FR Doc 07-3796

[Federal Register: August 17, 2007 (Volume 72, Number 159)]
[Rules and Regulations]
[Page 46335-46342]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17au07-23]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 12, 22 and 52

[FAC 2005-19; FAR Case 2005-012; Item V; Docket 2006-0020; Sequence 1]
RIN 9000-AK31

Federal Acquisition Regulation; FAR Case 2005-012, Combating
Trafficking in Persons (Revised Interim Rule)

AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comments.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on an interim
rule amending the Federal Acquisition Regulation (FAR) to implement 22
U.S.C. 7104(g). This statute requires that contracts must include a
provision that authorizes the department or agency to terminate the
contract, if the contractor or any subcontractor engages in trafficking
in persons. This interim rule contains a clause to be used in all
contracts.

DATES: Effective Date: August 17, 2007.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before October 16, 2007 to be considered in
the formulation of a final rule.

ADDRESSES: Submit comments identified by FAC 2005-19, FAR case 2005-
012, by any of the following methods:
Federal eRulemaking Portal:http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.

Search for any document by first selecting the proper document types
and selecting ``Federal Acquisition Regulation'' as the agency of
choice. At the ``Keyword'' prompt, type in the FAR case number (for
example, FAR Case 2006-001) and click on the ``Submit'' button. Please
include your name and company name (if any) inside the document.
You may also search for any document by clicking on the ``Advanced
search/document search'' tab at the top of the screen, selecting from
the agency field ``Federal Acquisition Regulation'', and typing the FAR
case number in the keyword field. Select the ``Submit'' button.
Fax: 202-501-4067.

[[Page 46336]]

Mail: General Services Administration, Regulatory
Secretariat (VIR), 1800 F Street, NW, Room 4035, ATTN: Laurieann
Duarte, Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-19, FAR
case 2005-012, in all correspondence related to this case. All comments
received will be posted without change to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov,

including any personal and/or business confidential information
provided.

FOR FURTHER INFORMATION CONTACT: Mr. Ernest Woodson, Procurement
Analyst, at (202) 501-3775 for clarification of content. Please cite
FAC 2005-19, FAR case 2005-012. For information pertaining to status or
publication schedules, contact the FAR Secretariat at (202) 501-4755.

SUPPLEMENTARY INFORMATION:

A. Background

The Trafficking Victims Protection Reauthorization Act of 2003, as
amended by the Trafficking Victims Protection Reauthorization Act of
2005, addresses the victimization of countless men, women, and children
in the United States and abroad. In order to implement the law, DoD,
GSA, and NASA published an interim rule in the Federal Register at 71
FR 20301, April 19, 2006 with request for comments by June 19, 2006.
The interim rule implemented 22 U.S.C. 7104(g) by adding FAR Subpart
22.17 with an associated clause at 52.222-50 which address combating
trafficking in persons. The interim rule applied to all contracts for
services, other than commercial service contracts under FAR Part 12.
The interim rule prohibited the contractor and contractor employees
from engaging in or supporting severe forms of trafficking in persons,
procurement of commercial sex acts, or use of forced labor during the
performance of the contract.
The Councils have determined to issue a revised interim rule with
request for comments. Changes implemented in this revised interim rule,
which are being made as a result of the public comments and further
discussions by the Councils, are summarized as follows:
Applicability of the rule. In revising the interim rule, the
Councils noted that the statutory language at 22 U.S.C. 7104(g)
contained no exceptions or limitations with regard to its application
to Federal contracts. Therefore, while the interim rule only applied to
contracts for services (other than commercial), this revised interim
rule applies to all contracts, including contracts for supplies, and
all contracts for commercial items as defined at 2.101. Although the
Federal Acquisition Streamlining Act (FASA) governs and limits the
applicability of laws to commercial items, it also provides that if a
provision of law contains criminal or civil penalties, or if the
Federal Acquisition Regulatory Council determines that it is not in the
best interest of the Federal Government to exempt commercial item
contracts, then the provision of law will apply to contracts for
commercial items.
Section 112 of the Trafficking Victims Protection Act of 2000
amended 18 U.S.C. Part 1 to provide for civil and criminal penalties
for severe forms of trafficking in persons and use of forced labor.
Therefore, consistent with FASA, the Councils have determined that the
statutory requirements prohibiting such activities apply to contracts
for commercial items.
Prohibited Activities. To accurately reflect the statutory
language, the revised interim rule provides for contract termination
for engaging in severe forms of trafficking in persons or procurement
of a commercial sex act during the period of performance of the
contract, and provides for contract termination for use of forced labor
in the performance of the contract.
Employee Notification. The requirements for the contractor to
establish policies and procedures and develop an awareness program have
been replaced with the requirement to notify employees of the U.S.
policy and actions that will be taken against them for violations.
Additionally, the requirement to obtain written agreement from
employees has been deleted.

