[Federal Register: March 31, 2009 (Volume 74, Number 60)]
[Rules and Regulations]
[Page 14639-14646]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr09-21]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 4 and 52
[FAC 2005-32; FAR Case 2009-009; Item IV; Docket 2009-0011, Sequence 1]
RIN 9000-AL21
Federal Acquisition Regulation; FAR Case 2009-009, American
Recovery and Reinvestment Act of 2009 (the Recovery Act)--Reporting
Requirements
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 (the Councils) are issuing an interim
rule amending the Federal Acquisition Regulation (FAR) to implement
section 1512 of Division A of the American Recovery and Reinvestment
Act of 2009, which requires contractors to report on their use of
Recovery Act funds.
DATES: Effective Date: March 31, 2009
Applicability Date: The rule applies to solicitations issued and
contracts awarded on or after the effective date of this rule.
Contracting officers shall modify, on a bilateral basis, in accordance
with FAR 1.108(d)(3), existing contracts to include the FAR clause if
Recovery Act funds will be used. In the event that a contractor refuses
to accept such a modification, the contractor will not be eligible for
receipt of Recovery Act funds.
Comment Date: Interested parties should submit written comments to
the FAR Secretariat on or before June 1, 2009 to be considered in the
formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-32, FAR case 2009-
009, by any of the following methods:
Regulations.gov: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2009-009'' under the heading ``Comment or Submission''. Select the link
``Send a Comment or Submission'' that corresponds with FAR Case 2009-
009. Follow the instructions provided to complete the ``Public Comment
and Submission Form''. Please include your name, company name (if any),
and ``FAR Case 2009-009'' on your attached document.
Fax: 202-501-4067.
Mail: General Services Administration, FAR Secretariat
(VPR), 1800 F Street, NW., Room 4041, Attn: Hada Flowers, Washington,
DC 20405.
Instructions: Please submit comments only and cite FAC 2005-32, FAR
case 2009-009, 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 2005-32, FAR case 2009-009. For information pertaining to status or
publication schedules, contact the FAR Secretariat at (202) 501-4755.
SUPPLEMENTARY INFORMATION:
A. Background
On February 17, 2009, the President signed Public Law 111-5, the
American Recovery and Reinvestment Act of 2009 (the ``Recovery Act''),
including a number of provisions to be implemented in Federal
Government contracts. This interim rule implements section 1512, which
is also known as the ``Jobs Accountability Act.'' Subsection (c) of
section 1512 requires contractors that receive awards (or modifications
to existing awards) funded, in whole or in part, by the Recovery Act to
report quarterly on the use of the funds.
This FAR case adds a new subpart 4.15, and a new clause, 52.204-11.
Contracting officers must include the new clause in solicitations and
contracts funded in whole or in part with Recovery Act funds, except
classified solicitations and contracts. Commercial item contracts and
Commercially Available Off-The-Shelf (COTS) item contracts are covered,
as well as actions under the simplified acquisition threshold.
Contracting officers who obligate Recovery Act funds on existing
contracts or orders must modify those contracts to add the new clause.
[[Page 14640]]
Contracting officers shall ensure that the contractor complies with the
reporting requirements of the new clause. Contracting officers are not
responsible for validating report content, only that a report was
submitted as required. The online reporting tool will allow the
contracting officer to monitor this as a matter of contract
performance.
Reports from contractors for all work funded, in whole or in part,
by the Recovery Act, and for which an invoice is submitted prior to
June 30, 2009, are due no later than July 10, 2009. Thereafter, reports
shall be submitted no later than the 10th day after the end of each
calendar quarter. Contractors will report the information, using the
online reporting tool available at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.FederalReporting.gov,
using instructions at that Web site. The online reporting tool is being
developed for use by the July 10th timeframe. The data elements to be
reported are outlined in the clause 52.204-11, in paragraph (d).
The Government intends to pre-populate as many data elements as
possible to reduce the burden on contractors and first-tier
subcontractors by using information available in other Government
systems. For instance, the Government is considering pre-populating
congressional districts based on nine-digit zip codes, funding agency,
North American Industry Classification System (NAICS) code, and parent
DUNS.
While Section 1512(c)(4) requires reporting on all Federal
Financial Accountability and Transparency Act (FFATA) data elements,
including the compensation information, it limits the reporting to
first-tier subcontractors that meet the applicability requirements. The
FAR clause requires this compensation disclosure for prime contractors,
because to exclude prime contractors while requiring disclosure for
first-tier subcontractors would be unsupportable given the transparency
goals of both FFATA and the Recovery Act.
B. Determinations
The Councils provide the following determinations with respect to
the rule's applicability to contracts and subcontracts in amounts not
greater than the simplified acquisition threshold, commercial items,
and commercially available off-the-shelf (COTS) items.
