Nonprocurement Debarment and Suspension
Federal RegisterJun 26, 1995
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[Federal Register Volume 60, Number 122 (Monday, June 26, 1995)]
[Rules and Regulations]
[Pages 33037-33064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14725]
Federal Register / Vol. 60, No. 122 / Monday, June 26, 1995 / Rules
and Regulations
[[Page 33037]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 970
DEPARTMENT OF AGRICULTURE
7 CFR Part 3017
DEPARTMENT OF ENERGY
10 CFR Part 1036
SMALL BUSINESS ADMINISTRATION
13 CFR Part 145
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
14 CFR Part 1265
DEPARTMENT OF COMMERCE
15 CFR Part 26
OFFICE OF NATIONAL DRUG CONTROL POLICY
21 CFR Part 1404
DEPARTMENT OF STATE
22 CFR Part 137
INTERNATIONAL DEVELOPMENT COOPERATION AGENCY
Agency for International Development
22 CFR Part 208
PEACE CORPS
22 CFR Part 310
UNITED STATES INFORMATION AGENCY
22 CFR Part 513
INTER-AMERICAN FOUNDATION
22 CFR Part 1006
AFRICAN DEVELOPMENT FOUNDATION
22 CFR Part 1508
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 24
DEPARTMENT OF JUSTICE
28 CFR Part 67
DEPARTMENT OF LABOR
29 CFR Part 98
FEDERAL MEDIATION AND CONCILIATION SERVICE
29 CFR Part 1471
DEPARTMENT OF THE TREASURY
31 CFR Part 19
DEPARTMENT OF DEFENSE
32 CFR Part 25
DEPARTMENT OF EDUCATION
34 CFR Parts 85, 668, and 682
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
36 CFR Part 1209
DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 44
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 32
GENERAL SERVICES ADMINISTRATION
41 CFR Part 105-68
DEPARTMENT OF THE INTERIOR
43 CFR Part 12
FEDERAL EMERGENCY MANAGEMENT AGENCY
44 CFR Part 17
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 76
NATIONAL SCIENCE FOUNDATION
45 CFR Part 620
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
National Endowment for the Arts
45 CFR Part 1154
National Endowment for the Humanities
45 CFR Part 1169
Institute of Museum Services
45 CFR Part 1185
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
45 CFR Part 2542
DEPARTMENT OF TRANSPORTATION
49 CFR Part 29
Nonprocurement Debarment and Suspension
AGENCIES: Department of Agriculture; Department of Commerce; Department
of Defense; Department of Education; Department of Energy; Department
of Health and Human Services; Department of Housing and Urban
Development; Department of the Interior; Department of Justice;
Department of Labor; Department of State; Department Transportation;
Department of the Treasury; Department of Veterans Affairs; African
Development Foundation; Agency for International Development,
International Development Cooperation Agency; Corporation for National
and Community Service; Environmental Protection Agency; Federal
Emergency Management Agency; Federal Mediation and Conciliation
Service; General Services Administration; Institute of Museum Services,
National Foundation on the Arts and Humanities (NFAH); Inter-American
Foundation; National Aeronautics and Space Administration; National
Archives and Records Administration; National Endowment for the Arts,
NFAH; National Endowment for the Humanities, NFAH; National Science
Foundation; Office of National Drug Control Policy; Office of Personnel
Management; Peace Corps; Small Business Administration; United States
Information Agency.
ACTION: Final Regulations and, for the Department of Transportation
only, Interim Final Regulations with an opportunity to comment.
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SUMMARY: This revision to the nonprocurement common rule is issued in
response to Executive Order (E.O.) 12689 and section 2455 of the
Federal Acquisition Streamlining Act of 1994. E.O. 12689 requires
agencies to establish regulations for reciprocal governmentwide effect
across procurement and nonprocurement debarment and suspension actions,
after technical differences between the procurement and nonprocurement
regulations governing debarments and suspensions are resolved. Section
2455 provides that the debarment, suspension, or other exclusion of a
participant in a procurement activity under the Federal Acquisition
Regulation, or in a nonprocurement activity under regulations issued
pursuant to Executive Order 12549, shall be given reciprocal
governmentwide effect. The final regulation establishes reciprocity
between the procurement and nonprocurement debarment and suspension
systems.
DATES: These final regulations and the Department of Transportation's
(DOT's) interim final regulations become effective August 25, 1995. For
comment [[Page 33038]] information on DOT's interim final regulations,
see DOT's agency-specific preamble.
FOR FURTHER INFORMATION CONTACT: See preambles of individual agencies
below.
SUPPLEMENTARY INFORMATION: On December 20, 1994, all but one of the
agencies participating in the development of this final rule published
a notice of proposed rulemaking (NPRM) that proposed to make changes to
the nonprocurement debarment and suspension Common Rule (Common Rule)
to provide for reciprocal effect between procurement and nonprocurement
debarments, suspensions, and other exclusionary actions. The history of
the nonprocurement debarment and suspension system and of the effort to
establish reciprocity between the procurement and nonprocurement
debarment and suspension systems was described in the December 20, 1994
NPRM. See 59 FR 65607.
The Department of Transportation, which did not join in publishing
the NPRM, is joining in the publication of this regulation as an
interim final rule. See the Department of Transportation's preamble to
this regulation for a discussion regarding its participation in the
Common Rule.
Technical changes to the regulations are generally not discussed in
this preamble. The notice of proposed rulemaking (NPRM) proposed
amendments to the Common Rule only as necessary to achieve the
objectives of reciprocity or to correct printing errors in the original
regulations. The NPRM used this approach to focus attention on those
substantive matters that were directly affected by the reciprocity
rule. In this final regulation, fuller text is provided, including, at
a minimum, the entire paragraph where any change is made, so that
readers may see the amendments in context. The text of the Common Rule
amendments is set out at the end of this preamble and is followed by
the agency-specific preambles and any agency-specific amendments to the
Common Rule.
Response to Comments
Five commenters provided their views on the proposed amendments to
the Common Rule. Eight comments were also submitted regarding the
effect of the proposed rule on specific agencies or regarding specific
additional changes to the Common Rule that were proposed by certain
agencies. Those comments are addressed in the agency-specific preambles
that follow the amendments to the Common Rule.
Request for Future Rulemaking
The Administrative Conference of the United States (ACUS) submitted
a comment supporting the proposed reciprocity amendments and asked that
the agencies participating in this rulemaking effort initiate a
subsequent rulemaking effort to consider additional changes to the
Common Rule and the Federal Acquisition Regulation (FAR), consistent
with ACUS Recommendation 95-2, which that agency adopted on January 19,
1995. Another commenter mentioned the ACUS recommendation and asked
that it be considered in a future rulemaking action, noting
particularly that part of the recommendation regarding the need for
agencies to consider mitigating and aggravating circumstances. The
agencies participating in this rulemaking action agree that additional
changes to the Common Rule should be considered and will consider
Recommendation 95-2 along with other proposed changes to the Common
Rule before the end of this year.
Should the FAR be amended so that proposed debarments would not be
effective?
Comment: Three of the commenters were concerned about a difference
between the procurement and nonprocurement rules that was not addressed
by the NPRM. Under the FAR subpart 9.4, Debarment, Suspension, and
Ineligibility, a proposed debarment has the effect of excluding a party
from receiving a contract. In contrast, under the Common Rule, a
proposed debarment has no effect on a person's eligibility to
participate in a nonprocurement program. In each of the three comments,
the commenter asked that the FAR rule be amended so that proposed
debarments under subpart 9.4 would have no effect.
Discussion: While the three comments request changes to the FAR and
do not technically request any change to the Common Rule, the agencies
participating in this rulemaking action agree that there is no need to
change either rule so that the effect of a proposed debarment is the
same under both debarment and suspension systems. The request to make
the two rules the same on this matter misconstrues the purpose and
effect of the reciprocity effort.
The purpose of the proposed reciprocity rule is to ensure that,
once one agency takes action to exclude a person and that person is
placed on the List of Parties Excluded from Federal Procurement and
Nonprocurement Programs, all agencies will honor that determination. In
deciding whether to take an action to exclude a person, the agency
considers whether a person's present responsibility is affected such
that the person poses a risk to the Federal Government. The agencies
did not intend that the decision to give reciprocity would require the
agencies to change the two debarment and suspension systems and
establish identical procedures for excluding persons under both the FAR
and the Common Rule.
Change: None.
Comment: One commenter thought that the nonprocurement common
rule's recognition of proposed debarments under the FAR went beyond the
authority in section 2455 of the Federal Acquisition Streamlining Act,
which provides that ``Regulations shall be issued providing that
provisions for the debarment, suspension, or other exclusion of a
participant in a procurement activity under the Federal Acquisition
Regulation (FAR), or in a nonprocurement activity under regulations
issued pursuant to Executive Order 12549, shall have government-wide
effect.'' The commenter pointed out that this statute does not list
proposed debarments specifically and, therefore, argued that the
nonprocurement rule could not give effect to proposed debarments
entered under the FAR. The commenter suggested that the phrase ``other
exclusion'' probably referred to voluntary exclusions under section
________.210 of the common rule.
Discussion: Section 2455 does not limit, as suggested by the
commenter, the scope of the amendments that agencies may make to the
Common Rule. The passage quoted by the commenter states that agencies
shall give effect under the Common Rule to ``debarment, suspension, or
other exclusion of a participant in a procurement activity under the
Federal Acquisition Regulation (FAR)'' (emphasis added). A proposed
debarment is an exclusion under the FAR, thus, section 2455 of the
Streamlining Act authorizes agencies to promulgate nonprocurement rules
that give effect to proposed debarments under the FAR. The commenter's
suggestion that ``other exclusion'' referred to voluntary exclusions
does not bear weight. There is no history that Congress intended to
limit that term to a unique exclusion that exists in only one system.
Rather, ``other exclusion'' must refer to any exclusion that has effect
under either system.
Change: None.
Comment: One commenter raised a hypothetical situation which it
believed demonstrated a difficulty between the [[Page 33039]] two rules
regarding the enforceability under the common rule of proposed
debarments entered under the FAR. In the commenter's example, two dairy
companies (Dairy X and Dairy Y) are attempting to enter into like
transactions with the Federal Government. Dairy X has been proposed for
debarment under the FAR while Dairy Y has been proposed for debarment
under the nonprocurement regulations. Under the proposed regulations,
Dairy Y could be considered for a contract under the FAR but Dairy X
could not be considered for a contract under the FAR. The commenter was
uncomfortable with the alleged disparate treatment of the two dairies.
Discussion: The commenter is correct that Dairy X would be excluded
but Dairy Y would not be excluded. However, if Dairy Y posed an
immediate threat to the Federal Government, the agency that proposed
its debarment under the nonprocurement regulations could suspend Dairy
Y under those regulations. In short, while the two systems use slightly
different mechanisms to protect the Federal Government, those
differences do not need to be eliminated in order to give reciprocity
for actions taken under the two systems.
Change: None.
Section ______ .100 Purpose
Comment: One commenter noted that the list of excluded persons
under paragraph (c) of section ________ .100 differed from the list
included in the definition for the List of Parties Excluded from
Federal Procurement and Nonprocurement Programs included in
Sec. ________.105, focusing on the fact that paragraph (c) in section
________.100 did not mention voluntarily excluded persons.
Discussion: A review of the Common Rule, including those portions
not amended by the proposed rule reveals that the purpose section does
mention voluntary exclusions in its more detailed provisions
implementing Executive Order 12549 (See section ________ .100(b)(3)).
These detailed provisions did not need to be set out again to indicate
the actions under the FAR that would be added to the List as a result
of the reciprocity rule.
Change: None.
Section ________ .105 Definitions
Comment: One commenter noted differences between the FAR definition
and the Common Rule definition for the List of Parties Excluded from
Federal Procurement and Nonprocurement Programs and requested that the
Common Rule use the FAR language. This commenter also asked that the
nonprocurement Common Rule definition of the List not refer to the
authorizing executive orders because the authority for a debarment or
suspension would be the regulations of the agency that took the action.
Discussion: The substance of the two definitions is identical and
the reason for the different language used in the two definitions is
the different contexts in which the definitions appear. The FAR
definition refers to ``parties'' while the nonprocurement Common Rule
refers to ``persons.'' The term ``parties'' is used throughout the FAR
to refer to contractors. The Common Rule refers to ``persons'' because
many of the entities covered by a nonprocurement debarment or
suspension do not have a relationship of privity with the Federal
Government.
Regarding the request not to refer to the executive orders, no
change is made because these executive orders address substantive, not
merely procedural authority for the agency regulations under which a
debarment or suspension is entered.
Change: None.
Section ________ .110, Coverage.
Comment: One commenter asked that the references to the executive
orders and to section 2455 of the Federal Acquisition Streamlining Act
of 1994 (Public Law 103-355) be removed from the proposed reciprocity
rule in Sec. ________ .110(c).
Discussion: The agencies participating in this rulemaking action
believe that it is appropriate to cite the substantive authority for
reciprocity in the actual paragraph that gives effect to that
authority.
Change: None.
Comment: One commenter thought that a suspension imposed different
burdens than a debarment. Thus, the commenter was concerned that the
reciprocity phrase requiring a FAR debarment or suspension to ``be
recognized * * * as an exclusion'' should be changed to require that a
FAR debarment or suspension ``be recognized * * * as a comparable
action.'' This commenter had a similar concern regarding the
recognition of governmentwide nonprocurement exclusions under the FAR.
Discussion: This comment starts from a mistaken view. Once a person
or party is excluded from participation in a nonprocurement transaction
or from entering into a contract, that person is treated the same way,
whether the person entered that excluded state by being suspended or
debarred. Thus, once a party or person is excluded, no agency may do
business with the party or person unless the agency affirmatively makes
a decision under the exception provision in Sec. ________ .215 and
states the need for the exception. Because all persons or parties on
the List are treated the same, there is no need to make the requested
change.
Change: None.
Comment: One commenter suggested that the phrase ``after [the
effective date of this rule]'' be added after the phrase ``imposed
under this regulation'' so that the reciprocity provision regarding FAR
recognition of nonprocurement exclusions would be parallel to the
reciprocity provision regarding nonprocurement recognition of FAR
exclusions.
Discussion: The agencies agree.
Change: The phrase ``after [date 60 days after publication]'' will
be added after the phrase ``imposed under this regulation'' in the
second sentence of Sec. ________.110(c).
Comment: One commenter noted that the proposed reciprocity rule did
not address how actions will be treated that are in process when the
rule becomes effective. The commenter thought that these actions should
be ``grandfathered'' under the current rule.
Discussion: Actions initiated by notices of proposed debarments or
suspensions sent to respondents before the date this rule becomes
effective generally will not be given reciprocity because these
regulations require a notice of proposed debarment to specify the
potential effect of a debarment or suspension (See Sec. ________.312(e)
and Sec. ________.411(g)). However, some agencies already run
simultaneous actions under both the FAR and the Common Rule, citing the
authority of both and giving notice that the action will be effective
under both the FAR and the Common Rule. For these agencies, their
actions will be effective on both sides. Once the rule becomes
effective, these agencies will no longer need to afford to respondents
the procedures of both rules in order to give effect on both sides.
However, after the effective date of these regulations, agencies will
have to give notice that actions initiated under the Common Rule will
affect an entity's ability to receive contracts under the FAR.
In order to clarify this result, Sec. ________.110(c) is amended to
state that the new rule applies to actions ``initiated'' after the
effective date of the rule rather than applying the new reciprocity
rule to actions ``imposed'' after the effective date of the reciprocity
rule. A proposed debarment or suspension is initiated when an agency
[[Page 33040]] sends notice of the action to the respondent.
Change: Section ________.110(c), as added by this rulemaking
action, is amended to apply the new regulation to actions initiated on
or after the effective date of the regulation.
