

require further legislation. Two 

commenters recommended establishing 

pre-positioned contracts for registered 

small businesses. These commenters 

said the pre-positioned contracts should 

be open to all small businesses, and not 

just the ones with additional emergency 

acquisition flexibilities. Two 

commenters said the rule does not 

extend the same emergency acquisition 

flexibilities to prime contractors. One 

commenter said the FAR and the rule 

use multiple terms for urgent needs 

including ‘‘urgent and compelling 

needs,’’ ‘‘urgent and compelling,’’ and 

‘‘unusual and compelling urgency’’

which is confusing. The commenter 

recommended selecting and using one 

term consistently in the rule and 

throughout the FAR. One commenter 

recommended supplementing FAR Part 

18 with guidance regarding hiring 

adequate staff to meet increased 

acquisition demands, improving 

training for when and how to use 

emergency flexibilities, and providing 

comprehensive contract administration 

and oversight to reduce waste, fraud, 

and abuse during emergency 

acquisitions. 

Response: The rule provides a single 

reference to the acquisition flexibilities 

already available in the FAR. The 

recommended policy changes are not 

included in the FAR and are therefore, 

beyond the scope of this rule. However, 

the Councils will consider the 

advisability of pursuing these 

recommendations to ensure all 

appropriate flexibilities are available to 

respond to emergency acquisitions. 

(b) Two commenters recommended 

providing regulatory authority for 

agencies to suspend small business 

contracting goals during the first 180 

days following an emergency 

declaration or start of a contingency 

operation because being able to contract 

with a firm that can do the work should 

be the more urgent and compelling need 

in the immediate aftermath of a 

domestic disaster or contingency 

operation. 

Response: The small business 

contracting goal is statutory and the 

Councils have no authority to suspend 

the program. 

(13) OFPP Guidebook. One 

commenter said OFPP should promptly 

update their May 2003 ‘‘Guidance on 

the Use of Emergency Procurement 

Flexibilities.’’

Response: OFPP has updated the 

Guide. 

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 Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration certify that this final 

rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because the 

rule makes no change to contracting 

policy. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. 3501, et 

seq. 

List of Subjects in 48 CFR Part 18 

Government procurement. 

Dated: July 30, 2007. 

Al Matera, 

Acting Director, Contract Policy Division. 

Interim Rule Adopted as Final With 

Changes 

■ Accordingly, the interim rule 

amending 48 CFR part 18, which was 

published in the Federal Register at 71 

FR 38247, July 5, 2006, is adopted as a 

final rule with changes. 

PART 18—EMERGENCY 

ACQUISITIONS 

■ 1. The authority citation for 48 CFR 

part 18 continues to read as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

■ 2. Amend section 18.000 by adding 

paragraph (c) to read as follows: 

18.000 Scope of part. 

* * * * * 

(c) Additional flexibilities may be 

authorized in an executive agency 

supplement to the FAR. 

18.117 through 18.124 [Redesignated as 

18.119 through 18.126] 

18.106 through 18.116 [Redesignated as 

18.107 through 18.117] 

■ 3. Redesignate sections 18.117 

through 18.124 as 18.119 through 

18.126, respectively, and 18.106 through 

18.116 as 18.107 through 18.117, 

respectively. 

18.106 and 18.118 [Added] 

■ 4. Add new section 18.106 to read as 

follows: 

18.106 Acquisitions from Federal Prison 

Industries, Inc. (FPI). 

Purchase from FPI is not mandatory 

and a waiver is not required if public 

exigency requires immediate delivery or 

performance (see 8.605(b)). 

■ 5. Add new section 18.118 to read as 

follows: 

18.118 Trade agreements. 

The policies and procedures of FAR 

25.4 may not apply to acquisitions not 

awarded under full and open 

competition (see 25.401(a)(5)). 

■ 6. Revise paragraph (b) of section 

18.203 to read as follows: 

18.203 Incidents of national significance, 

emergency declaration, or major disaster 

declaration. 

* * * * * 

(b) Disaster or emergency assistance 

activities. Preference will be given to 

local organizations, firms, and 

individuals when contracting for major 

disaster or emergency assistance 

activities when the President has made 

a declaration under the Robert T. 

Stafford Disaster Relief and Emergency 

Assistance Act. In addition, contracting 

officers may set aside solicitations to 

allow only offerors residing or doing 

business primarily in the area affected 

by such major disaster or emergency to 

compete. (See Subparts 6.6 and 26.2.) 

* * * * * 

■ 7. Amend section 18.204 by adding 

paragraph (b) to read as follows: 


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Federal Register / Vol. 72, No. 159 / Friday, August 17, 2007 / Rules and Regulations 46345 

18.204 Resources. 

* * * * * 

(b) OFPP Guidelines. The Office of 

Federal Procurement Policy (OFPP) 

‘‘Emergency Acquisitions Guide’’ is 

available at http://www.whitehouse.gov/ 

omb/procurement/guides/ 

emergencylacquisitionslguide.pdf. 

[FR Doc. 07–3797 Filed 8–16–07; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 19, 52, and 53 

[FAC 2005–19; FAR Case 2004–017; Item 

VII; Docket 2007–001; Sequence 6] 

RIN 9000–AK18 

Federal Acquisition Regulation; FAR 

Case 2004–017, Small Business Credit 

for Alaska Native Corporations and 

Indian Tribes 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to implement section 

702 of the Emergency Supplemental 

Act, 2002, as amended by section 3003 

of the 2002 Supplemental 

Appropriations Act for Further 

Recovery From and Response to 

Terrorist Attacks on the United States. 

