[Federal Register: March 20, 2002 (Volume 67, Number 54)]
[Rules and Regulations]
[Page 13057-13063]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr02-25]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 3, 4, 9, 15, and 52
[FAC 2001-06; FAR Case 1998-024; Item IV]
RIN 9000-AI61
Federal Acquisition Regulation; Procurement Integrity Rewrite
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
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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 rewrite
procurement integrity coverage in plain language.
DATES: Effective Date: April 4, 2002.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS
Building, Washington, DC 20405, (202) 501-4755, for information
pertaining to status or publication schedules. For clarification of
content, contact Mr. Ralph De Stefano, Procurement Analyst, at (202)
501-1758. Please cite FAC 2001-06, FAR case 1998-024.
SUPPLEMENTARY INFORMATION:
A. Background
Section 27 of the Office of Federal Procurement Policy Act (41
U.S.C. 423) is more commonly referred to as the Procurement Integrity
Act (hereinafter referred to as the Act). FAR 3.104 implements
prohibitions, restrictions, and other requirements of the Act that are
placed on certain agency officials that participate in Federal agency
procurements.
Other statutes and regulations also govern the conduct of
Government employees. In particular, the Office of Government Ethics
regulations provide interpretive guidance on the prohibitions in 18
U.S.C. 207 and 208 that also apply to Government employees that
participate in procurement activities during the conduct of a Federal
agency procurement. While FAR 3.104 does not implement these other
statutes and regulations, it is very important for agency employees to
be aware, not only of the prohibitions and restrictions in the Act, but
also those contained in other statutes and regulations that deal with
the same or related prohibited conduct. Criminal and administrative
penalties can result if an employee violates the restrictions or
otherwise engages in prohibited conduct.
It became apparent that we could improve FAR 3.104 by reorganizing
and simplifying the text. Moreover, we clarify 3.104 to alert agency
officials that even if their participation does not meet the definition
in FAR 3.104 of participating personally and substantially, they are
precluded from participating in a Federal agency procurement if they
engage in certain conduct otherwise prohibited by other statutes and
regulations. We added this guidance in FAR 3.104-2(b), 3.104-3(c), and
3.104-5(a) to alert these agency officials that they should seek advice
from agency ethics officials before engaging in certain activities that
could have serious consequences, including
[[Page 13058]]
criminal prosecution. These revisions to FAR 3.104 do not change either
the requirements of the Act or change, in any manner, who is covered
by, or the activities covered in, Office of Government Ethics
regulations interpreting conflict of interest statutes.
To avoid possible violations of 18 U.S.C. 208, agency employees
need to be aware that while their participation in a Federal agency
procurement may not be considered ``participating personally and
substantially in a Federal agency procurement'' for purposes of certain
requirements in the Act, nevertheless, there will be instances where
the employee will be considered to be participating personally and
substantially for purposes of 18 U.S.C. 208. We have added these
revisions to FAR 3.104 to alert agency officials that, while
participating in a Federal agency procurement, they must be aware of
and comply with the applicable disqualification requirements of 5 CFR
2635.604 and 2635.606.
These revisions also may assist agency ethics officials in advising
agency officials participating in a Federal agency procurement. Certain
conduct by an agency official during the conduct of a Federal agency
procurement requires the official's disqualification from participation
irrespective of whether or not the official's participation meets the
definition of participating personally and substantially for purposes
of the Act.
A proposed rule was published in the Federal Register at 65 FR
16758, March 29, 2000. Seven sources submitted comments in response to
the proposed rule. All comments were considered in the development of
the final rule. A summary of the substantive comments is provided.
Comment: Additional clarification should be added that
merely signing appointment letters for source selection evaluation
panels, boards is not ``participating personally and substantially
participation in a Federal agency procurement.''
Response: Not accepted. The definition of ``participating
personally and substantially in a Federal agency procurement'' is
already quite detailed and more clarification is unnecessary.
Comment: The standards identified in FAR 3.104-3(d)
concerning prohibition on a former official's acceptance of
compensation from a contractor that has been awarded a competitive or
sole source contract, as an employee, officer, director, or consultant
of the contractor should be made more restrictive.
Response: Not accepted. The regulatory coverage tracks the
statutory language.
Comment: A definition of ``must'' should be added.
Response: The definition of ``must'' was added to FAR 2.101 under
another final rule and is currently in the FAR.
