Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Proposed Rules 20663

(c) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager,

Standardization Branch, ANM–13, FAA,

Transport Airplane Directorate. Operators

shall submit their requests through an

appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Standardization

Branch, ANM–113.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Standardization Branch,

ANM–113.

(d) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Issued in Renton, Washington, on April 21,

1995.

Darrell M. Pederson,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 95–10320 Filed 4–26–95; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Chapter II

Review of Existing Regulations

AGENCY: Minerals Management Service,

Interior.

ACTION: Notice of extension of public

comment period.

SUMMARY: This document extends, by 30

days, the comment period of a

document published by the Minerals

Management Service (MMS) in the

Federal Register on March 28, 1995 (60

FR 15888) which requested comments

on a review of existing MMS regulations

under Executive Order 12866. The

extension was requested by the

American Petroleum Institute.

DATES: The comment period is extended

to May 27, 1995. Comments should be

received or postmarked by that date.

ADDRESSES: Mail written comments to

Department of the Interior; Minerals

Management Service; Mail Stop 4013;

1849 C Street NW.; Washington, DC

20240; Attention: Bettine Montgomery,

MMS Regulatory Coordinator, Policy

and Management Improvement.

FOR FURTHER INFORMATION CONTACT:

Bettine Montgomery, Policy and

Management Improvement, telephone

(202) 208–3976; Fax (202) 208–4891.

Dated: April 21, 1995.

Lucy R. Querques,

Associate Director for Policy and

Management Improvement.

[FR Doc. 95–10329 Filed 4–26–95; 8:45 am]

BILLING CODE 4310–MR–M

DEPARTMENT OF ENERGY

48 CFR Part 970

[Regulation Identifier Number 1991–AB20]

Acquisition Regulation; Department of

Energy Management and Operating

Contracts

AGENCY: Department of Energy.

ACTION: Amendment of a notice of

proposed rulemaking.

SUMMARY: The Department of Energy

(DOE) today amends its March 2, 1995,

notice of proposed rulemaking (60 FR

11646) which proposed amendments to

the DOE Acquisition Regulation (DEAR)

provisions applicable to subcontracting

by management and operating

contractors. Today’s amendments do not

affect the principal provisions of the

proposal which are: Substitution of

more commercial-like subcontracting

objectives, expectations, and standards

for the so-called ‘‘Federal norm’’ that, in

effect, requires DOE’s management and

operating contractors to follow certain

Federal-oriented prescribed procedures

in their award of subcontracts; and

elimination of the reference concerning

General Accounting Office protest

jurisdiction over such subcontract

awards. Rather, this amendment of the

earlier notice deals with administrative

matters, mostly technical, that DOE

reserved for further analysis and action

during the public comment period. DOE

today amends its notice of proposed

rulemaking to redesignate most of the

requirements of DEAR 970.7104 to two

other subsections of the DEAR and to

eliminate certain of them. The

amendment also moves two paragraphs

previously set forth in DEAR 970.7104

to another existing subsection.

DATES: Written comments on this

amended notice of proposed rulemaking

must be received on or before May 30,

1995. Comments on today’s amendment

should be submitted separately from

those related to the March 2, 1995,

notice of proposed rulemaking. This is

necessary as the Department may elect

to finalize those portions of the March

2 rule, which are unaffected by today’s

amendment, in more than one stage.

ADDRESSES: Comments on the proposed

rulemaking should be sent to the

following address: U.S. Department of

Energy, Office of Contractor

Management and Administration (HR–

55), Attention: James J. Cavanagh, 1000

Independence Avenue SW.,

Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT:

James J. Cavanagh, Office of Contractor

Management and Administration (HR–

55), U.S. Department of Energy, 1000

Independence Avenue SW.,

Washington, D.C. 20585; telephone 202–

586–8257.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background.

II. Section-by-Section Analysis.

III. Public Comments.

IV. Procedural Requirements.

I. Background

On March 2, 1995, DOE published in

the Federal Register (60 FR 11646) a

notice of proposed rulemaking. That

notice proposed to amend the DEAR to

modify requirements for management

and operating contractor purchasing

systems. Principally, DEAR subpart

970.71 is being amended to identify

certain purchasing system objectives

and standards, eliminate the application

of the ‘‘Federal norm,’’ place greater

reliance on commercial practices, and

remove the provisions concerning

General Accounting Office protest

jurisdiction over management and

operating contractor subcontract

awards.

