This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

18671 

Vol. 77, No. 60 

Wednesday, March 28, 2012 

DEPARTMENT OF EDUCATION 

2 CFR Part 3485 

34 CFR Parts 77, 85, 668, and 682 

[Docket ID ED–2012–OS–0007] 

RIN 1890–AA17 

Implementation of OMB Guidance on 

Nonprocurement Debarment and 

Suspension 

AGENCY: Department of Education. 

ACTION: Final regulations and request for 

technical comments. 

SUMMARY: The Secretary of the 

Department of Education (Department) 

establishes a new part in 2 CFR that 

adopts the Office of Management and 

Budget’s (OMB’s) guidance, as 

supplemented by this new part, as the 

Department’s regulations for 

nonprocurement debarment and 

suspension. The Secretary removes 

regulations that contain the 

Department’s current implementation of 

the Governmentwide common rule on 

nonprocurement debarment and 

suspension. The Secretary also amends 

regulations to correct citations as 

appropriate. The new part will serve the 

same purposes as, and is substantively 

identical to, the nonprocurement 

suspension and debarment common 

rule published in the Federal Register 

on November 26, 2003. 

On August 31, 2005, OMB established 

interim final guidance that was 

substantively identical to the common 

rule and directed Federal agencies to 

adopt those guidelines as regulations. 

On November 15, 2006, OMB published 

final guidance. 

These final regulations adopt the 

OMB guidance as regulations of the 

Department. In addition, the 

Department adds those requirements 

that describe how the Department 

implements suspension and debarment 

requirements in the context of Title IV 

of the Higher Education Act of 1965, as 

amended (HEA). This regulatory action 

is an administrative simplification that 

makes no substantive change in the 

Department’s policy or procedures for 

nonprocurement debarment and 

suspension. We do not intend any 

substantive changes to the Department’s 

debarment and suspension regulations. 

To be sure we achieved that objective, 

we ask for technical comments about 

whether the new regulations are 

substantively different than the existing 

regulations. 

DATES: These final regulations are 

effective April 27, 2012. In order for us 

to consider your comments, we must 

receive them on or before April 27, 

2012. 

ADDRESSES: Submit your comments 

through the Federal eRulemaking Portal 

or via postal mail, commercial delivery, 

or hand delivery. We will not accept 

comments by fax or by email. To ensure 

that we do not receive duplicate copies, 

please submit your comments only one 

time. In addition, please include the 

Docket ID and the term 

‘‘Nonprocurement Debarment and 

Suspension’’ at the top of your 

comments. 

• Federal eRulemaking Portal: Go to 

www.regulations.gov to submit your 

comments electronically. Information 

on using Regulations.gov, including 

instructions for accessing agency 

documents, submitting comments, and 

viewing the docket, is available on the 

site under ‘‘How To Use This Site.’’ 

• Postal Mail, Commercial Delivery, 

or Hand Delivery. If you mail or deliver 

your comments about the final 

regulations, address them to Alfreida 

Pettiford, U.S. Department of Education, 

400 Maryland Avenue SW., Room 7100, 

Potomac Center Plaza, Washington, DC 

20202–2550. 

• Privacy Note: The Department’s 

policy for comments received from 

members of the public (including 

comments submitted by mail, 

commercial delivery, or hand delivery) 

is to make these submissions available 

for public viewing in their entirety on 

the Federal eRulemaking Portal at 

www.regulations.gov. Therefore, 

commenters should be careful to 

include in their comments only 

information that they wish to make 

publicly available on the Internet. 

FOR FURTHER INFORMATION CONTACT: 

Alfreida Pettiford, U.S. Department of 

Education, 400 Maryland Avenue SW., 

Room 7100, Potomac Center Plaza, 

Washington, DC 20202–2550. 

Telephone: (202) 245–6110. 

If you use a telecommunications 

device for the deaf (TDD), call the 

Federal Relay Service (FRS), toll-free, at 

1–800–877–8339. 

Individuals with disabilities may 

obtain this document in an accessible 

format (e.g., braille, large print, 

audiotape, or compact disc) on request 

to the contact person listed in this 

section. 

SUPPLEMENTARY INFORMATION: 

Invitation to Comment: We invite you 

to submit comments regarding these 

final regulations to assist us in 

complying with the specific 

requirements of Executive Order 12866 

and Executive Order 13563 and their 

overall requirement of reducing 

regulatory burden that might result from 

these final regulations. 

During and after the comment period, 

you may inspect all public comments 

about this regulatory action by accessing 

Regulations.gov. You may also inspect 

the public comments in person at the 

Department of Education, 550 12th 

Street SW., Room 7100, Washington, 

DC, between the hours of 8:30 a.m. and 

4 p.m., Washington, DC time, Monday 

through Friday of each week except 

Federal holidays. 

Assistance to Individuals With 

Disabilities in Reviewing the 

Rulemaking Record: On request, we will 

provide an appropriate accommodation 

or auxiliary aid to an individual with a 

disability who needs assistance to 

review the comments or other 

documents in the public rulemaking 

record for these regulations. If you want 

to schedule an appointment for this type 

of accommodation or auxiliary aid, 

please contact the person listed under 

FOR FURTHER INFORMATION CONTACT. 

Background 

In 2003, the Department joined with 

32 other agencies to revise the 

nonprocurement debarment and 

suspension regulations that these 

agencies had adopted jointly in 1998. 

