Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 9, 27, and 47

OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 9, 27, 47, and 52

[FAR Case 2026-011, Docket No. FAR-2026-0011, Sequence No. 1]

RIN 9000-AO84

Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 9, 27, and 47

AGENCY:

Office of Federal Procurement Policy (OFPP), Office of Management and Budget (OMB); Department of Defense (DoD); General Services Administration (GSA); and National Aeronautics and Space Administration (NASA).

ACTION:

Proposed rule.

SUMMARY:

OFPP, DoD, GSA, and NASA (collectively referred to as the Federal Acquisition Regulatory Council or FAR Council) are proposing to amend the Federal Acquisition Regulation (FAR) to implement Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement. The E.O. directs the elimination of excessive acquisition regulations to stop the inefficient use of American taxpayer dollars. The FAR Council is issuing twelve proposed rules that collectively, if finalized, would streamline the FAR in its entirety. This rule proposes revisions to FAR parts 9, 27, 47, and 52.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat Division at the address shown below on or before October 19, 2026, to be considered in the formation of the final rule.

ADDRESSES:

Submit comments in response to FAR Case 2026-011 to the Federal eRulemaking portal at

https://www.regulations.gov.

Follow the instructions for sending comments.

Instructions:

Please submit comments only and cite “FAR Case 2026-011” in all correspondence related to this case. Include your name, company name (if any), and “FAR Case 2026-011” on any attached document. Comments received generally will be posted without change to

https://www.regulations.gov,

including any personal and/or business confidential information provided. Public comments may be submitted as an individual, as an organization, or anonymously (see frequently asked questions at

https://www.regulations.gov/faq

). To confirm receipt of your comment(s), please check

https://www.regulations.gov,

approximately two to three days after submission to verify posting.

Docket:

For access to the docket to read background documents or comments received, go to

https://www.regulations.gov/FAR-2026-0011.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact

FARpolicy@gsa.gov

or call 202-969-4075 and cite “FAR Case 2026-011.” For information pertaining to status, publication schedules, or alternate instructions for submitting comments if

https://www.regulations.gov

cannot be used, contact the Regulatory Secretariat Division at 202-501-4755 or

GSARegSec@gsa.gov.

Please cite “FAR Case 2026-011.”

SUPPLEMENTARY INFORMATION:

I. Background

E.O. 14275, Restoring Common Sense to Federal Procurement (April 15, 2025), resets the foundation for Federal buying by requiring the FAR Council to produce a streamlined FAR that is simpler, clearer, and structured for speed. According to the E.O., the FAR has evolved from its original purpose (

i.e.,

to establish uniform procedures across executive departments and agencies), into an excessive and overcomplicated regulatory framework and bureaucracy. While meant to “deliver, on a timely basis, the best value product or service to the customer, while maintaining the public's trust and fulfilling public policy objectives,” the FAR has become an expensive barrier to achieving those objectives. As a result, the E.O. directed the FAR Council and OMB to create an agile, effective, and efficient regulation that contains only provisions required by statute or essential to sound procurement.

To implement E.O. 14275, OMB issued Memorandum M-25-26, Overhauling the Federal Acquisition Regulation, which announced the “Revolutionary FAR Overhaul” (RFO) and created a roadmap for producing simpler regulations aligned to statute, rewritten in plain language, and including nonstatutory requirements that are necessary to conducting a sound procurement. The memorandum described a new streamlined vision for the FAR, to be maintained alongside nonregulatory governmentwide guidance to provide a common-sense authoritative foundation for nimble response and delivery of mission capability.

This new vision represents a paradigm shift where over-engineered regulations designed for paperwork and compliance are replaced with streamlined regulations focused on core stewardship principles and nonregulatory guidance that will be used in concert with the streamlined FAR focused on proven buying strategies, critical thinking, market awareness (including to expand awareness of goods, products, and materials offered in the United States), and risk literacy to enhance workforce problem-solving. The significant reduction of unnecessary mandates is intended to clarify and reinforce the contracting officer's discretion to determine the best way to apply policies and practices. The newly established, nonregulatory guidance, which has been inspired by acquisition innovation advocates, category managers, other experienced practitioners, and many years of feedback from the contractor community—is expected to facilitate contracting officers' use of their discretion more efficiently and effectively to make smarter buying decisions.

OMB Memorandum M-25-26 also directed the FAR Council to complete the regulatory overhaul in two phases, each with robust public input. The FAR Council conducted its phase one effort in fiscal year 2025 by issuing model class deviations to replace each part in the FAR until such time as formal rulemaking occurred. This proposed rule is one of a series that constitute the FAR Council's phase two effort to obtain public comment through formal rulemaking.

II. Discussion and Analysis

A summary of proposed changes to existing FAR parts 9, 27, and 47, and their corresponding provisions and clauses in part 52 are as follows:

A. General

1. General RFO updates.

This proposed rule generally reorganizes the FAR parts into phases of acquisition and simplifies the text into plain language, where possible. The plain language efforts include changes to active voice, edits to improve readability, and reorganization to present information more logically. None of the plain language edits are intended to change existing FAR requirements. The rewriting of the entire FAR also required edits to harmonize the changes being proposed such as updating the cross-

references. This aligns with Federal plain language guidelines as directed by the Plain Writing Act of 2010 (5 U.S.C. 301 note).

2. Standardization of prescriptions.

This rule proposes revisions to standardize prescriptions for provisions and clauses. These changes are intended to provide better clarity around the applicability of provisions and clauses such as whether they apply to commercial products and services.

3. Use of “must” instead of “shall”.

Additional revisions are being proposed throughout the FAR text and FAR provisions and clauses to replace the use of the term “shall” with “must” or “will,” as appropriate, to impose requirements.

4. Non-statutory requirements.

Section 4 of the E.O. required amendments to the FAR to ensure it contains only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security. The FAR Council reviewed all non-statutory requirements to determine if they are still relevant and essential to sound procurement in today's contracting environment based on the criteria from section 4 of the E.O. The proposed rule retains non-statutory requirements that further one or more of the elements of sound procurements, including those requirements that serve as guardrails to protecting taxpayer interests and promote taxpayer confidence in the procurement system. Non-statutory requirements that were beneficial but not essential were retained in the non-regulatory guidance documents. Other non-statutory requirements that did not meet these standards, were removed. The Council considered the extent to which regulation is the most efficient means for capturing the benefit of the policy. For example, most “how to” requirements were found to be more appropriately suited for non-regulatory coverage which better enables a contracting officer to use discretion in determining the application of a strategy to a given situation and limits the risk of overapplication, which can create wasteful burden on the contracting parties.

As part of the RFO, the FAR Council has created a number of non-regulatory resources, including the FAR Companion, which provides insight from experienced practitioners across the government on using more streamlined practices and processes. The migration of significant coverage to non-regulatory guidance is intended to ensure that the benefits of the policy are not outweighed by the compliance burden of a more rigidly written regulation that is prone to application in an overly broad manner. This approach was explained to the public in a set of “frequently asked questions” that were posted on the Revolutionary FAR Overhaul homepage shortly after the initiative was launched.

B. FAR Part 9

1. Streamlining

This proposed rule would remove or relocate FAR content that is outdated, redundant, or otherwise unnecessary. These revisions align with the broader RFO initiatives and do not substantively change policy or procedures in the part. FAR section 9.000 “Scope of Part,” is proposed to be removed because the language is duplicative. The definition of “Surveying activity” is proposed to be removed from FAR section 9.101, “Definitions,” because the definition is unnecessary. FAR section 9.104-2, “Special Standards,” is proposed to be removed as unnecessary. FAR section 9.106, “Preaward Surveys,” is proposed to be removed; this includes the reference to utilizing the Standard Form 1403, Preaward Survey of Prospective Contractor (General). FAR section 9.107, “Surveys of Nonprofit Agencies Participating in the AbilityOne Program,” is proposed to be removed because the AbilityOne Program is covered in FAR part 8, and nuances of pre-award surveys relevant to the AbilityOne Program are now covered in nonregulatory content. FAR subpart 9.6, “Contractor Team Arrangements,” is proposed to be removed as unnecessary. FAR subpart 9.7, “Defense Production Pools and Research and Development Pools,” is proposed to be removed. Lastly, this rule proposes to revise FAR section 9.103-2(b), “Satisfactory performance record,” for clarity.

2. Section 812(a)(6) of the National Defense Authorization Act for Fiscal Year 2026

This rule would implement section 812(a)(6) of the National Defense Authorization Act for Fiscal Year 2026 (Pub. L. 119-60). Section 812(a)(6) strikes 10 U.S.C. 3243(d)(2), which, where fewer than two actual manufacturers were available to compete in a future procurement involving a qualification requirement, required DoD agencies to make a determination before bearing the cost for a small business and prospective competitor to undergo the testing and evaluation necessary to meet the qualification requirement. A corresponding requirement for civilian agencies remains in effect at 41 U.S.C. 3311(d)(2). FAR section 9.204(a)(2)(i) implements this requirement in the FAR. This rule proposes to change FAR 9.204(a)(2)(i) to exclude DoD from the requirement.

3. Implementation of Executive Order 14398

E.O. 14398 of March 26, 2026, Addressing DEI Discrimination by Federal Contractors, was published in the

Federal Register

on March 31, 2026, at 91 FR 16147. E.O. 14398 establishes that agencies should not do business with contractors that engage in any racially discriminatory diversity, equity, and inclusion (DEI) activities. Section 5 of E.O. 14398 directs the FAR Council to amend the FAR to implement the contract clause described in section 3 of the E.O. This rule proposes to add noncompliance with the resulting FAR clause, 52.222-XX, Addressing DEI Discrimination by Federal Contractors, to the list of causes for debarment and suspension at FAR 9.406-2(b)(1) and 9.407-2(a), respectively.

4. Other Editorials

FAR part 9 is proposed to be revised to remove reserved subparts, sections, subsections and paragraphs and to renumber the retained content to avoid numbering gaps.

FAR part 9 is proposed to be revised to replace the disused term “Federal Awardee Performance and Integrity Information System,” (FAPIIS) with “integrity records.” As part of its ongoing systems modernization effort, GSA retired FAPIIS, and integrity records are now accessed in

SAM.gov

and reported in CPARS.gov. The paragraph at FAR 9.105-2(b)(2)(iii), describing this distinction, is proposed to relocate to FAR 9.104-5.

The definition of “Qualified products list (QPL)” is proposed to relocate from FAR subpart 2.1 to FAR subpart 9.2 because the term is used only within the latter subpart. The definition itself remains unchanged.

C. FAR Part 27

1. Overhaul of FAR Subpart 27.4

This rule proposes to delete FAR subpart 27.4, Rights in Data and Copyrights, in its entirety, along with associated provisions and clauses, and replace it with analogous content derived from the Defense Federal Acquisition Regulation Supplement (DFARS). As revised, FAR subpart 27.4 would be titled “Technical Data, Computer Software, Computer Software Documentation, and Associated Rights Related to Other Than Commercial

Products, Components, Services, Processes, and Computer Software.” This subpart would prescribe policies and procedures for the acquisition of other-than-commercial technical data, computer software, computer software documentation, and corresponding rights to use, modify, reproduce, release, perform, display, or disclose technical data. Further, this rule proposes to add DFARS-derived provisions and clauses basically for use in other than commercial acquisitions.

To complement FAR subpart 27.4, this rule proposes to add FAR subpart 27.5, titled “Technical Data, Computer Software, Computer Software Documentation, and Associated Rights Related to Commercial Products and Computer Services.” Further, this rule proposes to add DFARS-derived provisions and clauses basically for use in commercial acquisitions. This subpart, also derived from the DFARS, would prescribe policies and procedures for the acquisition of commercial technical data, computer software, and computer software documentation related to commercial products, components, services, processes, and computer software, and corresponding rights to use, modify, reproduce, release, perform, display, or disclose such data or software.

This rule proposes therefore to replace existing FAR subpart 27.4 with two new subparts to bifurcate treatment of acquisitions of other than commercial products and services and commercial products and services.

2. Additional Patent-Related Clauses

This rule proposes to add to FAR subpart 52.2 two DFARS-derived clauses: FAR 52.227-24, Patents—Reporting of Subject Inventions, and FAR 52.227-25, Patent Rights—Ownership by the Contractor (Large Business), to complement existing patent-related clauses, all of which substantially remain. Clause prescriptions are added accordingly to FAR subpart 27.3.

3. Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer (STTR) Program

This rule proposes to update coverage of the SBIR program and to add coverage of the STTR program. This revised SBIR/STTR coverage would align the FAR with the Small Business Administration (SBA) SBIR/STTR Policy Directive, effective May 3, 2023. Accordingly, this rule proposes to update the SBIR/STTR data protection period to a single, non-extendable, 20-year period. This rule also proposes to grant the Government a Government purpose rights license after the expiration of the SBIR/STTR data protection period, rather than an unlimited rights license, and it would establish or revise several definitions to correspond to terminology used in the SBA Policy Directive.

4. Other Editorials

FAR part 27 is otherwise proposed to be revised to remove reserved sections, subsections and paragraphs and to renumber the retained content to avoid numbering gaps.

D. FAR Part 47

1. Streamlining

This rule proposes to revise FAR part 47 to eliminate outdated requirements not derived from statute or executive order. These revisions, including removing 33 clauses, align with the broader RFO initiatives and do not substantively change policy or procedures in the part.

FAR section 47.102, “Transportation Insurance”, is proposed to be deleted. FAR section 47.103-1 (renumbered as FAR 47.102-1), addressing “Transportation Payment and Audit Regulation”, is proposed to be updated from five paragraphs that detailed where and how to send paid freight bills to the General Services Administration (GSA) for audit, to a single sentence that states the statutory requirement for a prepayment audit program and directs users to 41 CFR part 102-118 for details. FAR section 47.105, “Transportation Assistance”, is proposed to be deleted. FAR subsection 47.301-2, “Participation of Transportation Officers”, is proposed to be deleted.

In FAR subsections 47.303-1 through 47.303-11, paragraph (b) of each subsection, each titled “Contractor Responsibilities,” is proposed to be removed because the content merely duplicates that found in the relevant contract clauses. The paragraphs within these subsections are proposed to be re-numbered accordingly.

