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Code · REGISTER · 2006-06-16 · Pension Benefit Guaranty Corporation · Rules and Regulations

Rules and Regulations. Final rule

30,330 words·~138 min read·/register/2006/06/16/06-5504

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 4910-13-P PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4062 and 4063 RIN 1212-AB03 Liability Pursuant to Section 4062(e) of ERISA AGENCY: Pension Benefit Guaranty Corporation. ACTION: Final rule. SUMMARY: This rule provides a formula for computing liability under section 4063(b) of the Employee Retirement Income Security Act of 1974 (“ERISA”) when there is a substantial cessation of operations by an employer as described by section 4062(e) of ERISA. That section provides, among other things, that when a section 4062(e) event occurs, liability arises under section 4063 of ERISA.
However, the method described in section 4063 for determining liability is impracticable when applied to a section 4062(e) event. This rule, which is narrow in scope, provides a practicable and transparent formula for calculating employer liability when a section 4062(e) event occurs. This rulemaking is part of the PBGC's ongoing effort to streamline regulation and improve administration of the pension insurance program. EFFECTIVE DATE: July 17, 2006. For a discussion of applicability of these amendments, see the Applicability section in SUPPLEMENTARY INFORMATION .
FOR FURTHER INFORMATION CONTACT: John H. Hanley, Director, Legislative and Regulatory Department, or James L. Beller, Jr., Attorney, Legislative and Regulatory Department, PBGC, 1200 K Street, NW., Washington, DC 20005-4026; 202-326-4024. (TTY/TDD users should call the Federal relay service by dialing 711 and ask for 202-326-4024.) SUPPLEMENTARY INFORMATION: On February 25, 2005, (at 70 FR 9258), the Pension Benefit Guaranty Corporation
(PBGC)published a proposed rule modifying 29 CFR parts 4062 (Liability for Termination of Single-employer Plans) and 4063 (Withdrawal Liability; Plans under Multiple Controlled Groups). Six comment letters were received on the proposed rule and are addressed below. The regulation is being issued substantially as proposed with one clarification. Section 4062(e) of ERISA provides special rules that apply when “an employer ceases operations at a facility in any location and, as a result of such cessation of operations, more than 20 percent of the total number of his employees who are participants under a plan established and maintained by him are separated from employment” (a “section 4062(e) event”). In the case of a section 4062(e) event, the employer “shall be treated with respect to that plan as if he were a substantial employer under a plan under which more than one employer makes contributions and the provisions of §§ 4063, 4064, and 4065 shall apply.” 1 1 A section 4062(e) event is similar to an active participant reduction reportable under part 4043. Often (but not always), a facility closing that results in a section 4062(e) event also results in a reportable event described in 29 CFR 4043.21 (active participant reduction). The reporting requirements for these two types of events are separate. Thus, if a section 4062(e) event occurs, the provisions of ERISA section 4063 (among other provisions) apply to the employer. Section 4063(b) imposes liability upon a substantial employer that withdraws from a multiple employer plan. This section 4063(b) liability represents the withdrawing employer's share of the liability to the PBGC under section 4062(b) that would arise if the plan were to terminate without enough assets to pay all benefit liabilities. The section 4063(b) liability payment made by the employer is held in escrow by the PBGC for the benefit of the plan. If the plan terminates within five years, the section 4063(b) liability payment is treated as part of the plan's assets. If the plan does not terminate within five years, the liability payment is returned to the employer. The statute also provides that, in lieu of the liability payment, the contributing sponsor may be required to furnish a bond to the PBGC in an amount not exceeding 150% of the section 4063(b) liability. The statute also specifies a method of computing the amount of the section 4063(b) liability. Section 4063(b) provides that “[t]he amount of liability shall be computed on the basis of an amount determined by the [PBGC] to be the amount described in section 4062 for the entire plan, as if the plan had been terminated by the [PBGC] on the date of the withdrawal, multiplied by a fraction
(1)the numerator of which is the total amount required to be contributed to the plan by such contributing sponsor for the last 5 years ending prior to the withdrawal, and
(2)the denominator of which is the total amount required to be contributed to the plan by all contributing sponsors for such last 5 years.” In sum, section 4063(b) imposes liability and provides a method for determining the amount of that liability— *i.e.* , for determining the withdrawing employer's portion of the liability to the PBGC under section 4062(b) that would arise if the plan terminated. Section 4062(e) provides that, when a section 4062(e) event occurs, the employer is treated as a substantial employer under a multiple employer plan. Thus, section 4062(e) creates liability that is analogous to the section 4063(b) liability arising when a substantial employer withdraws from a multiple employer plan. Section 4062(e) does not, however, provide any details as to how this analogy is to be implemented— *i.e.* , how the liability is to be apportioned with respect to the cessation of operations. As explained above, when a substantial employer withdraws from a multiple employer plan, section 4063(b) allocates liability to that withdrawing employer based upon the ratio of the employer's required contributions to all required contributions for the five years preceding the withdrawal. The PBGC has found, in general, that application of this statutory allocation formula is relatively straightforward when determining the liability of a withdrawing substantial employer from a multiple employer plan because it is generally easy to verify what contributions were required to be made by the withdrawing employer and what contributions were required to be made by all of the contributing employers. 2 2 When there have been no required contributions for the plan for the past five years, the contribution method results in an undefined fraction of zero divided by zero. This presents a problem for determining liability under the contribution method of section 4063 in the context of a section 4062(e) event. In contrast, when there is a section 4062(e) event, there is by definition only one employer that contributes to the plan. When there is only one employer, the numerator and denominator used to determine the liability under section 4063(b) would always be equal. Thus, the literal application of the allocation method described in section 4063(b) to determine the liability arising upon a section 4062(e) event is impracticable. Instead, the PBGC has been using the method prescribed in this rule to determine that liability on a case-by-case basis. Section 4063(b) of ERISA provides that “in addition to and in lieu of” the manner of computing the liability prescribed in that provision, the PBGC “may also determine the liability on any other equitable basis prescribed by the [PBGC] in regulations.” Pursuant to that authority, the PBGC is prescribing in this rule a simple, practicable, and equitable method for determining the liability for a section 4062(e) event. Specifically, under this rule, the section 4062(e) liability equals the liability under section 4062(b) multiplied by a fraction
(1)the numerator of which is the number of the employer's employees who are participants under the plan and are separated from employment as a result of the cessation of operations, and
(2)the denominator of which is the total number of the employer's current employees, as determined immediately before the cessation of operations, who are participants under the plan. The liability under section 4062(b) is determined as if the plan had been terminated by the PBGC immediately after the cessation of operations rather than “on the date of the withdrawal” (as specified in section 4063(b)), which does not literally apply in the case of a section 4062(e) event. By providing a simple and transparent method for determining the amount of this liability, this rule will allow plan sponsors who experience a section 4062(e) event (or believe they may experience a section 4062(e) event) to more readily determine their liability (or expected liability). Although this final rule specifies a method for determining the amount of the liability imposed by statute, it does not affect the imposition of liability. Moreover, because this method has generally been followed on a case-by-case basis, the final rule will have little or no effect on the amount of liability. Nothing in this final rule affects the computation of liability incurred when there is a withdrawal of a substantial employer from a multiple employer plan under ERISA section 4063. Comments Six comment letters on the proposed rule were received: two from associations of employee benefits professionals, two from employee benefits consulting firms, one from a large domestic corporation, and one from an individual. Two commenters commended the PBGC for proposing a method for calculating the liability for a section 4062(e) event. Commenters made four major recommendations, asking for: Clarification on how to determine the denominator of the fraction set forth in the proposed rule for determining employer liability pursuant to ERISA section 4062(e); Additional guidance on a variety of interpretive issues relating to ERISA section 4062(e); A regulatory exemption from ERISA section 4062(e) liability for small plans (generally, those with fewer than 500 participants); and A cap on liability in the formula for calculating the ERISA section 4062(e) liability because the proposed formula could lead to unreasonable results. Clarification of Liability Calculation The final rule clarifies that the denominator used for determining the employer liability pursuant to section 4062(e) equals the total number of the employer's current employees, as determined immediately before the cessation of operations, who are participants under the plan. The denominator does not include all participants in the plan, such as retirees and other former employees who separated from employment before the cessation of operations. In addition, the regulation includes an example for further clarification. Additional Guidance Several commenters asked for additional guidance on a number of issues relating to section 4062(e) that were not addressed in the proposed regulations. For instance, commenters asked for guidance on what constitutes a “cessation of operations,” whether a sale of assets constitutes a cessation of operations, what is meant by a “facility in any location,” which employees are treated as separated as a result of the cessation, how to provide notice, and other issues. One commenter opposed the imposition of 4062(e) liability pending further guidance. The PBGC agrees that additional guidance in this area is warranted. However, this rule is narrow in scope and is intended to address one overarching aspect of ERISA § 4062(e)—the formula for calculating employer liability. As commenters point out, there are other interpretive issues that may arise under ERISA § 4062(e), but these issues remain outside of the scope of this rulemaking. The PBGC plans to issue additional guidance as appropriate, recognizing that such guidance would provide valuable assistance to plan administrators, employers, and participants, especially in determining whether and when a section 4062(e) event has occurred. When formulating guidance related to ERISA § 4062(e), the PBGC will take these commenters' concerns into consideration. In the interim, these issues will continue to be resolved on a case-by-case basis. Small Plan Exemption One commenter asked for a regulatory exemption from ERISA section 4062(e) liability for small plans (generally, those with fewer than 500 participants). This request also is beyond the scope of this rulemaking. As discussed above, this rule addresses only the formula for calculating the section 4062(e) liability. The PBGC will consider this request as it formulates additional guidance in this area. Cap on Liability Two commenters expressed concern that the proposed formula for determining the section 4062(e) liability could result in an “unreasonable” outcome. Both commenters noted that the liabilities of separated participants might represent a small percentage of all liabilities, yet the section 4062(e) liability imposed by the rule could be substantially larger. For instance, if the facility that closed had recently been opened with all newly hired employees, the benefit liabilities associated with those separated employees could be quite small. If those separated employees represented 25% of the employer's employees participating in the plan, the liability determined using the fraction prescribed in the proposed rule would be 25% of the plan underfunding. Both commenters asked that the final rule provide that the section 4062(e) liability be limited to a fraction of the unfunded liability based upon benefit liabilities attributable to participants who separated as a result of the cessation of operations. The PBGC considered a number of approaches, including ones based on the liabilities associated with the separated participants. It rejected a liabilities-based approach primarily because it found that employers had great difficulty separating liabilities by employee group—thus, this sort of liabilities-based approach would not provide a simple, predictable formula for determining section 4062(e) liability. Moreover, the liabilities-based approach would not necessarily provide a result more in line with statutory intent than would the headcount approach prescribed in this rule. These comments assume that there is in fact a theoretically exact amount of section 4062(e) liability that should arise in each case and from which a large deviation would be “unreasonable.” One comment also seems to assume that the section 4062(e) liability amount should never include amounts that are not directly attributable to unfunded benefit liabilities of the participants who separated from service as a result of the cessation of operations. This is contrary to what Congress prescribed for determining liability for a substantial employer under ERISA section 4063, the section under which section 4062(e) liability is to be determined. The method prescribed by Congress for calculating liability for a substantial employer that withdraws from a multiple employer plan establishes the underfunded liability for which the withdrawing employer is responsible. It is not an exact calculation of the unfunded benefit liabilities for all of the employer's employees or former employees that participated in the plan. As explained before in the proposed rule and above, the substantial employer's liability under section 4063 is based on the employer's required contributions for the last five years. Obviously, this 5-year contribution method only approximates the unfunded liabilities attributable to all of the substantial employer's participants. Moreover, in a multiple employer plan, there may be unfunded benefit liabilities not attributable to the withdrawing substantial employer's participants for which the substantial employer is nevertheless partially responsible. The substantial employer's liability is a portion of the plan's total unfunded liability. This total unfunded liability, for instance, may include unfunded liabilities attributable to employees of employers who have withdrawn from the plan but owed no section 4063(b) liability because they were not substantial employers. The headcount method in this rule provides a simple, practicable, and equitable method for determining employer liability under section 4062(e). The headcount method attributes to the employer responsibility for an appropriate amount of plan underfunding upon the cessation of operations in much the same way that ERISA section 4063 attributes to a substantial employer responsibility for a portion of plan underfunding upon withdrawal. Moreover, the liability amount (whether pursuant to a section 4062(e) event or withdrawal of a substantial employer) goes to the plan if the plan terminates within 5 years; otherwise the liability amount is returned to the employer. Other Comments One commenter expressed concern about the hardship on employers arising from the imposition of section 4062(e) liability, noting that “the PBGC's proposal to calculate and assess pension liability when a facility shuts down may have the unintended consequence of making defined benefit plans more difficult and costlier to maintain or continue.” Another commenter opposed the proposed rule on similar grounds, noting that it could unnecessarily restrict business decisions. That commenter also suggested that the PBGC should study what impact the rule would have had if it had been implemented several decades ago. This final rule will have little effect on either the imposition or amount of section 4062(e) liability. As stated in the preamble to the proposed rule (70 FR at 9259), this rule simply provides a method of calculating the section 4062(e) liability and does not affect the imposition of such liability, which is statutorily imposed. Moreover, because historically 4062(e) cases have generally been resolved on a case-by-case basis using the method set forth in this rule, the rule will have little or no effect on the amount of liability. One commenter asked the PBGC to communicate its current practice with respect to the many substantive and interpretative questions related to ERISA section 4062(e) before changing that practice. The PBGC has no generally applicable practice with respect to section 4062(e). As stated above, the PBGC currently handles ERISA section 4062(e) liability on a case-by-case basis. However, in these cases, it has generally imposed liability based on headcount, often as part of a negotiated settlement. One commenter said that the proposal would “exacerbate incongruity between congressional intent, legislation, and regulation,” since it would apply one form of liability calculation in the multiple employer context and another form of liability calculation ( *i.e.* , ERISA § 4062(e) liability under this rule) to plans with one employer. As explained above and in the proposed rule, it is impracticable to use the allocation method described in section 4063(b) (which applies to a withdrawal from a multiple employer plan) to determine the liability arising upon a section 4062(e) event. Moreover, while withdrawal from a multiple employer plan and a section 4062(e) event are analogous events, they are not equivalent. As explained, the headcount method provides a simple, practicable, and equitable method for determining ERISA § 4062(e) liability, which is analogous to the method used for determining liability for a substantial employer that withdraws from a multiple employer plan. One commenter asked for clarification of the effective date of the regulation and, in particular, clarification that it does not apply retroactively. The preamble to this rule contains a section on applicability. Applicability This rule applies to section 4062(e) events occurring on or after July 17, 2006. However, as noted in the proposed rule (and above), the rule will have little or no effect on the imposition or amount of liability-the liability is statutorily imposed and the amount of liability is generally determined on a case-by-case basis using the method prescribed in this rule. Compliance With Rulemaking Guidelines The PBGC has determined, in consultation with the Office of Management and Budget, that this final rule is a “significant regulatory action” under Executive Order 12866. The Office of Management and Budget, therefore, has reviewed this notice under Executive Order 12866. The PBGC certifies under section 605(b) of the Regulatory Flexibility Act that this final rule would not have a significant economic impact on a substantial number of small entities. A section 4062(e) event is generally not relevant for small employers. Most small employers sponsoring defined benefit plans tend not to have multiple operations. For these small employers, the shutdown of operations almost always would be accompanied by plan termination. Section 4062(e) protection is only relevant when the plan is ongoing after the cessation of operations. Thus, the change will not have a significant economic impact on a substantial number of small entities. Accordingly, sections 603 and 604 of the Regulatory Flexibility Act do not apply. List of subjects 29 CFR Part 4062 Employee Benefit Plans, Pension insurance, Reporting and recordkeeping requirements 29 CFR Part 4063 Employee Benefit Plans, Pension insurance, Reporting and recordkeeping requirements For the reasons set forth above, the PBGC amends parts 4062 and 4063 of 29 CFR chapter LX as follows: PART 4062—LIABILITY FOR TERMINATION OF SINGLE-EMPLOYER PLANS 1. The authority citation for Part 4062 continues to read as follows: Authority: 29 U.S.C. 1302(b)(3), 1362-1364, 1367, 1368. § 4062.1 [Amended] 2. Amend § 4062.1 by adding the following sentence after the first sentence of the paragraph: § 4062.1 Purpose and Scope * * * This part also sets forth rules for determining the amount of liability incurred under section 4063 of ERISA pursuant to the occurrence of a cessation of operations as described by section 4062(e) of ERISA. * * * § 4062.3 [Amended] 3. In paragraph
(b)of § 4062.3, remove the references to “§ 4062.8(c)” and “4062.8(b)” and add the references to “§ 4062.9(c)” and “§ 4062.9(b)” in their places, respectively. § 4062.7 [Amended] 4. In paragraph
(a)of § 4062.7, remove the reference to “§ 4062.8” and add in its place the reference to “§ 4062.9”. § 4062.8 through § 4062.10 [Redesignated] 5. Redesignate §§ 4062.8, 4062.9, and 4062.10 as §§ 4062.9, 4062.10, and 4062.11, respectively. 6. Add new § 4062.8 to read as follows: § 4062.8 Liability pursuant to section 4062(e).
(a)*Liability amount.* If, pursuant to section 4062(e) of ERISA, an employer ceases operations at a facility in any location and, as a result of such cessation of operations, more than 20% of the total number of the employer's employees who are participants under a plan established and maintained by the employer are separated from employment, the PBGC will determine the amount of liability under section 4063(b) of ERISA to be the amount described in section 4062 of ERISA for the entire plan, as if the plan had been terminated by the PBGC immediately after the date of the cessation of operations, multiplied by a fraction—
(1)The numerator of which is the number of the employer's employees who are participants under the plan and are separated from employment as a result of the cessation of operations; and
(2)The denominator of which is the total number of the employer's current employees, as determined immediately before the cessation of operations, who are participants under the plan.