Today’s notice does not alter any of

the above-described principal

provisions of the proposed

amendments. The main focus of this

notice is an administrative matter

discussed in the Supplementary

Information section of the March 2

notice and reserved for further analysis

and action during the comment period.

That issue is whether to eliminate DEAR

§ 970.7104.

The March 2 proposed rulemaking

stated:

Section 970.7104, Conditions of

purchasing by management and operating

contractors, is removed. DOE believes it is

not necessary to retain this section since

many of the requirements comply with

provisions of statutes and are already

reflected in contract clauses. These

requirements, will therefore, continue to be

applicable as contractual requirements. Some

of the requirements, however, are not

specifically prescribed in other parts of the

DEAR. The Department will review such

requirements prior to finalization of this

proposed rule and may redesignate

appropriate paragraphs, in the final rule, to

other parts of the DEAR, if necessary. If such

requirements are identified, the Department

will publish a Federal Register notice, prior

to issuing a final rule, listing the paragraphs

being considered for redesignation.
20664 Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Proposed Rules

DOE’s analysis showed that, except

for seven items proposed for deletion as

discussed below, most of the provisions

of § 970.7104 should be retained either

in the preaward process or in the

subcontract document itself. Moreover,

DOE has reconsidered the desirability of

proposing to eliminate the convenient

listing of these subjects and the clarity

that comes with such a listing. Further,

removing the section could be

interpreted incorrectly as proposing to

eliminate the underlying substantive

requirements identified elsewhere.

Therefore, DOE has chosen instead to

propose elimination of seven

subparagraphs of that section and

relocation of most of the subjects from

§ 970.7104 to two contract clauses,

thereby removing the content of

§ 970.7104 in its entirety. The

amendment proposes no new policy and

adds no new requirements for a

contractor. For the most part, the

regulatory treatment of each subject has

been simplified and shortened. For

details, see the section-by-section

analysis below.

II. Section-by-Section Analysis

A. In accordance with Section II,

paragraph 6 of the notice of proposed

rulemaking published on March 2, 1995,

the Department of Energy has performed

a detailed review of the subjects covered

by DEAR 970.7104 to determine which

requirements should be redesignated in

the other parts of the DEAR. This

amendment to the notice of proposed

rulemaking reflects the proposed

disposition of the provisions of DEAR

970.7104–1 through 970.7104–47. The

redesignation table set forth below will

graphically reflect this proposed

disposition.

B. The Department has decided that

the subjects of 970.7104 which are to

continue to play a part in the award of

subcontracts under DOE management

and operating contracts fall generally

into two categories. The first category

consists of processes that lead to the

award of prospective subcontracts, and

the second category consists of those

clauses that should be included in

appropriate subcontracts and provisions

that guide the administration of certain

of those clauses. As a result of this

recognition, this amendment proposes

to deal with the first category as

additions to an existing clause. A new

clause is proposed to deal with the

subjects that comprise the second

category.

C. This amendment proposes to add

subjects in the first category to the

clause currently set forth at 970.5204–

22, ‘‘Contractor Purchasing System.’’

The March 2, 1995, notice of proposed

rulemaking proposed to change

paragraph (a) of 970.5204–22. Today’s

amendment proposes to further amend

paragraph (a) to insert the phrase ‘‘this

clause, DEAR 970.5204–XX, and’’ in the

first sentence. It would also expand the

content of that clause to cover

requirements that directly relate to the

management and operating contractor’s

purchasing system and methods in the

award of subcontracts.

D. This amendment also proposes to

identify subjects in the second category

in paragraph (b) of a new clause at

970.5204–XX. The purpose of that

clause would be to continue to provide

a convenient listing of clauses and

related requirements that management

and operating contractors would be

required to include in, or apply to,

prospective subcontracts. That new

clause in its paragraph (a) would

contain a general instruction directing

the inclusion of the listed clauses and,

where appropriate, the application of

attendant regulations governing the

subject matter of the cited clause.

