Acquisition Regulation; Department of Energy Management and Operating Contracts

DEPARTMENT OF ENERGY

48 CFR Part 970

[Regulation Identifier Number 1991-AB20]

Acquisition Regulation; Department of Energy Management and

Operating Contracts

AGENCY: Department of Energy.

ACTION: Amendment of a notice of proposed rulemaking.

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SUMMARY: The Department of Energy (DOE) today amends its March 2, 1995,

notice of proposed rulemaking (60 FR 11646) which proposed amendments

to the DOE Acquisition Regulation (DEAR) provisions applicable to

subcontracting by management and operating contractors. Today's

amendments do not affect the principal provisions of the proposal which

are: Substitution of more commercial-like subcontracting objectives,

expectations, and standards for the so-called ``Federal norm'' that, in

effect, requires DOE's management and operating contractors to follow

certain Federal-oriented prescribed procedures in their award of

subcontracts; and elimination of the reference concerning General

Accounting Office protest jurisdiction over such subcontract awards.

Rather, this amendment of the earlier notice deals with administrative

matters, mostly technical, that DOE reserved for further analysis and

action during the public comment period. DOE today amends its notice of

proposed rulemaking to redesignate most of the requirements of DEAR

970.7104 to two other subsections of the DEAR and to eliminate certain

of them. The amendment also moves two paragraphs previously set forth

in DEAR 970.7104 to another existing subsection.

DATES: Written comments on this amended notice of proposed rulemaking

must be received on or before May 30, 1995. Comments on today's

amendment should be submitted separately from those related to the

March 2, 1995, notice of proposed rulemaking. This is necessary as the

Department may elect to finalize those portions of the March 2 rule,

which are unaffected by today's amendment, in more than one stage.

ADDRESSES: Comments on the proposed rulemaking should be sent to the

following address: U.S. Department of Energy, Office of Contractor

Management and Administration (HR-55), Attention: James J. Cavanagh,

1000 Independence Avenue SW., Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT: James J. Cavanagh, Office of

Contractor Management and Administration (HR-55), U.S. Department of

Energy, 1000 Independence Avenue SW., Washington, D.C. 20585; telephone

202-586-8257.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background.

II. Section-by-Section Analysis.

III. Public Comments.

IV. Procedural Requirements.

I. Background

On March 2, 1995, DOE published in the Federal Register (60 FR

11646) a notice of proposed rulemaking. That notice proposed to amend

the DEAR to modify requirements for management and operating contractor

purchasing systems. Principally, DEAR subpart 970.71 is being amended

to identify certain purchasing system objectives and standards,

eliminate the application of the ``Federal norm,'' place greater

reliance on commercial practices, and remove the provisions concerning

General Accounting Office protest jurisdiction over management and

operating contractor subcontract awards.

Today's notice does not alter any of the above-described principal

provisions of the proposed amendments. The main focus of this notice is

an administrative matter discussed in the Supplementary Information

section of the March 2 notice and reserved for further analysis and

action during the comment period. That issue is whether to eliminate

DEAR Sec. 970.7104.

The March 2 proposed rulemaking stated:

Section 970.7104, Conditions of purchasing by management and

operating contractors, is removed. DOE believes it is not necessary

to retain this section since many of the requirements comply with

provisions of statutes and are already reflected in contract

clauses. These requirements, will therefore, continue to be

applicable as contractual requirements. Some of the requirements,

however, are not specifically prescribed in other parts of the DEAR.

The Department will review such requirements prior to finalization

of this proposed rule and may redesignate appropriate paragraphs, in

the final rule, to other parts of the DEAR, if necessary. If such

requirements are identified, the Department will publish a Federal

Register notice, prior to issuing a final rule, listing the

paragraphs being considered for redesignation.