See 68 FR 66534 (November 26, 2003). 

The regulations that the agencies 

adopted were referred to as ‘‘the 

common rule.’’ 


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On November 15, 2006, the Office of 

Management and Budget (OMB) issued 

final guidance for Governmentwide 

nonprocurement suspension and 

debarment (71 FR 66431). This 

guidance, located in 2 CFR part 180, is 

substantively the same as the common 

rule, but is published in a form that 

each agency can adopt, thus eliminating 

the need for each agency to publish a 

separate version of the same rule. The 

guidance also makes it possible to 

update Governmentwide requirements 

without each agency having to repromulgate its own rules. 

The Department’s current regulations 

on nonprocurement debarment and 

suspension are found in 34 CFR part 85. 

In accordance with OMB’s guidance, 

these final regulations establish the 

Department’s nonprocurement 

debarment and suspension regulations 

in subtitle B of title 2 of the CFR. The 

new 2 CFR part 3485 adopts the OMB 

guidelines with the same additions and 

clarifications that the Department made 

to the Governmentwide common rule on 

this subject issued on November 26, 

2003 (68 FR 66609). The substance of 

the Department’s nonprocurement 

debarment and suspension regulations 

is unchanged. 

These final regulations remove 

34 CFR part 85 from the CFR, which is 

the current location for the 

Department’s nonprocurement 

debarment and suspension regulations. 

We also amend the definition of EDGAR 

in 34 CFR part 77 to remove the 

reference to part 85. 

Finally, these final regulations amend 

34 CFR parts 668 and 682 to update 

cross references to the debarment and 

suspension regulations in 2 CFR parts 

180 and 3485. 

Waiver of Rulemaking 

Under the Administrative Procedure 

Act (APA) (5 U.S.C. 553), the 

Department is generally required to 

publish a notice of proposed rulemaking 

and provide the public with an 

opportunity to comment on proposed 

regulations prior to establishing a final 

rule. 

However, we are waiving the noticeand-comment rulemaking requirements 

under the APA. Section 553(b) of the 

APA provides that an agency is not 

required to conduct notice-andcomment rulemaking when the agency 

for good cause finds that notice and 

public procedure thereon are 

impracticable, unnecessary, or contrary 

to the public interest. The Secretary has 

determined that it is unnecessary to 

conduct notice-and-comment 

rulemaking because these regulatory 

amendments to 2 CFR are an 

administrative simplification that do not 

make substantive changes to the 

Department’s policy or procedures for 

nonprocurement debarment and 

suspension. The Department is therefore 

publishing the revisions as final 

regulations and not as proposed 

regulations. 

Nonetheless, because we intend the 

new part to make no changes in current 

policies and procedures, we specifically 

invite comments on any unintended 

changes in substantive content that the 

new 2 CFR part 3485 would make 

relative to the November 2003 common 

rule published by the Department on 

November 26, 2003 (68 FR 66534, 

66609–66615). 

If the Department receives comments 

that result in any changes to the final 

regulation, we will make timely 

publication of those changes in the 

Federal Register. 

Adoption of OMB Guidance 

We add § 3485.12 to adopt the OMB 

guidance on suspension and debarment. 

Section 3485.12(a) adopts subparts A 

through I of the guidance in 2 CFR part 

180 as a regulation of the Department. 

The Department’s current debarment 

and suspension regulations in 34 CFR 

part 85 contain additional requirements 

that must be met to make debarment 

and suspension actions taken by the 

Department or other agencies apply to 

participants in the programs authorized 

under title IV of the HEA. These final 

regulations place those same 

modifications in 2 CFR part 3485 so that 

debarment and suspension actions can 

be applied to participants in title IV 

HEA programs. In each section of these 

final regulations that adopt a 

requirement in the OMB guidance that 

must be modified, the section restates 

the standard OMB guidance and adds 

one or more paragraphs that contain the 

needed changes. 

General Education Provisions Act 

Requirements 

Section 437(b) of the General 

Education Provisions Act (GEPA) 

requires that immediately following 

each substantive provision of the 

Department’s regulations, the 

Department must provide the citations 

to the particular section or sections of 

statutory law or other legal authority on 

which that provision is based. The 

substantive provision in these final 

regulations that adopts the guidance in 

2 CFR part 180 is 2 CFR 3485.12. 

Because the authority citations for all of 

the sections adopted by the Department 

are the same, the Department provides 

the authority citation for all of the 

adopted guidance in paragraph (d) of 

§ 3485.12. Other sections in part 3485 

that supplement the guidance in part 

180 or relate to the effectiveness of 

debarment and suspension actions 

against participants in the title IV, HEA 

programs list the authority citations for 

those sections at the end of each of 

those sections. 

Executive Orders 12866 and 13563 

OMB has determined these 

regulations to be a non-significant 

regulatory action for the purposes of 

Executive Order 12866. We have also 

determined that this regulatory action 

does not unduly interfere with State, 

local, and tribal governments in the 

exercise of their governmental 

functions. Finally, we have reviewed 

these regulations under Executive Order 

13563, which supplements and 

explicitly reaffirms the principles, 

structures, and definitions governing 

regulatory review established in 

Executive Order 12866. In accordance 

with both Executive orders, the 

Department has assessed the potential 

costs and benefits of this regulatory 

action. As this regulatory action is a 

recodification of existing regulations 

without substantive change, the 

potential costs associated with this 

regulatory action are only those that 

result from existing statutory 

requirements and those we have 

determined as necessary for 

administering the Department’s 

programs and activities. 