The following sections or subsections are proposed to be removed because the content duplicates contracting principles established in other parts of the FAR or other regulations:

• FAR 47.202, Presolicitation Planning

• FAR 47.205, Availability of Term Contracts and Basic Ordering Agreements for Transportation or for Transportation-related Services

• FAR 47.206, Preparation of Solicitations and Contracts

• FAR 47.207-2, Duration of Contract and Time of Performance

• FAR 47.207-10, Discrepancies Incident to Shipments

The following subsections are proposed to be removed because they are not required by statute or executive order, and they are not otherwise essential to sound procurement:

• FAR 47.303-12, Ex dock, pier, or warehouse, port of importation

• FAR 47.303-13, C.& f. destination

• FAR 47.303-14, C.i.f. destination

• FAR 47.303-15, F.o.b. designated air carrier's terminal, point of exportation

• FAR 47.303-16, F.o.b. designated air carrier's terminal, point of importation

• FAR 47.303-17, Contractor-prepaid commercial bills of lading, small package shipments

The following provisions and clauses are proposed to be removed because they are not required by statute or executive order, and they are not otherwise essential to sound procurement:

• FAR 52.247-3, Capability To Perform a Contract for the Relocation of a Federal Office

• FAR 52.247-4, Inspection of Shipping and Receiving Facilities

• FAR 52.247-6, Financial Statement

• FAR 52.247-7, Freight Excluded

• FAR 52.247-9, Agreed Weight—General Freight

• FAR 52.247-12, Supervision, Labor, or Materials

• FAR 52.247-14, Contractor Responsibility for Receipt of Shipment

• FAR 52.247-16, Contractor Responsibility for Returning Undelivered Freight

• FAR 52.247-20, Estimated Quantities or Weights for Evaluation of Offers

• FAR 52.247-24, Advance Notification by the Government

• FAR 52.247-25, Government-Furnished Equipment With or Without Operators

• FAR 52.247-26, Government Direction and Marking

• FAR 52.247-27, Contract Not Affected by Oral Agreement

• FAR 52.247-28, Contractor's Invoices

• FAR 52.247-40, Ex Dock, Pier, or Warehouse, Port of Importation

• FAR 52.247-41, C.& f. Destination

• FAR 52.247-42, C.i.f. Destination

• FAR 52.247-43, F.o.b. Designated Air Carrier's Terminal, Point of Exportation

• FAR 52.247-44, F.o.b. Designated Air Carrier's Terminal, Point of Importation

• FAR 52.247-45, F.o.b. Origin and/or F.o.b. Destination Evaluation

• FAR 52.247-46, Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers

• FAR 52.247-47, Evaluation—F.o.b. Origin

• FAR 52.247-49, Destination Unknown

• FAR 52.247-50, No Evaluation of Transportation Costs

• FAR 52.247-51, Evaluation of Export Offers

• FAR 52.247-55, F.o.b. Point for Delivery of Government-Furnished Property

• FAR 52.247-57, Transportation Transit Privilege Credits

• FAR 52.247-59, F.o.b. Origin—Carload and Truckload Shipments

• FAR 52.247-60, Guaranteed Shipping Characteristics

• FAR 52.247-61, F.o.b. Origin—Minimum Size of Shipments

• FAR 52.247-62, Specific Quantities Unknown

• FAR 52.247-65, F.o.b. Origin, Prepaid Freight—Small Package Shipments

• FAR 52.247-66, Returnable Cylinders

2. Other Editorials

FAR part 47 is otherwise proposed to be revised to remove reserved sections, subsections and paragraphs and to renumber the retained content to avoid numbering gaps.

E. FAR Part 52 Renumbering

As a result of the RFO, the FAR Council is considering establishing a new FAR subpart in part 52 and relocating and renumbering all provisions and clauses under this new subpart. This means, if subpart 52.4 were used, all provisions and clauses would begin with 52.4 instead of 52.2. This change is anticipated to prevent confusion and increase compliance by creating a clear distinction between versions of a provision or clause prior to the RFO. Other benefits include avoiding potential clause numbering conflicts and information system and data collection impacts. The FAR Council welcomes comments on the potential impact of such a change on contractors, Government personnel, and other stakeholders.

III. Applicability to Contracts and Subcontracts Valued at or Below the Simplified Acquisition Threshold and for Commercial Products and Commercial Services

The following sections address the applicability of provisions and clauses prescribed in FAR parts 9, 27, and 47 to solicitations and contracts valued at or below the simplified acquisition threshold (SAT) and those for the acquisition of commercial products, commercially available off-the-shelf (COTS) items, and commercial services. Prescriptions for provisions and clauses in these parts have been updated to reflect applicability to commercial acquisitions.

A. Contracts and Subcontracts Valued at or Below the Simplified Acquisition Threshold

This proposed rule, if finalized, does not alter the prescriptions of provisions and clauses included in this proposed rule to change their applicability to contracts and subcontracts valued at or below the SAT.

B. Contracts and Subcontracts for Commercial Products, Commercially Available Off-the-Shelf Items, and Commercial Services

41 U.S.C. 1906 governs the applicability of laws to contracts for the acquisition of commercial products and commercial services and gives the FAR Council the authority to determine to apply a law to contracts or subcontracts for the acquisition of commercial products and commercial services. 41 U.S.C. 1907 exempts contracts for commercially available off-the-shelf (COTS) items from certain provisions of law unless the Administrator for Federal Procurement Policy determines that doing so would not be in the best interest of the Federal Government.

Section 839 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232) required the FAR Council and the Administrator of Federal Procurement Policy to review prior determinations under 41 U.S.C. 1906 and 41 U.S.C. 1907, as well as the applicability of provisions and clauses to contracts and subcontracts for commercial products, COTS items, and commercial services that do not implement statute or Executive order, and propose amendments to the FAR to eliminate or exempt such requirements from commercial acquisitions, unless there are specific reasons to retain particular requirements.

In accordance with section 839 of the NDAA for FY 2019 and their authorities under 41 U.S.C. 1906 and 1907, the FAR Council reviewed the applicability of the provisions and clauses associated with the FAR parts covered by this proposed rule.

The following table reflects the FAR Council and Administrator of Federal Procurement Policy's proposed determination regarding the applicability of the provisions and clauses to solicitations and contracts for commercial products, COTS items, and/or commercial services. In making proposed applicability determinations, the FAR Council considered factors such as whether the provision or clause advances national security or economic security, contributes to the resilience of contractors and subcontractors in the federal marketplace, or advances uniformity and clarity in the performance of basic functions that are essential to sound procurement.

Accordingly, this proposed rule, if finalized, would revise provision and clause prescriptions to clearly reflect applicability to commercial acquisitions as outlined in the table. An “X” in the following table indicates the provision or clause would apply to that category of commercial acquisition, as prescribed:

Provision/clause No.

Title

Commercial

products

Commercial

services

COTS items

52.209-1

Qualification Requirements

X

X

52.209-2

Prohibition on Contracting With Inverted Domestic Corporations-Representation

X

X

X

52.209-3

First Article Approval-Contractor Testing

X

X

52.209-3 Alt I

First Article Approval-Contractor Testing

X

X

52.209-3 Alt II

First Article Approval-Contractor Testing

X

X

52.209-4

First Article Approval-Government Testing

52.209-4 Alt I

First Article Approval-Government Testing

52.209-4 Alt II

First Article Approval-Government Testing

52.209-5

Certification Regarding Responsibility Matters

X

X

X

52.209-6

Protecting the Government's Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded

X

X

52.209-6 Alt I

Protecting the Government's Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded

X

52.209-7

Information Regarding Responsibility Matters

X

X

X

52.209-9

Updates of Publicly Available Information Regarding Responsibility Matters

X

X

X

52.209-10

Prohibition on Contracting With Inverted Domestic Corporations

X

X

X

52.209-11

Representation by Corporations Regarding Delinquent Tax Liability or a Felony Conviction under any Federal Law

X

X

X

52.209-12

Certification Regarding Tax Matters

X

X

X

52.209-13

Violation of Arms Control Treaties or Agreements-Certification

52.209-14

Reserve Officer Training Corps and Military Recruiting on Campus

52.227-1

Authorization and Consent

X

X

X

52.227-1 Alt I

Authorization and Consent

52.227-1 Alt II

Authorization and Consent

X

52.227-2

Notice and Assistance Regarding Patent and Copyright Infringement

X

X

X

52.227-3

Patent Indemnity

52.227-3 Alt I

Patent Indemnity

52.227-3 Alt II

Patent Indemnity

52.227-3 Alt III

Patent Indemnity

52.227-4

Patent Indemnity-Construction Contracts

X

52.227-4 Alt I

Patent Indemnity-Construction Contracts

52.227-5

Waiver of Indemnity

X

X

X

52.227-6

Royalty Information

52.227-6 Alt I

Royalty Information

52.227-9

Refund of Royalties

52.227-10

Filing of Patent Applications-Classified Subject Matter

X

X

X

52.227-11

Patent Rights-Ownership by the Contractor

X

X

X

52.227-11 Alt I

Patent Rights-Ownership by the Contractor

X

X

X

52.227-11 Alt II

Patent Rights-Ownership by the Contractor

X

X

X

52.227-11 Alt III

Patent Rights-Ownership by the Contractor

X

X

X

52.227-11 Alt IV

Patent Rights-Ownership by the Contractor

X

X

X

52.227-11 Alt V

Patent Rights-Ownership by the Contractor

X

X

X

52.227-13

Patent Rights-Ownership by the Government

X

X

X

52.227-13 Alt I

Patent Rights-Ownership by the Government

X

X

X

52.227-13 Alt II

Patent Rights-Ownership by the Government

X

X

X

52.227-24

Patents—Reporting of Subject Inventions

X

X

X

52.227-25

Patent Rights—Ownership by the Contractor (Large Business)

X

X

X

52.227-25 Alt I

Patent Rights—Ownership by the Contractor (Large Business)

X

X

X

52.227-25 Alt II

Patent Rights—Ownership by the Contractor (Large Business)

X

X

X

52.227-26

Rights in Technical Data, Computer Software, and Computer Software Documentation—Other Than Commercial Products and Commercial Services

X

X

X

52.227-26 Alt I

Rights in Technical Data, Computer Software, and Computer Software Documentation—Other Than Commercial Products and Commercial Services

X

X

X

52.227-26 Alt II

Rights in Technical Data, Computer Software, and Computer Software Documentation—Other Than Commercial Products and Commercial Services

X

X

X

52.227-27

Technical Data—Commercial Products and Commercial Services

X

X

X

52.227-27 Alt I

Technical Data—Commercial Products and Commercial Services

X

X

X

52.227-28

Rights in Bid or Proposal Information

X

X

X

52.227-29

Identification and Assertion of Use, Release, or Disclosure Restrictions

X

X

X

52.227-30

Rights in Other Than Commercial Technical Data and Other Than Commercial Computer Software—Small Business Innovation Research Program and Small Business Technology Transfer Program

X

X

X

52.227-31

Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends

X

X

X

52.227-32

Deferred Ordering of Technical Data or Computer Software

X

X

X

52.227-33

Technical Data or Computer Software Previously Delivered to the Government

X

X

X

52.227-34

Technical Data—Withholding of Payment

X

X

X

52.227-35

Validation of Asserted Restrictions

X

X

X

52.227-36

Additional Preaward Requirements for Small Business Technology Transfer Program

X

X

X

52.227-37

Additional Postaward Requirements for Small Business Technology Transfer Program

X

X

X

52.247-1

Commercial Bill of Lading Notations

X

X

X

52.247-2

Permits, Authorities, or Franchises

X

X

X

52.247-5

Familiarization with Conditions

X

X

X

52.247-8

Estimated Weights or Quantities Not Guaranteed

X

X

X

52.247-10

Net Weight-General Freight

X

X

X

52.247-11

Net Weight-Household Goods or Office Furniture

X

X

X

52.247-13

Accessorial Services-Moving Contracts

X

X

X

52.247-15

Contractor Responsibility for Loading and Unloading

X

X

X

52.247-17

Charges

X

X

X

52.247-18

Multiple Shipments

X

X

X

52.247-19

Stopping in Transit for Partial Unloading

X

X

X

52.247-21

Contractor Liability for Personal Injury and/or Property Damage.

X

X

X

52.247-22

Contractor Liability for Loss of and/or Damage to Freight other than Household Goods

X

X

X

52.247-23

Contractor Liability for Loss of and/or Damage to Household Goods

X

X

X

52.247-29

F.o.b. Origin

52.247-30

F.o.b. Origin, Contractor's Facility

52.247-31

F.o.b. Origin, Freight Allowed

52.247-32

F.o.b. Origin, Freight Prepaid

52.247-33

F.o.b. Origin, with Differentials

52.247-34

F.o.b. Destination

52.247-35

F.o.b. Destination, Within Consignee's Premises

52.247-36

F.a.s. Vessel, Port of Shipment

52.247-37

F.o.b. Vessel, Port of Shipment

52.247-38

F.o.b. Inland Carrier, Point of Exportation

52.247-39

F.o.b. Inland Point, Country of Importation

52.247-48

F.o.b. Destination-Evidence of Shipment

X

X

X

52.247-52

Clearance and Documentation Requirements-Shipments to DoD Air or Water Terminal Transshipment Points

X

X

X

52.247-53

Freight Classification Description

X

X

X

52.247-56

Transit Arrangements

X

X

X

52.247-58

Loading, Blocking, and Bracing of Freight Car Shipments

X

X

X

52.247-63

Preference for U.S.-Flag Air Carriers

X

52.247-64

Preference for Privately Owned U.S.-Flag Commercial Vessels

X

X

X

52.247-64 Alt I

Preference for Privately Owned U.S.-Flag Commercial Vessels

X

X

X

52.247-64 Alt II

Preference for Privately Owned U.S.-Flag Commercial Vessels

X

X

X

52.247-67

Submission of Transportation Documents for Audit

52.247-68

Report of Shipment (REPSHIP)

X

X

X

52.247-69

Reporting Requirement for U.S.-Flag Air Carriers Regarding Training to Prevent Human Trafficking

X

The FAR Council also reviewed subcontract flow down requirements in clauses associated with the FAR parts covered by this proposed rule. The following table reflects the FAR Council and Administrator of Federal Procurement Policy's proposal regarding whether those clauses flow down to subcontracts for commercial products, COTS items, and/or commercial services. This proposed rule, if finalized, would revise the subcontract paragraphs in these clauses to clearly state whether the clause flows down to commercial subcontracts, as outlined in the table. An “X” in the following table indicates the provision or clause would apply to subcontracts for that category of commercial subcontracts, as described in the clause:

Clause No.

Title

Commercial

products

Commercial

services

COTS items

52.209-6

Protecting the Government's Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded

X

X

52.209-6 Alt I

Protecting the Government's Interest When Subcontracting With Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded

X

52.227-1

Authorization and Consent

X

X

X

52.227-1 Alt I

Authorization and Consent

X

X

X

52.227-1 Alt II

Authorization and Consent

X

X

X

52.227-2

Notice and Assistance Regarding Patent and Copyright Infringement

X

X

X

52.227-9

Refund of Royalties

52.227-10

Filing of Patent Applications-Classified Subject Matter

X

X

X

52.227-11

Patent Rights-Ownership by the Contractor

52.227-11 Alt I

Patent Rights-Ownership by the Contractor

52.227-11 Alt II

Patent Rights-Ownership by the Contractor

52.227-11 Alt III

Patent Rights-Ownership by the Contractor

52.227-11 Alt IV

Patent Rights-Ownership by the Contractor

52.227-11 Alt V

Patent Rights-Ownership by the Contractor

52.227-13

Patent Rights-Ownership by the Government

52.227-13 Alt I

Patent Rights-Ownership by the Government

52.227-13 Alt II

Patent Rights-Ownership by the Government

52.227-25

Patent Rights—Ownership by the Contractor (Large Business)

52.227-25 Alt I

Patent Rights—Ownership by the Contractor (Large Business)

52.227-25 Alt II

Patent Rights—Ownership by the Contractor (Large Business)

52.227-26

Rights In Technical Data, Computer Software, and Computer Software Documentation—Other Than Commercial Products and Commercial Services

X

X

X

52.227-27

Technical Data—Commercial Products and Commercial Services

X

X

X

52.227-28

Rights in Bid or Proposal Information

X

X

X

52.227-30

Rights in Other Than Commercial Technical Data and Other than Commercial Computer Software-Small Business Innovation Research Program and Small Business Technology Transfer Program

X

X

X

52.227-35

Validation of Asserted Restrictions

X

X

X

52.247-63

Preference for U.S.-Flag Air Carriers

X

52.247-64

Preference for Privately Owned U.S.-Flag Commercial Vessels

X

X

X

52.247-64 Alt I

Preference for Privately Owned U.S.-Flag Commercial Vessels

X

X

X

52.247-64 Alt II

Preference for Privately Owned U.S.-Flag Commercial Vessels

X

X

X

IV. Expected Impact of the Rule

A. Overview

The intended impact of the RFO, as stated in E.O. 14275, is to restore the Government's ability to “deliver on a timely basis the best value product or service to the customer, while maintaining the public's trust and fulfilling public policy objectives.” Each of the RFO rulemakings is designed to contribute to this impact by emphasizing mission first, by aligning acquisition activities directly to achieving the agency's overarching objectives and serving the public interest and elevating the importance of fiscal responsibility. The proposed RFO rules focus on three goals in particular: (1) timely acquisition and delivery, (2) lower cost and accountability in all spending, and (3) increased competition.