1. Applicability to contracts at or below the simplified
acquisition threshold. Section 4101 of Public Law 103-355, the Federal
Acquisition Streamlining Act (FASA) (41 U.S.C. 429), governs the
applicability of laws to contracts or subcontracts in amounts not
greater than the simplified acquisition threshold. It is intended to
limit the applicability of laws to them. FASA provides that if a
provision of law contains criminal or civil penalties, or if the
Federal Acquisition Regulatory Council makes a written determination
that it is not in the best interest of the Federal Government to exempt
contracts or subcontracts at or below the simplified acquisition
threshold, the law will apply to them. Therefore, given section 1512 of
the Recovery Act which requires that prime contractors report
information on their use of Recovery funds, and the initial
implementing guidance for the Recovery Act issued on February 18, 2009
by the Director of the Office of Management and Budget (OMB) committing
to an unprecedented level of transparency and accountability for
taxpayer dollars, the FAR Council has determined that it is in the best
interest of the Federal Government to apply this rule to contracts or
subcontracts at or below the simplified acquisition threshold, as
defined at 2.101.
2. Applicability to Commercial Item contracts. Section 8003 of
Public Law 103-355, the Federal Acquisition Streamlining Act (FASA) (41
U.S.C. 430), governs the applicability of laws to commercial items, and
is intended to limit the applicability of laws to commercial items.
FASA provides that if a provision of law contains criminal or civil
penalties, or if the Federal Acquisition Regulatory Council makes a
written determination that it is not in the best interest of the
Federal Government to exempt commercial item contracts, the provision
of law will apply to contracts for commercial items. The same applies
for subcontracts for commercial items.
Therefore, given section 1512, of the Recovery Act, which requires
that prime contractors report information on their use of recovery
funds, and the initial implementing guidance for the Recovery Act
issued on February 18, 2009 by the Director of the Office of Management
and Budget (OMB) committing to an unprecedented level of transparency
and accountability for taxpayer dollars, the FAR Council has determined
that it is in the best interest of the Federal Government to apply the
rule to commercial items, as defined at 2.101, both at the prime and
subcontract levels.
3. Applicability to Commercially Available Off-The-Shelf (COTS)
item contracts. Section 4203 of Public Law 104-106, the Clinger-Cohen
Act of 1996 (41 U.S.C. 431), governs the applicability of laws to the
procurement of commercially available off-the-shelf (COTS) items, and
is intended to limit the applicability of laws to them. Clinger-Cohen
provides that if a provision of law contains criminal or civil
penalties, or if the Administrator for Federal Procurement Policy makes
a written determination that it is not in the best interest of the
Federal Government to exempt COTS item contracts, the provision of law
will apply. The same applies for subcontracts for COTS items.
Therefore, given section 1512, of the Recovery Act which requires
that prime contractors report information on their use of recovery
funds, and the initial implementing guidance for the Recovery Act
issued on February 18, 2009 by the Director of the Office of Management
and Budget (OMB) committing to an unprecedented level of transparency
and accountability for taxpayer dollars, the Administrator, Office of
the Federal Procurement Policy, has determined that it is in the best
interest of the Federal Government to apply the rule to Commercially
Available Off-The-Shelf (COTS) item contracts and subcontracts, as
defined at FAR 2.101.
C. Request for Public Comments
The Councils ask for public comments on the interim rule, and the
following additional issues:
1. The statute requires a description of the work (implemented at
52.204-11(d)(5)). Should the Government provide a list of broad
categories of work under the Recovery Act from which the contractor
would select and, if so, what should these be?
2. The definitions of ``jobs created'' and ``jobs retained'' are
currently based on a conversion of part-time or temporary jobs into
``full-time equivalent'' (FTE) jobs. In order to do such a conversion,
these part-time hours must be divided by the number of hours in a full-
time schedule. This interim rule leaves the definition of full-time
schedule to each individual company's discretion based on its existing
practices. With respect to the methodology described in the interim
rule for estimating jobs created or retained:
--Is the use of FTE and the description provided consistent with
existing business practices and systems?
--Is a standardized methodology based on FTE necessary or do
contractors have existing practices that adequately address other than
full-time jobs to avoid inflating estimated numbers for jobs created
and jobs retained? Should the Government allow contractors to use any
method consistent with their existing practice as long as the
contractor provides an
[[Page 14641]]
explanation of the methodology, including a description of how part-
time and temporary employees are addressed?
--If the Government were to standardize the number of hours in a
``full-time schedule,'' would this increase the burden of reporting on
jobs created or retained?
3. If the Government were to require companies to separately
invoice for all supplies or services funded by the Recovery Act, what
challenges would this pose? Are there any benefits?
4. Is there information not customarily provided that would make it
easier for companies to segregate their invoices to separately identify
items funded by the Recovery Act?
5. Are there challenges to obtaining the information required from
first-tier subcontractors? If so, how could the rule be changed to ease
the submission of this information from both a prime contractor and
subcontractor perspective?
6. Does the definition of ``Total compensation'' used in the clause
provide sufficient clarity? If not, what specifically should be
clarified?
7. Would it be useful to provide an Alternate clause that would
allow agencies to identify meaningful distinct ``projects'' within the
contract for the purpose of requiring the contractor to report
employment impact and progress by ``project'' rather than for the
contract as a whole? For example, if the contract called for work in
distinct geographic areas, the report might provide more meaningful
information if the contractor were to report employment impact and
progress separately by geographic area. This would not require
individual reports but rather separate sections within the quarterly
report.
