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.

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REGISTER issue of each week.

Rules and Regulations Federal Register

9233 

Vol. 72, No. 40 

Thursday, March 1, 2007 

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. 

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: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

E-mail: to Nancy.Weisman@hhs.gov. 

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 [Nancy.Weisman@hhs.gov]. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On August 31, 2005, OMB issued 

interim final Guidance for Governmentwide 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 


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9234 Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Rules and Regulations 

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. 

■ 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 

■ 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). 

§ 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). 

§ 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. 

§ 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 

§ 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. 

§ 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 


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

§ 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 

§ 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. 

§ 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 

§ 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 

§ 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. 

§ 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] 

■ 1. The authority citation for part 74 

continues to read as follows: 

Authority: 5 U.S.C. 301. 

§ 74.13 [Amended] 

■ 2. Section 74.13 is amended by 

revising the citation ‘‘45 CFR part 76’’

to read ‘‘2 CFR part 376.’’

PART 76—[REMOVED] 

■ 3. Remove part 76 from Title 45 CFR. 

[FR Doc. 07–946 Filed 2–27–07; 12:05 pm] 

BILLING CODE 4150–24–P 

NATIONAL FOUNDATION ON THE 

ARTS AND THE HUMANITIES 

2 CFR Part 3369 

45 CFR Part 1169 

RIN 3136–AA29 

Office of the General Counsel; National 

Endowment for the Humanities 

Implementation of OMB Guidance on 

Nonprocurement Debarment and 

Suspension 

AGENCY: National Endowment for the 

Humanities. 

ACTION: Direct final rule. 

SUMMARY: The National Endowment for 

the Humanities (NEH) implements 

Office of Management and Budget 

(OMB) guidance on nonprocurement 

suspension and debarment, issued on 

August 31, 2005 [70 FR 51863], by 

adopting the guidelines in a new part in 

title 2 of the CFR, the Government-wide 

title recently established for OMB 

guidance on grants and agreements, and 

removing 45 CFR part 1169, the part 

containing the NEH implementation of 

the government-wide common rule on 

nonprocurement debarment and 

suspension. This regulatory action 

would make no substantive change in 

NEH policy or procedures for 

nonprocurement debarment and 

suspension. 

DATES: The effective date for this final 

rule is April 2, 2007. 

FOR FURTHER INFORMATION CONTACT: 

National Endowment for the 

Humanities, ATTN: Office of the 

General Counsel, 1100 Pennsylvania 

Avenue, NW., Room 529, Washington, 

DC 20506; or Heather Gottry, (202) 606–

8322. Hearing-impaired individuals are 

advised that information on this matter 

may be obtained by contacting the 

Endowment’s TDD terminal on (202) 

606–8282. 

SUPPLEMENTARY INFORMATION: This final 

rule implements the OMB guidance and 

does not make any changes in current 

policies and procedures. NEH is not 

soliciting public comment on this rule 

and is instead issuing this rule as a 

direct final rule. Under 5 U.S.C. 

553(b)(3)(A) agencies are not required to 

undergo notice and comment procedure 

for ‘‘interpretative rules, general 

statements of policy, or rules of agency 

organization, procedure, or practice.’’

Because this rule adopts OMB’s 

published guidelines, which followed 

notice and comment procedures, and 

collocates NEH’s specific 

nonprocurement suspension and 

debarment rules to title 2 of the CFR, we 


rwilkins on PROD1PC63 with RULES