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###### Agency for International Development

          - 48 CFR Parts 731 and 752
          - [USAID Acquisition Regulation Acquisition Circular (AIDAC) 2007-1]
          - RIN 0412-AA60

# AGENCY:

United States Agency for International Development.

# ACTION:

Final rule.

# SUMMARY:

The U.S. Agency for International Development (USAID) is amending its Agency for International Development Acquisition Regulation (AIDAR) to: Remove all references to Office of Personnel Management's (OPM) obsolete Executive Service (ES-6) as the contract employee salary threshold and replace with revised terminology; revise the Medical Evacuation (MEDEVAC) Services clause and provisions by deleting the requirement for contractors to purchase MEDEVAC services insurance through a USAID centrally awarded contract; remove clause 752.7016 FAMILY PLANNING AND POPULATION ASSISTANCE ACTIVITIES (AUG 1986); and update the title of Office of Procurement (OP) to Office of Acquisition and Assistance (OAA) throughout.

# DATES:

                        This rule is effective July 18, 2007 without further action, unless adverse comment is received by May 21, 2007. If adverse comment is received, USAID will publish a timely withdrawal of the rule in the                         **Federal Register**                        . Submit comments on or before May 21, 2007.                    

# ADDRESSES:

Submit comments, identified by title of the Proposed Action, and RIN number by any of the following methods:

*Federal eRulemaking Portal: http://www.regulations.gov.*                         Follow the instructions for submitting comments.                    

*Fax:*                         202-216-3395.                    

*Mail:*                         U.S. Agency for International Development, Office of Acquisition & Assistance, Policy Division, 1300 Pennsylvania Avenue, NW., Room 7.9-18, Washington, DC 20523-0001.                    

*Instructions:*                         All submissions must include the title of the proposed action, and Regulatory Information Number (RIN) for this rulemaking. Please include your name, title, organization, postal address, telephone number, and e-mail address in the text of the message.                    

# FOR FURTHER INFORMATION CONTACT:

                        Carol Ketrick, Telephone: 202-712-1382, e-mail:                         *cketrick@usaid.gov.*

# SUPPLEMENTARY INFORMATION:

*Public Participation:*                     Because security screening precautions have slowed the delivery and dependability of surface mail to USAID/Washington, USAID recommends sending all comments to the Federal eRulemaking Portal or fax number listed above (all comments must be in writing to be reviewed). All comments will be made available for public review without change, including any personal information provided, from 3 workdays after receipt to finalization of action at                     *http://www.Regulations.gov.*

## A. Background

The AIDAR reflects agency policy regarding the maximum annual rate of personnel compensation for contractor employees. The threshold beyond which contract employees' salaries require contracting officer approval is currently stated as being equivalent to OPM's ES-6 level. In 2003, Public Law 108-136 replaced the SES grade structure with a single, open-range “payband”; therefore, the use of the ES-6 level as the threshold for contracting officer approval is no longer possible. USAID has established a new threshold, the “USAID Contractor Salary Threshold” or “USAID CST,” which is set forth in the agency's ADS Chapter 302 on Direct Contracting. The change to the AIDAR deletes all references to OPM's obsolete Executive Service (ES-6) level or “ES-6 policy” and replaces it with this updated terminology.

                    Emergency medical evacuation services are for individuals involved in accidents or suffering a sudden illness at a time when adequate medical facilities are not available at post. USAID implemented AIDAR 752.228-70 “Medical Evacuation (MEDEVAC) Services (Mar 1993)”, Appendix D—General Provision 25 “Medical Evacuation (MEDEVAC) Services (Jul 1993)”, and Appendix J—General Provision 21 “Medical Evacuation (MEDEVAC) Services (Jul 1993)” which required contractors use USAID's central contract to purchase MEDEVAC                           ( print page 19669)                        insurance for employees. The central contract incorporated a volume discount for these services, thereby saving insurance costs to the Agency. However, after more than ten years' experience with the centrally-awarded MEDEVAC contract, we have concluded that the difference in rates the Agency obtained through the competitive contracting process and the rates the insurance providers were offering to the general public was negligible and that continuing the central MEDEVAC contract was no longer in the Agency's best interest. USAID did not re-compete a new contract when the last MEDEVAC contract expired in 2003; therefore, the requirement is obsolete. The entire clause and general provisions are revised both to remove the reference to the USAID central MEDEVAC services contract and to update the language overall.                

The clause AIDAR 752.7016 FAMILY PLANNING AND POPULATION ASSISTANCE ACTIVITIES (AUG 1986) is removed and the section reserved as the clause was made obsolete by guidance issued under Public Law 105-277 (FY 1999 Foreign Operations Appropriations Act). The Act established new statutory requirements for voluntary family planning projects, known as the Tiahrt Amendment. The Tiahrt Amendment has been included in all subsequent Foreign Operations Appropriations Acts and its requirements will be incorporated by a proposed rule at a later date.

This document also amends the AIDAR to make editorial changes deleting all references to Office of Procurement (M/OP) and replacing with Office of Acquisition and Assistance (M/OAA).