8. Currently, this rule requires contractors to report on invoiced
amounts because the Government assumed that it would be extremely
difficult for the contractor employee responsible for report
submission, to report on ``receipt of funds.'' Would a contractor be
able to separately identify when Recovery Act funds were received and
be able to identify the payment to particular deliverables? How
difficult would this be to track and report on a quarterly basis?
This is a significant regulatory action and, therefore, was subject
to Office of Management and Budget (OMB) 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.
D. Regulatory Flexibility Act
This interim rule may 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 it requires
contractors to report on their use of Recovery Act funds. An Initial
Regulatory Flexibility Analysis has been prepared and the results of
the analysis show that the direct cost of this rule on an average cost-
per-contractor basis does not appear to rise to the level of being
economically significant (i.e. $100,000,000); however, the Councils
request comments on this finding.
Therefore, the Councils have prepared an Initial Regulatory
Flexibility Analysis (IRFA) for public comment that is summarized as
follows:
This Initial Regulatory Flexibility Analysis has been prepared
consistent with 5 U.S.C. 603.
1. Reasons for the action.
This action implements section 1512 of the American Recovery and
Reinvestment Act of 2009 (Recovery Act), which requires contractors
to report quarterly on their use of Recovery Act funds.
2. Objectives of, and legal basis for, the rule.
The objective of the Recovery Act is to create jobs, restore
economic growth, and strengthen America's middle class through
measures that modernize the nation's infrastructure, enhance
America's energy independence, expand educational opportunities,
preserve and improve affordable health care, provide tax relief,
protect those in greatest need, and provide for other purposes. This
rule implements section 1512 of the Recovery Act which requires
contractors, as a condition of receipt of funds, to report quarterly
on their use of those funds. These reports will be made available to
the public. The Recovery Act is designed to provide unprecedented
transparency to the American taxpayer.
3. Description and estimate of the number of small entities to
which the rule will apply.
The rule imposes a clause in any award document funded by the
Recovery Act, requiring the contractor to publicly disclose
information related to the use of funds and specific information
about first-tier subcontract awards. This clause requires
contractors to report on use of Recovery Act funds. The clause
imposes a public reporting burden on prime contractors and, in a
more limited way, on their first-tier subcontractors. According to
the Federal Procurement Data System (FPDS), there are 129,331 active
and unique prime Federal contractors. The estimate for the number of
active and unique prime federal contractors that will participate in
awards funded by the Recovery Act is 20,013, of which 4,003 or 20
percent are estimated to be small businesses. It is also noted that
this is 20 percent of prime contractors, which should not be
confused with the 23 percent small business contracting goal which
is based on dollars and that continues to apply to both Recovery Act
spending and agencies' ongoing procurement spending.
The number of first-tier subcontractors estimated to participate
in Recovery Act awards is 60,039 or three times the number of prime
contractors. Of these 60,039 Recovery Act first-tier subcontractors,
it is estimated that 25 percent, or 15,010, will be small
businesses.
Based on the above, the estimated total number of small
businesses, prime and subcontractors, to which this rule will apply
is 19,013 and the estimated total number of other than small
businesses to which this rule will apply is 61,039.
4. Description of projected reporting, recordkeeping, and other
compliance requirements of the rule, including an estimate of the
classes of small entities which will be subject to the requirement
and the type of professional skills necessary for preparation of the
report or record.
The rule requires Federal prime contractors, both small and
other than small businesses, to report quarterly on their use of
funds received under the Recovery Act. The rule applies to all
Federal contractors regardless of size or business ownership. Such a
report would probably be prepared by a company contract
administrator or contract manager or a company subcontract
administrator. The information required in the report is primarily
information that companies would maintain for their own business
purposes including, but not limited to, contract or other award
number, the dollar amount of invoices, the supplies or services
delivered, a broad assessment of progress towards completion, the
estimated number of new jobs created or retained resulting from the
award, and first-tier subcontract information (or aggregate
information if the subcontract is less than $25,000, or the
subcontractor is an individual or had gross income in the previous
tax year of less than $300,000). While most of the data elements
impose only one-time burden collection, some will require quarterly
updates.
There are three data elements required in the report that will
likely require some additional effort: (1) Estimating the cumulative
number of jobs created each calendar quarter, (2) estimating the
cumulative number of jobs retained each calendar quarter, and (3)
providing the name and total compensation of each of the five most
highly compensated officers of the contractor for the calendar year
in which the contract is awarded, which applies at both the prime
and first-tier subcontract level. The rule also requires the prime
contractor to report certain information, required by the Federal
Funding Accountability and Transparency Act of 2006 (FFATA), about
first-tier subcontracts (though all awards under $25,000 will be
aggregated, eliminating the need to report transaction-level data).
The prime contractor will have most of this information in the
subcontract award document, such as the name of the subcontractor,
award number, and date of award. However, the prime contractor will
have to obtain four of the elements directly from the first-tier
subcontractor: (1) The unique identifier (DUNS Number) ``for awards
of $25,000 or more'' as well as for the
[[Page 14642]]
subcontractor's parent company, if the subcontractor has a parent
company, (2) subcontractor's physical address, (3) subcontract
primary performance location, and (4) the compensation information
described earlier as required by FFATA and reflected in section 1512
of the Recovery Act.