Disposition of Comments received on the interim rule.

The Council received six responses with multiple comments on the
interim rule (available at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov). The responses

were from Government personnel and industry and are grouped into six
categories. A summary of the comments and their respective dispositions
are as follows:

Applicability of the Rule

Five comments were received concerning the rule's applicability:
Comment: One respondent questioned the rule's applicability to
noncommercial purchases below the micro-purchase threshold.
Response: Because micro-purchases do not require provisions or
clauses, except as provided at 4.1104 and 32.1110, the rule will not
apply to noncommercial purchases below the micro-purchase threshold.
Comment: One respondent suggested that the clause at 52.213-4,
Terms and Conditions - Simplified Acquisitions (Other Than Commercial
Items), be amended to include the new 52.222-50, Combating Trafficking
in Persons.
Response: The Councils concur with the respondent's suggestion. The
clause has been listed at 52.213-4(b)(vii), and provides for
application to all contracts.
Comment: One respondent questioned the rule's applicability to all
service contracts.
Response: The revised interim rule applies to all contracts,
including all service contracts.
Comment: One respondent indicated that the Trafficking Victims
Protection Reauthorization Act of 2003, the Trafficking Victims
Protection Reauthorization Act of 2005, and 22 U.S.C. 7104 all state
that the provisions apply to grants, contracts, and cooperative
agreements to carry out activities abroad; and that the public laws and
U.S. Code state that these provisions apply only to activities funded
by budget category 150 regarding international affairs.
Response: The Trafficking Victims Protection Reauthorization Act of
2005 amended 22 U.S.C. 7104(g) to remove the language speaking to
budget category 150 funds and activities performed abroad. Therefore,
the statutory language is no longer limited by type of funds or
location of performance.
Comment: One respondent strongly supported the exclusion for
acquisitions of commercial services under FAR Part 12.
Response: Although the interim rule did not apply to commercial
services, this revised interim rule applies to all contracts, including
contracts for commercial items. The language in the statute does not
indicate exceptions to the termination authority for engaging in the
prohibited activities. The Councils note the criminal and civil
penalties in Title 18 that apply to severe forms of trafficking in
persons and the use of forced labor, and FASA does not provide an
exception for commercial items in such a case.

Statutory Requirements

Several comments were received suggesting that the rule exceeds the
statutory requirements of the Act and that the rule was overly broad
and burdensome.
Comment: One respondent suggested that the rule goes beyond the
statutory requirements and is overly broad and burdensome. In
questioning the

[[Page 46337]]