Comment: Does the definition of ``source selection
information'' include quotations in FAR Subpart 13.5, Test Program for
Certain Commercial Items, that are over the simplified acquisition
threshold, normally over $100,000.
Response: No. Bids and proposals are addressed in the Act. Bids and
proposals are terms of art to distinguish methods of contracting (bids
under sealed bidding and proposals under negotiation). A quotation is
not a bid or a proposal.
Comment: The references to ``procurement'' in the rule
should be changed to read ``acquisition.''
Response: Not accepted. The Act and its implementation in FAR 3.104
apply only to a ``Federal agency procurement.'' The term ``Federal
agency procurement'' is defined in both the Act and FAR 3.104. The
definition is different from the definition of ``acquisition'' in FAR
2.101.
Comment: Head of the contracting activity delegation
restrictions in FAR 3.104-7(g) should be relaxed.
Response: Not accepted. The issues being addressed are very
significant, i.e., violations or possible violations of the Act;
therefore, relaxation of the restriction is not appropriate.
Comment: Informing acquisition employees that some post-
employment restrictions are not tied to ``personal and substantial
participation'' should be added in the rule.
Response: Accepted. See discussion under Supplementary Information,
Background, above.
Comment: Suggest retaining current FAR definition at FAR
3.104-1, ``Participating personally and substantially in a Federal
agency procurement,'' as applied to the OMB Circular A-76, paragraph
(4). The proposed rule contains an expanded definition.
Response: Accepted. The 1996 amendments to the Act limit the
application of the post-employment restrictions to designated
positions; therefore, the participation of most personnel in these
activities would not place them at risk of losing any right of first
refusal. See paragraph (4)(iv) of FAR 3.104-1, ``Participating
substantially''.
Comment: Clarify what constitutes a ``contact'' under the
Act. Response: An explanation of ``contact'' was added to the rule at
FAR 3.104-3(c)(2). The addition gives the suggested guidance.
Comment: A clarification that employment contacts through
agents are subject to disqualification needs to be added at FAR 3.104-
5(a).
Response: Accepted. The added language makes a clear statement that
an employment contact through agents is subject to disqualification
under this final rule.
Comment: The number of individuals required to receive the
disqualification notice directly from the agency official disqualifying
herself/himself should be reduced.
Response: Partially accepted. The requirement for a notice of
disqualification to the head of the contracting activity was deleted,
but the requirements for notice to the contracting officer, source
selection official, and immediate supervisor were retained. In an
attempt to reduce the number of officials required to be notified, it
was determined that the head of the contracting activity could be
deleted. The Act places an affirmative responsibility on the agency
official to disqualify herself/himself.
Comment: Clarify that satisfying the requirement of 18
U.S.C 208 does not automatically authorize the disqualified official to
resume participation in the procurement.
Response: The wording of the first sentence of 3.104-5(c) was
revised to clarify that the conditions for resumption of participation
in 3.104-3(c)(1)(ii) are statutorily mandated and that reinstatement is
not necessarily automatic after those conditions have been met.
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 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 clarification only
applies to individuals that are Government officials.
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
[[Page 13059]]
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 2, 3, 4, 9, 15, and 52
Government procurement.
Dated: March 6, 2002.
Al Matera,
Director, Acquisition Policy Division.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 3, 4, 9, 15,
and 52 as set forth below:
1. The authority citation for 48 CFR parts 2, 3, 4, 9, 15, and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 2--DEFINITIONS OF WORDS AND TERMS
2. Amend section 2.101 by adding, in alphabetical order, the
definitions ``Offeror'' and ``Source selection information'' to read as
follows:
2.101 Definitions.
* * * * *
Offeror means offeror or bidder.
* * * * *
Source selection information means any of the following information
that is prepared for use by an agency for the purpose of evaluating a
bid or proposal to enter into an agency procurement contract, if that
information has not been previously made available to the public or
disclosed publicly:
(1) Bid prices submitted in response to an agency invitation for
bids, or lists of those bid prices before bid opening.
(2) Proposed costs or prices submitted in response to an agency
solicitation, or lists of those proposed costs or prices.
(3) Source selection plans.
(4) Technical evaluation plans.
(5) Technical evaluations of proposals.
(6) Cost or price evaluations of proposals.
(7) Competitive range determinations that identify proposals that
have a reasonable chance of being selected for award of a contract.
(8) Rankings of bids, proposals, or competitors.