With respect to the DUNS Number, we anticipate that most first-
tier subcontractors have a DUNS Number as it is a requirement for
receipt of any Government contract. However, a company that never
received nor anticipated a Government contract might not have a DUNS
number and will have to register for one with Dunn and Bradstreet.
The registration process is not burdensome, can be done online or by
phone, and requires only information any company would have on hand
for business purposes. First-tier subcontractors are not required to
register in the Central Contractor Registration (CCR) as a
consequence of this rule.
With respect to compensation information, this requirement
results from FFATA and will not apply if the public has access to
information about compensation of the senior executives through
periodic reports filed under section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or
section 6104 of the Internal Revenue Code of 1986. Otherwise, each
prime contractor and first-tier subcontractors will have to disclose
the compensation information if it received (1) 80 percent or more
of annual gross revenues in Federal awards; and (2) $25M or more in
annual gross revenue from Federal awards. Because this requirement
of FFATA became law on December 26, 2007, we anticipate that those
companies to which it applies are aware of the requirement and have
been preparing to provide this information.
5. Relevant Federal rules which may duplicate, overlap, or
conflict with the rule.
The rule includes the reporting requirements stipulated by FFATA
in FAR Case 2008-039 FFATA flow-down and 2008-037 Financial
Disclosure.
These cases are in process and as they are finalized, they will
be amended to ensure that they do not duplicate, overlap, or
conflict with the requirements of this interim rule.
6. Description of any significant alternatives to the rule which
accomplish the stated objectives of applicable statutes and which
minimize any significant economic impact of the rule on small
entities.
The rule requires Federal prime contractors to respond to all of
the reporting requirements, eliminating some of the reporting burden
on first-tier subcontractors despite the fact that they will have to
provide some information to the prime contractor. Also, all of the
reporting elements applied to first-tier subcontractors, a
significant percentage of which will be small businesses, are one-
time collection burdens. The Government believes that the rule will
further minimize the reporting burden on Government contractors,
including all small businesses, as well as other businesses, by
using existing Federal acquisition/registration systems to pre-
populate certain data elements.
The FAR Secretariat will be submitting a copy of the IRFA to the
Chief Counsel for Advocacy of the Small Business Administration.
Interested parties may obtain a copy from the FAR Secretariat. The
Councils will consider comments from small entities concerning the
affected FAR Parts 4 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 2005-32, FAR case 2009-009), in all correspondence.
E. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) applies because the
interim rule contains information collection requirements. Accordingly,
the FAR Secretariat forwarded an emergency information collection
request for approval of new information collection requirements to the
Office of Management and Budget (OMB) under 44 U.S.C. Chapter 35, et
seq. OMB approved the new information collection requirements as
follows:
1. OMB Control No. 9000-0166--One Time Reporting Requirements for
Prime Contractors.
2. OMB Control No. 9000-0167--One Time Reporting for First-tier
Subcontractors.
3. OMB Control No. 9000-0168--One Time Reporting, Compensation
Requirements.
4. OMB Control No. 9000-0169--Quarterly Reporting for Prime
Contractors.
Comments on the interim rule as well as the collection will be
considered in the revisions to both the rule and the collection.
Any award funded by the Recovery Act will contain the clause at
52.204-11. This clause requires contractors to report on use of
Recovery Act funds. The clause imposes public reporting burden on prime
contractors and, in a more limited way, on their first-tier
subcontractors. According to the Federal Procurement Data System
(FPDS), there are 129,331 active and unique prime Federal contractors
as of February 2009. The estimate for the number of active and unique
prime Federal contractors that will participate in awards funded by the
Recovery Act is 20,013. This is based on using a factor of .16 of
129,331, derived by dividing 129,331 by $517B in procurement
obligations for fiscal year 2008 or by dividing estimated Recovery Act
dollars for contracts ($80B: Government's best estimate of Recovery Act
dollars to be obligated by contracts is between $60 and $80 billion;
using $80 billion for calculation purposes) by $517B. Of the estimated
20,013 Recovery Act prime contractors, it is estimated that 20 percent,
or 4,003, will be small businesses. It should be noted that this is 20
percent of prime contractors; this should not be confused with the 23
percent small business contracting goal which is based on dollars and
that continues to apply to both Recovery Act spending and agencies'
ongoing procurement spending.
The number of first-tier subcontractors estimated to participate in
Recovery Act awards is 60,039. This was derived by estimating three
first-tier subcontractors for each prime contractor. Of these 60,039
Recovery Act first-tier subcontractors, it is estimated that 25
percent, or 15,010, will be small businesses.
Based on the above, the estimated total number of small businesses,
prime and subcontractors, to which this rule will apply is 19,013 and
the estimated total number of other than small businesses to which this
rule will apply is 61,039.
Though Section 1512 requires that the reports be completed by the
prime contractor for all data elements, for practical purposes, the
prime contractor will have to obtain certain information from their
first-tier subcontractors, hence the flow-down requirements of
paragraph (d)(10) of the clause. Additionally, the information required
on the prime contractor award varies from that required for the first-
tier subcontract awards. For instance, the elements at paragraphs
(d)(1) through (9) are collection burdens associated with the prime
contract award while the elements in (d)(10)(i) through (ix) are
associated with first-tier subcontracts.