Paragraph (a) would recognize that

certain of the listed clauses flow down

pursuant to the management and

operating contractor’s prime contract

with the Department (e.g., Employment

of the Handicapped). Certain other

clauses that would be included in

appropriate subcontracts either are not

included in the prime contract (e.g.,

Service Contract Act) or, if included, do

not contain a flowdown instruction. For

these latter two types of clauses,

paragraph (a) would instruct the

contractor to apply requirements to

subcontracts in the same manner as the

Department does for the award of a DOE

prime contract which is not a

management and operating contract.

E. For certain subjects, such as

termination and indemnification, there

would be coverage of different aspects

of the same subject in both of the

clauses at 970.5204–22 and at 970.5204–

XX.

F. The following table identifies the

new location of each item in 970.7104

and indicates whether the original

requirement for the subject provision is

based on an Executive Order,

Department policy, Federal regulation

or statute.

Old citation

970.– Subject New citation 970.5204–

7104–1 Contingent Fees (P) ........................................................................................................................... Deleted.

7104–2 Record Retention (S) ......................................................................................................................... XX(b)(20).

7104–3 Utility Services (P) ............................................................................................................................. 22(b).

7104–4 Leasing Property, Plant or Equipment (P) ......................................................................................... 22(q).

7104–5 Leasing of Motor Vehicles (P) ........................................................................................................... 22(m).

7104–6 Strategic and Critical Materials (P) .................................................................................................... 22(t).

7104–7 Purchases of Special Items (S/R/P) .................................................................................................. 22(p).

7104–8 Purchasing Alternative Determinations (P) ........................................................................................ 22(q).

7104–9 Qualification Requirements (P) .......................................................................................................... Deleted.

7104–10 Organization Conflicts of Interest (S) ................................................................................................ XX(b)(16).

7104–11 Cost or Pricing Data (S) .................................................................................................................... XX(b)(5).

7104–12 Small Business and Small Disadvantaged Business Concerns (S) ................................................. XX(b)(23) and 970.1901.

7104–13 Labor Surplus Concerns (P) .............................................................................................................. Deleted.

7104–14 Convict Labor (P) ............................................................................................................................... Deleted.

7104–15 Contract Work Hours and Safety Standards Act (S) ......................................................................... XX(b)(4).

7104–16 Davis-Bacon Labor Standards for Construction (S) .......................................................................... XX(b)(8).

7104–17 Walsh-Healey (P) ............................................................................................................................... Deleted.

7104–18 Equal Employment Opportunity (E) ................................................................................................... XX(b)(11).

7104–19 Service Contract Act (S) .................................................................................................................... XX(b)(22).

7104–20 Vietnam Vets (S) ................................................................................................................................ XX(b)(24).

7104–21 Environmental & Occupational Safety & Health (S/P) ...................................................................... XX(b)(10).

7104–22 Buy American (S) ............................................................................................................................... 22(g).

7104–23 Patents, Data and Copyrights (S/P) .................................................................................................. XX(b)(17).

7104–24 Bonds & Insurance (S/P) ................................................................................................................... 22(f).

7104–25 Indemnification (S/P) .......................................................................................................................... 22(l) and XX(b)(14).
Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Proposed Rules 20665

Old citation

970.– Subject New citation 970.5204–

7104–26 Taxes (P) ........................................................................................................................................... XX(b)(25).

7104–27 Audit of Subcontractors (S/R/P) ........................................................................................................ 22(e).

7104–28 Construction & A–E conflict-of-interest (P) ........................................................................................ 22(h).

7104–29 Quality Assurance (P) ........................................................................................................................ 22(r).

7104–30 Termination (P) .................................................................................................................................. 22(v) and XX(b)(26).

7104–31 Authorization of Subcontractors’ Use of Government Supply Sources (P) ...................................... Deleted.

7104–32 Safeguarding Classified Information (S) ............................................................................................ XX(b)(21).

7104–33 Cost Accounting Standards (S) ......................................................................................................... XX(b)(7).

7104–34 Clean Air & Water (S/R) .................................................................................................................... XX(b)(3).

7104–35 Air Transportation by U.S. Flag Carriers (S) ..................................................................................... XX(b)(1).

7104–36 Acquisition of Real Property (S/P) ..................................................................................................... 22(c).

7104–37 Management, Acquisition and use of Information Resources (P) ..................................................... 22(n).

7104–38 Privacy Act (R) ................................................................................................................................... XX(b)(19).

7104–39 Officials Not To Benefit (P) ................................................................................................................ Deleted.