Regulatory Flexibility Act Certification 

The Secretary certifies that this 

regulatory action will not have a 

significant adverse impact on a 

substantial number of small entities. 

The Secretary makes this certification 

because the action recodifies existing 

regulations without substantive change. 

Paperwork Reduction Act of 1995 

This regulatory action will not impose 

any additional reporting or 

recordkeeping requirements under the 

Paperwork Reduction Act of 1995. 

Federalism (Executive Order 13132) 

This regulatory action does not have 

Federalism implications, as set forth in 

Executive Order 13132. It will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

Assessment of Educational Impact 

In accordance with section 444 of the 

General Education Provisions Act 

(GEPA), 20 U.S.C. 1221e–4, when the 


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Department published the notice of 

proposed rulemaking for the debarment 

and suspension common rule on 

January 23, 2002 (67 FR 3272 and 3328), 

we requested comments on whether 

those proposed regulations would 

require transmission of information that 

any other agency or authority of the 

United States gathers or makes 

available. 

We did not receive any comments in 

response to that request and, based on 

our own review, have determined that 

these final regulations do not require 

such a transmission of information. 

Electronic Access to This Document: 

The official version of this document is 

the document published in the Federal 

Register. Free Internet access to the 

official edition of the Federal Register is 

available via the Federal Digital System 

at http://www.gpo.gov/fdsys. At this site 

you can view this document, as well as 

all other documents of this Department 

published in the Federal Register, in 

text or Adobe Portable Document 

Format (PDF). To use PDF you must 

have Adobe Acrobat Reader, which is 

available free at this site. 

You may also access documents of the 

Department published in the Federal 

Register by using the article search 

feature at http:// 

www.federalregister.gov. Specifically, 

through the advanced search feature at 

this site, you can limit your search to 

documents published by the 

Department. 

(Catalog of Federal Domestic Assistance 

Number does not apply.) 

List of Subjects 

2 CFR Part 3485 

Administrative practice and 

procedure, Debarment and suspension, 

Grant programs, Loan programs, 

Reporting and recordkeeping 

requirements. 

34 CFR Part 77 

Definitions, Education Department, 

Grant programs—education. 

34 CFR Part 85 

Administrative practice and 

procedure, Debarment and suspension, 

Drug abuse, Grant programs, Loan 

programs, Reporting and recordkeeping 

requirements. 

34 CFR Part 668 

Administrative practice and 

procedure, Colleges and universities, 

Consumer protection, Grant programs— 

education, Loan programs—education, 

Reporting and recordkeeping 

requirements, Student aid. 

34 CFR Part 682 

Administrative practice and 

procedure, Colleges and universities, 

Education, Loan programs—education, 

Reporting and recordkeeping 

requirements, Student aid, Vocational 

education. 

Dated: March 22, 2012. 

Arne Duncan, 

Secretary of Education. 

For the reasons discussed in the 

preamble, under the authority of 20 

U.S.C. 1221e–3 and 3474, the Secretary 

amends Title 2, subtitle B, and Title 34, 

parts 77, 85, 668, and 682 of the Code 

of Federal Regulations as follows: 

Title 2—Grants and Agreements 

■ 1. Add Chapter XXXIV, consisting of 

part 3485, to Subtitle B of Title 2 to read 

as follows: 

Chapter XXXIV—Department of Education 

PART 3485—NONPROCUREMENT 

DEBARMENT AND SUSPENSION 

3485.12 What does this part do? 

3485.22 Does this part apply to me? 

3485.32 What policies and procedures 

must I follow? 

Subpart A—General 

3485.137 May the Department grant an 

exception to let an excluded person 

participate in a covered transaction? 

Subpart B—Covered Transactions 

3485.220 Are any procurement contracts 

included as covered transactions? 

Subpart C—Responsibilities of Participants 

Regarding Transactions 

3485.310 What must I do if a Federal 

agency excludes a person with whom I 

am already doing business in a covered 

transaction? 

3485.315 May I use the services of an 

excluded person as a principal under a 

covered transaction? 

3485.330 What methods must I use to pass 

requirements down to participants at 

lower tiers with whom I intend to do 

business? 

Subpart D—Responsibilities of the 

Department’s Officials Regarding 

Transactions 

3485.415 What must I do if a Federal 

agency excludes the participant or a 

principal after I enter into a covered 

transaction? 

3485.437 What method do I use to 

communicate to a participant the 

requirements described in § 180.435 of 

this title? 

Subpart E—[Reserved] 

Subpart F—General Principles Relating to 

Suspension and Debarment Actions 

3485.611 What procedures do we use for a 

suspension or debarment action 

involving title IV, HEA transactions? 

3485.612 When does an exclusion by 

another agency affect the ability of the 

excluded person to participate in a title 

IV, HEA transaction? 

Subpart G—Suspension 

3485.711 When does a suspension affect 

title IV, HEA transactions? 

Subpart H—Debarment 

3485.811 When does a debarment affect 

title IV, HEA transactions? 

