40748 Federal Register / Vol. 62, No. 146 / Wednesday, July 30, 1997 / Rules and Regulations

Final Regulatory Flexibility Analysis

24. In the Order, we conducted a

Final Regulatory Flexibility Analysis, as

required by section 603 of the

Regulatory Flexibility Act, as amended

by the Contract With America

Advancement Act of 1996, Public Law

104–121, 110 Stat. 847 (1996). The

changes we adopt in this Order do not

affect that analysis.

List of Subjects

47 CFR Part 36

Communications common carriers,

Reporting and recordkeeping

requirements, Telephone.

47 CFR Part 54

Libraries, Schools,

Telecommunications, Telephone.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Parts 36 and 54 of title 47 of the Code

of Federal Regulations are amended as

follows:

PART 36—JURISDICTIONAL

SEPARATIONS PROCEDURES:

STANDARD PROCEDURES FOR

SEPARATING

TELECOMMUNICATIONS PROPERTY

COSTS, REVENUES, EXPENSES,

TAXES AND RESERVES FOR

TELECOMMUNICATIONS COMPANIES

1. The authority citation for part 36

continues to read as follows:

Authority: 47 USC Secs. 151, 154 (i) and

(j), and 205, 221(c), 254, 403, and 410.

2. Section 36.601 is amended by

adding a last sentence to paragraph (a)

to read as follows:

§ 36.601 General.

(a) * * * Beginning January 1, 1998,

the expense adjustment calculated

pursuant to this subpart will be

administered and funded through the

new universal service system discussed

in part 54 of this chapter.

* * * * *

3. Section 36.621 is amended by

revising paragraph (a)(4) introductory

text, the first sentence of paragraph

(a)(4)(ii), paragraph (a)(4)(ii)(A) and

(a)(4)(ii)(B) and adding new paragraph

(a)(4)(ii)(C) to read as follows:

§ 36.621 Study area total unseparated loop

cost.

(a) * * *

(4) Corporate Operations Expenses,

Operating Taxes and the benefits and

rent portions of operating expenses, as

reported in § 36.611(a)(5) attributable to

investment in C&WF Category 1.3 and

COE Category 4.13. This amount is

calculated by multiplying the total

amount of these expenses and taxes by

the ratio of the unseparated gross

exchange plant investment in C&WF

Category 1.3 and COE Category 4.13, as

reported in § 36.611(a)(1), to the

unseparated gross telecommunications

plant investment, as reported in

§ 36.611(a)(6). Total Corporate

Operations Expense, for purposes of

calculating universal service support

payments beginning January 1, 1998,

shall be limited to the lesser of:

(i) * * *

(ii) A per-line amount computed

according to paragraphs (a)(4)(ii)(A),

(a)(4)(ii)(B), and (a)(4)(ii)(C) of this

section. * * *

(A) For study areas with 6,000 or

fewer working loops; [($27.12 minus

(0.002 times the number of working

loops)) times 1.15] or [1.15 × $8,266

divided by the number of working

loops], whichever is greater.

(B) For study areas with more than

6,000 but fewer than 17,988 working

loops; [($72,024 divided by the number

of working loops) + $3.12)] times 1.15.

(C) For study areas with 17,988 or

more working loops; $7.12 times 1.15,

which equals $8.19.

* * * * *

PART 54—UNIVERSAL SERVICE

4. The authority citation for part 54

continues to read as follows:

Authority: 47 U.S.C. Secs. 1, 4(i), 201, 205,

214, and 254 unless otherwise noted.

5. Section 54.500 is amended by

redesignating paragraphs (b) through (h)

as paragraphs (c) through (i) and adding

new paragraph (b) to read as follows:

§ 54.500 Terms and definitions.

* * * * *

(b) Existing contract. For the purpose

of § 54.511(c), an ‘‘existing contract’’ is

any signed contract for services eligible

for discounts pursuant to this subpart

between an eligible school or library as

defined under § 54.501 and a service

provider that either:

(1) Was signed prior to November 8,

1996; or

(2) Is limited to services provided

before December 31, 1998 and was

signed on or after November 8, 1996 but

before the first date that the universal

service competitive bidding system

described in § 54.504 is operational. The

competitive bidding system will be

deemed to be operational when both the

universal service administrator is ready

to accept and post requests for service

from schools and libraries on a website

and that website may be used by

potential service providers.

* * * * *

6. Section 54.507 is amended by

redesignating paragraph (f) as paragraph

(g), and adding new paragraph (f) to

read as follows:

§ 54.507 Cap.

* * * * *

(f) Date services must be supplied.

The administrator shall not approve

funding for service received by a school

or library before January 1, 1998.