Finally, the elements required by Section 1512 of the Recovery Act
are a combination of those that will be updated in each quarterly
report, such as jobs created and retained and progress towards
completion of the overall purpose and expected outcomes or results of
the contract and those that are one-time collection burdens, such as
award number and date and all of the reporting requirements for first-
tier subcontracts. Therefore, the following analysis separately
estimates the burden associated with the one-time reporting elements
and those that are updated quarterly. The parenthetical reference after
the description of each reporting element refers to the FAR clause. The
hours estimated per response include the time for reviewing
instructions, searching existing data sources, gathering the data, and
completing the collection of information. The estimated total annual
burden associated with reporting requirements of FAR 52.204-
[[Page 14643]]
11 is $31,725,468, based on the following:
One-Time Reporting Elements
1. OMB Control No. 9000-0166--One Time Reporting Requirements for
Prime Contractors. One-time reporting elements for which the burden is
imposed on the prime contractor include the following:
a. The award number for both its Government contract and first-tier
subcontracts ((d)(1) and (d)(10)(viii));
b. Program or project title, if any, for its Government contract
((d)(4));
c. A description of the overall purpose and expected outcomes or
results of the contract and first-tier subcontracts, including
significant deliverables and, if appropriate, units of measure ((d)(5)
and (d)(10)(vii));
d. Name of the first-tier subcontractor ((d)(10)(ii));
e. Amount of the first-tier subcontract award ((d)(10)(iii));
f. Date of the first-tier subcontract award ((d)(10)(iv));
g. Applicable North American Industry Classification System (NAICS)
code ((d)(10)(v)); and
h. Funding agency ((d)(10)(vi)).
We estimate the total annual public cost burden for these elements
to be $850,544 based on the following:
Respondents: 20,013.
Responses per respondent: 1.25 (reflects estimate that 25 percent
of contractors will have more than one Recovery Act funded award on
which to report).
Total annual responses: 25,016.
Preparation hours per response: .5.
Total response burden hours: 12,508.
Average hourly wages ($50.00+36.35 percent overhead): 68.00.
Estimated cost to the public: $850,544.
2. OMB Control No. 9000-0168--One Time Reporting, Compensation
Requirements. A one-time reporting element for which the burden is
imposed on certain prime contractors and first-tier subcontractors to
publicly disclose the names and total compensation of each of the
contractor's or first-tier subcontractor's five most highly compensated
officers, for the calendar year in which the award was made ((d)(8) and
(d)(10)(xi)) (see applicability requirements in the clause at (d)(8)
and (d)(10)).
While Section 1512(c)(4) of the Recovery Act requires reporting on
all FFATA data elements, including the compensation information, it
limits the prime's reporting responsibility to first-tier
subcontractors that meet the applicability requirements. The FAR clause
requires this compensation disclosure for prime contractors as well
because to exclude prime contractors while requiring disclosure for
first-tier subcontractors would be unsupportable given the transparency
goals of both FFATA and the Recovery Act.
There are likely to be some prime contractors that already provide
public access to the compensation of senior executives through periodic
reports filed under section 13(a) or 15(d) of the Securities Exchange
Act of 1934 or section 6104 of the Internal Revenue Code of 1986. For
purposes of this analysis, the Government estimates that 5 percent of
prime contractors already provide such public access. There are also
likely to be some first-tier subcontractors that do not meet either of
the revenue thresholds for applicability. For purposes of this
analysis, the Government estimates that 5 percent of first-tier
subcontractors will not have to disclose compensation information
because they do not meet the revenue thresholds.
We estimate the total annual public cost burden for these elements
to be $19,392,444, based on the following:
Respondents: 76,049 (20,013 primes-5 percent=19,012+60,039 first-
tier subcontractors-5 percent=57,037).
Responses per respondent: 1.25 (reflects estimate that 25 percent
of all respondents will have more than one Recovery Act funded award on
which to report).
Total annual responses: 95,061.
Preparation hours per response: 3.
Total response burden hours: 285,183.
Average hourly wages ($50.00+36.35 percent overhead): $68.00.
Estimated cost to the public: $19,392,444.
3. OMB Control No. 9000-0167--One Time Reporting for First-tier
Subcontractors.
One-time reporting elements for which the burden is imposed only on
the first-tier subcontractor include the following:
a. Unique identifier (DUNS Number) for the subcontractor receiving
the award and for the subcontractor's parent company, if the
subcontractor has a parent company ((d)(10)(i));
b. Subcontractor's physical address including street address, city,
state, and country. Also include the nine-digit zip code and
congressional district if applicable((d)(10)(ix)); and
c. Subcontract primary performance location including street
address, city, state, and country. Also include the nine-digit zip code
and congressional district if applicable ((d)(10)(x)).
The Government expects that most first-tier subcontractors will
have a DUNS number. However, if a company has never received nor
anticipated a Government contract, it would be required to register for
a DUNS number which is not an onerous process and can be done online or
by phone using information a company would have on hand for business
purposes.
