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

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

29183 

Vol. 75, No. 100 

Tuesday, May 25, 2010 

DEPARTMENT OF AGRICULTURE 

2 CFR Chapter IV 

7 CFR Part 3017 

RIN 0505–AA11 

Office of the Chief Financial Officer; 

Department of Agriculture 

Implementation of OMB Guidance on 

Nonprocurement Debarment and 

Suspension 

AGENCY: Office of the Chief Financial 

Officer, USDA. 

ACTION: Interim rule. 

SUMMARY: The Department of 

Agriculture (USDA) is establishing a 

new part 417 on nonprocurement 

debarment and suspension at 2 CFR 

Chapter 4 that adopts and supplements 

the Office of Management and Budget 

(OMB) guidance at 2 CFR part 180 as 

USDA’s policies and procedures for 

nonprocurement debarment and 

suspension. Part 417 of 2 CFR replaces 

the existing USDA implementation of 

the governmentwide common rule on 

nonprocurement debarment and 

suspension at 7 CFR part 3017, and 7 

CFR part 3017 is removed. This action 

also modifies exclusions from covered 

transactions and codifies a statutory 

permanent debarment provision. This 

action also finalizes an earlier proposed 

rule to eliminate an appeal to a USDA 

administrative law judge (ALJ) of a 

suspension or debarment decision. 

USDA also makes adjustments to its 

current exclusions from covered 

transactions. Finally, this interim rule 

implements Section 14211 of the Food, 

Conservation, and Energy Act of 2008, 

Public Law 110–246 (7 U.S.C. 2209j), 

which requires the Secretary to debar 

permanently from participation in 

USDA programs those convicted of 

having knowingly committed fraud in 

USDA programs. 

DATES: This interim final rule is 

effective September 22, 2010, unless 

written adverse comments or written 

notice of intent to submit adverse 

comments are received on or before July 

26, 2010. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: Federal eRulemaking Portal: 

Go to http://www.regulations.gov, select 

‘‘Department of Agriculture—All’’ from 

the agency drop-down menu, select 

‘‘Proposed Rules’’ from the document 

type menu, and then click ‘‘Submit.’’ In 

the document title column, select the 

proposed rule with ‘‘2 CFR 417, 

Implementation of OMB Guidance on 

Nonprocurement Debarment and 

Suspension’’ in the title to submit or 

view public comments and to view 

supporting and related materials 

available electronically. Information on 

using Regulations.gov, including 

instructions for accessing documents, 

submitting comments, and viewing the 

docket after the close of the comment 

period, is available through the site’s 

‘‘User Tips’’ link. 

E-mail: peter.laub@cfo.usda.gov or 

Fax: (202) 690–1529. Include Regulatory 

Information Number (RIN) 0505–AA11 

in the subject line of the message. 

Postal Mail/Commercial Delivery: 

Please send four copies of your 

comments (an original and three copies) 

to Peter Laub, OCFO/CTGPD Room 

3451–S, Stop 9010, 1400 Independence 

Avenue, SW., Washington, DC 20250– 

9010. 

All comments submitted must include 

the agency name and RIN for this 

rulemaking. All comments received will 

be posted without change to http:// 

www.regulations.gov, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: 

Peter Laub, (202) 720–1554; Fax: (202) 

690–1529, E-mail: peter.laub@usda.gov. 

SUPPLEMENTARY INFORMATION: 

Background: On August 31, 2005, 

OMB issued interim final guidance for 

governmentwide nonprocurement 

debarment and suspension (70 FR 

51863). This guidance, located at 2 CFR 

part 180, is substantively the same as 

the common rule but is published in a 

form that each agency can adopt, thus 

eliminating the need for each agency to 

publish its separate version of the same 

rule. It also facilitates the ability to 

update governmentwide requirements 

without each agency having to repromulgate its own rules. On November 

15, 2006, OMB published a final rule 

adopting the interim final guidance with 

changes (71 FR 66431). 

USDA’s current regulation on 

nonprocurement debarment and 

suspension is found at 7 CFR part 3017. 

In accordance with OMB’s guidance, 

this rule places USDA’s 

nonprocurement debarment and 

suspension regulations in Title 2 of the 

CFR, along with other agencies’ 

nonprocurement debarment and 

suspension regulations. The new 

regulation at 2 CFR part 417 adopts the 

OMB guidelines and includes, with few 

exceptions, the same additions and 

clarifications that USDA made to the 

governmentwide common rule on this 

subject issued November 26, 2003 (68 

FR 66534, 66562). In addition to those 

additions and clarifications, USDA is 

eliminating the ALJ appeal processes for 

suspension and debarment, which were 

authorized in 7 CFR 3017.765 and 

3017.890, respectively. In 68 FR 66562, 

USDA stated an intention to remove the 

ALJ appeal. The Department did not 

receive any adverse comments regarding 

its intention to remove the ALJ appeals. 

The Department decided to remove the 

appeal to an ALJ to conform to the same 

process as other Federal agencies. 

USDA is replacing the exclusion from 

covered transaction status for 

nonprocurement transactions currently 

found in paragraph (i) of 7 CFR section 

3017.215 with narrower exclusions in 

paragraphs (a)(8) and (9) of 2 CFR 

section 417.215. The exclusion from 

covered transaction status under 7 CFR 

3017.215(i) applied to any transactions 

below the primary tier covered 

transaction in USDA’s export and 

foreign assistance programs, with one 

exception relating to the Market Access 

Program. USDA is also replacing the 

exclusion from covered transaction 

status for procurement transactions 

currently found in subsection (c) of 7 

CFR 3017.220 with narrower exclusions 

in paragraphs (c) and (d) of 2 CFR 

section 417.220. The exclusion from 

covered transaction status under 7 CFR 

3017.220(c) applied to any procurement 

transactions below the primary tier 

covered transaction in USDA’s export 

and foreign assistance programs, with 

the exception of a contract for the 

procurement of ocean transportation in 

connection with USDA’s foreign 

assistance programs. 