* * * * *

[FR Doc. 97–20031 Filed 7–29–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF ENERGY

48 CFR Parts 909, 952, and 970

RIN 1991–AB26

Acquisition Regulation; Revisions to

Organizational Conflicts of Interest

AGENCY: Office of Procurement and

Assistance Management, Department of

Energy.

ACTION: Final rule.

SUMMARY: The Department of Energy

(DOE) publishes today amendments to

its Acquisition Regulation that effect

changes to its Organizational Conflicts

of Interest policies as a result of the

repeal of the two statutory provisions

upon which DOE’s system for treating

organizational conflicts of interest was

based.

DATES: These regulations will be

effective on August 29, 1997.

FOR FURTHER INFORMATION CONTACT:

Robert M. Webb, U.S. Department of

Energy, Office of Procurement and

Assistance Management, 1000

Independence Avenue, SW.,

Washington, D.C. 20585, (202) 586–

8264

Edward Lovett, U.S. Department of

Energy, Office of Procurement and

Assistance Management, 1000

Independence Avenue, SW.,

Washington, D.C. 20585, (202) 586–

8614

SUPPLEMENTARY INFORMATION:

I. Background

II. Discussion of Public Comments

III. Procedural Requirements

A. Review Under Executive Order 12866

B. Review Under Executive Order 12988

C. Review Under the Regulatory Flexibility

Act

D. Review Under the Paperwork Reduction

Act
Federal Register / Vol. 62, No. 146 / Wednesday, July 30, 1997 / Rules and Regulations 40749

E. Review Under the National

Environmental Policy Act

F. Review Under Executive Order 12612

G. Review Under Unfunded Mandate

Reform Act of 1995

H. Review Under Small Business

Regulatory Enforcement Fairness Act of

1996

I. Background

Subsections (b) (2) and (5) of section

4304 of the Federal Acquisition Reform

Act of 1996 (FARA), Public Law 104–

106, repealed section 33 of the Federal

Energy Administration Act of 1974 (15

U.S.C. 789) and section 19 of the

Federal Nonnuclear Energy Research

and Development Act of 1974 (42 U.S.C.

5918). These two statutory provisions

provided the basis for the Department of

Energy organizational conflict of interest

(OCI) regulation that is codified at 48

CFR Subpart 909.5. As a result of the

repeal of the underlying statutes, the

Department has re-examined the OCI

systems established in the Department

of Energy Acquisition Regulation

(DEAR) and the Federal Acquisition

Regulation (FAR) and is amending the

DEAR to implement and supplement the

current FAR provisions in the manner

described below. The objective of the

revision is to streamline the

Department’s OCI procedure and reduce

the burdens on contractors, but also to

preserve the necessary protections

provided by an OCI control system.

A proposed rule to accomplish this

purpose was published for public

comment on August 6, 1996, at 61 FR

40775.

II. Discussion of Public Comments

The Department received five sets of

comments in response to the

publication of the proposed rule. Three

sets of those comments were from

entities that manage and operate DOE

facilities, one of which is a university

and two of which are large businesses.

Two sets of comments were received

from trade associations. The comments

fall into four areas and are discussed

below.

A. Scope of Coverage

One commenter suggested that it be

made clear that ‘‘advisory and

assistance services’’ do not include

research contracts with universities. The

Department believes that the FAR

definition is clear. See FAR 37.201. The

definition of advisory and assistance

services provides that such services may

be used in support of research and

development; however, it does not

include research and development

itself. Therefore, the Department sees no

need for clarification in the text of the

rule, and intends that each procurement

request for support services be

evaluated against that definition to

determine whether the services to be

procured are advisory and assistance

services and, therefore, should be

covered by the organizational conflicts

of interest process.

Another commenter questioned the

use of the clause at 952.209–72 in ‘‘all

contracts, rather than limiting its

application to the contractor’s

performance of technical consulting and

management support services.’’ The

basis of this comment is unclear. The

proposed rule and the final rule provide

for the use of the organizational

conflicts of interest clause only in those

contracts that provide advisory and

assistance services and that are valued

in excess of the simplified acquisition

threshold. The Department does not

intend that the clause be used routinely

in other contracts. It should be noted,

however, that FAR 9.502(b) provides

that the applicability of Subpart 9.5 is

not limited to any particular kind of

acquisition and thus allows for the

possibility that the contracting officer

will determine that it is appropriate in

rare instances to include the

organizational conflicts of interest

clause in individual contracts involving

other types of work.

B. Disclosure Requirement

Two commenters suggested that the

Department ought to limit the disclosure

requirement to that of the FAR. In the

time since publication of the proposed

rule, the FAR solicitation provision has

been deleted. See 62 FR 224 (1997).