statutory requirements, the respondent questioned why FAR Part 12
services are exempt.
Response: The Councils have made various revisions to the rule as a
result of comments on the breadth of the rule and specific requirements
of the rule. Such revisions include deletion of the requirement in the
clause to obtain written agreement from the employee, deletion of the
requirement in FAR Part 22 to monitor employees, replacement of the
awareness program with a notification requirement to employees, and
deletion of the requirement to identify all related U.S. and host
country laws and regulations. The Councils have addressed the rule's
application to FAR Part 12 services in the response provided above
concerning the applicability of the rule.
Comment: One respondent suggested eliminating the condition of
``supporting'' or ``promoting'' trafficking, noting that the
restriction does not appear in the statute and may interfere with
scholarly social and behavioral research on such topics as the
incidence or prevalence of sexually transmitted diseases among
prostitutes.
Response: The Councils note the respondent's concerns as they
relate to behavioral and scholarly research. The terms ``supporting or
promoting'' have not been included in the revised interim rule. The
revised interim rule reflects the terms used in the statute.
Comment: One respondent suggested revising the policy requirement
at 22.1703(b) to prohibit engaging in the prescribed activities rather
than expecting the institution to proactively combat trafficking.
Response: The policy in 22.1703(b) has been revised to reflect the
requirements in the clause at 52.222-50(c). The revised interim rule
requires that contractors notify employees of the U.S. policy and the
actions that may be taken against them for violating the policy.
Comment: One respondent suggested that any and all references to
contractor requirements and violations and the Government's remedies
should clearly relate to the specific award. The problem is exacerbated
by the current definition of employee which implies a broader
application than the specific contract.
Response: The rule has been revised to align with the statutory
language. The revised interim rule provides that requirements and
remedies associated with engaging in severe forms of trafficking in
persons and the procurement of commercial sex acts apply during the
period of performance of the contract. The revised interim rule
provides that requirements and remedies associated with the use of
forced labor apply in the performance of the contract. In regard to the
definition of employee, the Councils note the respondent's concerns and
have amended the definition to mean ``an employee of the contractor
directly engaged in performance of work under the contract who has
other than a minimal impact or involvement in contract performance.''
Comment: One respondent suggested adding the phrase ``in the
performance of this contract'' at FAR 22.1703(b) and (c), and at FAR
52.222-50, at the prohibition on forced labor.
Response: The rule has been revised to reflect the statutory
language prohibiting the use of forced labor in the performance of the
contract.
Comment: One respondent suggested that FAR 22.1703(a)(2) and (a)(3)
are not necessary in the rule as they are already included in the
definition of ``severe forms of trafficking in persons'' in FAR
22.1702.
Response: The Councils believe the separate references are
necessary in that the rule reflects the statutory prohibitions, which
are listed separately at 22 U.S.C. 7104(g). Furthermore, the Councils
note that the prohibited behavior in 22.1703(a)(2) and (a)(3) are not
included in the definition of ``severe forms of trafficking in
persons.'' For example, the procurement of a commercial sex act
(prohibited by 22.1703(a)(2)) for which the commercial sex act is not
induced by force, fraud, or coercion, is not included within the
definition of severe forms of trafficking in persons.
Comment: One respondent was concerned that certain types of sex
acts are legal in several jurisdictions of the U.S. and in some foreign
countries and urge that careful attention be given to how the remedies
in this rule intersect with otherwise lawful conduct.
Response: The Trafficking Victims Protection Reauthorization Act of
2005 speaks to both ``unlawful commercial sex acts'' and ``commercial
sex acts.'' The section of the Act implemented by this rule, 22 U.S.C.
7104(g), speaks to ``commercial sex acts,'' and is not qualified by the
words ``illegal'' or ``unlawful.'' Furthermore, the National Security
Presidential Directive (NSPD) 22, which espouses the United States
``zero tolerance policy'' regarding trafficking in persons, states that
``the United States Government opposes prostitution and related
activities, including pimping, pandering, or maintaining brothels, as
contributing to the phenomenon of trafficking in persons.'' The
Councils believe that Congress' intent is to reduce the demand for
commercial sex acts, both lawful and unlawful, as such activities have
contributed to the worldwide problem of trafficking in persons.
Commercial sex venues are one of the prime areas in which trafficking
victims are exploited, and customers are very often unable to tell the
difference between an individual who has been trafficked and one who
has not. Thus, Congress has made reducing the demand for commercial sex
acts-both lawful and unlawful-a key component in the fight against
human trafficking, not only in the statutory provision at issue here,
but also in other provisions of the Trafficking Victims Protection Act
(for example, 22 U.S.C. Sec. 7106(b)(3) lists ``measures to reduce the
demand for commercial sex acts'' as an indicator of a serious and
sustained effort to eliminate trafficking; 22 U.S.C. Sec. 7110(g)
prohibits any U.S. anti-trafficking funds from going to an organization
that ``promotes, supports, or advocates the legalization or practice of
prostitution.''). Application of this aspect of the Trafficking Victims
Protection Act to commercial items corresponds to the Government's zero
tolerance policy. Therefore, neither the interim nor the revised
interim rule differentiates between lawful and unlawful commercial sex
acts.

Definitions in the Rule

Four comments were received concerning the definitions in the rule:
Comment: One respondent suggested that the definition of employee
be revised to limit it only to the person's activities performing work
under the award.
Response: The Councils believe that limiting the definition of
employee in this manner would inadequately implement the statute since
employee violations are more likely to occur after working hours.
Furthermore, contractor employees are often perceived as representing
the Government, and their actions reflect upon the Government's
integrity and ethics. Therefore, to ensure that U.S. Government
contracts do not contribute to trafficking in persons, the rule
requires the contractor to notify its employees (as defined in the
clause) of the U.S. zero tolerance policy, and take action against
those employees who violate the U.S. policy.
Comment: One respondent suggested revising the definition of
commercial sex act to add ``in a manner that violates any applicable
state or Federal law.''
Response: The rule reflects the definition of commercial sex act at
22 U.S.C. 7102. As previously stated in the response to a comment
concerning the

[[Page 46338]]

statutory requirements of the rule, 22 U.S.C. 7104(g) does not provide
for limiting application of the rule to only unlawful commercial sex
acts.
Comment: One respondent recommended revising ``direct cost'' to
``direct charge'' or alternatively delete the phrase ``including all
direct cost employees,'' in the definition of employee at FAR 22.1702
and 52.222-50(b).
Response: The Councils concur with the respondent's alternative
recommendation and have revised the definition of employee by deleting
the phrase ``including all direct cost employees.''
Comment: One respondent was concerned that Section 22.1702 does not
include a definition of ``individual'' although the term is defined in
the clause at 52.222-50(a). The respondent recommends adding this as a
defined term at the appropriate place.
Response: Revisions to the interim rule have eliminated the need to
use the term ``individual.'' Therefore, the definition has been removed
from the clause.

