31564 Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 

meets the criteria specified in 6 U.S.C. 

395(b), applied in accordance with the 

rules and definitions of 6 U.S.C. 395(c). 

9.108–2 Relationship with the Internal 

Revenue Code and Treasury regulations. 

(a) Inverted domestic corporations are 

covered not only in the Department of 

Homeland Security statute at 6 U.S.C. 

395, but also are similarly covered in 

the Internal Revenue Code at 26 U.S.C. 

7874. A foreign corporation is treated as 

an inverted domestic corporation for 

U.S. Federal income tax purposes, 

rather than as a foreign corporation, if— 

(1) At least 80 percent (80%) of the 

stock is now held by former 

shareholders of the domestic 

corporation or partners of the domestic 

partnership; and 

(2) The foreign entity plus companies 

connected to it by 50 percent (50%) or 

more ownership do not have substantial 

business activities in the foreign 

country. 

(b) A foreign corporation that is 

treated as an inverted domestic 

corporation for U.S. Federal income tax 

purposes, is also treated as one for 

purposes of this section. 

(c) A foreign entity that escapes the 

tax consequence of 26 U.S.C. 7874 only 

because the inversion transactions were 

completed on or before the March 4, 

2003, date in section 7874, is 

nevertheless treated as an inverted 

domestic corporation for purposes of 6 

U.S.C. 395 (which does not have a 

limiting date) and therefore also for 

purposes of this section. 

9.108–3 Prohibition. 

(a) Section 743 of Division D of the FY 

2009 Omnibus Appropriations Act 

(Public Law 111–8) prohibits the use of 

2009 appropriated funds for contracting 

with any foreign incorporated entity 

that is treated as an inverted domestic 

corporation, or with a subsidiary of such 

a corporation. The same restriction was 

also contained in the Fiscal Year 2006 

through 2008 appropriations acts. In 

order to be eligible for contract award 

when using Fiscal Year 2006 through 

Fiscal Year 2009 funds, an offeror must 

represent that it is not an inverted 

domestic corporation or subsidiary. Any 

offeror that cannot so represent is 

ineligible for award of a contract using 

such appropriated funds. 

(b) Contracting officers should 

rigorously examine circumstances 

known to them that would lead a 

reasonable business person to question 

the contractor self—certification and, 

after consultation with legal counsel, 

take appropriate action where that 

questionable self-certification cannot be 

verified. 

9.108–4 Waiver. 

Any agency head may waive the 

requirement of subsection 9.108–3 for a 

specific contract if the agency head 

determines in writing that the waiver is 

required in the interest of national 

security, documents the determination, 

and reports it to the Congress. 

9.108–5 Solicitation provision. 

When using funds appropriated in 

Fiscal Year 2006 through Fiscal Year 

2009, the contracting officer shall 

include the provision at 52.209–2, 

Prohibition on Contracting with 

Inverted Domestic Corporations— 

Representation, in each solicitation 

issued after July 1, 2009 for the 

acquisition of products or services (see 

FAR 52.212–3 for solicitations issued 

under Part 12), unless waived in 

accordance with FAR 9.108–4. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

■ 5. Add section 52.209–2 to read as 

follows: 

52.209–2 Prohibition on Contracting with 

Inverted Domestic Corporations— 

Representation. 

As prescribed in 9.108–5, insert the 

following provision: 

PROHIBITION ON CONTRACTING WITH 

INVERTED DOMESTIC CORPORATIONS— 

REPRESENTATION (JUL 2009) 

(a) Definition. Inverted domestic 

corporation means a foreign incorporated 

entity which is treated as an inverted 

domestic corporation under 6 U.S.C. 395(b), 

i.e., a corporation that used to be 

incorporated in the United States, or used to 

be a partnership in the United States, but 

now is incorporated in a foreign country, or 

is a subsidiary whose parent corporation is 

incorporated in a foreign country, that meets 

the criteria specified in 6 U.S.C. 395(b), 

applied in accordance with the rules and 

definitions of 6 U.S.C. 395(c). 