However, Subsection 9.507–1 still

provides for including a solicitation

provision in affected solicitations. The

revised FAR requires that this

solicitation provision, among other

things, state the nature of any potential

conflicts identified by the contracting

officer, but is not explicit about how the

contracting officer is to make this

judgment.

The Department’s substantial

experience in the area of organizational

conflicts of interest has demonstrated

that specificity in defining disclosure

requirements facilitates the entire

process by providing the contracting

officer with the best information

available. The quality of the ultimate

decision as to whether an organizational

conflict of interest may exist is only as

good as the information that the

decision-maker has at hand. The ability

to craft meaningful remedies to

situations that may present an

organizational conflict of interest is as

well dependent upon having complete

and accurate information before the

decision-maker.

One commenter suggested that ‘‘[i]n

many cases, agency personnel are aware

of the issues and activities that would

impair the objectivity of their actual or

potential contractors or that would

impact the fairness of a procurement.’’

The Department disagrees. One type of

conflict of interest consists of

conflicting financial, contractual, or

organizational interests of the

individual contractor that might

reasonably be expected to impair the

objectivity of the contractor or its ability

to render impartial analysis or advice.

The potential for conflicting financial

interests can be meaningfully identified

only by a disclosure of relevant

interests, and there is no meaningful

way to address this facet of

organizational conflicts of interest

without disclosure by the proposer.

The final rule supplements the FAR

disclosure requirements to ensure that

the apparent successful offeror discloses

all information relevant to the OCI

determination. The Department has

limited the disclosure period nominally

to 12 months. Also, the Department has

limited the requirement to the apparent

successful offeror and does not require

disclosure from subcontractors, except

under management and operating

contracts and other contracts for the

operation or remediation of a DOE site

or facility, or affiliates.

C. The Organizational Conflicts of

Interest Clause

Other commenters questioned various

portions of the clause.

1. Affiliates

Three commenters argued that

affiliates of the contractor should not be

covered by the organizational conflicts

of interest clause at 952.209–72. The

Department believes this provision is

necessary because an organizational

conflict of interest may arise where the

interests of an affiliate may affect the

objectivity of a contractor, or an affiliate

may benefit from an unfair competitive

advantage. A detailed discussion of this

point was contained in the proposed

rule at 61 FR 40777 (Aug. 6, 1996).

Affiliates are unaffected by this clause

unless they attempt to propose in

situations described in the clause that

present the potential for an

organizational conflict of interest. The

FAR provides for the drafting of a clause

to deal with organizational conflicts of

interest. The clause in this final rule has

been drafted to deal systematically with

the potential sources of organizational

conflicts of interest relating to the

performance of the contractor.

In this regard, the clause has been

drafted to protect the integrity of the
40750 Federal Register / Vol. 62, No. 146 / Wednesday, July 30, 1997 / Rules and Regulations

procurement process as it relates to

future procurements and to protect the

integrity of any advice or

recommendations produced by the

contractor in the performance of its

contract, which advice or

recommendations then may be used in

Departmental decision-making and

policy setting processes.

2. Contracting Officer Discretion

Another commenter believed that the

clause limits the discretion of the

contracting officer to deal with

identified organizational conflicts of

interest. The Department disagrees. The

clause provides a generic remedy to

almost every type of post-contract award

organizational conflict of interest. In

addition, section 909.507–2 of this rule

provides that ‘‘[c]ontracting officers may

make appropriate modifications where

necessary to address the potential for

organizational conflicts of interest in

individual contracts.’’ This language

provides adequate authority for

contracting officers to consider and

adopt appropriate changes to the clause.

The contracting officer is, of course,

required by 909.507–2 to determine the

duration of the bar in paragraph (b)(1)(i)

against a contractor’s or its affiliate’s

proposing on work ‘‘stemming directly

from’’ work performed under the

contract.

3. Five Year Prohibition

Two other commenters believed that

the prohibitions against the contractor

or its affiliates proposing for five years

on work stemming ‘‘directly from the

contractor’s performance of work under

this contract’’ or where the contractor

prepares a statement of work or

specifications for future competitive

solicitations is excessive. The

Department has made a change to allow

the contracting officer more discretion

in using the clause at 952.209–72. As a

preliminary matter, one should

recognize that the prohibitions of the

clause do not prevent the contractor or

its affiliates from proposing on the

follow-on support services contract.

The clause has been revised to

provide the contracting officer the

discretion to determine the term of the

bar in paragraph (b)(1)(i) against a

contractor’s or its affiliate’s proposing

on work ‘‘stemming directly from’’ work

performed under the contract. That term

should be between three and five years

in the normal contract for advisory and

assistance services, but the contracting

officer may select a period of greater or

lesser duration.