Awareness Program

Several respondents raised concerns that the rule's requirements
for an awareness program, certification of contractor's employees and
for the contractor to identify, interpret, analyze, and explain every
host country law and regulation in which it may do business exceed the
statutory requirements of 22 U.S.C. 7104(g).
Comment: One respondent questioned what constitutes a suitable
awareness program, and recommended that the FAR establish program
guidelines to meet the ``suitable'' definition.
Response: The Councils have replaced the requirement for an
awareness program with a requirement to notify employees of the
Government policy and actions that may be taken in response to
violations.
Comment: One respondent was concerned that the requirements at FAR
22.17 and 52.222-50 to develop a policy, communicate the policy to
employees, require certification of compliance from employees, and
monitor and report violations to the Federal Government exceed the
statutory requirements of 22 U.S.C. 7104(g).
Response: The Councils have replaced the requirement for the
contractor to develop a policy and an awareness program with a
requirement to notify employees of the Government's policy and actions
that may be taken in response to violations. Although the interim rule
did not require ``certification of compliance from employees,'' as
stated by the respondent, it did require the contractor to obtain the
employee's written agreement. Based on the respondent's comment and
further discussion, the Councils determined that this requirement is
overly burdensome and have therefore deleted the language from
paragraph (c) of the clause. Additionally, the Councils recognize the
respondent's concerns related to monitoring employees and also noted
that the requirement to monitor was stated in 22.1703(c), but not in
the clause. Therefore, the requirement for monitoring that was included
at 22.1703(c) has been removed from the revised interim rule.
Comment: One respondent recommended that the rule and clause be
revised to simply prohibit the awardee and any sub-awardee and their
respective employees from engaging in severe forms of trafficking in
persons, procuring commercial sex acts, or using forced labor in the
performance of the award.
Response: The Councils have made revisions to the rule as a result
of this and other comments on the breadth of the rule and specific
requirements. The revised interim rule prohibits engaging in severe
forms of trafficking in persons and procurement of commercial sex acts
during the performance period of the contract, and prohibits the use of
forced labor in the performance of the contract. However, the Councils
do not believe it is sufficient to simply state the prohibited behavior
in the clause. As such, the revised interim rule replaces the
requirement for an awareness program with a notification requirement to
employees of the U.S. policy and actions that may be taken against
employees for violating the U.S. policy.
Comment: One respondent was concerned that FAR 52.222-
50(c)(2)(iii)(A) and (B) place an unrealistic burden on the contractor
to correctly identify and actually obtain copies of every host country
law and regulation in which it may do business and then interpret,
analyze, and explain any and every such law or regulation.
Response: The Councils have considered this concern and deleted the
requirement for the contractor to identify and inform employees of all
host country laws and regulations, and all U.S. laws and regulations
which may apply to its employees in the host country. The contractor is
required to notify employees of the U.S. policy and the actions that
may be taken against them for violation of the policy. The Councils
have added an Alternate I to the clause for use in contracts performed
outside the U.S. when the contracting officer has been advised of
specific directives or notices regarding combating trafficking in
persons (such as lists of off-limits establishments) that are
applicable to contractor employees performing at the contract place of
performance.
Comment: One respondent suggested that if the awareness program
continues to include applicable international laws, the Government
should compile and provide the list of laws to the contractor.
Presumably the U.S. Government will compile such information to inform
and provide direction to U.S. Government employees working outside the
U.S.
Response: In response to comments and concerns received about the
burden involved in identifying host country laws and regulations, the
Councils have deleted the requirement. The Councils have added an
Alternate I to the clause as described in the response to the preceding
comment.
Comment: One respondent suggested asking employees to enter into a
separate contract with their employers respecting their obligations not
to traffic in humans and not to procure commercial sex acts is
unnecessary and overly intrusive in the employer-employee relationship.
Response: As discussed in the response to prior concern on the
subject, this revised interim rule removes the requirement for the
contractor to obtain the employee's written agreement to abide by the
U.S. zero tolerance policy. However, the contractor remains responsible
for notifying its employees of the U.S. zero tolerance policy, as well
as the actions that may be taken against them as a result of a
violation.
Comment: One respondent suggested that a program of education and
certification by direct cost employees increases administrative burden,
is unnecessary, and represents a questionable intrusion by the
Government in how institutions manage their employees' conduct. The
requirements in the clause are sufficient to educate employees.
Response: As discussed in the responses to a prior question in this
category and another concerning definitions, the definition of employee
has been revised and the requirement to obtain the employee's signature
is not included in the revised interim rule. Additionally, the
requirement for an awareness program has been replaced by a requirement
to notify employees of the U.S. policy, including the actions that may
be taken against them as a result of violating the policy.

