[Federal Register: November 2, 2011 (Volume 76, Number 212)]
[Rules and Regulations]
[Page 68028-68032]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02no11-21]
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DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 4, 25, and 52
[FAC 2005-54; FAR Case 2010-018; Item V; Docket 2010-0018, Sequence 1]
RIN 9000-AL91
Federal Acquisition Regulation; Representation Regarding Export
of Sensitive Technology to Iran
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule.
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SUMMARY: DoD, GSA, and NASA are issuing an interim rule amending the
Federal Acquisition Regulation (FAR) to add a representation to
implement section 106 of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010. Section 106 imposes a
procurement prohibition relating to contracts with persons that export
certain sensitive technology to Iran.
DATES: Effective Date: November 2, 2011.
Comment Date: Interested parties should submit written comments to
the Regulatory Secretariat at one of the addresses shown below on or
before January 3, 2012 to be considered in the formulation of the final
rule.
ADDRESSES: Submit comments identified by FAC 2005-54, FAR Case 2010-018
by any of the following methods:
Regulations.gov: http://www.regulations.gov.
Submit comments via the Federal eRulemaking portal by inputting
``FAR Case 2010-018'' under the heading ``Enter Keyword or ID'' and
selecting ``Search.'' Select the link ``Submit a Comment'' that
corresponds with ``FAR Case 2010-018.'' Follow the instructions
provided at the ``Submit a Comment'' screen. Please include your name,
company name (if any), and ``FAR Case 2010-018'' on your attached
document.
Fax: (202) 501-4067.
Mail: General Services Administration, Regulatory
Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 7th
Floor, Washington, DC 20417.
Instructions: Please submit comments only and cite FAC 2005-54, FAR
Case 2010-018, in all correspondence related
[[Page 68029]]
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: Ms. Cecelia L. Davis, Procurement
Analyst, at (202) 219-0202, for clarification of content. For
information pertaining to status or publication schedules, contact the
Regulatory Secretariat at (202) 501-4755. Please cite FAC 2005-54, FAR
Case 2010-018.
SUPPLEMENTARY INFORMATION:
I. Background and Discussion
This interim rule expands upon the interim rule published in the
Federal Register at 75 FR 60254 on September 29, 2010, under FAR Case
2010-012, Certification Requirement and Procurement Prohibition
Relating to Iran Sanctions. FAR Case 2010-012 implementation of section
106 of the Comprehensive Iran Sanctions, Accountability, and Divestment
Act of 2010 (Pub. L. 111-195), included imposing a procurement
prohibition relating to contracts with persons that export certain
sensitive technology to Iran. To further implement section 106, the
rule adds at FAR 25.703-3(b) a requirement for a representation that
the offeror does not export any sensitive technology to the government
of Iran or any entities or individuals owned or controlled by, or
acting on behalf or at the direction of, the government of Iran.
The interim rule provides an exception to the representation
requirement for offerors that are providing eligible products in
acquisitions that are subject to trade agreements.
The waiver procedure at FAR 25.703-2(d) is moved to FAR 25.703-4,
so that waiver of section 106 can be addressed along with the
procedures for waiver of section 102 of the Comprehensive Iran
Sanctions, Accountability, and Divestment Act of 2010.
The representation that the offeror does not export sensitive
technology to Iran is incorporated into the certification at FAR
52.225-25, now titled ``Prohibition on Contracting with Entities
Engaging in Sanctioned Activities Relating to Iran--Representation and
Certification,'' in order to include the representation and clarify
that the prohibition is against contracting with sanctioned entities.
Along with the statutory definition of ``sensitive technology,'' an
email address is included in the provision, so that offerors can refer
questions concerning sensitive technology to the Department of State,
prior to making the representation.
This representation requirement is also applied to acquisition of
commercial items at FAR 52.212-3, Offeror Representations and
Certifications--Commercial Items, paragraph (o) (see section III,
Determinations of Applicability).
Offerors will be able to make an annual certification through the
Online Representations and Certifications Application, if the offeror
is registered in the Central Contractor Registration database.
Therefore, conforming changes have been made to FAR part 4 and the FAR
clause at 52.204-8, Annual Representations and Certifications.