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29184 Federal Register / Vol. 75, No. 100 / Tuesday, May 25, 2010 / Rules and Regulations 

The exclusions from covered 

transaction status in 2 CFR 417.215(a)(8) 

and (9) and 417.220(c) and (d) will 

apply only to USDA’s foreign assistance 

programs and two categories of USDA’s 

export programs, the export credit 

guarantee programs and the direct credit 

programs. Furthermore, the exclusions 

will apply only to lower tier 

transactions that will be implemented 

outside the United States. In two newly 

added sections, 2 CFR 417.221 and 

417.222, USDA explains how the 

exclusions from covered transaction 

status for its foreign assistance, export 

credit guarantee and direct credit 

programs will apply. The examples of 

transactions provided in these sections 

are intended to be illustrative but not 

exhaustive. 

At the current time, USDA is 

implementing two foreign assistance 

programs, the Food for Progress Program 

and the McGovern-Dole International 

Food for Education and Child Nutrition 

Program. USDA also has authority to 

carry out foreign assistance activities 

under section 416(b) of the Agricultural 

Act of 1949. With regard to USDA’s 

foreign assistance programs, the vast 

majority of transactions below the 

primary tier covered transactions are 

carried out in foreign countries. 

For example, a private voluntary 

organization receiving a grant under the 

McGovern-Dole International Food for 

Education and Child Nutrition Program 

might enter into an agreement with a 

foreign subrecipient that would hire a 

construction company to build a school 

in Afghanistan. In the absence of the 

exclusions from covered transaction 

status in 2 CFR 417.215(a)(8) and 

417.220(c), the private voluntary 

organization would have to insert 

compliance language into its agreement 

with the subrecipient, which would be 

a participant in a covered transaction at 

the first lower tier, and require the 

subrecipient to insert appropriate 

language into its contract with the 

construction company. This contract 

would most likely be written in the 

foreign language. This would place a 

tremendous burden on the private 

voluntary organization. Entities in some 

countries may not have ready access to 

the Excluded Parties List System 

(EPLS). Furthermore, due to language 

and logistical difficulties, it would be 

very difficult for USDA to monitor 

compliance by participants in lower tier 

transactions who are located and 

carrying out activities in foreign 

countries. The exceptions in 2 CFR 

417.215(a)(8) and 417.220(c) have been 

narrowly drawn to recognize the 

realities of foreign transactions and to 

avoid an adverse impact upon the 

implementation of USDA’s foreign 

assistance programs. 

Currently, the only export credit 

guarantee program operated by USDA is 

the Commodity Credit Corporation 

(CCC) Export Credit Guarantee Program, 

commonly known as the GSM–102 

program. USDA does not currently 

operate a direct credit program. Under 

the GSM–102 program, CCC guarantees 

repayment of certain loans extended to 

foreign bank obligors. The guarantee 

itself is originally issued in favor of an 

exporter of U.S. agricultural 

commodities, and in the vast majority of 

cases, is assigned by such exporter to a 

U.S. financial institution. The currently 

authorized but dormant direct credit 

sales program authorizes CCC to finance 

commercial export sales of privately 

owned stocks of commodities. 

For example, under GSM–102, a CCC 

guarantee would exist in favor of a U.S. 

exporter or U.S. financial institution, as 

assignee of such exporter. At inception, 

such a guarantee would contemplate a 

U.S. exporter, a foreign importer, a CCCapproved foreign bank, and, in all 

likelihood, an assignee U.S. financial 

institution. The guarantee would extend 

to certain obligations of the CCCapproved foreign bank. To the extent the 

foreign bank and the importer are 

considered participants in a covered 

transaction at the first lower tier, then, 

in the absence of an exception, the 

foreign bank and the importer would 

each be required to adhere to the 

provisions of 2 CFR 180.300 when 

entering into a covered transaction with 

another person at the next lower tier. 

This would have the effect of requiring 

each foreign bank and each importer 

involved in a GSM–102 transaction, 

with respect to any person with whom 

it enters into a lower tier covered 

transaction, to check the EPLS, collect a 

certification, or add a clause or 

condition to the covered transaction 

with that person. Similar concerns 

would arise with respect to the direct 

credit sales program, in the event it 

became active. 

It would be difficult in the extreme to 

monitor compliance by each importer 

participant and foreign bank participant 

with respect to each person with whom 

it entered into a lower tier covered 

transaction. More importantly, the 

inability to ensure compliance with 

such a requirement could readily cause 

U.S. financial institutions to opt out of 

participation in the program. As nearly 

100 percent of all GSM–102 transactions 

currently involve a U.S. financial 

institution as assignee of the program, 

such reticence on the part of the U.S. 

financial institutions would effectively 

cause the demise of the program 

altogether. 

While there will be no covered 

transactions below the primary tier 

covered transaction in USDA’s foreign 

assistance programs, export credit 

guarantee programs, and direct credit 

programs, USDA will still require 

primary tier participants in these 

programs to check the EPLS and not to 

enter into a nonprocurement transaction 

or a procurement contract that is 

expected to equal or exceed $25,000 at 

the first lower tier with a person who is 

excluded or disqualified. Complying 

with this requirement will not be 

impracticable or impose undue 

hardship upon the primary tier 

participant. 