Timeliness.

Timely acquisition and delivery are essential for mission success. To this end, RFO rules propose to eliminate mandates that unnecessarily interfere with agency discretion to determine the best way to procure products and services. The proposed RFO rules highlight more clearly streamlined and simplified authorities that allow buyers to use their time more efficiently and are expected to reduce time between solicitation and award. The proposed RFO rules are expected to make it easier for contracting officers to leverage commercial practices that are familiar to the commercial marketplace. This is expected to make it easier for sellers to engage and respond to Government solicitations more rapidly.

Lower cost.

E.O. 14271, Ensuring Commercial, Cost-Effective Solutions in Federal Contracts (April 15, 2025), directs the Government to utilize, to the maximum extent practicable, the commercial marketplace and the innovations of private enterprise to provide better, more cost-effective services to taxpayers, as envisioned by the Federal Acquisition Streamlining Act. The procurement of custom products and services where a suitable or superior commercial solution would have fulfilled the Government's needs has resulted in avoidable waste to the detriment of American taxpayers.

To address these concerns, consistent with associated responsibilities in section 839 of the John S. McCain National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Pub. L. 115-232), the FAR Council reviewed prescriptions for provisions and clauses to ensure all prescriptions are clear regarding their applicability to acquisitions for commercial products and services. Currently, many prescriptions do not specify applicability to commercial acquisitions and leave the applicability determination to contracting officer interpretation. By specifically stating when a provision or clause can be applied to commercial acquisitions, proposed RFO rules should decrease the likelihood of inclusion of provisions and clauses in commercial acquisitions that are not required by law and drive greater consistency in the terms and conditions used in these contracts. In turn, these changes should increase the participation of commercial sellers, who are unwilling or unable to manage the cost of complying with noncommercial requirements, and also improve taxpayer access to affordable commercial solutions.

Some RFO rules propose to delete requirements placed on commercial or noncommercial sellers that are not related to performance of the contract, drive up cost without attendant performance benefits, and may misdirect efforts away from innovation, investment and economic growth. Greater emphasis on timeliness should reduce bidders' carrying costs, enabling them to pass those savings on to customers through lower prices.

Increased competition.

Since enactment of the Competition in Contracting Act of 1984 (Title VII of Pub. L. 98-369), competition has been the cornerstone of the Federal acquisition system. The benefits of competition are well established: competition saves money for the taxpayer, improves contractor performance, curbs fraud, and promotes accountability for results. Competition also drives contractor resilience and positions the U.S. market to develop a strategic advantage for the nation.

According to data in the SAM Contract Award Management, roughly 45 percent of contract dollars were awarded in FY 2025 either without competition or with competition that received only one offer. Of equal concern, the Federal marketplace has seen a significant decline over the past 20 years in the number of businesses—especially small businesses—participating in the Federal supplier base. Studies suggest that high compliance costs lead to the misallocation of resources away from more profitable activities and discourage innovation, investment, and economic growth (Council of Economic Advisers, Executive Office of the President. June 2025. The Economic Benefits of Current Deregulatory Policies.

https://www.whitehouse.gov/wp-content/uploads/2025/03/The-Economic-Benefits-of-Current-Deregulatory-Efforts.pdf).

This may shelter incumbent contractors and stifle competition, reducing startup activity and job formation.

The RFO rules seek to increase participation in agency competitions and the resilience of the Federal supplier base, which includes commercial entities, small businesses, manufacturers, and nontraditional suppliers. The RFO will achieve this outcome by removing regulatory mandates that are not rooted in statute or essential to sound procurement, promoting greater reliance on practices that reduce transaction costs, and improving the quality of

communications with offerors and potential offerors. Access to a broader range of solutions in a more dynamic marketplace will drive better return for each taxpayer dollar spent and increase taxpayer confidence in the Federal acquisition system.

B. Impact of Rule

The Government has conducted a regulatory impact analysis (RIA) for the RFO rulemaking inclusive of this proposed rule for FAR parts 9, 27, and 47. The RIA includes a discussion of the anticipated effects of the rulemakings as follows:

1. FAR Part 9

This proposed rule, if finalized, is not expected to have a significant impact on contractors or subcontracts. The proposed changes to FAR part 9 consist basically of removal of non-statutory material, streamlining and plain-language rewriting.

2. FAR Part 27

The proposed changes to part 27 are expected to have a significant positive impact on both industry and the Government.

Alignment with the DFARS. Aligning the FAR to the DFARS with regard to data rights would lower costs for contractors because they would spend less time determining application of data rights by contractor employees and outside consultants. This follows from the DFARS-derived content providing clear definitions, better organized guidance, and simple determinations of applicable data rights (

i.e.,

the source of funds and specific categories). The DFARS-derived content ensures contractors receive adequate data rights for technology developed with both Government and private funds by granting government purpose rights (GPR) whereas the FAR lacks this category. The conceptual lack of GPR in the FAR often results in uncertainty or inadequate data rights. Further, ensuring contractors receive adequate data rights for commercial technology through separate clauses for commercial acquisitions and other than commercial acquisitions. This alignment would also create economies of scale for contractors from having to train employees, and hiring outside consultants, to operate within a single system of data rights, across all agencies (

e.g.,

standardized markings), rather than essentially two systems of data rights. This would ultimately reduce burden on industry, including small business.

The Government would also benefit from aligning the FAR to the DFARS. Adopting the DFARS-derived data rights guidance and clauses at civilian agencies would provide better options for data rights when acquiring emerging technology. Civilian agencies would receive robust data rights and would not have to spend additional funds to acquire data rights in the future or be locked into sole-source vendors. The acquisition workforce and Government attorneys would spend less time determining application of data rights resulting from clear definitions, better organized guidance, and simpler determination of applicable data rights. This proposed change would also provide the Government with unlimited rights in eleven different categories of data, while the FAR currently provides unlimited data for only four categories. This proposed change provides clarity regarding Government rights in data developed with both Government and contractor funding. Aligning the FAR to DFARS would better allow the Government to buy as a single entity because it allows both for standardized buying and for economies of scale that are impossible with different sets of data rights. Finally, contractors would be more likely to lower prices if they have more assurance that they would receive adequate data rights and that their data would be better protected.

SBIR/STTR.

By updating SBIR coverage in part 27, and by adding STTR coverage, this rule proposes to align the FAR with the current SBA SBIR/STTR Policy Directive. This includes updating the SBIR/STTR data protection period to a single, non-extendable 20-year period, rather than an extendable 4-year period. The proposed rule also provides the Government with perpetual GPR license rights after the expiration of the SBIR/STTR data protection period, rather than unlimited rights. In addition, the proposed rule implements STTR-unique requirements in the SBIR/STTR Policy Directive related to allocation of IP rights between partnering institutions and contractors under the STTR program. The proposed rule therefore impacts both contractor and Government license rights in SBIR/STTR data while respecting existing data rights.

The SBIR/STTR Policy Directive emphasizes the need to protect the IP interests of small businesses. Accordingly, this proposed rule, if finalized, provides a transparent and consistent markings framework that permits the Government to easily identify and resolve inadvertently omitted restrictive markings. This allows the Government to better protect the IP interests of our small-business industry partners.

3. FAR Part 47

This proposed rule, if finalized, is expected to have a positive impact on both industry and the Government. This rule removes a large quantity of non-statutory material, including thirty-three provisions and clauses. These changes are intended to benefit and to reduce burden on both Government and contractors.

V. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993.

VI. Executive Order 14192

This rule is subject to E.O. 14192, Unleashing Prosperity Through Deregulation. This proposed rule, if finalized as proposed, is anticipated to be an E.O. 14192 deregulatory rule. See discussion in the “Expected Impact of the Rule” section of this preamble.

VII. Regulatory Flexibility Act

This proposed rule, if finalized, may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601-612. However, an Initial Regulatory Flexibility Analysis (IRFA) is as follows:

1. Reasons for the action.

Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement, directs the elimination of excessive acquisition regulations to stop the inefficient use of American taxpayer dollars. The E.O. directs the first comprehensive end-to-end overhaul of the FAR in its 40-year history. The E.O. establishes the policy that the FAR should “contain only provisions that are required by statute or that are otherwise necessary to support simplicity and usability, strengthen the efficacy of the procurement system, or protect economic or national security interests.” In response to E.O. 14275, the Office of Management and Budget issued memorandum M-25-26, Overhauling the Federal Acquisition Regulation. The Memo directed the FAR Council to

complete a “revolutionary overhaul” of the FAR. Therefore, the FAR Council is issuing twelve proposed rules that collectively, if finalized, would streamline the FAR in its entirety.

2. Objectives of, and legal basis for, the rule.

The revolutionary FAR overhaul (RFO) rewrite represents a paradigm shift in federal acquisition. It emphasizes streamlining, clarity, and accessibility, while ensuring that the regulation focuses only on statutory mandates and foundational procurement principles. The RFO is designed to simplify compliance for contracting professionals, improve acquisition speed and agility, and reinforce mission outcomes over process formalities.

The basis for the RFO is E.O. 14275. The authority for promulgation of the FAR is 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

3. Description of and an estimate of the number of small entities to which the rule will apply.

All small business concerns who want to contract with the Federal Government would need to familiarize themselves with the reorganized, streamlined, and revised FAR, including the content of this rulemaking. As of January 2026, there are 401,196 entities registered in the System for Award Management (SAM) that were small for at least one North American Industry Classification System (NAICS) code they had selected.

a. FAR Part 9.

The proposed changes to FAR part 9 consist generally of removing non-statutory content and plain-language rewriting. These revisions align with the broader RFO initiatives and do not substantively change policy. These revisions are not expected significantly to impact small businesses.

b. FAR Part 27.

The proposed changes to part 27 consist primarily of replacing the current FAR data-rights coverage and replacing it with analogous, DFARS-based coverage. This rule also proposes to add a new solicitation provision and a contract clause applicable to STTR awards where no such coverage has existed in the FAR.

c. FAR Part 47.

The proposed changes to FAR part 47 consist generally of removing non-statutory content, streamlining retained content, and plain-language rewriting. These revisions align with the broader RFO initiatives and do not substantively change policy. These revisions are not expected significantly to impact small businesses.

4. Description of projected reporting, recordkeeping, and other compliance requirements of the rule.

Unless stated otherwise below, this proposed rule does not create any new reporting or recordkeeping requirements, nor does it create any new compliance requirements.

a. FAR Part 27.

This proposed rule alters reporting or recordkeeping or other compliance requirements. The proposed changes to part 27 consist primarily of replacing the current FAR data-rights coverage and replacing it with analogous, DFARS-based coverage. Reporting or recordkeeping or other compliance requirements are largely similar to those in the superseded FAR material. Some requirements are currently contained in FAR clauses, such as 52.227-17, Rights in Data-Special Works, that have no analogue in the DFARS-based material, and such requirements are therefore removed from the FAR. By updating SBIR coverage and by adding STTR coverage, this rule benefits small entities particularly by emphasizing protection of small entities' intellectual property, therefore balancing any additional compliance requirements under the rule. While the changes in reporting or recordkeeping or other compliance requirements entail familiarizations costs, such costs are difficult to quantify. Additionally, by aligning FAR and DFARS data-right requirements, this rule, if finalized, would ultimately reduce burden on industry, including small entities.

b. FAR Part 47.

This proposed rule removes reporting, recordkeeping or other compliance requirements to the extent such requirements lie in clauses removed by this rule, specifically:

• The requirement under 52.247-6 for offerors to furnish the Government with a current certified statement of the offeror's financial condition and such data as the Government may request with respect to the offeror's operations.

• The requirement under 52.247-51 for offerors to nominate a port/terminal of loading they recommend for the purposes of evaluation of their offer and indicate whether the prices proposed are based on f.o.b. origin or f.o.b. destination.

• The requirement under 52.247-57 for offerors to identify any transportation charges, including any transit charges, that the offeror agrees to pay, subject to reimbursement by the Government.

• The requirement under 52.247-60 for offerors to provide details on the shipping container(s) to be used for each part or component that is packed or packaged separately.

• Requirements under 52.247-41, 52.247-42, 52.247-43, 52.247-44, and 52.247-65 for contractors to prepare or provide special annotation on a Government or commercial bill of lading; provide an ocean bill of lading or airway bill; annotate commercial shipping documents; distribute copies of the bill of lading; provide applicable transportation receipts; assist in obtaining documents for exportation or importation destinations; and/or obtain insurance documents, as applicable.

5. Relevant Federal rules which may duplicate, overlap, or conflict with the rule.

The proposed rule, if finalized, would not duplicate, overlap, or conflict with other Federal rules.

6. Description of any significant alternatives to the rule which accomplish the stated objectives of applicable statutes, and which minimize any significant economic impact of the rule on small entities.

The FAR Council has not, at this stage, identified any significant alternatives that would minimize the impact of the rule on small entities while also implementing the requirements of E.O. 14275. The FAR Council will consider any significant alternatives identified by commenters for the final rule.

The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. The FAR Council invites comments from small business concerns and other interested parties on the expected impact of this proposed rule on small entities.

The FAR Council will also consider comments from small entities concerning the existing regulations in subparts affected by the rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite “5 U.S.C. 610 (FAR Case 2026-011)” in correspondence.

VIII. Paperwork Reduction Act

This rule includes information collections under the Paperwork Reduction Act (44 U.S.C. 3501-3521). Following are the specific collections associated with each FAR part in this rule as previously approved by OMB followed by how each collection would be affected by the proposed rule.

A. FAR Part 9

OMB Control No 9000-0198, Certain Federal Acquisition Regulation Part 9 Requirements.

The changes under this proposed rule, if finalized, would not affect the information collection or the paperwork burden previously approved by OMB. The collection would remain unchanged.

B. FAR Part 27

OMB Control No. 9000-0095, Federal Acquisition Regulation Part 27 Requirements.

The changes under this proposed rule, if finalized, would revise this information collection and the paperwork burden previously approved by OMB. As explained in section II.C.1 of this preamble, the DFARS provisions and clauses related to FAR subpart 27.4 are proposed to be relocated to the FAR and replace the provisions and clauses at FAR 52.227-14 through 52.227-21 and FAR 52.227-23. This relocation of provisions and clauses from the DFARS to the FAR requires the following:

• Revising the annual reporting burden for OMB Control No. 9000-0095 to be estimated as follows:

Respondents:

439.