The interim rule includes two additional changes:
FAR 25.703-2(b)--Adds an authority for termination--FAR
part 49 and a cite to FAR 12.403 for termination of commercial
contracts.
FAR 52.225-25(d)--Adds two more examples of trade
agreement provisions that may be included in the solicitation to
indicate the applicability of trade agreements to the acquisition.
II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is a significant regulatory action and, therefore, was subject to
review under section 6(b) of E.O. 12866, Regulatory Planning and Review
dated September 30, 1993. This rule is not a major rule under 5 U.S.C.
804.
III. Determinations of Applicability
The Federal Acquisition Regulatory Council (FAR Council) has made a
determination to apply the requirement of section 106 of the
Comprehensive Iran Sanctions, Accountability, and Divestment Act of
2010, to contracts at or below the simplified acquisition threshold
(SAT), contracts for the acquisition of commercial items, and contracts
for the acquisition of commercially available off-the-shelf (COTS)
items.
1. Applicability to Contracts at or Below the SAT
41 U.S.C. 1905 governs the applicability of laws to contracts or
subcontracts in amounts not greater than the SAT. It is intended to
limit the applicability of laws to them. 41 U.S.C. 1905 provides that
if a provision of law contains criminal or civil penalties, or if the
FAR 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 SAT, the law will apply to them. Therefore, given that
the requirements of sections 102 and 106 of the Comprehensive Iran
Sanctions, Accountability, and Divestment Act of 2010 were enacted to
widen the sanctions against Iran, the FAR Council has determined that
it is in the best interest of the Federal Government to apply this rule
to all acquisitions including contracts at or below the SAT, as defined
at FAR 2.101. An exception for acquisitions at or below the SAT would
exclude a significant portion of Federal contracting and the
contractors who provide these products and services, thereby
undermining the overarching public policy purpose of the law.
2. Applicability to Contracts for the Acquisition of Commercial Items
41 U.S.C. 1906 governs the applicability of laws to contracts for
the acquisition of commercial items, and is intended to limit the
applicability of laws to contracts for the acquisition of commercial
items. 41 U.S.C. 1906 provides that if a provision of law contains
criminal or civil penalties, or if the FAR 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 the acquisition of commercial items.
Therefore, given that the requirements of sections 102 and 106 of
the Comprehensive Iran Sanctions, Accountability, and Divestment Act of
2010 were enacted to widen the sanctions against Iran, the FAR Council
has determined that it is in the best interest of the Federal
Government to apply the rule to contracts for the acquisition of
commercial items, as defined at FAR 2.101. An exception for contracts
for the acquisition of commercial items would exclude a significant
portion of Federal contracting and the contractors who provide these
products and services, thereby undermining the overarching public
policy purpose of the law.
3. Applicability to Contracts for the Acquisition of COTS Items
41 U.S.C. 1907 governs the applicability of laws to contracts for
the acquisition of COTS items, and is intended to limit the
applicability of
[[Page 68030]]
laws to them. 41 U.S.C. 1907 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 contracts for
the acquisition of COTS items, the provision of law will apply.
Therefore, given that the requirements of sections 102 and 106 of the
Comprehensive Iran Sanctions, Accountability, and Divestment Act of
2010 were enacted to widen the sanctions against Iran, the
Administrator for Federal Procurement Policy has determined that it is
in the best interest of the Federal Government to apply the rule to
contracts for the acquisition of COTS items, as defined at FAR 2.101.
An exception for contracts for the acquisition of COTS items would
exclude a significant portion of Federal contracting and the
contractors who provide these products and services, thereby
undermining the overarching public policy purpose of the law.
IV. Regulatory Flexibility Act
DoD, GSA, and NASA do not expect this interim rule 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 this rule will only have an impact on an offeror that is
exporting sensitive technology to Iran. Domestic entities are generally
prohibited from engaging in activity that would cause them to be
subject to the procurement bans described in this rule due to current
restrictions on trade with Iran (see, e.g., Department of the Treasury
Office of Foreign Assets Control regulations at 31 CFR part 560).