We estimate the total annual public cost burden for these elements
to be $1,275,816, based on the following:
Respondents: 60,039.
Responses per respondent: 1.25 (reflects estimate that 25 percent
of first-tier subcontractors will have more than one Recovery Act
funded award on which to report).
Total annual responses: 75,049.
Preparation hours per response: .25.
Total response burden hours: 18,762.
Average hourly wages ($50.00+36.35 percent overhead):$68.00.
Estimated cost to the public: $1,275,816.
4. OMB Control No. 9000-0169--Quarterly Reporting for Prime
Contractors. Elements updated quarterly for which the burden is imposed
on the prime contractor include the following:
a. The amount of Recovery Act funds invoiced by the contractor,
cumulative since the beginning of the contract ((d)(2));
b. A list of all significant services performed or supplies
delivered, including construction, for which the contractor has
invoiced ((d)(3));
c. An assessment of the contractor's progress towards the
completion of the overall purpose and expected outcomes or results of
the contract (i.e., not started, less than 50 percent completed,
completed 50 percent or more, or fully completed). This covers the
contract (or portion thereof) funded by the Recovery Act ((d)(6));
d. A narrative description of the employment impact of the Recovery
Act funded work ((d)(7)(i) through (ii)); and
e. For subcontracts valued at less than $25,000 or any subcontracts
awarded to an individual, or subcontracts awarded to a subcontractor
that in the previous tax year had gross income under $300,000, the
contractor shall only report the aggregate number of such first tier
subcontracts awarded in the quarter and their aggregate total dollar
amount ((d)(9)).
We estimate the total annual public cost burden for these elements
to be $10,206,664, based on the following:
Respondents: 20,013.
Responses per respondent: 1.25 (reflects 4 reports multiplied by a
factor of 1.25 to reflect Government's estimate that 25 percent of
contractors will have more than one Recovery Act funded award on which
to report).
Total annual responses: 100,065.
[[Page 14644]]
Preparation hours per response: 1.5.
Total response burden hours: 150,098.
Average hourly wages ($50.00+36.35 percent overhead): $68.00.
Estimated cost to the public: $10,206,664.
F. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than June 1, 2009 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, FAR Secretariat (VPR), 1800 F Street, NW., Room 4041,
Washington, DC 20405. Please cite the applicable OMB Control No.: 9000-
0166; 9000-0167; 9000-0168; or 9000-0169, and FAR Case 2009-009,
American Recovery and Reinvestment Act--Reporting Requirements, 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 (VPR), Room 4041, Washington,
DC 20405, telephone (202) 501-4755. Please cite the applicable OMB
Control No.: 9000-0166, 9000-0167; 9000-0168; or 9000-0169, and FAR
Case 2009-009, American Recovery and Reinvestment Act--Reporting
Requirements, in all correspondence.
The Paperwork Reduction Act applies to this interim rule.
G. 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 American Recovery and Reinvestment Act of 2009
became effective on enactment on February 17, 2009, and agencies are
ready to award contracts using funds appropriated by the Act. Without a
FAR clause, agencies will be forced to develop their own clause, which
would (1) significantly increase the costs for Government as well as
contractors who may have to comply with varied clauses and reporting
mechanisms, (2) increase the risk of non-compliance, and (3) degrade
transparency and public understanding. Waiting for public comment prior
to issuing a clause will require resource-intensive and costly post-
award bilateral negotiations and may hinder recovery. 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 4 and 52
Government procurement.
Dated: March 25, 2009.
Al Matera,
Director, Office of Acquisition Policy.
0
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4 and 52 as set forth
below:
0
1. The authority citation for 48 CFR parts 4 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).
PART 4--ADMINISTRATIVE MATTERS
0
2. Add subpart 4.15 to read as follows:
Subpart 4.15-American Recovery and Reinvestment Act--Reporting
Requirements
Sec.
4.1500 Scope of subpart.
4.1501 Procedures.
4.1502 Contract clause.
4.1500 Scope of subpart.
This subpart implements section 1512(c) of Division A of the
American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5)
(Recovery Act), which requires, as a condition of receipt of funds,
quarterly reporting on the use of funds. The subpart also implements
the data elements of the Federal Funding Accountability and
Transparency Act of 2006, as amended (Pub. L. 109-282). Contractors
that receive awards (or modifications to existing awards) funded, in
whole or in part by the Recovery Act, must report information
including, but not limited to--
(a) The dollar amount of contractor invoices;
(b) The supplies delivered and services performed;
(c) An assessment of the completion status of the work;
(d) An estimate of the number of jobs created and the number of
jobs retained as a result of the Recovery Act funds;
(e) Names and total compensation of each of the five most highly
compensated officers for the calendar year in which the contract is
awarded; and
(f) Specific information on first-tier subcontractors.
4.1501 Procedures.
(a) In any contract action funded in whole or in part by the
Recovery Act, the contracting officer shall indicate that the contract
action is being made under the Recovery Act, and indicate which
products or services are funded under the Recovery Act. This
requirement applies whenever Recovery Act funds are used, regardless of
the contract instrument.
(b) To maximize transparency of Recovery Act funds that must be
reported by the contractor, the contracting officer shall structure
contract awards to allow for separately tracking Recovery Act funds.
