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[Federal Register Volume 90, Number 5 (Wednesday, January 8, 2025)]
[Proposed Rules]
[Page 1401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00202]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / 
Proposed Rules

[[Page 1401]]

DEPARTMENT OF STATE

2 CFR Part 602

48 CFR Parts 625 and 652

[Public Notice: 12630]
RIN 1400-AF65
RIN 1400-AF66

Department of State Acquisition Regulation: Nondiscrimination in 
Foreign Assistance; Withdrawal of Two NPRMs

AGENCY: Department of State.

ACTION: Withdrawal of notices of proposed rulemaking and termination of 
rulemaking proceedings.

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SUMMARY: The Department of State (the Department) hereby withdraws two 
notices of proposed rulemaking (NPRMs) that proposed specific contract 
and grant terms that would have prohibited the discriminatory use of 
Department foreign assistance funds on specified grounds.

DATES: The two notices of proposed rulemaking published in the Federal 
Register on January 19, 2024 (89 FR 3583 and 89 FR 3625, respectively) 
are withdrawn as of January 8, 2025.

FOR FURTHER INFORMATION CONTACT: Kenneth Kero-Mentz, Senior Advisor in 
the Bureau of Democracy, Human Rights, & Labor, Department of State, 
[email protected], 202-647-3087.

SUPPLEMENTARY INFORMATION:

Background

    On January 19, 2024, the Department published two NPRMs in the 
Federal Register that sought to amend the Department of State 
Acquisition Regulation (DOSAR) and the Department's grant rules.
    The DOSAR rule (RIN 1400-AF65), ``Department of State Acquisition 
Regulation: Nondiscrimination in Foreign Assistance,'' proposed to 
amend the DOSAR (48 CFR Chapter 6) to include a new contract clause 
entitled ``Nondiscrimination in Foreign Assistance.'' The amended 
clause would have stated that contractors and subcontractors receiving 
Department-funded foreign assistance funds must not discriminate on 
specified bases against end-users of supplies or services or in certain 
employment decisions involving persons employed in the performance of 
the covered contract and funded in whole or in part with foreign 
assistance funds, with limited exceptions as specified in the relevant 
statement of work or as otherwise required by U.S. law.
    The grants rule (RIN 1400-AF66), ``Nondiscrimination in Foreign 
Assistance,'' proposed to revise 2 CFR part 600 to add an award term at 
Sec.  602, entitled ``Nondiscrimination in Foreign Assistance.'' As set 
out in the NPRM, the proposed award term, applicable to all 
solicitations, Federal awards, and subawards funded with Department of 
State foreign assistance funds, would prohibit recipients and 
subrecipients from discriminating against beneficiaries or potential 
beneficiaries (i.e., those individuals intended to receive the benefits 
of the award or persons employed in the performance of the award) on 
the basis of specified characteristics.
    The Department accepted public comments on both NPRMs through March 
19, 2024. There were 26 public comments submitted in response to the 
DOSAR proposed rule, and 50 public comments submitted in response to 
the grants proposed rule. Although the two rules are distinct in their 
scope, the issues raised for both rules were substantively similar.

Withdrawal of the Notices of Proposed Rulemaking and Termination of the 
Rulemaking Proceedings

    The Department believes that two of the issues raised by the public 
would benefit from further study that will extend beyond the time 
remaining in the administration. Accordingly, the Department is 
withdrawing these NPRMs and terminating these rulemaking proceedings at 
this time.
    In particular, the Department notes the concern expressed in some 
public comments that faith-based implementing organizations would be 
prohibited from employing individuals of a particular religion. In 
considering alternative text to provide more clarity on this issue in 
the final rules, it became clear that additional time would be 
necessary to fully consider the suggestions provided by commenters and 
relevant regulatory provisions applicable to other Federal agency 
partnerships with faith-based organizations. See, e.g., 29 CFR 2.37 
(Department of Labor); 7 CFR 16.3(h) (Department of Agriculture); 38 
CFR 50.2(h) (Department of Veterans Affairs); 45 CFR 87.3(h) 
(Department of Health and Human Services).
    The Department also determined that additional time would be needed 
to fully consider comments from both supporters and opponents of the 
proposed rules on the need for more specific criteria on the rules' 
proposed waiver provision. Several of these commenters sought to ensure 
that the provision authorizing waivers ``in the best interest of the 
government'' on a range of issues would be applied on a clear and 
consistent basis. Some commenters referred to the proposed ``totality 
of the circumstances'' factor, stating their view that this language 
would not be enough to guarantee that the concerns of religious 
organizations will be protected. Other commenters recommended that 
additional language be included to ensure that waivers would be 
provided sparingly and only in rare and exceptional cases. The 
Department appreciates these comments and, as noted above, requires 
additional time to consider this issue.
    The Department is withdrawing these proposed rules and terminating 
these rulemaking proceedings for the above, independently sufficient 
reasons concerning the need for further study that will extend beyond 
the time remaining in the administration. The Department is not 
withdrawing these proposed rules based on a changed view of the 
Secretary's authority in this area. These rulemaking proceedings were 
authorized by the Secretary's longstanding and existing authority, as 
delegated from the President, to set the terms and conditions for use 
of Foreign Assistance Act funding, as explained in the two NPRMs.
    The Department of State does not intend for final rules to be 
issued on the basis of these NPRMs.

Zachary Parker,
Director, Office of Organizational Policy, U.S. Department of State.
[FR Doc. 2025-00202 Filed 1-7-25; 8:45 am]
BILLING CODE 4710-24-P
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