27946 Federal Register / Vol. 75, No. 96 / Wednesday, May 19, 2010 / Rules and Regulations 

List of Subjects 

40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Particulate matter, Reporting 

and recordkeeping requirements. 

40 CFR Part 81 

Environmental protection, Air 

pollution control, National parks, 

Wilderness areas. 

Dated: May 13, 2010. 

Jared Blumenfeld, 

Regional Administrator, Region 9. 

[FR Doc. 2010–12093 Filed 5–18–10; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 212, 222, and 252 

RIN 0750–AG70 

Defense Federal Acquisition 

Regulation Supplement; Restrictions 

on the Use of Mandatory Arbitration 

Agreements (DFARS Case 2010–D004) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Interim rule with request for 

comments. 

SUMMARY: DoD is issuing an interim rule 

to implement section 8116 of the DoD 

Appropriations Act for Fiscal Year 2010. 

Section 8116 restricts the use of 

mandatory arbitration agreements when 

using funds appropriated or otherwise 

made available by this DoD 

Appropriations Act to award contracts 

that exceed $1 million. It allows the 

Secretary of Defense to waive 

applicability to a particular contractor 

or subcontractor, if determined 

necessary to avoid harm to national 

security. 

DATES: Effective date: May 19, 2010. 

Comment date: Comments on this 

interim rule should be submitted in 

writing to the address shown below on 

or before July 19, 2010, to be considered 

in the formation of the final rule. 

ADDRESSES: You may submit comments, 

identified by DFARS Case 2010–D004, 

using any of the following methods: 

Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

E-mail: dfars@osd.mil. Include 

DFARS Case 2010–D004 in the subject 

line of the message. 

Fax: 703–602–0350. 

Mail: Defense Acquisition Regulations 

System, Attn: Mr. Julian E. Thrash, 

OUSD (AT&L) DPAP (DARS), Room 

3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Julian E. Thrash, 703–602–0310. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 8116 of the DoD 

Appropriations Act for Fiscal Year 2010 

(FY 10) (Pub. L. 111–118) prohibits the 

use of funds appropriated or otherwise 

made available by the FY 10 DoD 

Appropriations Act for any contract 

(including task or delivery orders and 

bilateral modifications adding new 

work) in excess of $1 million, if the 

contractor restricts its employees to 

arbitration for claims under title VII of 

the Civil Rights Act of 1964, or tort 

related to or arising out of sexual assault 

or harassment, including assault and 

battery, intentional infliction of 

emotional distress, false imprisonment, 

or negligent hiring, supervision, or 

retention, hereinafter the ‘‘covered 

areas.’’ 

This rule does not apply to the 

acquisition of commercial items, 

including commercially available offthe-shelf items. After June 17, 2010, 

section 8116(b) requires the contractor 

to certify compliance by subcontractors. 

Additionally, enforcement of this rule 

does not affect the enforcement of other 

aspects of an agreement that is not 

related to the covered areas. 

This rule allows the Secretary of 

Defense to waive applicability to a 

particular contract or subcontract, if 

determined necessary to avoid harm to 

national security. 

The following examples are provided 

to help determine applicability: 

• A new order that exceeds $1 

million using funds appropriated or 

otherwise made available by the FY 10 

DoD Appropriations Act, placed against 

an indefinite-delivery/indefinitequantity contract for an applicable item 

or service, is covered by this restriction, 

regardless of whether the basic 

indefinite-delivery/indefinite-quantity 

contract was covered. 

• A funding modification adding 

more than $1 million of funds 

appropriated or otherwise made 

available by the FY 10 DoD 

Appropriations Act to a contract that 

does not contain the clause at 252.222– 

7006 or 252.222–7999 (Deviation), is not 

covered. 

• A bilateral modification adding new 

work that uses funds appropriated or 

otherwise made available by the FY 10 

DoD Appropriations Act in excess of $1 

million is covered. 