USDA is also eliminating the 

exclusion from covered transaction 

status for nonprocurement transactions 

currently found in subsection (j) of 7 

CFR 3017.215. This exclusion applied to 

any transactions under USDA’s 

conservation programs, warehouse 

licensing programs, or programs that 

provide statutory entitlements and make 

available loans to individuals and 

entities in their capacity as producers of 

agricultural commodities. With regard 

to USDA’s conservation and commodity 

programs, after approximately 20 years, 

USDA has determined that the interests 

of the United States are not adequately 

protected if persons who have been 

suspended or debarred are allowed to 

participate in these programs. With 

respect to USDA’s warehouse licensing 

programs, these would be excluded 

from covered transaction status 

pursuant to 2 CFR 417.215(a)(3), which 

excludes the receipt of licenses, permits, 

certificates, and indemnification under 

regulatory programs conducted in the 

interest of public health and safety. 

It is important to note that, consistent 

with its predecessor in 7 CFR part 3017, 

this rule excludes from covered 

transaction status those 

nonprocurement transactions provided 

as individual benefits, sometimes 

referred to as personal entitlements, 

which are received without regard to an 

individual’s present responsibility. An 

individual debarred or suspended from 

participation in a covered transaction 

under this part, then, would not be 

prohibited on that basis from 

participation in a transaction that 

involves Federal funds but does not 

have covered transaction status under 

this part. To clarify further, an 

individual debarred or suspended 

nevertheless remains eligible to 

participate in a USDA transaction 

excluded from covered transaction 

status by this rule. For instance, based 

on a criminal conviction in connection 


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Federal Register / Vol. 75, No. 100 / Tuesday, May 25, 2010 / Rules and Regulations 29185 

with the performance of a grant related 

to another Federal agency’s program, an 

individual may be debarred from 

participation in all covered transactions 

governmentwide. Despite being 

debarred, however, the individual 

would remain eligible to participate in 

a USDA transaction excluded from 

covered transaction status here, such as 

the receipt of individual or household 

benefits under the USDA’s 

Supplemental Nutrition Assistance 

Program (SNAP, formerly the Food 

Stamp Program). This particular 

exemption is also consistent with that 

established in Section 1(c) of Executive 

Order 12549, Debarment and 

Suspension, the basis for the 

governmentwide nonprocurement 

debarment and suspension authorities 

codified here, which specifically ‘‘does 

not cover * * * benefits to an 

individual as a personal entitlement.’’ 

Examples of other noncovered 

transactions, for purposes of 

nonprocurement debarment and 

suspension, include participation as an 

authorized retailer in SNAP or as a retail 

vendor in the Special Supplemental 

Nutrition Program for Women, Infants, 

and Children (WIC), because exclusion 

under this part is superseded by other 

law, i.e., comprehensive statutory 

disqualification provisions are in place 

for these entities that would conflict 

with the application of this part. 

In addition, this rule codifies at 2 CFR 

417.865(b) the Secretary’s recently 

enacted statutory authority to debar 

permanently a specific class of 

participants involved in USDA 

programs. Section 14211(b)(2) of the 

Food, Conservation, and Energy Act of 

2008, Public Law 110–246 (7 U.S.C. 

2209j), directs the Secretary to debar 

permanently from subsequent 

participation in USDA programs an 

‘‘individual, organization, corporation, 

or other entity’’ convicted of a felony for 

‘‘knowingly defrauding’’ the USDA 

related to any of its programs. While a 

conviction may be imposed by a State, 

local, or Federal jurist, the underlying 

crime must encompass a fraud 

committed with knowledge by the 

defendant. Permanent debarment is also 

statutorily limited—extending only to a 

felon’s future participation in USDA 

programs. 

Section 14211(b)(2) limits the effect of 

permanent debarments imposed by the 

Secretary using this authority, stating 

that they ‘‘shall not apply with respect 

to participation in domestic food 

assistance programs (as defined by the 

Secretary).’’ In view of the definitional 

discretion afforded the Secretary, this 

rule includes an inclusive rather than 

exhaustive list of those domestic food 

assistance programs. We note that the 

listed programs encompass benefits 

provided under domestic food 

assistance programs to individuals or 

households participating in and 

receiving benefits under those listed 

programs. In contrast, the rule provides 

that a business, organization, 

corporation, etc., debarred by the 

Secretary using this authority would be 

prohibited from participation in the 

listed programs. Thus, for example, the 

Secretary could use the authority in 

§ 417.865(b) to debar from future 

participation in USDA programs a day 

care home provider convicted of 

knowingly defrauding the USDA while 

participating in the Child and Adult 

Care Food Program. As an individual, 

the day care home provider and her 

household would remain eligible to 

participate in USDA’s domestic food 

assistance programs as recipients—for 

example, receiving benefits under the 

Supplemental Nutrition Assistance 

Programs. Conversely, WIC retail 

vendors and other nonbeneficiary 

entities in the domestic food assistance 

programs are not considered 

participants and are therefore subject to 

permanent debarment under 

§ 417.865(b). 

In light of the new 2 CFR part 417, 

USDA is removing 7 CFR part 3017, 

which is the current location for 

USDA’s nonprocurement debarment 

and suspension regulations. 

Executive Order 12866 ‘‘Regulatory 

Planning and Review’’ 

OMB has determined this rule to be 

‘‘Nonsignificant.’’ 

Regulatory Flexibility Act of 1980 

(5 U.S.C. 605(b)) 

This regulatory action will not have a 

significant, adverse impact on a 

substantial number of small entities. 

Unfunded Mandates Act of 1995 (Sec. 