Section ________.200 Debarment or Suspension
Comment: One commenter was particularly concerned about the
differences in the flow down of an action under the FAR and the Common
Rule. Under Sec. ________.200(b), a debarment affects a person's
ability to participate in lower tier covered transactions. In contrast,
under the FAR rule, a debarment affects a party's ability to enter into
contracts and places limitations on a Federal Government prime
contractor's ability to contract with first tier subcontractors who
have been debarred, suspended or proposed for debarment. The commenter
wanted to know whether a debarment entered under the FAR would be
limited in its flow down under the Common Rule and, conversely, whether
a debarment entered under the Common Rule would have to be honored at a
lower level under the FAR.
Discussion: The Reciprocity rule established under this rulemaking
effort does not affect the flow down of either the FAR or the Common
Rule. Once a person is excluded, that person will be treated the same
under these regulations as any other person for purposes of determining
the entity's ability to participate in any nonprocurement covered
transaction. The fact that the person was excluded as a result of an
action taken under the FAR does not make the person eligible under
these regulations to enter into lower tier covered transactions. The
same is true for treatment of a debarment under the FAR; the fact that
a debarment was entered under the Common Rule does not prohibit the
excluded person from entering into a first tier subcontract provided
the Federal Government prime contractor notifies the Contracting
Officer of its compelling reasons for doing business with the otherwise
excluded subcontractor.
Change: For clarification, Section ________.200 is amended to add
proposed for debarment under the FAR.
Section ________.215 Exception Provision.
Comment: One commenter recommended that the exception provision be
amended to ensure that, under the Common Rule, agencies could give an
exception permitting participation by a party that is proposed for
debarment under the FAR.
Discussion: The agencies participating in this rulemaking effort
agree with the concern that an agency should have the same amount of
discretion to permit participation in a covered transaction of a party
that has been proposed for debarment under the FAR as it would to
permit participation by any other excluded entity.
Change: Section ________.215 is amended so that parties proposed
for debarment under the FAR can be considered for participation in
covered transactions under the exception rule.
Section ______.220 Continuation of covered transactions.
Comment: One commenter noted that a party that is proposed for
debarment under the FAR should be treated the same as other excluded
parties in that the party's proposed debarment should not affect the
party's ability to participate in a covered transaction entered into
before the proposed debarment was issued.
Discussion: The agencies participating in this rulemaking agree.
Change: Section ______.220 is amended to ensure that parties that
have been proposed for debarment under the FAR will be treated the same
under Sec. ________.220 as other persons who have been excluded.
Appendices A and B
Discussion: Certain changes have been made in Appendices A and B,
which contain the instructions for certifications and certifications
for primary and lower tier participants. These technical changes
recognize that proposed debarments entered under the FAR will be given
effect under the Common Rule.
Change: A reference to proposed debarments initiated under the FAR
has been added in appropriate places throughout the instructions in
Appendices A and B.
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OFFICE OF PERSONNEL MANAGEMENT
Text of the Common Rule
The text of the common rule appears below:
PART ________--GOVERNMENTWIDE DEBARMENT AND SUSPENSION
(NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE
WORKPLACE (GRANTS)
1. Section ________.100 is revised to read as follows:
Sec. ________.100 Purpose.
(a) Executive Order (E.O.) 12549 provides that, to the extent
permitted by law, Executive departments and agencies shall participate
in a governmentwide system for nonprocurement debarment and suspension.
A person who is debarred or suspended shall be excluded from Federal
financial and nonfinancial assistance and benefits under Federal
programs and activities. Debarment or suspension of a participant in a
program by one agency shall have governmentwide effect.
(b) These regulations implement section 3 of E.O. 12549 and the
guidelines promulgated by the Office of Management and Budget under
section 6 of the E.O. by:
(1) Prescribing the programs and activities that are covered by the
governmentwide system;
(2) Prescribing the governmentwide criteria and governmentwide
minimum due process procedures that each agency shall use;
(3) Providing for the listing of debarred and suspended
participants, participants declared ineligible (see definition of
``ineligible'' in Sec. ________.105), and participants who have
voluntarily excluded themselves from participation in covered
transactions;
(4) Setting forth the consequences of a debarment, suspension,
determination of ineligibility, or voluntary exclusion; and
(5) Offering such other guidance as necessary for the effective
implementation and administration of the governmentwide system.
(c) These regulations also implement Executive Order 12689 (3 CFR,
1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103-355, sec.
2455, 108 Stat. 3327) by--
(1) Providing for the inclusion in the List of Parties Excluded
from Federal Procurement and Nonprocurement Programs all persons
proposed for debarment, debarred or suspended under the Federal
Acquisition Regulation, 48 CFR Part 9, subpart 9.4; persons against
which governmentwide exclusions have been entered under this part; and
persons determined to be ineligible; and
(2) Setting forth the consequences of a debarment, suspension,
determination of ineligibility, or voluntary exclusion.
(d) Although these regulations cover the listing of ineligible
participants and the effect of such listing, they do not prescribe
policies and procedures governing declarations of ineligibility.
2. Section ________.105 is amended by adding introductory text,
removing paragraph designations for the definitions and placing them in
alphabetical order, removing the [[Page 33041]] definition for
``Nonprocurement List'', adding, in alphabetical order, a definition
for ``List of Parties Excluded from Federal Procurement and
Nonprocurement Programs'', and revising the definitions for
``Affiliate'', ``Conviction'', and ``Legal proceedings'' to read as
follows:
Sec. ________.105 Definitions.
The following definitions apply to this part:
Affiliate. Persons are affiliates of each other if, directly or
indirectly, either one controls or has the power to control the other,
or, a third person controls or has the power to control both. 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 suspension or debarment of a person which has
the same or similar management, ownership, or principal employees as
the suspended, debarred, ineligible, or voluntarily excluded person.
* * * * *
Conviction. A judgment or conviction of a criminal offense by any
court of competent jurisdiction, whether entered upon a verdict or a
plea, including a plea of nolo contendere.
* * * * *
Legal proceedings. Any criminal proceeding or any civil judicial
proceeding to which the Federal Government or a State or local
government or quasi-governmental authority is a party. The term
includes appeals from such proceedings.
List of Parties Excluded from Federal Procurement and
Nonprocurement Programs. A list compiled, maintained and distributed by
the General Services Administration (GSA) containing the names and
other information about persons who have been debarred, suspended, or
voluntarily excluded under Executive Orders 12549 and 12689 and these
regulations or 48 CFR part 9, subpart 9.4, persons who have been
proposed for debarment under 48 CFR part 9, subpart 9.4, and those
persons who have been determined to be ineligible.
* * * * *
3. Section ________.110 is amended by revising paragraph (c) to
read as follows:
Sec. ________.110 Coverage.
* * * * *
(c) Relationship to Federal procurement activities. In accordance
with E.O. 12689 and section 2455 of Public Law 103-355, any debarment,
suspension, proposed debarment or other governmentwide exclusion
initiated under the Federal Acquisition Regulation (FAR) on or after
August 25, 1995 shall be recognized by and effective for Executive
Branch agencies and participants as an exclusion under this regulation.
Similarly, any debarment, suspension or other governmentwide exclusion
initiated under this regulation on or after August 25, 1995 shall be
recognized by and effective for those agencies as a debarment or
suspension under the FAR.
4. Section ________.200 is revised to read as follows:
Sec. ________.200 Debarment or suspension.
(a) Primary covered transactions. Except to the extent prohibited
by law, persons who are debarred or suspended shall be excluded from
primary covered transactions as either participants or principals
throughout the Executive Branch of the Federal Government for the
period of their debarment, suspension, or the period they are proposed
for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency
shall enter into primary covered transactions with such excluded
persons during such period, except as permitted pursuant to
Sec. ________.215.
(b) Lower tier covered transactions. Except to the extent
prohibited by law, persons who have been proposed for debarment under
48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded
from participating as either participants or principals in all lower
tier covered transactions (see Sec. ________.110(a)(1)(ii)) for the
period of their exclusion.
(c) Exceptions. Debarment or suspension does not affect a person's
eligibility for--
(1) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(2) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, and
entities consisting wholly or partially of foreign governments or
foreign governmental entities;
(3) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits
received in an individual's business capacity are not excepted);
(4) Federal employment;
(5) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(6) Incidental benefits derived from ordinary governmental
operations; and
(7) Other transactions where the application of these regulations
would be prohibited by law.
5. Section ________.215 is revised to read as follows:
Sec. ________.215 Exception provision.
[Agency] may grant an exception permitting a debarred, suspended,
or voluntarily excluded person, or a person proposed for debarment
under 48 CFR part 9, subpart 9.4, to participate in a particular
covered transaction upon a written determination by the agency head or
an authorized designee stating the reason(s) for deviating from the
Presidential policy established by Executive Order 12549 and
Sec. ________.200. However, in accordance with the President's stated
intention in the Executive Order, exceptions shall be granted only
infrequently. Exceptions shall be reported in accordance with
Sec. ________.505(a).
6. Section ________.220 is revised to read as follows:
Sec. ________.220 Continuation of covered transactions.
(a) Notwithstanding the debarment, suspension, proposed debarment
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or
voluntary exclusion of any person by an agency, agencies and
participants may continue covered transactions in existence at the time
the person was debarred, suspended, proposed for debarment under 48 CFR
part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A
decision as to the type of termination action, if any, to be taken
should be made only after thorough review to ensure the propriety of
the proposed action.
(b) Agencies and participants shall not renew or extend covered
transactions (other than no-cost time extensions) with any person who
is debarred, suspended, proposed for debarment under 48 CFR part 9,
subpart 9.4, ineligible or voluntary excluded, except as provided in
Sec. ________.215.
7. Section ________.225 is revised to read as follows:
Sec. ________.225 Failure to adhere to restrictions.
(a) Except as permitted under Sec. ________.215 or
Sec. ________.220, a participant shall not knowingly do
[[Page 33042]] business under a covered transaction with a person who
is--
(1) Debarred or suspended;
(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or
(3) Ineligible for or voluntarily excluded from the covered
transaction.
(b) Violation of the restriction under paragraph (a) of this
section may result in disallowance of costs, annulment or termination
of award, issuance of a stop work order, debarment or suspension, or
other remedies as appropriate.
(c) A participant may rely upon the certification of a prospective
participant in a lower tier covered transaction that it and its
principals are not debarred, suspended, proposed for debarment under 48
CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the
covered transaction (See Appendix B of these regulations), unless it
knows that the certification is erroneous. An agency has the burden of
proof that a participant did knowingly do business with a person that
filed an erroneous certification.
8. Appendix A is revised to read as follows:
Appendix A to Part________--Certification Regarding Debarment,
Suspension, and Other Responsibility Matters--Primary Covered
Transactions
Instructions for Certification
1. By signing and submitting this proposal, the prospective
primary participant is providing the certification set out below.
2. The inability of a person to provide the certification
required below will not necessarily result in denial of
participation in this covered transaction. The prospective
participant shall submit an explanation of why it cannot provide the
certification set out below. The certification or explanation will
be considered in connection with the department or agency's
determination whether to enter into this transaction. However,
failure of the prospective primary participant to furnish a
certification or an explanation shall disqualify such person from
participation in this transaction.
3. The certification in this clause is a material representation
of fact upon which reliance was placed when the department or agency
determined to enter into this transaction. If it is later determined
that the prospective primary participant knowingly rendered an
erroneous certification, in addition to other remedies available to
the Federal Government, the department or agency may terminate this
transaction for cause or default.
4. The prospective primary participant shall provide immediate
written notice to the department or agency to which this proposal is
submitted if at any time the prospective primary participant learns
that its certification was erroneous when submitted or has become
erroneous by reason of changed circumstances.
5. The terms covered transaction, debarred, suspended,
ineligible, lower tier covered transaction, participant, person,
primary covered transaction, principal, proposal, and voluntarily
excluded, as used in this clause, have the meanings set out in the
Definitions and Coverage sections of the rules implementing
Executive Order 12549. You may contact the department or agency to
which this proposal is being submitted for assistance in obtaining a
copy of those regulations.
6. The prospective primary participant agrees by submitting this
proposal that, should the proposed covered transaction be entered
into, it shall not knowingly enter into any lower tier covered
transaction with a person who is proposed for debarment under 48 CFR
part 9, subpart 9.4, debarred, suspended, declared ineligible, or
voluntarily excluded from participation in this covered transaction,
unless authorized by the department or agency entering into this
transaction.
7. The prospective primary participant further agrees by
submitting this proposal that it will include the clause titled
``Certification Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion-Lower Tier Covered Transaction,'' provided by
the department or agency entering into this covered transaction,
without modification, in all lower tier covered transactions and in
all solicitations for lower tier covered transactions.
8. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
transaction that it is not proposed for debarment under 48 CFR part
9, subpart 9.4, debarred, suspended, ineligible, or voluntarily
excluded from the covered transaction, unless it knows that the
certification is erroneous. A participant may decide the method and
frequency by which it determines the eligibility of its principals.
Each participant may, but is not required to, check the List of
Parties Excluded from Federal Procurement and Nonprocurement
Programs.
9. Nothing contained in the foregoing shall be construed to
require establishment of a system of records in order to render in
good faith the certification required by this clause. The knowledge
and information of a participant is not required to exceed that
which is normally possessed by a prudent person in the ordinary
course of business dealings.
10. Except for transactions authorized under paragraph 6 of
these instructions, if a participant in a covered transaction
knowingly enters into a lower tier covered transaction with a person
who is proposed for debarment under 48 CFR part 9, subpart 9.4,
suspended, debarred, ineligible, or voluntarily excluded from
participation in this transaction, in addition to other remedies
available to the Federal Government, the department or agency may
terminate this transaction for cause or default.
Certification Regarding Debarment, Suspension, and Other
Responsibility Matters--Primary Covered Transactions
(1) The prospective primary participant certifies to the best of
its knowledge and belief, that it and its principals:
(a) Are not presently debarred, suspended, proposed for
debarment, declared ineligible, or voluntarily excluded by any
Federal department or agency;
(b) Have not within a three-year period preceding this proposal
been convicted of or had a civil judgment rendered against them for
commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public (Federal,
State or local) transaction or contract under a public transaction;
violation of Federal or State antitrust statutes or commission of
embezzlement, theft, forgery, bribery, falsification or destruction
of records, making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or
civilly charged by a governmental entity (Federal, State or local)
with commission of any of the offenses enumerated in paragraph
(1)(b) of this certification; and
(d) Have not within a three-year period preceding this
application/proposal had one or more public transactions (Federal,
State or local) terminated for cause or default.
(2) Where the prospective primary participant is unable to
certify to any of the statements in this certification, such
prospective participant shall attach an explanation to this
proposal.
9. Appendix B is revised to read as follows:
Appendix B to Part________--Certification Regarding Debarment,
Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Covered
Transactions
Instructions for Certification
1. By signing and submitting this proposal, the prospective
lower tier participant is providing the certification set out below.
2. The certification in this clause is a material representation
of fact upon which reliance was placed when this transaction was
entered into. If it is later determined that the prospective lower
tier participant knowingly rendered an erroneous certification, in
addition to other remedies available to the Federal Government the
department or agency with which this transaction originated may
pursue available remedies, including suspension and/or debarment.
3. The prospective lower tier participant shall provide
immediate written notice to the person to which this proposal is
submitted if at any time the prospective lower tier participant
learns that its certification was erroneous when submitted or had
become erroneous by reason of changed circumstances.
4. The terms covered transaction, debarred, suspended,
ineligible, lower tier covered transaction, participant, person,
primary covered transaction, principal, proposal, and voluntarily
excluded, as used in this clause, have the meaning set out in the
Definitions and Coverage sections of rules implementing Executive
Order 12549. You may contact the person to which this proposal is
submitted for assistance in obtaining a copy of those regulations.
5. The prospective lower tier participant agrees by submitting
this proposal that, [[Page 33043]] should the proposed covered
transaction be entered into, it shall not knowingly enter into any
lower tier covered transaction with a person who is proposed for
debarment under 48 CFR part 9, subpart 9.4, debarred, suspended,
declared ineligible, or voluntarily excluded from participation in
this covered transaction, unless authorized by the department or
agency with which this transaction originated.
