60258 Federal Register / Vol. 75, No. 188 / Wednesday, September 29, 2010 / Rules and Regulations 

(c)(1) * * * 

(xviii) * * * This provision applies to all 

solicitations. 

(xix) 52.225–25, Prohibition on Engaging in 

Sanctioned Activities Relating to Iran— 

Certification. This provision applies to all 

solicitations. 

* * * * * 

■ 8. Amend section 52.212–3 by— 

■ a. Revising the date of the clause; 

■ b. Removing from the introductory 

text ‘‘through (m) of’’ and adding 

‘‘through (o) of’’ in its place; 

■ c. Removing from the first 

undesignated paragraph of (b)(2) 

‘‘through (n) of’’ and adding ‘‘through (o) 

of’’ in its place; and 

■ d. Adding paragraph (o). 

The revised and added text reads as 

follows: 

52.212–3 Offeror Representations and 

Certifications—Commercial Items. 

* * * * * 

OFFEROR REPRESENTATIONS AND 

CERTIFICATIONS—COMMERCIAL 

ITEMS (SEP 2010) 

* * * * * 

(o) Sanctioned activities relating to Iran. (1) 

Unless a waiver is granted or an exception 

applies as provided in paragraph (o)(2) of this 

provision, by submission of its offer, the 

offeror certifies that the offeror, or any person 

owned or controlled by the offeror, does not 

engage in any activities for which sanctions 

may be imposed under section 5 of the Iran 

Sanctions Act of 1996. 

(2) The certification requirement of 

paragraph (o)(1) of this provision does not 

apply if— 

(i) This solicitation includes a trade 

agreements certification (e.g., 52.212–3(g) or 

a comparable agency provision); and 

(ii) The offeror has certified that all the 

offered products to be supplied are 

designated country end products. 

* * * * * 

■ 9. Add section 52.225–25 to read as 

follows: 

52.225–25 Prohibition on Engaging in 

Sanctioned Activities Relating to Iran— 

Certification. 

As prescribed at 25.1103(e), insert the 

following provision: 

PROHIBITION ON ENGAGING IN 

SANCTIONED ACTIVITIES RELATING 

TO IRAN—CERTIFICATION (SEP 

2010) 

(a) Definition. 

Person— 

(1) Means— 

(i) A natural person; 

(ii) A corporation, business association, 

partnership, society, trust, financial 

institution, insurer, underwriter, guarantor, 

and any other business organization, any 

other nongovernmental entity, organization, 

or group, and any governmental entity 

operating as a business enterprise; and 

(iii) Any successor to any entity described 

in paragraph (1)(ii) of this definition; and 

(2) Does not include a government or 

governmental entity that is not operating as 

a business enterprise. 

(b) Certification. Except as provided in 

paragraph (c) of this provision or if a waiver 

has been granted in accordance with FAR 

25.703–2(d), by submission of its offer, the 

offeror certifies that the offeror, or any person 

owned or controlled by the offeror, does not 

engage in any activities for which sanctions 

may be imposed under section 5 of the Iran 

Sanctions Act of 1996. These sanctioned 

activities are in the areas of development of 

the petroleum resources of Iran, production 

of refined petroleum products in Iran, sale 

and provision of refined petroleum products 

to Iran, and contributing to Iran’s ability to 

acquire or develop certain weapons. 

(c) Exception for trade agreements. The 

certification requirement of paragraph (b) of 

this provision does not apply if— 

(1) This solicitation includes a trade 

agreements certification (e.g., 52.225–4, 

52.225–11 or comparable agency provision); 

and 

(2) The offeror has certified that all the 

offered products to be supplied are 

designated country end products or 

designated country construction material. 

(End of provision) 

[FR Doc. 2010–24165 Filed 9–28–10; 8:45 am] 

BILLING CODE 6820–EP–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 8, 12, 15, 42, and 49 

[FAC 2005–46; FAR Case 2008–016; Item 

III; Docket 2009–0032, Sequence 1] 

RIN 9000–AL45 

Federal Acquisition Regulation; 

Termination for Default Reporting 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council (the 

Councils) are issuing a final rule 

amending the Federal Acquisition 

Regulation (FAR) to establish 

procedures for contracting officers to 

provide contractor information, such as 

terminations for cause or default and 

defective cost or pricing data, into the 

Past Performance Information System 

(PPIRS) and Federal Awardee 

Performance and Integrity Information 

System (FAPIIS) module within PPIRS. 

This information will assist the 

contracting officer in making an 

informed source selection and award 

decision. Instructions on access to the 

FAPIIS module and how to input data 

into the FAPIIS module will be 

available at http://www.ppirs.gov/ 

fapiis.html. 