Total Annual Responses:

13,634.

Total Burden Hours:

54,386.

• Transferring to the FAR the following OMB Control Nos. 0704-0369, DFARS Subpart 227.71, Rights in Technical Data, and Subpart 227.72, Rights in Computer Software and Computer Software Documentation, and related provisions and clauses; and 0750-0010, Defense Federal Acquisition Regulation Supplement Part 227, Patents, Data, and Copyrights; Small Business Technology Transfer Program.

The total annual reporting burden for FAR part 27 is estimated as follows:

Respondents/Recordkeepers:

47,332.

Total Annual Responses:

442,149.

Total Burden Hours:

513,057.

C. FAR Part 47

OMB Control No. 9000-0061, Federal Acquisition Regulation Part 47 Transportation Requirements.

The changes under this proposed rule, if finalized, would revise this information collection and the paperwork burden previously approved by OMB. This rule proposes to remove certain requirements as explained in section VII.4.b of this preamble.

The revised public annual burden is estimated as follows:

Respondents/Recordkeepers:

12,656.

Total Annual Responses:

259,516.

Total Burden Hours:

17,661.

D. Comments Regarding Paperwork Burden.

The FAR Council will publish a separate first notice in accordance with the Paperwork Reduction Act seeking comments on the changes to the collections of information affected by this proposed rule.

IX. Severability

If any portion (

e.g.,

section, clause, sentence) of this rule is held to be invalid or unenforceable facially, or as applied to any entity or circumstance, it shall be severable from the remainder of this rule, and shall not affect the remainder thereof, or its application to entities not similarly situated or to other dissimilar circumstances. The various portions of this rule are independent and serve distinct purposes. Even if one aspect were rendered invalid, the other benefits of the rule would still be applicable.

List of Subjects in 48 CFR Parts 9, 27, 47, and 52

Government procurement.

William F. Clark,

Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

Therefore, OFPP, DoD, GSA, and NASA propose amending 48 CFR parts 9, 27, 47, and 52 as set forth below:

1. Revise parts 9, 27, and 47 to read as follows:

PART 9—CONTRACTOR QUALIFICATIONS

Sec.

Subpart 9.1—Responsible Prospective Contractors

9.101

Definition.

9.102

Applicability.

9.103

Policy.

9.104

Standards.

9.104-1

General standards.

9.104-2

Application of standards.

9.104-3

Subcontractor responsibility.

9.104-4

Representation and certifications regarding responsibility matters.

9.104-5

Integrity Records.

9.104-6

Solicitation provisions and contract clauses.

9.105

Procedures.

9.105-1

Obtaining information.

9.105-2

Determinations and documentation.

9.105-3

Disclosure of preaward information.

9.106

Prohibition on contracting with inverted domestic corporations.

9.106-1

Definitions.

9.106-2

Authority.

9.106-3

Prohibition.

9.106-4

Representation by the offeror.

9.106-5

Waiver.

9.106-6

Solicitation provision and contract clause.

9.107

Prohibition on contracting with an entity involved in activities that violate arms control treaties or agreements with the United States.

9.107-1

Authority.

9.107-2

Prohibition.

9.107-3

Exception.

9.107-4

Certification by the offeror.

9.107-5

Solicitation provision.

9.108

Reserve Officer Training Corps and military recruiting on campus.

9.108-1

Definitions.

9.108-2

Authority.

9.108-3

Policy.

9.108-4

Procedures.

9.108-5

Contract clause.

Subpart 9.2—Qualifications Requirements

9.200

Scope of subpart.

9.201

Definitions.

9.202

Policy.

9.203

QPLs, QMLs, and QBLs.

9.204

Responsibilities when establishing qualification requirements.

9.205

Opportunity for qualification before award.

9.206

Acquisitions subject to qualification requirements.

9.206-1

General.

9.206-2

Contract clause.

9.206-3

Competition.

9.207

Changes in status regarding qualification requirements.

Subpart 9.3—First Article Testing and Approval

9.301

Definition.

9.302

General.

9.303

Use.

9.304

Exceptions.

9.305

Risk.

9.306

Solicitation requirements.

9.307

Administrative procedures.

9.308

Contract clauses.

9.308-1

Testing performed by the contractor.

9.308-2

Testing performed by the Government.

Subpart 9.4—Debarment, Suspension, and Ineligibility

9.400

Scope of subpart.

9.401

Applicability.

9.402

Policy.

9.403

Definitions.

9.404

Exclusions in the System for Award Management.

9.405

Effect of listing.

9.405-1

Continuation of current contracts.

9.405-2

Restrictions on subcontracting.

9.406

Debarment.

9.406-1

General.

9.406-2

Causes for debarment.

9.406-3

Procedures.

9.406-4

Period of debarment.

9.406-5

Scope of debarment.

9.407

Suspension.

9.407-1

General.

9.407-2

Causes for suspension.

9.407-3

Procedures.

9.407-4

Period of suspension.

9.407-5

Scope of suspension.

9.408

Contract clause.

Subpart 9.5—Organizational and Consultant Conflicts of Interest

9.500

Scope of subpart.

9.501

Definition.

9.502

Applicability.

9.503

Waiver.

9.504

Contracting officer responsibilities.

9.505

General rules.

9.505-1

Providing systems engineering and technical direction.

9.505-2

Preparing specifications or work statements.

Authority:

41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

9.101

Definition.

As used in this subpart—

Administrative proceeding

means a non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability (

e.g.,

Securities and Exchange Commission Administrative Proceedings, Civilian Board of Contract Appeals Proceedings, and Armed Services Board of Contract Appeals Proceedings). This includes administrative proceedings at the Federal and state level but only in connection with performance of a Federal contract or grant. It does not include agency actions such as contract audits, site visits, corrective plans, or inspection of deliverables.

9.102

Applicability.

(a) This subpart applies to all proposed contracts with any prospective contractor located—

(1) In the United States or its outlying areas; or

(2) Elsewhere, unless application of this subpart would be inconsistent with the laws or customs where the contractor is located.

(b) This subpart does not apply to proposed contracts with—

(1) Foreign, State, or local governments;

(2) Other U.S. Government agencies or their instrumentalities; or

(3) Agencies for people who are blind or severely disabled (see part 8).

9.103

Policy.

(a) Award contracts to responsible prospective contractors only.

(b) Do not award a contract before making an affirmative determination of contractor responsibility. Without a clear indication of responsibility, make a determination of nonresponsibility. If the prospective contractor is a small business concern, comply with 19.204, Certificates of Competency.

(c) A prospective contractor must affirmatively demonstrate its responsibility, including, when necessary, the responsibility of its proposed subcontractors.

9.104

Standards.

9.104-1

General standards.

To demonstrate responsibility, a prospective contractor must—

(a) Have, or have the ability to obtain, adequate financial resources to perform the contract (see 9.104-2(a));

(b) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;

(c) Have a satisfactory performance record (see 9.104-2(b) and part 42). Do not determine a prospective contractor responsible or nonresponsible based solely on a lack of relevant performance history;

(d) Have a satisfactory record of integrity and business ethics (see part 42);

(e) Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors) (see 9.104-2(a));

(f) Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (see 9.104-2(a)); and

(g) Be otherwise qualified and eligible to receive an award under applicable laws and regulations (see also inverted domestic corporation prohibition at 9.106).

9.104-2

Application of standards.

(a) Ability to obtain resources. Except to the extent that a prospective contractor has sufficient resources or proposes to perform the contract by subcontracting, require evidence of the prospective contractor's ability to obtain required resources (see 9.104-1(a), (e), and (f)).

(b) Satisfactory performance record. (1) When determining whether a prospective contractor has a satisfactory performance record, consider, as applicable, the prospective contractor's—

(i) History of meeting the quality requirements of a contract; and

(ii) History of previous compliance with subcontracting plans (if the pending contract requires a subcontracting plan).

(2) In addition to 9.104-2(b)(1)(i) and (ii), consider any other relevant information when making this determination, including—

(i) The number of contracts involved;

(ii) The extent of deficient performance in each contract;

(iii) The contractor's overall pattern of performance; and

(iv) Documented corrective actions.

(3) Presume a prospective contractor is nonresponsible if it is or has been seriously deficient in contract performance, unless the circumstances were beyond the contractor's control, or the contractor has taken meaningful corrective action.

(c)(1)

Affiliates.

Treat a prospective contractor's affiliates as separate entities. However, consider the affiliate's past performance and integrity when these factors may affect the prospective contractor's responsibility.

(2)

Joint ventures.

For a prospective contractor that is a party to a joint venture, consider the past performance of the joint venture. If the joint venture lacks past performance, consider the past performance of each party to the joint venture.

(d)(1)

Small business concerns.

Upon determining a small business concern to be nonresponsible, refer the matter to the Small Business Administration, which will decide whether to issue a Certificate of Competency (see 19.204).

(2)

Limitations on subcontracting.

A small business that does not agree to or is unable to comply with the limitations on subcontracting may be nonresponsible.

9.104-3

Subcontractor responsibility.

(a) Generally, prospective prime contractors are responsible for determining the responsibility of their prospective subcontractors (but see 9.405 and 9.405-2 regarding debarred, ineligible, or suspended firms). Determinations of prospective subcontractor responsibility may affect the determination of responsibility for the prospective prime contractor. Require a prospective contractor to provide written evidence of a proposed subcontractor's responsibility, as necessary to determine responsibility.

(b) When in the Government's interest, the contracting officer may directly determine a prospective subcontractor's responsibility (

e.g.,

when the prospective contract involves medical supplies, urgent requirements, or substantial subcontracting). Apply the same standards for prime contractor responsibility to determine subcontractor responsibility.

9.104-4

Representation and certifications regarding responsibility matters.

(a) When an offeror provides an affirmative response in paragraph (a)(1) of the provision at 52.209-5,

Certification Regarding Responsibility Matters—

(1) Promptly, upon receipt of offers, request that the offeror submit additional information to demonstrate the offeror's responsibility to the contracting officer (but see 9.405); and

(2) Notify, prior to proceeding with award, in accordance with agency procedures (see 9.406-3(a) and 9.407-3(a)), the agency official responsible for initiating debarment or suspension action, where an offeror indicates the existence of an indictment, charge, conviction, or civil judgment, or Federal tax delinquency in an amount that exceeds $15,000.

(b) The provision at 52.209-11, Representation by Corporations Regarding Delinquent Tax Liability or a Felony Conviction under any Federal Law, implements sections 744 and 745 of Division E of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) (and similar provisions in subsequent appropriations acts). When an offeror provides an affirmative response in paragraph (b)(1) or (2) of the provision at 52.209-11—

(1) Promptly, upon receipt of offers, request that the offeror submit additional information to demonstrate the offeror's responsibility to the contracting officer (but see 9.405);

(2) Notify, in accordance with agency procedures (see 9.406-3(a) and 9.407-3(a)), the agency official responsible for initiating debarment or suspension action; and

(3) Do not award to the offeror unless an agency suspending and debarring official has considered suspension or debarment of the corporation and made a determination that suspension or debarment is not necessary to protect the interests of the Government.

(c) If the provision at 52.209-12, Certification Regarding Tax Matters, is applicable (see 9.104-6(e)), do not award any contract in an amount greater than $7 million, unless the offeror affirmatively certified in its offer, as required by paragraph (b)(1), (2), and (3) of the provision.

(d) Give offerors who do not furnish the representation or certifications or other requested information an opportunity to remedy the deficiency. Failure to furnish the representation or certifications or other requested information may render the offeror nonresponsible.

9.104-5

Integrity Records.

(a) Integrity records refer to the documented history of the past performance and integrity information of an offeror or contractor. Integrity records consist of two segments, a non-public segment and a publicly-available segment:

(1) The non-public segment in

CPARS.gov

is where Government officials and contractors post information, which can only be viewed by—

(i) Government personnel and authorized users performing business on behalf of the Government; or

(ii) An offeror or contractor, when viewing data on itself; and

(2) The publicly-available segment in the responsibility/qualification (R/Q) section of

SAM.gov

is where data in the non-public segment is automatically made public after a waiting period of 14 calendar days, except for—

(i) Past performance reviews required by part 42 (see section 3010 of Pub. L. 111-212) (41 U.S.C. 2313); or

(ii) Information that is withdrawn during the 14-calendar-day waiting period by the Government official who posted it in accordance with 9.105-2(b)(2)(ii).

(b)(1) Before awarding a contract exceeding the simplified acquisition threshold, review the R/Q records in

SAM.gov.

(2) The R/Q records also identify—

(i) An affiliate that is an immediate owner or subsidiary of the offeror, if any; and

(ii) All predecessors of the offeror that held a Federal contract or grant within the last three years.

(c)(1) When making a responsibility determination, consider all the information available in the R/Q records regarding the offeror and any immediate owner, predecessor, or subsidiary identified for that offeror, as well as other past performance information on the offeror in

CPARS.gov

(see part 42).

(2) For evaluation of information available in the R/Q records relating to an affiliate of the offeror, see 9.104-2(c).

(3) For source selection evaluations of past performance, see part 15. Use sound judgment in determining the weight and relevance of the past performance information and how it relates to the present acquisition.

(4) Given the R/Q records may contain information on any of the offeror's previous contracts and information covering a 5-year period, some of that information might be irrelevant to a determination of present responsibility. For example, a prior administrative action such as debarment, suspension, voluntary exclusion, or administrative agreement, that has expired or otherwise been resolved, or information relating to contracts for completely different products or services, might be irrelevant.

(5) Integrity records in CPARS provide information about prime contractors. When the contracting officer posts information about a subcontractor such as trafficking in persons violations, to the record of the prime contractor (see subpart 42.14), the prime contractor may post any mitigating factors to the record. Consider any mitigating factors the prime contractor posted, such as degree of compliance by the prime contractor with the terms of clause 52.222-50.

(d) Upon obtaining relevant R/Q records regarding criminal, civil, or administrative proceedings in connection with the award or performance of a Government contract; terminations for default or cause; determinations of nonresponsibility because the contractor does not have a satisfactory performance record or a satisfactory record of integrity and business ethics; or comparable information relating to a grant, unless the contractor has already been debarred, suspended, or has agreed to a voluntary exclusion—

(1) Promptly request from the offeror additional information to demonstrate the offeror's responsibility (but see 9.405); and

(2) Notify, prior to proceeding with award, in accordance with agency procedures (see 9.406-3(a) and 9.407-3(a)), the agency official responsible for initiating debarment or suspension action, if the information appears appropriate for the official's consideration.

(e) Document the contract file for each contract exceeding the simplified acquisition threshold to indicate how the information in the R/Q records was considered in any responsibility determination, as well as the action that was taken as a result of the information. Post nonresponsibility determinations in the integrity records in

CPARS.gov

in accordance with 9.105-2 (b)(2).

9.104-6

Solicitation provisions and contract clauses.

(a) Insert the provision at 52.209-5, Certification Regarding Responsibility Matters, in solicitations, including those for commercial products and commercial services, if the acquisition value exceeds the simplified acquisition threshold.

(b) Insert the provision at 52.209-7, Information Regarding Responsibility Matters, in solicitations, including those for commercial products or commercial services, if the acquisition value exceeds $750,000.