(9) Reports and evaluations of source selection panels, boards, or
advisory councils.
(10) Other information marked as ``Source Selection Information--
See FAR 2.101 and 3.104'' based on a case-by-case determination by the
head of the agency or the contracting officer, that its disclosure
would jeopardize the integrity or successful completion of the Federal
agency procurement to which the information relates.
* * * * *
PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
3. Remove sections 3.104-10 and 3.104-11 and revise sections 3.104
through 3.104-9 to read as follows:
3.104 Procurement integrity.
3.104-1 Definitions.
As used in this section--
Agency ethics official means the designated agency ethics official
described in 5 CFR 2638.201 or other designated person, including--
(1) Deputy ethics officials described in 5 CFR 2638.204, to whom
authority under 3.104-6 has been delegated by the designated agency
ethics official; and
(2) Alternate designated agency ethics officials described in 5 CFR
2638.202(b).
Compensation means wages, salaries, honoraria, commissions,
professional fees, and any other form of compensation, provided
directly or indirectly for services rendered. Compensation is
indirectly provided if it is paid to an entity other than the
individual, specifically in exchange for services provided by the
individual.
Contractor bid or proposal information means any of the following
information submitted to a Federal agency as part of or in connection
with a bid or proposal to enter into a Federal agency procurement
contract, if that information has not been previously made available to
the public or disclosed publicly:
(1) Cost or pricing data (as defined by 10 U.S.C. 2306a(h)) with
respect to procurements subject to that section, and section 304A(h) of
the Federal Property and Administrative Services Act of 1949 (41 U.S.C.
254b(h)), with respect to procurements subject to that section.
(2) Indirect costs and direct labor rates.
(3) Proprietary information about manufacturing processes,
operations, or techniques marked by the contractor in accordance with
applicable law or regulation.
(4) Information marked by the contractor as ``contractor bid or
proposal information'' in accordance with applicable law or regulation.
(5) Information marked in accordance with 52.215-1(e).
Decision to award a subcontract or modification of subcontract
means a decision to designate award to a particular source.
Federal agency procurement means the acquisition (by using
competitive procedures and awarding a contract) of goods or services
(including construction) from non-Federal sources by a Federal agency
using appropriated funds. For broad agency announcements and small
business innovative research programs, each proposal received by an
agency constitutes a separate procurement for purposes of the Act.
In excess of $10,000,000 means--
(1) The value, or estimated value, at the time of award, of the
contract, including all options;
(2) The total estimated value at the time of award of all orders
under an indefinite-delivery, indefinite-quantity, or requirements
contract;
(3) Any multiple award schedule contract, unless the contracting
officer documents a lower estimate;
(4) The value of a delivery order, task order, or an order under a
Basic Ordering Agreement;
(5) The amount paid or to be paid in settlement of a claim; or
(6) The estimated monetary value of negotiated overhead or other
rates when applied to the Government portion of the applicable
allocation base.
Official means--
(1) An officer, as defined in 5 U.S.C. 2104;
(2) An employee, as defined in 5 U.S.C. 2105;
(3) A member of the uniformed services, as defined in 5 U.S.C.
2101(3); or
(4) A special Government employee, as defined in 18 U.S.C. 202.
Participating personally and substantially in a Federal agency
procurement means--
(1) Active and significant involvement of an official in any of the
following activities directly related to that procurement:
(i) Drafting, reviewing, or approving the specification or
statement of work for the procurement.
(ii) Preparing or developing the solicitation.
(iii) Evaluating bids or proposals, or selecting a source.
(iv) Negotiating price or terms and conditions of the contract.
(v) Reviewing and approving the award of the contract.
(2) Participating personally means participating directly, and
includes the direct and active supervision of a subordinate's
participation in the matter.
(3) Participating substantially means that the official's
involvement is of significance to the matter. Substantial participation
requires more than official responsibility, knowledge, perfunctory
[[Page 13060]]
involvement, or involvement on an administrative or peripheral issue.
Participation may be substantial even though it is not determinative of
the outcome of a particular matter. A finding of substantiality should
be based not only on the effort devoted to a matter, but on the
importance of the effort. While a series of peripheral involvements may
be insubstantial, the single act of approving or participating in a
critical step may be substantial. However, the review of procurement
documents solely to determine compliance with regulatory,
administrative, or budgetary procedures, does not constitute
substantial participation in a procurement.