[[Page 20664]] DOE's analysis showed that, except for seven items

proposed for deletion as discussed below, most of the provisions of

Sec. 970.7104 should be retained either in the preaward process or in

the subcontract document itself. Moreover, DOE has reconsidered the

desirability of proposing to eliminate the convenient listing of these

subjects and the clarity that comes with such a listing. Further,

removing the section could be interpreted incorrectly as proposing to

eliminate the underlying substantive requirements identified elsewhere.

Therefore, DOE has chosen instead to propose elimination of seven

subparagraphs of that section and relocation of most of the subjects

from Sec. 970.7104 to two contract clauses, thereby removing the

content of Sec. 970.7104 in its entirety. The amendment proposes no new

policy and adds no new requirements for a contractor. For the most

part, the regulatory treatment of each subject has been simplified and

shortened. For details, see the section-by-section analysis below.

II. Section-by-Section Analysis

A. In accordance with Section II, paragraph 6 of the notice of

proposed rulemaking published on March 2, 1995, the Department of

Energy has performed a detailed review of the subjects covered by DEAR

970.7104 to determine which requirements should be redesignated in the

other parts of the DEAR. This amendment to the notice of proposed

rulemaking reflects the proposed disposition of the provisions of DEAR

970.7104-1 through 970.7104-47. The redesignation table set forth below

will graphically reflect this proposed disposition.

B. The Department has decided that the subjects of 970.7104 which

are to continue to play a part in the award of subcontracts under DOE

management and operating contracts fall generally into two categories.

The first category consists of processes that lead to the award of

prospective subcontracts, and the second category consists of those

clauses that should be included in appropriate subcontracts and

provisions that guide the administration of certain of those clauses.

As a result of this recognition, this amendment proposes to deal with

the first category as additions to an existing clause. A new clause is

proposed to deal with the subjects that comprise the second category.

C. This amendment proposes to add subjects in the first category to

the clause currently set forth at 970.5204-22, ``Contractor Purchasing

System.'' The March 2, 1995, notice of proposed rulemaking proposed to

change paragraph (a) of 970.5204-22. Today's amendment proposes to

further amend paragraph (a) to insert the phrase ``this clause, DEAR

970.5204-XX, and'' in the first sentence. It would also expand the

content of that clause to cover requirements that directly relate to

the management and operating contractor's purchasing system and methods

in the award of subcontracts.

D. This amendment also proposes to identify subjects in the second

category in paragraph (b) of a new clause at 970.5204-XX. The purpose

of that clause would be to continue to provide a convenient listing of

clauses and related requirements that management and operating

contractors would be required to include in, or apply to, prospective

subcontracts. That new clause in its paragraph (a) would contain a

general instruction directing the inclusion of the listed clauses and,

where appropriate, the application of attendant regulations governing

the subject matter of the cited clause. Paragraph (a) would recognize

that certain of the listed clauses flow down pursuant to the management

and operating contractor's prime contract with the Department (e.g.,

Employment of the Handicapped). Certain other clauses that would be

included in appropriate subcontracts either are not included in the

prime contract (e.g., Service Contract Act) or, if included, do not

contain a flowdown instruction. For these latter two types of clauses,

paragraph (a) would instruct the contractor to apply requirements to

subcontracts in the same manner as the Department does for the award of

a DOE prime contract which is not a management and operating contract.

E. For certain subjects, such as termination and indemnification,

there would be coverage of different aspects of the same subject in

both of the clauses at 970.5204-22 and at 970.5204-XX.

F. The following table identifies the new location of each item in

970.7104 and indicates whether the original requirement for the subject

provision is based on an Executive Order, Department policy, Federal

regulation or statute.

----------------------------------------------------------------------------------------------------------------

Old citation

970.- Subject New citation 970.5204-

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7104-1........ Contingent Fees (P).......................................... Deleted.

7104-2........ Record Retention (S)......................................... XX(b)(20).

7104-3........ Utility Services (P)......................................... 22(b).

7104-4........ Leasing Property, Plant or Equipment (P)..................... 22(q).

7104-5........ Leasing of Motor Vehicles (P)................................ 22(m).

