[Federal Register: July 2, 2010 (Volume 75, Number 127)]
[Rules and Regulations]
[Page 38684-38687]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jy10-20]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 4 and 52
[FAC 2005-43; FAR Case 2010-008; Item III; Docket 2010-0008, Sequence
1]
RIN 9000-AL63
Federal Acquisition Regulation; FAR Case 2010-008, Recovery Act
Subcontract Reporting Procedures
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 revise the
clause at FAR 52.204-11. This interim rule does not require
renegotiation of existing Recovery Act contracts that include the
clause dated March 2009. This change will require first-tier
subcontractors with Recovery Act funded awards of $25,000 or more, to
report jobs information to the prime contractor for reporting into
http://FederalReporting.gov. It also will require the prime contractor
to submit its first report on or before the 10th day after the end of
the calendar quarter in which the prime contractor received the award,
and quarterly thereafter.
DATES: Effective Date: July 2, 2010.
Applicability Date: The changes to the original clause will be used
for all new solicitations and contracts issued on or after the
effective date of this interim rule. This change is not required for
task and delivery orders where the original clause dated March 2009 is
already in the underlying task and delivery order contract. This change
is not required when modifying existing contracts that contain the
clause dated March 2009. Therefore, this interim rule does not require
renegotiation of existing Recovery Act contracts that include the
clause dated March 2009.
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat on or before August 31, 2010 to be
considered in the formulation of a final rule.
ADDRESSES: Submit comments identified by FAC 2005-43, FAR case 2010-
008, by any of the following methods:
Regulations.gov: http://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by inputting ``FAR Case
2010-008'' under the heading ``Enter Keyword or ID'' and selecting
``Search.'' Select the link ``Submit a Comment'' that corresponds with
``FAR Case 2010-008.'' Follow the instructions provided at the ``Submit
a Comment'' screen. Please include your name, company name (if any),
and ``FAR Case 2010-008'' on your attached document.
Fax: 202-501-4067.
Mail: General Services Administration, Regulatory
Secretariat (MVCB), 1800 F Street, NW., Room 4041, ATTN: Hada Flowers,
Washington, DC 20405.
Instructions: Please submit comments only and cite FAC 2005-43, FAR
case 2010-008, in all correspondence related to this case. All comments
received will be posted without change to http://www.regulations.gov,
including any personal and/or business confidential information
provided.
FOR FURTHER INFORMATION CONTACT: Mr. Karlos Morgan, Procurement
Analyst, at (202) 501-2364 for clarification of content. Please cite
FAC 2005-43, FAR case 2010-008. For information pertaining to status or
publication schedules, contact the Regulatory 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. On March 31, 2009, the Councils published FAR
Case 2009-009 in the Federal Register, (74 FR 14639) as an interim rule
amending the FAR to implement section 1512 of the Recovery Act, which
requires contractors to report on their use of Recovery Act funds. A
correction was published May 14, 2009 (74 FR 22810). The FAR interim
rule added a new subpart 4.15, and a new clause, 52.204-11, requiring
contracting officers to include the clause in solicitations and
contracts funded in whole or in part with Recovery Act funds, except
classified solicitations and contracts.
This new interim rule revises the clause and instructs contracting
officers to include the clause in all new solicitations and contracts
issued on or after the effective date of this interim rule. This
revised clause is not required for any existing contracts, or task and
delivery orders issued under a contract, that contain the original
clause FAR clause 52.204-11 dated March 2009. Therefore, no
renegotiation is required. However, the revised clause will be required
for any new Recovery Act funded task or delivery orders if the
underlying task or delivery order contract does not contain FAR clause
52.204-11, dated March 2009.
The revised clause requires first-tier subcontractors to report
jobs information to the prime contractor for reporting into http://
FederalReporting.gov. It also requires prime contractors to submit
their first quarterly report into http://FederalReporting.gov on or
before the 10th day following the end of the calendar quarter in which
the prime contractor received its award and submit quarterly
thereafter. The revised clause also refers contractors and their first-
tier subcontractors to a set of Frequently Asked Questions (FAQs)
available online. Contractors subject to 52.204-11 were initially
notified of the FAQs through a Federal Register notice (74 FR 48971),
published on September 25, 2009.
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
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
quarterly reporting on subcontractor jobs under newly awarded Recovery
Act funded contracts.
An Initial Regulatory Flexibility Analysis (IRFA) has been
prepared. The analysis is summarized as follows:
1. Reasons for the action.
[[Page 38685]]
This action is being implemented to obtain jobs information on
first-tier subcontracts of $25,000 or more funded by the Recovery
Act.