Although this rule mainly affects foreign entities, the Regulatory
Flexibility Act is for the protection of domestic small entities, not
foreign entities. For the definition of ``small business,'' the
Regulatory Flexibility Act refers to the Small Business Act, which in
turn allows the U.S. Small Business Administration (SBA) Administrator
to specify detailed definitions or standards (5 U.S.C. 601(3) and 15
U.S.C. 632(a)). The SBA regulations at 13 CFR 121.105 discuss who is a
small business: ``(a)(1) Except for small agricultural cooperatives, a
business concern eligible for assistance from SBA as a small business
is a business entity organized for profit, with a place of business
located in the United States, and which operates primarily within the
United States or which makes a significant contribution to the U.S.
economy through payment of taxes or use of American products, materials
or labor.''
Therefore, an Initial Regulatory Flexibility Analysis has not been
performed because the number of domestic entities significantly
impacted by this rule will be minimal. DoD, GSA, and NASA invite
comments from small business concerns and other interested parties on
the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the 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 2005-54, FAR Case
2010-018), in correspondence.
V. Paperwork Reduction Act
The interim rule does not contain any information collection
requirements that require the approval of the Office of Management and
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
VI. 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. FAR Case
2010-012 implemented section 102 and partially implemented section 106
of the Comprehensive Iran Sanctions, Accountability, and Divestment Act
of 2010 (Pub. L. 111-195). This interim rule is necessary because the
rule further implements section 106 of the Comprehensive Iran
Sanctions, Accountability, and Divestment Act of 2010, which was signed
on July 1, 2010. Section 106 was effective upon enactment, which
imposed a procurement prohibition relating to contracts with persons
that export certain sensitive technology to Iran entered into or
renewed on or after September 29, 2010. However, pursuant to 41 U.S.C.
1707 and FAR 1.501-3(b), DoD, GSA, and NASA 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, 25, and 52
Government procurement.
Dated: October 21, 2011.
Laura Auletta,
Acting Director, Office of Governmentwide Acquisition Policy, Office of
Acquisition Policy, Office of Governmentwide Policy.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 4, 25, and 52 as
set forth below:
0
1. The authority citation for 48 CFR parts 4, 25, 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. Amend section 4.1202 by revising paragraph (y) to read as follows:
4.1202 Solicitation provision and contract clause.
* * * * *
(y) 52.225-25, Prohibition on Contracting with Entities Engaging in
Sanctioned Activities Relating to Iran--Representation and
Certification.
* * * * *
PART 25--FOREIGN ACQUISITION
0
3. Amend section 25.703-1 by--
0
a. Revising the section heading;
0
b. Adding an introductory paragraph; and
0
c. Adding, in alphabetical order, the definition ``Sensitive
technology''.
The revised and added text reads as follows:
25.703-1 Definitions.
As used in this subpart--
* * * * *
Sensitive technology--
(1) Means hardware, software, telecommunications equipment, or any
other technology that is to be used specifically--
(i) To restrict the free flow of unbiased information in Iran; or
(ii) To disrupt, monitor, or otherwise restrict speech of the
people of Iran; and
(2) Does not include information or informational materials the
export of which the President does not have the authority to regulate
or prohibit pursuant to section 203(b)(3) of the International
Emergency Economic Powers Act (50 U.S.C. 1702(b)(3)).
0
4. Amend section 25.703-2 by revising paragraphs (a)(1) and (b)(1); and
removing paragraph (d).
The revised text reads as follows:
25.703-2 Iran Sanctions Act.
(a) * * *
(1) As required by the Iran Sanctions Act (50 U.S.C. 1701 note),
unless an exception applies in accordance with paragraph (c) of this
section, or a waiver
[[Page 68031]]
is granted in accordance with 25.703-4, each offeror must certify that
the offeror, and any person owned or controlled by the offeror, does
not engage in any activity for which sanctions may be imposed under
section 5 of the Iran Sanctions Act.
* * * * *
(b) * * *
(1) The contracting officer may terminate the contract in
accordance with procedures in part 49, or for commercial items, 12.403.
* * * * *
0
5. Revise section 25.703-3 to read as follows:
25.703-3 Comprehensive Iran Sanctions, Accountability, and Divestment
Act of 2010, section 106.
(a) The head of an Executive agency may not enter into or extend a
contract for the procurement of goods or services with a person that
exports certain sensitive technology to Iran, as determined by the
President and listed on the Excluded Parties List System at http://
www.epls.gov.