7104–40 Subcontractors’ Reporting Systems (P) ............................................................................................ XX(b)(6).

7104–41 Employment of the Handicapped (S) ................................................................................................ XX(b)(9).

7104–42 Unclassified Controlled Nuclear Information (R) ............................................................................... 22(w).

7104–43 Government Property (S/R) ............................................................................................................... 22(k).

7104–44 Foreign Travel (P) .............................................................................................................................. XX(b)(13).

7104–45 Anti-Kickback (S) ............................................................................................................................... XX(b)(2).

7104–46 Setoff of Assigned Subcontractor Proceeds (P) ................................................................................ 22(s).

7104–47 Additional Flowdown and Extension Provisions ................................................................................

—Exam. of records by Comptroller General (S) ............................................................................ XX(b)(12).

—Accts Records and Inspection (S/P) .......................................................................................... XX(b)(20).

—Printing (P) .................................................................................................................................. XX(b)(18).

—Priorities (S/R) ............................................................................................................................ 22(o).

(E)=Executive Order.

(P)=Policy.

(R)=Regulation.

(S)=Statute.

G. The substance of the material

related to Small Business and Small

Disadvantaged Business Concerns cited

in DEAR Subpart 970.7104–12,

paragraphs (a), (b), (c) and (d) have been

relocated in DEAR Part 970.1901,

paragraphs (c) and (d).

H. From DEAR 970.7104, it is

proposed to delete seven subsections as

identified and for the reasons set forth

in the following table:

Old citation

970.– Subject Reason for deletion

7104–1 Contingent Fees .......................................................... These subject matters have been incorporated into appropriate subcontracts of management and operating (M&O) contracts as a matter

of DOE policy. Because it has been decided that these subject matters should be handled in the same manner as for subcontracts

under non-M&O cost-reimbursement contracts, flowdown is no longer

required.

7104–9 Qualification Requirements

7104–14 Convict Labor

7104–17 Walsh-Healy Public Contracts Act

7104–39 Officials Not to Benefit

7104–13 Labor Surplus Area Concerns ..................................... The preference of the Federal procurement system that this subsection

reflected has been substantially altered by section 7101 of the Federal Acquisition Streamlining Act of 1994.

7104–31 Authorization for Subcontractors’ Use of Government

Supply Sources. ....................................................... The authority for contracting officers to allow management and operating contractor subcontract level access to Government supply

sources exists at DEAR 970.51.

I. This amendment to the March 2,

1995, notice of proposed rulemaking

will also redesignate the substance of

970.7103, paragraph (c)(7) to 970.5204–

22(e)(4) to make clear that the contractor

is required to determine the allowability

of subcontractor reimbursable costs in

accordance with 48 CFR (FAR) part 31.

J. Conforming amendments will be

made to 970.5204–21, –5204–24, –5204–

45, and –5204–50 to remove references

to text proposed to be deleted.

III. Public Comments

DOE invites interested persons to

participate by submitting data, views, or

arguments with respect to the DEAR

amendments set forth in this rule. Three

copies of written comments should be

submitted to the address indicated in

the ADDRESSES section of this rule. All

comments received will be available for

public inspection during normal work

hours. All written comments received

by the date indicated in the DATES

section of this notice will be carefully

assessed and fully considered prior to

the effective date of these amendments

as a final rule. Any information

considered to be confidential must be so

identified and submitted in writing, one

copy only. DOE reserves the right to
20666 Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Proposed Rules

determine the confidential status of the

information and to treat it according to

its determination in accordance with 10

CFR 1004.11.

IV. Procedural Requirements

The procedural requirements

discussed in section IV of the

Supplementary Information of the

March 2, 1995, notice of proposed

rulemaking (60 FR 11646) apply as well

to this amendment of proposed

rulemaking.

List of Subjects in 48 CFR Parts 933 and

970

Government procurement.

Issued in Washington, D.C. on April 20,

1995.

Richard H. Hopf,

Deputy Assistant Secretary for Procurement

and Assistance Management.

For the reasons set forth in the

preamble, chapter 9 of title 48 of the

Code of Federal Regulations is proposed

to be amended as set forth below.

PART 970—DOE MANAGEMENT AND

OPERATING CONTRACTS

1. 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, Pub.