DATES: Effective Date: October 29, 2010. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Jeritta 

Parnell, Procurement Analyst, at (202) 

501–4082. For information pertaining to 

status or publication schedules, contact 

the Regulatory Secretariat at (202) 501– 

4755. Please cite FAC 2005–46, FAR 

case 2008–016. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The Councils have agreed on a final 

rule amending the FAR to revise the 

contractor performance information 

process. This case sets forth 

requirements for contracting officers to 

report defective cost or pricing data and 

terminations for cause or default into 

the FAPIIS module of the PPIRS. 

Evaluation of past performance 

information, especially terminations, 

manages risks associated with timely, 

effective, and cost efficient completion 

of contracts, a key objective of the 

President’s March 4, 2009, 

Memorandum on Government 

Contracting. 

The Councils published in the 

Federal Register at 74 FR 45394 on 

September 2, 2009, a proposed rule with 

request for comments. Four respondents 

submitted fifteen comments. 

B. Discussion of Public Comments 

The comments received were grouped 

under six general topics. A summary of 

these topics and a discussion of the 

comments and the changes made to the 

proposed rule as a result of those 

comments are provided below: 

1. Certification Regarding Responsibility 

Matters 

Comment: One respondent 

recommended deletion of the 

certification on terminations found in 

FAR clause 52.209–5, Certification 

Regarding Responsibility Matters, since 

the information concerning terminations 

will be available to contracting officers 

in PPIRS. The respondent further 

suggested that conforming deletions 

should also be made at FAR 52.204– 

8(c)(1)(v) and in the Online 

Representations and Certifications 

Application (ORCA) Web site. 

Response: The Councils disagree. 

PPIRS is the repository for 


erowe on DSK5CLS3C1PROD with RULES3
Federal Register / Vol. 75, No. 188 / Wednesday, September 29, 2010 / Rules and Regulations 60259 

determinations made by contracting 

officers. PPIRS is not a repository for 

certifications made by contractors when 

certifications are required. Executive 

order 12689 requires the inclusion of 

the certification at FAR 52.209–5. FAR 

9.105–1 also requires contracting 

officers to consider contractor 

certifications in making a contractor 

determination of responsibility. 

2. Contractor Rebuttal 

Comment: Two of the four 

respondents submitted comments 

requesting that the contractor be given 

an opportunity to post rebutting 

statements and additional information 

into PPIRS and this information be 

retained as long as the fundamental 

information is retained in PPIRS. 

Response: When termination records 

are posted in the FAPIIS module of 

PPIRS, contractors will have an 

opportunity to provide additional 

information as required by section 872 

of the Duncan Hunter National Defense 

Authorization Act of 2009 (Pub. L. 110– 

417). This process should not be 

confused with the rebuttal process for 

past performance information as 

specified in FAR 42.1503(b). 

3. Defective Pricing Information 

Comment: One respondent submitted 

two separate comments suggesting that 

defective pricing information not be 

included in PPIRS. 

Response: The Councils disagree. The 

Councils believe that defective cost or 

pricing data is relevant to other 

contractor performance information to 

be considered when evaluating 

contractor’s performance for award of 

contracts. However, the Councils did 

clarify in FAR 15.407–1(d) and 

42.1503(f) that the contracting officer 

shall report only the final 

determination. 

4. Relevance and Currency 

Comment: One respondent submitted 

two separate comments on relevance 

and currency. One comment stated that 

the FAR does not provide any guidance 

with respect to relevance when 

determining the relevance and currency 

of any termination for cause or default 

information in PPIRS. The second 

comment suggested that the rule explain 

how the contracting officer will evaluate 

defective pricing information recorded 

in PPIRS. 

Response: The Councils disagree with 

revising the rule. Relevancy is specific 

to the instant contract and based on the 

circumstances of contract performance. 

Contracting officers are responsible for 

making a determination of the relevancy 

of the information. The Councils will 

work with the Federal Acquisition 

Institute and the Defense Acquisition 

University to develop guidance and 

training for contracting officials on the 

proper use of the reported information. 

5. Removal of Detrimental Information 

Comment: Two respondents 

submitted comments concerning 

removal of detrimental information from 

PPIRS. One comment suggested that the 

Government remove unfavorable 

information from PPIRS should it no 

longer be valid. For example, when 

terminations for cause or default are 

converted to termination for 

convenience or withdrawn the 

contracting officer should remove from 

PPIRS any reference to the termination 

for default. The respondent 

recommended changing the language at 

FAR 8.406–8 and 12.403. 