(4) Generally, an official will not be considered to have
participated personally and substantially in a procurement solely by
participating in the following activities:
(i) Agency-level boards, panels, or other advisory committees that
review program milestones or evaluate and make recommendations
regarding alternative technologies or approaches for satisfying broad
agency-level missions or objectives.
(ii) The performance of general, technical, engineering, or
scientific effort having broad application not directly associated with
a particular procurement, notwithstanding that such general, technical,
engineering, or scientific effort subsequently may be incorporated into
a particular procurement.
(iii) Clerical functions supporting the conduct of a particular
procurement.
(iv) For procurements to be conducted under the procedures of OMB
Circular A-76, participation in management studies, preparation of in-
house cost estimates, preparation of ``most efficient organization''
analyses, and furnishing of data or technical support to be used by
others in the development of performance standards, statements of work,
or specifications.
Source selection evaluation board means any board, team, council,
or other group that evaluates bids or proposals.
3.104-2 General.
(a) This section implements section 27 of the Office of Federal
Procurement Policy Act (the Procurement Integrity Act) (41 U.S.C. 423)
referred to as ``the Act''). Agency supplementation of 3.104, including
specific definitions to identify individuals who occupy positions
specified in 3.104-3(d)(1)(ii), and any clauses required by 3.104 must
be approved by the senior procurement executive of the agency, unless a
law establishes a higher level of approval for that agency.
(b) Agency officials are reminded that there are other statutes and
regulations that deal with the same or related prohibited conduct, for
example--
(1) The offer or acceptance of a bribe or gratuity is prohibited by
18 U.S.C. 201 and 10 U.S.C. 2207. The acceptance of a gift, under
certain circumstances, is prohibited by 5 U.S.C. 7353 and 5 CFR part
2635;
(2) Contacts with an offeror during the conduct of an acquisition
may constitute ``seeking employment,''(see subpart F of 5 CFR part 2636
and 3.104-3(c)(2)). Government officers and employees (employees) are
prohibited by 18 U.S.C. 208 and 5 CFR part 2635 from participating
personally and substantially in any particular matter that would affect
the financial interests of any person with whom the employee is seeking
employment. An employee who engages in negotiations or is otherwise
seeking employment with an offeror or who has an arrangement concerning
future employment with an offeror must comply with the applicable
disqualification requirements of 5 CFR 2635.604 and 2635.606. The
statutory prohibition in 18 U.S.C. 208 also may require an employee's
disqualification from participation in the acquisition even if the
employee's duties may not be considered ``participating personally and
substantially,'' as this term is defined in 3.104-1;
(3) Post-employment restrictions are covered by 18 U.S.C. 207 and 5
CFR parts 2637 and 2641, that prohibit certain activities by former
Government employees, including representation of a contractor before
the Government in relation to any contract or other particular matter
involving specific parties on which the former employee participated
personally and substantially while employed by the Government.
Additional restrictions apply to certain senior Government employees
and for particular matters under an employee's official responsibility;
(4) Parts 14 and 15 place restrictions on the release of
information related to procurements and other contractor information
that must be protected under 18 U.S.C. 1905;
(5) Release of information both before and after award (see 3.104-
4) may be prohibited by the Privacy Act (5 U.S.C. 552a), the Trade
Secrets Act (18 U.S.C. 1905), and other laws; and
(6) Using nonpublic information to further an employee's private
interest or that of another and engaging in a financial transaction
using nonpublic information are prohibited by 5 CFR 2635.703.
3.104-3 Statutory and related prohibitions, restrictions, and
requirements.
(a) Prohibition on disclosing procurement information (subsection
27(a) of the Act). (1) A person described in paragraph (a)(2) of this
subsection must not, other than as provided by law, knowingly disclose
contractor bid or proposal information or source selection information
before the award of a Federal agency procurement contract to which the
information relates. (See 3.104-4(a).)
(2) Paragraph (a)(1) of this subsection applies to any person who--
(i) Is a present or former official of the United States, or a
person who is acting or has acted for or on behalf of, or who is
advising or has advised the United States with respect to, a Federal
agency procurement; and
(ii) By virtue of that office, employment, or relationship, has or
had access to contractor bid or proposal information or source
selection information.
(b) Prohibition on obtaining procurement information (subsection
27(b) of the Act). A person must not, other than as provided by law,
knowingly obtain contractor bid or proposal information or source
selection information before the award of a Federal agency procurement
contract to which the information relates.