[[Page 46339]]

Enforcement Requirements

Six comments were received regarding the rule's enforcement
requirements.
Comment: One respondent wanted to know what constitutes a violation
of FAR 52.222-50, explaining that a company may not be aware of a
violation unless it interferes with job performance and that a company
should not be obligated to have knowledge of an incident nor be
obligated to terminate the employee if the company does not deem
termination appropriate.
Response: Failure to comply with the requirements of the clause
constitutes a violation. Contractors must inform employees of the
prohibited activities, and the actions that will be taken against them
if they participate in the prohibited activities. The contractor is
obligated to take appropriate action when it becomes aware of an
employee violation. The clause does not require termination, but
provides that termination of employment should be considered when
appropriate.
Comment: One respondent indicated that the prime contractor cannot
assure compliance by subcontractors and should not be held responsible
or liable for the conduct of subcontractor employees.
Response: The prime contractor is responsible for determining the
responsibility of its prospective subcontractors (FAR 9.104-4(a)),
which includes determining that the subcontractor has a satisfactory
record of integrity and business ethics (FAR 9.104-1(d)). Therefore,
prime contractors should be selecting subcontractors that comply with
laws and regulations, and exercise care when selecting individuals for
employment. Upon award, the prime contractor is required to flow down
the clause and take appropriate action against subcontractors when the
prime becomes aware that a subcontractor or subcontractor employee has
a violated U.S. policy. The prime contractor is required to take action
against those subcontractors that do not comply with the terms of the
clause, including termination if the subcontractor fails to take
corrective action. The prime contractor's failure to take action
against a subcontractor that has violated U.S. policy, or evidence that
the prime contractor failed to exercise due diligence in determining
said subcontractor responsible prior to making the award, may result in
the Government taking action against the prime contractor as a result
of violations committed by the subcontractor. Although one respondent
suggested that certifications of compliance and reports would be
necessary to ``ensure'' compliance, the Councils do not believe that
such measures would further compliance with U.S. policy, and believe
that it is sufficient to flow down the clause and require appropriate
action and notification when instances of noncompliance have occurred.
Comment: One respondent suggested that the requirement in FAR
52.222-50(d)(1), for the Government to expect the reporting of
allegations before those allegations are thoroughly investigated by the
institution and found to be true, is inappropriate.
Response: Many allegations become a subject of interest outside the
company or organization before they are thoroughly investigated. As a
result, the contracting officer needs to be made aware of allegations
of a violation of U.S. policy immediately after the contractor becomes
aware.
Comment: One respondent was concerned that the requirement in
Section 22.1704, providing that the contracting officer initiate
actions after determining that ``adequate evidence'' exists to suspect
any violation of the policy, be revised to provide that the standard
for initiating action be based on ``clear and convincing evidence.''
Response: The Councils believe that receipt of ``adequate
evidence'' is reasonable and sufficient for the contracting officer to
take action. The phrase ``clear and convincing'' implies a much more
stringent standard which the Councils believe would severely restrict
the contracting officer's ability to take appropriate action within an
appropriate timeframe.
Comment: One respondent was concerned that the contractor cannot
``ensure'' that no violation will occur, as required by FAR 52.222-
50(b). The contractor can establish clear rules of conduct and impose
penalties for violations.
Response: The Councils concur with the comment. The requirement has
been removed and FAR 52.222-50(c) has been revised to require the
contractor to notify employees of the U.S. policy and actions that may
be taken against them for violation of the policy.