7104-6........ Strategic and Critical Materials (P)......................... 22(t).

7104-7........ Purchases of Special Items (S/R/P)........................... 22(p).

7104-8........ Purchasing Alternative Determinations (P).................... 22(q).

7104-9........ Qualification Requirements (P)............................... Deleted.

7104-10....... Organization Conflicts of Interest (S)....................... XX(b)(16).

7104-11....... Cost or Pricing Data (S)..................................... XX(b)(5).

7104-12....... Small Business and Small Disadvantaged Business Concerns (S). XX(b)(23) and 970.1901.

7104-13....... Labor Surplus Concerns (P)................................... Deleted.

7104-14....... Convict Labor (P)............................................ Deleted.

7104-15....... Contract Work Hours and Safety Standards Act (S)............. XX(b)(4).

7104-16....... Davis-Bacon Labor Standards for Construction (S)............. XX(b)(8).

7104-17....... Walsh-Healey (P)............................................. Deleted.

7104-18....... Equal Employment Opportunity (E)............................. XX(b)(11).

7104-19....... Service Contract Act (S)..................................... XX(b)(22).

7104-20....... Vietnam Vets (S)............................................. XX(b)(24).

7104-21....... Environmental & Occupational Safety & Health (S/P)........... XX(b)(10).

7104-22....... Buy American (S)............................................. 22(g).

7104-23....... Patents, Data and Copyrights (S/P)........................... XX(b)(17).

7104-24....... Bonds & Insurance (S/P)...................................... 22(f).

7104-25....... Indemnification (S/P)........................................ 22(l) and XX(b)(14).

[[Page 20665]]

7104-26....... Taxes (P).................................................... XX(b)(25).

7104-27....... Audit of Subcontractors (S/R/P).............................. 22(e).

7104-28....... Construction & A-E conflict-of-interest (P).................. 22(h).

7104-29....... Quality Assurance (P)........................................ 22(r).

7104-30....... Termination (P).............................................. 22(v) and XX(b)(26).

7104-31....... Authorization of Subcontractors' Use of Government Supply Deleted.

Sources (P).

7104-32....... Safeguarding Classified Information (S)...................... XX(b)(21).

7104-33....... Cost Accounting Standards (S)................................ XX(b)(7).

7104-34....... Clean Air & Water (S/R)...................................... XX(b)(3).

7104-35....... Air Transportation by U.S. Flag Carriers (S)................. XX(b)(1).

7104-36....... Acquisition of Real Property (S/P)........................... 22(c).

7104-37....... Management, Acquisition and use of Information Resources (P). 22(n).

7104-38....... Privacy Act (R).............................................. XX(b)(19).

7104-39....... Officials Not To Benefit (P)................................. Deleted.

7104-40....... Subcontractors' Reporting Systems (P)........................ XX(b)(6).

7104-41....... Employment of the Handicapped (S)............................ XX(b)(9).

7104-42....... Unclassified Controlled Nuclear Information (R).............. 22(w).

7104-43....... Government Property (S/R).................................... 22(k).

7104-44....... Foreign Travel (P)........................................... XX(b)(13).

7104-45....... Anti-Kickback (S)............................................ XX(b)(2).

7104-46....... Setoff of Assigned Subcontractor Proceeds (P)................ 22(s).

7104-47....... Additional Flowdown and Extension Provisions................. .................................

--Exam. of records by Comptroller General (S).............. XX(b)(12).

--Accts Records and Inspection (S/P)....................... XX(b)(20).

--Printing (P)............................................. XX(b)(18).

--Priorities (S/R)......................................... 22(o).

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(E)=Executive Order.

(P)=Policy.

(R)=Regulation.

(S)=Statute.

G. The substance of the material related to Small Business and

Small Disadvantaged Business Concerns cited in DEAR Subpart 970.7104-

12, paragraphs (a), (b), (c) and (d) have been relocated in DEAR Part

970.1901, paragraphs (c) and (d).