E. Subcontracts

Comments were received questioning

the flowdown of the organizational

conflicts of interest concerns to

subcontracts for advisory and assistance

services valued in excess of the

simplified acquisition threshold,

particularly in light of the general

Government-wide practice of not

applying organizational conflicts of

interest to subcontracts. The Department

has chosen to limit the mandatory

flowdown of organizational conflicts of

interest coverage to subcontracts under

management and operating contracts

and other contracts for the operation or

management of a DOE facility or

environmental remediation of a specific

DOE site or sites. To achieve this result,

the organizational conflict of interest in

those contracts will contain Alternate I

to the organizational conflicts of interest

clause at 952.209–72.

Contractors under other contracts

awarded by DOE generally will not be

required to acquire disclosure from

prospective subcontractors and will not

be required to flowdown the clause at

952.209–72 in subcontracts for advisory

and assistance services valued in excess

of the simplified acquisition threshold.

However, there is provision for the

contracting officer to use Alternate I in

other contracts where he or she believes

there will be sufficient subcontracting

for advisory and assistance services

awarded to warrant its use. It is believed

that this change will limit the burden of

organizational conflicts of interest

requirements, but permit discretionary

application where the nature and extent

of anticipated subcontracting warrant

additional protection for the

Government.

III. Procedural Requirements

A. Review Under Executive Order 12866

Today’s regulatory action has been

determined not to be a ‘‘significant

regulatory action’’ under Executive

Order 12866, ‘‘Regulatory Planning and

Review’’ (58 FR 51735, October 4, 1993).

Accordingly, this action was not subject

to review under that Executive Order by

the Office of Information and Regulatory

Affairs of the Office of Management and

Budget (OMB).

B. Review Under Executive Order 12988

With respect to the review of existing

regulations and the promulgation of

new regulations, section 3(a) of

Executive Order 12988, ‘‘Civil Justice

Reform,’’ 61 FR 4729 (February 7, 1996),

imposes on Executive agencies the

general duty to adhere to the following

requirements: (1) Eliminate drafting

errors and ambiguity; (2) write

regulations to minimize litigation; and

(3) provide a clear legal standard for

affected conduct rather than a general

standard and promote simplification

and burden reduction. With regard to

the review required by section 3(a),

section 3(b) of Executive Order 12988

specifically requires that Executive

agencies make every reasonable effort to

ensure that the regulation: (1) Clearly

specifies the preemptive effect, if any;

(2) clearly specifies any effect on

existing Federal law or regulation; (3)

provides a clear legal standard for

affected conduct while promoting

simplification and burden reduction; (4)

specifies the retroactive effect, if any; (5)

adequately defines key terms; and (6)

addresses other important issues

affecting clarity and general

draftsmanship under any guidelines

issued by the Attorney General. Section

3(c) of Executive Order 12988 requires

Executive agencies to review regulations

in light of applicable standards in

section 3(a) and section 3(b) to

determine whether they are met or it is

unreasonable to meet one or more of

them. DOE has completed the required

review and determined that, to the

extent permitted by law, these final

regulations meet the relevant standards

of Executive Order 12988.

C. Review Under the Regulatory

Flexibility Act

This final rule has been reviewed

under the Regulatory Flexibility Act of

1980, 5 U.S.C. 601 et seq., that requires

preparation of an initial regulatory

flexibility analysis for any proposed rule

which is likely to have significant

economic impact on a substantial

number of small entities. In the

proposed rule, DOE certified that these

regulations will not have a significant

economic impact on a substantial

number of small entities, and, therefore,

no initial regulatory flexibility analysis

was prepared. The Department received

no comments on this certification.

D. Review Under the Paperwork

Reduction Act

No additional information or record

keeping requirements are imposed by

this rulemaking. Accordingly, no OMB

clearance is required under the

Paperwork Reduction Act of 1980 (44

U.S.C. 3501 et seq.).

E. Review Under the National

Environmental Policy Act

DOE has concluded that promulgation

of this rule falls into a class of actions

which would not individually or

cumulatively have significant impact on

the human environment, as determined

by DOE’s regulations (10 CFR Part 1021,
Federal Register / Vol. 62, No. 146 / Wednesday, July 30, 1997 / Rules and Regulations 40751

Subpart D) implementing the National

Environmental Policy Act (NEPA) of

1969 (42 U.S.C. 4321 et seq.).

Specifically, this rule is categorically

excluded from NEPA review because

the amendments made to the DEAR

would be strictly procedural (categorical

exclusion A6). Therefore, this rule does

not require an environmental impact

statement or environmental assessment

pursuant to NEPA.