Remedies

Seven comments were received concerning the rule's requirement for
remedies:
Comment: One respondent indicated that the laws and the U.S. Code
state that violators will not be subject to any penalty besides
termination of the contract or grant. FAR 52.222-50, paragraph (e),
Remedies, applies penalties such as loss of award fee, termination for
default, suspension or debarment, suspension of contract payments, etc.
These remedies are clearly penalties.
Response: 22 U.S.C. Section 7104(g) states that the contract shall
include a condition that authorizes the department or agency to
terminate the contract without penalty if the contractor engages in the
prohibited acts. The term ``without penalty'' means that the Government
is able to terminate without the Government incurring breach of
contract damages, but does not affect other actions the Government may
take under the clause.
Comment: One respondent suggested revising the language on remedies
to state only that in addition to all other rights and remedies
available, the Government may terminate the award, without penalty, if
the awardee or any sub-awardee commits a violation during the period in
which the award is in effect.
Response: Whereas the statutory language uses the phrase ``period
in which the award is in effect,'' the FAR rule uses the equivalent
phrase currently used throughout the FAR, which is ``period of
performance,'' and the term ``contract'' rather than ``award.'' This
phrase is reflected in the final rule at 22.1703(a)(1), 22.1703(a)(2),
22.1704(a)(1), 22.1704(a)(2) and at paragraphs (b)(1) and (b)(2) of the
clause.
Comment: One respondent suggested that the statute is directed
toward the institution or organization as awardee and its sub-awardees.
It is not appropriate to penalize the institution for activities of its
employees outside of work under the Federal award or in their personal
lives.
Response: The Government seeks to ensure that contractor employees
who traffic in persons or procure commercial sex acts do not work on
Government contracts. The clause requires the contractor to notify
employees of the U.S. policy and actions that can be taken against
employees for violating the policy. Should the contractor become aware
that the employee has violated these terms, the Government requires the
contractor to take appropriate action against the employee. The clause
provides for remedies when the contractor fails to take appropriate
action against an employee who has violated the policy.
Comment: One respondent was concerned that FAR 22.1703(c) should
refer to remedies for violations of the statutory prohibitions, and
should not refer to remedies for ``supporting or promoting'' the
proscribed activities or for failing to ``monitor'' employees and

[[Page 46340]]

sub-awardees. The term ``monitor'' has a connotation of invading
employee privacy, not merely supervising employees in the conduct of
their work.
Response: The Councils have considered the comment and revised the
language to be consistent with statute. The terms ``supporting or
promoting'' and ``monitor'' are not included in the revised interim
rule.
Comment: One respondent suggested that the FAR should not describe
its expectations of remedies that the institution may pursue against
employees who violate the policy. The respondent recommends deletion of
the phrase ``up to and including termination'' from FAR 52.222-
50(c)(4).
Response: The Councils believe it is important to provide examples
of actions that are appropriate to be taken against employees who
violate the policy. The clause provides the contractor discretion to
determine the appropriate action based on the circumstances surrounding
a violation.
Comment: One respondent requested that paragraph (3), suspension of
contract payments, be deleted from the remedies at FAR 52.222-50(e).
Response: The Councils believe this is a suitable remedy for
violations of U.S. policy on trafficking in persons. The authority to
suspend payments is modeled after the remedies in paragraph (d) of the
clause at FAR 52.223-6, Drug-Free Workplace. FAR 22.1704 requires that
the contracting officer may pursue this remedy only after making a
written determination that adequate evidence exists to suspect a
violation of U.S. policy.
Comment: One respondent requested that FAR 52.222-50(f) exclude the
flow down to subcontracts for commercial items awarded pursuant to FAR
Part 12 as well as to subcontracts to ``individuals'' as defined in
52.222-50(a).
Response: The revisions to the rule result in this suggestion no
longer being applicable. In accordance with the statute, the revised
rule applies to all subcontracts.
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 revised interim rule is not expected to 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 impact will be minimal unless the contractor or its
employees engage in forms of trafficking in persons, use forced labor,
or procure commercial sex acts that are illegal within the U.S.
Although not considered significant, additional impact may be
associated with contract performance in counties/states and locations
outside the U.S. where certain commercial sex acts are legal. However,
the termination authorities at 22 U.S.C. 7104(g) apply to Government
contracts performed in these areas. Therefore, an Initial Regulatory
Flexibility Analysis has not been performed. The Councils will consider
comments from small entities concerning the affected FAR Parts 12, 22,
and 52 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
2005-19, FAR case 2005-012), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 104-13) applies because the
interim rule contains information collection requirements. Accordingly,
the FAR Secretariat will forward a request for approval of a new
information collection requirement concerning OMB Number 9000-00XX to
the Office of Management and Budget under 44 U.S.C. 3501, et seq.
The clause at 52.222-50 requires the contractor to notify the
contracting officer of any information alleging employee misconduct
under the clause, and any actions taken against employees pursuant to
the clause.
Public reporting burden for this collection of information is
estimated to average 1 hour per response, including the time for
reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
The annual reporting burden is estimated as follows:
Respondents: 250
Responses per respondent: 1
Total annual responses: 250
Preparation hours per response: 1
Total response burden hours: 250