(c) Actions required when an agency official contacts or is
contacted by an offeror regarding non-Federal employment (subsection
27(c) of the Act). (1) If an agency official, participating personally
and substantially in a Federal agency procurement for a contract in
excess of the simplified acquisition threshold, contacts or is
contacted by a person who is an offeror in that Federal agency
procurement regarding possible non-Federal employment for that
official, the official must--
(i) Promptly report the contact in writing to the official's
supervisor and to the agency ethics official; and
(ii) Either reject the possibility of non-Federal employment or
disqualify himself or herself from further personal and substantial
participation in that Federal agency procurement (see 3.104-5) until
such time as the agency authorizes the official to resume participation
in that procurement, in accordance with the requirements of 18 U.S.C.
208 and applicable agency regulations, because--
(A) The person is no longer an offeror in that Federal agency
procurement; or
[[Page 13061]]
(B) All discussions with the offeror regarding possible non-Federal
employment have terminated without an agreement or arrangement for
employment.
(2) A contact is any of the actions included as ``seeking
employment'' in 5 CFR 2635.603(b). In addition, unsolicited
communications from offerors regarding possible employment are
considered contacts.
(3) Agencies must retain reports of employment contacts for 2 years
from the date the report was submitted.
(4) Conduct that complies with subsection 27(c) of the Act may be
prohibited by other criminal statutes and the Standards of Ethical
Conduct for Employees of the Executive Branch. See 3.104-2(b)(2).
(d) Prohibition on former official's acceptance of compensation
from a contractor (subsection 27(d) of the Act). (1) A former official
of a Federal agency may not accept compensation from a contractor that
has been awarded a competitive or sole source contract, as an employee,
officer, director, or consultant of the contractor within a period of 1
year after such former official--
(i) Served, at the time of selection of the contractor or the award
of a contract to that contractor, as the procuring contracting officer,
the source selection authority, a member of a source selection
evaluation board, or the chief of a financial or technical evaluation
team in a procurement in which that contractor was selected for award
of a contract in excess of $10,000,000;
(ii) Served as the program manager, deputy program manager, or
administrative contracting officer for a contract in excess of
$10,000,000 awarded to that contractor; or
(iii) Personally made for the Federal agency a decision to--
(A) Award a contract, subcontract, modification of a contract or
subcontract, or a task order or delivery order in excess of $10,000,000
to that contractor;
(B) Establish overhead or other rates applicable to a contract or
contracts for that contractor that are valued in excess of $10,000,000;
(C) Approve issuance of a contract payment or payments in excess of
$10,000,000 to that contractor; or
(D) Pay or settle a claim in excess of $10,000,000 with that
contractor.
(2) The 1-year prohibition begins on the date--
(i) Of contract award for positions described in paragraph
(d)(1)(i) of this subsection, or the date of contractor selection if
the official was not serving in the position on the date of award;
(ii) The official last served in one of the positions described in
paragraph (d)(1)(ii) of this subsection; or
(iii) The official made one of the decisions described in paragraph
(d)(1)(iii) of this subsection.
(3) Nothing in paragraph (d)(1) of this subsection may be construed
to prohibit a former official of a Federal agency from accepting
compensation from any division or affiliate of a contractor that does
not produce the same or similar products or services as the entity of
the contractor that is responsible for the contract referred to in
paragraph (d)(1) of this subsection.
3.104-4 Disclosure, protection, and marking of contractor bid or
proposal information and source selection information.
(a) Except as specifically provided for in this subsection, no
person or other entity may disclose contractor bid or proposal
information or source selection information to any person other than a
person authorized, in accordance with applicable agency regulations or
procedures, by the agency head or the contracting officer to receive
such information.
(b) Contractor bid or proposal information and source selection
information must be protected from unauthorized disclosure in
accordance with 14.401, 15.207, applicable law, and agency regulations.
(c) Individuals unsure if particular information is source
selection information, as defined in 2.101, should consult with agency
officials as necessary. Individuals responsible for preparing material
that may be source selection information as described at paragraph (10)
of the ``source selection information'' definition in 2.101 must mark
the cover page and each page that the individual believes contains
source selection information with the legend ``Source Selection
Information--See FAR 2.101 and 3.104.'' Although the information in
paragraphs (1) through (9) of the definition in 2.101 is considered to
be source selection information whether or not marked, all reasonable
efforts must be made to mark such material with the same legend.