F. Review Under Executive Order 12612

Executive Order 12612, (52 FR 41685,

October 30, 1987), requires that

regulations, rules, legislation, and any

other policy actions be reviewed for any

substantial direct effects on States, on

the relationship between the Federal

Government and the States, or in the

distribution of power and

responsibilities among the various

levels of Government. If there are

sufficient substantial direct effects, then

the Executive Order requires the

preparation of a federalism assessment

to be used in all decisions involved in

promulgating and implementing a

policy action. This rule revises certain

policy and procedural requirements.

States which contract with DOE will be

subject to this rule. However, DOE has

determined that this rule will not have

a substantial direct effect on the

institutional interests or traditional

functions of the States.

G. Review Under Unfunded Mandate

Reform Act of 1995

The Unfunded Mandate Reform Act of

1995 requires preparation of a budgetary

impact statement for rules that may

result in estimated costs to state, local,

or tribal governments in the aggregate,

or in the private sector, of $100 million

or more. It also requires a plan for

informing and advising any small

governments that may be uniquely

impacted by the rule.

DOE has determined that the rule will

not impose estimated costs of $100

million or more and that it will not

significantly or uniquely affect small

government. Accordingly, there are no

actions required to comply with the

Unfunded Mandate Reform Act of 1995.

H. Review Under Small Business

Regulatory Enforcement Fairness Act of

1996

Prior to the effective date of this

regulatory action, set forth above, DOE

will submit a report to Congress

containing the rule and other

information, as required by 5 U.S.C.

801(a)(1)(A). The report will state that

the rule is not a ‘‘major rule’’ as defined

by 5 U.S.C. 804(2).

List of Subjects in 48 CFR Parts 909,

952, and 970

Government Procurement.

Richard H. Hopf,

Deputy Assistant Secretary for Procurement

and Assistance Management.

For the reasons set out in the

preamble, Chapter 9 of Title 48 of the

Code of Federal Regulations is amended

as set forth below.

PART 909—CONTRACTOR

QUALIFICATIONS

1. The authority citation for Part 909

continues to read as follows:

Authority: 42 U.S.C. 7254, 40 U.S.C.

486(c).

2. Subpart 909.5 is revised to read as

set forth below:

Subpart 909.5—Organizational and

Consultant Conflicts of Interest

909.503 Waiver.

909.504 Contracting Officer’s

Responsibility.

909.507 Solicitation provisions and

contract clause.

909.507–1 Solicitation provisions.

909.507–2 Contract Clause.

§ 909.503 Waiver.

Heads of Contracting Activities are

delegated the authorities in 48 CFR

(FAR) 9.503 regarding waiver of OCI

requirements.

§ 909.504 Contracting Officer’s

Responsibility. (DOE coverage-paragraphs

(d) and (e)).

(d) The contracting officer shall

evaluate the statement by the apparent

successful offeror or, where individual

contracts are negotiated with all firms in

the competitive range, all such firms for

interests relating to a potential

organizational conflict of interest in the

performance of the proposed contract.

Using that information and any other

credible information, the contracting

officer shall make written determination

of whether those interests create an

actual or significant potential

organizational conflict of interest and

identify any actions that may be taken

to avoid, neutralize, or mitigate such

conflict. In fulfilling their

responsibilities for identifying and

resolving potential conflicts, contracting

officers should avoid creating

unnecessary delays, burdensome

information requirements, and excessive

documentation.

(e) The contracting officer shall award

the contract to the apparent successful

offeror unless a conflict of interest is

determined to exist that cannot be

avoided, neutralized, or mitigated.

Before determining to withhold award

based on organizational conflict of

interest considerations, the contracting

officer shall notify the offeror, provide

the reasons therefor, and allow the

offeror a reasonable opportunity to

respond. If the conflict cannot be

avoided, neutralized, or mitigated to the

contracting officer’s satisfaction, the

contracting officer may disqualify the

offeror from award and undertake the

disclosure, evaluation, and

determination process with the firm

next in line for award. If the contracting

officer finds that it is in the best interest

of the United States to award the

contract notwithstanding a conflict of

interest, a request for waiver shall be

submitted in accordance with 48 CFR

909.503. The waiver request and

decisions shall be included in the

contract file.

§ 909.507 Solicitation provisions and

contract clause.

§ 909.507–1 Solicitation provisions. (DOE

coverage-paragraph (e)).

(e) The contracting officer shall insert

the provision at 48 CFR 952.209–8,

Organizational Conflicts of Interest

Disclosure-Advisory and Assistance

Services, in solicitations for advisory

and assistance services expected to

exceed the simplified acquisition

threshold. In individual procurements,

the Head of the Contracting Activity

may increase the period subject to

disclosure in 952.209–8 (c)(1) up to 36

months.

§ 909.507–2 Contract Clause.

(a) (1) The contracting officer shall

insert the clause at 48 CFR 952.209–72,

Organizational Conflicts of Interest, in

each solicitation and contract for

advisory and assistance services

expected to exceed the simplified

acquisition threshold.