(b)*Example.* Company X sponsors a pension plan with 50,000 participants of which 20,000 are current employees and 30,000 are retirees or deferred vested participants. On a PBGC termination basis, the plan is underfunded by $80 million. Company X ceases operations at a facility resulting in the separation from employment of 5,000 employees, all of whom are participants in the pension plan. A section 4062(e) event has occurred, and the PBGC will determine the amount of employer liability under section 4063(b) of ERISA. The numerator described in paragraph (a)(1) of this section is 5,000 and the denominator described in paragraph (a)(2) of this section is 20,000. Therefore, the amount of liability under section 4063(b) of ERISA pursuant to section 4062(e) is $20 million (5,000/20,000 × $80 million). PART 4063—LIABILITY OF SUBSTANTIAL EMPLOYER FOR WITHDRAWAL FROM SINGLE-EMPLOYER PLANS UNDER MULTIPLE CONTROLLED GROUPS AND OF EMPLOYER EXPERIENCING A CESSATION OF OPERATION 7. The authority citation for part 4063 continues to read as follows: Authority: 29 U.S.C. 1302(b)(3). 8. Revise paragraph
(a)of § 4063.1 to read as follows: § 4063.1 Cross-references
(a)Part 4062 of this chapter sets forth rules for determination and payment of the liability incurred, under section 4062(b) of ERISA, upon termination of any single-employer plan and, to the extent appropriate, determination of the liability incurred with respect to multiple employer plans under sections 4063 and 4064 of ERISA. Part 4062 also sets forth rules for determining the amount of liability incurred under section 4063 of ERISA pursuant to the occurrence of a cessation of operations as described by section 4062(e) of ERISA. Issued in Washington, DC, this 13th day of June, 2006. Elaine L. Chao, Chairman, Board of Directors, Pension Benefit Guaranty Corporation. Issued on the date set forth above pursuant to a resolution of the Board of Directors authorizing its Chairman to issue this final rule. Judith R. Starr, Secretary, Board of Directors, Pension Benefit Guaranty Corporation. [FR Doc. E6-9503 Filed 6-15-06; 8:45 am] BILLING CODE 7708-01-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [CGD05-06-052] RIN 1625-AA87 Security Zone; Severn River and College Creek, Annapolis, MD AGENCY: Coast Guard, DHS. ACTION: Temporary final rule; correction. SUMMARY: The Coast Guard published a document in the **Federal Register** on June 1, 2006 (71 FR 31088), correcting the coordinates described in the security zone. However, that correction contained an incorrect section number. This document corrects that section number. DATES: The correction to this rule is effective May 25, 2006. The rule itself is effective May 26, 2006. ADDRESSES: Documents indicated in this preamble as being available in the docket are part of docket CGD05-06-052 and are available for inspection or copying at Commander, Coast Guard Sector Baltimore, 2401 Hawkins Point Road, Baltimore, Maryland 21226-1791, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Ronald L. Houck, Waterways Management Division, U.S. Coast Guard Sector Baltimore, telephone 410-576-2674, Fax 410-576-2553. SUPPLEMENTARY INFORMATION: In FR Doc. E6-8428 appearing on page 31088 in the **Federal Register** of June 1, 2006, the following correction to the section number is made: § 165.35-T05-052 [Corrected] 1. On page 31088, in the third column, correct the bold heading four lines below the SUPPLEMENTARY INFORMATION heading to read “§ 165.T05-052 [Corrected]”. 2. On page 31088, in the third column, in the second and third lines of instruction 1., correct the section number and heading to read “§ 165.T05-052 Severn River and College Creek, Annapolis, MD”. Dated: June 9, 2006. Stefan G. Venckus, Chief, Office of Regulations and Administrative Law, United States Coast Guard. [FR Doc. E6-9411 Filed 6-15-06; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Part 223 RIN 0596-AB70 Sale and Disposal of National Forest System Timber; Modification of Timber Sale Contracts in Extraordinary Conditions; Noncompetitive Sale of Timber AGENCY: Forest Service, USDA. ACTION: Interim final rule; request for comment. SUMMARY: This interim final rule revises regulations at Title 36, Code of Federal Regulations, part 223, on noncompetitive disposal of timber and other forest products based on the Secretary of Agriculture's determination that extraordinary conditions exist. The rule will expand upon the 1996 interim final rule currently applicable to certain sales in Washington and Oregon. The 1996 interim final rule defines extraordinary conditions to mean those circumstances where a contract must be changed to prevent environmental degradation or resource damage, or as the result of administrative appeals, litigation, court orders, or catastrophic events and applies throughout the National Forest System. This rule permits, without advertisement, timber or forest products from outside the area specified in the contract to replace material deleted from the contract when such extraordinary conditions exist. Replacement material must come from the same national forest as the subject contract and the decision to replace must be made in compliance with all applicable laws and regulations. The value of replacement material may not exceed the value of the material it is replacing by more than 10% or $10,000, whichever is less, as determined by standard Forest Service appraisal methods. The intended effect of this rule is to reduce damage claims by offering replacement material of similar volume, quantity, value, access and topography in lieu of contract cancellations or partial cancellations. DATES: *Effective Date:* This rule is effective June 16, 2006. *Comment Date:* Comments must be received in writing on or before August 15, 2006. ADDRESSES: Send written comments by U.S. Mail to Director of Forest Management; USDA Forest Service; 1400 Independence Avenue, SW., Mailstop 1103; Washington, DC 20250-1103; by e-mail to *reptbr@fs.fed.us;* or by facsimile to
(202)205-1045. The public may inspect comments received on this rule in the Office of the Director, Forest Management Staff, Forest Service, USDA, 201 14th Street, SW., Washington, DC 20250. Parties wishing to view comments are requested to call ahead
(202)205-1496 to ease entry into the building. FOR FURTHER INFORMATION CONTACT: Forest Management Staff personnel, Lathrop Smith
(202)205-0858, or Richard Fitzgerald
(202)205-1753. SUPPLEMENTARY INFORMATION: Background The National Forest Management Act (NFMA), codified in part at Title 16 U.S.C. 472a(d), requires the Secretary of Agriculture to advertise all sales of forest products unless the appraised value of the sale is less than $10,000, or the Secretary determines that extraordinary conditions exist, as defined by regulation. The requirement to advertise sales unless extraordinary conditions exist applies to the substitution of timber outside a sale contract area. District court injunctions in *NFRC* v. *Glickman* , (No. 95-6244-HO (D. Or.)) required the Forest Service to take immediate action pursuant to section 2001(k) of the 1995 Rescissions Act to award and release certain timber sales offered or awarded between October 1, 1990 and July 27, 1995. Concurrently the Forest Service needed to modify many of these sales to meet standards and guidelines of the 1994 Northwest Forest Plan Amendment before they were awarded or released. Given the duty to comply with the district court's injunction, and the urgent need to modify these timber sales to meet standards and guidelines of the 1994 Northwest Forest Plan Amendment, in 1996 the Secretary promulgated an interim final rule set out at 36 CFR 223.85(b), that defined extraordinary conditions for sales released pursuant to section 2001(k) of the 1995 Rescissions Act (61 FR 14618, April 3, 1996). The 1996 interim final rule allows substituting timber from outside the sale area specified in the contract, without advertisement, on specific timber sales in Washington and Oregon affected by section 2001(k) of the fiscal year 1995 Rescissions Act (Pub. L. 104-19), that were previously subject to section 318 of the fiscal year 1990 Interior and Related Agencies Appropriations Act (Pub. L. 101-121, 103 Stat. 745). One of the primary reasons for promulgating this rule was the recognition that the event or situation causing a need for replacement timber generally precludes obtaining suitable replacement timber from within the original contract area. The 1996 rule does not place any restrictions on where outside the contract area of 2001(k) sales replacement timber may be obtained. Hence, replacement timber for sales in Washington and Oregon could come from any national forest in the system. Pursuant to the advertising requirements of 16 U.S.C. 472a(d), material found outside the contract area must be offered competitively to other potential contractors, unless the Secretary of Agriculture determines that extraordinary conditions exist. The current rule at 36 CFR 223.85(b) is limited to 2001(k) sales and does not authorize contract modifications that add or replace material from outside the contract area of non-2001(k) sales. Prior to NFMA, the Government Accountability Office (formerly the General Accounting Office) held that substitution of timber outside the contract area for timber in the contract area violated the Agency's authority to sell timber (Letter to Mr. Secretary, 1973 WL 7905 (Comp. Gen.), B-177602 (1973)). Since the passage of NFMA, but in the absence of a regulation defining “extraordinary conditions,” the Agriculture Board of Contract Appeals has decided similarly in several cases. See Appeal of Summit Contractors, (1986 WL 19566 (AGBCA), Nos. 81-252-1, No. 83-312-1 (Jan. 8, 1986), and Appeal of Jay Rucker, 1980 WL 2345 (AGBCA) Nos. 79-211A, 79-211B (June 11, 1980). See also, *Croman Corporation* v. *United States* , 31 Fed. Cl. 741, 746-47 (August 16, 1994)). Developing case law on environmental and related statutes and regulations, such as the Endangered Species Act, the Clean Water Act, and the Clean Air Act, in conjunction with finding new information on the environmental effects and resource impacts of various activities on National Forest System land, has led to constantly changing and more rigorous management requirements. Before authorizing activities on National Forest System lands, the Forest Service must ensure compliance with applicable laws and regulations and with conditions on the ground at the time of the authorization. Even so, after entering into timber sale contracts, environmental changes may occur such as the listing of a new species on the endangered species list, or a catastrophic event may occur, such as a large wildfire resulting in the need to modify the contracts. Also, court orders and decisions resulting from environmental litigation may require making changes to existing contracts even when those contracts are not specifically named in the litigation if they are similar to contracts that were named. When this occurs, it is essential for Forest Service officials to have flexibility to adjust management activities and contractual arrangements without incurring enormous financial liability. At the time a sale is sold, there is no way to accurately predict what future litigation or environmental changes may occur that will result in the sale contract needing to be changed. Each occurrence is a unique situation that constitutes an extraordinary condition. The Forest Service needs the ability to provide replacement timber or forest products for contracts that must be modified to prevent environmental degradation or resource damage, or as a result of administrative appeals, litigation, court orders, or catastrophic events that occur after contract award. Thus, the Forest Service is revising the regulations on noncompetitive sale of timber and other forest products based on the Secretary of Agriculture's determination that extraordinary conditions exist whenever a timber or forest products contract needs to be modified or canceled to address such unexpected changes. This provides contracting officers with an opportunity to avert costly claims by providing replacement timber or forest products from outside the contract area. Comments on the 1996 Interim Final Rule at 36 CFR 223.85(b) The comment period for the 1996 interim final rule ended May 20, 1996. Because that interim final rule is similar to this interim final rule, those comments are being incorporated as background information for this rule. Two respondents submitted comments; one from a timber purchaser and one from a Federal agency. One respondent stated that this rule should apply agency-wide to provide broad authority to the Forest Service to prevent harvesting in areas under contract that are found to be environmentally sensitive and to give the Forest Service greater ability to negotiate modifications rather than canceling contracts and paying large damage claims. The Forest Service concurs with this recommendation and has incorporated it in this rule, but with limitations addressed in the following paragraph. One respondent expressed a need to allow replacement timber to come from other districts or other forests if needed to protect fish and wildlife resources. The Forest Service agrees in part with this recommendation and did that under *NFRC* v. *Glickman* on the basis that the 1995 Rescissions Act provided the independent authority to provide replacement timber in this manner. But the Forest Service found that going beyond the boundaries of the administrative unit where the original contract was let to find replacement timber often created other problems including greater difficulty in finding similar timber that could be harvested at comparable prices, increased National Environmental Policy Act costs, and interference with timber sale programs on other units. Because of those experiences, this interim final rule limits substitution to within the boundaries of the national forest where the subject contract is found. Confining replacement timber to the original national forest has the advantages of allowing individual Forest Supervisors to evaluate the pros and cons of substituting timber and forest products on their units based on the specific circumstances. This would lessen administrative, resource, and monetary effects to the purchaser and Forest Service. It also ensures accountability to the Forest Service administrative unit which offered the original contract. Good Cause Statement This rule is being promulgated as an interim final rule for the following reasons:
(1)Existing regulations at 36 CFR 223.85(b) already permit going outside of a contract area to find replacement timber for sales subject to section 2001(k) of the 1995 Rescissions Act. This rule expands the existing regulation to more than just those 2001(k) sales;
(2)This rule is not expected to be controversial. Only two respondents provided comments during the comment period for the 1996 interim final rule at 36 CFR 223.85(b) that established a foundation for this rule. Both of those respondents supported going outside the contract area to find replacement timber;
(3)Comments received in response to the proposed FS-2400-6 and FS-2400-6T timber sale contracts (68 FR 70758), and the interim integrated resource contracts FS-2400-13 and FS-2400-13T (69 FR 59577) supported searching for replacement timber outside the contract area as an alternative to contract cancellation or partial cancellation. No comments were received opposing seeking replacement timber outside of the contract area;
(4)Establishing a process for the Forest Service to provide replacement timber from outside the contract area has been a longstanding issue with timber purchasers and the forest products industry. By making this rule effective immediately upon publication, the Forest Service can finally resolve this issue by incorporating the change in the FS-2400-6 and FS-2400-6T contracts which are in the final stages of revision; and
(5)By making this rule effective immediately upon publication, the Government may be able to provide replacement timber in lieu of paying damages on sales that are cancelled before notice, comment and publication of a final rule could be accomplished. During fiscal years 2004, 2005, and the first quarter of 2006, the Forest Service paid a little more than $4.6 million in damages associated with litigation and changes in environmental conditions affecting existing contracts. The Forest Service currently has approximately $60 million in unresolved claims associated with litigation and changes in environmental conditions affecting existing contracts. Many of these claims may have been averted if replacement timber could have been provided from outside the contract area. Some of these claims could still be resolved by providing replacement timber from outside the contract area in lieu of the Forest Service paying monetary damages. This interim final rule helps to reduce payment of costly claims and as such, implementation should not be delayed. Explanation of Revisions to 36 CFR Part 223, Subpart B This interim final rule revises the current paragraph
(b)at 36 CFR 223.85 by correcting the reference to “16 U.S.C. 472(d)” to “16 U.S.C. 472a(d).” This interim final rule also adds paragraph (c), which defines “extraordinary conditions” and allows forest officers, without advertisement, to make modifications to awarded timber and forest products contracts to replace timber or forest products from outside the area specified in the contract. But, it does place limits on substituting timber or forest products not contained in the 1996 regulation in that replacement timber or forest products for non-2001(k) sales must be from the same National Forest as the subject contract, must not exceed the value of the material it is replacing by more than 10% or $10,000, whichever is less, and must comply with laws and regulations applicable to any new timber sale including, but not limited to, the National Forest Management Act of 1976 as amended, the Endangered Species Act of 1973 as amended, the National Environmental Policy Act of 1970 as amended, and the Appeals Reform Act as amended. This interim final rule authorizes the Forest Service and the purchaser to search for, within the same national forest as the subject sale, replacement timber of similar volume, quantity, value, access, and topography, and to adjust stumpage prices to account for differences between replacement timber and timber deleted. The Forest Service and purchaser shall make good faith efforts to identify replacement timber within these parameters. When replacement timber or forest products agreeable to both parties is identified, the contract will be modified to reflect the changes associated with the substitution, including a rate redetermination. Concurrently, both parties will sign an agreement waiving any future claims for damages associated with the deleted timber or forest products except those specifically provided for under the contract up to the time of the modification. Either party may opt to end the search if satisfactory replacement timber or forest products cannot be found. Although the objective will be to replace timber of equal quantity and value, exact matches are unlikely and in some cases will exceed the value of the timber it is replacing. However, the interim final rule specifies that the value of replacement material may not exceed the value of the material it is replacing by more than 10% or $10,000, whichever is less, as determined by standard Forest Service appraisal methods. To the extent that contract cancellations and partial cancellations are avoided, the effect of this rule will be to allow purchasers to harvest timber as expected when they entered into the timber sale contract and will also provide the Forest Service an opportunity to mitigate potential damage claims that may arise as the result of a cancellation or partial cancellation of the contract. Regulatory Certifications Unfunded Mandates Reform Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), which the President signed into law on March 22, 1995, the Agency has assessed the effects of this rule on State, local, and tribal governments and the private sector. This rule does not compel the expenditure of $100 million or more by any State, local, or tribal governments or anyone in the private sector. Therefore, a statement under section 202 of the Act is not required. Regulatory Impact This rule has been reviewed under USDA procedures and Executive Order 12866, Regulatory Planning and Review. The Office of Management and Budget
(OMB)has determined that this is not a significant rule. This rule will not have an annual effect of $100 million or more on the economy nor adversely affect productivity, competition, jobs, the environment, public health or safety, nor State or local governments. This rule will not interfere with an action taken or planned by another agency nor raise new legal or policy issues. Finally, this action will not alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients of such programs. Accordingly, this rule is not subject to OMB review under Executive Order 12866. Moreover, this rule has been considered in light of Executive Order 13272 regarding proper consideration of small entities and the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), which amended the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). An initial small entities flexibility assessment has been made and it has been determined that this action will not have a significant economic impact on a substantial number of small entities as defined by SBREFA. The rule has no adverse or special impacts on small business, small not-for-profit organizations, or small units of the Government because it imposes no additional requirements on the affected public. Environmental Impact This rulemaking action falls within a category of actions excluded from documentation in an environmental impact statement or an environmental assessment. Section 31.1b of Forest Service Handbook 1909.15 (57 FR 43180, September 18, 1992) excludes from documentation in an environmental assessment or impact statement “rules, regulations, or policies to establish Service-wide administrative procedures, program processes, or instructions.” The Agency's assessment is that this rule falls within this category of actions and that no extraordinary circumstances exist, which would require preparation of an environmental assessment or environmental impact statement for this rule. No Takings Implications This rule has been analyzed in accordance with the principles and criteria contained in Executive Order 12360, and it has been determined that the rule will not pose the risk of a taking of private property, as the rule is limited to the establishment of administrative procedures. Civil Justice Reform This rule has been reviewed under Executive Order 12988, Civil Justice Reform. After adoption of this rule,
(1)all State and local laws and regulations that conflict with this rule or that would impede full implementation of this rule will be preempted;
(2)no retroactive effect will be given to this rule; and
(3)this rule would not require the use of administrative proceedings before parties could file suit in court challenging its provisions. Federalism The Agency has considered this rule under the requirements of Executive Order 13132, Federalism. The Agency has made a preliminary assessment that the rule conforms with the federalism principles set out in this Executive Order; would not impose any compliance costs on the States; and would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of Government. Based on comments received on this interim final rule, the Agency will consider if any additional consultation will be needed with State and local governments prior to adopting a final rule. Consultation and Coordination With Indian Tribal Governments This rule does not have tribal implications as defined by Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. Therefore, advance consultation with Tribes is not required. Controlling Paperwork Burdens on the Public This rule does not require any record keeping or reporting requirements or other information collection requirements as defined in 5 CFR part 1320 not already approved for use and, therefore, imposes no additional paperwork burden on the public. Accordingly, the review provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, *et seq.* ) and implementing regulations at 5 CFR part 1320 do not apply. List of Subjects in 36 CFR Part 223 Exports, Government contracts, National Forest, Reporting and record keeping requirements, Timber sales. For the reasons set forth in the preamble, the Forest Service proposes to amend part 223 of title 36 of the Code of Federal Regulations as follows: PART 223—SALE AND DISPOSAL OF NATIONAL FOREST SYSTEM TIMBER Subpart B—Timber Sale Contracts 1. The authority citation for part 223 continues to read as follows: Authority: 90 Stat. 2958, 16 U.S.C. 472a; 98 Stat. 2213, 16 U.S.C. 618, 104 Stat. 714-726, 16 U.S.C. 620-620j, unless otherwise noted. 2. Amend § 223.85 by revising paragraph
(b)and adding paragraph
(c)to read as follows: § 223.85 Noncompetitive sale of timber.