(b) Each offeror must represent that it does not export any
sensitive technology to the government of Iran or any entities or
individuals owned or controlled by, or acting on behalf or at the
direction of, the government of Iran.
(c) Exception for trade agreements. The representation requirement
of paragraph (b) of this subsection does not apply with respect to the
procurement of eligible products, as defined in section 308(4) of the
Trade Agreements Act of 1974 (19 U.S.C. 2518(4)), of any foreign
country or instrumentality designated under section 301(b) of that Act
(19 U.S.C. 2511(b)) (see subpart 25.4).
0
6. Add section 25.703-4 to read as follows:
25.703-4 Waiver.
(a) An agency or contractor seeking a waiver of these requirements,
consistent with section 6(b)(5) of the Iran Sanctions Act or section
401(b) of the Comprehensive Iran Sanctions, Accountability, and
Divestment Act of 2010 (Pub. L. 111-195), and the Presidential
Memorandum of September 23, 2010 (75 FR 67025), shall submit the
request to the Office of Federal Procurement Policy, allowing
sufficient time for review and approval.
(b) Agencies may request a waiver on an individual or class basis;
however, waivers are not indefinite and can be cancelled, if warranted.
(1) A class waiver may be requested only when the class of supplies
or equipment is not available from any other source and it is in the
national interest.
(2) Prior to submitting the waiver request, the request must be
reviewed and cleared by the agency head.
(c) In general, all waiver requests should include the following
information:
(1) Agency name, complete mailing address, and point of contact
name, telephone number, and email address.
(2) Offeror's name, complete mailing address, and point of contact
name, telephone number, and email address.
(3) Description/nature of product or service.
(4) The total cost and length of the contract.
(5) Justification, with market research demonstrating that no other
offeror can provide the product or service and stating why the product
or service must be procured from this offeror, as well as why it is in
the national interest for the President to waive the prohibition on
contracting with this offeror that--
(i) Conducts activities for which sanctions may be imposed under
section 5 of the Iran Sanctions Act; or
(ii) Exports sensitive technology to the government of Iran or any
entities or individuals owned or controlled by, or acting on behalf or
at the direction of, the government of Iran.
(6) Documentation regarding the offeror's past performance and
integrity (see the Past Performance Information Retrieval System and
the Federal Awardee Performance Information and Integrity System at
http://www.ppirs.gov, and any other relevant information).
(7) Information regarding the offeror's relationship or connection
with other firms that--
(i) Conduct activities for which sanctions may be imposed under
section 5 of the Iran Sanctions Act; or
(ii) Export sensitive technology to the government of Iran or any
entities or individuals owned or controlled by, or acting on behalf or
at the direction of, the government of Iran.
(8) Describe--
(i) The activities in which the offeror is engaged for which
sanctions may be imposed under section 5 of the Iran Sanctions Act; or
(ii) The sensitive technology and the entity or individual to which
it was exported (i.e., the government of Iran or an entity or
individual owned or controlled by, or acting on behalf or at the
direction of, the government of Iran).
0
7. Amend section 25.1103 by revising paragraph (e) to read as follows:
25.1103 Other provisions and clauses.
* * * * *
(e) The contracting officer shall include in all solicitations the
provision at 52.225-25, Prohibition on Contracting with Entities
Engaging in Sanctioned Activities Relating to Iran--Representation and
Certification.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
8. Amend section 52.204-8 by revising the date of the provision and
paragraph (c)(1)(xx) to read as follows:
52.204-8 Annual Representations and Certifications.
* * * * *
Annual Representations and Certifications (NOV 2011)
* * * * *
(c) * * *
(1) * * *
(xx) 52.225-25, Prohibition on Contracting with Entities
Engaging in Sanctioned Activities Relating to Iran--Representation
and Certification. This provision applies to all solicitations.
* * * * *
0
9. Revise section 52.212-3 by--
0
a. Revising the date of the provision;
0
b. In paragraph (a), adding, in alphabetical order, the definition
``Sensitive technology''; and
0
c. Revising paragraph (o).
The revised and added text reads as follows:
52.212-3 Offeror Representations and Certifications--Commercial Items.