L. 95–91 (42 U.S.C. 7254), sec 201 of the

Federal Civilian Employee and Contractor

Travel Expenses Act of 1985 (41 U.S.C. 420)

and sec. 1534 of the Department of Defense

Authorization Act, 1986, Pub. L. 99–145 (42

U.S.C. 7256a), as amended.

2. At 970.1901 add paragraphs (c) and

(d) as follows:

970.1901 General.

* * * * *

(c) Contractors may provide in their

purchasing systems and methods for the

setting aside of requirements for small

disadvantaged businesses, provided

there are sufficient qualified entities

available to assure effective

competition, and provided that the cost

or price of the successful offer is found

by the contractor to be fair and

reasonable.

(d) In pursuit of the objective of

contractor purchasing of a fair

proportion of supplies and services from

small business concerns, small

disadvantaged business concerns and

woman-owned business concerns, the

HCA may authorize the use of

innovative means after receipt of proper

approval by the Procurement Executive

and the DOE Office of Small and

Disadvantaged Business Utilization.

970.5204–21 Property.

3. At 970.5204–21, Property, remove

the phrase ‘‘As prescribed in 970.7104–

43,’’ from the introductory text.

4. At 970.5204–22, the clause

‘‘Contractor Purchasing System’’ is

revised to read as follows:

970.5204–22 Contractor purchasing

system.

* * * * *

Contractor Purchasing System (month year

TBE)

(a) General. The contractor shall develop,

implement, and maintain formal policies,

practices, and procedures to be used in the

award of subcontracts consistent with this

clause, 48 CFR (DEAR) 970.5204–XX, and 48

CFR (DEAR) 970.71. The contractor’s

purchasing system and methods shall be

fully documented, consistently applied, and

acceptable to DOE in accordance with 48

CFR (DEAR) 970.7102. The contractor’s

purchasing performance will be evaluated

against agreed-upon criteria in accordance

with the performance criteria and measures

clause(s) set forth elsewhere in this contract.

DOE reserves the right at any time to require

that the contractor submit for approval any

or all purchases under this contract. The

contractor shall not purchase any item or

service the purchase of which is expressly

prohibited by the written direction of DOE

and shall use such special and directed

sources as may be expressly required by the

DOE contracting officer.

(b) Acquisition of Utility Services. Utility

services shall be acquired in accordance with

the requirements of 48 CFR (DEAR) 970.0803.

(c) Acquisition of Real Property. The

contractor shall contract for real property in

accordance with 48 CFR (DEAR) Subpart

917.74.

(d) Advance Notice of Proposed

Subcontract Awards. The contractor shall

provide advance notice of proposed

subcontract awards in accordance with 48

CFR (DEAR) 970.7109; shall document

purchases in writing; and shall establish and

maintain subcontract files which present an

accurate and adequate record of all

purchasing transactions.

(e) Audit of Subcontractors.

(1) The contractor shall assure that its

purchasing systems and methods provide for:

(i) periodic post-award audit of costreimbursement subcontractors at all tiers,

and (ii) audits, where necessary, to provide

a valid basis for pre-award or cost or price

analysis.

(2) Responsibility for determining the costs

allowable under each cost-reimbursement

subcontract remains with the contractor or

next higher-tier subcontractor. Contractors’

purchasing systems and methods shall

provide, in appropriate cases, for the timely

involvement of the contractor and the DOE

contracting officer in resolution of

subcontract cost allowability.

(3) Where audits of subcontractors of any

tier are required, arrangements may be made

to have the cognizant Federal agency perform

the audit of the subcontract. These

arrangements shall be made administratively

between DOE and the other agency involved

and shall provide for the cognizant agency to

audit in an appropriate manner in light of the

magnitude and nature of the subcontract.

(4) Allowable costs for cost reimbursable

subcontracts are to be determined in

accordance with the cost principles of 48

CFR (FAR) part 31, appropriate for the type

of organization to which the subcontract is to

be awarded, as supplemented by 48 CFR

(DEAR) part 931. Allowable costs in the

purchase or transfer from contractor-affiliated

sources shall be determined in accordance

with 48 CFR (DEAR) 970.7105 and 48 CFR

(DEAR) 970.3102–15(b). In no case, however,

shall these arrangements preclude

determination by the DOE contracting officer

of the allowability or unallowability of

subcontractor costs claimed for

reimbursement by the contractor.

(f) Bonds and Insurance.