(b)Extraordinary conditions, as provided for in 16 U.S.C. 472a(d), are defined to include the potential harm to natural resources, including fish and wildlife, and related circumstances arising as a result of the award or release of timber sale contracts pursuant to section 2001(k) of Public Law 104-19 (109 Stat. 246). Notwithstanding the provisions of paragraph
(a)of this section or any other regulation in this part, for timber sale contracts that have been or will be awarded or released pursuant to section 2001(k) of Public Law 104-19 (109 Stat. 246), the Secretary of Agriculture may allow forest officers to, without advertisement, modify those timber sale contracts by substituting timber from outside the sale area specified in the contract for timber within the timber sale contract area.
(c)Extraordinary conditions, as provided for in 16 U.S.C. 472a(d), includes those conditions under which contracts for the sale or exchange of timber or other forest products must be suspended, modified, or terminated under the terms of such contracts to prevent environmental degradation or resource damage, or as the result of administrative appeals, litigation, court orders, or catastrophic events. Notwithstanding the provisions of paragraph
(a)of this section or any other regulation in this part, when such extraordinary conditions exist on sales not addressed in paragraph
(b)of this section, the Secretary of Agriculture may allow forest officers to, without advertisement, modify those contracts by substituting timber or other forest products from outside the contract area specified in the contract for timber or forest products within the area specified in the contract. When such extraordinary conditions exist, the Forest Service and the purchaser shall make good faith efforts to identify replacement timber or forest products of similar volume, quality, value, access, and topography. When replacement timber or forest products agreeable to both parties is identified, the contract will be modified to reflect the changes associated with the substitution, including a rate redetermination. Concurrently, both parties will sign an agreement waiving any future claims for damages associated with the deleted timber or forest products, except those specifically provided for under the contract up to the time of the modification. If the Forest Service and the purchaser cannot reach agreement on satisfactory replacement timber or forest products, or the proper value of such material, either party may opt to end the search. Replacement timber or forest products must come from the same national forest as the original contract, and must meet agency requirements for compliance with applicable laws and regulations. Replacement timber or forest products must also come from an area included in an approved National Environmental Policy Act decision in which the appeals process has been exhausted. The value of replacement timber or forest products may not exceed the value of the material it is replacing by more than 10% or $10,000, whichever is less as determined by standard Forest Service appraisal methods. Dated: June 7, 2006. David P. Tenny, Deputy Under Secretary, Natural Resources and Environment. [FR Doc. E6-9424 Filed 6-15-06; 8:45 am] BILLING CODE 3410-11-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 225, and 252 RIN 0750-AF25 Defense Federal Acquisition Regulation Supplement; Contractor Personnel Authorized to Accompany U.S. Armed Forces (DFARS Case 2005-D013) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement DoD policy regarding contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States. The rule addresses the status of contractor personnel as civilians accompanying the U.S. Armed Forces and the responsibilities of the combatant commander regarding the protection of contractor personnel. DATES: *Effective date:* June 16, 2006. *Comment date:* Comments on the interim rule should be submitted to the address shown below on or before August 15, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2005-D013, using any of the following methods: ○ Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. ○ E-mail: *dfars@osd.mil.* Include DFARS Case 2005-D013 in the subject line of the message. ○ Fax:
(703)602-0350. ○ Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. ○ Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov,* including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,
(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background This interim rule revises DFARS Subpart 225.74 and the clause at DFARS 252.225-7040 to implement the policy in DoD Instruction 3020.41, Contractor Personnel Authorized to Accompany the U.S. Armed Forces, dated October 3, 2005. DoD Instruction 3020.41 is available via the Internet at *http://www.dtic.mil/whs/directives/corres/html/302041.htm.* The DFARS changes address the following areas: 1. Contractor participation in hostilities Prior to this interim rule, paragraph
(b)of the clause at DFARS 252.225-7040 prohibited contractor personnel from using force or otherwise directly participating in acts likely to cause actual harm to enemy armed forces. The interim rule revises the clause to provide for contractor personnel other than private security contractor personnel to use deadly force against enemy armed forces only in self-defense. Private security contractor personnel are also authorized to use deadly force when necessary to execute their security mission to protect assets/persons, consistent with the mission statement contained in their contract. It is the responsibility of the combatant commander to ensure that private security contract mission statements do not authorize the performance of any inherently Governmental military functions, such as preemptive attacks, or any other types of attacks. Otherwise, civilians who accompany the U.S. Armed Forces lose their law of war protection from direct attack if and for such time as they take a direct part in hostilities. 2. Government support Prior to this interim rule, paragraph
(c)of the clause at 252.225-7040 required the combatant commander to develop a security plan for protection of contractor personnel through military means unless the terms of the contract placed the responsibility with another party. In accordance with DoD Instruction 3020.41, paragraph 6.3.4., this interim rule revises the clause to limit the requirement for the combatant commander to develop such a security plan to those locations where there is not sufficient or legitimate civil authority and the combatant commander decides that it is in the interests of the Government to provide security. Paragraph (c)(3) of the clause at 252.225-7040 requires the contractor to provide support for its personnel, except as otherwise specified in the contract. This interim rule adds text at 225.7402-3(b) to state that the Government will provide logistical or security support only when the appropriate agency official, in accordance with agency guidance, determines that Government provision of such support is needed to ensure continuation of essential contractor services and that the contractor cannot obtain adequate support from other sources. This interim rule also adds text at 225.7402-3(c)(4) to require that the contract specify whether the support is to be provided on a reimbursable basis, citing the authority for the reimbursement. 3. Authorized to accompany the U.S. Armed Forces The phrase “supporting a force” is replaced with “authorized to accompany U.S. Armed Forces” throughout the rule. 4. Other military operations The scope of the DFARS policy is changed, from “other military operations or exercises designated by the combatant commander,” to “other military operations” and “military exercises designated by the combatant commander.” A definition of “other military operations” is added to paragraph
(a)of the clause at 252.225-7040. 5. Not active duty Paragraph (b)(4) is added to the clause at 252.225-7040 to clarify that service performed by contractor personnel subject to the clause is not active duty or service under 38 U.S.C. 106. 6. Letter of Authorization and Common Access Card Paragraph (c)(4) is added to the clause at 252.225-7040 to address requirements for contractor personnel to have a letter of authorization, for consistency with the policy at 225.7402-3(d). Also, text has been added to paragraph (e)(1)(iii) of the clause to address requirements for Common Access Cards issued to deploying personnel to contain the access permissions allowed by the letter of authorization. 7. Training Paragraphs (e)(1)(v) and
(vi)are added to the clause at 252.225-7040 to address additional pre-deployment training requirements relating to personal security and isolated personnel. 8. Military Extraterritorial Jurisdiction Act and other applicable statutes Paragraph (e)(2) is added to the clause at 252.225-7040 to address the requirement for the contractor to notify its personnel that— ○ The Military Extraterritorial Jurisdiction Act (18 U.S.C. 3621, *et seq.* ) and some other statutes may apply to contractor personnel who commit offenses outside the United States; and ○ When there is a formal declaration of war by Congress, contractor personnel authorized to accompany U.S. Armed Forces may be subject to prosecution under the Uniform Code of Military Justice. 9. Deployment centers Paragraph (f)(1) of the clause at 252.225-7040 is amended to clarify that the deployment center must ensure that all deployment requirements are met. 10. Personnel data list Paragraph (g)(1) of the clause at 252.225-7040 is revised to clarify requirements for the contractor to establish and maintain a personnel data list. 11. Military clothing and protective equipment Paragraph
(i)of the clause at 252.225-7040 is amended to clarify requirements relating to military clothing and protective equipment. 12. Weapons Paragraph
(j)of the clause at 252.225-7040 is revised to clarify requirements relating to situations where contractor personnel are authorized to carry weapons. A statement has also been added to clarify that the liability for use of any weapon by contractor personnel rests solely with the contractor and the contractor employee using such weapon. 13. Personnel recovery Paragraph
(n)of the clause at 252.225-7040 is amended to include additional terms (“isolated” and “detained”) to cover all situations in which an employee might need to be recovered. 14. Changes Paragraph
(p)of the clause at 252.225-7040 is amended to include “place of performance” as a condition that is subject to change, in addition to those authorized by the Changes clause. Although paragraph
(c)of the clause already addresses site changes, the term “place of performance” has a broader applicability, since the term “site” is normally associated with construction contracts. This rule was subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act This rule is not expected to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because application of the rule is limited to those contracts that involve contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2005-D013. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. Although the contract clause requires contractors to maintain certain information regarding their personnel, DoD believes that this requirement is usual and customary and does not exceed what a contractor would maintain in the normal course of business. D. Determination to Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements DoD Instruction 3020.41, Contractor Personnel Authorized to Accompany the U.S. Armed Forces, dated October 3, 2005. Existing DFARS requirements prohibit contractor personnel from using force or otherwise directly participating in acts likely to cause actual harm to enemy armed forces. In accordance with DoD Instruction 3020.41, this interim rule revises the DFARS to provide for contractor personnel to use deadly force against enemy armed forces in self-defense or in the performance of a contract for private security services. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Parts 212, 225, and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Parts 212, 225, and 252 are amended as follows: 1. The authority citation for 48 CFR Parts 212, 225, and 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 212—ACQUISITION OF COMMERCIAL ITEMS 2. Section 212.301 is amended by revising paragraph (f)(vii) to read as follows: 212.301 Solicitation provisions and contract clauses for the acquisition of commercial items.
(f)* * *
(vii)Use the clause at 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, as prescribed in 225.7402-4. PART 225—FOREIGN ACQUISITION 3. Sections 225.7402 through 225.7402-4 are revised to read as follows: 225.7402 Contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States. 225.7402-1 Scope. This section applies to contracts that involve contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States in—
(a)Contingency operations;
(b)Humanitarian or peacekeeping operations;
(c)Other military operations; or
(d)Military exercises designated by the combatant commander. 225.7402-2 Definitions. *Combatant commander, other military operations,* and *theater of operations,* as used in this section, have the meaning given in the clause at 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States. 225.7402-3 Government support.
(a)Government support that may be authorized or required for contractor personnel performing in a theater of operations may include, but is not limited to, the types of support listed in PGI 225.7402-3(a).
(b)The agency shall provide logistical or security support only when the appropriate agency official, in accordance with agency guidance, determines in coordination with the combatant commander that—
(1)Government provision of such support is needed to ensure continuation of essential contractor services; and
(2)The contractor cannot obtain adequate support from other sources.
(c)The contracting officer shall—
(1)Ensure that the contract contains valid terms, approved by the combatant commander, that specify the responsible party, if a party other than the combatant commander is responsible for providing protection to the contractor personnel performing in the theater of operations as specified in 225.7402-1;
(2)Specify in the terms of the contract, if medical or dental care is authorized beyond the standard specified in paragraph (c)(2)(i) of the clause at 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States;
(3)Provide direction to the contractor, if the contractor is required to reimburse the Government for medical treatment or transportation of contractor personnel to a selected civilian facility in accordance with paragraph (c)(2)(ii) of the clause at 252.225-7040; and
(4)Specify in the contract any other Government support to be provided, and whether this support is provided on a reimbursable basis, citing the authority for the reimbursement.
(d)Contractor personnel must have a letter of authorization
(LOA)issued by a contracting officer in order to process through a deployment center or to travel to, from, or within the theater of operations. The LOA also will identify any additional authorizations, privileges, or Government support that the contractor personnel are entitled to under the contract. For a sample LOA, see PGI 225.7402-3(d). 225.7402-4 Contract clauses.
(a)Use the clause at 252.225-7040, Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States, in solicitations and contracts when contract performance requires that contractor personnel accompany U.S. Armed Forces deployed outside the United States in—
(1)Contingency operations;
(2)Humanitarian or peacekeeping operations;
(3)Other military operations; or
(4)Military exercises designated by the combatant commander.
(b)For additional guidance on clauses to consider when using the clause at 252.225-7040, see PGI 225.7402-4(b). PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 4. Section 252.225-7040 is revised to read as follows: 252.225-7040 Contractor Personnel Authorized to Accompany U.S. Armed Forces Deployed Outside the United States. As prescribed in 225.7402-4(a), use the following clause: Contractor Personnel Authorized To Accompany U.S. Armed Forces Deployed Outside The United States (JUN 2006)
(a)*Definitions.* As used in this clause— *Combatant Commander* means the commander of a unified or specified combatant command established in accordance with 10 U.S.C. 161. *Other military operations* means a range of military force responses that can be projected to accomplish assigned tasks. Such operations may include one or a combination of the following: Civic action, humanitarian assistance, civil affairs, and other military activities to develop positive relationships with other countries; confidence building and other measures to reduce military tensions; military presence; activities to convey messages to adversaries; military deceptions and psychological operations; quarantines, blockades, and harassment operations; raids; intervention operations; armed conflict involving air, land, maritime, and strategic warfare operations; support for law enforcement authorities to counter international criminal activities (terrorism, narcotics trafficking, slavery, and piracy); support for law enforcement authorities to suppress domestic rebellion; and support for insurgency, counterinsurgency, and civil war in foreign countries. *Theater of operations* means an area defined by the combatant commander for the conduct or support of specified operations.
(b)*General.*
(1)This clause applies when Contractor personnel are authorized to accompany U.S. Armed Forces deployed outside the United States in—
(i)Contingency operations;
(ii)Humanitarian or peacekeeping operations;
(iii)Other military operations; or
(iv)Military exercises designated by the Combatant Commander.
(2)Contract performance in support of U.S. Armed Forces deployed outside the United States may require work in dangerous or austere conditions. The Contractor accepts the risks associated with required contract performance in such operations.
(3)Contractor personnel are civilians accompanying the U.S. Armed Forces.
(i)Except as provided in paragraph (b)(3)(ii) of this clause, Contractor personnel are not authorized to use deadly force against enemy armed forces other than in self-defense.
(ii)Private security Contractor personnel are authorized to use deadly force only when necessary to execute their security mission to protect assets/persons, consistent with the mission statement contained in their contract.
(iii)Civilians who accompany the U.S. Armed Forces lose their law of war protection from direct attack if and for such time as they take a direct part in hostilities.
(4)Service performed by Contractor personnel subject to this clause is not active duty or service under 38 U.S.C. 106 note.
(c)*Support.* (1)(i) The Combatant Commander will develop a security plan for protection of Contractor personnel in locations where there is not sufficient or legitimate civil authority, when the Combatant Commander decides it is in the interests of the Government to provide security because—
(A)The Contractor cannot obtain effective security services;
(B)Effective security services are unavailable at a reasonable cost; or
(C)Threat conditions necessitate security through military means.
(ii)The Contracting Officer shall include in the contract the level of protection to be provided to Contractor personnel.
(iii)In appropriate cases, the Combatant Commander may provide security through military means, commensurate with the level of security provided DoD civilians. (2)(i) Generally, all Contractor personnel authorized to accompany the U.S. Armed Forces in the theater of operations may be provided resuscitative care, stabilization, hospitalization at level III military treatment facilities, and assistance with patient movement in emergencies where loss of life, limb, or eyesight could occur. Hospitalization will be limited to stabilization and short-term medical treatment with an emphasis on return to duty or placement in the patient movement system.
(ii)When the Government provides medical treatment or transportation of Contractor personnel to a selected civilian facility, the Contractor shall ensure that the Government is reimbursed for any costs associated with such treatment or transportation.
(iii)Medical or dental care beyond this standard is not authorized unless specified elsewhere in this contract.
(3)Unless specified elsewhere in this contract, the Contractor is responsible for all other support required for its personnel engaged in the theater of operations under this contract.
(4)Contractor personnel must have a letter of authorization issued by the Contracting Officer in order to process through a deployment center or to travel to, from, or within the theater of operations. The letter of authorization also will identify any additional authorizations, privileges, or Government support that Contractor personnel are entitled to under this contract.
(d)*Compliance with laws and regulations.* The Contractor shall comply with, and shall ensure that its personnel authorized to accompany U.S. Armed Forces deployed outside the United States as specified in paragraph (b)(1) of this clause are familiar with and comply with, all applicable—
(1)United States, host country, and third country national laws;
(2)Treaties and international agreements;
(3)United States regulations, directives, instructions, policies, and procedures; and
(4)Orders, directives, and instructions issued by the Combatant Commander, including those relating to force protection, security, health, safety, or relations and interaction with local nationals.
(e)*Pre-deployment requirements.*
(1)The Contractor shall ensure that the following requirements are met prior to deploying personnel in support of U.S. Armed Forces. Specific requirements for each category may be specified in the statement of work or elsewhere in the contract.
(i)All required security and background checks are complete and acceptable.
(ii)All deploying personnel meet the minimum medical screening requirements and have received all required immunizations as specified in the contract. The Government will provide, at no cost to the Contractor, any theater-specific immunizations and/or medications not available to the general public.
(iii)Deploying personnel have all necessary passports, visas, and other documents required to enter and exit a theater of operations and have a Geneva Conventions identification card, or other appropriate DoD identity credential, from the deployment center. Any Common Access Card issued to deploying personnel shall contain the access permissions allowed by the letter of authorization issued in accordance with paragraph (c)(4) of this clause.
(iv)Special area, country, and theater clearance is obtained for personnel. Clearance requirements are in DoD Directive 4500.54, Official Temporary Duty Abroad, and DoD 4500.54-G, DoD Foreign Clearance Guide. Contractor personnel are considered non-DoD personnel traveling under DoD sponsorship.