D. Request for Comments Regarding Paperwork Burden

Submit comments, including suggestions for reducing this burden,
not later than October 16, 2007 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, FAR Secretariat (VIR), 1800 F Street, NW, Room 4035,
Washington, DC 20405. Please cite OMB Control No. 9000-00XX, Combating
Trafficking in Persons (FAR Case 2005-012), in all correspondence.
Public comments are particularly invited on: whether this
collection of information is necessary for the proper performance of
functions of the FAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requester may obtain a copy of the justification from the General
Services Administration, FAR Secretariat (VIR), Room 4035, Washington,
DC 20405, telephone (202) 501-4755. Please cite OMB Control Number
9000-00XX, Combating Trafficking in Persons (FAR Case 2005-012), in all
correspondence.

E. Determination to Issue an Interim Rule

A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that urgent and compelling reasons exist to promulgate this
interim rule without prior opportunity for public comment. This action
is necessary because the Trafficking Victims Protection Reauthorization
Act of 2003 (Pub. L. 108-193), and the Trafficking Victims Protection
Reauthorization Act of 2005 (Pub. L. 109-164) were effective upon
enactment.
However, pursuant to Public Law 98-577 and FAR 1.501, the Councils
will consider public comments received in response to this interim rule
in the formation of the final rule.

List of Subjects in 48 CFR Parts 12, 22 and 52

Government procurement.

Dated: July 30, 2007.
Al Matera,
Acting Director, Contract Policy Division.

0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 12, 22 and 52 as set
forth below:
0
1. The authority citation for 48 CFR parts 12, 22 and 52 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).

[[Page 46341]]

PART 12--ACQUISITION OF COMMERCIAL ITEMS

12.503 [Amended]

0
2. Amend section 12.503 by removing paragraph (a)(6).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

22.1700 [Amended]

0
3. Amend section 22.1700 by removing ``as amended by Pub. L. No. 108-
193 and 109-164''.
0
4. Amend section 22.1701 to read as follows:

22.1701 Applicability.

This subpart applies to all acquisitions.
0
5. Amend section 22.1702 by revising the definition ``Employee'' to
read as follows:

22.1702 Definitions.

22.1703 Policy.

The United States Government has adopted a zero tolerance policy
regarding trafficking in persons. Government contracts shall--
(a) Prohibit contractors, contractor employees, subcontractors, and
subcontractor employees from--
(1) Engaging in severe forms of trafficking in persons during the
period of performance of the contract;
(2) Procuring commercial sex acts during the period of performance
of the contract; and
(3) Using forced labor in the performance of the contract;
(b) Require contractors and subcontractors to notify employees of
the prohibited activities described in paragraph (a) of this section
and the actions that may be taken against them for violations; and
(c) Impose suitable remedies, including termination, on contractors
that fail to comply with the requirements of paragraphs (a) and (b) of
this section.
0
7. Revise section 22.1704 to read as follows:

22.1704 Violations and remedies.

(a) Violations. The Government may impose the remedies set forth in
paragraph (b) of this section if--
(1) The contractor, contractor employee, subcontractor, or
subcontractor employee engages in severe forms of trafficking in
persons during the period of performance of the contract;
(2) The contractor, contractor employee, subcontractor, or
subcontractor employee procures a commercial sex act during the period
of performance of the contract;
(3) The contractor, contractor employee, subcontractor, or
subcontractor employee uses forced labor in the performance of the
contract; or
(4) The contractor fails to comply with the requirements of the
clause at 52.222-50, Combating Trafficking in Persons.
(b) Remedies. After determining in writing that adequate evidence
exists to suspect any of the violations at paragraph (a) of this
section, the contracting officer may pursue any of the remedies
specified in paragraph (e) of the clause at 52.222-50, Combating
Trafficking in Persons. These remedies are in addition to any other
remedies available to the United States Government.
0
8. Revise section 22.1705 to read as follows:

22.1705 Contract clause.

(a) Insert the clause at 52.222-50, Combating Trafficking in
Persons, in all solicitations and contracts.
(b) Use the basic clause with its Alternate I when the contract
will be performed outside the United States (as defined at 25.003) and
the contracting officer has been notified of specific U.S. directives
or notices regarding combating trafficking in persons (such as general
orders or military listings of ``off-limits'' local establishments)
that apply to contractor employees at the contract place of
performance.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
9. Amend section 52.212-5 by--
0
a. Revising the date of the clause to read ``(AUG 2007)'';
0
b. Redesignating paragraphs (b)(24) through (b)(37) as (b)(25) through
(b)(38), respectively, and adding a new paragraph (b)(24); and
0
c. Redesignating paragraph (e)(1)(vii) as paragraph (e)(1)(viii); and
adding a new paragraph (e)(1)(vii).
The revised text reads as follows:

52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.