6. The prospective lower tier participant further agrees by
submitting this proposal that it will include this clause titled
``Certification Regarding Debarment, Suspension, Ineligibility and
Voluntary Exclusion-Lower Tier Covered Transaction,'' without
modification, in all lower tier covered transactions and in all
solicitations for lower tier covered transactions.
7. A participant in a covered transaction may rely upon a
certification of a prospective participant in a lower tier covered
transaction that it is not proposed for debarment under 48 CFR part
9, subpart 9.4, debarred, suspended, ineligible, or voluntarily
excluded from covered transactions, unless it knows that the
certification is erroneous. A participant may decide the method and
frequency by which it determines the eligibility of its principals.
Each participant may, but is not required to, check the List of
Parties Excluded from Federal Procurement and Nonprocurement
Programs.
8. Nothing contained in the foregoing shall be construed to
require establishment of a system of records in order to render in
good faith the certification required by this clause. The knowledge
and information of a participant is not required to exceed that
which is normally possessed by a prudent person in the ordinary
course of business dealings.
9. Except for transactions authorized under paragraph 5 of these
instructions, if a participant in a covered transaction knowingly
enters into a lower tier covered transaction with a person who is
proposed for debarment under 48 CFR part 9, subpart 9.4, suspended,
debarred, ineligible, or voluntarily excluded from participation in
this transaction, in addition to other remedies available to the
Federal Government, the department or agency with which this
transaction originated may pursue available remedies, including
suspension and/or debarment.
Certification Regarding Debarment, Suspension, Ineligibility an
Voluntary Exclusion--Lower Tier Covered Transactions
(1) The prospective lower tier participant certifies, by
submission of this proposal, that neither it nor its principals is
presently debarred, suspended, proposed for debarment, declared
ineligible, or voluntarily excluded from participation in this
transaction by any Federal department or agency.
(2) Where the prospective lower tier participant is unable to
certify to any of the statements in this certification, such
prospective participant shall attach an explanation to this
proposal.
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OFFICE OF PERSONNEL MANAGEMENT
Adoption of Common Rule
The agency-specific adoptions of the common rule, which appears at
the end of the common preamble, appear below.
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 970
RIN 3206-AG51
FOR FURTHER INFORMATION CONTACT: Murray M. Meeker, Attorney, Office of
the General Counsel, (202) 606-1980.
List of Subjects in 5 CFR Part 970
Administrative practice and procedure, Contract programs, Grant
programs.
Lorraine A. Green,
Deputy Director.
Title 5 of the Code of Federal Regulations, part 970 is amended as
follows.
PART 970--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
1. The authority for part 970 continues to read as follows:
Authority: Executive Order 12549 (51 FR 6370-71).
2. Section 970.100 is revised as set forth at the end of the common
preamble.
3. Sections 970.105 and 970.110 are amended as set forth at the end
of the common preamble.
4. Sections 970.200, 970.215, 970.220, and 970.225 and Appendices A
and B to Part 970 are revised as set forth at the end of the common
preamble.
BILLING CODE: 6325-01
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DEPARTMENT OF AGRICULTURE
7 CFR Part 3017
RIN 0503-AA11
FOR FURTHER INFORMATION CONTACT:
Gary W. Butler, Deputy Assistant General Counsel, Office of the General
Counsel, (202) 720-2577.
List of Subjects in 7 CFR Part 3017
Administrative practice and procedure, Contract programs, Grant
programs--Agriculture, Grants administration.
Dated: June 8, 1995.
Dan Glickman,
Secretary of Agriculture.
Title 7 of the Code of Federal Regulations, part 3017 is amended as
follows.
PART 3017--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 3017 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et
seq.); 5 U.S.C. 301.
2. Section 3017.100 is revised as set forth at the end of the
common preamble.
3. Sections 3017.105 and 3017.110 are amended as set forth at the
end of the common preamble.
4. Sections 3017.200, 307.215, 3017.220, and 3017.225 and
Appendices A and B to Part 3017 are revised as set forth at the end of
the common preamble.
BILLING CODE: 3420-01-M
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DEPARTMENT OF ENERGY
10 CFR Part 1036
RIN 1991-AA69
FOR FURTHER INFORMATION CONTACT: Cynthia Yee, Office of Clearance and
Support, Office of Procurement and Assistance Management, Human
Resources and Administration, 202-586-1140.
List of Subjects in 10 CFR Part 1036
Administrative practice and procedures, Contract programs, Grant
programs.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
Title 10 of the Code of Federal Regulations, part 1036 is amended
as follows:
PART 1036--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1036 continues to read as follows:
Authority: E.O. 12689; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et
seq.); Secs. 644 and 646, Pub. L. 95-91, 91 Stat. 599 (42 U.S.C.
7254 and 7256); Pub. L. 97-258, 98 Stat. 1003-1005 (31 U.S.C. 6301-
6308).
2. Section 1036.100 is revised as set forth at the end of the
common preamble. [[Page 33044]]
3. Sections 1036.105 and 1036.110 are amended as set forth at the
end of the common preamble.
4. Sections 1036.200, 1036.215, 1036.220, and 1036.225 and
Appendices A and B to part 1036 are revised as set forth at the end of
the common preamble.
BILLING CODE: 6450-01-M
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 145
RIN 3245-AD46
FOR FURTHER INFORMATION CONTACT: John W. Klein, Chief Counsel for
Special Programs, Office of General Counsel, U.S. Small Business
Administration, 409 3rd Street, SW, Washington, DC 20416, (202) 205-
6645.
ADDITIONAL SUPPLEMENTARY INFORMATION: As stated in the supplementary
information to the common rule, the purpose of this rule is to give
reciprocal governmentwide effect to both nonprocurement and procurement
debarment and suspension actions. SBA reads revised Sec. 145.110(c) as
having no effect on the exceptions from coverage already provided for
in Secs. 145.110(a)(2), 145.215, and 145.220. These exemptions include
SBA disaster assistance.
List of Subjects in 13 CFR Part 145
Administrative practice and procedure, Contract programs, Debarment
and suspension (nonprocurement), Grant programs, Loan programs--
business.
Dated: June 2, 1995.
Philip Lader,
Administrator.
Title 13 of the Code of Federal Regulations, Part 145 is amended as
follows:
PART 145--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for Part 145 continues to read as follows:
Authority: E.O. 12549; Secs. 5151-5160 of the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41
U.S.C. 701 et seq.); 15 U.S.C. 634(b)(6).
2. Section 145.100 is revised as set forth at the end of the common
preamble.
3. Sections 145.105 and 145.110 are amended as set forth at the end
of the common preamble.
4. Sections 145.200, 145.215, 145.220, and 145.225 and Appendices A
and B to Part 145 are revised as set forth at the end of the common
preamble.
BILLING CODE: 8025-01-M
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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
14 CFR Part 1265
RIN 2700-AB99
FOR FURTHER INFORMATION CONTACT: Thomas J. Wheland, NASA Headquarters,
Acquisition Liaison Division (Code HP), (202) 358-0475.
List of Subjects in 14 CFR Part 1265
Administrative practice and procedure, Contract programs,
Cooperative agreements, Debarment and suspension (nonprocurement),
Grant programs.
Tom Luedtke,
Deputy Associate Administrator for Procurement.
Title 14 of the Code of Federal Regulations, Part 1265 is amended
as follows.
PART 1265--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1265 continues to read as follows:
Authority: E.O. 12549; Secs. 5151-5160 of the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41
U.S.C. 701 et seq.); National Aeronautics and Space Act, Pub. L. 85-
568, July 29, 1958, as amended, sec. 203(c)(1).
2. Section 1265.100 is revised as set forth at the end of the
common preamble.
3. Sections 1265.105 and 1265.110 are amended as set forth at the
end of the common preamble.
4. Sections 1265.200, 1265.215, 1265.220 and 1265.225 and
Appendices A and B to Part 1265 are revised as set forth at the end of
the common preamble.
BILLING CODE: 7510-01-M
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DEPARTMENT OF COMMERCE
15 CFR Part 26
RIN 0605-AA02
FOR FURTHER INFORMATION CONTACT: John J. Phelan, III, 202-482-4115.
List of Subjects in 15 CFR Part 26
Administrative practice and procedure, Contract programs, Grant
administration, Grant programs, Reporting and recordkeeping
requirements.
Sonya G. Stewart,
Director for Executive Budgeting and Assistance Management.
Title 15 of the Code of Federal Regulations, part 26 is amended as
follows.
PART 26--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT--
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 26 is revised to read as follows:
Authority: 5 U.S.C. 301; 41 U.S.C. 701 et seq.; Sec. 2455, Pub.
L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 3 CFR,
1986 comp., p. 189; E.O. 12689, 3 CFR, 1989 comp., p. 235.
2. Section 26.100 is revised as set forth at the end of the common
preamble.
3. Sections 26.105 and 26.110 are amended as set forth at the end
of the common preamble.
4. Sections 26.200, 26.215, 26.220, and 26.225 and Appendices A and
B to part 26 are revised as set forth at the end of the common
preamble.
BILLING CODE: 3510-(FA)-M
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OFFICE OF NATIONAL DRUG CONTROL POLICY
21 CFR Part 1404
RIN 3201-ZA00
FOR FURTHER INFORMATION CONTACT: Edward H. Jurith, General Counsel,
(202) 395-6709.
List of Subjects in 21 CFR Part 1404
Administrative practice and procedure, Contract programs, Grant
programs.
Lee P. Brown,
Director.
Title 21 of the Code of Federal Regulations, part 1404, is amended
as follows:
PART 1404--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1404 continues to read as follows:
Authority: Executive Order 12549, 3 CFR, 1986 Comp., p. 189; 5
U.S.C. 301; Sec. 5151-5160 of the Drug-Free Workplace Act of 1988
(Pub. L. 100-690, Title V, Subtitle D, 102 Stat. 4304; 41 U.S.C. 701
et seq.).
[[Page 33045]] 2. Section 1404.100 is revised as set forth at the
end of the common preamble.
3. Sections 1404.105 and 1404.110 are amended as set forth at the
end of the common preamble.
4. Sections 1404.200, 1404.215, 1404.220, and 1404.225 and
Appendices A and B to part 1404 are revised as set forth at the end of
the common preamble.
BILLING CODE: 3180-02-M
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DEPARTMENT OF STATE
22 CFR Part 137
RIN 1400-AA55
FOR FURTHER INFORMATION CONTACT: Robert E. Lloyd, Office of the
Procurement Executive, 703-516-1690.
List of Subjects in 22 CFR Part 137
Administrative practice and procedure, Contract programs, Grant
programs.
Lloyd W. Pratsch,
Procurement Executive.
Title 22 of the Code of Federal Regulations, part 137, is amended
as follows:
PART 137--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 137 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et
seq.); 22 U.S.C. 2658.
2. Section 137.100 is revised as set forth at the end of the common
preamble.
3. Sections 137.105 and 137.110 are amended as set forth at the end
of the common preamble.
4. Sections 137.200, 137.215, 137.220, and 137.225 and Appendices A
and B to Part 137 are revised as set forth at the end of the common
preamble.
BILLING CODE: 4710-24-M
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INTERNATIONAL DEVELOPMENT COOPERATION AGENCY
Agency for International Development
22 CFR Part 208
RIN 0412-AA24
FOR FURTHER INFORMATION CONTACT: Kathleen J. O'Hara, M/OP/P, Telephone
(703) 875-1534.
List of Subjects in 22 CFR Part 208
Administrative practice and procedure, Contract programs, Grant
programs--foreign relations, Grant programs, Loan programs--foreign
relations.
Marcus L. Stevenson,
Acting Procurement Executive.
Title 22 of the Code of Federal Regulations, part 208, is amended
as follows:
PART 208--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 208 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, title V, subtitle D; 41 U.S.C. 701 et
seq.); Sec. 621, Foreign Assistance Act of 1961, 22 U.S.C. 2381.
2.Section 208.100 is revised as set forth at the end of the common
preamble.
3. Sections 208.105 and 208.110 are amended as set forth at the end
of the common preamble.
4. Sections 208.200, 208.215, 208.220, and 208.225 and Appendices A
and B to Part 208 are revised as set forth at the end of the common
preamble.
BILLING CODE: 6116-01-M
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PEACE CORPS
22 CFR Part 310
RIN 0420-AA13
FOR FURTHER INFORMATION CONTACT:
Kirby Mullen, 202-606-3114
List of Subjects in 22 CFR Part 310
Administrative practice and procedure, Contract programs, Grant
programs.
Charles R. Baquet, III,
Acting Director.
Title 22 of the Code of Federal Regulations, part 310 is amended as
follows.
PART 310--GOVERNMENTWIDE DEPARTMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 310 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, subtitle D; 41 U.S.C. 701 et
seq.); 22 U.S.C. 2503.
2. Section 310.100 is revised as set forth at the end of the common
preamble.
3. Sections 310.105 and 310.110 are amended as set forth at the end
of the common preamble.
4. Sections 310.200, 300.215, 310.220, and 310.225 and Appendices A
and B to Part 310 are revised as set forth at the end of the common
preamble.
BILLING CODE: 6051-01-M
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UNITED STATES INFORMATION AGENCY
22 CFR Part 513
RIN 3116-AA07
FOR FURTHER INFORMATION CONTACT: GEORGIA HUBERT ON (202) 205-5404.
List of Subjects in 22 CFR Part 513 Administrative practice and
procedure, Contract programs, Grant programs.
Henry Howard, Jr.,
Associate Director for Management.
The 22 of the code of Federal Regulations, Part 513 is amend as
follows.
PART 513--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 513 is revised to read as follows:
Authority: 40 U.S.C. 486 (c); 41 U.S.C. 701 et seq.; Sec. 2455,
Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E. O. 12549,
3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 comp., p. 235.
2. Section 513.100 is revised as set forth at the end of the common
preamble.
3. Sections 513.105 and 513.110 are amended as set forth at the end
of the common preamble.
4. Sections 513.200, 513.215, 515.220, and 513.225 and Appendices A
and B to Part 513 are revised as set forth at the end of the common
preamble.
BILLING CODE: 8230-01-M
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INTER-AMERICAN FOUNDATION
22 CFR Part 1006
FOR FURTHER INFORMATION CONTACT: Adolfo A. Franco, 703-841-3894.
[[Page 33046]]
List of Subjects in 22 CFR Part 1006
Administrative practice and procedure, Contract programs, Grant
programs.
Adolfo A. Franco,
General Counsel.
Title 22 of the Code of Federal Regulations, part 1006 is amended
as follows.
PART 1006--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1006 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et
seq.); 22 U.S.C. 290f.
2. Section 1006.100 is revised as set forth at the end of the
common preamble.
3. Sections 1006.105 and 1006.110 are amended as set forth at the
end of the common preamble.
4. Sections 1006.200, 1006.215, 1006.220 and 1006.225 and
Appendices A and B to Part 1006 are revised as set forth at the end of
the common preamble.
BILLING CODE: 7025-01-M
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AFRICAN DEVELOPMENT FOUNDATION
22 CFR Part 1508
for further information contact: Paul S. Magid, (202) 673-3916.
List of Subjects in 22 CFR Part 1508
Administrative practice and procedure, Contract programs, Grant
programs--foreign relations.
William R. Ford,
President.
Title 22 of the Code of Federal Regulations, Part 1508 is amended
as follows:
PART 1508--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1508 is revised to read as follows:
Authority: 22 U.S.C. 290h; 41 U.S.C. 701 et seq.; E.O. 12549, 3
CFR, 1986 comp., p. 189.
2. Section 1508.100 is revised as set forth at the end of the
common preamble.
3. Section 1508.105 and 1508.110 are amended as set forth at the
end of the common preamble.
4. Sections 1508.200, 1508.215, 1508.220, and 1508.225 and
Appendices A and B to Part 1508 are revised as set forth at the end of
the common preamble.
BILLING CODE: 6117-01-M
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 24
RIN 2501-AB24
FOR FURTHER INFORMATION CONTACT: Emmett N. Roden, Assistant General
Counsel for Administrative Proceedings, Office of General Counsel, U.S.