For example, the contracting officer may consider awarding dedicated
separate contracts when using Recovery Act funds or establishing
contract line item number (CLIN) structures to mitigate commingling of
Recovery funds with other funds.
(c) Contracting officers shall ensure that the contractor complies
with the reporting requirements of 52.204-11, American Recovery and
Reinvestment Act--Reporting Requirements. If the contractor fails to
comply with the reporting requirements, the contracting officer shall
exercise appropriate contractual remedies.
(d) The contracting officer shall make the contractor's failure to
comply with the reporting requirements a part of the contractor's
performance information under Subpart 42.15.
4.1502 Contract clause.
Insert the clause at 52.204-11, American Recovery and Reinvestment
Act--Reporting Requirements in all solicitations and contracts funded
in whole or in part with Recovery Act funds, except classified
solicitations and contracts. This includes, but is not limited to,
Governmentwide Acquisition Contracts (GWACs), multi-agency contracts
(MACs), Federal Supply Schedule (FSS) contracts, or agency indefinite-
delivery/indefinite-quantity (ID/IQ) contracts that will be funded with
Recovery Act funds. Contracting officers shall ensure that this clause
is included in any existing contract or
[[Page 14645]]
order that will be funded with Recovery Act funds. Contracting officers
may not use Recovery Act funds on existing contracts and orders if the
clause at 52.204-11 is not incorporated.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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3. Add section 52.204-11 to read as follows:
52.204-11 American Recovery and Reinvestment Act--Reporting
Requirements
As prescribed in 4.1502, insert the following clause:
American Recovery and Reinvestment Act--Reporting Requirements (MAR
2009)
(a) Definitions. As used in this clause--
Contract, as defined in FAR 2.101, means a mutually binding
legal relationship obligating the seller to furnish the supplies or
services (including construction) and the buyer to pay for them. It
includes all types of commitments that obligate the Government to an
expenditure of appropriated funds and that, except as otherwise
authorized, are in writing. In addition to bilateral instruments,
contracts include (but are not limited to) awards and notices of
awards; job orders or task letters issued under basic ordering
agreements; letter contracts; orders, such as purchase orders, under
which the contract becomes effective by written acceptance or
performance; and bilateral contract modifications. Contracts do not
include grants and cooperative agreements covered by 31 U.S.C. 6301,
et seq. For discussion of various types of contracts, see FAR Part
16.
First-tier subcontract means a subcontract awarded directly by a
Federal Government prime contractor whose contract is funded by the
Recovery Act.
Jobs created means an estimate of those new positions created
and filled, or previously existing unfilled positions that are
filled, as a result of funding by the American Recovery and
Reinvestment Act of 2009 (Recovery Act). This definition covers only
prime contractor positions established in the United States and
outlying areas (see definition in FAR 2.101). The number shall be
expressed as ``full-time equivalent'' (FTE), calculated cumulatively
as all hours worked divided by the total number of hours in a full-
time schedule, as defined by the contractor. For instance, two full-
time employees and one part-time employee working half days would be
reported as 2.5 FTE in each calendar quarter.
Jobs retained means an estimate of those previously existing
filled positions that are retained as a result of funding by the
American Recovery and Reinvestment Act of 2009 (Recovery Act). This
definition covers only prime contractor positions established in the
United States and outlying areas (see definition in FAR 2.101). The
number shall be expressed as ``full-time equivalent'' (FTE),
calculated cumulatively as all hours worked divided by the total
number of hours in a full-time schedule, as defined by the
contractor. For instance, two full-time employees and one part-time
employee working half days would be reported as 2.5 FTE in each
calendar quarter.
Total compensation means the cash and noncash dollar value
earned by the executive during the contractor's past fiscal year of
the following (for more information see 17 CFR 229.402(c)(2)):
(1) Salary and bonus.
(2) Awards of stock, stock options, and stock appreciation
rights. Use the dollar amount recognized for financial statement
reporting purposes with respect to the fiscal year in accordance
with the Statement of Financial Accounting Standards No. 123
(Revised 2004) (FAS 123R), Shared Based Payments.
(3) Earnings for services under non-equity incentive plans. Does
not include group life, health, hospitalization or medical
reimbursement plans that do not discriminate in favor of executives,
and are available generally to all salaried employees.
(4) Change in pension value. This is the change in present value
of defined benefit and actuarial pension plans.
(5) Above-market earnings on deferred compensation which is not
tax-qualified.
(6). Other compensation. For example, severance, termination
payments, value of life insurance paid on behalf of the employee,
perquisites or property if the value for the executive exceeds
$10,000.
(b) This contract requires the contractor to provide products
and/or services that are funded under the American Recovery and
Reinvestment Act of 2009 (Recovery Act). Section 1512(c) of the
Recovery Act requires each contractor to report on its use of
Recovery Act funds under this contract. These reports will be made
available to the public.
(c) Reports from contractors for all work funded, in whole or in
part, by the Recovery Act, and for which an invoice is submitted
prior to June 30, 2009, are due no later than July 10, 2009.
Thereafter, reports shall be submitted no later than the 10th day
after the end of each calendar quarter.