(v)All personnel have received personal security training. At a minimum, the training shall—
(A)Cover safety and security issues facing employees overseas;
(B)Identify safety and security contingency planning activities; and
(C)Identify ways to utilize safety and security personnel and other resources appropriately.
(vi)All personnel have received isolated personnel training, if specified in the contract.
(2)The Contractor shall notify all personnel who are not a host country national, or who are not ordinarily resident in the host country, that—
(i)Such employees, and dependents residing with such employees, who engage in conduct outside the United States that would constitute an offense punishable by imprisonment for more than one year if the conduct had been engaged in within the special maritime and territorial jurisdiction of the United States, may potentially be subject to the criminal jurisdiction of the United States in accordance with the Military Extraterritorial Jurisdiction Act of 2000 (18 U.S.C. 3621, et seq.);
(ii)Pursuant to the War Crimes Act (18 U.S.C. 2441), Federal criminal jurisdiction also extends to conduct that is determined to constitute a violation of the law of war when committed by a civilian national of the United States;
(iii)Other laws may provide for prosecution of U.S. nationals who commit offenses on the premises of U.S. diplomatic, consular, military or other U.S. Government missions outside the United States (18 U.S.C. 7(9)); and
(iv)When there is a formal declaration of war by Congress, Contractor personnel authorized to accompany U.S. Armed Forces may be subject to prosecution under the Uniform Code of Military Justice.
(f)*Processing and departure points.* Deployed Contractor personnel shall—
(1)Process through the deployment center designated in the contract, or as otherwise directed by the Contracting Officer, prior to deploying. The deployment center will conduct deployment processing to ensure visibility and accountability of Contractor personnel and to ensure that all deployment requirements are met, including the requirements specified in paragraph (e)(1) of this clause;
(2)Use the point of departure and transportation mode directed by the Contracting Officer; and
(3)Process through a Joint Reception Center
(JRC)upon arrival at the deployed location. The JRC will validate personnel accountability, ensure that specific theater of operations entrance requirements are met, and brief Contractor personnel on theater-specific policies and procedures.
(g)*Personnel data list. *
(1)In accordance with DoD Instruction 3020.41, Contractor Personnel Authorized to Accompany the U.S. Armed Forces, the Contractor shall establish and maintain with the designated Government official a current list of all Contractor personnel that deploy with or otherwise provide support in the theater of operations to U.S. Armed Forces as specified in paragraph (b)(1) of this clause. The list shall include each individual's general location in the theater of operations. The Contracting Officer will inform the Contractor of the Government official designated to receive this data and the appropriate automated system(s) to use for this effort.
(2)The Contractor shall ensure that all employees on the list have a current DD Form 93, Record of Emergency Data Card, on file with both the Contractor and the designated Government official.
(h)* Contractor personnel.*
(1)The Contracting Officer may direct the Contractor, at its own expense, to remove and replace any Contractor personnel who jeopardize or interfere with mission accomplishment or who fail to comply with or violate applicable requirements of this clause. Such action may be taken at the Government's discretion without prejudice to its rights under any other provision of this contract, including the Termination for Default clause.
(2)The Contractor shall have a plan on file showing how the Contractor would replace employees who are unavailable for deployment or who need to be replaced during deployment. The Contractor shall keep this plan current and shall provide a copy to the Contracting Officer upon request. The plan shall—
(i)Identify all personnel who are subject to military mobilization;
(ii)Detail how the position would be filled if the individual were mobilized; and
(iii)Identify all personnel who occupy a position that the Contracting Officer has designated as mission essential.
(i)*Military clothing and protective equipment.*
(1)Contractor personnel are prohibited from wearing military clothing unless specifically authorized in writing by the Combatant Commander. If authorized to wear military clothing, Contractor personnel must—
(i)Wear distinctive patches, arm bands, nametags, or headgear, in order to be distinguishable from military personnel, consistent with force protection measures; and
(ii)Carry the written authorization with them at all times.
(2)Contractor personnel may wear military-unique organizational clothing and individual equipment
(OCIE)required for safety and security, such as ballistic, nuclear, biological, or chemical protective equipment.
(3)The deployment center, or the Combatant Commander, shall issue OCIE and shall provide training, if necessary, to ensure the safety and security of Contractor personnel.
(4)The Contractor shall ensure that all issued OCIE is returned to the point of issue, unless otherwise directed by the Contracting Officer.
(j)*Weapons* .
(1)If the Contractor requests that its personnel performing in the theater of operations be authorized to carry weapons, the request shall be made through the Contracting Officer to the Combatant Commander, in accordance with DoD Instruction 3020.41, paragraph 6.3.4.1 or, if the contract is for security services, paragraph 6.3.5.3. The Combatant Commander will determine whether to authorize in-theater Contractor personnel to carry weapons and what weapons and ammunition will be allowed.
(2)If the Contracting Officer, subject to the approval of the Combatant Commander, authorizes the carrying of weapons—
(i)The Contracting Officer may authorize the Contractor to issue Contractor-owned weapons and ammunition to specified employees; or
(ii)The *[Contracting Officer to specify the appropriate individual, e.g., Contracting Officer's Representative, Regional Security Officer]* may issue Government-furnished weapons and ammunition to the Contractor for issuance to specified Contractor employees.
(3)The Contractor shall ensure that its personnel who are authorized to carry weapons—
(i)Are adequately trained to carry and use them—
(A)Safely;
(B)With full understanding of, and adherence to, the rules of the use of force issued by the Combatant Commander; and
(C)In compliance with applicable agency policies, agreements, rules, regulations, and other applicable law;
(ii)Are not barred from possession of a firearm by 18 U.S.C. 922; and
(iii)Adhere to all guidance and orders issued by the Combatant Commander regarding possession, use, safety, and accountability of weapons and ammunition.
(4)Whether or not weapons are Government-furnished, all liability for the use of any weapon by Contractor personnel rests solely with the Contractor and the Contractor employee using such weapon.
(5)Upon redeployment or revocation by the Combatant Commander of the Contractor's authorization to issue firearms, the Contractor shall ensure that all Government-issued weapons and unexpended ammunition are returned as directed by the Contracting Officer.
(k)*Vehicle or equipment licenses* . Contractor personnel shall possess the required licenses to operate all vehicles or equipment necessary to perform the contract in the theater of operations.
(l)*Purchase of scarce goods and services* . If the Combatant Commander has established an organization for the theater of operations whose function is to determine that certain items are scarce goods or services, the Contractor shall coordinate with that organization local purchases of goods and services designated as scarce, in accordance with instructions provided by the Contracting Officer.
(m)*Evacuation* .
(1)If the Combatant Commander orders a mandatory evacuation of some or all personnel, the Government will provide assistance, to the extent available, to United States and third country national Contractor personnel.
(2)In the event of a non-mandatory evacuation order, unless authorized in writing by the Contracting Officer, the Contractor shall maintain personnel on location sufficient to meet obligations under this contract.
(n)*Next of kin notification and personnel recovery* .
(1)The Contractor shall be responsible for notification of the employee-designated next of kin in the event an employee dies, requires evacuation due to an injury, or is isolated, missing, detained, captured, or abducted.
(2)In the case of isolated, missing, detained, captured, or abducted Contractor personnel, the Government will assist in personnel recovery actions in accordance with DoD Directive 2310.2, Personnel Recovery.
(o)*Mortuary affairs* . Mortuary affairs for Contractor personnel who die while accompanying the U.S. Armed Forces will be handled in accordance with DoD Directive 1300.22, Mortuary Affairs Policy.
(p)*Changes* . In addition to the changes otherwise authorized by the Changes clause of this contract, the Contracting Officer may, at any time, by written order identified as a change order, make changes in the place of performance or Government-furnished facilities, equipment, material, services, or site. Any change order issued in accordance with this paragraph
(p)shall be subject to the provisions of the Changes clause of this contract.
(q)*Subcontracts* . The Contractor shall incorporate the substance of this clause, including this paragraph (q), in all subcontracts when subcontractor personnel are authorized to accompany U.S. Armed Forces deployed outside the United States in—
(1)Contingency operations;
(2)Humanitarian or peacekeeping operations;
(3)Other military operations; or
(4)Military exercises designated by the Combatant Commander. (End of clause) [FR Doc. E6-9499 Filed 6-15-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System [DFARS Case 2004-D031] 48 CFR Part 219 Defense Federal Acquisition Regulation Supplement; Sole Source 8(a) Awards to Small Business Concerns Owned by Native Hawaiian Organizations AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has adopted as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement DoD appropriations act provisions permitting the award of sole source contracts to small business concerns owned by Native Hawaiian Organizations. The rule applies to manufacturing contracts exceeding $5,000,000 and non-manufacturing contracts exceeding $3,000,000 that are awarded under the Small Business Administration's 8(a) Program. DATES: *Effective Date:* June 16, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone
(703)602-0289; facsimile
(703)602-0350. Please cite DFARS Case 2004-D031. SUPPLEMENTARY INFORMATION: A. Background DoD published an interim rule at 70 FR 43072 on July 26, 2005, to implement Section 8021 of the DoD Appropriations Act for Fiscal Year 2004 (Pub. L. 108-87) and Section 8021 of the DoD Appropriations Act for Fiscal Year 2005 (Pub. L. 108-287). In addition to providing funding for the DoD Indian Incentive Program, these statutes required that small business concerns owned by Native Hawaiian Organizations be provided the same status as Indian tribes and Alaska Native Corporations with regard to sole source contract awards under the Small Business Administration's 8(a) Program. The interim rule amended DFARS 219.805-1 to reflect this requirement. Three sources submitted comments on the interim rule. All three supported the rule and recommended that the rule be made permanent. DoD has adopted the interim rule as a final rule, with additional changes to reflect the provisions of Section 8020 of the DoD Appropriations Act for Fiscal Year 2006 (Pub. L. 109-148). Section 8020 established a permanent requirement for provision of Native Hawaiian Organizations with the same status as Indian tribes and Alaska Native Corporations under the 8(a) Program. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD has prepared a final regulatory flexibility analysis consistent with 5 U.S.C. 604. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows: This rule amends the DFARS to implement DoD appropriations act provisions permitting the award of sole source contracts to small business concerns owned by Native Hawaiian Organizations. The rule applies to manufacturing contracts exceeding $5,000,000 and non-manufacturing contracts exceeding $3,000,000 that are awarded under the Small Business Administration's 8(a) Program. The objective of the rule is to provide small business concerns owned by Native Hawaiian Organizations the same status that is provided to Indian tribes and Alaska Native Corporations under the 8(a) Program. Awards to these entities are exempt from the competition requirements that otherwise would apply to award of manufacturing contracts exceeding $5,000,000 and non-manufacturing contracts exceeding $3,000,000 under the Program. The rule will benefit small business concerns owned by Native Hawaiian Organizations, by permitting sole source contract awards to these concerns. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 219 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Accordingly, the interim rule amending 48 CFR Part 219, which was published at 70 FR 43072 on July 26, 2005, is adopted as a final rule with the following change: PART 219—SMALL BUSINESS PROGRAMS 1. The authority citation for 48 CFR Part 219 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 219.805-1 is amended by revising paragraph (b)(2)(A) to read as follows: 219.805-1 General. (b)(2)(A) For acquisitions that exceed the competitive threshold, the SBA also may accept the requirement for a sole source 8(a) award on behalf of a small business concern owned by a Native Hawaiian Organization (Section 8020 of Pub. L. 109-148). [FR Doc. E6-9506 Filed 6-15-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 225 RIN 0750-AF32 Defense Federal Acquisition Regulation Supplement; Berry Amendment Exceptions—Acquisition of Perishable Food, and Fish, Shellfish, or Seafood (DFARS Case 2006-D005) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 831 of the National Defense Authorization Act for Fiscal Year 2006 and Section 8118 of the Defense Appropriations Act for Fiscal Year 2005. These statutes relate to the acquisition of perishable foods for DoD activities located outside the United States, and the acquisition of domestic fish, shellfish, and seafood. DATES: *Effective date:* June 16, 2006. *Comment date:* Comments on the interim rule should be submitted in writing to the address shown below on or before August 15, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D005, using any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions for submitting comments. • E-mail: *dfars@osd.mil* . Include DFARS Case 2006-D005 in the subject line of the message. • Fax:
(703)602-0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to * http://www.regulations.gov* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,
(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background 10 U.S.C. 2533a (the Berry Amendment) requires DoD to acquire certain items from domestic sources, unless an exception applies. The requirements of 10 U.S.C. 2533a are implemented at DFARS 225.7002, and the exceptions are listed at DFARS 225.7002-2. This interim rule amends the exceptions at DFARS 225.7002-2 to implement Section 831 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163) and Section 8118 of the Defense Appropriations Act for Fiscal Year 2005 (Pub. L. 108-287). Section 831 of Public Law 109-163 amended 10 U.S.C. 2533a(d)(3) to expand the exception that permits the acquisition of non-domestic perishable foods by activities located outside the United States, to also permit the acquisition of such foods by activities that are making purchases on behalf of activities located outside the United States. Section 8118 of Public Law 108-287 established a permanent requirement for the acquisition of domestic fish, shellfish, and seafood, including fish, shellfish, and seafood contained in foods manufactured or processed in the United States. This requirement previously had been included in Defense Appropriations Acts on an annual basis. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this 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 the rule applies only to:
(1)The acquisition of perishable foods for DoD activities located outside the United States; and
(2)continuation of the existing requirement for the acquisition of domestic fish, shellfish, and seafood. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D005. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq. D. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 831 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163), which became effective upon enactment on January 6, 2006. Section 831 facilitates the acquisition of perishable foods for personnel of activities located outside the United States, by expanding the exception to domestic source requirements for those acquisitions. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Part 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR part 225 is amended as follows: PART 225—FOREIGN ACQUISITION 1. The authority citation for 48 CFR part 225 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 225.7002-2 is amended by revising paragraphs
(e)and
(l)to read as follows: 225.7002-2 Exceptions.
(e)Acquisitions of perishable foods by or for activities located outside the United States for personnel of those activities.
(l)Acquisitions of foods manufactured or processed in the United States, regardless of where the foods (and any component if applicable) were grown or produced. However, in accordance with Section 8118 of the DoD Appropriations Act for Fiscal Year 2005 (Pub. L. 108-287), this exception does not apply to fish, shellfish, or seafood manufactured or processed in the United States or fish, shellfish, or seafood contained in foods manufactured or processed in the United States. [FR Doc. E6-9485 Filed 6-15-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 237 RIN 0750-AF37 Defense Federal Acquisition Regulation Supplement; Security-Guard Services Contracts (DFARS Case 2006-D011) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement Section 344 of the National Defense Authorization Act for Fiscal Year 2006. Section 344 extends, through September 30, 2007, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001. DATES: *Effective date:* June 16, 2006. *Comment date:* Comments on the interim rule should be submitted to the address shown below on or before August 15, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D011, using any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • E-mail: *dfars@osd.mil.* Include DFARS Case 2006-D011 in the subject line of the message. • Fax:
(703)602-0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Robin Schulze, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. All comments received generally will be posted without change to *http://emissary.acq.osd.mil/dar/dfars.nsf.* FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze,
(703)602-0326. SUPPLEMENTARY INFORMATION: A. Background 10 U.S.C. 2465 prohibits DoD from entering into contracts for the performance of firefighting or security-guard functions at military installations or facilities, unless an exception applies. Section 332 of the National Defense Authorization Act for Fiscal Year 2003 (Pub. L. 107-314) provided temporary authority for DoD to waive the prohibition at 10 U.S.C. 2465, to fulfill additional requirements for security-guard functions at military installations or facilities resulting from the terrorist attacks on the United States on September 11, 2001. This authority applied to security-guard functions performed through December 1, 2005. Section 324 of the National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-175) conditionally extended the expiration date of this authority to September 30, 2006. Section 344 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163) has extended the authority through September 30, 2007. This interim rule amends DFARS 237.102-70 to reflect the new expiration date. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this 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.* Although the rule may provide opportunities for small business concerns to receive contracts for the performance of security-guard functions at military installations or facilities, the economic impact is not expected to be substantial. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D011. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* D. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 344 of the National Defense Authorization Act for Fiscal Year 2006 (Pub. L. 109-163). Section 344 extends, through September 30, 2007, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Part 237 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR part 237 is amended as follows: PART 237—SERVICE CONTRACTING 1. The authority citation for 48 CFR part 237 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 237.102-70 is amended by revising paragraph (d)(3) to read as follows: 237.102-70 Prohibition on contracting for firefighting or security-guard functions.