Department of Housing and Urban Development, 451 7th Street, SW., Room
10251, Washington, DC 20410, telephone (202) 708-2350. The telephone
number for the hearing impaired (TDD) is (202) 708-9300. These are not
toll-free numbers.
ADDITIONAL SUPPLEMENTARY INFORMATION: In accordance with Executive
Order 12549, the Department, along with other Federal agencies,
promulgated governmentwide nonprocurement debarment and suspension
regulations. The common rule, which is identical to the Office of
Management and Budget's final guidelines, and the various agency-
specific supplements to the common rule were published at the same time
on May 26, 1988 (53 FR 19161). The provisions of the common rule that
provide nonprocurement participants with the opportunity to contest
suspensions and proposed debarments and the procedures by which
suspending and debarring officials make final agency determinations are
substantially similar to the procedures applicable to procurement
contractors under the Federal Acquisition Regulation (FAR, 48 CFR,
especially subpart 9.4 thereof). Although the Department adopted
verbatim significant portions of the common rule, it did not include
all of the provisions concerning suspension and debarment hearing
procedures or the reconsideration or appeal of post-hearing
determinations.
Executive Order 12689, issued in 1989, and section 2455 of the
Federal Acquisition Streamlining Act of 1994 require that the
debarment, suspension, or other exclusion of a participant in a
procurement activity under the FAR, or in a nonprocurement activity
under an agency's debarment regulations, shall, after regulations are
issued, have the governmentwide effect of excluding the participant
from both procurement and nonprocurement activities. Under current HUD
rules, a debarment of a nonprocurement participant does not affect such
person's participation in procurement activities with other agencies.
On December 20, 1994, HUD and other agencies participating in the
development of this final rule published a notice of proposed
rulemaking to implement Executive Order 12689 and section 2455 of the
Federal Acquisition Streamlining Act. HUD's portion of the proposed
rule, published at 59 FR 65612, also included revisions to conform the
Department's hearing procedures to those of the common rule.
The Department's current hearing procedures, which depart from the
generally applicable governmentwide provisions, have adversely affected
the Department's ability to process suspensions and debarments in an
efficient and cost-effective manner. The amount of time and expense
currently involved in the Department's suspension and debarment
proceedings benefit neither the Department nor the persons who are
subject to such sanctions. In addition, the Department notes that the
common rule procedures have not been successfully challenged in Federal
court since their implementation in 1988.
The issuance of this rule will simplify and streamline the
suspension, debarment, and limited denial of participation processes at
HUD. Therefore, this rule will reduce, rather than increase, the
regulatory burden on contractors and participants in the Department's
programs.
The Department considers these changes necessary to comply with the
President's directive to streamline agency operations throughout the
Executive Branch. The revisions are also an element in the Government
reinvention process at the Department.
Effective date: The final rule shall apply to notices of proposed
debarment, suspension and limited denial of participation that are
issued on or after the effective date of this rule.
Discussion of Public Comments
Comments on the proposed rule were received from one Federal
Government organization, from one private professional organization,
and from three individuals. The issues raised by the commenters are
summarized below. [[Page 33047]]
Recommendations by the Administrative Conference of the United
States (ACUS)
Comment: Four of the five commenters refer to recommendations
recently issued by ACUS (Recommendation 95-2, ``Debarment and
Suspension from Federal Programs,'' adopted January 19, 1995) and urge
that HUD conform its regulations to the ACUS Recommendations. In
particular, the commenters urge compliance with item II of the
Recommendations. This item recommends that cases involving disputed
issues of material fact be referred to administrative law judges,
military judges, administrative judges of boards of contract appeals or
similarly independent hearing officers for hearings and preparation of
(1) findings of fact certified to the debarring official, or (2) a
recommended decision to the debarring official, or (3) an initial
decision, subject to agency appeal. Item II of the ACUS Recommendations
also recommends that debarring officials be senior agency officials who
are guaranteed sufficient independence to provide due process, and that
such officials ensure that information used as the basis for a sanction
appear in the administrative record of the decision.
The commenters expressed concern that the use of ``hearing
officials'' who are not administrative judges would result in the
deprivation of due process. They criticized these officials as being
neither trained in the law nor versed in HUD's programs.
One commenter also urged HUD to adopt item III of the ACUS
Recommendation. Item III lists various recommendations for future
rulemaking: (1) that entities coordinating the FAR and the common rule,
and individual agencies, provide for a list of mitigating and
aggravating factors; (2) establishment of a process for determining a
lead agency when a person deals with more than one agency; (3) minimum
evidentiary thresholds for procurement debarment; (4) notice to
affected persons of the impact of sanctions; and (5) use of ``show
cause'' warning letters.
Response: The rule satisfies the ACUS recommendation that debarring
officials be senior, independent agency officials. Notices of
suspension and proposed debarment are, under delegations by the
Secretary of HUD, issued by Assistant Secretaries, the Inspector
General, and the President of the Government National Mortgage
Association. These officials are the highest responsible officials for
major components of the Department. They report directly to the
Secretary. These officials are not subject to the supervision of, nor
do they directly supervise, agency personnel who carry out
investigative or prosecutive activities. Their ability to make
independent debarment decisions is thus evident from their position.
The Department has revised the rule to address the comments
concerning referral of disputes of material fact. The revision deletes
the references to ``hearing official.'' The specific HUD-only additions
to the common rule, at Secs. 24.314(b)(2)(i) and 24.413(b)(3), clarify
that disputes of material fact may be referred to ``hearing officers''
who are defined as administrative law judges or members of the HUD
Board of Contract Appeals. In accordance with the first option listed
in ACUS Recommendation item II, the hearing officers will provide
findings of fact to the suspending or debarring official. In addition,
the final rule provides that the suspending or debarring official may,
in his or her discretion, refer cases based upon indictment, conviction
or civil judgment, or cases in which there is no dispute of material
fact, to the hearing officer for appropriate findings.
The final rule is in conformity with the other elements of ACUS
Recommendation 95-2 to the extent possible in the context of a
coordinated governmentwide system. Recommendation item IV urges that
all federal agencies adopt the common rule. By conforming its hearing
procedures to those of the common rule, HUD has followed the ACUS
suggestion. By coordinating procurement and non-procurement suspension
and debarment, HUD has followed the suggestion of ACUS in
Recommendation item I.
HUD has agreed to consider ACUS Recommendation item III, along with
other proposed changes to the common rule, before the end of this year.
Certain of the item III suggestions, such as appropriate notice to
respondents and the use of ``show cause'' letters, will in any event be
considered by HUD as new procedures are adopted under the regulatory
revision.
Finally, ACUS Recommendation item V addresses Congress rather than
the executive branch agencies.
Consideration of Mitigating Factors in Debarment Proceedings
Comment: Two commenters asserted that the proposed rule had
eliminated all references to mitigating factors as an element of the
suspension and debarment process.
Response: These comments may be based on the elimination of
paragraph (d) in 24 C.F.R. Sec. 24.115, which refers to consideration
of mitigating factors in the debarment of contractors. This deletion is
the result of coordination of procurement and non-procurement
debarment.
Mitigation will, necessarily, continue to be an element in HUD's
suspension and debarment process. Most importantly, 24 C.F.R.
Sec. 24.300 will continue to require consideration of the seriousness
of the ``person's'' acts and ``any mitigating factors.'' In addition,
the provisions of 24 C.F.R. Sec. 24.314, referring to the inclusion of
``any evidence of mitigating circumstances,'' are expanded under the
proposed rule and this final rule by requiring consideration of ``any
information and argument'' submitted by the respondent. (See
Secs. 24.313(a) and 24.314(a) and (b)(1).) The opportunity to submit,
for review, evidence of mitigation as well as any other information is
thus well preserved.
Limits on Discovery and Use of Alternative Dispute Resolution
Comment: Two commenters proposed that the Department impose limits
on discovery as a means of streamlining the hearing process. One
commenter further recommended that the rule provide for the use of
alternative dispute resolution. The commenters stated that these
changes would reduce costs to the Department and to participants while
increasing efficiency.
Response: The Department's current rule allows the use of discovery
pursuant to the provisions of 24 CFR Part 26. In the final rule, cases
that the suspending or debarring official does not refer to hearing
officers shall not be subject to formal discovery, but instead shall be
limited to information in the administrative record, including any
submissions by the respondent. (See Secs. 24.314(a) and (b) and
24.413(a) and (b).)
The discovery provisions of Part 26 shall continue to apply to
those cases that are referred to a hearing officer for findings of
fact. (See Secs. 24.314(b)(2)(i) and 24.413(b)(3).) However, 24 CFR
Sec. 26.17 provides that ``discovery shall not be permitted where it
will unduly delay the hearing, thereby resulting in prejudice to the
public interest or the rights of the parties.'' In addition, the final
rule procedures at Secs. 24.314(b)(2)(ii) and 24.413(b)(4) will require
that the hearing in a case referred to the hearing officer commence
within 45 days of referral, unless both parties agree to an extension
of time. The Department is also required to compile an administrative
record prior to hearing, and to provide a copy to the respondent. This
record will contain all [[Page 33048]] information that the debarring
official relied upon in issuing the suspension or proposed debarment.
The 45-day requirement and use of an administrative record, coupled
with the existing part 26 restrictions, should eliminate protracted
discovery. At the same time, the rule is sufficiently flexible to allow
an extended period of discovery if the parties mutually agree to extend
the 45-day limit. However, if these provisions prove inadequate, the
Department agrees to consider limitations on discovery in future
rulemaking.
The Department agrees with the comment recommending alternative
dispute resolution. Provisions for voluntary use of alternative dispute
resolution have been added to the final rule. The Department has
determined that this section does not impose any restrictions on
existing rights of HUD participants, but rather serves to expand the
methods for resolving disputes. Accordingly, the Department believes
there is good cause for promulgating this provision in a final rule,
rather than through a proposed rule.
Creation of an Office To Chair Informal Conferences for Limited
Denials of Participation
Comment: One commenter proposed that the Department establish a new
office to chair informal conferences for limited denials of
participation. The commenter stated that, under the existing process,
the official presiding over the conference is often the person who
initiated the sanction, and therefore may be biased against the
respondent.
Response: The Department has addressed this concern by revising the
proposed rule to allow the respondent to by-pass the informal
conference and proceed directly to a hearing before a hearing officer.
List of Subjects in 24 CFR Part 24
Administrative practice and procedure, Contract programs, Drug
abuse, Government contracts, Grant programs, Government procurement,
Loan programs, Reporting and recordkeeping requirements.
Henry G. Cisneros,
Secretary.
Title 24 of the Code of Federal Regulations, part 24 is amended as
follows:
PART 24--GOVERNMENT DEBARMENT AND SUSPENSION AND GOVERNMENTWIDE
REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 24 is revised to read as follows:
Authority: 41 U.S.C. 701 et seq.; 42 U.S.C. 3535(d); E.O. 12549,
51 FR 6370, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 54 FR 34131, 3
CFR, 1989 Comp., p. 235.
2. Section 24.100 is revised as set forth at the end of the common
preamble.
3. Sections 24.105 and 24.110 are amended as set forth at the end
of the common preamble.
4. Sections 24.200, 24.215, 24.220, 24.225 and Appendices A and B
to Part 24 are revised as set forth at the end of the common preamble.
5. Section 24.100 is further amended by adding paragraphs (e) and
(f), to read as follows:
Sec. 24.100 Purpose.
* * * * *
(e) These regulations also:
(1) Prescribe policies and procedures governing the debarment and
suspension of contractors and the limited denial of participation of
participants and contractors;
(2) Provide for the listing of debarred, suspended and ineligible
contractors; and
(3) Set forth the consequences of such listing.
(f) Although this part covers the listing of ineligible
contractors, it does not prescribe policies and procedures governing
declarations of ineligibility.
6. Section 24.105 is further amended by removing paragraphs (1) and
(2) under the definitions of ``Debarment,'' ``Suspension'' and
``Voluntary exclusion or voluntarily excluded'' and by revising the
definitions for ``Limited denial of participation,'' and ``Respondent''
to read as follows:
Sec. 24.105 Definitions.
* * * * *
Limited denial of participation. An action taken by a HUD official,
in accordance with subpart G of these regulations, that immediately
excludes or restricts a person from participating in HUD program(s)
within a defined geographic area.
* * * * *
Respondent. A person against whom a debarment or suspension action
has been initiated.
(1) A respondent is also a person against whom a limited denial of
participation has been initiated.
(2) [Reserved].
* * * * *
7. Section 24.110 is further amended by adding a paragraph
(a)(1)(i)(A)(3) and a paragraph (a)(3), and by revising the last
sentence of paragraph (d), to read as follows:
Sec. 24.110 Coverage.
(a) * * *
(1) Covered transaction. * * *
(i) * * *
(A) * * *
(3) Any procurement transaction between HUD and a person.
* * * * *
(3) Other exceptions. (i) Sanctions against participants whose only
involvement in HUD programs is as ultimate beneficiaries, such as
subsidized tenants and subsidized mortgagors, may be taken only upon
commission of one of the offenses set forth in Sec. 24.305(a), unless
the participant has otherwise been debarred or suspended by another
Federal agency.
(ii) Sanctions under this part against mortgagees approved by HUD
to participate in Federal Housing Administration programs may be
initiated only with the approval of the Mortgagee Review Board.
* * * * *
(d) * * * The consequences of a debarment or suspension as set
forth in Sec. 24.200 apply to contractors in Federal procurement
programs, and Secs. 24.325 and 24.420 govern the extent to which a
specific contractor or its organizational elements would be included
within a debarment or suspension action.
* * * * *
Sec. 24.115 [Amended]
8. In Sec. 24.115, paragraph (d) is removed.
9. Section 24.200 is further amended by adding new paragraphs
(c)(8), (c)(9) and (d), to read as follows:
Sec. 24.200 Debarment or suspension.
* * * * *
(c) Exceptions. * * *
* * * * *
(8) Debarment for any of the causes set forth in Sec. 24.305(f)
shall have no governmentwide effect.
(9) Sanctions imposed on an individual participant under this part
shall not preclude the participant from selling his or her principal
residence to a purchaser using HUD/FHA financing.
(d) Relationship to HUD administrative sanction procedures.-- (1)
Sanctions provided pursuant to contract provisions. Nothing in this
part [[Page 33049]] shall impair or limit the right to impose any
sanction provided for by contract, including guaranty agreements with
the Government National Mortgage Association.
(2) Other Departmental sanctions. Where an office of the Department
is required by statute, regulation, or Executive Order to follow
administrative sanction procedures that may differ from the
requirements of this part, the requirements of the statute, regulation,
or Executive Order shall take precedence. These alternative procedures
include, but are not limited to: 24 CFR part 200 Previous Participation
Review and Clearance procedures, 24 CFR part 25 Mortgagee Review Board
administrative actions, and 24 CFR part 570 Community Development Block
Grant corrective and remedial actions.
10. In Sec. 24.305, paragraph (d) is revised to read as follows:
Sec. 24.305 Causes for debarment.
* * * * *
(d) Any other cause of so serious or compelling a nature that it
affects the present responsibility of a person.
* * * * *
11. Section 24.313 is revised to read as follows:
Sec. 24.313 Opportunity to contest proposed debarment.
(a) Submission in opposition. Within 30 days after receipt of the
notice of proposed debarment, the respondent may submit, in person, in
writing, or through a representative, information and argument in
opposition to the proposed debarment.
(1) The information and argument should be addressed to the
Debarment Docket Clerk, Department of Housing and Urban Development,
451 Seventh Street, SW., Washington, DC 20410.
(2) If the respondent does not contest the proposed debarment
within the 30 day period, the proposed debarment shall become final.
(3) If the respondent desires a hearing, it shall submit a written
request to the Debarment Docket Clerk within the 30-day period
following receipt of the notice of proposed debarment.