(c) Insert the clause at 52.209-9, Updates of Publicly Available

Information Regarding Responsibility Matters—

(1) In solicitations, including those for commercial products or commercial services, if the acquisition value exceeds $750,000; and

(2) In contracts, including those for commercial products or commercial services, if the prospective contractor checked “has” in paragraph (b) of the provision at 52.209-7.

(d) Insert the provision at 52.209-11, Representation by Corporations Regarding Delinquent Tax Liability or a Felony Conviction under any Federal Law, in all solicitations, including those for commercial products and commercial services.

(e) For agencies receiving funds subject to section 523 of Division B of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235) and similar provisions in subsequent appropriations acts, insert the provision at 52.209-12, Certification Regarding Tax Matters, in solicitations, including those for commercial products or commercial services, if the acquisition value exceeds $7 million.

9.105

Procedures.

9.105-1

Obtaining information.

(a) Before determining responsibility, obtain information establishing that a prospective contractor currently meets the standards in 9.104.

(b)(1) Generally, obtain information regarding responsibility promptly after a bid opening or receipt of offers. Limit such requests to information concerning the low bidder or those offerors in range for award.

(2) For negotiated contracting, especially for research and development, consider obtaining information regarding responsibility before issuing the request for proposals.

(3) To the extent feasible, obtain or update information regarding financial resources and performance capability up to the date of award.

(c) When determining responsibility, consider the R/Q records (see 9.104-5) regarding the offeror and any immediate owner, predecessor, or subsidiary identified for that offeror and any other relevant past performance information on the offeror in

CPARS.gov

(see 9.104-1(c) and part 42). In addition, consider using the following sources of information to support such determinations:

(1) Records and experience data, including verifiable knowledge of personnel within the contracting office, audit offices, contract administration offices, and other contracting offices.

(2) The prospective contractor, including bid or proposal information (including the certification at 52.209-5 (see 9.104-4), questionnaire replies, financial data, information on production equipment, and personnel information.

(3) Commercial sources of supplier information of a type offered to buyers in the private sector.

(4) Other sources, such as publications; suppliers, subcontractors, and customers of the prospective contractor; financial institutions; Government agencies; and business and trade associations.

(d) Contracting offices and cognizant contract administration offices that become aware of circumstances casting doubt on a contractor's ability to perform contracts successfully must promptly exchange relevant information.

9.105-2

Determinations and documentation.

(a)

Determinations.

(1) The contracting officer's signing of a contract constitutes a determination that the prospective contractor is responsible with respect to that contract. Upon rejecting an offer that would otherwise generate an award because the prospective contractor is nonresponsible, sign a determination of nonresponsibility, stating the grounds for nonresponsibility.

(2) Upon determining that a responsive small business lacks certain elements of responsibility, comply with the procedures in part 19. If, in response, the Small Business Administration issues a Certificate of Competency for the small business concern, award the contract to the concern.

(b)

Support documentation.

(1) Include in the contract file documents and reports supporting a determination of responsibility or nonresponsibility, including the use of R/Q records (see 9.104-5) and any applicable Certificate of Competency.

(2)(i) Post the determination of nonresponsibility in the integrity records in

CPARS.gov

within 3 business days of making a determination if—

(A) The contract is valued at more than the simplified acquisition threshold;

(B) The determination of nonresponsibility is based on lack of satisfactory performance record or satisfactory record of integrity and business ethics; and

(C) The Small Business Administration does not issue a Certificate of Competency.

(ii) Do not post any information in the non-public segment covered by a disclosure exemption under the Freedom of Information Act. If the contractor asserts within 7 calendar days, to the Government official who posted the information, that some of the information posted to the non-public segment is covered by a disclosure exemption under the Freedom of Information Act, the Government official who posted the information must, within 7 calendar days, remove the posting from the integrity records in

CPARS.gov.

Resolve the issue in accordance with agency Freedom of Information Act procedures prior to reposting the releasable information.

9.105-3

Disclosure of preaward information.

Except as provided in part 24 concerning the Freedom of Information Act, do not release or disclose outside the Government information gathered for purposes of determining the responsibility of a prospective contractor.

9.106

Prohibition on contracting with inverted domestic corporations.

9.106-1

Definitions.

As used in this section—

Inverted domestic corporation

means a foreign incorporated entity that meets the definition of an inverted domestic corporation under 6 U.S.C. 395(b), applied in accordance with the rules and definitions of 6 U.S.C. 395(c).

Subsidiary

means an entity in which more than 50 percent of the entity is owned—

(1) Directly by a parent corporation; or

(2) Through another subsidiary of a parent corporation.

9.106-2

Authority.

Section 9.106 implements section 745 of Division D of the Consolidated Appropriations Act, 2008 (Pub. L. 110-161) and its successor provisions in subsequent appropriations acts (and as extended in continuing resolutions).

9.106-3

Prohibition.

(a) Do not use appropriated funds, or funds otherwise made available, for contracts with either an inverted domestic corporation, or a subsidiary of such a corporation, except as provided in paragraph (b) of this section and in 9.106-5, Waiver.

(b) This prohibition does not apply to any contract entered into before December 26, 2007, or to any task order issued pursuant to such a contract.

(c) Consult with legal counsel if, during the performance of a contract, a contractor becomes an inverted domestic corporation or a subsidiary of one.

9.106-4

Representation by the offeror.

(a) To be eligible for contract award, an offeror must represent that it is neither an inverted domestic corporation, nor a subsidiary of an inverted domestic corporation. Any offeror that cannot so represent is ineligible for award of a contract, unless waived in accordance with the procedures at 9.106-5.

(b) The contracting officer may rely on an offeror's representation that it is not an inverted domestic corporation unless the contracting officer has reason to question the representation.

9.106-5

Waiver.

An agency head may waive the prohibition in section 9.106-3 and the requirement of section 9.106-4 for a specific contract if the agency head determines in writing that the waiver is required in the interest of national security. The agency head must report issuance of the waiver to Congress and to the Made in America Office.

9.106-6

Solicitation provision and contract clause.

(a) Include the provision at 52.209-2, Prohibition on Contracting with Inverted Domestic Corporations—Representation, in all solicitations, including those for commercial products and commercial services.

(b) Include the clause at 52.209-10, Prohibition on Contracting with Inverted Domestic Corporations, in all solicitations, including those for commercial products and commercial services.

9.107

Prohibition on contracting with an entity involved in activities that violate arms control treaties or agreements with the United States.

9.107-1

Authority.

This section implements 22 U.S.C. 2593e.

9.107-2

Prohibition.

Do not award, renew, or extend a contract with an entity identified as excluded in the System for Award Management, specifically for this subpart, based on involvement in activities that violate arms control treaties or agreements with the United States.

9.107-3

Exception.

The prohibition in 9.107-2 does not apply to contracts for the procurement of products or services along a major route of supply to a zone of active combat or major contingency operation, as specified in statute or by the cognizant Combatant Commander, in consultation with the Chief of Mission.

9.107-4

Certification by the offeror.

(a) To be eligible for contract award, an offeror must—

(1) Certify that it does not engage and has not engaged in any activity that contributed to or was a significant factor in the President's or Secretary of State's determination that a foreign country is—

(i) In violation of its obligations undertaken in any arms control, nonproliferation, or disarmament agreement to which the United States is a party; or

(ii) Not adhering to its arms control, nonproliferation, or disarmament commitments in which the United States is a participating state; and

(2) Similarly certify regarding any entity owned or controlled by the offeror; or

(3) Provide with its offer information that the President of the United States has—

(i) Waived application under 22 U.S.C. 2593e(d) or (e); or

(ii) Determined under 22 U.S.C. 2593e(g)(2) that the entity has ceased all activities for which measures were imposed under 22 U.S.C. 2593e(b).

(b) If certifying in accordance with 52.209-13(b)(1), the Offeror is required to submit the certification with the offer. It is not included in the annual representations and certifications in the System for Award Management.

(c) The contracting officer may rely on an offeror's certification unless the contracting officer has reason to question the certification.

(d) Upon the determination of a false certification under 52.209-13, an offeror will be subject to such remedies as suspension or debarment under subpart 9.4, or termination of any contract resulting from the false certification. Debarments pursued as a remedy under subpart 9.4 are for a period of not less than 2 years, inclusive of any suspension period, if suspension precedes a debarment (see 9.406-4(a)(1)(iii) and (a)(2)).

(e) The determinations referenced in paragraph (a)(1) of this section are described in the most recent unclassified annual report provided to Congress pursuant to section 403 of the Arms Control and Disarmament Act (22 U.S.C. 2593a). The report is available at

https://www.state.gov/adherence-to-and-compliance-with-arms-control-nonproliferation-and-disarmament-agreements-and-commitments/.

9.107-5

Solicitation provision.

Insert the provision at 52.209-13, Violation of Arms Control Treaties or Agreements—Certification, in solicitations, other than those for commercial products or commercial services, if the acquisition value exceeds the simplified acquisition threshold.

9.108

Reserve Officer Training Corps and military recruiting on campus.

9.108-1

Definitions.

As used in this section—

Covered agency

means—

(1) The Department of Defense;

(2) Any department or agency for which regular appropriations are made in a Department of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act;

(3) The Department of Homeland Security;

(4) The National Nuclear Security Administration of the Department of Energy;

(5) The Department of Transportation; or

(6) The Central Intelligence Agency.

Institution of higher education

means an institution that meets the requirements of 20 U.S.C. 1001 and includes all sub-elements of such an institution.

9.108-2

Authority.

This section implements 10 U.S.C. 983.

9.108-3

Policy.

(a) Except as provided in paragraph (b) of this section, 10 U.S.C. 983 prohibits a covered agency from providing funds by contract to an institution of higher education if the Secretary of Defense determines that the institution has a policy or practice that prohibits or in effect prevents—

(1) The Secretary of a military department from maintaining, establishing, or operating a unit of the Senior Reserve Officer Training Corps (ROTC) at that institution;

(2) A student at that institution from enrolling in a unit of the Senior ROTC at another institution of higher education;

(3) The Secretary of a military department or the Secretary of Homeland Security from gaining access to campuses, or access to students (who are 17 years of age or older) on campuses, for purposes of military recruiting in a manner that is at least equal in quality and scope to the access to campuses and to students that is provided to any other employer; or

(4) Military recruiters from accessing certain information pertaining to students (who are 17 years of age or older) enrolled at that institution:

(i) Name, address, and telephone listings.

(ii) Date and place of birth, educational level, academic majors,

degrees received, and the most recent educational institution enrolled in by the student.

(b) The prohibition in paragraph (a) of this section does not apply to an institution of higher education if the Secretary of Defense determines that—

(1) The institution has ceased the policy or practice described in paragraph (a) of this section; or

(2) The institution has a long-standing policy of pacifism based on historical religious affiliation.

9.108-4

Procedures.

(a) If the Secretary of Defense determines, pursuant to the procedures at 32 CFR part 216, that an institution of higher education is ineligible to receive funds from a covered agency because of a policy or practice described in 9.108-3, then the Secretary of Defense will create an active exclusion record for the institution in the System for Award Management.

(b) Upon a determination described in paragraph (a), a covered agency must not solicit offers from, award contracts to, or consent to subcontracts with the institution. This prohibition does not apply to acquisitions at or below the simplified acquisition threshold or to acquisitions of commercial products and commercial services, including commercially available off-the-shelf items.

9.108-5

Contract clause.

When using funds from a covered agency, insert the clause at 52.209-14, Reserve Officer Training Corps and Military Recruiting on Campus, in solicitations and contracts with institutions of higher education, other than those for commercial products or commercial services, if the acquisition value exceeds the simplified acquisition threshold.

Subpart 9.2—Qualifications Requirements

9.200

Scope of subpart.

This subpart implements 10 U.S.C. 3243 and 41 U.S.C. 3311.

9.201

Definitions.

As used in this subpart—

Qualification requirement

means a requirement for testing or other quality assurance demonstration that must be completed by an offeror before award of a contract.

Qualified bidders list (QBL)

means a list of bidders who have had their products examined and tested and who have satisfied all applicable qualification requirements for that product or have otherwise satisfied all applicable qualification requirements.

Qualified manufacturers list (QML

) means a list of manufacturers who have had their products examined and tested and who have satisfied all applicable qualification requirements for that product.

Qualified products list (QPL)

means a list of products that have been examined, tested, and have satisfied all applicable qualification requirements.

9.202

Policy.

(a)(1) Before establishing a qualification requirement, the head of the agency must prepare a written justification—

(i) Stating the necessity for the qualification requirement and specifying why the qualification requirement must be demonstrated before contract award;

(ii) Estimating the likely costs for testing and evaluation which will be incurred by the potential offeror to become qualified; and

(iii) Specifying all requirements that a potential offeror (or its product) must satisfy to become qualified.

(2) Specify only the least restrictive qualification requirements necessary to meet agency purposes.

(3) Upon request, provide potential offerors—

(i) All requirements that they or their products must satisfy to become qualified; and

(ii) At their expense (but see 9.204(a)(2) with regard to small businesses), a prompt opportunity to demonstrate their abilities to meet the standards specified for qualification using qualified personnel and facilities of the agency concerned, or of another agency obtained through interagency agreements or under contract, or other methods approved by the agency (including use of approved testing and evaluation services not provided under contract to the agency).

(4) If the services in (a)(3)(ii) of this section are under contract, select only those contractors to provide testing and evaluation services that are—

(i) Not expected to benefit from an absence of additional qualified sources; and

(ii) Required by their contracts to adhere to any restriction on technical data asserted by the potential offeror seeking qualification.

(5) Promptly inform a potential offeror seeking qualification whether it attained qualification and, in the event it has not, promptly provide it specific reasons why it did not attain qualification.

(b)(1) When justified under the circumstances, the agency activity responsible for establishing a qualification requirement for an item must submit to the advocate for competition for the contracting activity responsible for purchasing the item, a determination that specifying a qualification requirement is unreasonable.

(2) After considering any comments from the advocate for competition reviewing the determination, the head of the contracting activity may waive the requirements of 9.202(a)(1)(ii) through (a)(5) of this section for up to 2 years with respect to the item subject to the qualification requirement. The waiver authority provided in this paragraph does not apply with respect to qualification requirements contained in a QPL, QML, or QBL.

(3) The head of the contracting activity must furnish a copy of the waiver to the head of the agency or other official responsible for actions under paragraph (a)(1) of this section.

(c) If a potential offeror can demonstrate to the satisfaction of the contracting officer that the potential offeror (or its product) meets qualification standards, or can meet them before the date specified for award of the contract, do not deny the potential offeror the opportunity to submit and have considered an offer for a contract solely because the potential offeror—

(1) Is not on a QPL, QML, or QBL maintained by the Department of Defense (DoD) or the National Aeronautics and Space Administration (NASA); or

(2) Has not been identified as meeting a qualification requirement established after October 19, 1984, by DoD or NASA; or

(3) Has not been identified as meeting a qualification requirement established by a civilian agency (not including NASA).

(d) The procedures in part 19 for referring matters to the Small Business Administration are not mandatory on the contracting officer when the basis for a referral would involve a challenge by the offeror to either the validity of the qualification requirement or the offeror's compliance with such requirement.