202, Pub. L. 104–4) 

This regulatory action does not 

contain a Federal mandate that will 

result in the expenditure by State, local, 

and Tribal governments, in aggregate, or 

by the private sector of $100 million or 

more in any one year. 

Paperwork Reduction Act of 1995 (44 

U.S.C., Chapter 35) 

This regulatory action will not impose 

any additional reporting or 

recordkeeping requirements under the 

Paperwork Reduction Act. 

Federalism (Executive Order 13132) 

This regulatory action does not have 

Federalism implications, as set forth in 

Executive Order 13132. It will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

List of Subjects 

2 CFR Part 417 

Debarment and suspension 

(nonprocurement), Grant programs 

(Agriculture). 

7 CFR Part 3017 

Debarment and suspension 

(nonprocurement), Grant programs 

(Agriculture). 

■ For the reasons stated in the preamble, 

under the authority 2 CFR 180.20, 

USDA establishes 2 CFR Chapter IV and 

amends 7 CFR Chapter XXX as follows: 

TITLE 2—GRANTS AND AGREEMENTS 

■ 1. Add Chapter IV, consisting of part 

417, to Subchapter B to read as follows: 

Chapter IV—Department of Agriculture 

PART 417—NONPROCUREMENT 

DEBARMENT AND SUSPENSION 

Sec. 

417.10 What does this part do? 

417.20 Does this part apply to me? 

417.30 What policies and procedures must 

I follow? 

Subpart A—General 

417.137 Who in the USDA may grant an 

exception to let an excluded person 

participate in a covered transaction? 

Subpart B—Covered Transactions 

417.215 Which nonprocurement 

transactions, in addition to those listed 

in 2 CFR 180.215, are not covered 

transactions? 

417.220 Are any procurement contracts 

included as covered transactions? 

417.221 How would the exclusions from 

coverage for the USDA’s foreign 

assistance programs apply? 

417.222 How would the exclusions from 

coverage for the USDA’s export credit 

guarantee and direct credit programs 

apply? 

Subpart C—Responsibilities of Participants 

Regarding Transactions 

417.332 What methods must I use to pass 

down requirements to participants in 

lower-tier covered transactions with 

whom I intend to do business? 

Subpart D—Responsibilities of USDA 

Officials Regarding Transactions 

417.437 What method do I use to 

communicate to a participant the 

requirements described in the OMB 

guidance at 2 CFR 180.435? 


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Subpart E—[Reserved] 

Subpart F—[Reserved] 

Subpart G—Suspension 

417.755 When will I know whether the 

USDA suspension is continued or 

terminated? 

Subpart H—Debarment 

417.800 What are the USDA causes for 

debarment? 

417.865 How long may my debarment last? 

417.870 When do I know if the USDA 

debarring official debars me? 

Subpart I—Definitions 

417.930 Debarring official (USDA 

supplement to governmentwide 

definition at 2 CFR 180.930). 

417.1010 Suspending official (USDA 

supplement to governmentwide 

definition at 2 CFR 180.1010). 

Subpart J—[Reserved] 

Authority: 5 U.S.C. 301; Pub. L. 101–576, 

104 Stat. 2838; Sec. 2455, Pub. L. 103–355, 

108 Stat. 3327 (31 U.S.C. 6101 note); 7 U.S.C. 

2209j; E.O. 12549 (3 CFR, 1986 Comp., p. 

189); E.O. 12698 (3 CFR, Comp., p. 235); 7 

CFR 2.28. 

§ 417.10 What does this part do? 

This part adopts the OMB guidance in 

Subparts A through I of 2 CFR part 180, 

as supplemented by this part, as the 

USDA policies and procedures for 

nonprocurement debarment and 

suspension. It thereby gives regulatory 

effect for the USDA to the OMB 

guidance, as supplemented by this part. 

This part satisfies the requirements in 

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). 

§ 417.20 Does this part apply to me? 

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’’ (see Subpart B of 

2 CFR part 180 and the definition of 

‘‘nonprocurement transaction’’ at 2 CFR 

180.970, as supplemented by §§ 417.215 

and 417.220 of this part); 

(b) Respondent in a USDA debarment 

and suspension action; 

(c) USDA debarment or suspension 

official; or 

(d) USDA grants officer, agreements 

officer, or other official authorized to 

enter into any type of nonprocurement 

transaction that is a covered transaction. 

§ 417.30 What policies and procedures 

must I follow? 

The USDA policies and procedures 

that you must follow are the policies 

and procedures specified in this 

regulation and each applicable section 

of the OMB guidance in Subparts A 

through I of 2 CFR part 180, as that 

section is supplemented by the section 

in this part with the same section 

number. The contracts 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., 

§ 417.220). For any section of OMB 

guidance in Subparts A through I of 2 

CFR part 180 that has no corresponding 

section in this part, USDA policies and 

procedures are those in the OMB 

guidance. 

Subpart A—General 

§ 417.137 Who in the USDA may grant an 

exception to let an excluded person 

participate in a covered transaction? 

Within the USDA, a debarring official 

may grant an exception to let an 

excluded person participate in a 

covered transaction as provided under 2 

CFR 180.135. 

Subpart B—Covered Transactions 

§ 417.210 Which nonprocurement 

transactions are covered transactions? 

All nonprocurement transactions, as 

defined in § 417.970, are covered 

transactions unless listed in § 417.215. 

§ 417.215 Which nonprocurement 

transactions, in addition to those listed in 

2 CFR 180.215, are not covered 

transactions? 