(4) The parties may agree to engage in an alternative dispute
resolution, including informal conference, mediation, conciliation,
summary trial with binding decision, minitrial, or use of a settlement
judge.
(b) Additional proceedings as to disputed material facts. (1) In
actions not based upon a conviction or civil judgment, if the debarring
official finds that the respondent's submission in opposition raises a
genuine dispute over facts material to the proposed debarment,
respondent(s) shall be afforded an opportunity to appear with a
representative, submit documentary evidence, present witnesses, and
confront any witness the agency presents.
(2) A transcribed record of any additional proceedings shall be
made available at cost to the respondent, upon request, unless the
respondent and the agency, by mutual agreement, waive the requirement
for a transcript.
(i) Upon the agreement of the parties, the additional proceedings
may be recorded using audiotape without transcription. The audiotape
shall be made available at cost to the respondent.
(ii) [Reserved].
12. Section 24.314 is revised to read as follows:
Sec. 24.314 Debarring official's decision.
(a) No additional proceedings necessary. In actions based upon a
conviction or civil judgment, or in which there is no genuine dispute
over material facts, the debarring official shall make a decision on
the basis of all the information in the administrative record,
including any submission made by the respondent. The decision shall be
made within 45 days after receipt of any information and argument
submitted by the respondent, unless the debarring official extends this
period for good cause.
(1) The debarring official may, in his or her discretion, refer
actions based upon a conviction or civil judgment, or in which there is
no genuine dispute over material facts, to a hearing officer or other
official for review of the administrative record and appropriate
findings. The hearing officer or other official shall issue such
findings within 45 days after the referral, and the debarring official
shall issue a decision within 15 days after the date of the findings,
unless such periods are extended for good cause.
(2) [Reserved].
(b) Additional proceedings necessary. (1) In actions in which
additional proceedings are necessary to determine disputed material
facts, written findings of fact shall be prepared. The debarring
official shall base the decision on the facts as found, together with
any information and argument submitted by the respondent and any other
information in the administrative record.
(2) The debarring official may refer disputed material facts to
another official for findings of fact. The 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.
(i) The debarring official may refer disputed material facts and
issues of law to a hearing officer for findings of fact and conclusions
of law.
(A) No appeal to the Secretary may be taken under Secs. 26.24
through 26.26 of this title with respect to any order or decision by a
hearing officer or other official.
(B) The debarring official shall provide the hearing officer or
other official with all the information in the administrative record,
including any information and argument submitted by the respondent. The
administrative record and any documents admitted at the hearing shall
constitute the exhibits in evidence.
(ii) Unless the parties mutually agree to extend this period, a
proceeding before a hearing officer or other official shall commence
within 45 days after referral of the case by the debarring official.
The hearing officer or other official shall issue findings of fact
within 30 days after the conclusion of such additional proceedings. The
time limitations of this subparagraph may be extended upon issuance, by
the debarring official, hearing officer or other official, of a written
notice describing good cause for such extension.
(3) The debarring official's decision shall be made after the
conclusion of the proceedings with respect to the disputed facts.
(i) Such decision shall be made within 15 days after the hearing
officer or other official issues findings of fact.
(ii) [Reserved].
(c)(1) Standard of proof. In any debarment action, the cause for
debarment must be established by a preponderance of the evidence. Where
the proposed debarment is based upon a conviction or civil judgment,
the standard shall be deemed to have been met.
(2) Burden of proof. The burden of proof is on the agency proposing
debarment.
(d) Notice of debarring official's decision. (1) If the debarring
official decides to impose debarment, the respondent shall be given
prompt notice:
(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 for covered
transactions throughout the executive branch of the
[[Page 33050]] Federal Government unless an agency head or an
authorized designee makes the determination referred to in Sec. 24.215.
(A) Where a debarment is based solely on Sec. 24.305(f), the notice
of the debarring official's decision shall advise that the debarment is
effective for programs or activities of the Department.
(B) [Reserved].
(2) If the debarring official decides not to impose debarment, the
respondent shall be given prompt notice of that decision. A decision
not to impose debarment shall be without prejudice to a subsequent
imposition of debarment by any other agency.
Sec. 24.400 [Amended]
13. In Sec. 24.400, paragraph (d) is removed.
Sec. 24.410 [Amended]
14. In Sec. 24.410, paragraph (c) is removed.
15. Section 24.411 is revised to read as follows:
Sec. 24.411 Notice of suspension.
When a respondent is suspended, notice shall immediately be given:
(a) That the suspension has been imposed;
(b) That the suspension is based on an indictment, conviction, or
other adequate evidence that the respondent has committed
irregularities seriously reflecting on the propriety of further Federal
Government dealings with the respondent;
(c) Describing any such irregularities in terms sufficient to put
the respondent on notice without disclosing the Federal Government's
evidence;
(d) Of the cause(s) relied upon under Sec. 24.405 for imposing
suspension;
(e) That the suspension is for a temporary period pending the
completion of an investigation or ensuing legal, debarment or Program
Fraud Civil Remedies Act proceedings;
(f) Of the provisions of Secs. 24.411 through 24.413 and any other
HUD procedures, if applicable, governing suspension decisionmaking; and
(g) Of the effect of the suspension.
16. Section 24.412 is revised to read as follows:
Sec. 24.412 Opportunity to contest suspension.
(a) Submission in opposition. Within 30 days after receipt of the
notice of suspension, the respondent may submit, in person, in writing,
or through a representative, information and argument in opposition to
the suspension.
(1) The information and argument should be addressed to the
Debarment Docket Clerk, Department of Housing and Urban Development,
451 Seventh Street, S.W., Washington, D.C. 20410.
(2) If the respondent does not contest the suspension within the 30
day period, the suspension shall become final.
(3) If the respondent desires a hearing, it shall submit a written
request to the Debarment Docket Clerk within the 30-day period
following receipt of the notice of suspension.
(4) The parties may agree to engage in an alternative dispute
resolution, including informal conference, mediation, conciliation,
summary trial with binding decision, minitrial, or use of a settlement
judge.
(b) Additional proceedings as to disputed material facts. (1) If
the suspending official finds that the respondent's submission in
opposition raises a genuine dispute over facts material to the
suspension, respondent(s) shall be afforded an opportunity to appear
with a representative, submit documentary evidence, present witnesses,
and confront any witnesses the agency presents, unless:
(i) The action is based on an indictment, conviction or civil
judgment; or
(ii) A determination is made, on the basis of Department of Justice
advice, that the substantial interests of the Federal Government in
pending or contemplated legal proceedings based on the same facts as
the suspension would be prejudiced.
(2) A transcribed record of any additional proceedings shall be
prepared and made available at cost to the respondent, unless the
respondent and the agency, by mutual agreement, waive the requirement
for a transcript.
(i) Upon the agreement of the parties, the additional proceedings
may be recorded using audiotape without transcription. The audiotape
shall be made available at cost to the respondent.
(ii) [Reserved].
17. Section 24.413 is revised to read as follows:
Sec. 24.413 Suspending official's decision.
The suspending official may modify or terminate the suspension (see
Sec. 24.320(c) for reasons for reducing the period or scope of
debarment) or may leave it in force. However, a decision to modify or
terminate the suspension shall be without prejudice to the subsequent
imposition of suspension by any other agency or debarment by any
agency. The decision shall be rendered in accordance with the following
provisions:
(a) No additional proceedings necessary. In actions based upon an
indictment, conviction, or civil judgment, in which there is no genuine
dispute over material facts, or in which additional proceedings to
determine disputed material facts have been denied on the basis of
Department of Justice advice, the suspending official shall make a
decision on the basis of all the information in the administrative
record, including any submission made by the respondent. The decision
shall be made within 45 days after receipt of any information and
argument submitted by the respondent, unless the suspending official
extends this period for good cause.
(1) The suspending official may, in his or her discretion, refer
actions based upon an indictment, conviction or civil judgment, or in
which there is no genuine dispute over material facts, to a hearing
officer or other official for review of the administrative record and
appropriate findings. The hearing officer or other official shall issue
such findings within 45 days after the referral, and the suspending
official shall issue a decision within 15 days after the date of such
findings, unless such periods are extended for good cause.
(2) [Reserved].
(b) Additional proceedings necessary. (1) In actions in which
additional proceedings are necessary to determine disputed material
facts, written findings of fact shall be prepared. The suspending
official shall base the decision on the facts as found, together with
any information and argument submitted by the respondent and any other
information in the administrative record.
(2) The suspending official may refer matters involving disputed
material facts to another official for findings of fact. The suspending
official may reject any such findings, in whole or in part, only after
specifically determining them to be arbitrary or capricious or clearly
erroneous.
(3) The suspending official may refer disputed material facts and
issues of law to a hearing officer for findings of fact and conclusions
of law.
(i) No appeal to the Secretary may be taken under Secs. 26.24
through 26.26 of this title with respect to any order or decision by a
hearing officer or other official.
(ii) The suspending official shall provide the hearing officer or
other official with all the information in the administrative record,
including any information and argument submitted by [[Page 33051]] the
respondent. The administrative record and any documents admitted at the
hearing shall constitute the exhibits in evidence.
(4) Unless the parties mutually agree to extend this period, a
proceeding before a hearing officer or other official shall commence
within 45 days after referral of disputed material facts and issues of
law by the suspending official. The hearing officer or other official
shall issue findings of fact within 30 days after the conclusion of
such additional proceedings. The time limitations of this subparagraph
may be extended upon issuance, by the suspending official, other
official or hearing officer, of a written notice describing good cause
for such extension.
(5) The suspending official's decision shall be made within 15 days
after the hearing officer or other official issues findings of fact.
(c) Notice of suspending official's decision. Prompt written notice
of the suspending official's decision shall be sent to the respondent.
Sec. 24.415 [Amended]
18. In Sec. 24.415, paragraph (d) is removed.
Sec. 24.705 [Amended]
19. In Sec. 24.705, paragraph (c) is amended to remove the words
``regional or field''.
Sec. 24.710 [Amended]
20. In Sec. 24.710, paragraph (a)(3) is amended to remove the words
``the Deputy Assistant Secretary for Single Family Housing'' and add,
in their place, the words ``an Assistant Secretary or Deputy Assistant
Secretary''.
21. Section 24.711 is revised to read as follows:
Sec. 24.711 Notice of limited denial of participation.
A limited denial of participation shall be made effective by
advising the participant or contractor, and any specifically named
affiliate, by mail, return receipt requested:
(a) That the limited denial of participation is being imposed;
(b) Of the cause(s) under Sec. 24.705 for the sanction;
(c) Of the potential effect of the sanction, including the length
of the sanction and the HUD program(s) and geographic area affected by
the sanction;
(d) Of the right to request, in writing, within 30 days of receipt
of the notice, a conference under Sec. 24.712; and
(e) Of the right to contest the limited denial of participation
under Sec. 24.713.
22. Section 24.712 is revised to read as follows:
Sec. 24.712 Conference.
Within 30 days after receiving a notice of limited denial of
participation, the respondent may request a conference with the
official who issued such notice. If the respondent does not request a
conference, the respondent shall nevertheless have the right to contest
the limited denial of participation under the provisions of
Sec. 24.713. The conference shall be held within 15 days after the
Department's receipt of the request for a conference, unless the
respondent waives this time limit. The official who imposed the
sanction, or his or her designee, shall preside. At the conference, the
respondent may appear with a representative and may present all
relevant information and materials to the official or designee. Within
20 days after the conference, or within 20 days after any agreed upon
extension of time for submission of additional materials by the
respondent, the official or designee shall, in writing, advise the
respondent of the decision to terminate, modify, or affirm the limited
denial of participation. If all or a portion of the remaining period of
exclusion is affirmed, the notice of affirmation shall advise the
respondent of the opportunity to contest the notice pursuant to
Sec. 24.713. If the official or designee does not issue a decision
within the 20-day period, the respondent may contest the sanction under
Sec. 24.713.
23. Section 24.713 is revised to read as follows:
Sec. 24.713 Opportunity to contest the limited denial of
participation.
(a) Submission in opposition. (1) The respondent may request a
hearing before a hearing officer:
(i) Within 30 days after receipt of a notice of affirmation of all
or a portion of the remaining period of exclusion under a limited
denial of participation; or
(ii) Within 30 days after receipt of a notice of a limited denial
of participation where the respondent elects not to request a
conference under Sec. 24.712.
(2) The request must be addressed to the Debarment Docket Clerk,
Department of Housing and Urban Development, 451 Seventh Street, SW.,
Washington, DC 20410.
(3) If the respondent does not submit the request within the 30-day
period, the sanction shall become final.
(b) Procedures. The hearing shall be conducted in accordance with
the procedures of Secs. 24.313 and 24.314 Within 15 days of the hearing
officer's issuance of findings of fact and a recommended decision, the
official who issued the limited denial of participation shall issue a
decision.
(c) Effect of suspension or debarment on limited denial of
participation. If a respondent has submitted a request for a hearing
pursuant to paragraph (a) of this section, and if the respondent has
also received, pursuant to subpart C or D of this part, a notice of
proposed debarment or suspension that is based on the same
transaction(s) or conduct as the limited denial of participation, the
following rules shall apply:
(1) If the respondent has not contested the proposed debarment
pursuant to Sec. 24.313(a) or the suspension pursuant to
Sec. 24.412(a), the final imposition of the debarment or suspension
shall also constitute a final decision with respect to the limited
denial of participation to the extent that the debarment or suspension
is based on the same transaction(s) or conduct as the limited denial of
participation.
(2) If the respondent has contested the proposed debarment pursuant
to Sec. 24.313(a), or the suspension pursuant to Sec. 24.412(a), the
proceedings shall be consolidated and the debarring or suspending
official shall issue a final decision as to both the limited denial of
participation and the debarment or suspension.
24. A new section 24.714 is added to read as follows:
Sec. 24.714 Reporting of limited denial of participation.
When a limited denial of participation has been made final, or the
period for requesting a conference pursuant to Sec. 24.712 has expired
without receipt of such a request, the official imposing the limited
denial of participation shall notify the Director of the Participation
and Compliance Division in the Office of Housing of the scope of the
limited denial of participation.
BILLING CODE: 4210-32-P
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DEPARTMENT OF JUSTICE
28 CFR Part 67
[A.G. Order No. 1972-95]
FOR FURTHER INFORMATION CONTACT: Cynthia J. Schwimer, Director,
Financial Management Division, 202-307-3186.
List of Subjects in 28 CFR Part 67
Administrative practice and procedure, Contract programs, Grant
programs.
[[Page 33052]] Dated: June 1, 1995.
Janet Reno,
Attorney General.
Title 28 of the Code of Federal Regulations, part 67, is amended as
follows:
PART 67--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 67 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et
seq.), Omnibus Crime Control and Safe Streets Act of 1968, 42 U.S.C.
3711 et seq. (as amended); Juvenile Justice and Delinquency
Prevention Act of 1974, 42 U.S.C. 5601 et seq. (as amended); Victims
of Crime Act of 1984, 42 U.S.C. 10601 et seq. (as amended); 18
U.S.C. 4042; and 18 U.S.C. 4351-4353.
2. Section 67.100 is revised as set forth at the end of the common
preamble.
3. Sections 67.105 and 67.110 are amended as set forth at the end
of the common preamble.
4. Sections 67.200, 67.215, 67.220, and 67.225 and Appendices A and
B to Part 67 are revised as set forth at the end of the common
preamble.
BILLING CODE: 4410-18-M
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DEPARTMENT OF LABOR
29 CFR Part 98
RIN 1291-AA23
FOR FURTHER INFORMATION CONTACT: Melvin Goldberg, Chief, Division of
Procurement and Grant Policy, (202) 219-9174.
List of Subjects in 29 CFR Part 98
Administrative practice and procedure, Contract programs, Grants
programs.
Cynthia A. Metzler,
Assistant Secretary for Administration and Management.
Title 27 of the Code of Federal Regulations, part 98, is amended as
follows:
PART 98--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 98 continues to read as follows:
Authority: E.O. 12549; Sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, title V, subtitle D; 41 U.S.C. 701 et
seq.); 5 U.S.C. 552-556.