## B. Regulatory Planning and Review

This is not a significant regulatory action and, therefore, is 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.

## C. Regulatory Flexibility Act

                    Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601*et seq.*), USAID has considered the economic impact of the rule and has determined that its provisions would not have a significant economic impact on a substantial number of small entities.                

## D. Paperwork Reduction Act

                    The Paperwork Reduction Act does not apply because the proposed changes to the AIDAR 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 Parts 731 and 752

      - Government procurement

For the reasons set forth in the preamble under the authority at Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., p. 435, the U.S. Agency for International Development proposes to amend 48 CFR Chapter 7 as follows:

1. The authority citation for 48 CFR parts 731 and 752 continues to read as follows:

Authority:Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., p. 435.

# PART 731—CONTRACT COST PRINCIPLES AND PROCEDURES

# Subpart 731.2—Contracts With Commercial Organizations

2. Amend section 731.205-6 by revising paragraph (b) to read as follows: 

731.205-6 

* * * * *

                            (b)                             *Salaries and wages.*                             It is USAID policy that if an employee's base salary plus overseas recruitment incentive, if any (see AIDAR 731.205-70) exceeds the USAID Contractor Salary Threshold (USAID CST), as stated in USAID's Automated Directives System (ADS) Chapter 302 USAID Direct Contracting (available at                             *http://www.usaid.gov/​policy/​ads/​300/​302.pdf*), it will be allowable only if approved in writing by the contracting officer. The contracting officer shall only provide such approval after internal Agency procedures for review/approval of salaries in excess of the USAID CST in ADS 302 have been followed. USAID policies on compensation of third country national or cooperating country national employees are set forth in AIDAR 722.170.                        

* * * * *

# Subpart 731.3—Contracts With Educational Institutions

3. Amend section 731.371 by revising paragraph (b)(1) to read as follows: 

731.371 

* * * * *

(b) * * *

(1) The policies set forth in AIDAR 731.205-6(b) are also applicable to contracts with a nonprofit organization.

* * * * *

# PART 752—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

4. Amend section 752.228-70 by revising the clause to read as follows: 

752.228-70 

* * * * *

#### Medical Evacuation (MEDEVAC) Services (JUL 2007)

(a) Contractor must provide MEDEVAC service coverage to all U.S. citizen, U.S. resident alien, and Third Country National employees and their authorized dependents (hereinafter “individual”) while overseas under a USAID-financed direct contract. USAID will reimburse reasonable, allowable, and allocable costs for MEDEVAC service coverage incurred under the contract. The Contracting Officer will determine the reasonableness, allowability, and allocability of the costs based on the applicable cost principles and in accordance with cost accounting standards.

                            (b)                             *Exceptions.*                             (i) The Contractor is not required to provide MEDEVAC insurance to eligible employees and their dependents with a health program that includes sufficient MEDEVAC coverage as approved by the Contracting Officer.                        

(ii) The Mission Director may make a written determination to waive the requirement for such coverage. The determination must be based on findings that the quality of local medical services or other circumstances obviate the need for such coverage for eligible employees and their dependents located at post.

(c) Contractor must insert a clause similar to this clause in all subcontracts that require performance by contractor employees overseas.

5. Amend section 752.7007 by revising the date of the clause and paragraph (b) to read as follows: 

752.7007 

* * * * *

#### Personnel Compensation (JUL 2007)

* * * * *

                            (b) Reimbursement of the employee's base annual salary plus overseas recruitment incentive, if any, which exceed the USAID Contractor Salary Threshold (USAID CST) stated in USAID Automated Directives System                                   ( print page 19670)                                (ADS) Chapter 302 USAID Direct Contracting, must be approved in writing by the Contracting Officer, as prescribed in 731.205-6(b) or 731.371(b), as applicable.                        

* * * * *

752.7016 

6. Remove and reserve section 752.7016. 

# Subpart 753.3—Illustration of Forms

7. Amend Appendix D to Chapter 7 as follows: 

A. Revise Section 4, paragraph (e)(3).

B. Revise Section 7, paragraph (k)(7).

C. Amend Section 12, General Provision 4 by revising the heading and paragraph (b).

D. Amend Section 12 by revising General Provision 25.

The revisions read as follows:

## Appendix D to Chapter 7—Direct USAID Contracts With a U.S. citizen or a U.S. Resident Alien for Personal Services Abroad

* * * * *

4. * * *

* * * * *

(e) * * *

(3) This Appendix applies the “USAID Contractor Salary Threshold (USAID CST)” policy in Automated Directives System (ADS) Chapter 302.3.6.8 to salaries for U.S. PSCs. Salaries in excess of the USAID CST, which is equivalent to the maximum rate for Federal agencies without a certified SES performance appraisal system, must be approved by the M/OAA Director in accordance with the approval procedures in ADS 302.3.6.8(e). This approval cannot be re-delegated.

