[Federal Register Volume 72, Number 40 (Thursday, March 1, 2007)]
[Rules and Regulations]
[Pages 9233-9235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-946]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

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 
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Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Rules 
and Regulations

[[Page 9233]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

2 CFR Part 376

45 CFR Parts 74 and 76


Department of Health and Human Services' Implementation of OMB 
Guidance on Nonprocurement Debarment and Suspension

AGENCY: Department of Health and Human Services.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Department of Health and Human Services (HHS or the 
Department) is issuing a new part 376 on nonprocurement debarment and 
suspension in Title 2 the Code of Federal Regulations (CFR). This new 
part is HHS's implementation of OMB's guidance provided at 2 CFR part 
180. HHS is removing 45 CFR part 76, the part containing its 
implementation of the government-wide common rule on nonprocurement 
debarment and suspension. The new part in 2 CFR serves the same purpose 
as the common rule, but in a simpler way. This interim final rule is 
part of OMB's initiative to streamline and consolidate all federal 
regulations on nonprocurement debarment and suspension. It is an 
administrative simplification that would make no substantive change in 
HHS policy or procedures for nonprocurement debarment and suspension.

DATES: Effective Date: March 1, 2007.
    Comment Date: April 2, 2007.

ADDRESSES: You may submit comments by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    E-mail: to <a href="/cdn-cgi/l/email-protection#b6f8d7d8d5cf98e1d3dfc5dbd7d8f6dedec598d1d9c0"><span class="__cf_email__" data-cfemail="f7b99699948ed9a0929e849a9699b79f9f84d9909881">[email protected]</span></a>. Please state ``2 CFR part 376'' 
on the subject line or mail: Nancy Weisman, HHS Office of Grants 
Policy, Oversight and Evaluation, Room 336-E, 200 Independence Ave., 
SW., Washington, DC 20201.

FOR FURTHER INFORMATION CONTACT: Nancy Weisman at (202) 260-4573, or by 
e-mail at [<a href="/cdn-cgi/l/email-protection#6c220d020f15423b09051f010d022c04041f420b031a"><span class="__cf_email__" data-cfemail="7d331c131e04532a18140e101c133d15150e531a120b">[email protected]</span></a>].

SUPPLEMENTARY INFORMATION:

I. Background

    On August 31, 2005, OMB issued interim final Guidance for 
Government-wide Debarment and Suspension (Nonprocurement), codified in 
part 180 of Title 2 of the CFR (70 FR 51862). In addition to restating 
and updating its guidance on nonprocurement debarment and suspension, 
the interim final guidance requires all Federal agencies to adopt a new 
approach to federal agency implementation of the guidance. OMB requires 
each agency to issue a brief rule that: (1) Adopts the guidance, giving 
it regulatory effect for that agency's activities; and (2) states any 
agency-specific additions, clarifications, and exceptions to the 
government-wide policies and procedures contained in that guidance.
    That guidance also requires agencies to implement the OMB guidance 
by February 28, 2007. Pursuant to the requirements in OMB's guidance, 
the Department will: (1) Establish Chapter 3 in Subtitle B of Title 2 
CFR for HHS regulations on grants and agreements; (2) remove 45 CFR 
part 76 containing the full text of the Department's debarment and 
suspension common rule; (3) replace 45 CFR part 76 with a brief new 
part 376 that adopts OMB's guidance at 2 CFR part 180 and adds 
provisions specific to HHS; (4) co-locate the Department's new part 376 
with OMB's guidance in 2 CFR along with other agencies' regulations in 
that title; and (5) revise the reference in 45 CFR 74.13 to reflect the 
new citation to the Department's nonprocurement debarment and 
suspension regulations now located at 2 CFR part 376.