(2) Contracting officers may make

appropriate modifications where

necessary to address the potential for

organizational conflicts of interest in

individual contracts. Contracting

officers shall determine the appropriate

term of the bar of paragraph (b)(1)(i) of

the clause at 48 CFR 952.209–72 and

enter that term in the blank provided. In

the usual case of a contract for advisory

and assistance services a period of three,

four, or five years is appropriate;

however, in individual cases the

contracting officer may insert a term of

greater or lesser duration.

(3) The contracting officer shall

include Alternate I with the clause in

instances in which a meaningful

amount of subcontracting for advisory

and assistance services is expected.

(b) Contracts, which are not subject to

part 970 but provide for the operation of
40752 Federal Register / Vol. 62, No. 146 / Wednesday, July 30, 1997 / Rules and Regulations

a DOE site or facility or environmental

remediation of a specific DOE site or

sites, shall contain the organizational

conflict of interest clause at 48 CFR

952.209–72. The organizational conflicts

of interest clause in such contracts shall

include Alternate I to that clause.

PART 952—SOLICITATION

PROVISIONS AND CONTRACT

CLAUSES

3. The authority citation for Part 952

continues to read as follows:

Authority: 42 U.S.C. 7254; 40 U.S.C.

486(c).

4. Subsection 952.209–8 is added as

follows:

§ 952.209–8 Organizational Conflicts of

Interest-Disclosure.

As prescribed in 48 CFR 909.507–1(e),

insert the following provision:

Organizational Conflicts of Interest

Disclosure-Advisory and Assistance Services

(June 1997)

(a) Organizational conflict of interest

means that because of other activities or

relationships with other persons, a person is

unable or potentially unable to render

impartial assistance or advice to the

Government, or the person’s objectivity in

performing the contract work is or might be

otherwise impaired, or a person has an unfair

competitive advantage.

(b) An offeror notified that it is the

apparent successful offeror shall provide the

statement described in paragraph (c) of this

provision. For purposes of this provision,

‘‘apparent successful offeror’’ means the

proposer selected for final negotiations or,

where individual contracts are negotiated

with all firms in the competitive range, it

means all such firms.

(c) The statement must contain the

following:

(1) A statement of any past (within the past

twelve months), present, or currently

planned financial, contractual,

organizational, or other interests relating to

the performance of the statement of work. For

contractual interests, such statement must

include the name, address, telephone number

of the client or client(s), a description of the

services rendered to the previous client(s),

and the name of a responsible officer or

employee of the offeror who is

knowledgeable about the services rendered to

each client, if, in the 12 months preceding

the date of the statement, services were

rendered to the Government or any other

client (including a foreign government or

person) respecting the same subject matter of

the instant solicitation, or directly relating to

such subject matter. The agency and contract

number under which the services were

rendered must also be included, if

applicable. For financial interests, the

statement must include the nature and extent

of the interest and any entity or entities

involved in the financial relationship. For

these and any other interests enough such

information must be provided to allow a

meaningful evaluation of the potential effect

of the interest on the performance of the

statement of work.

(2) A statement that no actual or potential

conflict of interest or unfair competitive

advantage exists with respect to the advisory

and assistance services to be provided in

connection with the instant contract or that

any actual or potential conflict of interest or

unfair competitive advantage that does or

may exist with respect to the contract in

question has been communicated as part of

the statement required by (b) of this

provision.

(d) Failure of the offeror to provide the

required statement may result in the offeror

being determined ineligible for award.

Misrepresentation or failure to report any fact

may result in the assessment of penalties

associated with false statements or such other

provisions provided for by law or regulation.

(End of provision)

§ 952.209–70 [Removed]

5. Subsection 952.209–70 is removed.

6. Subsection 952.209–72 is revised to

read as follows:

§ 952.209–72 Organizational conflicts of

interest.

As prescribed at 48 CFR 909.507–2,

insert the following clause:

Organizational Conflicts of Interest (June

1997)

(a) Purpose. The purpose of this clause is

to ensure that the contractor (1) is not biased

because of its financial, contractual,

organizational, or other interests which relate

to the work under this contract, and (2) does

not obtain any unfair competitive advantage

over other parties by virtue of its

performance of this contract.

(b) Scope. The restrictions described herein

shall apply to performance or participation

by the contractor and any of its affiliates or

their successors in interest (hereinafter

collectively referred to as ‘‘contractor’’) in the

activities covered by this clause as a prime

contractor, subcontractor, cosponsor, joint

venturer, consultant, or in any similar

capacity. For the purpose of this clause,

affiliation occurs when a business concern is

controlled by or has the power to control

another or when a third party has the power

to control both.