* * * * *
(b) * * *
---- (24)(i) 52.222-50, Combating Trafficking in Persons (AUG 2007)
(Applies to all contracts).
---- (ii) Alternate I (AUG 2007) of 52.222-50.
* * * * *
(e)(1) * * *
(vii) 52.222-50, Combating Trafficking in Persons (AUG 2007) (22
U.S.C. 7104(g)). Flow down required in accordance with paragraph (f) of
FAR clause 52.222-50.
* * * * *
0
10. Amend section 52.213-4 by revising the clause date to read ``(AUG
2007)''; redesignating paragraphs (a)(1)(iv) through (a)(1)(vi) as
paragraphs (a)(1)(v) through (a)(1)(vii); and adding a new paragraph
(a)(1)(iv) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).

* * * * *
(a) * * *
(1) * * *
(iv) 52.222-50, Combating Trafficking in Persons (AUG 2007) (22
U.S.C. 7104(g)).
* * * * *
0
11. Amend section 52.222-50 by
0
a. Amending the introductory text by removing ``22.1705'' and adding
``22.1705(a)'' in its place; and revising the date of the clause to
read ``(AUG 2007)'';
0
b. Amending paragraph (a) by revising the definition ``Employee'', and
removing the definition ``Individual''; and
0
c. Revising paragraphs (b), (c), (d), (e), and (f), and adding
Alternate I.
The revised text reads as follows:

52.222-50 Combating Trafficking in Persons.

* * * * *
Employee means an employee of the Contractor directly engaged in
the performance of work under the contract who has other than a minimal
impact or involvement in contract performance.
* * * * *
(b) Policy. The United States Government has adopted a zero
tolerance policy regarding trafficking in persons. Contractors and
contractor employees shall not--
(1) Engage in severe forms of trafficking in persons during the
period of performance of the contract;
(2) Procure commercial sex acts during the period of performance of
the contract; or
(3) Use forced labor in the performance of the contract.
(c) Contractor requirements. The Contractor shall--

[[Page 46342]]

(1) Notify its employees of--
(i) The United States Government's zero tolerance policy described
in paragraph (b) of this clause; and
(ii) The actions that will be taken against employees for
violations of this policy. Such actions may include, but are not
limited to, removal from the contract, reduction in benefits, or
termination of employment; and
(2) Take appropriate action, up to and including termination,
against employees or subcontractors that violate the policy in
paragraph (b) of this clause.
(d) Notification. The Contractor shall inform the Contracting
Officer immediately of--
(1) Any information it receives from any source (including host
country law enforcement) that alleges a Contractor employee,
subcontractor, or subcontractor employee has engaged in conduct that
violates this policy; and
(2) Any actions taken against Contractor employees, subcontractors,
or subcontractor employees pursuant to this clause.
(e) Remedies. In addition to other remedies available to the
Government, the Contractor's failure to comply with the requirements of
paragraphs (c), (d), or (f) of this clause may render the Contractor
subject to--
(1) Required removal of a Contractor employee or employees from the
performance of the contract;
(2) Required subcontractor termination;
(3) Suspension of contract payments;
(4) Loss of award fee, consistent with the award fee plan, for the
performance period in which the Government determined Contractor non-
compliance;
(5) Termination of the contract for default or cause, in accordance
with the termination clause of this contract; or
(6) Suspension or debarment.
(f) Subcontracts. The Contractor shall include the substance of
this clause, including this paragraph (f), in all subcontracts.
(End of clause)
Alternate I (AUG 2007). As prescribed in 22.1705(b), substitute the
following paragraph in place of paragraph (c)(1)(i) of the basic
clause:
(i)(A) The United States Government's zero tolerance policy
described in paragraph (b) of this clause; and
(B) The following directive(s) or notice(s) applicable to employees
performing work at the contract place(s) of performance as indicated
below:

----------------------------------------------------------------------------------------------------------------
Document may be
Document Title obtained from: Applies Performance to in/at:
----------------------------------------------------------------------------------------------------------------
---------------- ----------------..... ----------------
---------------- ----------------..... ----------------
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[Contracting Officer shall insert title of directive/notice;
indicate the document is attached or provide source (such as website
link) for obtaining document; and, indicate the contract performance
location outside the U.S. to which the document applies.]
[FR Doc. 07-3796 Filed 8-16-07; 8:45 am]

BILLING CODE 6820-EP-S