Response: The Councils disagree that 

a change to the rule is necessary. The 

language at FAR 8.406–4(e), 

12.403(c)(4), 15.407–1, and 49.402–8 

states that the contracting officer shall 

report a subsequent withdrawal or a 

conversion to a termination for 

convenience in accordance with FAR 

42.1503(f). 

Comment: Another respondent 

suggested the Government should be 

held to the same high standard of record 

keeping as no system is infallible. 

Determination of malice and intent 

should be made before contract 

termination occurs. Follow-up systems 

should be in place to make sure that 

when an error occurs and is corrected 

that the Government does hold up its 

side of the bargain and remove 

detrimental information. 

Response: Comment noted. 

Throughout the revised coverage, 

language was added that in the event a 

termination for cause is subsequently 

converted to a termination for 

convenience, or otherwise withdrawn, 

the contracting officer shall ensure that 

a notice of the conversion or withdrawal 

is reported in accordance with FAR 

42.1503(f). 

6. Timing of Posting of Defective Pricing 

Information 

Five comments were received from 

two respondents regarding the timing 

and posting of defective pricing 

information. 

Comment: The respondents believe 

that it is not clear that the intent of this 

language is to post this information 

before or after a defective pricing case 

has been resolved. 

Response: The Councils agree. 

Language was clarified at FAR 15.407– 

1 to add the word ‘‘final’’ before 

determination in the coverage. In 

addition, a requirement was added to 

update PPIRS. 

Comment: One respondent expressed 

concern that posting within 10 days is 

not likely to happen. 

Response: The Councils disagree. 

There were no objections to the 10-day 

timeframe made by the agencies during 

the proposed rule comment period. The 

10-day timeframe was changed to 3 

working days to be synonymous with 

the requirements of FAPIIS. 

Summary of Major Changes to the 

Proposed Rule 

• New coverage at FAR 8.406–8 was 

moved to FAR 8.406–4(e). 

• Language was clarified at FAR 

15.407–1 to add ‘‘contracting officer’s 

final’’ before ‘‘determination’’ in the 

coverage. A requirement was added to 

update PPIRS. 

• In FAR 42.1503, the 10-day 

timeframe was changed to 3 working 

days to be synonymous with the 

requirements of FAPIIS. Language was 

clarified on what a ‘‘conversion’’ is. 

Language was added to address agency 

focal points. 

This is a significant regulatory action 

and, therefore, was subject to review 

under section 6(b) of Executive Order 

12866, Regulatory Planning and Review, 

dated September 30, 1993. This rule is 

not a major rule under 5 U.S.C. 804. 

B. Regulatory Flexibility Act 

The Department of Defense, the 

General Services Administration, and 

the National Aeronautics and Space 

Administration certify that this final 

rule will not have a significant 

economic impact on a substantial 

number of small entities within the 

meaning of the Regulatory Flexibility 

Act, 5 U.S.C. 601, et seq., because the 

rule does not impose any additional 

requirements on small entities. The 

collection and reporting of past 

performance information is an internal 

process to the Government. The rule 

merely puts into effect the internal 

requirement that contracting officers 

report defective cost or pricing data and 

terminations for cause or default into 

PPIRS. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

not apply because the changes to the 

FAR do not impose information 

collection requirements that require the 

approval of the Office of Management 

and Budget under 44 U.S.C. chapter 35, 

et seq. 

List of Subjects in 48 CFR Parts 8, 12, 

15, 42, and 49 

Government procurement. 


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60260 Federal Register / Vol. 75, No. 188 / Wednesday, September 29, 2010 / Rules and Regulations 

Dated: September 21, 2010. 

Edward Loeb, 

Director, Acquisition Policy Division. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR parts 8, 12, 15, 42, and 

49 as set forth below: 

■ 1. The authority citation for 48 CFR 

parts 8, 12, 15, 42, and 49 continues to 

read as follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

Part 8—REQUIRED SOURCES OF 

SUPPLIES AND SERVICES 

■ 2. Amend section 8.406–4 by adding 

paragraph (e) to read as follows: 

8.406–4 Termination for cause. 

* * * * * 

(e) Reporting. An ordering activity 

contracting officer, in accordance with 

agency procedures, shall ensure that 

information related to termination for 

cause notices and any amendments are 

reported. In the event the termination 

for cause is subsequently converted to a 

termination for convenience, or is 

otherwise withdrawn, the contracting 

officer shall ensure that a notice of the 

conversion or withdrawal is reported. 

All reporting shall be in accordance 

with 42.1503(f). 