(d)* * *
(3)Contract performance will not extend beyond September 30, 2007. [FR Doc. E6-9486 Filed 6-15-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 252 RIN 0750-AF43 Defense Federal Acquisition Regulation Supplement; Free Trade Agreement—El Salvador, Honduras, and Nicaragua (DFARS Case 2006-D019) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Interim rule with request for comments. SUMMARY: DoD has issued an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the Dominican Republic-Central America-United States Free Trade Agreement with respect to El Salvador, Honduras, and Nicaragua. The Free Trade Agreement waives the applicability of the Buy American Act for some foreign supplies and construction materials and specifies procurement procedures designed to ensure fairness. DATES: *Effective date:* June 16, 2006. *Comment date:* Comments on the interim rule should be submitted in writing to the address shown below on or before August 15, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2006-D019, using any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • E-mail: *dfars@osd.mil.* Include DFARS Case 2006-D019 in the subject line of the message. • Fax:
(703)602-0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received generally will be posted without change to *http://www.regulations.gov,* including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,
(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background This interim rule amends DFARS provisions and clauses to implement the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) with respect to El Salvador, Honduras, and Nicaragua. Congress approved the CAFTA-DR in the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (Pub. L. 109-53). Other signatory countries to the CAFTA-DR are Costa Rica, the Dominican Republic, and Guatemala. The DFARS will be further amended when the CAFTA-DR takes effect for these countries. The CAFTA-DR waives the applicability of the Buy American Act for some foreign supplies and construction materials and specifies procurement procedures designed to ensure fairness. For supply and service contracts, the CAFTA-DR has the same dollar threshold as the other Free Trade Agreements ($64,786), except that the Morocco Free Trade Agreement has a higher threshold that is equal to the threshold for the World Trade Organization Government Procurement Agreement ($193,000); and the North American Free Trade Agreement (NAFTA) has a lower threshold with respect to supply contracts involving Canada ($25,000). For construction contracts, the CAFTA-DR and the Morocco Free Trade Agreement have the same threshold as the Australia Free Trade Agreement, the Chile Free Trade Agreement, the Singapore Free Trade Agreement, and the World Trade Organization Government Procurement Agreement ($7,407,000), which is lower than the NAFTA threshold of $8,422,165 for construction contracts. Therefore, the DFARS provision and clause that implement the Free Trade Agreements below the World Trade Organization Government Procurement Agreement threshold (DFARS 252.225-7035 and 252.225-7036) apply to end products from all Free Trade Agreement countries except Morocco. The construction contract clause that implements trade agreements (DFARS 252.225-7045) applies to all designated country construction material except Mexican construction material, because Canada, the other NAFTA country, is a member of the World Trade Organization Government Procurement Agreement. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this 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.* Although the rule opens up DoD procurement to the products of El Salvador, Honduras, and Nicaragua, DoD does not believe there will be a significant economic impact on U.S. small businesses. DoD applies the trade agreements to only those non-defense items listed at DFARS 225.401-70, and procurements that are set aside for small businesses are exempt from application of the trade agreements. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2006-D019. C. Paperwork Reduction Act This interim rule affects the certification and information collection requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, currently approved under Office of Management and Budget Control Number 0704-0229. The impact, however, is negligible. D. Determination To Issue an Interim Rule A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements the Dominican Republic-Central America-United States Free Trade Agreement with respect to El Salvador, Honduras, and Nicaragua, as approved by Congress in Public Law 109-53. The Free Trade Agreement waives the applicability of the Buy American Act for some foreign supplies and construction materials from El Salvador, Honduras, and Nicaragua, and specifies procurement procedures designed to ensure fairness. The Free Trade Agreement became effective for El Salvador on March 1, 2006, and for Honduras and Nicaragua on April 1, 2006. Comments received in response to this interim rule will be considered in the formation of the final rule. List of Subjects in 48 CFR Part 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR part 252 is amended as follows: PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 1. The authority citation for 48 CFR part 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 252.212-7001 [Amended] 2. Section 252.212-7001 is amended as follows: a. By revising the clause date to read “(JUN 2006)”; b. In paragraph (b), in entry “252.225-7021”, by removing “(FEB 2006)” and adding in its place “(JUN 2006)”; and c. In paragraph (b), in entry “252.225-7036”, by removing “(JUN 2005)” and adding in its place “(JUN 2006)”. 3. Section 252.225-7013 is amended by revising the clause date and paragraph (a)(2) to read as follows: 252.225-7013 Duty-Free Entry. Duty-Free Entry (JUN 2006)
(a)* * *
(2)*Eligible product* means—
(i)*Designated country end product* as defined in the Trade Agreements clause of this contract;
(ii)*Free Trade Agreement country end product,* other than a *Moroccan end product,* as defined in the Buy American Act-Free Trade Agreements-Balance of Payments Program clause of this contract; or
(iii)*Canadian end product* as defined in Alternate I of the Buy American Act-Free Trade Agreements-Balance of Payments Program clause of this contract. 4. Section 252.225-7021 is amended by revising the clause date and paragraphs (a)(3)(ii) and
(iv)to read as follows: 252.225-7021 Trade agreements. Trade Agreements (JUN 2006)
(a)* * *
(3)* * *
(ii)A Free Trade Agreement country (Australia, Canada, Chile, El Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore);
(iv)A Caribbean Basin country (Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, Dominican Republic, Grenada, Guatemala, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, or Trinidad and Tobago). 5. Section 252.225-7035 is amended by revising the clause date and paragraphs (a), (b)(2), (c)(2)(ii), and Alternate I to read as follows: 252.225-7035 Buy American Act-Free Trade Agreements-Balance of Payments Program Certificate. Buy American Act-Free Trade Agreements-Balance of Payments Program Certificate (JUN 2006)
(a)*Definitions. Domestic end product, Free Trade Agreement country, Free Trade Agreement country end product, foreign end product, Moroccan end product, qualifying country end product,* and *United States* have the meanings given in the Buy American Act-Free Trade Agreements-Balance of Payments Program clause of this solicitation.
(b)* * *
(2)For line items subject to Free Trade Agreements, will evaluate offers of qualifying country end products or Free Trade Agreement country end products other than Moroccan end products without regard to the restrictions of the Buy American Act or the Balance of Payments Program.
(c)* * *
(2)* * *
(ii)The offeror certifies that the following supplies are Free Trade Agreement country end products other than Moroccan end products: (Line Item Number) (Country of Origin) Alternate I (JUN 2006) As prescribed in 225.1101(9), substitute the phrase “ *Canadian end product* ” for the phrases “ *Free Trade Agreement country* ”, “ *Free Trade Agreement country end product* ”, and “ *Moroccan end product* ” in paragraph
(a)of the basic provision; and substitute the phrase “Canadian end products” for the phrase “Free Trade Agreement country end products other than Moroccan end products” in paragraphs (b)(2) and (c)(2)(ii) of the basic provision. 6. Section 252.225-7036 is amended as follows: a. By revising the clause date; b. By removing paragraph (a)(4); c. By redesignating paragraph (a)(5) as paragraph (a)(4), and paragraphs (a)(6) through
(9)as paragraphs (a)(8) through
(11)respectively; d. By adding new paragraphs (a)(5) through (7); and e. By revising paragraph
(c)to read as follows: 252.225-7036 Buy American Act-Free Trade Agreements-Balance of Payments Program. Buy American Act-Free Trade Agreements-Balance of Payments Program (JUN 2006)
(a)* * *
(5)*Free Trade Agreement country* means Australia, Canada, Chile, El Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore;
(6)*Free Trade Agreement country end product* means an article that—
(i)Is wholly the growth, product, or manufacture of a Free Trade Agreement country; or
(ii)In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in a Free Trade Agreement country into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(7)*Moroccan end product* means an article that—
(i)Is wholly the growth, product, or manufacture of Morocco; or
(ii)In the case of an article that consists in whole or in part of materials from another country or instrumentality, has been substantially transformed in Morocco into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. The term refers to a product offered for purchase under a supply contract, but for purposes of calculating the value of the end product includes services (except transportation services) incidental to its supply, provided that the value of those incidental services does not exceed the value of the product itself.
(c)The Contractor shall deliver under this contract only domestic end products unless, in its offer, it specified delivery of qualifying country end products, Free Trade Agreement country end products other than Moroccan end products, or other foreign end products in the Buy American Act-Free Trade Agreements-Balance of Payments Program Certificate provision of the solicitation. If the Contractor certified in its offer that it will deliver a qualifying country end product or a Free Trade Agreement country end product other than a Moroccan end product, the Contractor shall deliver a qualifying country end product, a Free Trade Agreement country end product other than a Moroccan end product, or, at the Contractor's option, a domestic end product. 7. Section 252.225-7045 is amended by revising the clause date, the definition of “ *Designated country* ” in paragraph (a), and Alternate I to read as follows: 252.225-7045 Balance of Payments Program—Construction Material Under Trade Agreements. Balance of Payments Program—Construction Material Under Trade Agreements (JUN 2006)
(a)* * * *Designated country* means—
(1)A World Trade Organization Government Procurement Agreement (WTO GPA) country (Aruba, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, or the United Kingdom);
(2)A Free Trade Agreement country (Australia, Canada, Chile, El Salvador, Honduras, Mexico, Morocco, Nicaragua, or Singapore);
(3)A least developed country (Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Cape Verde, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, East Timor, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Yemen, or Zambia); or
(4)A Caribbean Basin country (Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, British Virgin Islands, Costa Rica, Dominica, Dominican Republic, Grenada, Guatemala, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, or Trinidad and Tobago). Alternate I (JUN 2006). As prescribed in 225.7503(b), add the following definition of “ *Mexican construction material* ” to paragraph
(a)of the basic clause, and substitute the following paragraphs
(b)and
(c)for paragraphs
(b)and
(c)of the basic clause: *Mexican construction material* means a construction material that—
(1)Is wholly the growth, product, or manufacture of Mexico; or
(2)In the case of a construction material that consists in whole or in part of materials from another country, has been substantially transformed in Mexico into a new and different construction material distinct from the materials from which it was transformed.
(b)This clause implements the Balance of Payments Program by providing a preference for domestic construction material. In addition, the Contracting Officer has determined that the WTO GPA and all Free Trade Agreements except NAFTA apply to this acquisition. Therefore, the Balance of Payments Program restrictions are waived for designated country construction material other than Mexican construction material.
(c)The Contractor shall use only domestic or designated country construction material other than Mexican construction material in performing this contract, except for—(1) Construction material valued at or below the simplified acquisition threshold in Part 2 of the Federal Acquisition Regulation; or
(2)The construction material or components listed by the Government as follows: *[Contracting Officer to list applicable excepted materials or indicate “none”]* . [FR Doc. E6-9500 Filed 6-15-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF STATE 48 CFR Parts 601, 611, 619, 622, 628, and 652 [Public Notice 5444] RIN 1400-AB90 Rule Title: Department of State Acquisition Regulation AGENCY: Department of State. ACTION: Final rule. SUMMARY: This rule makes final a proposed rule issued on December 22, 2004, with several revisions. It revises the DOSAR to formalize Department policy regarding the application of the Small Business Act to contracts awarded by domestic contracting activities where contract performance takes place overseas; and, revises the coverage regarding Defense Base Act insurance. The final rule also contains several miscellaneous amendments and corrections not published on December 22, 2004, as outlined below. The Department received public comments from three sources on the proposed rule, which are discussed below. DATES: *Effective Date:* This rule is effective June 16, 2006. FOR FURTHER INFORMATION CONTACT: Gladys Gines, Procurement Analyst, Department of State, Office of the Procurement Executive, 2201 C Street, NW., Suite 603, State Annex Number 6, Washington, DC 20522-0602; e-mail address: *ginesgg@state.gov.* SUPPLEMENTARY INFORMATION: The Department published a proposed rule, Public Notice 4938 at 69 FR 76660, December 22, 2004, with a request for comments, amending Parts 619, 625, 628, and 652 of Title 48 of the Code of Federal Regulations. The rule made three changes to the DOSAR:
(1)Formalized policy regarding the application of the Small Business Act to contracts awarded by domestic contracting activities where contract performance takes place overseas;
(2)added language to deal with U.S. Government support to contractors performing overseas; and
(3)revised the coverage regarding Defense Base Act insurance. The proposed rule was discussed in detail in Public Notice 4938. The Department is now promulgating a final rule with changes from the proposed rule. In particular, the Department is not finalizing that part of the proposed rule dealing with U.S. Government support to contractors performing overseas. The Department of Defense published a final rule on May 5, 2005 (70 FR 23790). That final rule contained a clause for use in DOD contracts that require contractor personnel to deploy with, or otherwise provide support in the theater of operations, to U.S. military forces deployed outside the United States in contingency operations, humanitarian or peacekeeping operations, or other military operations or exercises designated by the combatant commander. The State Department's proposed rule language was, in part, based on this DOD rule. However, in the interim, the FAR Council has determined that coverage for DOD, State, and other agencies regarding contractor support outside the United States is necessary for those services that are not in direct support of a deployed military force, e.g., reconstruction efforts. A FAR case is being developed to deal with U.S. Government support to contractors operating overseas. The Department of State intends to follow the FAR language when promulgated; therefore, separate DOSAR language will not be required. The final rule also contains several amendments and corrections that were not published as part of the proposed rule. They are as follows: • DOSAR 601.106 is revised to add the information collection number and burden estimate for *Department of State Form DS-4053, Department of State Mentor-Protégé Program Application.* • DOSAR 601.603-70(b) is revised to add an additional DOS office that has been delegated limited procurement authority. • DOSAR 611.502 is corrected to read 611.501. The FAR citation of 11.502(d) is corrected to read FAR 11.501(d). • DOSAR 619.803-71(b) is revised to change the reference to the Small Business Administration's PRO-Net database to the Central Contractor Registration
(CCR)database. The CCR database is now the official source of vendor data for the Government. • DOSAR 619.811-3 is revised to remove the reference to Alternate III of FAR clause 52.219-18, Notification of Competition Limited to Eligible 8(a) Concerns. There is no Alternate III to FAR 52.219-18. • DOSAR 622.604-2 is revised to correct a citation. These amendments and corrections do not affect the public, and therefore good cause exists to publish the amendments for effect without first soliciting public comment because prior public comment is unnecessary. The amendments are for the purpose of implementing internal changes and making minor corrections. *Analysis of Comments:* The proposed rule was published for comment on December 22, 2004 (69 FR 76660). The comment period closed on February 22, 2005. The Department received comments from three sources. The following is a synopsis of the Department's response to the public comments and any changes made to the rule as a result. The comments are grouped by topic. I. Comments Regarding the Application of the Small Business Act 1. *Comment:* One commentator disagreed that the language of FAR 19.000(b) is ambiguous, and questioned the Department's policy of applying the Small Business Act to contracts awarded domestically and performed overseas. The commentator pointed out that no other agency has made such an interpretation. *Response:* Nonconcur. The Department does consider the language of FAR 19.000(b), which states that FAR Part 19, with the exception of Subpart 19.6, applies “only in the United States or its outlying areas”, to be ambiguous. The application of the Small Business Act to contracts awarded domestically for performance overseas has been a longstanding practice at the Department of State; this rule merely formalizes that practice. 2. *Comment:* One commentator stated that if the Department implemented the proposed language, it should adopt a regime that reflects the realities of work in a contingency operation or high risk location and that is directly related to the instant procurement requirement. *Response:* Partially Concur. The Department already does this. DOSAR 619.201(d)(5) requires that the Office of Small and Disadvantaged Utilization (A/SDBU) review requests for acquisitions exceeding the simplified acquisition threshold ($100,000), and task and delivery orders exceeding $2 million. The capabilities and capacities of small businesses to perform on any given acquisition, including those in contingency or high risk locations, are taken into consideration by A/SDBU when making set-aside recommendations. Since this requirement is already in the DOSAR, no change to the rule is necessary. 3. *Comment:* One commentator expressed confusion regarding what the Department meant by the term “legislatively specified categories”. *Response:* Concur. The term “legislatively specified categories” refers to the small business programs under the Small Business Act, namely, small business concerns, HUBZone small business concerns, service-disabled veteran-owned small business concerns, 8(a) concerns, women-owned small business concerns, small disadvantaged business concerns, and veteran-owned small business concerns. However, to avoid confusion, this term has been removed from the final rule. 4. *Comment:* One commentator recommended revising the last sentence of proposed 619.000(b) to state: “Contracts that are both awarded and performed outside the United States should comply on a voluntary basis.” *Response:* Concur. The sentence has been revised accordingly. 5. *Comment:* One commentator questioned the practicality of the proposed rule, citing the requirement for subcontracting plans and goals and questioning how goals will be negotiated. The commentator questioned how the Department would reconcile these small business subcontracting goals with U.S. treaty obligations and the frequent U.S. foreign policy goal of requiring U.S. contractors to use host country businesses and resources. *Response:* Nonconcur. As indicated previously, this policy is not new. In point of fact, the Department has not experienced difficulties in implementing this policy. FAR 19.702(b) states that subcontracting plans are not required for contracts that will be performed entirely outside of the United States, so contracts that are performed overseas are already exempted from the subcontracting plan requirements. Additionally, the Omnibus Diplomatic Security and Antiterrorism Act (Public Law 99-399) stipulates that ten percent of the monies appropriated for diplomatic security should, to the extent practicable, be awarded to minority owned business concerns, and another 10 percent to small businesses. In making any set-aside recommendations, A/SDBU takes into account all of the issues raised by the commentator, including any limitations that foreign governments may impose. No change to the rule is therefore necessary. 6. *Comment:* One commentator suggested that, instead of applying the policy, the Department use small business performance as a competitive evaluation factor in appropriate solicitations. *Response:* Partially Concur. The Department already does this. DOSAR 619.705-3 encourages contracting officers to consider the adequacy of subcontracting plans and/or past performance in achieving negotiated goals, as part of the overall evaluation of proposals. Since this requirement is already in the DOSAR, no change to the rule is necessary. 7. *Comment:* One commentator recommended that the Department conduct a public meeting to discuss the rule, as well as separate this revision from the other parts of the proposed rule. *Response:* Nonconcur. The Department does not see the need for a public meeting, nor to separate this from the rest of the rule. As indicated previously, this has been a longstanding practice and the Department has not experienced any difficulties in its implementation. II. Comments Regarding Defense Base Act
(DBA)Insurance 1. *Comment:* One commentator expressed concern about how vendors would know, at the time of the solicitation, whether a country has a workers' compensation law. *Response:* Concur. The Department agrees that this information should be provided by the Government in the solicitation. The solicitation provision at 652.228-70 has been revised so that the contracting officer will check a block to indicate if a country does or does not have such laws. 2. *Comment:* One commentator requested that the rule be revised so that contractors would be allowed to purchase their own Defense Base Act insurance rather than use the insurance broker that the Department has under contract. *Response:* Nonconcur. The contract with the insurance broker is a requirements contract. This means that the Department has an obligation to require that its contractors purchase all of their DBA insurance from the insurance broker. In addition, the Department has negotiated more favorable rates since the contractor has been assured of the volume of work. Since the cost of the DBA insurance premiums is a direct reimbursable cost under the Department's contracts, contractors do not incur additional costs in procuring the DBA insurance from the Department's contractor. 3. *Comment:* All commentators, including the Department of Labor (DOL), expressed concern regarding the coverage on Section 16 of the State Department Basic Authorities Act. This statutory provision provides that the Defense Base Act shall not apply with respect to such contracts as the Secretary of State determines are contracts with persons employed to perform work for the Department on an intermittent basis for not more than 90 days in a calendar year. Specifically, commentators pointed out that the rule did not address how to request a waiver, under what circumstances a waiver would be approved, how the Department would notify exempted individuals, and what workers' compensation coverage these exempted employees would have. *Response:* Concur. The Department agrees that more detail is required. The language in the State Department Basic Authorities Act was added in the early 1980s, before the Department had a contract with an insurance broker for DBA insurance. At that time, contractors that had short-term contracts with the Department for overseas performance were paying relatively high DBA insurance premiums. However, State worker's compensation programs protected workers based in that State when they performed short out-of-state assignments, even foreign assignments. Since the workers had the protection of the State's workers' compensation law, additional DBA insurance was not needed for these short-term assignments. In response to these comments, the Department has revised the language of the proposed rule to:
(1)List the information that a contractor must submit in order for a waiver to be considered;
(2)conditioned the waiver on the contractor's presentation of evidence of alternative workers' compensation coverage (e.g., from the State); and
(3)limited the waiver to U.S. citizens and residents, not local or third country nationals. We believe that these changes address the concerns raised regarding what coverage these exempted employees would have. We also have added language that the contracting officer will provide the contractor with the original of any approved waivers, thereby addressing the concern of how contractors will be notified. The Department believes that since we now have a contract with an insurance broker for DBA insurance at reasonable rates, requests for waivers should be rare. To further clarify DBA coverage, we have added language, based on guidance from DOL, that individuals who are self-employed (i.e., are not incorporated) do not meet the definition of an employee; therefore, no DBA insurance is required when contracting with these individuals. The language was added because the Department does contract with individuals (e.g., eligible family members) to perform tasks (e.g., prepare a monthly embassy newsletter), and the question was raised as to whether these individuals needed to procure DBA insurance. 4. *Comment:* The paragraph numbering of proposed DOSAR 628.305 is incorrect. The paragraphs are numbered
(b)through
(f)instead of
(a)through (e). *Response:* Nonconcur. The DOSAR follows the FAR numbering convention. We are implementing paragraphs
(b)through
(e)of the FAR, but not implementing paragraph
(a)of FAR 28.305, since that paragraph
(a)is merely a definition of “public-work contract.” 5. *Comment:* DOL supports the new definition of “covered contractor employees”, as well as the acknowledgement that local and third country nationals are covered by DBA if there is no local workers' compensation law. *Response:* Concur. No revision is necessary. 6. *Comment:* One commentator recommended that in the clause prescriptions at DOSAR 628.309-70(a) and (b), we retain the reference to 628.309(b) only in both instances, as opposed to (b)(1). By only referring to (b)(1), we have unintentionally excluded the recognized exceptions to coverage that are cross-referenced in 628.305(b)(2). *Response:* Concur. We have revised the section accordingly. 7. *Comment:* One commentator recommended that we either delete the repetitious definition of “covered contractor employee” in the provision at 652.228-74 and simply provide a cross-reference to the language at 628.305(a), or add at the end of paragraph
(a)of 652.228-74 a new sentence that recognizes the exception for intermittent employees where the Procurement Executive has granted a waiver. *Response:* Nonconcur. We believe that it is important to have the definition of “covered contractor employee” in the solicitation provision so that vendors will not have to refer back to other parts of the regulation. At the time of the solicitation, vendors will not know whether they will have any exempted employees, since any waiver is approved after contract award. They will need to include the DBA insurance costs for those employees in terms of preparing their cost proposal. Should a waiver be approved after contract award, the contractor simply would not request reimbursement for any employees that are exempted under the waiver, since the DBA insurance costs are a direct reimbursable cost under the contract. 8. *Comment:* One commentator recommended that the Department conduct a public meeting to discuss the rule, as well as separate this revision from the other parts of the proposed rule. *Response:* Nonconcur. The Department does not see the need for a public meeting, nor to separate this from the rest of the rule. As indicated, most of the comments regarding the DBA coverage center around the waiver for intermittent employees, and the Department believes that these waivers will be a rare occurrence. III. Comments Regarding U.S. Government Support to Contractors Overseas The Department received numerous comments regarding this section of the proposed rule. However, since the Department is rescinding this part of the proposed rule, and will adopt the FAR language, no discussion of the comments is required. The public will have an opportunity to comment on the FAR language. Regulatory Findings Administrative Procedure Act The Department is publishing this rule as a final rule with changes after it was published as a proposed rule on December 22, 2004 (see Supplementary Information ). Regulatory Flexibility Act The Department of State, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities. Unfunded Mandates Act of 1995 This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $1 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and import markets. Executive Order 13132 This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. Executive Order 12866: Regulatory Review This regulation has been reviewed by the Office of Management and Budget. Paperwork Reduction Act Information collection requirements have been approved under the Paperwork Reduction Act of 1980 by OMB, and have been assigned OMB control number 1405-0050. The information and recordkeeping requirements for Form DS-4053, *Department of State Mentor-Protégé Program Application* , have been approved by OMB under OMB Control Number 1405-0161. List of Subjects in 48 CFR Parts 601, 611, 619, 622, 628, 652 Government procurement. Accordingly, for the reasons set forth in the preamble, title 48, chapter 6 of the Code of Federal Regulations is amended as follows: 1. The authority citation for 48 CFR parts 601, 611, 619, 622, 628, and 652 continues to read as follows: Authority: 40 U.S.C. 486(c); 22 U.S.C. 2658. Subchapter A—General PART 601—DEPARTMENT OF STATE ACQUISITION REGULATION SYSTEM 2. Section 601.106 is amended by adding the following sentence at the end: 601.106 OMB approval under the Paperwork Reduction Act. * * * The information and recordkeeping requirements for Form DS-4053, *Department of State Mentor-Protégé Program Application* , have been approved by OMB under OMB Control Number 1405-0161; the burden estimate is 294 hours. 3. Section 601.603-70 is amended by adding a new paragraph (b)(8) to read as follows: 601.603-70 Delegations of authority.