• The award of a new order using 

funds appropriated or otherwise made 

available by the FY 10 DoD 

Appropriations Act with a value of 

$700,000 is not covered, since the value 

is under $1 million. 

• A contract valued at $1.5 million 

awarded today, and only $10,000 in 

funds appropriated or otherwise made 

available by the FY 10 DoD 

Appropriations Act will be obligated, 

with the remaining balance being FY 11 

funding, is not covered, because the 

total value of funds appropriated or 

otherwise made available by the FY 10 

DoD Appropriations Act is less than $1 

million. 

• An entity or firm that does not have 

a contract in excess of $1 million 

appropriated or otherwise made 

available by the FY 10 DoD 

Appropriations Act is not affected by 

the clause. The term ‘‘contractor’’ is 

narrowly applied only to the entity that 

has the contract. Unless a parent or 

subsidiary corporation is a party to the 

contract, it is not affected. 

Contracting officers will modify 

existing contracts, on a bilateral basis, if 

using funds appropriated or otherwise 

made available by the FY 10 DoD 

Appropriations Act, when such funds 

will be used for bilateral modifications 

adding new work or orders that exceed 

$1 million and are issued after the 

effective date of this interim rule. In the 

event that a contractor refuses to accept 

such a modification, the contractor will 

not be eligible for receipt of funds 

appropriated or otherwise made 

available by the FY 10 DoD 

Appropriations Act on such 

modifications or orders. 

This is a significant regulatory action 

and, therefore, was subject to review 

under section (6)b of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This is not a 

major rule. 

B. Regulatory Flexibility Act 

DoD has prepared an initial regulatory 

flexibility analysis consistent with 5 

U.S.C. 603. A copy of the analysis may 

be obtained from the point of contact 

specified herein. The analysis is 

summarized as follows: 

The objective of this rule is to 

implement section 8116 of the DoD 

Appropriations Act for Fiscal Year 2010 

(Pub. L. 111–118). The clause at 

252.222–7006, Restrictions on the Use 

of Mandatory Arbitration Agreements, 

prohibits the use of funds appropriated 


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Federal Register / Vol. 75, No. 96 / Wednesday, May 19, 2010 / Rules and Regulations 27947 

or otherwise made available by the FY 

10 DoD Appropriations Act for any 

contract (including task or delivery 

orders and bilateral modifications 

adding new work) in excess of $1 

million, if the contractor restricts its 

employees to arbitration for claims 

under title VII of the Civil Rights Act of 

1964, or tort related to or arising out of 

sexual assault or harassment, including 

assault and battery, intentional 

infliction of emotional distress, false 

imprisonment, or negligent hiring, 

supervision, or retention. Most 

contractors should not be impacted 

unless they have a covered claim. A 

significant number of small businesses 

provide only commercial items to the 

Government, and this rule does not 

apply to that portion of the business 

community. We anticipate that there 

will be limited, if any, additional costs 

imposed on small businesses unless 

there is, in fact, a covered claim filed 

against a particular contractor. 

DoD invites comments from small 

business concerns and other interested 

parties on the expected impact of this 

rule on small entities. 

DoD will also consider comments 

from small entities concerning the 

existing regulations in subparts affected 

by this rule in accordance with 5 U.S.C. 

610. Interested parties must submit such 

comments separately and should cite 5 

U.S.C. 610 (DFARS Case 2010–D004) in 

correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply, because the rule does not 

impose any information collection 

requirements that require the approval 

of the Office of Management and Budget 

under 44 U.S.C. 3501, et seq. 