(1) The contractor shall obtain from a

subcontractor a payment bond on Standard

Form 25A, modified to name the contractor

as well as the United States of America as

obligees, for all fixed price, unit-price and

cost-reimbursement construction

subcontractors in excess of $25,000. The

penal amounts shall be determined as set

forth in 48 CFR (FAR) 28.102–2(b).

(2) The contractor may accept more than

one corporate surety upon recognizance,

stipulation, bond, or undertaking in both

construction and other contracts, provided

that in no case will the liability of any cosurety exceed the maximum penal sum for

which it is qualified for any one obligation.

For subcontracts other than construction, a

co-surety may reinsure amounts in excess of

its capacity with a corporate surety having

the required underwriting capacity that

appears on the acceptable list of corporate

sureties. No such reinsurance is acceptable in

connection with construction subcontracts.

Corporate co-sureties may individually

obligate themselves for a definite sum less

than the full amount of the bond; however,

all such obligations must total the entire

amount of the bond and each co-surety must

bind itself ‘‘jointly and severally’’ for the

purpose of allowing a joint action or actions

against any or all of the corporate sureties.

(g) Buy American. The contractor shall

comply with the provisions of the Buy

American Act as reflected in 48 CFR (FAR)

52.225–3, as amended by 48 CFR (DEAR)

970.5203–3.

(h) Construction and Architect-Engineer

Contracts.

(1) Independent Estimates. A detailed,

independent estimate of costs shall be

prepared for all construction work to be

subcontracted.

(2) Specifications. Specifications for

construction shall be prepared in accordance

with the DOE publication entitled ‘‘General

Design Criteria Manual.’’

(3) Prevention of Conflict of Interest.

(i) The contractor shall not award a

contract for construction to the architectengineer firm or an affiliate that prepared the

design. This prohibition does not preclude

the award of a ‘‘turnkey’’ contract so long as

the subcontractor assumes all liability for

defects in design and construction and

consequential damages.

(ii) The contractor shall not award both a

cost-reimbursement contract and a fixed-
Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Proposed Rules 20667

price contract for construction or architectengineer services or any combination thereof

to the same firm where those contracts will

be performed at the same site.

(iii) The contractor shall not employ the

construction subcontractor or an affiliate to

inspect the firm’s work. The contractor shall

assure that the working relationships of the

construction subcontractor and the

subcontractor inspecting its work and the

authority of the inspector are clearly defined.

(i) Contractor-Affiliated Sources. Purchase

or transfer of equipment, materials, supplies,

or services from a contractor-affiliated source

shall be treated in accordance with 48 CFR

(DEAR) 970.7105.

(j) Contractor-Subcontractor Relationship.

The obligations of the contractor under

paragraph (a) of this clause, including the

development of the purchasing system and

methods, and purchases made pursuant

thereto, shall not relieve the contractor of any

obligation under this contract (including,

among other things, the obligation to

properly supervise, administer, and

coordinate the work of subcontractors).

Subcontracts shall be in the name of the

contractor, and shall not bind or purport to

bind the Government.

(k) Government Property. The contractor’s

purchasing system and methods for the

identification, inspection, maintenance,

protection, and disposition of Government

property shall conform with the policies and

principles of 48 CFR (FAR) part 45, 48 CFR

(DEAR) part 945, the Federal Property

Management Regulations, the DOE Property

Management Regulations, and their contracts.

(l) Indemnification. No subcontractor may

be otherwise indemnified except with the

prior approval of the Procurement Executive.

(m) Leasing of Motor Vehicles. Contractors

shall abide by 48 CFR (FAR) 8.11 and 48 CFR

(DEAR) 908.11.

(n) Management, Acquisition and Use of

Information Resources. The contractor shall

provide in its purchasing system and

methods, with regard to the purchase of

automatic data processing resources and

telecommunications facilities, services, and

equipment, for review and approval of

requirements in ways that conform to the

procedures contained in applicable DOE

Directives (Orders and Notices).

(o) Priorities, Allocations and Allotments.

The contractor shall provide in its

purchasing system and methods for the

extension to appropriate subcontracts of

priorities, allocations and allotments in

accordance with the clause or clauses of this

contract dealing with priorities and

allocations.