(a) Transactions not covered. In 

addition to the nonprocurement 

transactions listed in 2 CFR 180.215, the 

following nonprocurement transactions 

are not covered transactions: 

(1) An entitlement or mandatory 

award required by a statute, including a 

lower tier entitlement or mandatory 

award that is required by a statute. 

(2) The export or substitution of 

Federal timber governed by the Forest 

Resources Conservation and Shortage 

Relief Act of 1990, 16 U.S.C. 620 et seq. 

(The ‘‘Export Act’’), which prevents a 

debarred person from entering into any 

contract for the purchase of unprocessed 

timber from Federal lands. See 16 U.S.C. 

620d(d)(1)(A). 

(3) The receipt of licenses, permits, 

certificates, and indemnification under 

regulatory programs conducted in the 

interest of public health and safety, and 

animal and plant health and safety. 

(4) The receipt of official grading and 

inspection services, animal damage 

control services, public health and 

safety inspection services, and animal 

and plant health and safety inspection 

services. 

(5) If the person is a State or local 

government, the provision of official 

grading and inspection services, animal 

damage control services, animal and 

plant health and safety inspection 

services. 

(6) The receipt of licenses, permits, or 

certificates under regulatory programs 

conducted in the interest of ensuring 

fair trade practices. 

(7) Permits, licenses, exchanges and 

other acquisitions of real property, 

rights of way, and easements under 

natural resource management programs. 

(8) Any transaction to be 

implemented outside the United States 

that is below the primary tier covered 

transaction in a USDA foreign assistance 

program. 

(9) Any transaction to be 

implemented outside the United States 

that is below the primary tier covered 

transaction in a USDA export credit 

guarantee program or direct credit 

program. 

(b) Limited requirement to check 

EPLS. Notwithstanding the fact that 

transactions to be implemented outside 

the United States that are below the 

primary tier covered transaction in a 

USDA foreign assistance program, 

export credit guarantee program or 

direct credit program are not covered 

transactions, pursuant to paragraphs 

(a)(8) and (9) of this section, primary tier 

participants under these programs must 

check the EPLS prior to entering into 

any transaction with a person at the first 

lower tier and shall not enter into such 

a transaction if the person is excluded 

or disqualified under the EPLS. 

(c) Exception. A cause for suspension 

or debarment under § 180.700 or 

180.800 of this title (as supplemented by 

§ 417.800) may be based on the actions 

of a person with respect to a 

procurement or nonprocurement 

transaction under a USDA program even 

if such transaction has been excluded 

from covered transaction status by this 

section or § 417.220. 

§ 417.220 Are any procurement contracts 

included as covered transactions? 

(a) Covered transactions under this 

part: 

(1) Do not include any procurement 

contracts awarded directly by a Federal 

agency; but 

(2) Do include some procurement 

contracts awarded by non-Federal 

participants in nonprocurement covered 

transactions (see appendix to this part). 


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(b) Specifically, a contract for goods 

or services is a covered transaction if 

any of the following applies: 

(1) The contract is awarded by a 

participant in a nonprocurement 

transaction that is covered under 

§ 417.210, and the amount of the 

contract is expected to equal or exceed 

$25,000. 

(2) The contract requires the consent 

of a USDA official. In that case, the 

contract, regardless of the amount, 

always is a covered transaction, and it 

does not matter who awarded it. For 

example, it could be a subcontract 

awarded by a contractor at a tier below 

a nonprocurement transaction, as shown 

in the appendix to this part. 

(3) The contract is for federallyrequired audit services. 

(c) Any procurement contract to be 

implemented outside the United States 

that is below the primary tier covered 

transaction in a USDA foreign assistance 

program is not a covered transaction, 

notwithstanding the provisions in 

paragraphs (a) and (b) of this section. 

(d) Any procurement contract to be 

implemented outside the United States 

that is below the primary tier covered 

transaction in a USDA export credit 

guarantee program or direct credit 

program is not a covered transaction, 

notwithstanding the provisions in 

paragraphs (a) and (b) of this section. 

(e) Notwithstanding the fact that 

procurement contracts to be 

implemented outside the United States 

that are below the primary tier covered 

transaction in a USDA foreign assistance 

program, export credit guarantee 

program or direct credit program are not 

covered transactions, pursuant to 

paragraphs (c) and (d) of this section, 

primary tier participants under these 

programs must check the EPLS prior to 

entering into any procurement contract 

that is expected to equal or exceed 

$25,000 with a person at the first lower 

tier and shall not enter into such a 

procurement contract if the person is 

excluded or disqualified under the 

EPLS. 

§ 417.221 How would the exclusions from 

coverage for the USDA’s foreign assistance 

programs apply? 

The primary tier covered transaction 

would be the food aid grant agreement 

entered into between USDA and a 

program participant, such as a U.S. 

private voluntary organization. USDA 

would have to check the EPLS before 

entering into the food aid grant 

agreement to ensure that the U.S. 

private voluntary organization that 

would be the primary tier participant is 

not excluded or disqualified. A 

transaction at the first lower tier might 

be a subrecipient agreement between the 

U.S. private voluntary organization and 

a foreign subrecipient of the 

commodities that were provided under 

the food aid grant agreement. Pursuant 

to § 417.215(a)(8), this nonprocurement 

transaction would not be a covered 

transaction. In addition, a transaction at 

the first lower tier might be a 

procurement contract entered into 

between the U.S. private voluntary 

organization and a foreign entity to 

provide supplies or services that are 

expected to equal or exceed $25,000 in 

value and that are needed by such 

organization to implement activities 

under the food aid grant agreement. 