(d) Except as provided in paragraph (d)(3) of this subsection, the
contracting officer must notify the contractor in writing if the
contracting officer believes that proprietary information, contractor
bid or proposal information, or information marked in accordance with
52.215-1(e) has been inappropriately marked. The contractor that has
affixed the marking must be given an opportunity to justify the
marking.
(1) If the contractor agrees that the marking is not justified, or
does not respond within the time specified in the notice, the
contracting officer may remove the marking and release the information.
(2) If, after reviewing the contractor's justification, the
contracting officer determines that the marking is not justified, the
contracting officer must notify the contractor in writing before
releasing the information.
(3) For technical data marked as proprietary by a contractor, the
contracting officer must follow the procedures in 27.404(h).
(e) This section does not restrict or prohibit--
(1) A contractor from disclosing its own bid or proposal
information or the recipient from receiving that information;
(2) The disclosure or receipt of information, not otherwise
protected, relating to a Federal agency procurement after it has been
canceled by the Federal agency, before contract award, unless the
Federal agency plans to resume the procurement;
(3) Individual meetings between a Federal agency official and an
offeror or potential offeror for, or a recipient of, a contract or
subcontract under a Federal agency procurement, provided that
unauthorized disclosure or receipt of contractor bid or proposal
information or source selection information does not occur; or
(4) The Government's use of technical data in a manner consistent
with the Government's rights in the data.
(f) This section does not authorize--
(1) The withholding of any information pursuant to a proper request
from the Congress, any committee or subcommittee thereof, a Federal
agency, the Comptroller General, or an Inspector General of a Federal
agency, except as otherwise authorized by law or regulation. Any
release containing contractor bid or proposal information or source
selection information must clearly identify the information as
contractor bid or proposal information or source selection information
related to the conduct of a Federal agency procurement and notify the
recipient that the disclosure of the information is restricted by
section 27 of the Act;
(2) The withholding of information from, or restricting its receipt
by, the Comptroller General in the course of a protest against the
award or proposed award of a Federal agency procurement contract;
(3) The release of information after award of a contract or
cancellation of a procurement if such information is
[[Page 13062]]
contractor bid or proposal information or source selection information
that pertains to another procurement; or
(4) The disclosure, solicitation, or receipt of bid or proposal
information or source selection information after award if disclosure,
solicitation, or receipt is prohibited by law. (See 3.104-2(b)(5) and
subpart 24.2.)
3.104-5 Disqualification.
(a) Contacts through agents or other intermediaries. Employment
contacts between the employee and the offeror, that are conducted
through agents, or other intermediaries, may require disqualification
under 3.104-3(c)(1). These contacts may also require disqualification
under other statutes and regulations. (See 3.104-2(b)(2).)
(b) Disqualification notice. In addition to submitting the contact
report required by 3.104-3(c)(1), an agency official who must
disqualify himself or herself pursuant to 3.104-3(c)(1)(ii) must
promptly submit written notice of disqualification from further
participation in the procurement to the contracting officer, the source
selection authority if other than the contracting officer, and the
agency official's immediate supervisor. As a minimum, the notice must--
(1) Identify the procurement;
(2) Describe the nature of the agency official's participation in
the procurement and specify the approximate dates or time period of
participation; and
(3) Identify the offeror and describe its interest in the
procurement.
(c) Resumption of participation in a procurement. (1) The official
must remain disqualified until such time as the agency, at its sole and
exclusive discretion, authorizes the official to resume participation
in the procurement in accordance with 3.104-3(c)(1)(ii).
(2) After the conditions of 3.104-3(c)(1)(ii)(A) or (B) have been
met, the head of the contracting activity (HCA), after consultation
with the agency ethics official, may authorize the disqualified
official to resume participation in the procurement, or may determine
that an additional disqualification period is necessary to protect the
integrity of the procurement process. In determining the
disqualification period, the HCA must consider any factors that create
an appearance that the disqualified official acted without complete
impartiality in the procurement. The HCA's reinstatement decision
should be in writing.
(3) Government officer or employee must also comply with the
provisions of 18 U.S.C. 208 and 5 CFR part 2635 regarding any resumed
participation in a procurement matter. Government officer or employee
may not be reinstated to participate in a procurement matter affecting
the financial interest of someone with whom the individual is seeking
employment, unless the individual receives--
(i) A waiver pursuant to 18 U.S.C. 208(b)(1) or (b)(3); or
(ii) An authorization in accordance with the requirements of
subpart F of 5 CFR part 2635.