H. From DEAR 970.7104, it is proposed to delete seven subsections

as identified and for the reasons set forth in the following table:

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Old citation

970.- Subject Reason for deletion

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7104-1........ Contingent Fees.......... These subject matters have

been incorporated into

appropriate subcontracts of

management and operating

(M&O) contracts as a matter

of DOE policy. Because it

has been decided that these

subject matters should be

handled in the same manner

as for subcontracts under

non-M&O cost-reimbursement

contracts, flowdown is no

longer required.

7104-9........ Qualification .............................

Requirements

7104-14....... Convict Labor .............................

7104-17....... Walsh-Healy Public .............................

Contracts Act

7104-39....... Officials Not to Benefit

7104-13....... Labor Surplus Area The preference of the Federal

Concerns. procurement system that this

subsection reflected has

been substantially altered

by section 7101 of the

Federal Acquisition

Streamlining Act of 1994.

7104-31....... Authorization for The authority for contracting

Subcontractors' Use of officers to allow management

Government Supply and operating contractor

Sources.. subcontract level access to

Government supply sources

exists at DEAR 970.51.

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I. This amendment to the March 2, 1995, notice of proposed

rulemaking will also redesignate the substance of 970.7103, paragraph

(c)(7) to 970.5204-22(e)(4) to make clear that the contractor is

required to determine the allowability of subcontractor reimbursable

costs in accordance with 48 CFR (FAR) part 31.

J. Conforming amendments will be made to 970.5204-21, -5204-24, -

5204-45, and -5204-50 to remove references to text proposed to be

deleted.

III. Public Comments

DOE invites interested persons to participate by submitting data,

views, or arguments with respect to the DEAR amendments set forth in

this rule. Three copies of written comments should be submitted to the

address indicated in the ADDRESSES section of this rule. All comments

received will be available for public inspection during normal work

hours. All written comments received by the date indicated in the DATES

section of this notice will be carefully assessed and fully considered

prior to the effective date of these amendments as a final rule. Any

information considered to be confidential must be so identified and

submitted in writing, one copy only. DOE reserves the right to

[[Page 20666]] determine the confidential status of the information and

to treat it according to its determination in accordance with 10 CFR

1004.11.

IV. Procedural Requirements

The procedural requirements discussed in section IV of the

Supplementary Information of the March 2, 1995, notice of proposed

rulemaking (60 FR 11646) apply as well to this amendment of proposed

rulemaking.

List of Subjects in 48 CFR Parts 933 and 970

Government procurement.

Issued in Washington, D.C. on April 20, 1995.

Richard H. Hopf,

Deputy Assistant Secretary for Procurement and Assistance Management.

For the reasons set forth in the preamble, chapter 9 of title 48 of

the Code of Federal Regulations is proposed to be amended as set forth

below.

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

1. The authority citation for part 970 continues to read as

follows:

Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.

2201), sec. 644 of the Department of Energy Organization Act, Pub.

L. 95-91 (42 U.S.C. 7254), sec 201 of the Federal Civilian Employee

and Contractor Travel Expenses Act of 1985 (41 U.S.C. 420) and sec.

1534 of the Department of Defense Authorization Act, 1986, Pub. L.

99-145 (42 U.S.C. 7256a), as amended.

2. At 970.1901 add paragraphs (c) and (d) as follows:

970.1901 General.

* * * * *

(c) Contractors may provide in their purchasing systems and methods

for the setting aside of requirements for small disadvantaged

businesses, provided there are sufficient qualified entities available

to assure effective competition, and provided that the cost or price of

the successful offer is found by the contractor to be fair and

reasonable.

(d) In pursuit of the objective of contractor purchasing of a fair

proportion of supplies and services from small business concerns, small

disadvantaged business concerns and woman-owned business concerns, the

HCA may authorize the use of innovative means after receipt of proper

approval by the Procurement Executive and the DOE Office of Small and

Disadvantaged Business Utilization.

970.5204-21 Property.