(e) The contracting officer need not delay a proposed award to provide a potential offeror with an opportunity to demonstrate its ability to meet qualification standards. In addition, when approved by the head of an agency or designee, a procurement need not be delayed in order to comply with paragraph (a) of this section.

(f) Within 7 years following enforcement of a QPL, QML, or QBL by DoD or NASA, or within 7 years after any qualification requirement was

originally established by a civilian agency other than NASA, the qualification requirement must be examined and revalidated in accordance with the requirements of paragraph (a) of this section. For DoD and NASA, qualification requirements, other than QPLs, QMLs, and QBLs, must be examined and revalidated within 7 years after establishment of the requirement under paragraph (a) of this section. Any periods for which a waiver under paragraph (b) of this section is in effect must be excluded in computing the 7 years within which review and revalidation must occur.

9.203

QPLs, QMLs, and QBLs.

(a)(1) Qualification in a QPL, QML, or QBL is the process by which—

(i) The Government obtains products from manufacturers or distributors for examination and testing for compliance with specification requirements; or

(ii) Manufacturers or potential offerors have an opportunity to demonstrate their abilities to meet the standards specified for qualification.

(2) Generally, qualification occurs in advance and independently of any specific acquisition action.

(3) After qualification, the products, manufacturers, or potential offerors are included in a Federal or Military QPL, QML, or QBL. (See 9.202(a)(3) regarding any product, manufacturer, or potential offeror not yet included on an applicable list.)

(b) Specifications requiring a qualified product are included—

(1) In the General Services Administration Index of Federal Specifications, Standards and Commercial Item Descriptions; and

(2) On the Department of Defense Acquisition Streamlining and Standardization Information System (ASSIST) website at

https://assist.dla.mil.

(c) Instructions concerning qualification procedures are included in the following publications:

(1) Federal Standardization Manual, FSPM-0001.

(2) Department of Defense Manual 4120.24, Defense Standardization Program (DSP) Procedures, (

www.esd.whs.mil/Directives/Issuances/dodm

) as amended by Military Standards 961 and 962 (

https://assist.dla.mil

).

9.204

Responsibilities when establishing qualification requirements.

(a)

Arranging publicity.

If active competition on anticipated future qualification requirements is likely to be fewer than two manufacturers or the products of two manufacturers, the activity responsible for establishment of the qualification requirements must—

(1) Periodically furnish through the Governmentwide point of entry (GPE) a notice seeking additional sources or products for qualification unless the contracting officer determines that such publication would compromise the national security.

(2) Bear the cost of conducting the specified testing and evaluation (excluding the costs associated with producing the item or establishing the production, quality control, or other system to be tested and evaluated) for a small business concern or a product manufactured by a small business concern which has met the standards specified for qualification and which could reasonably be expected to compete for a contract for that requirement.

(i) For agencies other than DoD, this cost may be borne only upon a determination in accordance with agency procedures that such additional qualified sources or products are likely to result in cost savings from increased competition for future requirements sufficient to amortize the costs incurred by the agency within a reasonable period, considering the duration and dollar value of anticipated future requirements.

(ii) A prospective contractor requesting the United States to bear testing and evaluation costs must certify as to its status as a small business concern under section 3 of the Small Business Act to receive further consideration.

(b) Other agency-activity responsibilities when establishing qualification requirements. Additional responsibilities of agencies that establish qualification requirements include:

(1) Qualifying products that meet specification requirements.

(2) Listing manufacturers and suppliers whose products are qualified in accordance with agency procedures.

(3) Furnishing QPLs, QMLs, or QBLs or the qualification requirements themselves to prospective offerors and the public upon request.

(4) Clarifying, as necessary, qualification requirements.

(5) In appropriate cases, when requested by the contracting officer, providing concurrence in a decision not to enforce a qualification requirement for a solicitation.

(6) Withdrawing or omitting qualification of a listed product, manufacturer or offeror, as necessary.

(7) Advising persons that are furnished any list of products, manufacturers or offerors meeting a qualification requirement and suppliers whose products are on any such list that—

(i) The list does not constitute endorsement of the product, manufacturer, or other source by the Government;

(ii) The products or sources listed have been qualified under the latest applicable specification;

(iii) The list may be amended without notice;

(iv) The listing of a product or source does not release the supplier from compliance with the specification; and

(v) Use of the list for advertising or publicity is permitted. However, the list must not state or imply that a particular product or source is the only product or source of that type qualified, or that the Government in any way recommends or endorses the products or the sources listed.

(8) Reexamining a qualified product or manufacturer when—

(i) The manufacturer has modified its product, or changed the material or the processing sufficiently so that the validity of previous qualification is questionable;

(ii) The requirements in the specification have been amended or revised sufficiently to affect the character of the product; or

(iii) Circumstances require confirmation that the product conforms with the specification.

9.205

Opportunity for qualification before award.

(a) If an agency determines that a qualification requirement is necessary, the agency activity responsible for establishing the requirement must—

(1) Urge manufacturers and other potential sources to demonstrate their ability to meet the standards specified for qualification;

(2) When possible, give sufficient time to arrange for qualification before award; and

(3) Before establishing any qualification requirement, furnish notice through the GPE. The notice must include—

(i) A statement of the intent to establish a qualification requirement;

(ii) The specification number and name of the product;

(iii) The name and address of the activity to which to submit a request for the information and opportunity;

(iv) The anticipated date that the agency will begin awarding contracts subject to the qualification requirement;

(v) A precautionary notice that when a product is submitted for qualification testing, the applicant must furnish any specific information that may be

requested of the manufacturer before testing will begin; and

(vi) The approximate time period following submission of a product for qualification testing within which the applicant will be notified whether the product passed or failed the qualification testing (see 9.202(a)(5)).

(b) The activity responsible for establishing a qualification requirement must keep any list maintained of those already qualified open for inclusion of additional products, manufacturers, or other potential sources.

9.206

Acquisitions subject to qualification requirements.

9.206-1

General.

(a) Do not enforce any QPL, QML, or QBL without first complying with the requirements of 9.202(a). However, qualification requirements themselves, whether or not previously embodied in a QPL, QML, or QBL, in either of the following categories are enforceable without regard to 9.202(a):

(1) Any qualification requirement established by statute prior to October 30, 1984, for civilian agencies (not including NASA).

(2) Any qualification requirement established by statute or administrative action prior to October 19, 1984, for DOD or NASA.

(b) Except when the agency head determines that an emergency exists, whenever an agency elects not to enforce a qualification requirement, the agency may not thereafter enforce that qualification requirement unless the agency complies with 9.202(a).

(c) If a qualification requirement applies, consider only those offers identified as meeting the requirement or included on the applicable QPL, QML, or QBL, unless an offeror can satisfactorily demonstrate that it or its product, or its subcontractor or its product, can meet the qualification standards before the date specified for award.

(d) If a component of an end item is subject to a qualification requirement, ensure that all such components and their qualification requirements are properly identified in the solicitation.

(e) In acquisitions subject to qualification requirements, take the following steps:

(1) Use presolicitation notices as appropriate to advise potential suppliers before issuing solicitations involving qualification requirements. The notices must identify the specification containing the qualification requirement and establish an allowable time period, consistent with delivery requirements, for prospective offerors to demonstrate their abilities to meet the qualification standards.

(2) Distribute solicitations to prospective contractors whether or not they have been identified as meeting applicable qualification requirements.

(3) When appropriate, request in accordance with agency procedures that a qualification requirement not be enforced in a particular acquisition and, if granted, so specify in the solicitation (see 9.206-1(b)).

(4) Forward requests from potential suppliers for information on a qualification requirement to the agency activity responsible for establishing the requirement.

(5) Allow the maximum time, consistent with delivery requirements, between issuing the solicitation and the contract award. As a minimum, comply with the time frames specified in part 5 when applicable.

9.206-2

Contract clause.

Insert the clause at 52.209-1, Qualification Requirements, in solicitations and contracts, including those for commercial products or commercial services, when the acquisition is subject to a qualification requirement.

9.206-3

Competition.

(a)

Presolicitation.

If a qualification requirement applies to an acquisition, review the applicable QPL, QML, or QBL or other identification of those sources meeting the requirement before issuing a solicitation to ascertain whether the number of sources is adequate for competition. If the number of sources is inadequate, request the agency activity which established the requirement to—

(1) Indicate the anticipated date on which any sources presently undergoing evaluation will have demonstrated their abilities to meet the qualification to allow for rescheduling; or

(2) Indicate whether a means other than the qualification requirement is feasible for testing or demonstrating quality assurance.

(b)

Postsolicitation.

Submit to the agency activity that established the qualification requirement the names and addresses of concerns that expressed interest in the acquisition but are not included on the applicable QPL, QML, or QBL or identified as meeting the qualification requirement. The activity will then assist interested concerns in meeting the standards specified for qualification (see 9.202(a)(3) and (5)).

9.207

Changes in status regarding qualification requirements.

(a) Promptly report to the agency activity that established the qualification requirement any conditions meriting removal or omission from a QPL, QML, or QBL or that affect whether a source should continue as identified as meeting the requirement. These conditions exist when—

(1) Products or services are submitted for inspection or acceptance that do not meet the qualification requirement;

(2) Products or services were previously rejected and the defects were not corrected when resubmitted for inspection or acceptance;

(3) A supplier fails to request reevaluation following change of location or ownership of the plant where the product which met the qualification requirement was manufactured (see the clause at 52.209-1, Qualification Requirements);

(4) A manufacturer of a product which met the qualification requirement has discontinued manufacture of the product;

(5) A source requests removal from a QPL, QML, or QBL;

(6) A condition of meeting the qualification requirement was violated;

e.g.,

advertising or publicity contrary to 9.204(b)(7)(v);

(7) A revised specification imposes a new qualification requirement;

(8) Manufacturing or design changes have been incorporated in the qualification requirement;

(9) The source is listed in the System for Award Management Exclusions (see subpart 9.4); or

(10) Performance of a contract subject to a qualification requirement is otherwise unsatisfactory.

(b) After considering these or other conditions related to whether a product or source continues to meet the standards specified for qualification, an agency may take appropriate action without advance notification. The agency must, however, promptly notify the affected parties if a product or source is removed from a QPL, QML, or QBL, or will no longer be identified as meeting the standards specified for qualification. This notice must contain specific information why the product or source no longer meets the qualification requirement.

Subpart 9.3—First Article Testing and Approval

9.301

Definition.

As used in this subpart—

Approval

means the contracting officer's written notification to the contractor accepting the test results of the first article.

9.302

General.

First article testing and approval (testing and approval) ensures that the contractor can furnish a product conforming to all contract requirements for acceptance. Before requiring testing and approval, consider the—

(a) Impact on cost or time of delivery;

(b) Risk to the Government of foregoing such test; and

(c) Availability of other, less costly, methods of ensuring the desired quality.

9.303

Use.

Testing and approval may be appropriate when—

(a) The contractor has not previously furnished the product to the Government;

(b) The contractor previously furnished the product to the Government, but—

(1) Subsequent changes in processes or specifications have occurred;

(2) Production has been discontinued for an extended period of time; or

(3) The product acquired under a previous contract developed a problem during its life.

(c) The product is described by a performance specification; or

(d) An approved first article is essential to serve as a manufacturing standard.

9.304

Exceptions.

Normally, do not require testing and approval in contracts for—

(a) Research or development;

(b) Products requiring qualification before award (

e.g.,

when an applicable qualified products list exists (see subpart 9.2));

(c) Products normally sold in the commercial market; or

(d) Products covered by complete and detailed technical specifications, unless the requirements are so novel or exacting that the products might not meet the requirements without testing and approval.

9.305

Risk.

(a) Provide sufficient time in the delivery schedule for the contractor's acquisition of materials and components as well as for production after receipt of first article approval.

(b) The contracting officer may, before approval of the first article, authorize the contractor to acquire specific materials or components or commence production to the extent necessary to meet the delivery schedule (see Alternate II of the clause at 52.209-3, First Article Approval—Contractor Testing, and Alternate II of the clause at 52.209-4, First Article Approval—Government Testing). Costs incurred based on this authorization are allocable to the contract for—

(1) Progress payments; and

(2) Termination settlements if the contract is terminated for the convenience of the Government.

9.306

Solicitation requirements.

Solicitations including a testing and approval requirement must—

(a) Provide, where the contractor is responsible for the first article approval testing—

(1) The performance or other characteristics that the first article must meet for approval;

(2) The detailed technical requirements for the tests necessary for approval; and

(3) The data the contractor must submit in the first article approval test report;

(b) Provide, where the Government is responsible for the first article approval testing—

(1) The performance or other characteristics that the first article must meet for approval; and

(2) The tests to which the first article will be subjected for approval;

(c) Inform offerors that the requirement may be waived when supplies identical or similar to those called for have previously been delivered by the offeror and accepted by the Government (see 52.209-3(h) and 52.209-4(i));

(d) Permit the submission of alternative offers,

i.e.,

one including and the other excluding testing and approval (if eligible under paragraph (c) of this section);

(e) State clearly the first article's relationship to the contract quantity (see paragraph (e) of the clause at 52.209-3, First Article Approval—Contractor Testing, or 52.209-4, First Article Approval—Government Testing);

(f) Contain a delivery schedule for the production quantity. The delivery schedule may—

(1) Be the same whether or not testing and approval is waived; or

(2) Provide for earlier delivery when testing and approval is waived, and the Government requires earlier delivery. In the latter case, any resulting difference in delivery schedules must not be an evaluation factor for award. The clause at 52.209-4, First Article Approval—Government Testing, must contain the delivery schedule for the first article;

(g) Provide for the submission of contract numbers, if any, to document the offeror's eligibility under paragraph (c) of this section;

(h) State whether the approved first article will serve as a manufacturing standard;

(i) Include the Government's estimated testing costs as an evaluation factor, if appropriate, when the Government is responsible for first article testing; and

(j) Inform offerors that the prices for first articles and first article tests in relation to production quantities must not be materially unbalanced (see 15.404-1(g)) if first article test items or tests are to be separately priced.

9.307

Administrative procedures.

(a) Before the contractor ships the first article, or the first article test report, to the Government laboratory or other activity responsible for approval, the contract administration office must provide that activity with as much advance notification as is feasible of the forthcoming shipment, and—

(1) Advise that activity of the contractual requirements for testing and approval, or evaluation, as appropriate;

(2) Call attention to the notice requirement in paragraph (b) of the clause at 52.209-3, First Article Approval—Contractor Testing, or 52.209-4, First Article Approval—Government Testing; and

(3) Request that the activity inform the contract administration office of the date when testing or evaluation will be completed.

(b) The Government laboratory or other activity responsible for first article testing or evaluation must inform the contracting office whether to approve, conditionally approve, or disapprove the first article. The contracting officer must then notify the contractor of the action taken and furnish a copy of the notice to the contract administration office. The notice must include the first article shipment number, when available, and the applicable line-item number. Make any necessary changes in the drawings, designs, or specifications only under the Changes clause.

9.308

Contract clauses.

9.308-1

Testing performed by the contractor.

(a) Insert the clause at 52.209-3, First Article Approval—Contractor Testing, in solicitations and contracts, including those for commercial products and commercial services, that require first article approval, and the Government requires the Contractor to conduct the first article testing.

(b) Use the clause with its Alternate I where the contract requires the contractor to produce the first article and the production quantity at the same facility.