Pursuant to § 417.220(c), this 

procurement contract would not be a 

covered transaction. However, pursuant 

to §§ 417.215(b) and 417.220(e), the U.S. 

private voluntary organization would be 

prohibited from entering into, at the first 

lower tier, an agreement with a 

subrecipient or a procurement contract 

that is expected to equal or exceed 

$25,000 with an entity that appears on 

the EPLS as excluded or disqualified. 

§ 417.222 How would the exclusions from 

coverage for USDA’s export credit 

guarantee and direct credit programs 

apply? 

(a) Export credit guarantee program. 

In the case of the export credit guarantee 

program, the primary tier covered 

transaction would be the guarantee 

issued by the USDA to a U.S. exporter. 

The U.S. exporter usually assigns the 

guarantee to a U.S. financial institution, 

and this would create another primary 

tier covered transaction between USDA 

and the U.S. financial institution. USDA 

would have to check the EPLS before 

issuing a guarantee or accepting a 

guarantee assignment to ensure that the 

U.S. exporter or financial institution 

that would be the primary tier 

participant is not excluded or 

disqualified. A transaction at the first 

lower tier under the export credit 

guarantee program might be a payment 

obligation of a foreign bank to the U.S. 

exporter to pay on behalf of the importer 

for the exported U.S. commodities that 

are covered by the guarantee. Similarly, 

a transaction at the first lower tier might 

be a payment obligation of a foreign 

bank under an instrument, such as a 

loan agreement or letter of credit, to the 

U.S. financial institution assigned the 

guarantee, which has paid the exporter 

for the exported U.S. commodities and, 

in so doing, issued a loan to the foreign 

bank, which the foreign bank is 

obligated to repay on deferred payment 

terms. Pursuant to § 417.215(a)(9), these 

nonprocurement transactions would not 

be covered transactions. In addition, a 

transaction at the first lower tier under 

the export credit guarantee program 

might be a procurement contract (i.e., a 

contract for the purchase and sale of 

goods) that is expected to equal or 

exceed $25,000 entered into between 

the U.S. exporter and the foreign 

importer for the U.S. commodities, the 

payment for which is covered by the 

guarantee. Pursuant to § 417.220(d), this 

procurement contract would not be a 

covered transaction. However, pursuant 

to §§ 417.215(b) and 417.220(e), the U.S. 

exporter or U.S. financial institution 

would be prohibited from entering into, 

at the first lower tier, an agreement with 

an importer (or intervening purchaser) 

or foreign bank or a procurement 

contract that is expected to equal or 

exceed $25,000 with an entity that 

appears on the EPLS as excluded or 

disqualified. 

(b) Direct credit program. In the case 

of the direct credit program, the primary 

tier covered transaction would be the 

financing agreement between the USDA 

and the U.S. exporter. USDA purchases 

the exporter’s account receivable in a 

particular transaction pursuant to the 

financing agreement. On occasion, such 

transaction may contemplate a payment 

obligation of a U.S. or foreign bank to 

make the required payments. USDA 

would have to check the EPLS before 

entering into a financing agreement or 

accepting such a payor to ensure that 

the U.S. exporter or the bank, if any, 

that would be the primary tier 

participant is not excluded or 

disqualified. A transaction at the first 

lower tier might be a payment obligation 

of the importer to pay the exporter for 

the exported U.S. commodities that are 

covered by the financing agreement. 

Pursuant to § 417.215(a)(9), this 

nonprocurement transaction would not 

be a covered transaction. In addition, a 

transaction at the first lower tier might 

be a procurement contract that is 

expected to equal or exceed $25,000 

entered into between the U.S. exporter 

and the foreign importer for the U.S. 

commodities, the payment for which is 

covered by the financing agreement. 

Pursuant to § 417.220(d), this 

procurement contract would not be a 

covered transaction. However, pursuant 

to §§ 417.215(b) and 417.220(e), the U.S. 

exporter would be prohibited from 

entering into, at the first lower tier, an 

agreement with an importer (or 

intervening purchaser) or bank, or a 

procurement contract that is expected to 

equal or exceed $25,000 with an entity 

that appears on the EPLS as excluded or 

disqualified. 


cprice-sewell on DSK8KYBLC1PROD with RULES
29188 Federal Register / Vol. 75, No. 100 / Tuesday, May 25, 2010 / Rules and Regulations 

Subpart C—Responsibilities of 

Participants Regarding Transactions 

§ 417.332 What methods must I use to 

pass down requirements to participants in 

lower tier covered transactions with whom 

I intend to do business? 

You as a participant must include a 

term or condition in lower tier covered 

transactions requiring lower tier 

participants to comply with Subpart C 

of the OMB guidance in 2 CFR part 180, 

as supplemented by Subpart C of this 

part. 

Subpart D—Responsibilities of 

Department of Agriculture Officials 

Regarding Transactions 

§ 417.437 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 requires the participant to include 

a similar term or condition in lower tier 

covered transactions. 

Subpart E—[Reserved] 

Subpart F—[Reserved] 

Subpart G—Suspension 

§ 417.755 When will I know whether the 

USDA suspension is continued or 

terminated? 

The suspending official must make a 

written decision whether to continue, 

modify, or terminate your suspension 

within 45 days of closing the official 

record. The official record closes upon 

the suspending official’s receipt of final 

submissions, information and findings 

of fact, if any. The suspending official 

may extend that period for good cause. 

However, the record will remain open 

for the full 30 days, as called for in 

§ 180.725, even when you make a 

submission before the 30 days expire. 

Subpart H—Debarment 

§ 417.800 What are the USDA causes for 

debarment? 