D. Determination To Issue an Interim 

Rule 

A determination has been made under 

the authority of the Secretary of Defense 

(DoD) that urgent and compelling 

reasons exist to promulgate this interim 

rule without prior opportunity for 

public comments. This action is 

necessary because section 8116 of the 

DoD Appropriations Act for Fiscal Year 

2010 (Pub. L. 111–118) prohibits the use 

of funds appropriated or otherwise 

made available by the FY 10 DoD 

Appropriations Act for any contract 

(including task or delivery orders and 

bilateral modifications) in excess of $1 

million. This action is necessary to 

provide implementing language quickly 

to preclude a contracting officer from 

inadvertently awarding a contract that is 

not in compliance with the DoD 

Appropriations Act for Fiscal Year 2010. 

Pursuant to 41 U.S.C. 418b, DoD will 

consider public comments received in 

response to this interim rule in the 

formation of the final rule. 

List of Subjects in 48 CFR Parts 212, 

222, and 252 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

■ Therefore, 48 CFR parts 212, 222, and 

252 are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 212, 222, and 252 continues to 

read as follows: 

Authority: 41 U.S.C. 421 and 48 CFR 

chapter 1. 

PART 212—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 2. Section 212.503 is amended by 

revising the heading and adding 

paragraph (a)(xi) to read as follows: 

212.503 Applicability of certain laws to 

executive agency contracts for the 

acquisition of commercial items. 

(a) * * * 

(xi) Section 8116 of the Defense 

Appropriations Act for Fiscal Year 2010 

(Pub. L. 111–118). 

* * * * * 

■ 3. In section 212.504, add paragraph 

(a)(xix) to read as follows: 

212.504 Applicability of certain laws to 

subcontracts for the acquisition of 

commercial items. 

(a) * * * 

(xix) Section 8116 of the Defense 

Appropriations Act for Fiscal Year 2010 

(Pub. L. 111–118). 

* * * * * 

PART 222—APPLICATION OF LABOR 

LAWS TO GOVERNMENT 

ACQUISITIONS 

■ 4. Subpart 222.74 is added to read as 

follows: 

Subpart 222.74—Restrictions on the Use of 

Mandatory Arbitration Agreements 

Sec. 

222.7400 Scope of subpart. 

222.7401 Policy. 

222.7402 Applicability. 

222.7403 Waiver. 

222.7404 Contract clause. 

Subpart 222.74—Restrictions on the 

Use of Mandatory Arbitration 

Agreements 

222.7400 Scope of subpart. 

This subpart implements section 8116 

of the Defense Appropriations Act for 

Fiscal Year 2010 (Pub. L. 111–118). 

222.7401 Policy. 

(a) Departments and agencies are 

prohibited from using funds 

appropriated or otherwise made 

available by the Fiscal Year 2010 

Defense Appropriations Act (Pub. L. 

111–118) for any contract (including 

task or delivery orders and bilateral 

modifications adding new work) in 

excess of $1 million, unless the 

contractor agrees not to— 

(1) Enter into any agreement with any 

of its employees or independent 

contractors that requires, as a condition 

of employment, that the employee or 

independent contractor agree to resolve 

through arbitration— 

(i) Any claim under title VII of the 

Civil Rights Act of 1964; or 

(ii) Any tort related to or arising out 

of sexual assault or harassment, 

including assault and battery, 

intentional infliction of emotional 

distress, false imprisonment, or 

negligent hiring, supervision, or 

retention; or 

(2) Take any action to enforce any 

provision of an existing agreement with 

an employee or independent contractor 

that mandates that the employee or 

independent contractor resolve through 

arbitration— 

(i) Any claim under title VII of the 

Civil Rights Act of 1964; or 

(ii) Any tort related to or arising out 

of sexual assault or harassment, 

including assault and battery, 

intentional infliction of emotional 

distress, false imprisonment, or 

negligent hiring, supervision, or 

retention. 

(b) After June 17, 2010, no funds 

appropriated or otherwise made 

available by the Fiscal Year 2010 

Defense Appropriations Act (Pub. L. 

111–118) may be expended unless the 

contractor certifies that it requires each 

covered subcontractor to agree not to 

enter into, and not to take any action to 

enforce, any provision of any agreement, 

as described in paragraph (a) of this 

section, with respect to any employee or 

independent contractor performing 

work related to such subcontract. 