II. Invitation To Comment

    This new part in 2 CFR adopts the OMB guidelines with the same 
additions and clarifications we made to the common rule on 
nonprocurement debarment and suspension in the Federal Register 
publication of November 26, 2003 (68 FR 66630). In soliciting comments 
on this action, we are not seeking to revisit substantive issues that 
were already resolved during the preparation of that final common rule. 
Because we intend the new part to make no changes in current HHS 
policies and procedures, we specifically invite comments on any 
unintended changes in substantive content that the new part in Title 2 
CFR would make relative to the November 2003 common rule at 45 CFR part 
76.

III. Procedural Review Requirements

A. Executive Order 12866, Regulatory Planning and Review

    HHS has determined that 2 CFR part 376 is not a significant 
regulatory action.

B. Regulatory Flexibility Act

    HHS certifies this rulemaking will not have a significant economic 
effect on a substantial number of small entities under the Regulatory 
Flexibility Act [5 U.S.C. 605(b)].
    Therefore, no regulatory flexibility statement has been prepared. 
Since this rule relocates existing HHS nonprocurement and debarment 
policies or procedures and does not promulgate any new policies and 
procedures that would impact the public, it has been determined that 
this rule will not have a significant economic effect on a substantial 
number of small entities, and, thus, a regulatory flexibility analysis 
was not performed.

C. Unfunded Mandates Reform Act

    HHS has determined that 2 CFR 376 does not contain a Federal 
mandate under 2 U.S.C. 1501(7) that may result in the expenditure by 
state, local and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any one year.

D. Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 35, does not apply because 
the issuance of 2 CFR part 376 does not impose any new reporting or 
recordkeeping requirements that require approval by OMB.

E. Executive Order 13132, Federalism

    This regulation does not have federalism implications, as set forth 
in Executive Order 13132. This regulation does not have substantial 
direct effects

[[Page 9234]]

on the states, the relationship between the Federal Government and the 
states, or the distribution of power and responsibilities among the 
various levels of government.

List of Subjects

2 CFR Part 376

    Administrative practice and procedure, Debarment and suspension, 
Grant programs, Reporting and recordkeeping requirements.

45 CFR Part 74

    Accounting, Colleges and universities, Grant programs, Hospitals, 
Indians, Intergovernmental relations, Nonprofit organizations, 
Reporting and recordkeeping requirements.

45 CFR Part 76

    Administrative practice and procedure, Debarment and suspension, 
Grant programs, Reporting and recordkeeping requirements.

    Dated: February 26, 2007.
Michael O. Leavitt,
Secretary.

0
Accordingly, under the authority of 5 U.S.C. 301; 31 U.S.C. 6101 
(note); E.O. 12689 (3 CFR, 1989 Comp., p. 235); E.O.12549 (3 CFR, 1986 
Comp., p. 189); E.O. 11738 (3 CFR, 1973 Comp., p. 799), the Department 
of Health and Human Services publishes the following amendments to the 
Code of Federal Regulations, Title 2, Subtitle B, and Title 45, Chapter 
I, as set forth below.

Title 2--Grants and Agreements

0
Add Chapter III in Subtitle B of Title 2 CFR where HHS grants and 
agreement rules will appear. With this regulatory action, Chapter III 
will consist of Part 376, to read as follows:

CHAPTER III--DEPARTMENT OF HEALTH AND HUMAN SERVICES

PART 376--NONPROCUREMENT DEBARMENT AND SUSPENSION

Sec.
376.10 What does this part do?
376.20 Does this part apply to me?
376.30 What policies and procedures must I follow?
Subpart A--General
376.137 Who in the Department of Health and Human Services (HHS) may 
grant an exception to let an excluded person participate in a 
covered transaction?
376.147 Does an exclusion from participation in Federal health care 
programs under Title XI of the Social Security Act affect a person's 
eligibility to participate in nonprocurement and procurement 
transactions?
Subpart B--Covered Transactions
376.220 What contracts and subcontracts, in addition to those listed 
in 2 CFR 180.220, are covered transactions?
Subpart C--Responsibilities of Participants Regarding Transactions
376.332 What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?
376.370 What are the obligations of Medicare carriers and 
intermediaries?
Subpart D--Responsibilities of Federal Agency Officials Regarding 
Transactions
376.437 What method do I use to communicate to a participant the 
requirements described in the OMB guidance at 2 CFR 180.435?
Subpart E--Excluded Parties List System [Reserved]
Subpart F--General Principles Relating to Suspension and Debarment 
Actions [Reserved]
Subpart G--Suspension [Reserved]
Subpart H--Debarment [Reserved]
Subpart I--Definitions
376.935 Disqualified (HHS supplement to government-wide definition 
at 2 CFR 180.935).
376.995 Principal (HHS supplement to government-wide definition at 2 
CFR 180.995).
Subpart J--[Reserved]

    Authority: 5 U.S.C. 301; 31 U.S.C. 6101 (note); E.O. 12689 (3 
CFR, 1989 Comp., p. 235); E.O. 12549 (3 CFR, 1986 Comp., p. 189); 
E.O. 11738 (3 CFR, 1973 Comp., p. 799).


Sec.  376.10  What does this part do?

    This part adopts the Office of Management and Budget (OMB) guidance 
in subparts A through I of 2 CFR part 180, as supplemented by this 
part, as the Department of Health and Human Services (HHS or 
Department) policies and procedures for nonprocurement debarment and 
suspension. HHS thereby gives regulatory effect to the OMB guidance as 
supplemented by this part. This part satisfies the requirements in 2 
CFR 180.20, section 3 of Executive Order 12549, ``Debarment and 
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689, 
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C. 
6101 note (Section 2455, Pub. L. 103-355, 108 Stat. 3327).


Sec.  376.20  Does this part apply to me?

    This part and, through this part, pertinent portions of the OMB 
guidance in subparts A through I of 2 CFR part 180 (see table at 2 CFR 
180.100(b)), apply to you if you are a--
    (a) Participant or principal in a ``covered transaction'' under 
subpart B of 2 CFR part 180, as supplemented by this part, and the 
definition of nonprocurement transaction'' at 2 CFR 180.970.
    (b) Respondent in HHS suspension or debarment action;
    (c) HHS debarment or suspension official;
    (d) HHS grants officer, agreements officer, or other HHS official 
authorized to enter into any type of nonprocurement transaction that is 
a covered transaction.


Sec.  376.30  What policies and procedures must I follow?

    The policies and procedures that you must follow are the policies 
and procedures specified in each applicable section of the OMB guidance 
in subparts A through I of 2 CFR part 180, including the corresponding 
section that HHS published in 2 CFR part 376 identified by the same 
section number. The contracts under a nonprocurement transaction, that 
are covered transactions, for example, are specified by section 220 of 
the OMB guidance (i.e., 2 CFR 180.220) as supplemented by section 220 
in this part (i.e., 2 CFR 376.220). For any section of OMB guidance in 
subparts A through I of 2 CFR part 180 that has no corresponding 
section in this part, HHS policies and procedures are those in the OMB 
guidance at 2 CFR part 180.

Subpart A--General


Sec.  376.137  Who in the Department of Health and Human Services may 
grant an exception to let an excluded person participate in a covered 
transaction?

    The HHS Debarring/Suspension Official has the authority to grant an 
exception to let an excluded person participate in a covered 
transaction as provided at 2 CFR 180.135.


Sec.  376.147  Does an exclusion from participation in Federal health 
care programs under Title XI of the Social Security Act affect a 
person's eligibility to participate in nonprocurement and procurement 
transactions?