(c) Use the clause with its Alternate II where necessary to authorize the contractor to purchase material or to

commence production before first article approval.

9.308-2

Testing performed by the Government.

(a) Insert the clause at 52.209-4, First Article Approval—Government Testing, in solicitations and contracts, other than those for commercial products or commercial services, that require first article approval, and the Government will conduct the first article test.

(b) Use the clause with its Alternate I where the contract requires the contractor to produce the first article and the production quantity at the same facility.

(c) Use the clause with its Alternate II where necessary to authorize the contractor to purchase material or to commence production before first article approval.

Subpart 9.4—Debarment, Suspension, and Ineligibility

9.400

Scope of subpart.

(a) This subpart—

(1) Prescribes policies and procedures governing the debarment and suspension of contractors by agencies for the causes given in 9.406-2 and 9.407-2;

(2) Provides for the listing of contractors debarred, suspended, proposed for debarment, and declared ineligible (see the definition of “ineligible” in 2.101); and

(3) Sets forth the consequences of this listing.

(b) Although this subpart does cover the listing of ineligible contractors (9.404) and the effect of this listing (9.405), it does not prescribe policies and procedures governing declarations of ineligibility except for contractors that have been declared ineligible pursuant to 10 U.S.C. 983 (see 9.108, and 9.405-1(b)).

(c) For Federal Acquisition Supply Chain Security Act (FASCSA) orders, see part 40.

9.401

Applicability.

In accordance with section 2455 of the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355), and Executive Order 12689, any debarment, suspension or other Governmentwide exclusion initiated under the Nonprocurement Common Rule implementing Executive Order 12549 on or after August 25, 1995, must be recognized by and effective for Executive Branch agencies as a debarment or suspension under this subpart. Similarly, any debarment, suspension, proposed debarment or other Governmentwide exclusion initiated on or after August 25, 1995, under this subpart must also be recognized by and effective for those agencies and participants as an exclusion under the Nonprocurement Common Rule.

9.402

Policy.

(a) Agencies must solicit offers from, award contracts to, and consent to subcontracts with responsible contractors only. Debarment and suspension are discretionary actions that, taken in accordance with this subpart, are appropriate means to effectuate this policy.

(b) The serious nature of debarment and suspension requires that these remedies be imposed only in the public interest for the Government's protection and not for purposes of punishment. Agencies must impose debarment or suspension to protect the Government's interest and only for the causes and in accordance with the procedures in this subpart.

(c) Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions.

(d) When more than one agency has an interest in the debarment or suspension of a contractor, the Interagency Suspension and Debarment Committee, established under Executive Order 12549, and authorized by section 873 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417), must resolve the lead agency issue and coordinate such resolution among all interested agencies prior to the initiation of any suspension, debarment, or related administrative action by any agency.

(e) Agencies must establish appropriate procedures to implement the policies and procedures of this subpart.

9.403

Definitions.

As used in this subpart—

Administrative agreement

means an agreement between an agency suspending and debarring official and the contractor used to resolve a suspension or debarment proceeding, or a potential suspension or debarment proceeding.

Affiliates.

—

(1) Business concerns, organizations, or individuals are affiliates of each other if, directly or indirectly—

(i) Either one controls or has the power to control the other; or

(ii) A third party controls or has the power to control both.

(2) Indicia of control include, but are not limited to, interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the debarment, suspension, or proposed debarment of a contractor which has the same or similar management, ownership, or principal employees as the contractor that was debarred, suspended, or proposed for debarment.

Agency

means any executive department, military department or defense agency, or other agency or independent establishment of the executive branch.

Civil judgment

means the disposition of a civil action by any court of competent jurisdiction, whether by verdict, decision, settlement, stipulation, other disposition that creates a civil liability for the complained of wrongful acts, or a final determination of liability under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801-3812).

Contractor

means any individual or other legal entity that—

(1) Directly or indirectly (

e.g.,

through an affiliate), submits offers for or is awarded, or reasonably may be expected to submit offers for or be awarded, a Government contract, including a contract for carriage under Government or commercial bills of lading, or a subcontract under a Government contract; or

(2) Conducts business, or reasonably may be expected to conduct business, with the Government as an agent or representative of another contractor.

Conviction

means—

(1) A judgment or any other determination of guilt of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or plea, including a plea of nolo contendere; or

(2) Any other resolution that is the functional equivalent of a judgment establishing a criminal offense by a court of competent jurisdiction, including probation before judgment and deferred prosecution. A disposition without the participation of the court is the functional equivalent of a judgment only if it includes an admission of guilt.

Indictment

means indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense is given the same effect as an indictment.

Legal proceedings

means any civil judicial proceeding to which the Government is a party or any criminal proceeding. The term includes appeals from such proceedings.

Nonprocurement Common Rule

means the procedures used by Federal Executive Agencies to suspend, debar, or exclude individuals or entities from

participation in nonprocurement transactions under Executive Order 12549. Examples of nonprocurement transactions are grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, and donation agreements. See 2 CFR part 180 and agency enacting regulations in 2 CFR subtitle B.

Pre-notice letter

means a written correspondence issued to a contractor in a suspension or debarment matter, which does not immediately result in an exclusion or ineligibility. The letter is issued at the discretion of the suspending and debarring official. The letter is not a mandatory step in the suspension or debarment process.

Unfair trade practices

means the commission of any of the following acts by a contractor:

(1) A violation of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) as determined by the International Trade Commission.

(2) A violation, as determined by the Secretary of Commerce, of any agreement of the group known as the “Coordination Committee” for purposes of the Export Administration Act of 1979 (50 U.S.C. App. 2401,

et seq.

) or any similar bilateral or multilateral export control agreement.

(3) A knowingly false statement regarding a material element of a certification concerning the foreign content of an item of supply, as determined by the Secretary of the Department or the head of the agency to which such certificate was furnished.

Voluntary exclusion

means a contractor's written agreement to be excluded for a period under the terms of a settlement between the contractor and the suspending and debarring official of one or more agencies. A voluntary exclusion must have Governmentwide effect.

9.404

Exclusions in the System for Award Management.

(a) The General Services Administration—

(1) Operates the web-based System for Award Management (SAM) at

https://www.sam.gov,

which contains exclusion records; and

(2) Provides technical assistance to Federal agencies in the use of SAM.

(b) An exclusion record in SAM contains the—

(1) Legal business name and physical address of the entities debarred, suspended, proposed for debarment, voluntarily excluded, declared ineligible, or excluded or disqualified under the nonprocurement common rule, with cross-references when more than one name is involved in a single action;

(2) Name of the agency or other authority taking the action;

(3) Cause for the action (see 9.406-2 and 9.407-2 for causes authorized under this subpart) or other statutory or regulatory authority;

(4) Effect of the action;

(5) Termination date for each listing;

(6) Unique Entity Identifier;

(7) Social Security Number (SSN), Employer Identification Number (EIN), or other Taxpayer Identification Number (TIN), if available; and

(8) Name and telephone number of the agency point of contact for the action.

(c) Each agency must—

(1) Identify the individual(s) responsible for entering and updating exclusions data in SAM and assign the appropriate roles;

(2) Remove the exclusion roles in SAM when the individual leaves the organization or changes functions;

(3) For each exclusion, including each voluntary exclusion, accomplished by the agency—

(i) Enter the information required by paragraph (b) of this section within 3 business days after the action becomes effective;

(ii) Determine whether it is legally permitted to enter the SSN, EIN, or other TIN, under agency authority to suspend or debar; and

(iii) Update the exclusion record in SAM, generally within 5 business days after modifying or rescinding an action;

(4) In accordance with internal retention procedures, maintain records relating to each debarment, suspension, proposed debarment, or voluntary exclusion taken or entered into by the agency;

(5) Establish procedures to ensure that the agency does not solicit offers from, award contracts to, or consent to subcontracts with contractors who have an active exclusion record in SAM, except as otherwise provided in this subpart; and

(6) Direct inquiries concerning listed contractors and other entities to the agency or other authority that took the action.

9.405

Effect of listing.

(a) Contractors debarred, suspended, proposed for debarment, or voluntarily excluded, are excluded from receiving contracts, and agencies must not solicit offers from, award contracts to, or consent to subcontracts with these contractors, unless the agency head determines that a compelling reason exists for such action (see 9.405-1(a)(2), 9.405-2, 9.406-1(d), 9.407-1(d), and 26.605-1(e)). Contractors debarred, suspended, proposed for debarment, or voluntarily excluded, are also excluded from conducting business with the Government as agents or representatives of other contractors.

(b) Contractors and other entities that have an active exclusion record in SAM because they have been declared ineligible based on statutory or other regulatory procedures are excluded from receiving contracts, and if applicable, subcontracts, under the conditions and for the period set forth in the statute or regulation. Do not solicit offers from, award contracts to, or consent to subcontracts with these contractors under those conditions and for that period.

(c) Do not enter into, renew, or extend contracts with contractors that have been declared ineligible pursuant to 22 U.S.C. 2593e.

(d) Contractors debarred, suspended, proposed for debarment, or voluntarily excluded, are excluded from acting as individual sureties (see part 28).

(e)(1) After the opening of bids or receipt of proposals or quotes, review the exclusion records in SAM.

(2) Bids received from any listed contractor in response to an invitation for bids must be entered on the abstract of bids and then rejected unless the agency head determines in writing that compelling reason exists to consider the bid.

(3) Unless the agency head determines in writing that a compelling reason exists otherwise, do not evaluate for award or include in the competitive range proposals, quotations, or offers received from, and do not conduct discussions with, a listed offeror during a period of ineligibility. If the period of ineligibility expires or is terminated prior to award, the contracting officer may, but is not required to, consider such proposals, quotations, or offers.

(4) Immediately prior to award, review again the exclusion records in SAM to ensure that no award is made to a listed contractor.

9.405-1

Continuation of current contracts.

(a)

Contractors debarred, suspended, proposed for debarment, or voluntarily excluded.

(1) Notwithstanding the debarment, suspension, proposed debarment, or voluntary exclusion, of a contractor, agencies may continue contracts or subcontracts in existence at the time the contractor was debarred, suspended, proposed for debarment, or voluntarily excluded, unless the agency head directs otherwise. A decision as to the type of termination action, if any, to be taken should be made only after

review by agency contracting and technical personnel and by counsel to ensure the propriety of the proposed action.

(2) For contractors debarred, suspended, proposed for debarment, or voluntarily excluded, unless the agency head makes a written determination of the compelling reasons for doing so, ordering activities must not—

(i) Place orders exceeding the guaranteed minimum under indefinite quantity contracts;

(ii) Place orders under Federal Supply Schedule contracts, blanket purchase agreements, or basic ordering agreements; or

(iii) Add new work, exercise options, or otherwise extend the duration of current contracts or orders.

(b)

Ineligible contractors.

A covered agency, as defined in 9.108-1, must terminate existing contracts and must not place new orders or award new contracts with contractors that have been declared ineligible pursuant to 10 U.S.C. 983 (see 9.108), except for contracts at or below the simplified acquisition threshold or contracts for the acquisition of commercial products and commercial services.

9.405-2

Restrictions on subcontracting.

(a) If an offeror proposes a contractor debarred, suspended, proposed for debarment, or voluntarily excluded, as a subcontractor for any subcontract subject to Government consent (see part 44), do not consent to such subcontracts unless the agency head states in writing the compelling reasons for this approval action. (See 9.405 concerning declarations of ineligibility affecting subcontracting.)

(b) The Government suspends or debars contractors to protect the Government's interests. Contractors are prohibited from entering into any subcontract in excess of $45,000, other than a subcontract for a commercially available off-the-shelf item, with a contractor that has been debarred, suspended, proposed for debarment, or voluntarily excluded, unless a compelling reason exists to do so. If a contractor intends to enter into a subcontract in excess of $45,000, other than a subcontract for a commercially available off-the-shelf item, with a party that is debarred, suspended, proposed for debarment, or voluntarily excluded, as evidenced by the party's having an active exclusion record (see 9.404), a corporate officer or designee of the contractor is required by operation of the clause at 52.209-6, Protecting the Government's Interest when Subcontracting with Contractors Debarred, Suspended, Proposed for Debarment, or Voluntarily Excluded, to notify the contracting officer, in writing, before entering into such subcontract. For contracts for the acquisition of commercial products, the notification requirement applies only for first-tier subcontracts. For all other contracts, the notification requirement applies to subcontracts at any tier. The notice must provide the following:

(1) The name of the subcontractor;

(2) The contractor's knowledge of the reasons for the subcontractor having an active exclusion record;

(3) The compelling reason(s) for doing business with the subcontractor notwithstanding it having an active exclusion record; and

(4) The systems and procedures the contractor has established to ensure that it is fully protecting the Government's interests when dealing with such subcontractor in view of the specific basis for the party's debarment, suspension, proposed debarment, or voluntary exclusion.

(c) The contractor's compliance with the requirements of 52.209-6 will be reviewed during Contractor Purchasing System Reviews (see part 44).

9.406

Debarment.

9.406-1

General.

(a) The suspending and debarring official is responsible for determining whether debarment is in the Government's interest. The suspending and debarring official may, in the public interest, debar a contractor for any of the causes in 9.406-2, using the procedures in 9.406-3. The existence of a cause for debarment, however, does not necessarily require that the contractor be debarred; the seriousness of the contractor's acts or omissions and any remedial measures, mitigating factors, or aggravating factors should be considered in making any debarment decision. Before arriving at any debarment decision, the suspending and debarring official should consider factors such as the following (some of the factors below could apply to individuals such as contractors that are individuals, and are so marked):

(1) Whether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment.

(2) Whether the contractor (including an individual) brought the activity cited as a cause for debarment to the attention of the appropriate Government agency in a timely manner.

(3) Whether the contractor has fully investigated the circumstances surrounding the cause for debarment (or the individual cooperated with the investigation) and, if so, made the result of the investigation available to the suspending and debarring official.

(4) Whether the contractor (including an individual) cooperated fully with Government agencies during the investigation and any court or administrative action.

(5) Whether the contractor (including an individual) has paid or has agreed to pay all criminal, civil, and administrative liability for the improper activity, including any investigative or administrative costs incurred by the Government, and has made or agreed to make full restitution.

(6) Whether the contractor has taken appropriate disciplinary action against the individuals responsible for the activity which constitutes cause for debarment.

(7) Whether the contractor (including an individual) has implemented or agreed to implement remedial measures, including any identified by the Government.

(8)(i) Whether the contractor has instituted or agreed to institute new or revised review and control procedures, ethics training, or other relevant training programs.

(ii) For an individual, whether the individual has attended relevant remediation training.

(9) Whether the contractor (including an individual) has had adequate time to eliminate the circumstances that led to the cause for debarment.

(10)(i) Whether the contractor's management recognizes, accepts, and understands the seriousness of the misconduct giving rise to the cause for debarment and has implemented programs to prevent recurrence.

(ii) For an individual, whether the individual recognizes, accepts, and understands the seriousness of the misconduct giving rise to the cause for debarment and has adopted practices to prevent recurrence.

(11) Whether the contractor (including an individual) has a pattern or prior history of wrongdoing, the frequency of incidents and/or duration of the wrongdoing, and the actual or potential harm or impact that results, or may result, from the wrongdoing.

(12) Whether and to what extent the contractor (including an individual) planned, initiated, or carried out the wrongdoing, and the kind of positions within the contractor's organization held by the individual involved in the wrongdoing.