(d) The Contractor shall report the following information, using
the online reporting tool available at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.FederalReporting.gov.
(1) The Government contract and order number, as applicable.
(2) The amount of Recovery Act funds invoiced by the contractor
for the reporting period. A cumulative amount from all the reports
submitted for this action will be maintained by the government's on-
line reporting tool.
(3) A list of all significant services performed or supplies
delivered, including construction, for which the contractor invoiced
in this calendar quarter.
(4) Program or project title, if any.
(5) A description of the overall purpose and expected outcomes
or results of the contract, including significant deliverables and,
if appropriate, associated units of measure.
(6) An assessment of the contractor's progress towards the
completion of the overall purpose and expected outcomes or results
of the contract (i.e., not started, less than 50 percent completed,
completed 50 percent or more, or fully completed). This covers the
contract (or portion thereof) funded by the Recovery Act.
(7) A narrative description of the employment impact of work
funded by the Recovery Act. This narrative should be cumulative for
each calendar quarter and only address the impact on the
contractor's workforce. At a minimum, the contractor shall provide--
(i) A brief description of the types of jobs created and jobs
retained in the United States and outlying areas (see definition in
FAR 2.101). This description may rely on job titles, broader labor
categories, or the contractor's existing practice for describing
jobs as long as the terms used are widely understood and describe
the general nature of the work; and
(ii) An estimate of the number of jobs created and jobs retained
by the prime contractor, in the United States and outlying areas. A
job cannot be reported as both created and retained.
(8) Names and total compensation of each of the five most highly
compensated officers of the Contractor for the calendar year in
which the contract is awarded if--
(i) In the Contractor's preceding fiscal year, the Contractor
received--
(A) 80 percent or more of its annual gross revenues from Federal
contracts (and subcontracts), loans, grants (and subgrants) and
cooperative agreements; and
(B) $25,000,000 or more in annual gross revenues from Federal
contracts (and subcontracts), loans, grants (and subgrants) and
cooperative agreements; and
(ii) The public does not have access to information about the
compensation of the senior executives through periodic reports filed
under section 13(a) or 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue
Code of 1986.
(9) For subcontracts valued at less than $25,000 or any
subcontracts awarded to an individual, or subcontracts awarded to a
subcontractor that in the previous tax year had gross income under
$300,000, the Contractor shall only report the aggregate number of
such first tier subcontracts awarded in the quarter and their
aggregate total dollar amount.
(10) For any first-tier subcontract funded in whole or in part
under the Recovery Act, that is over $25,000 and not subject to
reporting under paragraph 9, the contractor shall require the
subcontractor to provide the information described in (i), (ix),
(x), and (xi) below to the contractor for the purposes of the
quarterly report. The contractor shall advise the subcontractor that
the information will be made available to the public as required by
section 1512 of the Recovery Act. The contractor shall provide
detailed information on these first-tier subcontracts as follows:
(i) Unique identifier (DUNS Number) for the subcontractor
receiving the award and for the subcontractor's parent company, if
the subcontractor has a parent company.
(ii) Name of the subcontractor.
[[Page 14646]]
(iii) Amount of the subcontract award.
(iv) Date of the subcontract award.
(v) The applicable North American Industry Classification System
(NAICS) code.
(vi) Funding agency.
(vii) A description of the products or services (including
construction) being provided under the subcontract, including the
overall purpose and expected outcomes or results of the subcontract.
(viii) Subcontract number (the contract number assigned by the
prime contractor).
(ix) Subcontractor's physical address including street address,
city, state, and country. Also include the nine-digit zip code and
congressional district if applicable.
(x) Subcontract primary performance location including street
address, city, state, and country. Also include the nine-digit zip
code and congressional district if applicable.
(xi) Names and total compensation of each of the subcontractor's
five most highly compensated officers, for the calendar year in
which the subcontract is awarded if--
(A) In the subcontractor's preceding fiscal year, the
subcontractor received--
(l) 80 percent or more of its annual gross revenues in Federal
contracts (and subcontracts), loans, grants (and subgrants), and
cooperative agreements; and
(2) $25,000,000 or more in annual gross revenues from Federal
contracts (and subcontracts), loans, grants (and subgrants), and
cooperative agreements; and
(B) The public does not have access to information about the
compensation of the senior executives through periodic reports filed
under section 13(a) or 15(d) of the Securities Exchange Act of 1934
(15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue
Code of 1986.
(End of clause)
0
4. Amend section 52.212-5 by revising the date of the clause; and
redesignating paragraphs (b)(4) through (b)(42) as (b)(5) through
(b)(43), respectively, and adding a new paragraph (b)(4) to read as
follows:
52.212-5 Contract Terms and Conditions Required to Implement Statutes
or Executive Orders--Commercial Items.
Contract Terms and Conditions Required to Implement Statutes or
Executive Orders--Commercial Items (MAR 2009)
* * * * *
(b) * * *
-- (4) 52.204-11, American Recovery and Reinvestment Act--
Reporting Requirements (MAR 2009) (Pub. L. 111-5).
* * * * *
[FR Doc. E9-7025 Filed 3-30-09; 8:45 am]
BILLING CODE 6820-EP-P