    Any individual or entity excluded from participation in Medicare, 
Medicaid, and other Federal health care programs under Title XI of the 
Social Security Act, 42 U.S.C. 1320a-7, 1320a-7a, 1320c-5, or 1395ccc, 
and implementing regulation at 42 CFR part 1001, will be subject to the 
prohibitions against participating in covered transactions, as set 
forth in this part and part 180, and is prohibited from participating 
in all Federal government procurement programs and nonprocurement 
programs. For example, if an individual or entity is

[[Page 9235]]

excluded by the HHS Office of the Inspector General from participation 
in Medicare, Medicaid, and/or other Federal health care programs, in 
accordance with 42 U.S.C. 1320a-7, then that individual or entity is 
prohibited from participating in all Federal government procurement and 
nonprocurement programs (42 CFR part 1001).

Subpart B--Covered Transactions


Sec.  376.220  What contracts and subcontracts, in addition to those 
listed in 2 CFR 180.220, are covered transactions?

    In addition to the contracts covered under 2 CFR 180.220(b), this 
part also applies 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 diagram in the 
Appendix to 2 CFR part 180.)

Subpart C--Responsibilities of Participants Regarding Transactions


Sec.  376.332  What methods must I use to pass requirements down to 
participants at lower tiers with whom I intend to do business?

    To communicate the requirements to lower-tier participants, you 
must include a term or condition in the lower-tier transaction 
requiring the lower-tier participant's compliance with 2 CFR part 180, 
as supplemented by this subpart.


Sec.  376.370  What are the obligations of Medicare carriers and 
intermediaries?

    Because Medicare carriers, intermediaries and other Medicare 
contractors undertake responsibilities on behalf of the Medicare 
program (Title XVIII of the Social Security Act), these entities assume 
the same obligations and responsibilities as the HHS Medicare officials 
responsible for the Medicare Program with respect to actions under 2 
CFR part 376. This would include the requirement for these entities to 
check the Excluded Parties List System (EPLS) and take necessary steps 
to effect this part.

Subpart D--Responsibilities of Federal Agency Officials Regarding 
Transactions


Sec.  376.437  What method do I use to communicate to a participant the 
requirements described in the OMB guidance at 2 CFR 180.435?

    To communicate to a participant the requirements described in 2 CFR 
180.435, you must include a term or condition in the transaction that 
requires the participant's compliance with subpart C of 2 CFR part 180, 
as supplemented by Subpart C of this part, and require the participant 
to include a similar term or condition in lower-tier covered 
transactions.

Subpart E--Excluded Parties List System [Reserved]

Subpart F--General Principles Relating to Suspension and Debarment 
Actions [Reserved]

Subpart G--Suspension [Reserved]

Subpart H--Debarment [Reserved]

Subpart I--Definitions


Sec.  376.935  Disqualified. (HHS supplement to government-wide 
definition at 2 CFR 180.935).

    Disqualified means persons prohibited from participating in 
specified federal procurement and nonprocurement transactions pursuant 
to the statutes listed in 2 CFR 180.935, and pursuant to Title XI of 
the Social Security Act (42 U.S.C. 1320a-7, 1320a-7a, 1320c-5, and 
1395ccc) as enforced by the HHS Office of the Inspector General.


Sec.  376.995  Principal (HHS supplement to government-wide definition 
at 2 CFR 180.995).

    Principal means individuals, in addition to those listed at 2 CFR 
180.995, who participate in HHS covered transactions including:
    (a) Providers of federally required audit services; and
    (b) Researchers.

Subpart J--[Reserved]

Title 45--Public Welfare

CHAPTER I--DEPARTMENT OF HEALTH AND HUMAN SERVICES

PART 74--[AMENDED]

0
1. The authority citation for part 74 continues to read as follows:

    Authority: 5 U.S.C. 301.


Sec.  74.13  [Amended]

0
2. Section 74.13 is amended by revising the citation ``45 CFR part 76'' 
to read ``2 CFR part 376.''

PART 76--[REMOVED]

0
3. Remove part 76 from Title 45 CFR.

[FR Doc. 07-946 Filed 2-27-07; 12:05 pm]
BILLING CODE 4150-24-P


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