(13) Whether the wrongdoing was pervasive within the contractor's organization.

(14) Whether the individual or the contractor's principals tolerated the offense.

(15) Whether the contractor (including an individual) is or has been excluded or disqualified by an agency of the Federal Government or has not been allowed to participate in State or local contracts or assistance agreements on a basis of conduct similar to one or more of the causes for debarment specified in this subpart.

(16) Whether the contractor (including an individual) has entered into an administrative agreement with a Federal agency or a similar agreement with a State or local government that is not Governmentwide but is based on conduct similar to one or more of the causes for debarment specified in this subpart.

(17) Whether any other factors meriting consideration exist for the contractor (including an individual) under the circumstances.

(b) The existence or nonexistence of any aggravating or mitigating factors or remedial measures such as set forth in paragraph (a) of this section is not necessarily determinative of a contractor's present responsibility. Accordingly, if a cause for debarment exists, the contractor has the burden of demonstrating, to the satisfaction of the suspending and debarring official, its present responsibility and that debarment is not necessary.

(c) Debarment constitutes debarment of all divisions or other organizational elements of the contractor, unless the debarment decision is limited by its terms to specific divisions, organizational elements, or commodities. The suspending and debarring official may extend the debarment decision to include any affiliates of the contractor if they are—

(1) Specifically named; and

(2) Given written notice of the proposed debarment and an opportunity to respond (see 9.406-3(c)).

(d) A contractor's debarment, or proposed debarment, is effective throughout the executive branch of the Government, unless the agency head or a designee (except see 26.605-1(e)) states in writing the compelling reasons justifying continued business dealings between that agency and the contractor.

(e)(1) When the suspending and debarring official has authority to debar contractors from both contracts pursuant to the Federal Acquisition Regulation in this chapter and contracts for the purchase of Federal personal property pursuant to the Federal Management Regulation (FMR) in 41 CFR part 102-38, that official must consider simultaneously debarring the contractor from the award of acquisition contracts and from the purchase of Federal personal property.

(2) A notice debarring a contractor from the award of acquisition contracts and from the purchase of Federal personal property must include the appropriate FAR and FMR citations.

9.406-2

Causes for debarment.

The suspending and debarring official may debar—

(a) A contractor for a conviction of or civil judgment for—

(1) Commission of fraud or a criminal offense in connection with—

(i) Obtaining;

(ii) Attempting to obtain; or

(iii) Performing a public contract or subcontract.

(2) Violation of Federal or State antitrust statutes relating to the submission of offers;

(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating Federal criminal tax laws, or receiving stolen property;

(4) Intentionally affixing a label bearing a “Made in America” inscription (or any inscription having the same meaning) to a product sold in or shipped to the United States or its outlying areas, when the product was not made in the United States or its outlying areas (see Section 202 of the Defense Production Act (Public Law 102-558)); or

(5) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a Government contractor or subcontractor.

(b)(1) A contractor, based upon a preponderance of the evidence, for any of the following—

(i) Violation of the terms of a Government contract or subcontract so serious as to justify debarment, such as—

(A) Willful failure to perform in accordance with the terms of one or more contracts; or

(B) A history of failure to perform, or of unsatisfactory performance of, one or more contracts.

(ii) Violations of 41 U.S.C. chapter 81, Drug-Free Workplace, as indicated by—

(A) Failure to comply with the requirements of the clause at 52.226-7, Drug-Free Workplace; or

(B) Such a number of contractor employees convicted of violations of criminal drug statutes occurring in the workplace as to indicate that the contractor has failed to make a good faith effort to provide a drug-free workplace (see 26.605-1).

(iii) Intentionally affixing a label bearing a “Made in America” inscription (or any inscription having the same meaning) to a product sold in or shipped to the United States or its outlying areas, when the product was not made in the United States or its outlying areas (see Section 202 of the Defense Production Act (Public Law 102-558)).

(iv) Commission of an unfair trade practice as defined in 9.403 (see Section 201 of the Defense Production Act (Public Law 102-558)).

(v) Delinquent Federal taxes in an amount that exceeds the threshold at 9.104-4(a)(2). Federal taxes are considered delinquent for purposes of this provision if both of the following criteria apply:

(A) The tax liability is finally determined. The liability is finally determined if it has been assessed. A liability is not finally determined if a pending administrative or judicial challenge remains. In the case of a judicial challenge to the liability, the liability is not finally determined until all judicial appeal rights have been exhausted.

(B) The taxpayer is delinquent in making payment. A taxpayer is delinquent if the taxpayer has failed to pay the tax liability when full payment was due and required. A taxpayer is not delinquent in cases where enforced collection action is precluded.

(vi) Knowing failure by a principal, until 3 years after final payment on any Government contract awarded to the contractor, to timely disclose to the Government, in connection with the award, performance, or closeout of the contract or a subcontract thereunder, credible evidence of—

(A) Violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code;

(B) Violation of the civil False Claims Act (31 U.S.C. 3729-3733); or

(C) Significant overpayment(s) on the contract, other than overpayments resulting from contract financing payments as defined in 32.001.

(vii) Determination of a false certification under 52.209-13, Violation of Arms Control Treaties or Agreements-Certification.

(viii) Failure to comply with the requirements of the clause at 52.222-XX, Addressing DEI Discrimination by Federal Contractors.

(2) A contractor, based on a determination by the Secretary of

Homeland Security or the Attorney General of the United States, that the contractor is not in compliance with Immigration and Nationality Act employment provisions (see Executive Order 12989, as amended by Executive Order 13286). Such determination is not reviewable in the debarment proceedings.

(c) A contractor or subcontractor based on any other cause of so serious or compelling a nature that it affects the present responsibility of the contractor or subcontractor.

9.406-3

Procedures.

(a)

Investigation and referral.

Agencies must establish procedures for the prompt reporting, investigation, and referral to the suspending and debarring official of matters appropriate for that official's consideration.

(b)

Decision-making process.

(1) Agencies must establish procedures governing the debarment decision-making process that are as informal as is practicable, consistent with principles of fundamental fairness. These procedures must afford the contractor (and any specifically named affiliates) an opportunity to submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment. If the suspending and debarring official extends the opportunity for the contractor to submit material in opposition, then the official should also give a deadline for submission of materials. The suspending and debarring official may use flexible procedures to allow a contractor to present matters in opposition in person or remotely through appropriate technology; if so, the suspending and debarring official should change the notice in paragraph (c)(3)(iv) of this section to include those flexible procedures.

(2) In actions not based upon a conviction or civil judgment, if the contractor's submission in opposition raises a genuine dispute over facts material to the proposed debarment, agencies must also—

(i) Afford the contractor an opportunity to appear with counsel, submit documentary evidence, present witnesses, and confront any person the agency presents; and

(ii) Make a transcribed record of the proceedings and make it available at cost to the contractor upon request, unless the contractor and the agency, by mutual agreement, waive the requirement for a transcript.

(c)

Notice of proposal to debar.

The suspending and debarring official must issue the notice of proposed debarment to the contractor and any specifically named affiliates.

(1) The written notice must be sent—

(i) By U.S. mail or private delivery service to the last known street address, with delivery notification service;

(ii) By email to the point of contact email address in the contractor's SAM registration, if any, or to the last known email address as confirmed by the agency; or

(iii) By certified mail to the last known street address with return receipt requested.

(2) The notice must be sent—

(i) To the contractor, the contractor's identified counsel for purposes of the administrative proceedings, or the contractor's agent for service of process; and

(ii) For each specifically named affiliate, to the affiliate itself, the affiliate's identified counsel for purposes of the administrative proceedings, or the affiliate's agent for service of process.

(3) The notice must state—

(i) That debarment is being considered;

(ii) The reasons for the proposed debarment in terms sufficient to put the contractor on notice of the conduct or transaction(s) upon which it is based;

(iii) The cause(s) relied upon under 9.406-2 for proposing debarment;

(iv) That, within 30 days after receipt of the notice, the contractor may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment, including any additional specific information that raises a genuine dispute over the material facts;

(v) The agency's procedures governing debarment decision making;

(vi) The effect of the issuance of the notice of proposed debarment;

(vii) The potential effect of an actual debarment;

(viii) That in addition to any information and argument in opposition to a proposed debarment, the contractor must identify—

(A) Specific facts that contradict the statements contained in the notice of proposed debarment. Include any information about any of the factors listed in 9.406-1(a). A general denial is insufficient to raise a genuine dispute over facts material to the proposed debarment;

(B) All existing, proposed, or prior exclusions and all similar actions taken by Federal, State, or local agencies, including administrative agreements that affect only those agencies;

(C) All criminal and civil proceedings not included in the notice of proposed debarment that grew out of facts relevant to the cause(s) stated in the notice; and

(D) All of the contractor's affiliates; and

(ix) That if the contractor fails to disclose the information in paragraph (c)(3)(viii) of this section, or provides false information, the agency taking the action may seek further criminal, civil, or administrative action against the contractor, as appropriate.

(d)

Suspending and debarring official's decision.

(1) In actions based upon a conviction or civil judgment, or in which no genuine dispute exists over material facts, the suspending and debarring official must decide based on all the information in the administrative record, including any contractor submission. If no suspension is in effect, the suspending and debarring official must make a decision within 45 days from the date that the official administrative record is closed, unless the suspending and debarring official extends this period for good cause. The official record closes upon the expiration of the contractor's time to submit information and argument in opposition, including any extensions (see paragraph (b)(1) of this section).

(2)(i) In actions in which additional proceedings are necessary as to disputed material facts, written findings of fact must be prepared. The suspending and debarring official must base the decision on the facts as found, together with any information and argument submitted by the contractor and any other information in the administrative record.

(ii) The suspending and debarring official may refer matters involving disputed material facts to another official for findings of fact. The suspending and debarring official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous.

(iii) The suspending and debarring official must make a decision after the conclusion of the proceedings with respect to disputed facts.

(3) In any action in which the proposed debarment is not based upon a conviction or civil judgment, the cause for debarment must be established by a preponderance of the evidence.

(e)

Notice of suspending and debarring official's decision.

(1) If the suspending and debarring official decides to impose debarment, the contractor and any affiliates involved must be given prompt notice using the procedures in paragraphs (c)(1) and (2) of this section—

(i) Referring to the notice of proposed debarment;

(ii) Specifying the reasons for debarment;

(iii) Stating the period of debarment, including effective dates; and

(iv) Advising that the debarment is effective throughout the executive branch of the Government unless the head of an agency or a designee makes the statement called for by 9.406-1(d).

(2) If debarment is not imposed, the suspending and debarring official must promptly notify the contractor and any affiliates involved, using the procedures in paragraphs (c)(1) and (2) of this section.

(f)

Administrative agreements.

(1) If the contractor enters into an administrative agreement with the Government in order to resolve a debarment or potential debarment proceeding, the suspending and debarring official must access the integrity records in

CPARS.gov,

enter the requested information, and upload documentation reflecting the administrative agreement.

(2) The suspending and debarring official is responsible for the timely and accurate submission of documentation reflecting the administrative agreement. The submission should be made within 3 business days.

(3) With regard to information that may be covered by a disclosure exemption under the Freedom of Information Act, the suspending and debarring official must follow the procedures at 9.105-2(b)(2)(ii).

(g)

Voluntary exclusions.

(1) If the contractor enters into a voluntary exclusion with the Government in order to resolve a debarment or potential debarment matter, the suspending and debarring official must access the System for Award Management website (available at

https://www.sam.gov

) and enter the requested information into the exclusions section of SAM (see 9.404(c)(3)).

(2) The suspending and debarring official is responsible for the timely and accurate submission of documentation reflecting the voluntary exclusion. The submission should be made within 3 business days.

(3) Regarding information that may be covered by a disclosure exemption under the Freedom of Information Act, the suspending and debarring official must follow the procedures at 9.105-2(b)(2)(ii).

(h)

Pre-notice letters.

Prior to initiating a proposed debarment, the suspending and debarring official has discretion to issue a pre-notice letter. A pre-notice letter is not required to initiate debarment under this subpart. (See 9.403.)

9.406-4

Period of debarment.

(a)(1) Debarment must be for a period commensurate with the seriousness of the cause(s). Generally, debarment should not exceed 3 years, except that—

(i) Debarment for violation of the provisions of 41 U.S.C. chapter 81, Drug-Free Workplace (see 26.605-1(e)) may be for a period not to exceed 5 years;

(ii) Debarments under 9.406-2(b)(2) must be for 1 year unless extended pursuant to paragraph (b) of this section; and

(iii) Debarments under 9.406-2(b)(1)(vii) must be for a period of not less than 2 years, inclusive of any suspension period, if suspension precedes a debarment (see paragraph (a)(2) of this section).

(2) If suspension precedes a debarment, the suspension period factors into determining the debarment period.

(b) The suspending and debarring official may extend the debarment for an additional period, if that official determines that an extension is necessary to protect the Government's interest. However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. Debarments under 9.406-2(b)(2) may be extended for additional periods of one year if the Secretary of Homeland Security or the Attorney General determines that the contractor continues to be in violation of the employment provisions of the Immigration and Nationality Act. Upon determining that debarment for an additional period is necessary, the suspension and debarring official must follow the procedures in 9.406-3 to extend the debarment.

(c) The suspending and debarring official may reduce the period or extent of debarment, upon the contractor's request, supported by documentation, for reasons such as—

(1) Newly discovered material evidence;

(2) Reversal of the conviction or civil judgment upon which the debarment was based;

(3) Bona fide change in ownership or management;

(4) Elimination of other causes for which the debarment was imposed; or

(5) Other reasons the suspending and debarring official deems appropriate.

9.406-5

Scope of debarment.

(a) The fraudulent, criminal, or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a contractor may be imputed to the contractor when the conduct occurred in connection with the individual's performance of duties for or on behalf of the contractor, or with the contractor's knowledge, approval, or acquiescence. The contractor's acceptance of the benefits derived from the conduct is evidence of such knowledge, approval, or acquiescence.

(b) The fraudulent, criminal, or other seriously improper conduct of a contractor may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the contractor who participated in, knew of, or had reason to know of the contractor's conduct.

(c) The fraudulent, criminal, or other seriously improper conduct of one contractor participating in a joint venture or similar arrangement may be imputed to other participating contractors if the conduct occurred for or on behalf of the joint venture or similar arrangement, or with the knowledge, approval, or acquiescence of these contractors. Acceptance of the benefits derived from the conduct is evidence of such knowledge, approval, or acquiescence.

9.407

Suspension.

9.407-1

General.

(a) The suspending and debarring official may, in the public interest, suspend a contractor for any of the causes in 9.407-2, using the procedures in 9.407-3.

(b)(1) Suspension is a serious action to be imposed based on adequate evidence, pending the completion of an investigation or legal proceedings, when the suspending and debarring official determines that immediate action is necessary to protect the Government's interest. In deciding whether immediate action is necessary to protect the Government's interest, the suspending and debarring official has wide discretion. The suspending and debarring official may infer the necessity for immediate action to protect the Government's interest either from the nature of the circumstances giving rise to a cause for suspension or from potential business relationships or involvement with a program of the Federal Government. In assessing the adequacy of the evidence, agencies should consider how much information is available, how credible it is given the circumstances, whether important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such a

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