3.104-6 Ethics advisory opinions regarding prohibitions on a former
official's acceptance of compensation from a contractor.
(a) An official or former official of a Federal agency who does not
know whether he or she is or would be precluded by subsection 27(d) of
the Act (see 3.104-3(d)) from accepting compensation from a particular
contractor may request advice from the appropriate agency ethics
official before accepting such compensation.
(b) The request for an advisory opinion must be in writing, include
all relevant information reasonably available to the official or former
official, and be dated and signed. The request must include information
about the--
(1) Procurement(s), or decision(s) on matters under 3.104-
3(d)(1)(iii), involving the particular contractor, in which the
individual was or is involved, including contract or solicitation
numbers, dates of solicitation or award, a description of the supplies
or services procured or to be procured, and contract amount;
(2) Individual's participation in the procurement or decision,
including the dates or time periods of that participation, and the
nature of the individual's duties, responsibilities, or actions; and
(3) Contractor, including a description of the products or services
produced by the division or affiliate of the contractor from whom the
individual proposes to accept compensation.
(c) Within 30 days after receipt of a request containing complete
information, or as soon thereafter as practicable, the agency ethics
official should issue an opinion on whether the proposed conduct would
violate subsection 27(d) of the Act.
(d)(1) If complete information is not included in the request, the
agency ethics official may ask the requester to provide more
information or request information from other persons, including the
source selection authority, the contracting officer, or the requester's
immediate supervisor.
(2) In issuing an opinion, the agency ethics official may rely upon
the accuracy of information furnished by the requester or other agency
sources, unless he or she has reason to believe that the information is
fraudulent, misleading, or otherwise incorrect.
(3) If the requester is advised in a written opinion by the agency
ethics official that the requester may accept compensation from a
particular contractor, and accepts such compensation in good faith
reliance on that advisory opinion, then neither the requester nor the
contractor will be found to have knowingly violated subsection 27(d) of
the Act. If the requester or the contractor has actual knowledge or
reason to believe that the opinion is based upon fraudulent,
misleading, or otherwise incorrect information, their reliance upon the
opinion will not be deemed to be in good faith.
3.104-7 Violations or possible violations.
(a) A contracting officer who receives or obtains information of a
violation or possible violation of subsection 27(a), (b), (c), or (d)
of the Act (see 3.104-3) must determine if the reported violation or
possible violation has any impact on the pending award or selection of
the contractor.
(1) If the contracting officer concludes that there is no impact on
the procurement, the contracting officer must forward the information
concerning the violation or possible violation and documentation
supporting a determination that there is no impact on the procurement
to an individual designated in accordance with agency procedures.
(i) If that individual concurs, the contracting officer may proceed
with the procurement.
(ii) If that individual does not concur, the individual must
promptly forward the information and documentation to the HCA and
advise the contracting officer to withhold award.
(2) If the contracting officer concludes that the violation or
possible violation impacts the procurement, the contracting officer
must promptly forward the information to the HCA.
(b) The HCA must review all information available and, in
accordance with agency procedures, take appropriate action, such as--
(1) Advise the contracting officer to continue with the
procurement;
(2) Begin an investigation;
(3) Refer the information disclosed to appropriate criminal
investigative agencies;
(4) Conclude that a violation occurred; or
[[Page 13063]]
(5) Recommend that the agency head determine that the contractor,
or someone acting for the contractor, has engaged in conduct
constituting an offense punishable under subsection 27(e) of the Act,
for the purpose of voiding or rescinding the contract.
(c) Before concluding that an offeror, contractor, or person has
violated the Act, the HCA may consider that the interests of the
Government are best served by requesting information from appropriate
parties regarding the violation or possible violation.
(d) If the HCA concludes that section 27 of the Act has been
violated, the HCA may direct the contracting officer to--
(1) If a contract has not been awarded--
(i) Cancel the procurement;
(ii) Disqualify an offeror; or
(iii) Take any other appropriate actions in the interests of the
Government.