2. Section 98.100 is revised as set forth at the end of the common
preamble.
3. Sections 98.105 and 98.110 are amended as set forth at the end
of the common preamble.
4. Sections 98.200, 98.215, 98.220, and 98.225 and Appendices A and
B to Part 98 are revised as set forth at the end of the common
preamble.
BILLING CODE: 4510-23-M
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FEDERAL MEDIATION AND CONCILIATION SERVICE
29 CFR Part 1471
RIN 3076-AA03
FOR FURTHER INFORMATION CONTACT: Peter Regner, (202) 606-8181.
List of Subjects in 29 CFR Part 1471
Administrative practice and procedure, Contract programs, Grant
programs.
Floyd L. Wood,
Deputy Director.
Title 29 of the Code of Federal Regulations, part 1471 is amended
as follows.
PART 1471--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1471 continues to read as follows:
Authority: E.O. 12549; secs. 5151-5160 of the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690, title V, subtitle D; 41
U.S.C. 701 et seq.); Pub. L. 95-524, Oct. 27, 1978, 29 U.S.C. 175a.
2. Section 1471.100 is revised as set forth at the end of the
common preamble.
3. Sections 1471.105 and 1471.110 are amended as set forth at the
end of the common preamble.
4. Sections 1471.200, 1471.215, 1471.220, and 1471.225 and
Appendices A and B to Part 1471 are revised as set forth at the end of
the common preamble.
BILLING CODE: 6372-01-M
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DEPARTMENT OF THE TREASURY
31 CFR Part 19
RIN 1505-AA57
FOR FURTHER INFORMATION CONTACT: William Murphy at (202) 622-0450.
List of Subjects in 31 CFR Part 19
Administrative practice and procedure, Contract programs, Grant
programs.
George Munoz,
Assistant Secretary for Management.
Title 31 of the Code of Federal Regulations, part 19 is amended as
follows.
PART 19--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 19 continues to read as follows:
Authority: E.O. 12549; secs. 5151-5160 of the Drug-Free
Workplace Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41
U.S.C. 701 et seq.); 31 U.S.C. 321.
2. Section 19.100 is revised as set forth at the end of the common
preamble.
3. Sections 19.105 and 19.110 are amended as set forth at the end
of the common preamble.
4. Sections 19.200, 19.215, 19.220, and 19.225 and Appendices A and
B to Part 19 are revised as set forth at the end of the common
preamble.
BILLING CODE: 4810-251-M
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 25
RIN 0790-AF68
FOR FURTHER INFORMATION CONTACT: Mark Herbst, (703) 614-0205.
ADDITIONAL SUPPLEMENTARY INFORMATION: The Department of Defense adopts
this amendment to the Governmentwide common rule on debarment and
suspension for nonprocurement transactions. In adopting this rule, the
Office of the Secretary of Defense, the Military Departments and the
Defense Agencies will maintain uniform policies and procedures that are
consistent with those of other Executive Departments and Agencies.
The Department of Defense originally codified this Governmentwide
rule on May 26, 1988 (53 FR 19190 and 19204), at 32 CFR Part 280. On
February 21, [[Page 33053]] 1992 57 FR 6199), Part 280 was redesignated
as Part 25. This rulemaking amends the redesignated part 25.
List of Subjects in 32 CFR Part 25
Administrative practice and procedure, Contract programs, Grant
programs.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
Title 32 of the Code of Federal Regulations, part 25 is amended as
follows.
PART 25--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 25 is revised to read as follows:
Authority: 41 U.S.C. 701 et seq.; sec. 2455, Pub. L. 103-355,
108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 3 CFR, 1986 Comp.;
189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.
2. Section 25.100 is revised as set forth at the end of the common
preamble.
3. Sections 25.105 and 25.110 are amended as set forth at the end
of the common preamble.
4. Sections 25.200, 25.215, 25.220, and 25.225 and Appendices A and
B to Part 25 are amended as set forth at the end of the common
preamble.
5. Section 25.105 is amended further by adding paragraphs (1) and
(2) to the definition for Agency, by adding paragraph (3) to the
definition for Debarring official, and by adding paragraph (3) to the
definition for Suspending official to read as follows:
Sec. 25.105 Definitions.
* * * * *
Agency. * * *
(1) The meaning of agency in Subpart F of this part, Drug-Free
Workplace Requirements, is given at Sec. 25.605(b)(6) and is different
than the meaning given in this section for subparts A through E of this
part. Agency in Subpart F of this part means the Department of Defense
or a Military Department only, and does not include any Defense Agency.
(2) [Reserved]
* * * * *
Debarring official. * * *
(3) DoD Components' debarring officials for nonprocurement
transactions are the same officials identified in 48 CFR part 209,
subpart 209.4, as debarring officials for procurement contracts.
* * * * *
Suspending official. * * *
(3) DoD Components' suspending officials for nonprocurement
transactions are the same officials identified in 48 CFR part 209,
subpart 209.4, as suspending officials for procurement contracts.
* * * * *
6. Section 25.610 is amended by adding paragraph (b)(1) to read as
follows and by reserving paragraph (b)(2):
Sec. 25.610 Coverage.
* * * * *
(b) * * *
(1) Heads of Defense Agencies, Heads of DoD Field Activities, and
their designees are authorized to make such determinations on behalf of
the Secretary of Defense.
(2) [Reserved]
* * * * *
7. Section 25.616 is added to read as follows:
Sec. 25.616 Determinations of grantee violations.
Heads of Defense Agencies, Heads of DoD Field Activities, and their
designees are authorized to make determinations of grantee violations
under Sec. 25.615.
BILLING CODE 5000.4-M
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DEPARTMENT OF EDUCATION
34 CFR Parts 85, 668, and 682
RIN 1880-AA51
FOR FURTHER INFORMATION CONTACT: Mary Jane Kane, U.S. Department of
Education, 600 Independence Avenue, S.W., Room 3636 ROB-3, Washington,
D.C. 20202-4700. Telephone: 708-7802. Individuals who use a
telecommunications device for the deaf (TDD) may call the Federal
Information Relay Service (FIRS) at 1-800-877-8339 between 8 a.m. and 8
p.m., Eastern time, Monday through Friday.
ADDITIONAL SUPPLEMENTARY INFORMATION: In addition to the amendments
made by all participating agencies for the common rule, the Secretary
amends the Department's debarment and suspension procedures to reflect
certain changes made by the Higher Education Amendments of 1992 to
those provisions of title IV of the Higher Education Act of 1965, as
amended (title IV, HEA) that govern administrative proceedings to limit
or terminate the eligibility of participants in programs under that
title. The Secretary also amends subpart G of part 668, which contains
the Department's procedures for Fine, Limitation, Suspension, and
Termination proceedings, to do the following: make technical amendments
to reflect the 1992 amendments to the HEA as they affect actions under
that part giving effect to debarments or suspensions; amend subpart G
of Part 682 in order to apply the same procedures to debarments or
suspensions of lenders or loan servicers under the Federal Family
Education Loan Programs (FFELP); and prescribe the weight to be
accorded a debarment or suspension by the hearing official in
proceedings under both subparts when the termination or suspension is
based on an action under Executive Order 12549 (3 CFR, 1986 Comp., p.
189) or the Federal Acquisition Regulation (FAR), 48 CFR part 9,
subpart 9.4.
The preamble to the notice of proposed rulemaking (NPRM) provided
information about the background for this rulemaking action, including
a discussion regarding the need to make changes to the Department's
amendments that were made to the Common Rule when it was issued in
1988.
Educational institutions participating in the Title IV, HEA
programs must execute a program participation agreement that includes,
as Schedule Z, a certification by the institution that neither it nor
its principals are currently debarred or suspended, and that it will
obtain a similar certification from those parties, such as third-party
servicers, with which it contracts. Those parties must notify the
institution if they are subsequently debarred or suspended; however,
the Department has no written agreement with servicers, or with lenders
under the Federal Family Education Loan Program, in which a
certification like that made by the institution could be included. The
Secretary is considering the desirability of including in Title IV, HEA
regulations a requirement that a debarred or suspended lender or
servicer promptly report that action to the Department, and will take
up this issue at the time that the Interagency Committee considers
further amendments to the nonprocurement Debarment and Suspension
Common Rule (See the response to the comments of the Administrative
Conference of the United States in the preamble to the Common Rule.).
Technical Amendments
The Secretary makes certain technical amendments to the regulations
in Part 85 that were not addressed in the preamble or set out in the
text of the proposed amendments. These amendments are needed because
the final common regulatory amendments [[Page 33054]] revise entire
paragraphs rather than setting out only the text of those changes
needed to achieve reciprocity (as was done in the NPRM). As a result,
some of the Department's agency-specific amendments to the original
debarment and suspension regulation needed to be restated to preserve
their inclusion in the revised regulation. Other technical amendments
are made to the final regulations to reflect the policies proposed in
the NPRM, as discussed in the following analysis of the comments.
Analysis of Comments and Responses
Section 85.201 Treatment of Title IV, HEA Participation.
Comment: Several commenters urged that Sec. 85.201 articulate the
specific standards that the Secretary would use to determine whether
the procedures used by another Federal agency to debar or suspend a
lender, third-party servicer, or institution provided equivalent due
process protections to those available under subpart G of Part 668 and
Part 682.
Discussion: The comment is well-taken. Prior to the amendments made
to the HEA in 1992, proceedings under subpart G of Parts 668 or 682 to
suspend or terminate the participation of lenders, servicers, and
institutions were required to be conducted ``on the record'' in
accordance with the requirements of 5 U.S.C. 554-557. These regulations
have since been modified to remove the provisions referring to the
proceedings as conducted ``on the record'' and to the presiding
official as an ``administrative law judge,'' and may be further
modified in the future.
The Secretary intends to give effect to debarments or suspensions
by other agencies that provide the same level of due process to
affected entities, without requiring that those procedures mirror each
feature of subpart G procedures as they now stand or may stand in the
future. The subpart G regulations assure affected entities certain
procedural protections before actions that had the effect of suspending
or terminating their Title IV, HEA participation could become
effective. Where those protections have been made available under
procedures used by another agency, the affected entity has no claim to
any additional procedural protections under Title IV, HEA regulations
before these actions are given effect with regard to Title IV, HEA
activities.
This approach is consistent with the way courts treat the judgment
of an administrative agency acting in an adjudicative capacity,
regarding the adjudicative action as sufficient to bar the respondent
from relitigating that matter in another proceeding either before the
court or another agency. Courts do not require that the procedures used
by the deciding agency mirror judicial procedures in order to bar
relitigation of the matter, so long as the deciding agency follows
typical adjudicative procedures. If adjudicative procedures are
followed by the deciding agency, moreover, it is immaterial whether the
entity subject to debarment or suspension under those procedures
actually contested the action or made use of particular opportunities
available under those procedures.
Consistent with the approach taken by courts in deciding whether an
agency's procedures suffice to bar relitigation of its decision
elsewhere, the Secretary identifies those procedural steps sufficient
to make other agency procedures comparable to subpart G procedures as
including: (1) written notice specifying the grounds on which action is
taken; (2) an opportunity to present evidence and legal argument in
opposition to the action and have that opposition considered by an
impartial trier of fact not responsible for the investigation or
prosecution of the action; (3) an opportunity, where material facts are
in dispute, for an oral evidentiary hearing at which the agency bears
the burden of persuasion by a preponderance of the evidence, at which
the respondent may, where the hearing official considers such testimony
needed in light of other available evidence and witnesses, obtain the
presence of agency witnesses with personal knowledge of material facts,
and of which a transcribed record is available; and (4) a written
decision based on the evidence and argument presented that states the
facts and legal conclusions on which the decision is based.
In determining whether the other agency's procedure comports with
these standards, the Secretary will apply case precedent relevant to
characterizing pertinent agency procedures in other, similar contexts.
For example, as noted in Withrow v. Larkin, 421 U.S. 57, 56 (1975), an
administrative official does not become an investigator or prosecutor
simply by the act of determining that a notice of proposed debarment is
supported by sufficient allegations and evidence to warrant issuance;
that function resembles the traditional judicial function of
considering and ruling on motions to dismiss.
Changes: The final rule articulates in Sec. 85.201 the elements
described here as those that the Secretary will consider sufficient to
provide the same level of procedural due process to make another
Federal agency exclusionary action binding with respect to Title IV,
HEA participation. Conforming changes are made in Secs. 668.82,
682.705, and 682.706. The regulations do not require that these
elements be articulated in the other agency's published regulations,
and the Secretary intends to consider whether a particular element,
although not stated in agency regulations, is, in practice, part of the
agency internal process used to decide the case in question. The
regulations are further amended to state that the Secretary will notify
an affected entity whether the debarment or suspension is regarded by
the Department as binding with respect to Title IV, HEA participation,
and specify the effective date of the action.
The rule provides no opportunity for an administrative appeal of
that determination, and the Secretary therefore considers that
determination to be the final action of the Department.
Section 668.90 Initial and Final Decisions.
Comment: Several commenters objected to the proposal in the NPRM to
treat a proposed debarment under the FAR, when imposed under procedures
considered equivalent to those in subpart G of Parts 668 and 682, as
sufficient action to suspend the participation in Title IV, HEA
programs of a lender, servicer, or institution.
Discussion: Both a proposed debarment under the FAR and a
suspension under E.O. 12549 have the effect of suspending the entity as
of the date on which the department or agency initiated the action by
sending notice of the action to the respondent. This immediate effect
differs from either termination or suspension actions under subpart G
of Parts 668 or 682; the latter both assure the entity an opportunity
to dispute the action prior to its taking effect, unless an emergency
action is simultaneously taken against the entity. However, this
difference does not necessarily prevent these debarment or suspension
procedures from being considered equivalent to subpart G procedures.
If the agency's procedures otherwise provide the procedural due
process protections described in Sec. 85.201, this lack of an
opportunity to object prior to the suspension taking effect becomes
moot in two instances. First, if the respondent does not object to the
action in a timely manner in accordance with the agency procedures, the
suspension continues in effect by what can either be characterized as a
default judgment or implicit consent by the respondent. Second, if the
respondent timely objects [[Page 33055]] and the debarring or
suspending agency issues a decision rejecting that objection, the
suspension thereafter continues in effect by virtue of that decision
and not by virtue of the mere initiation of the action.
Changes: The final rule provides, in Secs. 85.201(a), 668.82(f)(2),
and 682.705 that if another agency, using procedures comparable to
those under subpart G of Parts 668 or 682, has proposed debarment under
the Federal Acquisition Regulation (FAR) or suspended an entity, the
Secretary gives effect to that action as suspending the Title IV, HEA
participation of a lender, servicer, or institution only after he
determines either that the entity has not timely objected to the
action, or has objected and received a decision from the agency
upholding the action.
In addition, the final regulation has been revised to give finality
only to those agency decisions that meet subpart G standards. Sections
668.90, 682.705 and 682.706 have been revised to provide that a
debarment or suspension by another agency under procedures that the
Secretary determines do not meet these standards does not bar the
affected entity from contesting the grounds and justification for the
suspension or debarment under subpart G procedures. However, the other
agency's decision is at very least strong evidence that debarment or
suspension is warranted, and the final regulations now provide that the
decision constitutes a prima facie case that the comparable action is
warranted under Department procedures.
Therefore, although the designated Department official continues to
bear the burden of persuasion in actions to debar, terminate, or
suspend a lender, servicer, or institution, the fact of suspension or
debarment by another agency shifts to the respondent the burden of
producing some credible evidence that the action is not warranted with
respect to the Title IV, HEA programs. The designated Department
official may then introduce rebuttal evidence to sustain his or her
burden of proof; that evidence may include the evidence on which the
other Federal agency relied in imposing the debarment or suspension.
Sections 668.90, 682.705, 682.706 Effective Date and Duration of
Suspension or Termination Based on Suspension or Debarment
Comment: Several commenters urged that the regulations clarify the
period for which the suspension or termination taken on the basis of a
debarment, suspension or proposed debarment would be effective.