3. At 970.5204-21, Property, remove the phrase ``As prescribed in

970.7104-43,'' from the introductory text.

4. At 970.5204-22, the clause ``Contractor Purchasing System'' is

revised to read as follows:

970.5204-22 Contractor purchasing system.

* * * * *

Contractor Purchasing System (month year TBE)

(a) General. The contractor shall develop, implement, and

maintain formal policies, practices, and procedures to be used in

the award of subcontracts consistent with this clause, 48 CFR (DEAR)

970.5204-XX, and 48 CFR (DEAR) 970.71. The contractor's purchasing

system and methods shall be fully documented, consistently applied,

and acceptable to DOE in accordance with 48 CFR (DEAR) 970.7102. The

contractor's purchasing performance will be evaluated against

agreed-upon criteria in accordance with the performance criteria and

measures clause(s) set forth elsewhere in this contract. DOE

reserves the right at any time to require that the contractor submit

for approval any or all purchases under this contract. The

contractor shall not purchase any item or service the purchase of

which is expressly prohibited by the written direction of DOE and

shall use such special and directed sources as may be expressly

required by the DOE contracting officer.

(b) Acquisition of Utility Services. Utility services shall be

acquired in accordance with the requirements of 48 CFR (DEAR)

970.0803.

(c) Acquisition of Real Property. The contractor shall contract

for real property in accordance with 48 CFR (DEAR) Subpart 917.74.

(d) Advance Notice of Proposed Subcontract Awards. The

contractor shall provide advance notice of proposed subcontract

awards in accordance with 48 CFR (DEAR) 970.7109; shall document

purchases in writing; and shall establish and maintain subcontract

files which present an accurate and adequate record of all

purchasing transactions.

(e) Audit of Subcontractors.

(1) The contractor shall assure that its purchasing systems and

methods provide for: (i) periodic post-award audit of cost-

reimbursement subcontractors at all tiers, and (ii) audits, where

necessary, to provide a valid basis for pre-award or cost or price

analysis.

(2) Responsibility for determining the costs allowable under

each cost-reimbursement subcontract remains with the contractor or

next higher-tier subcontractor. Contractors' purchasing systems and

methods shall provide, in appropriate cases, for the timely

involvement of the contractor and the DOE contracting officer in

resolution of subcontract cost allowability.

(3) Where audits of subcontractors of any tier are required,

arrangements may be made to have the cognizant Federal agency

perform the audit of the subcontract. These arrangements shall be

made administratively between DOE and the other agency involved and

shall provide for the cognizant agency to audit in an appropriate

manner in light of the magnitude and nature of the subcontract.

(4) Allowable costs for cost reimbursable subcontracts are to be

determined in accordance with the cost principles of 48 CFR (FAR)

part 31, appropriate for the type of organization to which the

subcontract is to be awarded, as supplemented by 48 CFR (DEAR) part

931. Allowable costs in the purchase or transfer from contractor-

affiliated sources shall be determined in accordance with 48 CFR

(DEAR) 970.7105 and 48 CFR (DEAR) 970.3102-15(b). In no case,

however, shall these arrangements preclude determination by the DOE

contracting officer of the allowability or unallowability of

subcontractor costs claimed for reimbursement by the contractor.

(f) Bonds and Insurance.

(1) The contractor shall obtain from a subcontractor a payment

bond on Standard Form 25A, modified to name the contractor as well

as the United States of America as obligees, for all fixed price,

unit-price and cost-reimbursement construction subcontractors in

excess of $25,000. The penal amounts shall be determined as set

forth in 48 CFR (FAR) 28.102-2(b).

(2) The contractor may accept more than one corporate surety

upon recognizance, stipulation, bond, or undertaking in both

construction and other contracts, provided that in no case will the

liability of any co-surety exceed the maximum penal sum for which it

is qualified for any one obligation. For subcontracts other than

construction, a co-surety may reinsure amounts in excess of its

capacity with a corporate surety having the required underwriting

capacity that appears on the acceptable list of corporate sureties.