2. Objectives of, and legal basis for, the rule.
The FAR Council has authority to promulgate regulations it
believes are necessary. OMB has determined that obtaining publicly
reported jobs information at the subcontractor level on new
contracts is desirable. This interim rule also requires that prime
contractors begin to report in the calendar quarter in which the
contract was awarded, even if no invoice has been submitted.
3. Description and estimate of the number of small entities to
which the rule will apply.
The rule revises the clause requiring quarterly reporting of
direct jobs for prime contractors and all first-tier subcontracts of
$25,000 or more, funded by the Recovery Act. The clause also
requires the first quarterly report to be submitted on or before the
10th day following the end of the calendar quarter in which the
prime contractor was awarded the Recovery Act funded contract. This
revised clause will only be required in new solicitations and
contracts issued on or after the effective date of the interim rule.
The revised clause is not required for task and delivery orders
where the underlying task or delivery order contract already
contains the original clause FAR 52.204-11 dated March 2009. This
clause is not required for any existing contracts, or task and
delivery orders issued under a contract, that contain the original
clause FAR 52.204-11 (March 2009). Therefore, the interim rule does
not require renegotiation of any existing awards that already
contain the original clause. The original clause imposed a public
reporting burden on prime contractors and, in a more limited way, on
their first-tier subcontractors. This interim rule will increase the
burden on both prime contractors and first-tier subcontractors who
receive new awards. However, because the Federal Government
estimates it has already obligated the majority of the Recovery Act
funded contracts (80 percent), the impact is more limited. According
to the Federal Procurement Data System (FPDS), there are currently
23,346 Recovery Act-funded contract awards. If that number
represents 80 percent of all awards, then there are an estimated
5,833 Recovery Act-funded actions left to be awarded. FPDS further
shows that of the 23,346 awards already made, 41 percent of them
have been to small businesses (this reflects the percentage of
awards, not dollars obligated which is currently 29 percent).
Therefore, of the 5,833 contracts remaining to be awarded, 2,392
will be awarded to small business.
The number of first-tier subcontractors estimated to participate
in Recovery Act awards is estimated at 7,874. This is based on an
assumption that there will be more first-tier subcontractors for
higher dollar awards. It is estimated that there will be three
first-tier subcontractors for each award of $550,000 or more; two
first-tier subcontractors for each award between $100,000 and
$449,999; and one first-tier subcontractor for each award between
$25,000 and $100,000. By analyzing FPDS data, we determined that the
highest dollar range represents 21 percent of all Recovery awards
with the middle and lowest ranges representing 25 percent and 22
percent, respectively. The remaining 32 percent is made up of awards
of $25,000 or below. Of the 7,874 first-tier subcontractors it is
estimated that 25 percent, or 1,969, will be small businesses.
Based on the above, including the assumption that awards under
$25,000 will have no subcontractors, the total number of small
businesses, prime and subcontractors, to which this interim rule
will apply is estimated at 3,595 and the total number of other than
small businesses to which this rule will apply is estimated at
8,245.
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.
This interim rule applies to all Federal contractors regardless
of size or business ownership. It is in addition to what was
previously required of all Federal contractors and first-tier
subcontractors, requiring the quarterly reporting of jobs
information for all first-tier subcontracts of $25,000 or more. Such
reporting would probably be prepared by a company contract
administrator or contract manager or a company subcontract
administrator. The information necessary to calculate the jobs is
primarily information that companies would maintain for their own
business purposes. The reporting burden is quarterly.
5. Relevant Federal rules which may duplicate, overlap, or
conflict with the rule.
FAR Case 2009-009, American Recovery and Reinvestment Act of
2009 (Recovery Act)--Reporting Requirements, is related to this rule
(see 74 FR 16469, published on March 31, 2009).
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 interim rule does not require that first-tier subcontractors
enter their jobs information directly into http://
FederalReporting.gov, which eliminates the burden associated with
Central Contractor Registration (CCR). CCR is required in order to
use http://FederalReporting.gov. It also eliminates the burdens
associated with registering in http://FederalReporting.gov and other
burdens associated with the use of that system. The prime contractor
will input the first-tier subcontractor's jobs information into
http://www.FederalReporting.gov. However, the first-tier
subcontractor will have to calculate the number of jobs that are
funded by the Recovery Act each calendar quarter and report that
information to the prime contractor in sufficient time that the
prime contractor can submit the report. To help alleviate some of
the burden, a set of Frequently Asked Questions is available at
http://www.whitehouse.gov/omb/recovery_faqs_contractors. One of
these FAQs provides a detailed example on how to calculate the jobs
funded by the Recovery Act.