Discussion: Subpart G of Part 668, as amended April 29, 1994, 59 FR
22444, provides in Sec. 668.82(f)(2) that a suspension by another
agency under procedures comparable to those in subpart G suspends the
participation of an institution or third-party servicer for 60 days
from the date of that agency's action, unless the Secretary commences a
limitation or termination action under subpart G within that period. In
other instances, the commencement and duration of a suspension imposed
by the Secretary is stated in Sec. 668.85(b), which provides that the
suspension commences 20 days after notice of the proposed suspension is
mailed, unless the respondent timely objects and requests a hearing,
and expires 60 days after it takes effect unless the Secretary
commences a limitation or termination action within that period.
The duration of a termination on the basis of a debarment is
similarly addressed in current Secs. 668.82(f)(1) and 668.96(b)(2),
which provide that a debarment under procedures comparable to subpart G
procedures is effective as a termination for at least the duration of
the debarment or 18 months, whichever is greater, after which the
institution or servicer may request reinstatement.
The commencement and duration of suspensions and terminations with
respect to lenders and loan servicers are similarly stated in current
regulations. 34 CFR Secs. 682.705, 682.706, and 682.711. These
regulations do not specifically address the commencement and duration
of a suspension or termination action taken based on actions pursuant
to Executive Order 12549 or the FAR. Generally, current regulations
provide and the proposed rule provided that a suspension or termination
based on a suspension or debarment by another agency under procedures
comparable to those provided under the respective subparts G of 34 CFR
Parts 668 and 682 is effective, with respect to Title IV, HEA program
transactions, on the date on which the other agency's action is
effective. Under the proposed rule, the Secretary would notify the
affected party whether that action had been taken under subpart G--type
procedures. If the debarment or suspension had been taken under such
procedures, the action would have been effective with respect to Title
IV, HEA program transactions already taken by the party; if it had not,
the Secretary would then bring an action under subpart G to suspend or
terminate the party's participation; unless emergency action were
taken, Title IV, HEA program transactions by that party would not be
effected until the subpart G proceeding was complete. Under the
proposed rule, then, the debarred or suspended party would not know
whether it could properly initiate new Title IV, HEA program
transactions--awarding and disbursing grant, loan, or work study funds,
or certifying new loan applications--after the date of the other agency
action until it received notice of the Secretary's determination.
The Secretary has decided to change this outcome so that a
debarment or suspension entered by another agency under procedures that
meet the standards in Sec. 85.201 will not be effective against an
institution or other affected entity until 20 days after the Department
mails notice of its determination that the other agency's action would
be recognized under Title IV, HEA.
Changes: Section 85.201 is amended in the final rule to provide
that where the Secretary gives effect to a suspension or debarment
pursuant to the action of another agency, the notice of that
determination will state the effective date and duration of those
actions. The effective date in such instances will be 20 days after the
date the notice is mailed. No revision is needed to address the
commencement and duration of other actions initiated by the Secretary
consistent with subpart G of Part 668. Changes are made in 34 CFR
Secs. 682.705 and 682.711 to conform the periods of exclusion from
FFELP participation to those under Part 668. In addition, the final
rule revises Secs. 85.201 and 85.220 to clarify the effect of debarment
on Title IV, HEA participation by stating that the particular
transactions from which a debarred or suspended entity is excluded
under Title IV, HEA are the loans, grants, or work study assistance
disbursed, awarded, acquired or serviced by that entity. Thus, only
those transactions listed in revised Sec. 85.201 are fully subject to
debarment and termination. The revised Sec. 85.220 also addresses the
effect of the debarment and termination on continuing transactions by
referring to current provisions of 34 CFR 668.26, 682.702, and 668.94,
which describe the kinds of actions that an affected party may take
after the effective date of its termination.
List of Subjects in 34 CFR Part 85
Administrative practice and procedure, Contract programs, Grant
programs, Grant administration Grant programs--education.
List of Subjects in 34 CFR Part 668
Administrative practice and procedure, Colleges and universities,
[[Page 33056]] Consumer protection, Grant programs--education, Loan
programs--education, Student aid.
List of Subjects in 34 CFR Part 682
Administrative practice and procedure, Colleges and universities,
Education, Loan programs-education, Reporting and recordkeeping
requirements, Student aid, Vocational education.
Richard W. Riley,
Secretary of Education.
Title 34 of the Code of Federal Regulations, Parts 85, 668, and 682
are amended as follows.
PART 85--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 85 is revised to read as follows:
Authority: 20 U.S.C. 1221e-3 and 3474; 41 U.S.C. 701 et. seq.;
sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327; E.O. 12549, 3
CFR, 198.6 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.
2. Section 85.100 is revised as set forth at the end of the common
preamble.
3. Sections 85.105 and 85.110 are amended as set forth at the end
of the common preamble.
4. Sections 85.200, 85.215, 85.220, and 85.225 and Appendices A and
B to Part 85 are revised as set forth at the end of the common
preamble.
5. Section 85.100 is further amended by revising paragraph (a) and
the authority citation to read as follows:
Sec. 85.100 Purpose.
(a) Executive Order (E.O.) 12549 provides that, to the extent
permitted by law, Executive departments and agencies shall participate
in a governmentwide system for nonprocurement debarment and suspension.
A person who is debarred or suspended shall be excluded from Federal
financial and nonfinancial assistance and benefits under Federal
programs and activities. Except as provided in Sec. 85.200, Debarment
or Suspension, Sec. 85.201, Treatment of Title IV HEA participation,
and Sec. 85.215, Exception provision, debarment or suspension of a
participant in a program by one agency shall have governmentwide
effect.
* * * * *
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
6. Section 85.200 is further amended by revising paragraphs (a) and
(b) and the authority citation to read as follows:
Sec. 85.200 Debarment or suspension.
(a) Primary covered transactions. Except to the extent prohibited
by law and subject to Sec. 85.201, Treatment of Title IV HEA
participation, persons who are debarred or suspended shall be excluded
from primary covered transactions as either participants or principals
throughout the executive branch of the Federal Government for the
period of their debarment, suspension or the period they are proposed
for debarment under 48 CFR part 9, subpart 9.4. Accordingly, ED shall
not enter into primary covered transactions with such excluded persons
during such period, except as permitted pursuant to Sec. 85.215.
(b) Lower tier covered transactions. Except to the extent
prohibited by law and subject to Sec. 85.201, Treatment of Title IV HEA
participation, persons who have been proposed for debarment under 48
CFR part 9, subpart 9.4, debarred or suspended shall be excluded from
participating as either participants or principals in all lower tier
covered transactions (see Sec. 85.110(a)(1)(ii)) for the period of
their exclusion. Such persons shall also be excluded from all contracts
to provide federally-required audit services, regardless of contract
amount.
* * * * *
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
7. Section 85.201 is revised to read as follows:
Sec. 85.201 Treatment of Title IV, HEA participation.
(a)(1) The debarment of an educational institution, lender, or
third party servicer under E.O. 12549 by an agency other than the
Department pursuant to procedures described in paragraph (c) of this
section terminates the eligibility of the entity to enter into
transactions under any student financial assistance program authorized
by Title IV of the Higher Education Act of 1965, as amended, for the
duration of the debarment.
(2)(i) The suspension of an educational institution, lender, or
servicer under E.O. 12549 or pursuant to a proposed debarment under the
Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4, by an
agency other than the Department under procedures described in
paragraph (c) of this section suspends the eligibility of the entity to
enter into transactions under any student financial assistance program
authorized by Title IV of the Higher Education Act of 1965, as amended.
(ii) The suspension of Title IV eligibility as a result of a
suspension described in paragraph (a)(2) of this section lasts for a
period of 60 days, beginning on the later of the date of the decision
of the suspending official of the other agency in response to an
objection to the suspension or, if no objection to that suspension was
raised, on the 35th day after the notice of suspension was issued by
that agency. The suspension described here does not expire on the 60th
day if the suspended entity and the Secretary agree to an extension or
if the Secretary initiates a limitation or termination proceeding
against the entity under 34 CFR Part 668, subpart G, or Part 682,
subpart G, as applicable, prior to the 60th day.
(3) A transaction under a Title IV, HEA program includes--
(i) The disbursement or delivery of funds provided under a Title
IV, HEA program to a student or borrower;
(ii) The certification by an educational institution of eligibility
for a loan under at Title IV, HEA program;
(iii) The acquisition of a loan made under a Title IV, HEA program;
and
(iv) The acquisition of any servicing responsibility for a grant,
loan, or work study assistance under a Title IV, HEA program.
(b)(1) The Secretary notifies the institution, lender, or servicer
that has been debarred or suspended by another Federal agency whether
the debarment or suspension takes effect in accordance with paragraph
(a) of this section and states the effective date and duration of that
action.
(2)(i) If the Secretary proposes to give effect to a suspension or
debarment against an educational institution, lender, or third-party
servicer that does not meet the standards in paragraph (c) of this
section, the Secretary initiates a debarment or suspension proceeding
under Sec. 85.316 or Sec. 85.414, respectively, against that entity.
(ii) The effective date of a debarment or suspension that takes
effect under paragraph (a) of this section shall be 20 days after the
date the notice is mailed. The Secretary gives effect to a suspension
described in paragraph (a)(2) of this section only after the suspending
official of the other agency has issued a decision in response to an
objection to the suspension or, if no objection to that suspension was
raised, on the 35th day after the notice of suspension was issued by
that agency. The suspension lasts for a period of 60 days, beginning on
the effective date specified in the notice, unless the suspended entity
and [[Page 33057]] the Secretary agree to an extension or the Secretary
initiates a limitation or termination proceeding against the entity
under 34 CFR Part 668, subpart G, or Part 682, subpart G, as
applicable, prior to the 60th day.
(3) If an institution, lender, or a third party servicer is
suspended by ED or another Federal agency, the Secretary determines
whether grounds exist for the initiation of an emergency action against
the entity under 34 CFR Part 668, subpart G, or Part 682, subpart G, as
applicable.
(c) An institution, lender, or third-party servicer that is
debarred or suspended by another agency, or proposed for debarment
under 48 CFR part 9, subpart 9.4 by another Federal agency, is
debarred, terminated or suspended, as provided under this part, 34 CFR
part 668, and 34 CFR part 682, as applicable, if that agency took this
action under procedures that afforded the excluded party the following:
(1) Notice of the proposed action;
(2) An opportunity to submit and have considered evidence and
argument in opposition to the proposed action;
(3) An opportunity to obtain a hearing on its objection--
(i) At which the agency bears the burden of persuasion, by a
preponderance of the evidence;
(ii) Conducted by an impartial person who does not also exercise
prosecutorial or investigative responsibilities with respect to that
action;
(iii) At which the entity may, unless the hearing official
determines that no genuine dispute of material fact exists, present
testimony and secure the attendance of those agency witnesses with
personal knowledge of material facts whose testimony the hearing
official determines to be needed, in light of other available evidence
and witnesses; and
(iv) Of which a transcribed record is available upon request; and
(4) A written decision stating findings of fact and conclusions of
law on which the decision is rendered.
(d) The Title IV, HEA programs are those programs listed in 34 CFR
668.1(c).
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
8. Section 85.220 is revised to read as follows:
Sec. 85.220 Continuation of covered transactions.
(a) Notwithstanding the debarment, suspension, proposed debarment
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or
voluntary exclusion of any person by an agency and except as provided
in Sec. 85.201, agencies and participants may continue covered
transactions in existence at the time the person was debarred,
suspended, proposed for debarment under 48 CFR part 9, subpart 9.4,
declared ineligible, or voluntarily excluded. A decision as to the type
of termination action, if any, to be taken should be made only after
thorough review to ensure the propriety of the proposed action.
(b) Agencies and participants shall not renew or extend covered
transactions (other than no-cost time extensions) with any person who
is debarred, suspended, proposed for debarment under 48 CFR part 9,
subpart 9.4, ineligible or voluntary excluded, except as provided in
Sec. 85.215.
(c) An educational institution, lender, or servicer may continue a
Title IV, HEA transaction after the effective date of a debarment as
determined under Sec. 85.201 only as provided in 34 CFR 668.26,
682.702, or 668.94, as applicable.
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
9. Section 85.314 is amended by revising paragraph (d) and the
authority citation to read as follows:
Sec. 85.314 Debarring official's decision.
* * * * *
(d) Notice of debarring official's decision.
(1) If the debarring official decides to impose debarment, the
respondent shall be given prompt notice--
(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 for covered
transactions throughout the executive branch of the Federal Government
unless an agency head or authorized designee makes the determination
referred to in Sec. 85.215.
(2) If the debarring official decides not to impose debarment, the
respondent shall be given prompt notice of that decision. A decision
not to impose debarment shall be without prejudice to a subsequent
imposition of debarment by any other agency.
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
10. Section 85.316 is revised to read as follows:
Sec. 85.316 Procedures for Title IV, HEA debarments.
(a) If the Secretary initiates a debarment action against an
educational institution, lender or third-party servicer under E.O.
12549, the Secretary uses the following procedures in connection with
the debarment to ensure that the debarment also precludes participation
under Title IV of the Higher Education Act of 1965, as amended:
(1) The procedures in Sec. 85.312, Notice of proposed debarment,
and Sec. 85.314(d), Notice of debarring official's decision.
(2) Instead of the procedures in Sec. 85.313 and Sec. 85.314(a)-
(c), the procedures in 34 CFR part 668, subpart G, or 34 CFR part 682,
subpart G, as applicable.
(b) On appeal from a decision debarring an educational institution,
lender, or third-party servicer, the Secretary issues a final decision
after all parties have filed their written materials with the
Secretary.
(c) In a proceeding under this section, in addition to the findings
and conclusions required by 34 CFR part 668, subpart G, or 682, subpart
G, the debarring official, and, on appeal, the Secretary, determine
whether there exist sufficient grounds for debarment as set forth in
Sec. 85.305.
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
11. Section 85.414 is revised to read as follows:
Sec. 85.414 Procedures for Title IV, HEA suspensions under E.O. 12549.
(a) Title IV E.O. 12549 suspensions. (1) If the Secretary initiates
a suspension against an educational institution, lender or third-party
servicer under E.O. 12549, the Secretary uses the following procedures
in connection with the suspension to ensure that the suspension
precludes participation under Title IV of the Higher Education Act of
1965, as amended:
(i) The procedures in Sec. 85.411, Notice of suspension.
(ii) Instead of the procedures in Secs. 85.412, 85.413 and 85.415,
the procedures in 34 CFR part 668, subpart G, or 34 CFR part 682,
subpart G, as applicable.
(2) In a proceeding under this section, in addition to the findings
and conclusions required by 34 CFR part 668, subpart G, or 34 CFR part
682, subpart G, the suspending official, and, on appeal, the Secretary,
determine whether there exist sufficient grounds for suspension as set
forth in Sec. 85.405.
(b) Continued assistance under Title IV, HEA. The institution,
lender, or [[Page 33058]] third-party servicer may continue its
participation in the Title IV programs until the procedures described
in paragraph (a) of this section, except for those relating to appeals
to the Secretary, have been completed, unless the Secretary takes an
emergency action under 34 CFR part 668, subpart G, or 34 CFR part 682,
subpart G.
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1082, 1094, 1221e-3 and
3474; and Sec. 2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
12. Insert ``ED'' where [agency] appears in Sec. 85.215.
13. The authority citation for sections 85.105, 85.110, 85.115,
85.205, 85.210, 85.215, 85.225, 85.300, 85.305, 85.310, 85.311, 85.312,
85.313, 85.315, 85.320, 85.325, 85.400, 85.405, 85.410, 85.411, 85.412,
85.413, 85.415, 85.420, 85.500, 85.505, and 85.510, is revised to read
as follows:
(Authority: E.Os. 12549 and 12689; 20 U.S.C. 1221e-3 and 3474; Sec.