Part 12—ACQUISITION OF 

COMMERCIAL ITEMS 

■ 3. Amend section 12.403 by adding 

paragraph (c)(4) to read as follows: 

12.403 Termination. 

* * * * * 

(c) * * * 

(4) The contracting officer, in 

accordance with agency procedures, 

shall ensure that information related to 

termination for cause notices and any 

amendments are reported. In the event 

the termination for cause is 

subsequently converted to a termination 

for convenience, or is otherwise 

withdrawn, the contracting officer shall 

ensure that a notice of the conversion or 

withdrawal is reported. All reporting 

shall be in accordance with 42.1503(f). 

* * * * * 

PART 15—CONTRACTING BY 

NEGOTIATION 

■ 4. Amend section 15.407–1 by 

revising paragraph (d) to read as 

follows: 

15.407–1 Defective cost or pricing data. 

* * * * * 

(d) For each advisory audit received 

based on a postaward review that 

indicates defective pricing, the 

contracting officer shall make a 

determination as to whether or not the 

data submitted were defective and 

relied upon. Before making such a 

determination, the contracting officer 

should give the contractor an 

opportunity to support the accuracy, 

completeness, and currency of the data 

in question. The contracting officer shall 

prepare a memorandum documenting 

both the determination and any 

corrective action taken as a result. The 

contracting officer shall send one copy 

of this memorandum to the auditor and, 

if the contract has been assigned for 

administration, one copy to the 

administrative contracting officer 

(ACO). A copy of the memorandum or 

other notice of the contracting officer’s 

determination shall be provided to the 

contractor. When the contracting officer 

determines that the contractor 

submitted defective cost or pricing data, 

the contracting officer, in accordance 

with agency procedures, shall ensure 

that information relating to the 

contracting officer’s final determination 

is reported in accordance with 

42.1503(f). Agencies shall ensure 

updated information that changes a 

contracting officer’s prior final 

determination is reported into the 

FAPIIS module of PPIRS in the event of 

a— 

(1) Contracting officer’s decision in 

accordance with the Contract Disputes 

Act; 

(2) Board of Contract Appeals 

decision; or 

(3) Court decision. 

* * * * * 

PART 42—CONTRACT 

ADMINISTRATION AND AUDIT 

SERVICES 

■ 5. Amend section 42.1502 by adding 

paragraph (i) to read as follows: 

42.1502 Policy. 

* * * * * 

(i) Agencies shall promptly report 

other contractor information in 

accordance with 42.1503(f). 

■ 6. Amend section 42.1503 by revising 

paragraph (a) and adding paragraph (f) 

to read as follows: 

42.1503 Procedures. 

(a) Agency procedures for the past 

performance evaluation system shall 

generally provide for input to the 

evaluations from the technical office, 

contracting office and, where 

appropriate, end users of the product or 

service. Agency procedures shall 

identify those responsible for preparing 

interim and final evaluations. Those 

individuals identified may obtain 

information for the evaluation of 

performance from the program office, 

administrative contracting office, audit 

office, end users of the product or 

service, and any other technical or 

business advisor, as appropriate. Interim 

evaluations shall be prepared as 

required, in accordance with agency 

procedures. 

* * * * * 

(f) Other contractor information. (1) 

Agencies shall ensure information is 

reported in the FAPIIS module of PPIRS 

within 3 working days after a 

contracting officer— 

(i) Issues a final determination that a 

contractor has submitted defective cost 

or pricing data; 

(ii) Makes a subsequent change to the 

final determination concerning 

defective cost or pricing data pursuant 

to 15.407–1(d); 

(iii) Issues a final termination for 

cause or default notice; or 

(iv) Makes a subsequent withdrawal 

or a conversion of a termination for 

default to a termination for 

convenience. 

(2) Agencies shall establish focal 

points and register users to report data 

into the FAPIIS module of PPIRS 

(available at http:// 

www.cpars.csd.disa.mil, then select 

FAPIIS). Instructions on reporting are 

available at http://www.ppirs.gov and at 

http://www.ppirs.gov/fapiis.html. 

PART 49—TERMINATION OF 

CONTRACTS 

■ 7. Add section 49.402–8 to read as 

follows: 

49.402–8 Reporting information. 

The contracting officer, in accordance 

with agency procedures, shall ensure 

that information relating to the 

termination for default notice and a 

subsequent withdrawal or a conversion 

to a termination for convenience is 

reported in accordance with 42.1503(f). 

[FR Doc. 2010–24214 Filed 9–28–10; 8:45 am] 

BILLING CODE 6820–EP–P 


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