Subpart I—Definitions 

3485.937 ED Deciding Official. 

3485.952 HEA. 

3485.995 Principal. 

3485.1016 Title IV, HEA participant. 

3485.1017 Title IV, HEA program. 

3485.1018 Title IV, HEA transaction. 

Subpart J—[Reserved] 

Appendix A to Part 3485—Covered 

Transactions 

Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474, unless otherwise 

noted. 

§ 3485.12 What does this part do? 

(a)(1) The Department of Education 

(the ‘‘Department’’ or ‘‘ED’’) adopts 

subparts A through I of the Office of 

Management and Budget guidance in 2 

CFR part 180. Thus, this part gives 

regulatory effect to the OMB guidance 

and supplements the guidance as 

needed for the Department. This part 

satisfies the requirements in section 3 of 

Executive Order 12549, ‘‘Debarment and 

Suspension’’ (3 CFR part 1986 Comp., p. 

189), Executive Order 12689, 

‘‘Debarment and Suspension’’ (3 CFR 

part 1989 Comp., p. 235) and 31 U.S.C. 

6101 note (Section 2455, Pub. L. 103– 

355, 108 Stat. 3327). 

(2) The table of contents for this part 

contains only those sections in part 

3485 that include supplements to the 

guidance in part 180 and new sections 

needed to implement the guidance for 

the Department’s programs. In those 

sections of the OMB guidance that are 

supplemented, the section in part 3485 

includes both the text of the OMB 

guidance that is not affected by the 

change and any additional paragraphs 

that need to be added to the OMB 

guidance. For example, § 180.220 of this 

title contains only paragraphs (a) and 

(b). The text of § 3485.220, which 

supplements § 180.220 to extend lowertier transactions to certain transactions 

below the primary tier, includes both 

the text of paragraph (a) and (b) of 

§ 180.220 and the text of added 

paragraph (c). 

(3) In those sections in part 180 that 

do not have paragraph designations and 

that the Department supplements, the 


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section in this part implementing the 

OMB guidance designates the 

undesignated paragraph from part 180 

as paragraph (a) and the first 

supplemental paragraph as paragraph 

(b). For example, 2 CFR 180.330 

includes an undesignated lead in 

paragraph and two subparagraphs 

designated (a) and (b). In § 3485.330, the 

undesignated paragraph in 2 CFR 

180.330 is designated paragraph (a) and 

the two subparagraphs are designated 

paragraphs (1) and (2). The added 

paragraphs are designated paragraph (b) 

and (c). 

(b) The authority for all the provisions 

in 2 CFR part 180 as adopted in this part 

is listed as follows. 

Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474, unless otherwise 

noted.) 

§ 3485.22 Does this part apply to me? 

This part applies to you if you are— 

(a) A participant or principal in a 

‘‘covered transaction’’ (see subpart B of 

this part and the definition of 

‘‘nonprocurement transaction’’ in 

§ 180.970 of this title). 

(b) A respondent in a suspension or 

debarment action of the Department. 

(c) An ED deciding official; or 

(d) An ED officer authorized to enter 

into any type of nonprocurement 

transaction that is a covered transaction. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.32 What policies and procedures 

must I follow? 

The Department’s policies and 

procedures that you must follow are the 

policies and procedures specified in this 

part and in Subparts A through I of 2 

CFR part 180. The contracts that are 

covered transactions, for example, are 

specified in § 3485.220. Section 180.205 

of this title does not require 

supplementation, so it is not included 

in the table of contents for this part and 

is not separately stated in this part. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart A—General 

§ 3485.137 May the Department grant an 

exception to let an excluded person 

participate in a covered transaction? 

(a) Yes, the Secretary delegates to the 

ED Deciding Official the authority under 

this section to grant an exception 

permitting an excluded person to 

participate in a particular covered 

transaction. 

(b) If the ED Deciding Official grants 

an exception, the exception must be in 

writing and state the reason(s) for 

deviating from the Governmentwide 

policy in Executive Order 12549. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart B—Covered Transactions 

§ 3485.220 Are any procurement contracts 

included as covered transactions? 

(a) Covered transactions under this 

part— 

(1) Do not include any procurement 

contracts awarded directly by a Federal 

agency; but 

(2) Do include some procurement 

contracts awarded by non-Federal 

participants in nonprocurement covered 

transactions. 

(b) Specifically, a contract for goods 

or services is a covered transaction if 

any of the following applies: 

(1) The contract is awarded by a 

participant in a nonprocurement 

transaction that is covered under 

§ 180.210 of this title, and the amount 

of the contract is expected to equal or 

exceed $25,000. 

(2) The contract requires the consent 

of an official of a Federal agency. In that 

case, the contract, regardless of the 

amount, always is a covered transaction, 

and it does not matter who awarded it. 

For example, it could be a subcontract 

awarded by a contractor at a tier below 

a nonprocurement transaction, as shown 

in the Appendix To Part 3485—Covered 

Transactions. 

(3) The contract is for Federallyrequired audit services. 

(4) The contract is to perform services 

as a third party servicer in connection 

with a title IV, HEA program. 