(p) Purchase of Special Items. Purchase of

the following items shall be in accordance

with the following provisions of 48 CFR

(DEAR) subpart 908.71 and the Federal

Property Management Regulations, as shown:

(1) Motor vehicles ..............................908.7101

(2) Aircraft..........................................908.7102

(3) Security Cabinets..........................908.7106

(4) Alcohol .........................................908.7107

(5) Helium ..........................................908.7108

(6) Fuels and packaged petroleum

products .......................................908.7109

(7) Coal ...............................................908.7110

(8) Arms and Ammunition ................908.7111

(9) Heavy Water .............................908.7121(a)

(10) Precious Metals ......................908.7121(b)

(11) Lithium ...................................908.7121(c)

(12) Products and services of the blind

and severely handicapped ..........FPMR 41

CFR 101–26.701

(13) Products made in Federal penal

and correctional institutions.......FPMR 41

CFR 101–26.702

(q) Purchase vs. Lease Determinations. The

contractor shall provide for a system to

determine whether required equipment and

property should be purchased or leased. The

system shall establish appropriate thresholds

for application of lease vs. purchase

determinations and shall be used in making

such determinations: (1) at time of original

acquisition; (2) when lease renewals are

being considered; and (3) at other times as

circumstances warrant.

(r) Quality Assurance. The contractor shall

provide no less protection for the

Government in its subcontracts than is

provided in the prime contract.

(s) Setoff of Assigned Subcontractor

Proceeds. The contractor shall provide that in

cases in which a subcontractor has been

permitted to assign payments to a financial

institution, the assignment shall treat any

right of setoff in accordance with 48 CFR

(DEAR) 932.803.

(t) Strategic and Critical Materials. The

contractor may use strategic and critical

materials and shall fulfill its requirements in

accordance with 48 CFR (FAR) 8.002.

(u) Suspended, Debarred or Ineligible

Contractors. Proposed awards to firms or

individuals on the GSA Consolidated List of

Debarred, Suspended and Ineligible

Contractors shall be forwarded to DOE for

approval notwithstanding any prior

purchasing system acceptance.

(v) Termination. When subcontracts are

terminated as a result of the termination of

all or a portion of this contract, the contractor

shall settle with subcontractors in conformity

with the policies and principles relating to

settlement of prime contracts in 48 CFR

(FAR) subparts 49.1, 49.2 and 49.3. When

subcontracts are terminated for reasons other

than termination of this contract, the

contractor shall settle such subcontracts in

general conformity with the policies and

principles in 48 CFR (FAR) subparts 49.1,

49.2, 49.3 and 49.4. Each such termination

shall be documented and consistent with the

terms of this contract. Terminations which

require approval by the Government shall be

supported by accounting data and other

information as may be directed by the

contracting officer.

(w) Unclassified Controlled Nuclear

Information. In its purchasing system and

methods, the contractor shall provide for the

treatment of unclassified uncontrolled

nuclear information to be handled in

accordance with 10 CFR part 1017.

970.5204–24 Subcontractor cost or pricing

data.

5. At 970.5204–24, Subcontractor cost

or pricing data, remove the phrase ‘‘As

prescribed in 970.7104–11,’’ from the

introductory text.

970.5204–45 Termination.

6. At 970.5204–45, Termination,

remove the phrase ‘‘As prescribed in

970.7104–30,’’ from the introductory

text.

970.5204–50 Cost and schedule control

systems.

7. At 970.5204–50, Cost and schedule

control systems, remove the phrase ‘‘As

prescribed in 970.7104–40,’’ from the

introductory text.

8. Add new subsection 970.5204–XX,

Flowdown of contract requirements to

subcontracts, to read as set forth below:

970.5204–XX Flowdown of contract

requirements to subcontracts.

Insert the following clause.

Flowdown of Contract Requirements to

Subcontracts (month year TBE).

(a) The contractor shall include the clauses

in paragraph (b) of this clause in appropriate

subcontracts.

(1) To the extent that the clause is included

in this prime contract, the contractor shall

comply with that portion of the clause that

directs application to subcontracts.

(2) To the extent that the clause is not

included in this prime contract, or where it

is included, but there is no instruction for

treatment in subcontracts, the contractor

shall include the clause in accordance with

applicable regulatory guidance which would

apply if the subcontract were a prime

contract with the Federal government.

(3) In all cases, where a regulation is cited,

the contractor shall comply with the

regulation in administration of the related

clause.