(b) Relation to Internal Revenue Code. A 

foreign entity that is treated as an inverted 

domestic corporation for purposes of the 

Internal Revenue Code at 26 U.S.C. 7874 (or 

would be except that the inversion 

transactions were completed on or before 

March 4, 2003), is also an inverted domestic 

corporation for purposes of 6 U.S.C. 395 and 

for this solicitation provision (see FAR 

9.108). 

(c) Representation. By submission of its 

offer, the offeror represents that it is not an 

inverted domestic corporation and is not a 

subsidiary of one. 

(End of provision) 

■ 6. Amend section 52.212–3 by— 

■ a. Revising the date of the provision; 

■ b. In paragraph (a), adding, in 

alphabetical order, the definition 

‘‘Inverted domestic corporation’’; 

■ c. Removing from paragraph (b)(2) ‘‘(c) 

through (m)’’ and adding ‘‘(c) through 

(n)’’ in its place; 

■ d. Adding paragraph (n). 

The revised and added text reads as 

follows: 

52.212–3 Offeror Representations and 

Certifications—Commercial Items. 

* * * * * 

OFFEROR REPRESENTATIONS AND 

CERTIFICATIONS—COMMERCIAL ITEMS 

(JUL 2009) 

* * * * * 

(a) * * * 

* * * * * 

Inverted domestic corporation means a 

foreign incorporated entity which is treated 

as an inverted domestic corporation under 6 

U.S.C. 395(b), i.e., a corporation that used to 

be incorporated in the United States, or used 

to be a partnership in the United States, but 

now is incorporated in a foreign country, or 

is a subsidiary whose parent corporation is 

incorporated in a foreign country, that meets 

the criteria specified in 6 U.S.C. 395(b), 

applied in accordance with the rules and 

definitions of 6 U.S.C. 395(c). 

* * * * * 

(n) Prohibition on Contracting with 

Inverted Domestic Corporations. (1) Relation 

to Internal Revenue Code. A foreign entity 

that is treated as an inverted domestic 

corporation for purposes of the Internal 

Revenue Code at 26 U.S.C. 7874 (or would 

be except that the inversion transactions 

were completed on or before March 4, 2003), 

is also an inverted domestic corporation for 

purposes of 6 U.S.C. 395 and for this 

solicitation provision (see FAR 9.108). 

(2) Representation. By submission of its 

offer, the offeror represents that it is not an 

inverted domestic corporation and is not a 

subsidiary of one. 

* * * * * 

[FR Doc. E9–15434 Filed 6–30–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Part 9 

[FAC 2005–34; FAR Case 2008–028; Item 

III; Docket 2009–0021; Sequence 1] 

RIN 9000–AL33 

Federal Acquisition Regulation; FAR 

Case 2008–028, Role of Interagency 

Committee on Debarment and 

Suspension 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

Federal Register / Vol. 74, No. 125 / Wednesday, July 1, 2009 / Rules and Regulations 31565 

ACTION: Final rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) have agreed on a final rule 

amending the Federal Acquisition 

Regulation (FAR) to implement Section 

873(a)(1) and (2) of the National Defense 

Authorization Act for Fiscal Year 2009. 

Section 873(a)(1) and (2) clarifies the 

role of the Interagency Committee on 

Debarment and Suspension when more 

than one agency has an interest in the 

debarment or suspension of a 

contractor. 

DATES: Effective Date: July 31, 2009. 

FOR FURTHER INFORMATION CONTACT: For 

clarification of content, contact Mr. 