The law permits subcontracts awarded 

to Alaska Native Corporations (ANCs) 

and Indian tribes to be counted towards 

a contractor’s goals for subcontracting 

with small business (SB) and small 

disadvantaged business (SDB) concerns. 

DATES: Effective Date: September 17, 

2007. 

FOR FURTHER INFORMATION CONTACT: 

Contact Ms. Rhonda Cundiff, 

Procurement Analyst, at (202) 501–

0044, for clarification of content. For 

information pertaining to status or 

publication schedules, contact the FAR 

Secretariat at (202) 501–4755. Please 

cite FAC 2005–19, FAR case 2004–017. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 702 of the Emergency 

Supplemental Act, 2002 (Public Law 

107–117), as amended by section 3003 

of the 2002 Supplemental 

Appropriations Act for Further 

Recovery From and Response to 

Terrorist Attacks on the United States 

(Public Law 107–206)(43 U.S.C. 1626), 

provides that subcontracts awarded to 

ANCs that are considered a minority 

and economically disadvantaged 

concern under the criteria at 43 U.S.C. 

1626(e)(1), and any of their direct and 

indirect subsidiary corporations, joint 

ventures, and partnerships that meet the 

requirements of 43 U.S.C. 1626(e)(2), 

shall be counted towards the 

satisfaction of a contractor’s goal for 

subcontracting with SB and SDB 

concerns. The law also provides that 

subcontracts awarded to Indian tribes 

that are recognized by the Bureau of 

Indian Affairs in accordance with 25 

U.S.C. 1452(c), and Indian-owned 

economic enterprises that meet the 

requirements of 25 U.S.C. 1452(e), may 

be counted towards the satisfaction of a 

contractor’s goal for subcontracting with 

SB and SDB concerns. Such credit is 

taken even where the ANC or Indian 

tribe may be ‘‘other than small’’ under 

the Small Business Administration 

(SBA) regulations. 

In addition, section 3003 provides 

that where lower-tier subcontracts exist, 

the ANC or Indian tribe shall designate 

the appropriate contractor or contractors 

to receive credit towards their SB and 

SDB subcontracting goals. Accordingly, 

the rule requires that, where one or 

more subcontractors are in the 

subcontract tier between the prime 

contractor and the ANC or Indian tribe, 

the ANC or Indian tribe shall designate 

the appropriate contractor(s) to count 

the subcontract towards its SB and SDB 

subcontracting goals. In most cases, the 

appropriate contractor is the contractor 

that awarded the subcontract to the 

ANC or Indian tribe. To help avoid 

possible double counting, the rule 

requires the ANC or Indian tribe to 

provide a copy of its written designation 

to the contracting officer, the prime 

contractor, and any subcontractors 

between the prime contractor and ANC 

or Indian tribe within 30 days of date of 

award to the ANC or Indian tribe. If the 

contracting officer does not receive a 

copy of the ANC or Indian tribe’s 

written designation within 30 days of 

the subcontract award, the contractor 

that awarded the subcontract to the 

ANC or Indian tribe will be considered 

the designated contractor. 

The law does not require the ANC or 

Indian tribe to be eligible for SDB or 8(a) 

certification. Similarly, the law does not 

provide for contractors to count 

subcontracts awarded to such an entity 

toward the evaluation of the extent of 

the participation of SDB concerns in the 

performance of certain North American 

Industry Classification System (NAICS) 

Industry codes unless the entity is 

certified as an SDB by SBA (FAR 

Subpart 19.12). 

The Councils initially interpreted 

section 702 of Public Law 107–117, as 

amended by section 3003 of Public Law 

107–206, to allow Indian tribes to be 

counted towards a contractor’s goal for 

subcontracting with SB concerns but not 

SDB concerns. Upon further 

consideration, the Councils believe their 

initial interpretation was incorrect. 

Nothing in the plain language of the 

statute or the legislative history 

indicates that Congress intended to treat 

Indian tribes differently than ANCs. In 

addition, the Councils believe 

interpreting the statute to treat Indian 

tribes differently contradicts the intent 

of other laws (e.g., Small Business Act 

and Technical Corrections Act of 1994 

(Public Law 103–263)) and longstanding 

Government policy that attempts to 

eliminate distinctions between the 

various Indian tribes, including ANCs 

and Indian-owned economic 

enterprises. Therefore, the rule allows 

Indian tribes to also be counted as SDBs. 

In addition, the Councils initially 

interpreted the statute to allow certain 

entities owned and controlled by ANCs 

to also be counted towards a 

contractor’s goal for subcontracting with 

SB and SDB concerns but did not 

believe the statute authorized entities 

owned and controlled by Indian tribes 

to be counted towards a contractor’s 

goal for subcontracting with SB and 

SDB concerns. Upon further 

consideration, the Councils believe their 

initial interpretation was also incorrect. 

Section 16 of the Indian Reorganization 

Act of 1934 (25 U.S.C. 476), as 

amended, prohibits departments or 

agencies from promulgating any 

regulation or making any decision or 

determination that classifies, enhances, 

or diminishes the privileges and 

immunities available to an Indian tribe 

relative to other federally recognized 

tribes. Excluding entities owned and 

controlled by Indian tribes from the 

treatment afforded by section 702 of 

Public Law 107–117, as amended by 

section 3003 of Public Law 107–206 (43 

U.S.C. 1626) to other federally 

recognized tribes diminishes the 

privileges available to entities owned 

and controlled by Indian tribes and 

enhances the privileges available to 

entities owned and controlled by ANCs. 

Therefore, the rule provides the same 


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