(b)* * *
(8)Bureau of Administration, Office of Operations. The authority to enter into and administer simplified acquisition transactions for emergency or contingency operations necessary to protect life or federal property. This authority is limited to cases when a contracting officer in the Office of Acquisitions Management is unavailable. Subchapter B—Competition and Acquisition Planning PART 611—DESCRIBING AGENCY NEEDS 611.502 [Redesignated as 611.501] and 611.501 [Amended] 4. Section 611.502 is redesignated as section 611.501. New section 611.501 is amended by correcting the citation at the end of paragraph
(d)to read “FAR 11.501(d).” Subchapter D—Socioeconomic Programs PART 619—SMALL BUSINESS PROGRAMS 5. A new section 619.000 is added to read as follows: 619.000 Scope of part.
(b)It is the Department's policy to provide maximum opportunities for U.S. small businesses to participate in the acquisition process. DOS contracts that are awarded domestically for performance overseas shall be subject to the Small Business Act as a matter of policy. Contracts that are both awarded and performed overseas should comply on a voluntary basis. 619.803-71 [Amended] 6. Section 619.803-71 is amended by removing the words “SBA's PRO-Net database on the Internet ( *http://www.sba.gov* )” and inserting the words “Central Contractor Registration database ( *http://www.ccr.gov* )” in their place in paragraph (b). 619.811-3 [Amended] 7. Section 619.811-3 is amended by removing the words “with its Alternate III” in paragraph (d)(3). PART 622—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS 622.604-2 [Amended] 8. Section 622.604-2 is amended by revising the citation to read “FAR 22.604-2(b)(1)” at the end. Subchapter E—General Contracting Requirements PART 628—BONDS AND INSURANCE 9. Subpart 628.3 is revised to read as follows: Subpart 628.3—Insurance Sec. 628.305 Overseas workers' compensation and war-hazard insurance. 628.309 Contract clauses for workers' compensation insurance. 628.309-70 DOSAR provisions and clauses. Subpart 628.3—Insurance 628.305 Overseas workers' compensation and war-hazard insurance. (b)(1) Acquisitions for services, including construction but excluding personal services contracts, requiring contractor personnel to perform work outside of the United States, shall include the contractual obligation for coverage under the Defense Base Act (42 U.S.C. Sections 1651-1654, as amended), for covered contractor employees. For the purposes of this section, “covered contractor employees” includes the following individuals:
(i)United States citizens or residents;
(ii)Individuals hired in the United States or its possessions, regardless of citizenship; and,
(iii)Local nationals and third country nationals where contract performance takes place in a country where there are no local workers' compensation laws.
(2)Individuals who are self-employed ( *i.e.* , they have not incorporated) do not meet the definition of an employee. No Defense Base Act insurance is required when contracting with these individuals.
(3)Exceptions are discussed in paragraphs (e)(1) and
(f)of this section.
(c)The Department of State has entered into a contract with an insurance broker and carrier to provide Defense Base Act insurance (at a fixed rate for services and construction) to cover DOS contracts that require performance overseas by covered contractor employees. Upon award of a contract that requires Defense Base Act insurance, the contracting officer shall provide the contractor with the name of the insurance broker from which the contractor must acquire the Defense Base Act insurance.
(d)The authority to recommend a waiver from the Defense Base Act, as set forth in FAR 28.305(d), is reserved to the Secretary of State. (e)(1) The Secretary of Labor has waived the applicability of the Defense Base Act to all DOS service contracts, including construction, for contractor employees who are local nationals or third country nationals. This waiver is conditioned on the requirement for the contractor to provide workers' compensation benefits against the risk of work injury or death and assume liability toward the employees and their beneficiaries for war-hazard injury, death, capture, or detention as prescribed by the local workers' compensation laws.
(2)In cases where a contract is performed in a country where there are no local workers' compensation laws, local and third country national contractor employees are considered to be “covered contractor employees”, and the contractor shall acquire Defense Base Act insurance for those employees pursuant to the contract between the Department of State and the Defense Base Act insurance broker. (f)(1) Section 16 of the State Department Basic Authorities Act (22 U.S.C. 2680a), as amended, provides that the Defense Base Act shall not apply with respect to such contracts as the Secretary of State determines are contracts with persons employed to perform work for the Department of State on an intermittent basis for not more than 90 days in a calendar year. The Department of State has established that “persons” includes employees hired by companies under contract with the Department. The Procurement Executive has the authority to issue the waivers for employees who work on an intermittent or short-term basis. Waivers may be issued only for employees who are U.S. citizens and residents, and only where the contractor provides evidence of alternative workers' compensation coverage for those employees. Waivers may not be issued for local or third country nationals.
(2)The contractor shall submit waiver requests to the contracting officer. The request shall contain the following information:
(i)Contract number;
(ii)Name of contractor;
(iii)Brief description of the services to be provided under the contract and country of performance;
(iv)Name and position title of individual(s);
(v)Nationality of individual(s) (must be U.S. citizen or resident);
(vi)Dates (or timeframe) of performance at the overseas location; and
(vii)Evidence of alternative workers' compensation coverage for these employees ( *e.g.* , evidence that the State workers' compensation program covers workers on short-term foreign assignments).
(3)The contracting officer shall review the request for completeness and accuracy. If the request is complete and accurate, the contracting officer shall forward the request to the Procurement Executive. If the contractor does not provide complete and accurate information, the contracting officer shall return the request to the contractor with an explanation as to what additional information is required.
(4)The Procurement Executive shall review requests for waiver forwarded by the contracting officer and either approve or disapprove the request. The Procurement Executive shall return the request indicating his/her approval or disapproval to the contracting officer. Any request that is not approved shall describe the reason(s) why the request was not approved. The contracting officer shall provide the contractor with the original of the approved or disapproved document and maintain a copy in the contract file. 628.309 Contract clauses for workers' compensation insurance. 628.309-70 DOSAR provisions and clauses.
(a)The contracting officer shall insert the provision at 652.228-70, Defense Base Act—Covered Contractor Employees, in all solicitations for services and construction to be performed outside of the United States.
(b)The contracting officer shall insert the clause at 652.228-71, Workers' Compensation Insurance (Defense Base Act)—Services, in solicitations and contracts for services to be performed outside of the United States when there is a reasonable expectation that offers will include covered contractor employees, as defined in 628.305(b). If the contracting officer is unsure as to whether offers will include covered contractor employees, the contracting officer shall insert the clause. If the contract is for construction, the contracting officer shall insert the clause with its Alternate I.
(c)The contracting officer shall insert the provision at 652.228-74, Defense Base Act Insurance Rates—Limitation, in solicitations for services or construction to be performed outside of the United States when there is a reasonable expectation that offers will include covered contractor employees, as defined in 628.305(b). If the contracting officer is unsure as to whether offers will include covered contractor employees, the contracting officer shall insert the provision. Subchapter H—Clauses and Provisions PART 652—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 10. Section 652.228-70 is added to read as follows: 652.228-70 Defense Base Act—Covered Contractor Employees. As prescribed in 628.309-70(a), insert the following provision: Defense Base Act—Covered Contractor Employees (MO/YR)
(a)Bidders/offerors shall indicate below whether or not any of the following categories of employees will be employed on the resultant contract, and, if so, the number of such employees: Category Yes/No Number
(1)United States citizens or residents
(2)Individuals hired in the United States, regardless of citizenship
(3)Local nationals or third country nationals where contract performance takes place in a country where there are no local workers' compensation laws Local nationals: __________ Third country nationals: __________
(4)Local nationals or third country nationals where contract performance takes place in a country where there are local workers' compensation laws Local nationals: __________ Third country nationals: __________
(b)The contracting officer has determined that for performance in the country of [contracting officer insert country of performance and check the appropriate block below] □ Workers' compensation laws exist that will cover local nationals and third country nationals. □ Workers' compensation laws do not exist that will cover local nationals and third country nationals.
(c)If the bidder/offeror has indicated “yes” in block (a)(4) of this provision, the bidder/offeror shall not purchase Defense Base Act insurance for those employees. However, the bidder/offeror shall assume liability toward the employees and their beneficiaries for war-hazard injury, death, capture, or detention, in accordance with the clause at FAR 52.228-4.
(d)If the bidder/offeror has indicated “yes” in blocks (a)(1), (2), or
(3)of this provision, the bidder/offeror shall compute Defense Base Act insurance costs covering those employees pursuant to the terms of the contract between the Department of State and the Department's Defense Base Act insurance carrier at the rates specified in DOSAR 652.228-74, Defense Base Act Insurance Rates—Limitation. If DOSAR provision 652.228-74 is not included in this solicitation, the bidder/offeror shall notify the contracting officer before the closing date so that the solicitation can be amended accordingly. (End of provision) 11. Section 652.228-71 is revised to read as follows: 652.228-71 Workers' Compensation Insurance (Defense Base Act)—Services. As prescribed in 628.309-70(b), insert the following clause: Workers' Compensation Insurance (Defense Base Act)—Services (MO/YR)
(a)This clause supplements FAR 52.228-3. For the purposes of this clause, “covered contractor employees” includes the following individuals:
(1)United States citizens or residents;
(2)Individuals hired in the United States or its possessions, regardless of citizenship; and
(3)Local nationals and third country nationals where contract performance takes place in a country where there are no local workers' compensation laws.
(b)The Contractor shall procure Defense Base Act
(DBA)insurance pursuant to the terms of the contract between the Department of State and the Department's DBA insurance carrier for covered contractor employees, unless the Contractor has a DBA self-insurance program approved by the Department of Labor. The Contractor shall submit a copy of the Department of Labor's approval to the contracting officer upon contract award, if applicable.
(c)The current rate under the Department of State contract is [contracting officer insert rate] of compensation for services.
(d)The Contractor shall insert a clause substantially the same as this in all subcontracts. The Contractor shall require that subcontractors insert a similar clause in any of their subcontracts.
(e)Should the rates for DBA insurance coverage increase or decrease during the performance of this contract, the contracting officer shall modify this contract accordingly.
(f)The Contractor shall demonstrate to the satisfaction of the contracting officer that the equitable adjustment as a result of the insurance increase or decrease does not include any reserve for such insurance. Adjustment shall not include any overhead, profit, general and administrative expenses, etc. (g)(1) Section 16 of the State Department Basic Authorities Act (22 U.S.C. 2680a), as amended, provides that the Defense Base Act shall not apply with respect to such contracts as the Secretary of State determines are contracts with persons employed to perform work for the Department of State on an intermittent basis for not more than 90 days in a calendar year. “Persons” includes individuals hired by companies under contract with the Department. The Procurement Executive has the authority to issue the waivers for Contractor employees who work on an intermittent or short-term basis.
(2)The Contractor shall submit waiver requests to the contracting officer. The request shall contain the following information:
(i)Contract number;
(ii)Name of Contractor;
(iii)Brief description of the services to be provided under the contract and country of performance;
(iv)Name and position title of individual(s);
(v)Nationality of individual(s) (must be U.S. citizen or U.S. resident);
(vi)Dates (or timeframe) of performance at the overseas location; and,
(vii)Evidence of alternative workers' compensation coverage for these employees (e.g., evidence that the State workers' compensation program covers workers on short-term foreign assignments).
(3)The contracting officer shall provide to the Contractor the original of the approved or disapproved document and maintain a copy in the contract file. (End of clause) *Alternate I.* (MO/YR) If the contract is for construction, as prescribed in 628.309-70(b), substitute the following paragraph
(c)for paragraph
(c)of the basic clause:
(c)The current rate under the Department of State contract is [contracting officer insert rate] of compensation for construction. 12. Section 652.228-74 is revised to read as follows: 652.228-74 Defense Base Act Insurance Rates—Limitation. As prescribed in 628.309-70(c), insert the following provision: Defense Base Act Insurance Rates—Limitation (MO/YR)
(a)The Department of State has entered into a contract with an insurance carrier to provide Defense Base Act
(DBA)insurance to Department of State covered contractor employees at a contracted rate. For the purposes of this provision, “covered contractor employees” includes the following individuals:
(1)United States citizens or residents;
(2)Individuals hired in the United States or its possessions, regardless of citizenship; and
(3)Local nationals and third country nationals where contract performance takes place in a country where there are no local workers' compensation laws.
(b)In preparing the cost proposal, the bidder/offeror shall use the following rates in computing the cost for DBA insurance: Services @[contracting officer insert current rate] of compensation; or Construction @[contracting officer insert current rate] of compensation.