A Federal agency may debar a person 

for— 

(a) Conviction of or civil judgment 

for— 

(1) Commission of fraud or a criminal 

offense in connection with obtaining, 

attempting to obtain, or performing a 

public or private agreement or 

transaction; 

(2) Violation of Federal or State 

antitrust statutes, including those 

proscribing price fixing between 

competitors, allocation of customers 

between competitors, and bid rigging; 

(3) Commission of embezzlement, 

theft, forgery, bribery, falsification or 

destruction of records, making false 

statements, tax evasion, receiving stolen 

property, making false claims, or 

obstruction of justice; or 

(4) Commission of any other offense 

indicating a lack of business integrity or 

business honesty that seriously and 

directly affects your present 

responsibility; 

(b) Violation of the terms of a public 

agreement or transaction so serious as to 

affect the integrity of an agency 

program, such as— 

(1) A willful failure to perform in 

accordance with the terms of one or 

more public agreements or transactions; 

(2) A history of failure to perform or 

of unsatisfactory performance of one or 

more public agreements or transactions; 

or 

(3) A willful violation of a statutory or 

regulatory provision or requirement 

applicable to a public agreement or 

transaction; 

(c) Any of the following causes: 

(1) A nonprocurement debarment by 

any Federal agency taken before March 

1, 1989, or a procurement debarment by 

any Federal agency taken pursuant to 48 

CFR part 9, subpart 9.4, before August 

25, 1995; 

(2) Knowingly doing business with an 

ineligible person, except as permitted 

under § 180.135; 

(3) Failure to pay a single substantial 

debt, or a number of outstanding debts 

(including disallowed costs and 

overpayments, but not including sums 

owed the Federal Government under the 

Internal Revenue Code) owed to any 

Federal agency or instrumentality, 

provided the debt is uncontested by the 

debtor or, if contested, provided that the 

debtor’s legal and administrative 

remedies have been exhausted; 

(4) Violation of a material provision of 

a voluntary exclusion agreement entered 

into under § 180.640 or of any 

settlement of a debarment or suspension 

action; or 

(5) Violation of the provisions of the 

Drug-Free Workplace Act of 1988 (41 

U.S.C. 701); or 

(d) Any other cause of so serious or 

compelling a nature that it affects your 

present responsibility. 

§ 417.865 How long may my debarment 

last? 

(a) If the debarring official decides to 

debar you, your period of debarment 

will be based on the seriousness of the 

cause(s) upon which your debarment is 

based. Generally, debarment should not 

exceed 3 years. However, if 

circumstances warrant, the debarring 

official may impose a longer period of 

debarment. 

(b) In determining the period of 

debarment, the debarring official may 

consider the factors in 2 CFR 180.860. 

If a suspension has preceded your 

debarment, the debarring official must 

consider the time you were suspended. 

(c) If the debarment is for a violation 

of the provisions of the Drug-Free 

Workplace Act of 1988, your period of 

debarment may not exceed 5 years. 

(d) The Secretary shall permanently 

debar from participation in USDA 

programs any individual, organization, 

corporation, or other entity convicted of 

a felony for knowingly defrauding the 

United States in connection with any 

program administered by USDA. 

(1) Reduction. If the Secretary 

considers it appropriate s/he may 

reduce a debarment under this 

subsection to a period of not less than 

10 years. 

(2) Exemption. A debarment under 

this subsection shall not apply with 

regard to participation in USDA 

domestic food assistance programs. For 

purposes of this paragraph, 

participation in a domestic food 

assistance program does not include 

acting as an authorized retail food store 

in the Supplemental Nutrition 

Assistance Program (SNAP), the Special 

Supplemental Nutrition Assistance 

Program for Women, Infants, and 

Children (WIC), or as a nonbeneficiary 

entity in any of the domestic food 

assistance programs. The programs 

include: 

(i) Special Nutrition Assistance 

Program, 7 U.S.C. 2011, et seq.; 

(ii) Food Distribution Program on 

Indian Reservations, 7 U.S.C. 2013(b); 

(iii) National School Lunch Program, 

42 U.S.C. 1751, et seq.; 

(iv) Summer Food Service Program for 

Children, 42 U.S.C. 1761; Child and 

Adult Care Food Program, 42 U.S.C. 

1766; 

(v) Special Milk Program for Children, 

42 U.S.C. 1772; School Breakfast 

Program, 42 U.S.C. 1773; 

(vi) Special Supplemental Nutrition 

Program for Women, Infants, and 

Children, 42 U.S.C. 1786; 

(vii) Commodity Supplemental Food 

Program, 42 U.S.C. 612c note; 

(viii) WIC Farmers Market Nutrition 

Program, 42 U.S.C. 1786; 

(ix) Senior Farmers’ Market Nutrition 

Program, 7 U.S.C. 3007; and 

(x) Emergency Food Assistance 

Program, 7 U.S.C. 7501, et. seq. 


cprice-sewell on DSK8KYBLC1PROD with RULES
Federal Register / Vol. 75, No. 100 / Tuesday, May 25, 2010 / Rules and Regulations 29189 

§ 417.870 When do I know if the USDA 

debarring official debars me? 

(a) The debarring official must make 

a written decision whether to debar 

within 45 days of closing the official 

record. The official record closes upon 

the debarring official’s receipt of final 

submissions, information and findings 

of fact, if any. The debarring official 

may extend that period for good cause. 

However, the record will remain open 

for the full 30 days, as called for in 

§ 180.820, even when you make a 

submission before the 30 days expire. 