* * * * *
Offer Representations and Certifications--Commercial Items (NOV 2011)
* * * * *
(a) Definitions. * * *
* * * * *
Sensitive technology--
(1) Means hardware, software, telecommunications equipment, or
any other technology that is to be used specifically--
(i) To restrict the free flow of unbiased information in Iran;
or
(ii) To disrupt, monitor, or otherwise restrict speech of the
people of Iran; and
(2) Does not include information or informational materials the
export of which the President does not have the authority to
regulate or prohibit pursuant to section 203(b)(3) of the
International Emergency Economic Powers Act (50 U.S.C. 1702(b)(3)).
* * * * *
(o) Sanctioned activities relating to Iran. (1) The offeror
shall email questions concerning sensitive technology to the
Department of State at CISADA106@state.gov.
(2) Representation and Certification. Unless a waiver is granted
or an exception applies as provided in paragraph (o)(3) of this
provision, by submission of its offer, the offeror--
[[Page 68032]]
(i) Represents, to the best of its knowledge and belief, that
the offeror does not export any sensitive technology to the
government of Iran or any entities or individuals owned or
controlled by, or acting on behalf or at the direction of, the
government of Iran; and
(ii) Certifies that the offeror, or any person owned or
controlled by the offeror, does not engage in any activities for
which sanctions may be imposed under section 5 of the Iran Sanctions
Act.
(3) The representation and certification requirements of
paragraph (o)(2) of this provision do not apply if--
(i) This solicitation includes a trade agreements certification
(e.g., 52.212-3(g) or a comparable agency provision); and
(ii) The offeror has certified that all the offered products to
be supplied are designated country end products.
* * * * *
0
10. Revise section 52.225-25 to read as follows:
52.225-25 Prohibition on Contracting with Entities Engaging in
Sanctioned Activities Relating to Iran--Representation and
Certification.
As prescribed at 25.1103(e), insert the following provision:
Prohibition on Contracting With Entities Engaging in Sanctioned
Activities Relating to Iran--Representation and Certification (NOV
2011)
(a) Definitions. As used in this provision--
Person--
(1) Means--
(i) A natural person;
(ii) A corporation, business association, partnership, society,
trust, financial institution, insurer, underwriter, guarantor, and
any other business organization, any other nongovernmental entity,
organization, or group, and any governmental entity operating as a
business enterprise; and
(iii) Any successor to any entity described in paragraph (1)(ii)
of this definition; and
(2) Does not include a government or governmental entity that is
not operating as a business enterprise.
Sensitive technology--
(1) Means hardware, software, telecommunications equipment, or
any other technology that is to be used specifically--
(i) To restrict the free flow of unbiased information in Iran;
or
(ii) To disrupt, monitor, or otherwise restrict speech of the
people of Iran; and
(2) Does not include information or informational materials the
export of which the President does not have the authority to
regulate or prohibit pursuant to section 203(b)(3) of the
International Emergency Economic Powers Act (50 U.S.C. 1702(b)(3)).
(b) The offeror shall email questions concerning sensitive
technology to the Department of State at CISADA106@state.gov.
(c) Except as provided in paragraph (d) of this provision or if
a waiver has been granted in accordance with 25.703-4, by submission
of its offer, the offeror--
(1) Represents, to the best of its knowledge and belief, that
the offeror does not export any sensitive technology to the
government of Iran or any entities or individuals owned or
controlled by, or acting on behalf or at the direction of, the
government of Iran; and
(2) Certifies that the offeror, or any person owned or
controlled by the offeror, does not engage in any activities for
which sanctions may be imposed under section 5 of the Iran Sanctions
Act. These sanctioned activities are in the areas of development of
the petroleum resources of Iran, production of refined petroleum
products in Iran, sale and provision of refined petroleum products
to Iran, and contributing to Iran's ability to acquire or develop
certain weapons or technologies.
(d) Exception for trade agreements. The representation
requirement of paragraph (c)(1) and the certification requirement of
paragraph (c)(2) of this provision do not apply if--
(1) This solicitation includes a trade agreements notice or
certification (e.g., 52.225-4, 52.225-6, 52.225-12, 52.225-24, or
comparable agency provision); and
(2) The offeror has certified that all the offered products to
be supplied are designated country end products or designated
country construction material.
(End of provision)
[FR Doc. 2011-27784 Filed 11-1-11; 8:45 am]
BILLING CODE 6820-EP-P