(c) In addition to the contracts 

covered under 2 CFR 180.220(b) of the 

OMB guidance, this part applies to any 

contract, regardless of tier, that is 

awarded by a contractor, subcontractor, 

supplier, consultant, or its agent or 

representative in any transaction, if the 

contract is to be funded or provided by 

ED under a covered nonprocurement 

transaction and the amount of the 

contract is expected to equal or exceed 

$25,000. This extends the coverage of 

the ED nonprocurement suspension and 

debarment requirements to all lower 

tiers of subcontracts under covered 

nonprocurement transactions, as 

permitted under the OMB guidance at 2 

CFR 180.220(c) (see optional lower tier 

coverage in the figure in Appendix A to 

Part 3485—Covered Transactions). 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart C—Responsibilities of 

Participants Regarding Transactions 

§ 3485.310 What must I do if a Federal 

agency excludes a person with whom I am 

already doing business in a covered 

transaction? 

(a) You as a participant may continue 

covered transactions with an excluded 

person if the transactions were in 

existence when the agency excluded the 

person. However, you are not required 

to continue the transactions, and you 

may consider termination. You should 

make a decision about whether to 

terminate and the type of termination 

action, if any, only after a thorough 

review to ensure that the action is 

proper and appropriate. 

(b) You may not renew or extend 

covered transactions (other than no-cost 

time extensions) with any excluded 

person, unless another Federal agency 

responsible for the transaction grants an 

exception under § 180.135 of this title or 

ED grants an exception under 

§ 3485.137. 

(c) If you are a title IV, HEA 

participant, you may not continue a title 

IV, HEA transaction with an excluded 

person after the effective date of the 

exclusion unless permitted by 34 CFR 

668.26, 682.702, or 668.94, as 

applicable. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.315 May I use the services of an 

excluded person as a principal under a 

covered transaction? 

(a) You as a participant may continue 

to use the services of an excluded 

person as a principal under a covered 

transaction if you were using the 

services of that person in the transaction 

before the person was excluded. 

However, you are not required to 

continue using that person’s services as 

a principal. You should make a decision 

about whether to discontinue that 

person’s services only after a thorough 


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Federal Register / Vol. 77, No. 60 / Wednesday, March 28, 2012 / Rules and Regulations 18675 

review to ensure that the action is 

proper and appropriate. 

(b) You may not begin to use the 

services of an excluded person as a 

principal under a covered transaction 

unless another Federal agency 

responsible for the transaction grants an 

exception under § 180.135 of this title 

or, if ED took the action, an ED deciding 

official grants an exception under 

§ 3485.137. 

(c) If you are a title IV, HEA 

participant— 

(1) You may not renew or extend the 

term of any contract or agreement for 

the services of an excluded person as a 

principal with respect to a title IV, HEA 

transaction; and 

(2) You may not continue to use the 

services of that excluded person as a 

principal under this kind of an 

agreement or arrangement more than 90 

days after you learn of the exclusion or 

after the close of the Federal fiscal year 

in which the exclusion takes effect, 

whichever is later. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.330 What methods must I use to 

pass requirements down to participants at 

lower tiers with whom I intend to do 

business? 

(a) Before entering into a covered 

transaction with a participant at the 

next lower tier, you must require that 

participant to— 

(1) Comply with this subpart as a 

condition of participation in the 

transaction. You must do so using the 

method specified in paragraph (b) of 

this section; and 

(2) Pass the requirement to comply 

with this subpart to each person with 

whom the participant enters into a 

covered transaction at the next lower 

tier. 

(b) To communicate the requirements 

in this part to a participant, you must 

include a term or condition in the 

transaction that requires the 

participant’s compliance with part 180, 

subpart C, of this title, as adopted at 

§ 3485.12, and requires the participant 

to include a similar term or condition in 

lower-tier covered transactions. 

(c) The failure of a participant to 

include a requirement to comply with 

Subpart C of 2 CFR part 180 in the 

agreement with a lower tier participant 

does not affect the lower tier 

participant’s responsibilities under this 

part. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart D—Responsibilities of the 

Department’s Officials Regarding 

Transactions 

§ 3485.415 What must I do if a Federal 

agency excludes the participant or a 

principal after I enter into a covered 

transaction? 

(a) You as a Federal agency official 

may continue covered transactions with 

an excluded person, or under which an 

excluded person is a principal, if the 

transactions were in existence when the 

person was excluded. You are not 

required to continue the transactions, 

however, and you may consider 

termination. You should make a 

decision about whether to terminate and 

the type of termination action, if any, 

only after a thorough review to ensure 

that the action is proper. 

(b) You may not renew or extend 

covered transactions (other than no-cost 

time extensions) with any excluded 

person, or under which an excluded 

person is a principal, unless you obtain 

an exception under § 3485.137. 

(c) Title IV, HEA transactions. If you 

are a title IV, HEA participant— 

(1) You may not renew or extend the 

term of any contract or agreement for 

the services of an excluded person as a 

principal with respect to a title IV, HEA 

transaction; and 

(2) You may not continue to use the 

services of that excluded person as a 

principal under this kind of an 

agreement or arrangement more than 90 

days after you learn of the exclusion or 

after the close of the Federal fiscal year 

in which the exclusion takes effect, 

whichever is later. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.437 What method do I use to 

communicate to a participant the 

requirements described in § 180.435 of this 

title? 

To communicate the requirements in 

this part to a participant, you must 

include a term or condition in the 

transaction that requires the 

participant’s compliance with part 180, 

subpart C, of this title, as adopted at 

§ 3485.12 and requires the participant to 

include a similar term or condition in 

lower-tier covered transactions. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart E—[Reserved] 

Subpart F—General Principles Relating 

to Suspension and Debarment Actions 

§ 3485.611 What procedures do we use for 

a suspension or debarment action involving 

a title IV, HEA transaction? 