(b) The debarring official sends you 

written notice, pursuant to § 180.615, 

that the official decided, either: 

(1) Not to debar you; or 

(2) To debar you. In this event, the 

notice: 

(i) Refers to the Notice of Proposed 

Debarment; 

(ii) Specifies the reasons for your 

debarment; 

(iii) States the period of your 

debarment, including the effective 

dates; and 

(iv) Advises you that your debarment 

is effective for covered transactions and 

contracts that are subject to the Federal 

Acquisition Regulation (48 CFR chapter 

1), throughout the Executive Branch of 

the Federal Government unless an 

agency head or an authorized designee 

grants an exception. 

Subpart I—Definitions 

§ 417.930 Debarring official (USDA 

supplement to governmentwide definition at 

2 CFR 180.930). 

(a) Debarring official means an agency 

official who is authorized to impose 

debarment. The debarring official is 

either: 

(1) The agency head; or 

(2) An official designated by the 

agency head. 

(b) The head of an organizational unit 

within USDA (e.g., Administrator, Food 

and Nutrition Service), who has been 

delegated authority in 7 CFR part 2 to 

carry out a covered transaction, is 

delegated authority to act as the 

debarring official in connection with 

such transaction. This authority to act as 

a debarring official may not be 

redelegated below the head of the 

organizational unit, except that, in the 

case of the Forest Service, the Chief may 

redelegate the authority to act as a 

debarring official to the Deputy Chief for 

the National Forest System or an 

Associate Deputy Chief for the National 

Forest System. 

§ 417.1010 Suspending official (USDA 

supplement to governmentwide definition at 

2 CFR 180.1010). 

(a) Suspending official means an 

agency official who is authorized to 

impose suspension. The suspending 

official is either: 

(1) The agency head; or 

(2) An official designated by the 

agency head. 

(b) The head of an organizational unit 

within USDA (e.g., Administrator, Food 

and Nutrition Service), who has been 

delegated authority in 7 CFR part 2 of 

this title to carry out a covered 

transaction, is delegated authority to act 

as the suspending official in connection 

with such transaction. This authority to 

act as a suspending official may not be 

redelegated below the head of the 

organizational unit, except that, in the 

case of the Forest Service, the Chief may 

redelegate the authority to act as a 

suspending official to the Deputy Chief 

for the National Forest System or an 

Associate Deputy Chief for the National 

Forest System. 

Subpart J—[Reserved] 

TITLE 7—AGRICULTURE 

■ 2. Remove 7 CFR part 3017. 

Dated: March 24, 2010. 

Issued at Washington, DC. 

Thomas J. Vilsack, 

Secretary. 

[FR Doc. 2010–11864 Filed 5–24–10; 8:45 am] 

BILLING CODE 3410–90–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

7 CFR Part 301 

[Docket No. APHIS-2009-0098] 

Emerald Ash Borer; Addition of 

Quarantined Areas in Kentucky, 

Michigan, Minnesota, New York, 

Pennsylvania, West Virginia, and 

Wisconsin 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Interim rule and request for 

comments. 

SUMMARY: We are amending the emerald 

ash borer regulations by adding portions 

of Kentucky, Michigan, Minnesota, New 

York, Pennsylvania, Wisconsin, and the 

entire State of West Virginia to the list 

of quarantined areas. This action will 

restrict the interstate movement of 

regulated articles from areas in the 

States of Kentucky, Michigan, 

Minnesota, New York, Pennsylvania, 

West Virginia, and Wisconsin. This 

interim rule is necessary to prevent the 

artificial spread of the emerald ash borer 

to noninfested areas of the United 

States. 

DATES: This interim rule is effective May 

25, 2010. We will consider all 

comments that we receive on or before 

July 26, 2010. 

ADDRESSES: You may submit comments 

by either of the following methods: 

∑ Federal eRulemaking Portal: Go to 

(http://www.regulations.gov/ 

fdmspublic/component/ 

main?main=DocketDetail&d=APHIS2009-0098) to submit or view comments 

and to view supporting and related 

materials available electronically. 

∑ Postal Mail/Commercial Delivery: 

Please send one copy of your comment 

to Docket No. APHIS-2009-0098, 

Regulatory Analysis and Development, 

PPD, APHIS, Station 3A-03.8, 4700 

River Road Unit 118, Riverdale, MD 

20737-1238. Please state that your 

comment refers to Docket No. APHIS2009-0098. 

Reading Room: You may read any 

comments that we receive on this 

docket in our reading room. The reading 

room is located in room 1141 of the 

USDA South Building, 14th Street and 

Independence Avenue SW., 

Washington, DC. Normal reading room 

hours are 8 a.m. to 4:30 p.m., Monday 

through Friday, except holidays. To be 

sure someone is there to help you, 

please call (202) 690-2817 before 

coming. 

Other Information: Additional 

information about APHIS and its 

programs is available on the Internet at 

(http://www.aphis.usda.gov). 

FOR FURTHER INFORMATION CONTACT: Mr. 

Paul Chaloux, Emergency and Domestic 

Programs, PPQ, APHIS, 4700 River Road 

Unit 134, Riverdale, MD 20737-1231; 

(301) 734-0917. 

SUPPLEMENTARY INFORMATION: 

Background 

The emerald ash borer (EAB) (Agrilus 

planipennis) is a destructive woodboring insect that attacks ash trees 

(Fraxinus spp., including green ash, 

white ash, black ash, and several 

horticultural varieties of ash). The 

insect, which is indigenous to Asia and 

known to occur in China, Korea, Japan, 

Mongolia, the Russian Far East, Taiwan, 

and Canada, eventually kills healthy ash 

trees after it bores beneath their bark 

and disrupts their vascular tissues. 

Although EAB adults have been 

known to fly as much as one-half mile 

from one tree to the next, the pest can 

also spread when infested nursery trees, 


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