No such reinsurance is acceptable in connection with construction

subcontracts. Corporate co-sureties may individually obligate

themselves for a definite sum less than the full amount of the bond;

however, all such obligations must total the entire amount of the

bond and each co-surety must bind itself ``jointly and severally''

for the purpose of allowing a joint action or actions against any or

all of the corporate sureties.

(g) Buy American. The contractor shall comply with the

provisions of the Buy American Act as reflected in 48 CFR (FAR)

52.225-3, as amended by 48 CFR (DEAR) 970.5203-3.

(h) Construction and Architect-Engineer Contracts.

(1) Independent Estimates. A detailed, independent estimate of

costs shall be prepared for all construction work to be

subcontracted.

(2) Specifications. Specifications for construction shall be

prepared in accordance with the DOE publication entitled ``General

Design Criteria Manual.''

(3) Prevention of Conflict of Interest.

(i) The contractor shall not award a contract for construction

to the architect-engineer firm or an affiliate that prepared the

design. This prohibition does not preclude the award of a

``turnkey'' contract so long as the subcontractor assumes all

liability for defects in design and construction and consequential

damages.

(ii) The contractor shall not award both a cost-reimbursement

contract and a fixed- [[Page 20667]] price contract for construction

or architect-engineer services or any combination thereof to the

same firm where those contracts will be performed at the same site.

(iii) The contractor shall not employ the construction

subcontractor or an affiliate to inspect the firm's work. The

contractor shall assure that the working relationships of the

construction subcontractor and the subcontractor inspecting its work

and the authority of the inspector are clearly defined.

(i) Contractor-Affiliated Sources. Purchase or transfer of

equipment, materials, supplies, or services from a contractor-

affiliated source shall be treated in accordance with 48 CFR (DEAR)

970.7105.

(j) Contractor-Subcontractor Relationship. The obligations of

the contractor under paragraph (a) of this clause, including the

development of the purchasing system and methods, and purchases made

pursuant thereto, shall not relieve the contractor of any obligation

under this contract (including, among other things, the obligation

to properly supervise, administer, and coordinate the work of

subcontractors). Subcontracts shall be in the name of the

contractor, and shall not bind or purport to bind the Government.

(k) Government Property. The contractor's purchasing system and

methods for the identification, inspection, maintenance, protection,

and disposition of Government property shall conform with the

policies and principles of 48 CFR (FAR) part 45, 48 CFR (DEAR) part

945, the Federal Property Management Regulations, the DOE Property

Management Regulations, and their contracts.

(l) Indemnification. No subcontractor may be otherwise

indemnified except with the prior approval of the Procurement

Executive.

(m) Leasing of Motor Vehicles. Contractors shall abide by 48 CFR

(FAR) 8.11 and 48 CFR (DEAR) 908.11.

(n) Management, Acquisition and Use of Information Resources.

The contractor shall provide in its purchasing system and methods,

with regard to the purchase of automatic data processing resources

and telecommunications facilities, services, and equipment, for

review and approval of requirements in ways that conform to the

procedures contained in applicable DOE Directives (Orders and

Notices).

(o) Priorities, Allocations and Allotments. The contractor shall

provide in its purchasing system and methods for the extension to

appropriate subcontracts of priorities, allocations and allotments

in accordance with the clause or clauses of this contract dealing

with priorities and allocations.