(a) If we suspend a title IV, HEA 

participant under Executive Order 

12549, we use the following procedures 

to ensure that the suspension prevents 

participation in title IV, HEA 

transactions: 

(1) The notification procedures in 

§ 180.715 of this title. 

(2) Instead of the procedures in 

§§ 180.720 through 180.760 of this title, 

the procedures in 34 CFR part 668, 

subpart G, or 34 CFR part 682, subpart 

D or G, as applicable. 

(3) In addition to the findings and 

conclusions required by 34 CFR part 

668, subpart G, or 34 CFR part 682, 

subpart D or G, the suspending official, 

and, on appeal, the Secretary 

determines whether there is sufficient 

cause for suspension as explained in 

§ 180.700 of this title. 

(b) If we debar a title IV, HEA 

participant under E.O. 12549, we use 

the following procedures to ensure that 

the debarment also precludes 

participation in title IV, HEA 

transactions: 

(1) The notification procedures in 

§§ 180.805 and 180.870 of this title. 

(2) Instead of the procedures in 

§§ 180.810 through 180.885 of this title, 

the procedures in 34 CFR part 668, 

subpart G, or 34 CFR part 682, subpart 

D or G, as applicable. 

(3) On appeal from a decision 

debarring a title IV, HEA participant, we 

issue a final decision after we receive 

any written materials from the parties. 

(4) In addition to the findings and 

conclusions required by 34 CFR part 

668, subpart G, or 34 CFR part 682, 

subpart D or G, the debarring official, 

and, on appeal, the Secretary 

determines whether there is sufficient 

cause for debarment as explained in 

§ 180.800 of this title. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.612 When does an exclusion by 

another agency affect the ability of the 

excluded person to participate in a title IV, 

HEA transaction? 

(a) If a title IV, HEA participant is 

debarred by another agency under E.O. 

12549, using procedures described in 

paragraph (d) of this section, that party 

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transactions for the duration of the 

debarment. 

(b)(1) If a title IV, HEA participant is 

suspended by another agency under 

E.O. 12549 or under a proposed 

debarment under the Federal 

Acquisition Regulation (FAR) (48 CFR 

part 9, subpart 9.4), using procedures 

described in paragraph (d) of this 

section, that party is not eligible to enter 

into title IV, HEA transactions for the 

duration of the suspension. 

(2)(i) The suspension of title IV, HEA 

eligibility as a result of suspension by 

another agency lasts for at least 60 days. 

(ii) If the excluded party does not 

object to the suspension, the 60-day 

period begins on the 35th day after that 

agency issues the notice of suspension. 

(iii) If the excluded party objects to 

the suspension, the 60-day period 

begins on the date of the decision of the 

suspending official. 

(3) The suspension of title IV, HEA 

eligibility does not end on the 60th day 

if— 

(i) The excluded party agrees to an 

extension; or 

(ii) Before the 60th day we begin a 

limitation or termination proceeding 

against the excluded party under 34 

CFR part 668, subpart G, or part 682, 

subpart D or G. 

(c)(1) If a title IV, HEA participant is 

debarred or suspended by another 

Federal agency— 

(i) We notify the participant whether 

the debarment or suspension prohibits 

participation in title IV, HEA 

transactions; and 

(ii) If participation is prohibited, we 

state the effective date and duration of 

the prohibition. 

(2) If a debarment or suspension by 

another agency prohibits participation 

in title IV, HEA transactions, that 

prohibition takes effect 20 days after we 

mail notice of our action. 

(3) If the Department or another 

Federal agency suspends a title IV, HEA 

participant, we determine whether 

grounds exist for an emergency action 

against the participant under 34 CFR 

part 668, subpart G, or part 682, subpart 

D or G, as applicable. 

(4) We use the procedures in 

§ 3485.611 to exclude a title IV, HEA 

participant excluded by another Federal 

agency using procedures that did not 

meet the standards in paragraph (d) of 

this section. 

(d) If a title IV, HEA participant is 

excluded by another agency, we debar, 

terminate, or suspend the participant— 

as provided under this part, 34 CFR part 

668, or 34 CFR part 682, as applicable— 

if that agency followed procedures that 

gave the excluded party— 

(1) Notice of the proposed action; 

(2) An opportunity to submit and 

have considered evidence and argument 

to oppose the proposed action; 

(3) An opportunity to present its 

objection at a hearing— 

(i) At which the agency has the 

burden of persuasion by a 

preponderance of the evidence that 

there is cause for the exclusion; and 

(ii) Conducted by an impartial person 

who does not also exercise prosecutorial 

or investigative responsibilities with 

respect to the exclusion action; 

(4) An opportunity to present witness 

testimony, unless the hearing official 

finds that there is no genuine dispute 

about a material fact; 

(5) An opportunity to have agency 

witnesses with personal knowledge of 

material facts in genuine dispute testify 

about those facts, if the hearing official 

determines their testimony to be 

needed, in light of other available 

evidence and witnesses; and 

(6) A written decision stating findings 

of fact and conclusions of law on which 

the decision is rendered. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart G—Suspension 

§ 3485.711 When does a suspension affect 

title IV, HEA transactions? 