(c)Bidders/offerors shall compute the total compensation (direct salary plus differential, but excluding per diem, housing allowance and other miscellaneous allowances) to be paid to covered contractor employees and the cost of the DBA insurance in their bid/offer using the foregoing rate. Bidders/offerors shall include the estimated DBA insurance costs in their proposed total fixed price or estimated cost. However, the DBA insurance costs shall be identified in a separate line item in the bid/proposal. (End of provision) 652.228-75 and 652.228-76 [Removed] 13. Sections 652.228-75 and 652.228-76 are removed. Dated: June 6, 2006. Corey M. Rindner, Procurement Executive, Bureau of Administration, Department of State. [FR Doc. E6-9502 Filed 6-15-06; 8:45 am] BILLING CODE 4710-24-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 060608158-6158-01; I.D. 051806E] RIN 0648-AU47 Fisheries of the Northeastern United States; Atlantic Sea Scallop Fishery; Emergency Rule AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Temporary rule; emergency interim rule and request for comments. SUMMARY: NMFS is implementing an observer service provider program for the Atlantic sea scallop (scallop) fishery including criteria for becoming an approved observer service provider, observer certification criteria, decertification criteria, and observer deployment logistics. Through this emergency rule, NMFS is re-activating the industry-funded observer program implemented under the Atlantic Sea Scallop Fishery Management Plan
(FMP)through a scallop total allowable catch
(TAC)and days-at-sea
(DAS)set-aside program that helps vessel owners defray the cost of carrying observers. Under this emergency action, scallop vessel owners, operators, or vessel managers are required to procure certified fishery observers for specified scallop fishing trips from an approved observer service provider. This emergency rule maintains the existing requirements for scallop vessel owners to pay for observers whether or not scallop TAC or DAS set-aside is available. DATES: Effective from June 16, 2006 through December 13, 2006. Comments must be received at the appropriate address or fax number (see ADDRESSES ) by 5 p.m., local time, on July 17, 2006. ADDRESSES: Written comments should be submitted by any of the following methods: • Mail: Patricia A. Kurkul, Regional Administrator, NMFS, Northeast Regional Office, One Blackburn Drive, Gloucester, MA 01930. Mark the outside of the envelope, “Comments on Scallop Emergency Action.” • Email: *ScallopAU47@noaa.gov* • Fax:
(978)281-9135 • Electronically through the Federal e-Rulemaking portal: *http//www.regulations.gov* . Written comments regarding the burden-hour estimate or other aspects of the collection-of-information requirement contained in this proposed rule should be submitted to the Regional Administrator at the address above and by e-mail to *David_Rostker@omb.eop.gov* , or fax to
(202)395-7285. FOR FURTHER INFORMATION CONTACT: Peter W. Christopher, Fishery Policy Analyst, 978-281-9288; fax 978-281-9135. SUPPLEMENTARY INFORMATION: Since 1999, NMFS has required scallop vessels operating in Sea Scallop Access Areas (Access Areas) to pay for observer coverage. The Scallop FMP requires vessel owners to provide advance notification to NMFS of upcoming scallop trips. This information is used to select trips on which an at-sea observer will be deployed. Observers were deployed through a contractual arrangement between NMFS and an observer provider until June 2004. The contractual arrangement was not renewed at that time because of unresolved concerns regarding use of a sole contractor to administer the industry-funded observer program. The prior contract arrangement had enabled vessel owners to pay the observer contractor directly for observer deployments, with details of the observer deployment requirements specified through the contract. The expiration of the contract arrangement eliminated the mechanism that allowed vessel owners to make these payments and, in the absence of this contractual program, NMFS did not require vessel owners to pay for the cost of observers. Thus, NMFS has not utilized the observer set-aside program since 2004. Observer coverage in the scallop fishery is necessary to monitor the bycatch of finfish, including yellowtail flounder, skates, monkfish, cod, and other species. Monitoring of yellowtail flounder bycatch in the Scallop Access Areas within the year-round closed areas under the Northeast
(NE)Multispecies FMP is of particular concern because the scallop fishery is constrained by a fishery-specific TAC of yellowtail flounder, which is part of the stock-wide yellowtail flounder TACs set by the NE Multispecies FMP to achieve specified mortality targets for the species. Observer coverage is also needed to monitor interactions of the scallop fishery with endangered and threatened sea turtles. Through fiscal year
(FY)2005, the Northeast Fisheries Science Center (NEFSC) funded the necessary levels of observer coverage in the sea scallop fishery to evaluate bycatch of groundfish and sea turtles by utilizing observer funding that was carried over from FY 2004. However, in FY 2006 the NEFSC's level of funding for the observer program is sufficient to provide only minimal observer coverage in the scallop fishery. The NEFSC did not receive its observer program budget until February 2006 and has been working to reconcile the shortfall ever since. In April 2006 NMFS determined that it could not reconcile the reduced level of observer coverage in the scallop fishery with available budget. Consequently, without the program established through this emergency rule, observer coverage would be constrained to levels below those recommended in the Scallop FMP for precise estimates of yellowtail flounder bycatch TAC in Access Areas. In addition, the lower level of coverage could make it more difficult to monitor and estimate interactions between the scallop fishery and sea turtles in the Mid-Atlantic, particularly during the June through October period, when such interactions are most likely. Despite the fact that the mechanism that allowed vessel owners to make payments for observer coverage became inoperable in 2004, the New England Fishery Management Council (Council) has continued to establish specifications for the fishery that include TAC and DAS set-asides that could be harvested on observed trips to offset the costs to the industry of observer payments. The existing scallop measures also specify that the industry must pay for observers, even if the set-asides have been exhausted. Set-asides are specified in the current scallop regulations, and in proposed Framework 18 to the Scallop FMP (71 FR 16091, March 30, 2006), which is intended by the Council to adjust the specifications for the 2006 and 2007 scallop fishing year. For vessels fishing in the Area Access Program, the Council has allocated a portion of the total projected scallop catch to defray the observer costs for vessel owners. Scallop vessels that are selected to carry observers will be authorized to land additional scallops on such trips to help offset the cost of carrying the observer. Additional scallops landed in excess of the amount necessary to compensate for costs of carrying an observer will be deducted from the access area set-aside for observers. A set-aside of DAS is also allocated for scallop vessel owners who pay for the cost of observers for observed trips in open areas. The open area DAS set-aside program is the same as the TAC set-aside program, with the exception that it allows DAS to accrue at a reduced rate when a vessel carries an observer, rather than providing additional pounds of scallops to the vessel to help defray the cost of carrying the observer. NMFS is implementing this emergency final rule, pursuant to its emergency action authority specified in the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) at 16 U.S.C. 1855(c), because it is critical to enact a program that will enable the industry to utilize the observer set-aside specified in the Scallop FMP no later than June 2006. The Area Access Program in the NE Multispecies closed areas begins on June 15th, with a requirement for monitoring of yellowtail bycatch by scallop vessels. Sea turtle interactions with the scallop fishery are most prevalent in the Mid-Atlantic between June and October. The benefits of taking emergency action through this final rule without the opportunity for prior public comment outweigh the adverse impacts that could be expected if NMFS proceeded under notice and comment rulemaking. The justification for this emergency action is consistent with the Policy Guidelines for the Use of Emergency Rules (62 FR 44422, August 21, 1997) because the limited amount of observer coverage for the scallop fishery that is possible under the current NEFSC funding situation is an unforeseen circumstance that also presents potentially serious management problems to the fishery that must be addressed as soon as possible. The NEFSC did not receive its observer program budget until February 2006 and NMFS determined in April 2006 that it could not reconcile the reduced level of observer coverage in the scallop fishery with available budget and therefore initiated this emergency rule. Much of the harvestable sea scallop biomass is currently located within areas closed to allow rebuilding of groundfish stocks. In order to access that scallop resource, the Area Access Program established bycatch TACs for the scallop fishery that maintain the yellowtail flounder conservation objectives of the NE Multispecies FMP. Low levels of observer coverage for scallop vessels fishing under the Area Access Program would make it difficult to monitor these yellowtail bycatch TACs and to obtain data concerning the scallop fishery's interactions with sea turtles. This emergency action does not impact other FMPs or fisheries in the Northeast because other FMPs neither require industry to fund observers nor include provisions to defray the costs of observers. Such programs would be difficult, if not impossible, to administer within the short timeframe statutorily restricting emergency action under the Magnuson-Stevens Act. This emergency action re-activates the industry-funded scallop observer program. Scallop vessels are required to procure observer coverage from a NMFS-approved observer service provider and to pay for the observer coverage. This emergency rule establishes criteria for being approved by NMFS as an observer service provider for the scallop fishery. Entities interested in being included on the list of NMFS-approved observer service providers are required to submit an application with the information specified in the regulatory text of this rule. Upon receipt of an application, NMFS shall provide all potential observer service providers with an estimated number of observer sea days for this fishing year under this program. Additionally, a planned schedule of observer deployments shall be posted on this NOAA website *http://www.nefsc.noaa.gov/femad/fsb/* . NMFS will notify candidate observer service providers of their approval or disapproval within 15 days of NMFS's receipt of the application. This emergency rule specifies observer service provider requirements, as well as observer requirements and responsibilities to become certified as an observer for the scallop fishery. The scallop observer set-aside will provide scallop vessel owners with compensation for observer coverage up to a specified limit, as specified in the regulations for the scallop fishery. Once the set-aside is exhausted, vessel owners will no longer be compensated for coverage but will still have to pay for the cost of observers, as specified at §§ 648.53(h)(1) and 648.60(d)(2). Classification The need to implement these measures such that adequate observer coverage is available to the scallop fishery starting in June 2006, and to avoid potential management problems, constitutes good cause under authority contained in 5 U.S.C. 553(d)(3), to waive the 30-day delayed effective date, and implement the emergency action upon publication. The emergency rule requires immediate implementation because without the measures in the emergency rule, NMFS's ability to monitor bycatch of NE multispecies and endangered and threatened sea turtles could be compromised. The Access Areas open on June 15 with yellowtail flounder bycatch TACs that require close monitoring. Reduced observer coverage for scallop vessels fishing under the Area Access Program particularly hampers NMFS's ability to monitor the yellowtail flounder bycatch TACs, which are a critical component of the yellowtail flounder rebuilding program under the NE Multispecies FMP. In particular, the yellowtail flounder TAC for the scallop fishery in the Access Area within the Nantucket Lightship Closed Area is only 31,544 lb (all catch, including discards), which, given the level of expected fishing effort in the area, could be harvested quickly. Without adequate observer coverage, excessive yellowtail flounder catch could result. Unless there is observer coverage, NMFS may need to rely on catch data from prior years to determine when bycatch TACs are attained. Such data may not be completely applicable to the 2006 fishing year. This would have immediate and/or long-term negative impacts on the fishery resources and the fishing industry due to the implications of excessive harvest levels of yellowtail flounder or closure based on incomplete information. In addition, adequate observer coverage to monitor interactions between the scallop fishery and sea turtles is particularly important during June through October because this is when the turtles are in the same areas that the scallop fishery takes place. NMFS did not initiate the emergency action earlier because it was pursuing other solutions to the observer coverage problems, including possible changes to budget allocations. NMFS determined that the emergency rule was necessary only after making the determination that it could not provide sufficient observer coverage in the scallop fishery through any other mechanism. The NEFSC did not receive its observer program budget until February 2006, and NMFS determined in April 2006 that it could not reconcile the reduced level of observer coverage in the scallop fishery with available budget. Subsequently, the Northeast Regional Administrator informed the Council's Executive Director during a coordinating meeting that because of the budgetary constraints, NMFS would be looking for an administrative solution to activate the observer set-aside program. Since there was no formal Council response, NMFS proceeded with the emergency rule. NMFS proceeded with this emergency rule with the intention of implementing the action in June 2006 to ensure that adequate observer coverage could be placed in the scallop fishery in order to monitor yellowtail flounder and sea turtle bycatch. For these reasons described above, the Assistant Administrator for Fisheries, NOAA also finds it is impracticable and contrary to the public interest to provide for prior notice and an opportunity for public comment under 5 U.S.C. 553(b)(B) prior to publishing the emergency rule. This emergency rule has been determined to be not significant for purposes of Executive Order 12866. This emergency rule is exempt from the procedures of the Regulatory Flexibility Act because the rule is issued without opportunity for prior notice and opportunity for public comment. This rule contains new collection-of-information requirements approved under emergency Paperwork Reduction Act by the Office of management and Budget
(OMB)under the paperwork Reduction Act (PRA). These new requirements apply to entities interested in becoming NMFS-approved observer service providers and to those observer service providers approved by NMFS and providing observer services to the scallop fishery. Public reporting burden for these collections of information are estimated to average as follows: 1. Application for approval of observer service provider, OMB control number 0648- 0546 (10 hr per response); 2. Applicant response to denial of application for approval of observer service provider, OMB control number 0648-0546 (10 hr per response); 3. Observer service provider request for observer training OMB #0648-0546 (30 min per response); 4. Observer deployment report, OMB control number 0648-0546 (10 min per response); 5. Observer availability report, OMB control number 0648-0546 (10 min per response); 6. Safety refusal report, OMB control number 0648-0546 (30 min per response); 7. Submission of raw observer data, OMB control number 0648-0546 (5 min per response); 8. Observer debriefing, OMB control number 0648-0546 (2 hr per response); 9. Biological samples, OMB control number 0648-0546 (5 min per response); 10. Rebuttal of pending removal from list of approved observer service providers, OMB control number 0648-0546 (8 hr per response); 11. Vessel request to observer service provider for procurement of a certified observer, OMB control number 0648-0546 (25 min per response); and 12. Vessel request for waiver of observer coverage requirement, OMB control number 0648-0546 (5 min per response). These estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information. Public comment is sought regarding whether this collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Send comments on these or any other aspects of the collection of information to NMFS and to OMB (see ADDRESSES ). Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number. List of Subjects in 50 CFR Part 648 Fisheries, Fishing, Recordkeeping and reporting requirements. Dated: June 14, 2006. William T. Hogarth, Assistant Administrator for Fisheries, National Marine Fisheries Service. For the reasons set out in the preamble, 50 CFR part 648 is amended as follows: PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES 1. The authority citation for part 648 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* § 648.10 [Amended] 2. In § 648.10, paragraphs (b)(4)(ii) through
(iv)are suspended. 3. In § 648.11, paragraphs (a)(1) and (a)(2) are suspended, and paragraphs (a)(3), (g), (h), and
(i)are added to read as follows: § 648.11 At-sea sea sampler/observer coverage.
(a)* * *
(3)The Regional Administrator may request any vessel holding a permit for Atlantic sea scallops, NE multispecies, monkfish, skates, Atlantic mackerel, squid, butterfish, scup, black sea bass, bluefish, spiny dogfish, Atlantic herring, tilefish, or Atlantic deep-sea red crab; or a moratorium permit for summer flounder; to carry a NMFS certified fisheries observer. A vessel holding a permit for Atlantic sea scallops is subject to the additional requirements specified in paragraph
(g)of this section.
(g)*Atlantic sea scallop observer program* —(1) *General.* Unless otherwise specified, owners, operators, and/or managers of vessels issued a Federal scallop permit under § 648.4(a)(2), and specified in paragraph
(b)of this section, must comply with this section and are jointly and severally responsible for their vessel's compliance with this section. To facilitate the deployment of at-sea observers, all sea scallop vessels issued limited access permits fishing in open areas or Sea Scallop Access Areas, and general category vessels fishing under the Sea Scallop Access Area program specified in § 648.60, are required to comply with the additional notification requirements specified in paragraphs (g)(2) of this section, except that scallop vessels issued Occasional scallop permits not participating in the Area Access Program specified in § 648.60 may provide the specified information to NMFS by calling NMFS. All sea scallop vessels issued a VMS general category or Non-VMS general scallop permit that are participating in the Area Access Program specified in § 648.60 are required to comply with the additional VMS notification requirements specified in paragraph (g)(2) of this section. When NMFS notifies the vessel owner, operator, or the vessel manager of any requirement to carry an observer on a specified trip in either an Access Area or Open Area as specified in paragraph (g)(2) of this section, the vessel may not fish for, take, retain, possess, or land any scallops without carrying an observer. Vessels may only embark on a scallop trip in open areas or Access Areas without an observer if the owner, operator, or vessel manager has been notified that the vessel has received a waiver of the observer requirement for that trip pursuant to paragraphs (g)(3) and
(5)of this section.
(2)*Vessel notification procedures.* For the purpose of determining if an observer will be deployed on a vessel for a specific trip, a vessel issued a limited access permit fishing in open areas or in the Sea Scallop Area Access program specified in § 648.60, or a vessel issued a general category scallop permit and fishing in the Sea Scallop Area Access program specified in § 648.60, is required to comply with the following notification requirements:
(i)Prior to the 25th day of the month preceding the month in which fishing for scallops is to take place, the vessel owner or operator must submit, through the VMS e-mail messaging system, notice of its intention to fish for scallops, along with the following information: Vessel name and permit number, owner and operator's name, owner and operator's phone numbers, and number of trips anticipated for open areas and each Sea Scallop Access Area or open area in which it intends to fish. General category vessels are required to submit this information only for Sea Scallop Access Area trips. The e-mail address shall be provided to vessels in a Small Entity Compliance Guide issued by the Regional Administrator. The Regional Administrator may waive this notification period if it is determined that there is insufficient time to provide such notification prior to a Sea Scallop Access Area opening or beginning of the fishing year. Notification of this waiver of a portion of the notification period shall be provided to the vessel through a permit holder letter issued by the Regional Administrator.
(ii)For each scallop trip, the vessel owner, operator, or vessel manager shall notify NMFS by telephone, using the phone number provided by the Regional Administrator in the Small Entity Compliance Guide, and provide the following information: Vessel Name; contact name and number; date and time of departure; port of departure; area to be fished (either open areas or the specific Sea Scallop Access Area), and fishing as a scallop dredge, scallop trawl or general category vessel.
(3)*Selection of scallop fishing trips for observer coverage.* Based on predetermined coverage levels for various sectors of the scallop fishery that are provided by NMFS in writing to all observer service provider approved pursuant to paragraph
(h)of this section, NMFS shall notify the vessel owner, operator, or vessel manager whether the vessel must carry an observer, or if a waiver has been granted, on the specified trip within 24 hours of the vessel owner's, operator's, or vessel manager's notification of the prospective trip as specified in paragraph (g)(2)(ii) of this section. Any request to carry an observer may be waived by NMFS. With the exception of vessels issued a non-VMS general category scallop permit that are fishing in an access area, all waivers for observer coverage shall be issued to the vessel by VMS so as to have on-board verification of the waiver. Waivers for vessels issued a non-VMS general category scallop permit will be issued by fax, if possible, or by phone if no fax number is available.
(4)*Procurement of observer services by scallop vessels.*
(i)An owner of a scallop vessel required to carry an observer under paragraph (g)(3) of this section must arrange for carrying an observer certified through the observer training class operated by the Northeast Fisheries Observer Program (herein after NMFS/NEFOP certified) from an observer service provider approved by NMFS under paragraph
(h)of this section. A list of approved observer service providers shall be posted on the NOAA/NEFOP website at *http://www.nefsc.noaa.gov/femad/fsb/* . The owner, operator, or vessel manager of a vessel selected to carry an observer must contact the observer service provider and must provide at least 72 hours notice in advance of the fishing trip for the provider to arrange for observer deployment for the specified trip.
(ii)An owner, operator, or vessel manager of a vessel that cannot procure a certified observer within 72 hours of the advance notification to the provider due to the unavailability of an observer, may request a waiver from NMFS from the requirement for observer coverage for that trip, but only if the owner, operator, or vessel manager has contacted all of the available observer service providers to secure observer coverage and no observer is available. NMFS shall issue such a waiver within 24 hours, if the conditions of this paragraph (g)(4)(ii) are met.