(p) Purchase of Special Items. Purchase of the following items

shall be in accordance with the following provisions of 48 CFR

(DEAR) subpart 908.71 and the Federal Property Management

Regulations, as shown:

(1) Motor vehicles

908.7101

(2) Aircraft

908.7102

(3) Security Cabinets

908.7106

(4) Alcohol

908.7107

(5) Helium

908.7108

(6) Fuels and packaged petroleum products

908.7109

(7) Coal

908.7110

(8) Arms and Ammunition

908.7111

(9) Heavy Water

908.7121(a)

(10) Precious Metals

908.7121(b)

(11) Lithium

908.7121(c)

(12) Products and services of the blind and severely handicapped

FPMR 41 CFR 101-26.701

(13) Products made in Federal penal and correctional institutions

FPMR 41 CFR 101-26.702

(q) Purchase vs. Lease Determinations. The contractor shall

provide for a system to determine whether required equipment and

property should be purchased or leased. The system shall establish

appropriate thresholds for application of lease vs. purchase

determinations and shall be used in making such determinations: (1)

at time of original acquisition; (2) when lease renewals are being

considered; and (3) at other times as circumstances warrant.

(r) Quality Assurance. The contractor shall provide no less

protection for the Government in its subcontracts than is provided

in the prime contract.

(s) Setoff of Assigned Subcontractor Proceeds. The contractor

shall provide that in cases in which a subcontractor has been

permitted to assign payments to a financial institution, the

assignment shall treat any right of setoff in accordance with 48 CFR

(DEAR) 932.803.

(t) Strategic and Critical Materials. The contractor may use

strategic and critical materials and shall fulfill its requirements

in accordance with 48 CFR (FAR) 8.002.

(u) Suspended, Debarred or Ineligible Contractors. Proposed

awards to firms or individuals on the GSA Consolidated List of

Debarred, Suspended and Ineligible Contractors shall be forwarded to

DOE for approval notwithstanding any prior purchasing system

acceptance.

(v) Termination. When subcontracts are terminated as a result of

the termination of all or a portion of this contract, the contractor

shall settle with subcontractors in conformity with the policies and

principles relating to settlement of prime contracts in 48 CFR (FAR)

subparts 49.1, 49.2 and 49.3. When subcontracts are terminated for

reasons other than termination of this contract, the contractor

shall settle such subcontracts in general conformity with the

policies and principles in 48 CFR (FAR) subparts 49.1, 49.2, 49.3

and 49.4. Each such termination shall be documented and consistent

with the terms of this contract. Terminations which require approval

by the Government shall be supported by accounting data and other

information as may be directed by the contracting officer.

(w) Unclassified Controlled Nuclear Information. In its

purchasing system and methods, the contractor shall provide for the

treatment of unclassified uncontrolled nuclear information to be

handled in accordance with 10 CFR part 1017.

970.5204-24 Subcontractor cost or pricing data.

5. At 970.5204-24, Subcontractor cost or pricing data, remove the

phrase ``As prescribed in 970.7104-11,'' from the introductory text.

970.5204-45 Termination.

6. At 970.5204-45, Termination, remove the phrase ``As prescribed

in 970.7104-30,'' from the introductory text.

970.5204-50 Cost and schedule control systems.

7. At 970.5204-50, Cost and schedule control systems, remove the

phrase ``As prescribed in 970.7104-40,'' from the introductory text.

8. Add new subsection 970.5204-XX, Flowdown of contract

requirements to subcontracts, to read as set forth below:

970.5204-XX Flowdown of contract requirements to subcontracts.

Insert the following clause.

Flowdown of Contract Requirements to Subcontracts (month year

TBE).

(a) The contractor shall include the clauses in paragraph (b) of

this clause in appropriate subcontracts.

(1) To the extent that the clause is included in this prime

contract, the contractor shall comply with that portion of the

clause that directs application to subcontracts.

(2) To the extent that the clause is not included in this prime

contract, or where it is included, but there is no instruction for

treatment in subcontracts, the contractor shall include the clause

in accordance with applicable regulatory guidance which would apply

if the subcontract were a prime contract with the Federal

government.

(3) In all cases, where a regulation is cited, the contractor

shall comply with the regulation in administration of the related

clause.

(b) Clauses and related regulations.

(1) Air transportation by U.S.-flag carriers. Clause at 48 CFR

(FAR) 52.247-63.

(2) Anti-Kickback Act of 1986. Clause at 48 CFR (FAR) 52.203-7.