(a) A suspension under § 3485.611(a) 

takes effect immediately if the Secretary 

takes an emergency action under 34 CFR 

part 668, subpart G, or 34 CFR part 682, 

subpart D or G, at the same time the 

Secretary issues the suspension. 

(b)(1) Except as provided under 

paragraph (a) of this section, a 

suspension under § 3485.611(a) takes 

effect 20 days after those procedures are 

complete. 

(2) If the respondent appeals the 

suspension to the Secretary before the 

expiration of the 20 days under 

paragraph (b)(1) of this section, the 

suspension takes effect when the 

respondent receives the Secretary’s 

decision. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart H—Debarment 

§ 3485.811 When does a debarment affect 

title IV, HEA transactions? 

(a) A debarment under § 3485.611(b) 

takes effect 30 days after those 

procedures are complete. 

(b) If the respondent appeals the 

debarment to the Secretary before the 

expiration of the 30 days under 

paragraph (a) of this section, the 

debarment takes effect when the 

respondent receives the Secretary’s 

decision. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart I—Definitions 

§ 3485.937 ED Deciding Official. 

The ED Deciding Official is an officer 

of the Department who has delegated 

authority under the procedures of the 

Department of Education to decide 

whether to affirm a suspension or enter 

a debarment. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.952 HEA. 

HEA means the Higher Education Act 

of 1965, as amended. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.995 Principal. 

Principal means— 

(a) An officer, director, owner, 

partner, principal investigator, or other 

person within a participant with 

management or supervisory 

responsibilities related to a covered 

transaction; or 

(b) A consultant or other person, 

whether or not employed by the 

participant or paid with Federal funds, 

who— 

(1) Is in a position to handle Federal 

funds; 

(2) Is in a position to influence or 

control the use of those funds; or 

(3) Occupies a technical or 

professional position capable of 

substantially influencing the 

development or outcome of an activity 

required to perform the covered 

transaction. 

(c) For the purposes of Department of 

Education title IV, HEA transactions— 

(1) A third-party servicer, as defined 

in 34 CFR 668.2 or 682.200; or 

(2) Any person who provides services 

described in 34 CFR 668.2 or 682.200 to 

a title IV, HEA participant, whether or 

not that person is retained or paid 

directly by the title IV, HEA participant. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p.189); E.O. 12689 (3 CFR 1989 Comp., 

p.235); sec. 2455, Pub. L. 103–355, 108 Stat. 


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3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.1016 Title IV, HEA participant. 

A title IV, HEA participant is— 

(a) An institution described in 34 CFR 

600.4, 600.5, or 600.6 that provides 

postsecondary education; or 

(b) A lender, third-party servicer, or 

guaranty agency, as those terms are 

defined in 34 CFR 668.2 or 682.200. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p.189); E.O. 12689 (3 CFR 1989 Comp., 

p.235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.1017 Title IV, HEA program. 

A title IV, HEA program includes any 

program listed in 34 CFR 668.1(c). 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p.189); E.O. 12689 (3 CFR 1989 Comp., p. 

235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

§ 3485.1018 Title IV, HEA transaction. 

A title IV, HEA transaction includes— 

(a) A disbursement or delivery of 

funds provided under a title IV, HEA 

program to a student or borrower; 

(b) A certification by an educational 

institution of eligibility for a loan under 

a title IV, HEA program; 

(c) Guaranteeing a loan made under a 

title IV, HEA program; and 

(d) The acquisition or exercise of any 

servicing responsibility for a grant, loan, 

or work study assistance under a title 

IV, HEA program. 

(Authority: E.O. 12549 (3 CFR 1986 Comp., 

p.189); E.O. 12689 (3 CFR 1989 Comp., 

p.235); sec. 2455, Pub. L. 103–355, 108 Stat. 

3327 (31 U.S.C. 6101 note); 20 U.S.C. 1082, 

1094, 1221e–3, and 3474) 

Subpart J—[Reserved] 

BILLING CODE 4000–01–P 


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BILLING CODE 4000–01–C 


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Federal Register / Vol. 77, No. 60 / Wednesday, March 28, 2012 / Rules and Regulations 18679 

Title 34—Education 

PART 77—DEFINITIONS THAT APPLY 

TO DEPARTMENT REGULATIONS 

■ 2. The authority citation for part 77 is 

added to read as follows: 

Authority: 20 U.S.C. 1221e–3, 2831(a), 

2974(b), and 3474. 

■ 3. Section 77.1(c) is amended by 

revising the definition of ‘‘EDGAR’’ to 

read as follows: 

§ 77.1 Definitions that apply to all 

Department programs. 

* * * * * 

(c) * * * 

EDGAR means the Education 

Department General Administrative 

Regulations (34 CFR parts 74, 75, 76, 77, 

79, 80, 81, 82, 84, 86, 97, 98, and 99). 

* * * * * 

PART 85—[REMOVED] 

■ 4. Remove 34 CFR part 85. 

PART 668—STUDENT ASSISTANCE 

GENERAL PROVISIONS 

■ 5. The authority citation for part 668 

continues to read as follows: 

Authority: 20 U.S.C. 1001, 1002, 1003, 

1070g, 1085, 1088, 1091, 1092, 1094, 1099c, 

and 1099c–1, unless otherwise noted. 

■ 6. Section 668.16 is amended by 

revising paragraph (k) to read as follows: 

§ 668.16 Standards of administrative 

capability. 