(b) Clauses and related regulations.

(1) Air transportation by U.S.-flag carriers.

Clause at 48 CFR (FAR) 52.247–63.

(2) Anti-Kickback Act of 1986. Clause at 48

CFR (FAR) 52.203–7.

(3) Clean Air and Water. Clause at 48 CFR

(FAR) 52.223–2, and follow the requirements

of 48 CFR (FAR) 23.1.

(4) Contract Work Hours and Safety

Standards Act. Clause at 48 CFR (FAR)

52.222–4, and follow the requirements of 48

CFR (FAR) 22.3.

(5) Cost or Pricing Data. Clause at 48 CFR

(DEAR) 970.5204–24.

(6) Cost and Schedule Control Systems.

Clause at 48 CFR (DEAR) 970.5204–50.

(7) Cost Accounting Standards. Clause at

48 CFR (FAR) 52.230–2, as prescribed in 48

CFR (DEAR) 970.30.

(8) Davis-Bacon Act. Clauses as directed at

48 CFR (FAR) 22.407, and follow the

requirements of 48 CFR (FAR) 22.4 to the

same extent that they would apply if the

subcontract had been directly awarded by

DOE. 48 CFR (DEAR) Subpart 922.4 and 48

CFR (DEAR) 970.2273 provide guidance to

assist in determining the applicability of

these regulations.

(9) Employment of the Handicapped.

Clause at 48 CFR (FAR) 52.222–36, and

follow the requirements of 48 CFR (FAR)

22.14.

(10) Environmental and Occupational

Safety and Health. Clauses as prescribed in

48 CFR (DEAR) 970.2303–2.
20668 Federal Register / Vol. 60, No. 81 / Thursday, April 27, 1995 / Proposed Rules

(11) Equal Employment Opportunity.

Clauses as prescribed in 48 CFR (FAR)

22.810, as applicable, and follow the

requirements of 48 CFR (FAR) 22.8, 48 CFR

(DEAR) 922.8, E.O. 11246 and 40 CFR part

60.

(12) Examination of Records by

Comptroller General. Clause at 48 CFR (FAR)

52.215–1.

(13) Foreign Travel. Clause at 48 CFR

(DEAR) 970.5204–52.

(14) Nuclear Hazards Indemnity. Clause at

48 CFR (DEAR) 970.2870.

(15) Officials Not To Benefit. Clause at 48

CFR (FAR) 52.203–1.

(16) Organizational Conflicts of Interest.

Clause at 48 CFR (DEAR) 952.209–72.

(17) Patent, Data and Copyrights.

Appropriate clauses as required by 48 CFR

(DEAR) parts 927 and 970.

(18) Printing. Clause at 48 CFR (DEAR)

970.5204–19.

(19) Privacy Act. Clauses at 48 CFR (FAR)

52.224–1 and 48 CFR (FAR) 52.224–2, and

follow the requirements of 48 CFR (FAR)

24.1.

(20) Record Retention. Clause at 48 CFR

(DEAR) 970.5204–9.

(21) Safeguarding Classified Information.

Appropriate clauses as prescribed at 48 CFR

(DEAR) 970.0404.

(22) Service Contract Act. Clauses at 48

CFR (FAR) 52.222–40 and 48 CFR (FAR)

52.222–41.

(23) Small Business and Small

Disadvantaged Business Concerns. Clause at

48 CFR (FAR) 52.219–9.

(24) Special Disabled and Vietnam Era

Veterans. Clause at 48 CFR (FAR) 52.222–35,

and follow the requirements of 48 CFR (FAR)

Subpart 22.13.

(25) Taxes. Clause at 48 CFR (DEAR)

970.5204–23.

(26) Termination. Appropriate clause or

clauses as set forth at 48 CFR (FAR) 52.249–

1 through 52.249–14.

(c) Other. Errors in or omissions from the

above DOE-compiled listing of contract

requirements requiring flowdown to

appropriate subcontracts shall not be

construed as waiving a requirement for the

contractor to comply with a requirement for

subcontracts appearing elsewhere in this

contract or a requirement for subcontracts as

required by law. Such errors or omissions

shall not form the basis for a defense by the

contractor in a legal or administrative

proceeding.

[FR Doc. 95–10262 Filed 4–26–95; 8:45 am]

BILLING CODE 6450–01–P