(2) If a contract has been awarded--
(i) Effect appropriate contractual remedies, including profit
recapture under the clause at 52.203-10, Price or Fee Adjustment for
Illegal or Improper Activity, or, if the contract has been rescinded
under paragraph(d)(2)(ii) of this subsection, recovery of the amount
expended under the contract;
(ii) Void or rescind the contract with respect to which--
(A) The contractor or someone acting for the contractor has been
convicted for an offense where the conduct constitutes a violation of
subsection 27(a) or (b) of the Act for the purpose of either--
(1) Exchanging the information covered by the subsections for
anything of value; or
(2) Obtaining or giving anyone a competitive advantage in the award
of a Federal agency procurement contract; or
(B) The agency head has determined, based upon a preponderance of
the evidence, that the contractor or someone acting for the contractor
has engaged in conduct constituting an offense punishable under
subsection 27(e)(1) of the Act; or
(iii) Take any other appropriate actions in the best interests of
the Government.
(3) Refer the matter to the agency suspending or debarring
official.
(e) The HCA should recommend or direct an administrative or
contractual remedy commensurate with the severity and effect of the
violation.
(f) If the HCA determines that urgent and compelling circumstances
justify an award, or award is otherwise in the interests of the
Government, the HCA, in accordance with agency procedures, may
authorize the contracting officer to award the contract or execute the
contract modification after notifying the agency head.
(g) The HCA may delegate his or her authority under this subsection
to an individual at least one organizational level above the
contracting officer and of General Officer, Flag, Senior Executive
Service, or equivalent rank.
3.104-8 Criminal and civil penalties, and further administrative
remedies.
Criminal and civil penalties, and administrative remedies, may
apply to conduct that violates the Act (see 3.104-3). See 33.102(f) for
special rules regarding bid protests. See 3.104-7 for administrative
remedies relating to contracts.
(a) An official who knowingly fails to comply with the requirements
of 3.104-3 is subject to the penalties and administrative action set
forth in subsection 27(e) of the Act.
(b) An offeror who engages in employment discussion with an
official subject to the restrictions of 3.104-3, knowing that the
official has not complied with 3.104-3(c)(1), is subject to the
criminal, civil, or administrative penalties set forth in subsection
27(e) of the Act.
(c) An official who refuses to terminate employment discussions
(see 3.104-5) may be subject to agency administrative actions under 5
CFR 2635.604(d) if the official's disqualification from participation
in a particular procurement interferes substantially with the
individual's ability to perform assigned duties.
3.104-9 Contract clauses.
In solicitations and contracts for other than commercial items that
exceed the simplified acquisition threshold, insert the clauses at--
(a) 52.203-8, Cancellation, Rescission, and Recovery of Funds for
Illegal or Improper Activity; and
(b) 52.203-10, Price or Fee Adjustment for Illegal or Improper
Activity.
3.704 [Amended]
4. Amend section 3.704 in paragraph (c)(1) by removing ``3.104-10''
and adding ``3.104-7'' in its place.
PART 4--ADMINISTRATIVE MATTERS
5. Amend section 4.802 in paragraphs (a)(1), (a)(2), and (a)(3) by
removing ``, which shall document'' and adding ``that documents'' in
their place; in the introductory text of paragraph (c) by removing
``shall'' the first time it appears and adding ``must'' in its place,
and removing ``shall'' the second time it appears; in the first
sentence of paragraph (d) by removing ``shall'' and adding ``must'' in
its place; and by revising paragraph (e) to read as follows:
4.802 Contract files.
* * * * *
(e) Contents of contract files that are contractor bid or proposal
information or source selection information as defined in 2.101 must be
protected from disclosure to unauthorized persons (see 3.104-4).
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
9.105-3 [Amended]
6. Amend section 9.105-3 in paragraph (c) by removing ``and/or''
and adding ``or'' in its place, and by removing ``3.104-3'' and adding
``3.104-4'' in its place.
9.505 [Amended]
7. Amend section 9.505 in paragraph (b)(2) by removing ``3.104-3''
and adding ``2.101'' in its place.
PART 15--CONTRACTING BY NEGOTIATION
8. Amend section 15.404-2 by revising paragraph (a)(5) to read as
follows:
15.404-2 Information to support proposal analysis.
(a) * * *
(5) Field pricing information and other reports may include
proprietary or source selection information (see 2.101). This
information must be appropriately identified and protected accordingly.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.203-8 [Amended]
9. Amend section 52.203-8 in the introductory paragraph by removing
``in solicitations and contracts''.
[FR Doc. 02-5823 Filed 3-19-02; 8:45 am]
BILLING CODE 6820-EP-P