(1) Use of Contractor’s Work Product. (i)

The contractor shall be ineligible to

participate in any capacity in Department

contracts, subcontracts, or proposals therefor

(solicited and unsolicited) which stem

directly from the contractor’s performance of

work under this contract for a period of

(Contracting Officer see DEAR 9.507–2 and

enter specific term) years after the

completion of this contract. Furthermore,

unless so directed in writing by the

contracting officer, the Contractor shall not

perform any advisory and assistance services

work under this contract on any of its

products or services or the products or

services of another firm if the contractor is

or has been substantially involved in their

development or marketing. Nothing in this

subparagraph shall preclude the contractor

from competing for follow-on contracts for

advisory and assistance services.

(ii) If, under this contract, the contractor

prepares a complete or essentially complete

statement of work or specifications to be used

in competitive acquisitions, the contractor

shall be ineligible to perform or participate

in any capacity in any contractual effort

which is based on such statement of work or

specifications. The contractor shall not

incorporate its products or services in such

statement of work or specifications unless so

directed in writing by the contracting officer,

in which case the restriction in this

subparagraph shall not apply.

(iii) Nothing in this paragraph shall

preclude the contractor from offering or

selling its standard and commercial items to

the Government.

(2) Access to and use of information. (i) If

the contractor, in the performance of this

contract, obtains access to information, such

as Department plans, policies, reports,

studies, financial plans, internal data

protected by the Privacy Act of 1974 (5

U.S.C. 552a), or data which has not been

released or otherwise made available to the

public, the contractor agrees that without

prior written approval of the contracting

officer it shall not:

(A) use such information for any private

purpose unless the information has been

released or otherwise made available to the

public;

(B) compete for work for the Department

based on such information for a period of six

(6) months after either the completion of this

contract or until such information is released

or otherwise made available to the public,

whichever is first;

(C) submit an unsolicited proposal to the

Government which is based on such

information until one year after such

information is released or otherwise made

available to the public; and

(D) release such information unless such

information has previously been released or

otherwise made available to the public by the

Department.

(ii) In addition, the contractor agrees that

to the extent it receives or is given access to

proprietary data, data protected by the

Privacy Act of 1974 (5 U.S.C. 552a), or other

confidential or privileged technical, business,

or financial information under this contract,

it shall treat such information in accordance

with any restrictions imposed on such

information.

(iii) The contractor may use technical data

it first produces under this contract for its

private purposes consistent with paragraphs

(b)(2)(i) (A) and (D) of this clause and the

patent, rights in data, and security provisions

of this contract.

(c) Disclosure after award. (1) The

contractor agrees that, if changes, including

additions, to the facts disclosed by it prior to

award of this contract, occur during the

performance of this contract, it shall make an

immediate and full disclosure of such

changes in writing to the contracting officer.

Such disclosure may include a description of

any action which the contractor has taken or

proposes to take to avoid, neutralize, or

mitigate any resulting conflict of interest. The

Department may, however, terminate the

contract for convenience if it deems such

termination to be in the best interest of the

Government.
Federal Register / Vol. 62, No. 146 / Wednesday, July 30, 1997 / Rules and Regulations 40753

(2) In the event that the contractor was

aware of facts required to be disclosed or the

existence of an actual or potential

organizational conflict of interest and did not

disclose such facts or such conflict of interest

to the contracting officer, DOE may terminate

this contract for default.

(d) Remedies. For breach of any of the

above restrictions or for nondisclosure or

misrepresentation of any facts required to be

disclosed concerning this contract, including

the existence of an actual or potential

organizational conflict of interest at the time

of or after award, the Government may

terminate the contract for default, disqualify

the contractor from subsequent related

contractual efforts, and pursue such other

remedies as may be permitted by law or this

contract.

(e) Waiver. Requests for waiver under this

clause shall be directed in writing to the

contracting officer and shall include a full

description of the requested waiver and the

reasons in support thereof. If it is determined

to be in the best interests of the Government,

the contracting officer may grant such a

waiver in writing.

(End of clause)

ALTERNATE I: In accordance with

909.507–2 and 970.0905, include the

following alternate in the specified types of

contracts.

(f) Subcontracts. (1) The contractor shall

include a clause, substantially similar to this

clause, including this paragraph (f), in

subcontracts expected to exceed the

simplified acquisition threshold determined

in accordance with FAR Part 13 and

involving the performance of advisory and

assistance services as that term is defined at

FAR 37.201. The terms ‘‘contract,’’

‘‘contractor,’’ and ‘‘contracting officer’’ shall

be appropriately modified to preserve the

Government’s rights.