2455, Pub. L. 103-355, 108 Stat. 3243 at 3327)
PART 668--STUDENT ASSISTANCE GENERAL PROVISIONS
1. The authority for part 668 continues to read as follows:
Authority: 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099c, and
1141, unless otherwise noted.
2. Section 668.82 is amended by removing from paragraph (f)(1)
introductory text the words ``that comply with 5 U.S.C. 554-557 (formal
adjudication requirements under the Administrative Procedure Act),''
and adding, in their place, ``described in 34 CFR 85.201(c)'' by
removing the words ``by the Secretary'' in paragraphs (f)(1)
introductory text and (f)(2)(i) introductory text, by removing from
paragraph (f)(2)(i) introductory text ``that comply with 5 U.S.C. 554-
557'' and adding, in their place, ``described in 34 CFR
Sec. 85.201(c)'' and by revising paragraph (f)(2)(ii) introductory text
and adding a new paragraph (f)(3), to read as follows:
Sec. 668.82 Standard of conduct.
* * * * *
(f) * * *
(2) * * *
(ii) A suspension described in paragraph (f)(2) of this section
lasts for a period of 60 days, beginning on the effective date
specified in the notice by the Secretary under 34 CFR 85.201(b),
unless--
* * * * *
(3) A debarment or suspension not described in (f)(1) or (f)(2) of
this section of a participating institution or third-party servicer by
another Federal agency constitutes prima facie evidence in a proceeding
under this subpart that cause for suspension or debarment and
termination, as applicable, exists.
PART 682--FEDERAL FAMILY EDUCATION LOAN (FFEL) PROGRAMS
1. The authority citation for part 682 continues to read as
follows:
Authority: 20 U.S.C. 1071 to 1087-2, unless otherwise noted.
2. Section 682.705 is amended by redesignating paragraphs (c)(6),
(c)(7), and (c)(8) as paragraphs (c)(7), (c)(8), and (c)(9),
respectively, and adding new paragraphs (a)(3) and (c)(6), to read as
follows:
Sec. 682.705 Suspension proceedings.
(a) * * *
(3) A suspension described in 34 CFR 85.201(c) lasts for a period
of 60 days, beginning on the effective date specified in the notice by
the Secretary under 34 CFR 85.201(b), except as provided in paragraph
(a)(1)(i) or (ii) of this section.
* * * * *
(c) * * *
(6) In a suspension action against a lender or third-party servicer
based on a suspension under Executive Order 12549 or a proposed
debarment under the Federal Acquisition Regulation (FAR), 48 CFR part
9, subpart 9.4, that does not meet the standards described in 34 CFR
85.201(c), the presiding official finds that the suspension or proposed
debarment constitutes prima facie evidence that cause for suspension
under this subpart exists.
* * * * *
3. Section 682.706 is amended by redesignating paragraphs (b)(7),
(b)(8), and (b)(9) as paragraphs (b)(8), (b)(9), and (b)(10),
respectively, and adding a new paragraph (b)(7), to read as follows:
Sec. 682.706 Limitation or termination proceedings.
* * * * *
(b) * * *
(7) In a termination action against a lender or third-party
servicer based on a debarment under Executive Order 12549 or under the
Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4 that
does not meet the standards described in 34 CFR 85.201(c), the
presiding official finds that the debarment constitutes prima facie
evidence that cause for debarment and termination under this subpart
exists.
* * * * *
4. Section 682.711 is amended by revising paragraph (a) to read as
follows:
Sec. 682.711 Reinstatement after termination.
(a) A lender or third-party servicer whose eligibility has been
terminated by the Secretary in accordance with the procedures of this
subpart may request reinstatement of its eligibility after the later
of--
(1) Eighteen months from the effective date of the termination; or
(2) The expiration of the period of debarment under Executive Order
12459 or the Federal Acquisition Regulation (FAR), 48 CFR part 9,
subpart 9.4.
* * * * *
BILLING CODE: 4000-01-P
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NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
36 CFR Part 1209
RIN 3095-AA38
FOR FURTHER INFORMATION CONTACT: Mary Ann Hadyka, Policy and
Information Resources Management, 301-713-6730.
List of Subjects in 36 CFR Part 1209
Administrative practice and procedure, Contract programs, Grant
programs--archives and records.
Trudy Huskamp Peterson,
Acting Archivist of the United States.
Title 36 of the Code of Federal Regulations, part 1209 is amended
as follows.
PART 1209--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 1209 continues to read as follows:
Authority: E.O. 12549; sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 101-690, title V, subtitle D; 41 U.S.C. 701 et
seq.); 44 U.S.C. 2104(a).
2. Section 1209.100 is revised as set forth at the end of the
common preamble.
3. Section 1209.105 and 1209.110 are amended as set forth at the
end of the common preamble.
4. Sections 1209.200, 1209.215, 1209.220, and 1209.225 and
Appendices A and B to Part 1209 are revised as set forth at the end of
the common preamble.
BILLING CODE: 7515-01
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[[Page 33059]]
DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 44
FOR FURTHER INFORMATION CONTACT: Ms. Judith A. Caden, Assistant
Director for Loan Policy (264), Loan Guaranty Service, Veterans
Benefits Administration, Department of Veterans Affairs, Washington, DC
20420, (202) 273-7368.
List of Subjects in 38 CFR Part 44
Administrative practice and procedure, Contract programs, Grant
programs, Housing, Loan Programs-housing and community development,
Reporting and recordkeeping requirements, Veterans.
Jesse Brown,
Secretary of Veterans Affairs.
Title 38 of the Code of Federal Regulations, part 44 is amended as
follows.
PART 44--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for part 44 continues to read as follows:
Authority: 38 U.S.C. 501(a) and 3703(c); E.O. 12549; E.O. 12689.
2. Section 44.100 is revised as set forth at the end of the common
preamble.
3. Sections 44.105 and 44.110 are amended as set forth at the end
of the common preamble.
4. Sections 44.200, 44.215, 44.220, and 44.225 and Appendices A and
B to Part 44 are revised as set forth at the end of the common
preamble.
BILLING CODE: 8320-01-M
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 32
RIN 2030-AA39
FOR FURTHER INFORMATION CONTACT: Robert F. Meunier, Director,
Suspension and Debarment Division (3902F), 401 M Street, S.W.,
Washington, D.C. 20460, telephone: (202) 260-8025.
ADDITIONAL SUPPLEMENTARY INFORMATION: Inquiries may also be submitted
via electronic mail (e-mail) to: [email protected].
Electronic inquiries must be submitted as an ASCII file avoiding the
use of special characters and any form of encryption. Inquiries will
also be accepted on disks in WordPerfect in 5.1 file format or ASCII
file format. No Confidential Business Information (CBI) should be
submitted through e-mail.
List of Subjects in 40 CFR Part 32
Administrative practice and procedure, Contract programs, Debarment
and suspension, Grant programs.
Dated: May 26, 1995.
Carol M. Browner,
Administrator.
Title 40 of the Code of Federal Regulations, Part 32 is amended as
follows:
PART 32--GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS)
1. The authority for Part 32 is revised to read as follows:
Authority: 7 U.S.C. 136 et seq.; 15 U.S.C. 2601 et seq.; 20
U.S.C. 4011 et seq.; 33 U.S.C. 1251 et seq.; 41 U.S.C. 701 et seq.;
42 U.S.C. 300f, 4901, 6901, 7401, 9801; sec. 2455, Pub. L. 103-355,
108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 3 CFR, 1986 Comp.;
189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.
2. Section 32.100 is revised as set forth at the end of the common
preamble.
3. Sections 32.105 and 32.110 are amended as set forth at the end
of the common preamble.
4. Sections 32.200, 32.215, 32.220, and 32.225 and Appendices A and
B to Part 32 are revised as set forth at the end of the common
preamble.
BILLING CODE: 6560-50-M
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GENERAL SERVICES ADMINISTRATION
41 CFR Part 105-68
RIN 3090-AF65
FOR FURTHER INFORMATION CONTACT: Donald Suda, (202) 501-1224.
List of Subjects in 41 CFR Part 105-68
Administrative practice and procedure, Contract programs, Grant
programs.
Roger W. Johnson,
Administrator.
Title 41 of the Code of Federal Regulations, Part 105-68 is amended
as follows.
PART 105-68--GOVERNMENTWIDE DEBARMENT AND SUSPENSION
(NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE
WORKPLACE (GRANTS)
1. The authority for part 105-68 continues to read as follows:
Authority: E.O. 12549; sec. 5151-5160 of the Drug-Free Workplace
Act of 1988 (Pub. L. 100-690, Title V, Subtitle D; 41 U.S.C. 701 et
seq.); 40 U.S.C. 486(c).
2. Section 105-68.100 is revised as set forth at the end of the
common preamble.
3. Sections 105-68.105 and 105-68.110 are amended as set forth at
the end of the common preamble.
4. Sections 105-68.200, 105-68.215, 105-68.220, and 105-68.225 and
Appendices A and B to Part 105-68 are revised as set forth at the end
of the common preamble.
BILLING CODE: 6820-61-M
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DEPARTMENT OF THE INTERIOR
Office of the Secretary
43 CFR Part 12
RIN 1090-AA49
FOR FURTHER INFORMATION CONTACT: Dean A. Titcomb, (Chief, Acquisition
and Assistance Division), (202) 208-6431.
ADDITIONAL SUPPLEMENTARY INFORMATION: The Department published an
agency-specific preamble as part of the final nonprocurement debarment
and suspension common rule on May 26, 1988 (53 FR 19159), which
indicated that, due to the expanded scope of transactions covered under
the rule, coverage of its nonprocurement debarment and suspension
system was limited to transactions included in section 12.110(a)(1) of
its proposed rule (52 FR 39042).
The Department also indicated that a review of the Department's
other nonprocurement program activities would be made to determine
whether such activities would be included in the coverage. The review
was made; however, plans to issue a notice of proposed rulemaking to
obtain public comment on covered transactions on or before October 1,
1988, were dropped.
Issues of concern to the Department were addressed through the
subcommittee of the Interagency Committee on Debarment and Suspension
(Interagency Group) which reviewed the scope of the nonprocurement
debarment system. Although the revision of the proposed
[[Page 33060]] common rule did not address the issue of scope, the
Department proposed to include the results of the resolution of this
issue as part of the December 20, 1994, publication as discussed below.
New exceptions for certain types of transactions under natural
resource management programs were proposed. These exceptions attempted
to make clear that permits, licenses, exchanges and other acquisitions
of real property, rights-of-way, and easements, under natural resource
management programs were excluded from coverage.
For example, when the Federal Government seeks to acquire real
property, including through use of an exchange of real property
elsewhere, the transaction will not be subject to these regulations. In
such cases, where the success of the agency program depends on a
specific parcel of land, the application of the debarment and
suspension system could harm the public interest. Moreover, public land
management activities require the use of certain transactions for land
and resource management without regard to the identity of the
recipient. Accordingly, range management transactions, such as grazing
permits and rights-of-way, are excluded by the proposed exception
language. Similarly, virtually all recreation management and public
land access transactions are not covered.
In addition, the Department proposed to amend section 12.110(a)(3)
of its final rule to include nonprocurement debarment system coverage
for Federal acquisition of a leasehold interest or any other interest
in real property, concession contracts, and disposition of Federal real
and personal property and natural resources.
The scope of the Department's nonprocurement debarment system will
include transactions associated with natural resources management
programs and the disposition of natural resources with the following
exceptions: permits, licenses, exchanges and other acquisitions of real
property, rights-of-way, easements, mineral patent claims administered
by the Bureau of Land Management and water service contracts and
repayment contracts awarded by the Bureau of Reclamation. Patents
issued under the Mining Law of 1872, 30 U.S.C. 22 et seq., as amended
are statutory entitlements and, therefore, are exempt under the terms
of Executive Order 12549. The award of water service contracts and
repayment contracts is mandatory, provided by the Reclamation Project
Act of 1939, as amended, set forth at 43 U.S.C. 485.
One comment was received from the private sector, and one comment
was received from another Federal agency in response to the proposed
rule. The private sector commenter stated that the Department's
proposal to include nonprocurement debarment system coverage for
disposition of Federal real and personal property and natural resources
was unwarranted and that the preamble provided no articulated basis for
the proposal. The commenter also stated that the Department was under
no statutory compulsion to make this change. The commenter stated that
there is no policy basis for including asset sales in the
nonprocurement debarment system, particularly given the expanded scope
of the system to include reciprocal procurement and nonprocurement
government-wide effect. The commenter expressed the view that including
asset sales in the nonprocurement debarment system works a punishment
on potential buyers who would be deemed ineligible, contrary to the
express purposes of the nonprocurement system.
The amendment of section 12.110(a)(3) as to covered transactions
does not add disposition of real and personal property and natural
resources. It is our interpretation that these transactions were
already covered as part of the general language adopted in the final
common rule published on May 26, 1988. Because of new exceptions from
coverage, as set forth in section 12.110(a)(2), however, the language
in section 12.110(a)(3) was added to attempt to clarify those covered
transactions previously excluded.
The U.S. Forest Service (USFS) addressed the compatibility of this
rule with the debarment provisions of the Forest Resources Conservation
and Shortage Relief Act of 1990 (Export Act). USFS states that in
enacting the Export Act, Congress ``anticipated no governmentwide
effect would be imposed on persons debarred pursuant to the Export
Act.'' USFS relies for this proposition solely on the provision of the
Export Act that debarment thereunder may be decided only by the
Secretaries of Commerce and of the Interior. We reject this
interpretation. By participating in this common rule making, agencies
are agreeing only to give reciprocal effect to debarments and
suspensions effectuated by other agencies. This is not the same as the
other agencies debarring or suspending a party under the Export Act.
Similarly, the Export Act gives both Commerce and Interior discretion
to deny applications for unprocessed timber that are filed under the
Export Act. Accordingly, we see no prohibition in that Act against
giving reciprocal effect to governmentwide debarments or suspensions to
applications under the Export Act.
USFS also stated a concern that due to differing requirements of
this rule and the Export Act, separate debarment systems will have to
be maintained, and that all timber-related debarments should be ``under
one system.'' We do not understand what USFS intends when it refers to
separate debarment systems. As long as the source of the debarment is
apparent, we see no reason why the differing effects of debarments
under the Export Act and this rule would require the maintenance of two
separate systems.
Next, USFS queries whether sale of miscellaneous forest products,
such as Christmas trees, posts and poles, and boughs, will be covered.
We would exclude such sales as incidental benefits.
Finally, USFS recommends that there should only be a self-
certification process for individuals and families, not also a check by
Federal agencies of the List of Parties Excluded from Federal
Procurement and Nonprocurement Programs for the individual or
corporation and all its aliases or affiliates. We believe that Federal
agencies have an obligation to ensure that the Federal Government is
only doing business with responsible parties; therefore, we are not
changing the Common Rule's requirement for Federal agencies to check
the List.
Therefore, the Department will exclude all transactions concerning
permits, licenses, exchanges and other acquisitions of real property,
rights-of-way, easements, mineral patent claims, water service
contracts, and repayment contracts from its nonprocurement debarment
and suspension system.
A corresponding change is also being made in Section 12.200(c) to
add a reference to these excluded transactions.
List of Subjects in 43 CFR Part 12
Administrative practice and procedure, Contract programs,
Cooperative agreements, Grant programs, Grants administration,
Reporting and recordkeeping requirements.
Dated: May 25, 1995.
Bonnie R. Cohen,
Assistant Secretary--Policy, Management and Budget.
Title 43 of the Code of Federal Regulations, part 12 is amended as
follows: [[Page 33061]]
PART 12--ADMINISTRATIVE AND AUDIT REQUIREMENTS AND COST PRINCIPLES
FOR ASSISTANCE PROGRAMS
1. The authority for part 12 is revised to read as follows:
Authority: 5 U.S.C. 301; 31 U.S.C. 6101 note, 7501; 41 U.S.C.
252a, 701 et seq.; sec. 501, Pub.L. 103-316, 108 Stat. 1723; sec.
307, Pub.L. 103-332, 108 Stat. 2499; E.O. 125
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