* * * * *

7. * * *

* * * * *

(k) * * *

(7) The approval for any salary in excess of the “USAID Contractor Salary Threshold (USAID CST)”, which is equivalent to the maximum rate for Federal agencies without a certified SES performance appraisal system, in accordance with approval procedures in ADS 302.3.6.8(e) as required in Section 4.(e)(3);

* * * * *

12. * * *

4. Workweek And Compensation (Pay Comparability Adjustments) (JUL 2007)

* * * * *

                            (b)                             *Compensation (Pay Comparability) Adjustments.*                             The PSC's compensation shall be adjusted to reflect the pay comparability adjustments, which are granted from time to time to U.S. direct-hire employees by Executive Order for the statutory pay systems (usually in January). Any adjustments authorized are subject to the availability of funds and shall not exceed that percentage stated in the Executive Order granting the adjustment. Further, the adjusted compensation may not exceed the annual “USAID Contractor Salary Threshold (USAID CST)”, which is equivalent to the maximum rate for agencies without a certified SES performance appraisal system (or the equivalent hourly rate).                        

* * * * *

#### 25. Medical Evacuation (MEDEVAC) Services (JUL 2007)

(a) The PSC must obtain MEDEVAC service coverage including coverage for authorized dependents while performing personal services abroad.

USAID will reimburse the total cost of MEDEVAC insurance to the PSC. The PSC must provide proof of coverage to the CO in order to receive reimbursement.

                            (b)                             *Exceptions.*                             (1) A PSC and authorized dependents with a health insurance program that includes sufficient MEDEVAC coverage as approved by the Contracting Officer are not required to obtain MEDEVAC service coverage.                        

(2) The Mission Director at the post of assignment may make a written determination to waive the requirement for such coverage. The determination must be based on findings that the quality of local medical services or other circumstances obviate the need for such coverage for PSCs and their dependents located at post.

8. Amend Appendix J to Chapter 7 in Section 12 by revising General Provision 21 to read as follows: 

## Appendix J to Chapter 7: Direct USAID Contracts With Cooperating Country Nationals and With Third Country Nationals for Personal Services Abroad

* * * * *

12. * * *

#### 21. MEDICAL EVACUATION (MEDEVAC) SERVICES (JUL 2007)

* * * * *

(a) The PSC must obtain MEDEVAC service coverage including coverage for authorized dependents while performing personal services abroad.

                            (b)                             *Exceptions.*                             (1) A PSC and authorized dependents with a health insurance program that includes sufficient MEDEVAC coverage as approved by the Contracting Officer are not required to obtain MEDEVAC service coverage.                        

(2) The Mission Director at the post of assignment may make a written determination to waive the requirement for such coverage. The determination must be based on findings that the quality of local medical services or other circumstances obviate the need for such coverage for PSCs and their dependents located at post.

* * * * *

9. In Chapter 7: 

I. Remove the words “Office of Procurement” and add, in their place, “Office of Acquisition and Assistance” each time they appear in the following locations:

a. 701.105(c).

b. 701.301(a) introductory text.

c. 701.303(c).

d. 701.470 (a)(2).

e. 702.170-3(a).

f. 702.170-10(a)(1)(i).

g. 728.105-1(b)(4).

h. 731.109.

i. 731.770(a).

j. 750.7109-1

k. 750.7110-1.

l. 752.247-70(c)(1).

m. 752.7002(p)(1)(i).

n. Appendix D to Chapter 7, Section 12, General Provision 10, paragraph (n)(1)(i).

o. Appendix J to Chapter 7, Section 12, General Provision 9, paragraph (m).

II. In addition to the amendments above, remove “M/OP”, and add, in its place, “M/OAA” each time they appear.

a. 701.105(c).

b. 701.301(a) introductory text.

c. 701.303(c).

d. 701.470(a)(2).

e. 701.470(b)(1).

f. 701.470(b)(2).

g. 701.470(b)(3)(i).

h. 701.470(e).

i. 701.470(f)(1).

j. 701.601(a)(1).

k. 701.601(a)(2) introductory text.

l. 701.601(c)(2).

m. 701.602-3(b)(2).

n. 702.170-9.

o. 705.502(a).

p. 706.501.

q. 709.403.

r. 709.503.

s. 714.406-3.

t. 714.406-4.

u. 716.303(c).

v. 726.7005.

w. 728.105-1(b)(4).

x. 733.103-71(a).

y. 733.103-71(c).

z. 733.103-72(a).

aa. 733.103-73(h).

bb. 733.103-73(i).

cc. 734.002-70.

dd. 749.111-70(a)(1).

ee. 749.111-70(b).

ff. 749.111-71(b).

gg. 750.7105.

hh. 750.7109-1.

ii. 750.7110-1.

jj. 750.7110-2.

kk. 750.7110-3 introductory text.

ll. 750.7110-4.

mm. Appendix D to Chapter 7, Section 4, paragraph (e)(3).

Michael F. Walsh,

Procurement Executive.

[FR Doc. E7-7437 Filed 4-18-07; 8:45 am]

BILLING CODE 6116-01-P