(2) Prior to the award under this contract

of any such subcontracts for advisory and

assistance services, the contractor shall

obtain from the proposed subcontractor or

consultant the disclosure required by DEAR

909.507–1, and shall determine in writing

whether the interests disclosed present an

actual or significant potential for an

organizational conflict of interest. Where an

actual or significant potential organizational

conflict of interest is identified, the

contractor shall take actions to avoid,

neutralize, or mitigate the organizational

conflict to the satisfaction of the contractor.

If the conflict cannot be avoided or

neutralized, the contractor must obtain the

approval of the DOE contracting officer prior

to entering into the subcontract.

(End of alternate)

PART 970—DOE MANAGEMENT AND

OPERATING CONTRACTS

7. The authority citation for part 970

continues to read as follows:

Authority: Sec. 161 of the Atomic Energy

Act of 1954 (42 U.S.C. 2201), sec. 644 of the

Department of Energy Organization Act,

Public Law 95–91 (42 U.S.C. 7254).

8. Section 970.0905 is revised to read

as follows:

§ 970.0905 Organizational conflicts of

interest.

Management and operating contracts

shall contain an organizational conflict

of interest clause substantially similar to

the clause at 48 CFR 952.209–72 and

appropriate to the statement of work of

the individual contract. In addition, the

contracting officer shall assure that the

clause contains appropriate restraints on

intra-corporate relations between the

contractor’s organization and personnel

operating the Department’s facility and

its parent corporate body and affiliates,

including personnel access to the

facility, technical transfer of information

from the facility, and the availability

from the facility of other advantages

flowing from performance of the

contract. The Contracting Officer is

responsible for ensuring that M&O

contractors adopt policies and

procedures in the award of subcontracts

that will meet the Department’s need to

safeguard against a biased work product

and an unfair competitive advantage. To

this end, the organizational conflicts of

interest clause in the management and

operating contract shall include

Alternate I.

9. Subsection 970.5204–44 is

amended by revising clause paragraph

(b)(15) to read as follows:

§ 970.5204–44 Flowdown of contract

requirements to subcontracts.

* * * * *

(b) * * *

(15) Organizational Conflicts of

Interest. Clause at 48 CFR (DEAR)

952.209–72 in accordance with 48 CFR

(DEAR) 970.0905.

* * * * *

[FR Doc. 97–20022 Filed 7–29–97; 8:45 am]

BILLING CODE 6450–01–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 300

(Docket No. ; I.D. 021197C)

International Code of Conduct for

Responsible Fisheries; Implementation

Plan

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Notice of final implementation

plan.

SUMMARY: On July 25, 1996, NMFS

announced the availability of a Draft

Implementation Plan for the Code of

Conduct for Responsible Fisheries

(Implementation Plan) in the Federal

Register and requested comments by

September 23, 1996. At the close of this

period, it became clear that several of

the public comments raised substantive

issues. During the same period, two

other relevant developments took place.

First, in October 1996, the Congress

passed the Sustainable Fisheries Act

(SFA) which contained numerous and

significant amendments to the

Magnuson-Stevens Fishery

Conservation and Management Act; and,

second, NOAA/NMFS moved into the

final and substantive phase of its longterm program planning exercise, the

NOAA Fisheries Strategic Plan

(Strategic Plan).

The requirements of the SFA and the

Strategic Plan point in the same

directions as the Code of Conduct. In

effect, NMFS will implement the Code

of Conduct domestically as it carries out

its Congressionally mandated

responsibilities and the objectives of the

Strategic Plan. Accordingly, NMFS

redrafted the Implementation Plan,

taking into account (1) the comments

received on the first draft; (2) the

guidance provided by Congress in the

SFA; and (3) the long-term program

planning that was being developed

through the Strategic Plan.

The revised Implementation Plan was

made available for public comment in a

Federal Register notice on March 12,

1997 (62 FR 11410), and comments were

requested by April 28, 1997. The public

may request a copy of the final plan (see

ADDRESSES) or access it on the NMFS

home page at http://www.nmfs.gov.

ADDRESSES: Questions regarding this

document may be directed to Matteo

Milazzo, International Fisheries

Division, Office of Sustainable

Fisheries, NMFS, 1315 East-West

Highway, Silver Spring, MD 20910.

FOR FURTHER INFORMATION CONTACT:

Matteo Milazzo, 3O1–713–2276.

SUPPLEMENTARY INFORMATION: For

background and rationale for the

Implementation Plan, please refer to the

notices of availability published on July

25, 1996 (61 FR 38703) and March 12,

1997

(62 FR 11410).

Comments and Responses

Five written comments were received

regarding the proposed Implementation

Plan. All were generally supportive of

the Implementation Plan but made

specific suggestions about various of its

provisions. Specific comments and

responses are given below:

Comment: One response urged that

the Implementation Plan should be