The Regulatory 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 Regulatory Secretariat.
The Councils invite comments from small business concerns and other
interested parties on the expected impact of this rule on small
entities.
The Councils will also consider comments from small entities
concerning the existing regulations in parts affected by this rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAC 2005-43, FAR Case
2010-008) 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 Regulatory Secretariat forwarded an emergency information
collection request for approval of a new information collection
requirement to the Office of Management and Budget under 44 U.S.C.
Chapter 35, et seq. OMB approved the new information collection
requirement as OMB Control No. 9000-0176, Quarterly Reporting for
First-tier Subcontractors. Comments on the interim rule as well as the
information collection will be considered in the revisions to both the
rule and the information collection.
Any award funded by the Recovery Act that was awarded prior to the
effective date of this interim rule contained the original clause at
52.204-11, dated March 2009. Any award funded by the Recovery Act that
is awarded on or after the effective date of this interim rule will
contain the revised clause at 52.204-11. The revised clause imposes
additional collection requirements not contained in the original clause
at 52.204-11 dated March 2009. The revised clause requires first-tier
subcontractors with Recovery Act funded awards of $25,000 or more, to
report jobs to the prime contractor for reporting into http://
FederalReporting.gov. It also requires the prime contractor to submit
its first report on or before the 10th day after the end of the
calendar quarter in which the prime contractor received the award, and
quarterly thereafter.
Because the Federal Government estimates it has already awarded the
majority of the Recovery Act funded contracts (80 percent), the impact
of this collection is limited. According to the Federal Procurement
Data System (FPDS), there are currently 23,346
[[Page 38686]]
Recovery Act-funded contract awards. If that number represents 80
percent of all awards, then there are an estimated 5,833 Recovery Act-
funded actions left to be awarded. FPDS further shows that of the
23,346 awards already made, 41 percent of them have been to small
businesses (this reflects the percentage of awards, not dollars
obligated which is currently 29 percent). Therefore, of the 5,833
contracts remaining to be awarded, an estimated 2,392 will be awarded
to small business.
The number of first-tier subcontractors estimated to participate in
Recovery Act awards is estimated at 7,874. This is based on an
assumption that there will be more first-tier subcontractors for higher
dollar awards. It is estimated that there will be three first-tier
subcontractors for each award of $550,000 or more; two first-tier
subcontractors for each award between $100,000 and $449,999; and one
first-tier subcontractor for each award between $25,000 and $100,000.
By analyzing FPDS data, we determined that the highest dollar range
represents 21 percent of all Recovery awards with the middle and lowest
ranges representing 25 percent and 22 percent, respectively. The
remaining 32 percent is made up of awards of $25,000 or below. Of the
7,874 first-tier subcontractors, it is estimated that 25 percent, or
1,969, will be small businesses.
Based on the above, including the assumption that awards under
$25,000 will have no subcontractors, the total number of small
businesses, prime and subcontractors, to which this interim rule will
apply is estimated at 3,595 and the total number of other than small
businesses to which this rule will apply is estimated at 8,245.
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 need for the revised flow-down
requirements in paragraph (d)(10). In addition to the burden of first-
tier subcontractors having to collect and report jobs information to
the prime contractor, there is also the burden on the prime contractor
for preparing and monitoring subcontractors who will have to collect
and report this information to the prime.
Annual Reporting Burden
We estimate the total annual public cost burden for these elements
to be $2,950,792, 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:
First-tier Subcontract Respondents: 7,874.
Responses per respondent: 4 (reflects quarterly reports).
Total annual responses: 31,496.
Preparation hours per response: 1.0.
Total response burden hours: 31,496.
Average hourly wages ($50.00 + 36.35 percent overhead): $68.00.
Estimated cost to the public: $2,141,728.
Prime Contract Respondents: 3,966.
Responses per respondent: 4 (reflects quarterly reports).
Total annual responses: 15,864.
Preparation hours per response: .75.
Total response burden hours: 11,898.
Average hourly wages ($50.00 + 36.35 percent overhead): $68.00.
Estimated cost to the public: $809,064.
D. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than August 31, 2010 to: FAR Desk Officer, OMB, Room 10102,
NEOB, Washington, DC 20503, and a copy to the General Services
Administration, Regulatory Secretariat (MVCB), 1800 F Street, NW., Room
4041, Washington, DC 20405. Please cite the applicable OMB Control No.:
9000-0176 and FAR Case 2010-008, Recovery Act Subcontract Reporting
Procedures, 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, Regulatory Secretariat (MVCB), Room 4041,
Washington, DC 20405, telephone (202) 501-4755. Please cite the
applicable OMB Control No.: 9000-0176 and FAR Case 2010-008, Recovery
Act Subcontract Reporting Procedures, 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 most of the funds provided under the American
Recovery and Reinvestment Act of 2009 for obligation on Federal
contracts, must be obligated by September 2010. In order to obtain the
additional information on jobs prior to the statutory requirement to
obligate most Recovery funds on contracts by September 2010, the
requirements must be implemented immediately. However, pursuant to 41
U.S.C 418b and FAR 1.501-3(b), 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: June 25, 2010.
Edward Loeb,
Director, Acquisition Policy Division.
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Therefore, DoD, GSA, and NASA amend 48 CFR parts 4 and 52 as set forth
below:
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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. Revise section 4.1502 to read as follows:
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 include this clause in
any existing contract or order that will be funded with Recovery Act
funds. Contracting officers may not use Recovery Act funds on existing
[[Page 38687]]
contracts and orders if the clause at 52.204-11 is not incorporated.
This clause is not required for any existing contracts, or task and
delivery orders issued under a contract, that contains the original
clause FAR 52.204-11 (March 2009).
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
3. Amend section 52.204-11 by--
0
a. Removing from the clause heading ``(MAR 2009)'' and adding ``(JUL
2010)''in its place;
0
b. Revising paragraphs (a) and (c);
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c. Revising paragraph (d)(7) introductory text;
0
d. Removing from paragraph (d)(7)(i) the word ``contractor's'' and
adding the word ``Contractor's'' in its place;
0
e. Revising paragraphs (d)(7)(ii) and (d)(10) introductory text; and
0
f. Adding paragraph (d)(10)(xii).
The added and revised text reads as follows:
52.204-11 American Recovery and Reinvestment Act--Reporting
Requirements.
* * * * *
(a) Definitions. For definitions related to this clause (e.g.,
contract, first-tier subcontract, total compensation etc.) see the
Frequently Asked Questions (FAQs) available at http://
www.whitehouse.gov/omb/recovery_faqs_contractors. These FAQs are
also linked under http://www.FederalReporting.gov.
* * * * *
(c) Reports from the Contractor for all work funded, in whole or
in part, by the Recovery Act, are due no later than the 10th day
following the end of each calendar quarter. The Contractor shall
review the Frequently Asked Questions (FAQs) for Federal Contractors
before each reporting cycle and prior to submitting each quarterly
report as the FAQs may be updated from time-to-time. The first
report is due no later than the 10th day after the end of the
calendar quarter in which the Contractor received the award.
Thereafter, reports shall be submitted no later than the 10th day
after the end of each calendar quarter. For information on when the
Contractor shall submit its final report, see http://
www.whitehouse.gov/omb/recovery_faqs_contractors.
(d) * * *
(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 address the impact on the Contractor's and
first-tier subcontractors' workforce for all first-tier subcontracts
valued at $25,000 or more. At a minimum, the Contractor shall
provide--
* * * * *
(ii) An estimate of the number of jobs created and jobs retained
by the prime Contractor and all first-tier subcontracts valued at
$25,000 or more, in the United States and outlying areas. A job
cannot be reported as both created and retained. See an example of
how to calculate the number of jobs at http://www.whitehouse.gov/
omb/recovery_faqs_contractors.
* * * * *
(10) For any first-tier subcontract funded in whole or in part
under the Recovery Act, that is valued at $25,000 or more and not
subject to reporting under paragraph 9, the Contractor shall require
the subcontractor to provide the information described in paragraphs
(d)(1)(i), (ix), (x), (xi), and (xii) of this section 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:
* * * * *
(xii) A narrative description of the employment impact of work
funded by the Recovery Act. This narrative should be cumulative for
each calendar quarter and address the impact on the subcontractor's
workforce. At a minimum, the subcontractor shall provide--
(A) 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 subcontractor's existing practice for describing
jobs as long as the terms used are widely understood and describe
the general nature of the work; and
(B) An estimate of the number of jobs created and jobs retained
by the subcontractor in the United States and outlying areas. A job
cannot be reported as both created and retained. See an example of
how to calculate the number of jobs at http://www.whitehouse.gov/
omb/recovery_faqs_contractors.
* * * * *
52.212-5 [Amended]
0
4. Amend section 52.212-5 by removing from the clause heading ``(June
2010)'' and adding ``(JUL 2010)'' in its place; and removing from
paragraph (b)(4) ``MAR 2009)'' and adding ``(JUL 2010)'' in its place.
[FR Doc. 2010-15908 Filed 7-1-10; 8:45 am]
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