222.7402 Applicability. 

This requirement does not apply to 

the acquisition of commercial items. 

222.7403 Waiver. 

The Secretary of Defense may waive 

the applicability of paragraphs (a) or (b) 

of 222.7401, in accordance with PGI 

222.7403, to a particular contract or 

subcontract, if the Secretary or the 

Deputy Secretary personally determines 

that the waiver is necessary to avoid 

harm to national security interests of the 

United States, and that the term of the 


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27948 Federal Register / Vol. 75, No. 96 / Wednesday, May 19, 2010 / Rules and Regulations 

contract or subcontract is not longer 

than necessary to avoid such harm. The 

Secretary of Defense shall transmit the 

determination to Congress and 

simultaneously publish it in the Federal 

Register, not less than 15 business days 

before the contract or subcontract 

addressed in the determination may be 

awarded. 

222.7404 Contract clause. 

Use the clause at 252.222–7006 

Restrictions on the Use of Mandatory 

Arbitration Agreements, in all 

solicitations and contracts valued in 

excess of $1 million utilizing funds 

appropriated or otherwise made 

available by the Fiscal Year 2010 

Defense Appropriations Act (Pub. L. 

111–118), except in contracts for the 

acquisition of commercial items, 

including commercially available offthe-shelf items. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

■ 5. Section 252.222–7006 is added to 

read as follows: 

252.222–7006 Restrictions on the Use of 

Mandatory Arbitration Agreements. 

As prescribed in 222.7404, use the 

following clause: 

Restrictions on the Use of Mandatory 

Arbitration Agreements (Date) 

(a) Definitions. As used in this clause— 

Covered subcontractor means any entity 

that has a subcontract valued in excess of $1 

million, except a subcontract for the 

acquisition of commercial items, including 

commercially available off-the-shelf items. 

Subcontract means any contract, as defined 

in Federal Acquisition Regulation subpart 

2.1, to furnish supplies or services for 

performance of this contract or a higher-tier 

subcontract thereunder. 

(b) The Contractor— 

(1) Agrees not to— 

(i) Enter into any agreement with any of its 

employees or independent contractors that 

requires, as a condition of employment, that 

the employee or independent contractor 

agree to resolve through arbitration— 

(A) Any claim under title VII of the Civil 

Rights Act of 1964; or 

(B) Any tort related to or arising out of 

sexual assault or harassment, including 

assault and battery, intentional infliction of 

emotional distress, false imprisonment, or 

negligent hiring, supervision, or retention; or 

(ii) Take any action to enforce any 

provision of an existing agreement with an 

employee or independent contractor that 

mandates that the employee or independent 

contractor resolve through arbitration— 

(A) Any claim under title VII of the Civil 

Rights Act of 1964; or 

(B) Any tort related to or arising out of 

sexual assault or harassment, including 

assault and battery, intentional infliction of 

emotional distress, false imprisonment, or 

negligent hiring, supervision, or retention; 

and 

(2) Certifies, by signature of the contract, 

for contracts awarded after June 17, 2010, 

that it requires each covered subcontractor to 

agree not to enter into, and not to take any 

action to enforce, any provision of any 

agreements, as described in paragraph (b)(1) 

of this clause, with respect to any employee 

or independent contractor performing work 

related to such subcontract. 

(c) The prohibitions of this clause do not 

apply with respect to a contractor’s or 

subcontractor’s agreements with employees 

or independent contractors that may not be 

enforced in a court of the United States. 

(d) The Secretary of Defense may waive the 

applicability of the restrictions of paragraph 

(b) of this clause in accordance with Defense 

Federal Acquisition Regulation Supplement 

222.7403. 

(End of clause) 

[FR Doc. 2010–11966 Filed 5–18–10; 8:45 am] 

BILLING CODE 5001–08–P 


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