* * * * * 

(k) Is not, and does not have any 

principal or affiliate of the institution 

(as those terms are defined in 2 CFR 

parts 180 and 3485) that is— 

(1) Debarred or suspended under 

Executive Order 12549 (3 CFR, 1986 

Comp., p. 189) or the Federal 

Acquisition Regulations (FAR), 48 CFR 

part 9, subpart 9.4; or 

(2) Engaging in any activity that is a 

cause under 2 CFR 180.700 or 180.800, 

as adopted at 2 CFR 3485.12, for 

debarment or suspension under E.O. 

12549 (3 CFR, 1986 Comp., p. 189) or 

the FAR, 48 CFR part 9, subpart 9.4; 

* * * * * 

§ 668.82 [Amended] 

■ 7. Section 668.82 is amended by: 

■ a. In paragraph (e)(1)(i)(B), removing 

the words ‘‘Cause exists under 34 CFR 

85.700 or 85.800’’ and adding, in their 

place, the words ‘‘Cause exists under 2 

CFR 180.700 or 180.800, as both those 

sections are adopted at 2 CFR 3485.12,’’. 

■ b. In paragraph (f)(1) introductory 

text, removing the words ‘‘under 

procedures described in 34 CFR 

85.612(d)’’ and adding, in their place, 

the words ‘‘under the procedures 

described in 2 CFR 3485.612(d)’’. 

■ c. In paragraph (f)(2)(i) introductory 

text, removing the words ‘‘under 

procedures described in 34 CFR 

85.612(d)’’ and, adding in their place, 

the words ‘‘under the procedures 

described in 2 CFR 3485.612(d)’’. 

■ d. In paragraph (f)(2)(ii) introductory 

text, removing the words ‘‘under 34 CFR 

85.201(b)’’ and adding, in their place, 

‘‘under 2 CFR 3485.612(c)’’. 

PART 682—FEDERAL FAMILY 

EDUCATION LOAN (FFEL) PROGRAM 

■ 8. The authority citation for part 682 

continues to read as follows: 

Authority: 20 U.S.C. 1071 to 1087–2, 

unless otherwise noted. 

§ 682.200 [Amended] 

■ 9. In § 682.200, paragraph (b), the 

definition of ‘‘Lender’’ is amended by: 

■ a. In paragraph (6)(i), removing the 

words ‘‘(as those terms are defined in 34 

CFR part 85)’’ and adding, in their 

place, the words ‘‘(as those terms are 

defined in 2 CFR parts 180 and 3485)’’. 

■ b. In paragraph (6)(ii), removing the 

words ‘‘as defined in 34 CFR part 85’’ 

and adding, in their place, the words 

‘‘as defined in 2 CFR parts 180 and 

3485’’. 

§ 682.416 [Amended] 

■ 10. Section 682.416(d)(1)(ii)(B) is 

amended by removing the words ‘‘cause 

under 34 CFR 85.700 or 85.800’’ and 

adding, in their place, the words ‘‘cause 

under 2 CFR 180.700 or 180.800, as 

those sections are adopted at 2 CFR 

3485.12’’. 

§ 682.706 [Amended] 

■ 11. Section 682.706(b)(7) is amended 

by removing the words ‘‘meet the 

standards described in 34 CFR 

85.201(c)’’ and adding, in their place, 

the words ‘‘meet the standards 

described in 2 CFR 3485.612(d)’’. 

[FR Doc. 2012–7358 Filed 3–27–12; 8:45 am] 

BILLING CODE 4000–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 97 

[Docket No. 30834; Amdt. No. 3471] 

Standard Instrument Approach 

Procedures, and Takeoff Minimums 

and Obstacle Departure Procedures; 

Miscellaneous Amendments 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This rule establishes, amends, 

suspends, or revokes Standard 

Instrument Approach Procedures 

(SIAPs) and associated Takeoff 

Minimums and Obstacle Departure 

Procedures for operations at certain 

airports. These regulatory actions are 

needed because of the adoption of new 

or revised criteria, or because of changes 

occurring in the National Airspace 

System, such as the commissioning of 

new navigational facilities, adding new 

obstacles, or changing air traffic 

requirements. These changes are 

designed to provide safe and efficient 

use of the navigable airspace and to 

promote safe flight operations under 

instrument flight rules at the affected 

airports. 

DATES: This rule is effective March 28, 

2012. The compliance date for each 

SIAP, associated Takeoff Minimums, 

and ODP is specified in the amendatory 

provisions. 

The incorporation by reference of 

certain publications listed in the 

regulations is approved by the Director 

of the Federal Register as of March 28, 

2012. 

ADDRESSES: Availability of matter 

incorporated by reference in the 

amendment is as follows: 

For Examination— 

1. FAA Rules Docket, FAA 

Headquarters Building, 800 

Independence Avenue SW., 

Washington, DC 20591; 

2. The FAA Regional Office of the 

region in which the affected airport is 

located; 

3. The National Flight Procedures 

Office, 6500 South MacArthur Blvd., 

Oklahoma City, OK 73169 or 

4. The National Archives and Records 

Administration (NARA). For 

information on the availability of this 

material at NARA, call 202–741–6030, 

or go to: http://www.archives.gov/ 

federal_register/ 

code_of_federal_regulations/ 

ibr_locations.html. 

Availability—All SIAPs are available 

online free of charge. Visit nfdc.faa.gov 


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