Edward Loeb, Director, at (202) 501– 

0650. The TTY Federal Relay Number 

for further information is 1–800–877– 

8973. For information pertaining to 

status or publication schedules, contact 

the Regulatory Secretariat at (202) 501– 

4755. Please cite FAC 2005–34, FAR 

case 2008–028. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This case amends FAR 9.402 to 

implement Section 873(a)(1) and (2) of 

the Duncan Hunter National Defense 

Authorization Act of 2009 (Public Law 

110–417), which was enacted on 

October 14, 2008. Section 873 of the Act 

defines the role of the Interagency 

Committee on Debarment and 

Suspension. Among other 

responsibilities, the Interagency 

Committee on Debarment and 

Suspension is authorized to resolve 

issues regarding the agency that will 

have lead responsibility in initiating a 

suspension or debarment proceeding. 

The Committee will also coordinate 

actions among interested agencies with 

respect to such action. 

This is not a significant regulatory 

action and, therefore, was not 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 Regulatory Flexibility Act does 

not apply to this rule. This final rule 

does not constitute a significant FAR 

revision within the meaning of FAR 

1.501 and Public Law 98–577, and 

publication for public comments is not 

required. However, the Councils will 

consider comments from small entities 

concerning the affected FAR Part 9 in 

accordance with 5 U.S.C. 610. Interested 

parties must submit such comments 

separately and should cite 5 U.S.C. 601, 

et seq. (FAC 2005–34, FAR case 2008– 

028), in all correspondence. 

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 Part 9 

Government procurement. 

Dated: June 25, 2009. 

Al Matera, 

Director, Office of Acquisition Policy. 

■ Therefore, DoD, GSA, and NASA 

amend 48 CFR part 9 as set forth below: 

PART 9—CONTRACTOR 

QUALIFICATIONS 

■ 1. The authority citation for 48 CFR 

part 9 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). 

■ 2. Amend section 9.402 by revising 

paragraph (c), redesignating paragraph 

(d) as paragraph (e), and adding a new 

paragraph (d) to read as follows: 

9.402 Policy. 

* * * * * 

(c) Agencies are encouraged to 

establish methods and procedures for 

coordinating their debarment or 

suspension actions. 

(d) When more than one agency has 

an interest in the debarment or 

suspension of a contractor, the 

Interagency Committee on Debarment 

and Suspension, established under 

Executive Order 12549, and authorized 

by Section 873 of the National Defense 

Authorization Act for Fiscal Year 2009 

(Pub. L. 110–417), shall resolve the lead 

agency issue and coordinate such 

resolution among all interested agencies 

prior to the initiation of any suspension, 

debarment, or related administrative 

action by any agency. 

* * * * * 

[FR Doc. E9–15431 Filed 6–30–09; 8:45 am] 

BILLING CODE 6820–EP–S 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Chapter 1 

[Docket FAR 2009–0002, Sequence 5] 

Federal Acquisition Regulation; 

Federal Acquisition Circular 2005–32; 

Small Entity Compliance Guide 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Small Entity Compliance Guide. 

SUMMARY: This document is issued 

under the joint authority of the 

Secretary of Defense, the Administrator 

of General Services and the 

Administrator of the National 

Aeronautics and Space Administration. 

This Small Entity Compliance Guide has 

been prepared in accordance with 

Section 212 of the Small Business 

Regulatory Enforcement Fairness Act of 

1996. It consists of a summary of rules 

appearing in Federal Acquisition 

Circular (FAC) 2005–34 which amend 

the FAR. Interested parties may obtain 

further information regarding these 

rules by referring to FAC 2005–34 

which precedes this document. These 

documents are also available via the 

Internet at http://www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Hada Flowers, FAR Secretariat, (202) 

208–7282. For clarification of content, 

contact the analyst whose name appears 

in the table below. 

LIST OF RULES IN FAC 2005–34 

Item Subject FAR case Analyst 

I ............ Contractor Performance Information ............................................................................................... 2006-022 Parnell. 

II ........... Prohibition on Contracting with Inverted Domestic Corporations (Interim) ..................................... 2008-009 Murphy. 

III .......... Role of Interagency Committee on Debarment and Suspension .................................................... 2008-028 Loeb.