(5)Unless otherwise notified by the Regional Administrator, owners of scallop vessels shall be responsible for paying the cost of the observer for all scallop fishing trips on which an observer is carried onboard the vessel, regardless of whether the vessel lands or sells sea scallops on that trip, and regardless of the availability of set-aside for an increased possession limit or reduced DAS accrual rate. Vessels that carry an observer may be compensated with a reduced DAS accrual rate for open area trips or additional scallop catch per day in Access Areas in order to help defray the cost of the observer, under the program specified in §§ 648.53 and 648.60. Observer service providers are responsible for setting the daily rate for observer coverage on a vessel. NMFS shall determine the reduced DAS accrual rate and the amount of additional pounds of scallops per day fished in an access area for the applicable fishing year based on the economic conditions of the scallop fishery, as determined by best available information. Vessel owners and observer service providers shall be notified by Small Entity Compliance Guide of the DAS accrual rate and additional pounds of scallops determined by the Regional Administrator. The Regional Administrator may adjust the DAS accrual rate and additional pounds of scallops if necessary based on economic conditions of the scallop fishery. Vessel owners and observer providers shall by notified of any such adjustments through a letter.
(6)When the available DAS or TAC set-aside for observer coverage is exhausted, vessels shall still be required to carry an observer as specified in this section and shall be responsible for paying for the cost of the observer, unless otherwise waived by NMFS, but shall not be authorized to harvest additional pounds or fish at a reduced DAS accrual rate.
(h)*Observer service provider approval and responsibilities* —(1) *General.* An entity seeking to provide observer services to the Atlantic sea scallop fishery must apply for and obtain approval from NMFS following submission of a complete application to The Observer Program Branch Chief, 25 Bernard St Jean Drive, East Falmouth, MA 02536. A list of approved observer service providers shall be distributed to scallop vessel owners and shall be posted on NMFS's web page as specified in paragraph (g)(4) of this section.
(2)*Existing observer service providers.* Observer service providers that currently deploy certified observers in the Northeast must submit an application containing the information specified in paragraph (h)(3) of this section, excluding any information specified in paragraph (h)(3) of this section that has already been submitted to NMFS.
(3)*Contents of application.* An application to become an approved observer service provider shall contain the following:
(i)Identification of the management, organizational structure, and ownership structure of the applicant's business, including identification by name and general function of all controlling management interests in the company, including but not limited to owners, board members, officers, authorized agents, and staff. If the applicant is a corporation, the articles of incorporation must be provided. If the applicant is a partnership, the partnership agreement must be provided.
(ii)The permanent mailing address, phone and fax numbers where the owner(s) can be contacted for official correspondence, and the current physical location, business mailing address, business telephone and fax numbers, and business e-mail address for each office.
(iii)A statement, signed under penalty of perjury, from each owner or owners, board members, and officers, if a corporation, that they are free from a conflict of interest as described under paragraph (h)(6) of this section.
(iv)A statement, signed under penalty of perjury, from each owner or owners, board members, and officers, if a corporation, describing any criminal convictions, Federal contracts they have had, and the performance rating they received on the contract, and previous decertification action while working as an observer or observer service provider.
(v)A description of any prior experience the applicant may have in placing individuals in remote field and/or marine work environments. This includes, but is not limited to, recruiting, hiring, deployment, and personnel administration.
(vi)A description of the applicant's ability to carry out the responsibilities and duties of a scallop fishery observer services provider as set out under paragraph (h)(2) of this section, and the arrangements to be used.
(vii)Evidence of holding adequate insurance to cover injury, liability, and accidental death for observers during their period of employment (including during training). Workers' Compensation and Maritime Employer's Liability insurance must be provided to cover the observer, vessel owner, and observer provider. The minimum coverage required is $5 million. Observer service providers shall provide copies of the insurance policies to observers to display to the vessel owner, operator, or vessel manager, when requested.
(viii)Proof that its observers, either contracted or employed by the service provider, are compensated with salaries that meet or exceed the Department of Labor
(DOL)guidelines for observers. Observers shall be compensated as a Fair Labor Standards Act
(FLSA)non-exempt employees. Observer providers shall provide any other benefits and personnel services in accordance with the terms of each observer's contract or employment status.
(ix)The names of its fully equipped, NMFS/NEFOP certified observers on staff or a list of its training candidates (with resumes) and a request for a NMFS/NEFOP Sea Scallop Observer Training class (minimum class size of eight).
(x)Am Emergency Action Plan
(EAP)describing its response to an 'at sea' emergency with an observer, including, but not limited to, personal injury, death, harassment, or intimidation.
(4)*Application evaluation.*
(i)NMFS shall review and evaluate each application submitted under paragraphs (h)(2) and (h)(3) of this section. Issuance of approval as an observer provider shall be based on completeness of the application, and a determination of the applicant's ability to perform the duties and responsibilities of a sea scallop fishery observer service provider as demonstrated in the application information. A decision to approve or deny an application shall be made by NMFS within 15 days of receipt of the application by NMFS.
(ii)If NMFS approves the application, the observer service provider's name will be added to the list of approved observer service providers found on NMFS website specified in paragraph (g)(4) of this section and in any outreach information to the industry. Approved observer service providers shall be notified in writing and provided with any information pertinent to its participation in the sea scallop fishery observer program.
(iii)An application shall be denied if NMFS determines that the information provided in the application is not complete or the evaluation criteria are not met. NMFS shall notify the applicant in writing of any deficiencies in the application or information submitted in support of the application. An applicant who receives a denial of his or her application may present additional information to rectify the deficiencies specified in the written denial, provided such information is submitted to NMFS within 30 days of the applicant's receipt of the denial notification from NMFS. In the absence of additional information, and after 30 days from an applicant's receipt of a denial, an observer provider is required to resubmit an application containing all of the information required under the application process specified in paragraph (h)(3) of this section to be re-considered for being added to the list of approved observer service providers.
(5)*Responsibilities of observer service providers.*
(i)An observer service provider must provide observers certified by NMFS/NEFOP pursuant to paragraph
(i)of this section for deployment in the sea scallop fishery when contacted and contracted by the owner, operator, or vessel manager of a vessel fishing in the scallop fishery unless the observer service provider rufuses to deploy an observer on a requesting vessel for any of the reasons specified at paragraph
(viii)of this section.
(ii)An observer service provider must provide to each of its observers:
(A)All necessary transportation, including arrangements and logistics, of observers to the initial location of deployment, to all subsequent vessel assignments, and to any debriefing locations, if necessary;
(B)Lodging, per diem, and any other services necessary for observers assigned to a scallop vessel or to attend a NMFS/NEFOP Sea Scallop Observer Training class;
(C)The required observer equipment, in accordance with equipment requirements listed on NMFS website specified in paragraph (g)(4) of this section under the Sea Scallop Program, prior to any deployment and/or prior to NMFS observer certification training; and
(D)Individually assigned communication equipment, in working order, such as a cell phone or pager, for all necessary communication. An observer service provider may alternatively compensate observers for the use of the observer's personal cell phone or pager for communications made in support of, or necessary for, the observer's duties.
(iii)*Observer deployment logistics.* Each approved observer service provider must assign an available certified observer to a vessel upon request. Each approved observer service provider must provide for access by industry 24 hours per day, 7 days per week, to enable an owner, operator, or manager of a vessel to secure observer coverage when requested. The telephone system must be monitored a minimum of four times daily to ensure rapid response to industry requests. Observer service providers approved under paragraph
(h)of this section are required to report observer deployments to NMFS daily for the purpose of determining whether the predetermined coverage levels are being achieved in the scallop fishery.
(iv)*Observer deployment limitations.* Unless alternative arrangements are approved by NMFS, an observer provider must not deploy any observer on the same vessel for two or more consecutive deployments, and not more than twice in any given month. A certified observer's first deployment shall be on a scallop closed area trip and the resulting data shall be immediately edited, and approved, by NMFS prior to any further deployments of that observer.
(v)*Communications with observers.* An observer service provider must have an employee responsible for observer activities on call 24 hours a day to handle emergencies involving observers or problems concerning observer logistics, whenever observers are at sea, stationed shoreside, in transit, or in port awaiting vessel assignment.
(vi)*Observer training requirements.* The following information must be submitted to NMFS to request a certified observer training class at least 30 days prior to the beginning of the proposed training class: Date of requested training;a list of observer candidates, with a minimum of eight individuals; observer candidate resumes; and a statement signed by the candidate, under penalty of perjury, that discloses the candidate's criminal convictions, if any. All observer trainees must complete a basic cardiopulmonary resuscitation/first aid course prior to the beginning of a NMFS/NEFOP Sea Scallop Observer Training class. NMFS may reject a candidate for training if the candidate does not meet the minimum qualification requirements as outlined by NMFS National Minimum Eligibility Standards for observers as described in paragraph (i)(1) of this section.
(vii)*Reports* —(A) *Observer deployment reports.* The observer service provider must report to NMFS when, where, to whom, and to what fishery (open or closed area) an observer has been deployed, within 24 hours of their departure. The observer service provider must ensure that the observer reports back to NMFS its Observer Contract (OBSCON) data, as described in the certified observer training, within 12 hours of landing. OBSCON data are to be submitted electronically or by other means as specified by NMFS. The observer service provider shall provide the raw (unedited) data collected by the observer to NMFS within 72 hours of the trip landing.
(B)*Safety refusals.* The observer service provider must report to NMFS any trip that has been refused due to safety issues, e.g., failure to hold a valid USCG Commercial Fishing Vessel Safety Examination Decal or to meet the safety requirements of the observer's pre-trip vessel safety checklist, within 24 hours of the refusal.
(C)*Biological samples.* The observer service provider must ensure that biological samples, including whole marine mammals, turtles and sea birds, are stored/handled properly and transported to NMFS within 7 days of landing.
(D)*Observer debriefing.* The observer service provider must ensure that the observer remains available to NMFS, including NMFS Office for Law Enforcement, for debriefing for at least two weeks following any observed trip. An observer that is at sea during the 2-week period must contact NMFS upon his or her return, if requested by NMFS.
(E)*Observer availability report.* The observer service provider must report to NMFS any occurrence of inability to respond to an industry request for observer coverage due to the lack of available observers on staff by 5 pm, Eastern Standard Time, of any day on which the provider is unable to respond to an industry request for observer coverage.
(F)*Other reports.* The observer provider must report possible observer harassment, discrimination, concerns about vessel safety or marine casualty, observer illness or injury, and any information, allegations, or reports regarding observer conflict of interest or breach of the standards of behavior must be submitted to NMFS within 24 hours of the event or within 24 of learning of the event.
(viii)*Refusal to deploy an observer.* —(A) An observer service provider may refuse to deploy an observer on a requesting scallop vessel if the observer service provider does not have an available observer within 72 hours of receiving a request for an observer from a vessel.
(B)An observer service provider may refuse to deploy an observer on a requesting scallop vessel if the observer service provider has determined that the requesting vessel is inadequate or unsafe pursuant to the reasons described at § 600.746.
(C)The observer service provider may refuse to deploy an observer on a scallop vessel that is otherwise eligible to carry an observer for any other reason including failure to pay for pervious observer deployments, provided the observer service provider has received prior written confirmation from NMFS authorizing such refusal.
(6)*Limitations on conflict of interest.* An observer service provider:
(i)Must not have a direct or indirect interest in a fishery managed under Federal regulations, including, but not limited to, a fishing vessel, fish dealer, fishery advocacy group, and/or fishery research;
(ii)Must assign observers without regard to any preference by representatives of vessels other than when an observer will be deployed; and
(iii)Must not solicit or accept, directly or indirectly, any gratuity, gift, favor, entertainment, loan, or anything of monetary value from anyone who conducts fishing or fishing related activities that are regulated by NMFS, or who has interests that may be substantially affected by the performance or nonperformance of the official duties of observer providers.
(7)*Removal of observer service provider from the list of approved observer service providers.* An observer provider that fails to meet the requirements, conditions, and responsibilities specified in paragraphs (h)(5) and (h)(6) of this section shall be notified by NMFS, in writing, that it is subject to removal from the list of approved observer service providers. Such notification shall specify the reasons for the pending removal. An observer service provider that has received notification that it is subject to removal from the list of approved observer service providers may submit information to rebut the reasons for removal from the list. Such rebuttal must be submitted within 30 days of notification received by the observer service provider that the observer service provider is subject to removal and must be accompanied by written evidence that clearly disproves the reasons for removal. NMFS shall review information rebutting the pending removal and shall notify the observer service provider within 15 days of receipt of the rebuttal whether or not the removal is warranted. If no response to a pending removal is received by NMFS, the observer service provider shall be automatically removed from the list of approved observer service providers. The decision to remove the observer service provider from the list, either after reviewing a rebuttal, or if no rebuttal is submitted, shall be the final decision of NMFS and the Department of Commerce. Removal from the list of approved observer service providers does not necessarily prevent such observer service provider from obtaining an approval in the future if a new application is submitted that demonstrates that the reasons for removal are remedied. Certified observers under contract with an observer service provider that has been removed from the list of approved service providers must complete their assigned duties for any scallop trips on which the observers are deployed at the time the observer service provider is removed from the list of approved observer service providers. An observer service provider removed from the list of approved observer service providers is responsible for providing NMFS with the information required in paragraph (h)(5)(vii) of this section following completion of the trip. NMFS may consider, but is not limited to, the following in determining if an observer service provider may remain on the list of approved observer service providers:
(i)Failure to meet the requirements, conditions, and responsibilities of observer service providers specified in paragraphs (h)(5) and (h)(6) of this section;
(ii)Evidence of conflict of interest as defined under paragraph (h)(3) of this section;
(iii)Evidence of criminal convictions related to:
(A)Embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property; or
(B)The commission of any other crimes of dishonesty, as defined by state law or Federal law that would seriously and directly affect the fitness of an applicant in providing observer services under this section;
(iv)Unsatisfactory performance ratings on any Federal contracts held by the applicant; and
(v)Evidence of any history of decertification as either an observer or observer provider.
(i)*Observer certification.*
(1)To be certified, employees or sub-contractors operating as observers for observer service providers approved under paragraph
(h)of this section must meet NMFS National Minimum Eligibility Standards for observers. NMFS National Minimum Eligibility Standards are available at the National Observer Program website: *http://www.st.nmfs.gov/st4/nop/* .
(2)*Observer training.* In order to be deployed on any scallop vessel, a candidate observer must have passed a NMFS/NEFOP Sea Scallop Fisheries Observer Training course. If a candidate fails training, the candidate shall be notified in writing on or before the last day of training. The notification will indicate the reasons the candidate failed the training. Observer training shall include an observer training trip, paid for as part of the observer's training, aboard a scallop vessel with a trainer. A certified observer's first deployment shall be on a scallop closed area trip and the resulting data shall be immediately edited, and approved, by NMFS prior to any further deployments of that observer.
(3)*Observer requirements.* All observers must:
(i)Have a valid NMFS/NEFOP fisheries observer certification pursuant to paragraph (i)(1) of this section;
(ii)Be physically and mentally capable of carrying out the responsibilities of an observer on board scallop vessels, pursuant to standards established by NMFS. Such standards are available from NMFS website specified in paragraph (g)(4) of this section and shall be provided to each approved observer service provider; and
(iii)Have successfully completed all NMFS-required training and briefings for observers before deployment, pursuant to paragraph (i)(2) of this section.
(4)*Probation and decertification* . NMFS has the authority to review observer certifications and issue observer certification probation and/or decertification as described in NMFS policy found on the website at: *http://www.nefsc.noaa.gov/femad/fsb/* .
(5)*Issuance of decertification.* Upon determination that decertification is warranted under paragraph (i)(3) of this section, NMFS shall issue a written decision to decertify the observer to the observer and approved observer service providers via certified mail at the observer's most current address provided to NMFS. The decision shall identify whether a certification is revoked and shall identify the specific reasons for the action taken. Decertification is effective immediately as of the date of issuance, unless the decertification official notes a compelling reason for maintaining certification for a specified period and under specified conditions. Decertification is the final decision of NMFS and the Department of Commerce and may not be appealed. 4. In § 648.51, paragraphs (c)(4) and (e)(3)(iii) are added to read as follows: § 648.51 Gear and crew restrictions.
(c)* * *
(4)A certified at-sea observer is on board, as required by § 648.11(g).
(e)* * *
(3)* * *
(iii)A certified at-sea observer is on board, as required by § 648.11(g). 5. In § 648.60, paragraphs (a)(2)(i) and
(ii)are suspended and paragraph (a)(2)(iii) is added to read as follows: § 648.60 Sea scallop area access program requirements.
(a)* * *
(2)* * *
(iii)Vessels participating in the Sea Scallop Access Area Program must comply with the trip declaration requirements specified in § 648.11(g), and each participating vessel owner or operator shall declare a Sea Scallop Access Area trip via VMS less than one hour prior to the vessel leaving port, in accordance with instructions provided by the Regional Administrator. [FR Doc. 06-5504 Filed 6-14-06; 1:03 pm]
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U.S. Code
30 references not yet in our index
  • 29 CFR 4062
  • 29 CFR 4063
  • 33 CFR 165
  • 36 CFR 223
  • Pub. L. 104-19
  • Pub. L. 101-121
  • 103 Stat. 745
  • 2 USC 1531-1538
  • 5 CFR 1320
  • 90 Stat. 2958
  • 98 Stat. 2213
  • 104 Stat. 714
  • 16 USC 620-620j
  • 109 Stat. 246
  • 41 USC 421
  • 48 CFR 219
  • Pub. L. 108-87
  • Pub. L. 108-287
  • Pub. L. 109-148
  • 48 CFR 225
  • Pub. L. 109-163
  • 48 CFR 237
  • Pub. L. 107-314
  • Pub. L. 108-175
  • 48 CFR 252
  • Pub. L. 109-53
  • Pub. L. 99-399
  • 40 USC 486(c)
  • 42 USC 1651-1654
  • 50 CFR 648
Citation graph
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Rules and Regulations
Final rule
C.F.R.§ 4043.21
Fed. Reg.Notices
U.S.C.§ 1302
U.S.C.§ 472a
C.F.R.§ 223.85
U.S.C.§ 472
Fed. Reg.Notices
U.S.C.§ 601
Fed. Reg.Notices
Cite29 CFR 4062
Cite29 CFR 4063
Cite33 CFR 165
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