(3) Clean Air and Water. Clause at 48 CFR (FAR) 52.223-2, and

follow the requirements of 48 CFR (FAR) 23.1.

(4) Contract Work Hours and Safety Standards Act. Clause at 48

CFR (FAR) 52.222-4, and follow the requirements of 48 CFR (FAR)

22.3.

(5) Cost or Pricing Data. Clause at 48 CFR (DEAR) 970.5204-24.

(6) Cost and Schedule Control Systems. Clause at 48 CFR (DEAR)

970.5204-50.

(7) Cost Accounting Standards. Clause at 48 CFR (FAR) 52.230-2,

as prescribed in 48 CFR (DEAR) 970.30.

(8) Davis-Bacon Act. Clauses as directed at 48 CFR (FAR) 22.407,

and follow the requirements of 48 CFR (FAR) 22.4 to the same extent

that they would apply if the subcontract had been directly awarded

by DOE. 48 CFR (DEAR) Subpart 922.4 and 48 CFR (DEAR) 970.2273

provide guidance to assist in determining the applicability of these

regulations.

(9) Employment of the Handicapped. Clause at 48 CFR (FAR)

52.222-36, and follow the requirements of 48 CFR (FAR) 22.14.

(10) Environmental and Occupational Safety and Health. Clauses

as prescribed in 48 CFR (DEAR) 970.2303-2. [[Page 20668]]

(11) Equal Employment Opportunity. Clauses as prescribed in 48

CFR (FAR) 22.810, as applicable, and follow the requirements of 48

CFR (FAR) 22.8, 48 CFR (DEAR) 922.8, E.O. 11246 and 40 CFR part 60.

(12) Examination of Records by Comptroller General. Clause at 48

CFR (FAR) 52.215-1.

(13) Foreign Travel. Clause at 48 CFR (DEAR) 970.5204-52.

(14) Nuclear Hazards Indemnity. Clause at 48 CFR (DEAR)

970.2870.

(15) Officials Not To Benefit. Clause at 48 CFR (FAR) 52.203-1.

(16) Organizational Conflicts of Interest. Clause at 48 CFR

(DEAR) 952.209-72.

(17) Patent, Data and Copyrights. Appropriate clauses as

required by 48 CFR (DEAR) parts 927 and 970.

(18) Printing. Clause at 48 CFR (DEAR) 970.5204-19.

(19) Privacy Act. Clauses at 48 CFR (FAR) 52.224-1 and 48 CFR

(FAR) 52.224-2, and follow the requirements of 48 CFR (FAR) 24.1.

(20) Record Retention. Clause at 48 CFR (DEAR) 970.5204-9.

(21) Safeguarding Classified Information. Appropriate clauses as

prescribed at 48 CFR (DEAR) 970.0404.

(22) Service Contract Act. Clauses at 48 CFR (FAR) 52.222-40 and

48 CFR (FAR) 52.222-41.

(23) Small Business and Small Disadvantaged Business Concerns.

Clause at 48 CFR (FAR) 52.219-9.

(24) Special Disabled and Vietnam Era Veterans. Clause at 48 CFR

(FAR) 52.222-35, and follow the requirements of 48 CFR (FAR) Subpart

22.13.

(25) Taxes. Clause at 48 CFR (DEAR) 970.5204-23.

(26) Termination. Appropriate clause or clauses as set forth at

48 CFR (FAR) 52.249-1 through 52.249-14.

(c) Other. Errors in or omissions from the above DOE-compiled

listing of contract requirements requiring flowdown to appropriate

subcontracts shall not be construed as waiving a requirement for the

contractor to comply with a requirement for subcontracts appearing

elsewhere in this contract or a requirement for subcontracts as

required by law. Such errors or omissions shall not form the basis

for a defense by the contractor in a legal or administrative

proceeding.

[FR Doc. 95-10262 Filed 4-26-95; 8:45 am]

BILLING CODE 6450-01-P