Miscellaneous Amendments to Acquisition Regulations

INTERNATIONAL DEVELOPMENT COOPERATION AGENCY

U.S. Agency for International Development

48 CFR Parts 712, 727, 742, 752, and Chapter 7, Appendix I

[AIDAR Notice 98-2]

RIN 0412-AA30

Miscellaneous Amendments to Acquisition Regulations

AGENCY: U.S. Agency for International Development (USAID).

ACTION: Proposed rule.

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SUMMARY: The U.S. Agency for International Development seeks public

comment on a proposed rule that would revise the USAID Acquisition

Regulation (AIDAR), 48 CFR Chapter 7. These revisions are being

proposed to address current AIDAR deficiencies, some of which result

from changes in the Federal Acquisition Regulation (FAR, 48 CFR Ch. 1).

DATES: Comments must be received no later than January 4, 1998.

ADDRESSES: Comments on the proposed rule should be addressed to: Ms.

Diane Howard, Procurement Analyst, Policy Division, Office of

Procurement (M/OP/P), Room 7.08-082U, 1300 Pennsylvania Ave. (RRB),

U.S. Agency for International Development, Washington, DC 20523-7801.

Electronic mail comments are encouraged and may be submitted via

Internet to [email protected]. Please include the full body of

electronic mail comments in the text and not as an attachment, as well

as the name, title, organization, postal address, and E-mail address in

the text of the message.

FOR FURTHER INFORMATION CONTACT:

M/OP/P, Ms. Diane M. Howard, (202) 712-0206.

SUPPLEMENTARY INFORMATION: USAID is seeking comments on the proposed

rule as described below:

A. The FAR was significantly revised as a result of the Federal

Acquisition Streamlining Act of 1994 (FASA) and the Federal Acquisition

Reform Act of 1996, now known as the Clinger-Cohen Act of 1996,

particularly in how it covers the procurement of commercial items. An

existing AIDAR clause, 752.7008 ``Use of Government Facilities or

Personnel (APR 1984)'', requires that the unauthorized use of U.S.

Government facilities (such as office space or equipment), or U.S.

Government clerical or technical personnel in the performance of the

services specified in the contract shall result in an offset in the

amount payable under the contract by an amount equal to the value of

the U.S. Government facilities or personnel. Although USAID does not

procure many commercial items, we envision a possible situation in

which this policy may be in conflict with customary commercial

practice, if there is a commercial practice of providing the

purchaser's facilities or personnel to the vendor for use in the normal

performance of the contract. A new section 712.101 ``Policy'' is

proposed to address this potential concern; while we believe that the

situation would rarely arise, the proposed language is intended to

clarify how it is to be handled, should it arise. We are especially

interested in receiving comments from vendors, particularly of

commercial services, who would be in a better position to inform us

whether our concerns have any basis.

B. For years before the Federal Acquisition Regulation covered

Rights in Data and Copyrights (48 CFR Subpart 27.4), AIDAR Appendix I

contained USAID's policy on academic publication or release to parties

other than those specifically authorized, of unclassified materials

gathered or developed under contracts with academic institutions. The

policy stated in Appendix I is not fully consistent with comparable

coverage in FAR Subpart 27.4 and the clause at FAR 52.227-14, and USAID

has determined that the Appendix, which is more restrictive than the

FAR coverage, should be removed, as we propose to do in this Rule.

However, some of the concerns addressed in the Appendix still exist, so

a new Part 727 is proposed to address these concerns by authorizing the

contracting officer to reserve the right to review data prior to

publication. Since this proposed rule will not require the contracting

officer's approval for the manuscript's publication, we do not believe

that it is contrary to FAR 27.4 or the Rights in Data--General clause

at FAR 52.227-14. Rather, it will serve to establish the Agency's

policy regarding publication of material that may have national

security implications serious enough to adversely affect the conduct of

U.S. assistance programs and that may have potential repercussions on

the successful execution of development and other cooperative programs

in which the United States and foreign countries are involved.

In addition, the proposed Part 727 includes language to make the

clause at FAR 52.227-14 applicable to USAID's contracts performed

overseas and awarded to U.S. organizations, to provide an alternate

paragraph to add to this clause to reserve USAID's right to restrict

release of data when release may negatively impact the Government's

development or diplomatic relationship with the cooperating country,

and to provide guidance on Rights in Data coverage for overseas

contracts with non-US entities.

C. Over the past several years as part of the Agency's

reengineering efforts under the NPR, we have been trying to standardize

reporting requirements under our technical assistance contracts.

Several versions of a ``Reports'' clause have been implemented in our

contracts since 1994, in lieu of the 1989 version of the clause that

currently is found at (48 CFR) AIDAR 752.7026. However, these

standardized ``Reports'' clauses have been found to be inadequate as

contractor performance monitoring tools. Many times, contractors have

not been reporting substantive information that is useful to the

cognizant technical officer (CTO)'s monitoring of the contractor's

performance, or the CTO has not been making effective use of the

information being provided, or the reports were submitted too late for

the information they contained to be of any benefit in improving or

correcting the contractor's performance.

We are proposing to add a new section 742.1170 to the AIDAR, as

well as a new clause as 752.242-70. Although we considered just making

use of (48 CFR) FAR Subpart 42.11, after conducting an informal

internal review, we concluded that developing a parallel but stand-

alone AIDAR section would be more effective since we would then be able

to use terminology and concepts more familiar to USAID program experts,

who would then be more likely to fully use it. The intent of the

proposed section is to allow the CTO to be specific about what

information should be reported and when, so we expect that the

reporting will be more efficient and timely, and therefore more

effective. Along with the rest of the Government, USAID has a renewed

focus on obtaining results in our programs, and we believe that the

proposed clause, AIDAR 752.242-70 entitled ``Periodic Progress

Reports'', will provide USAID with a mechanism to tailor the reporting

requirements to obtain the best information to ensure that we achieve

the results we need from our contractors. In addition, the optional

withholding provision in paragraph (b) of the clause provides the

Agency with an enforcement tool that will reduce the contractors to

comply. Supplementary guidance on how to tailor the reporting

requirements and circumstances that may warrant exercising the

withholding will be

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issued to contracting officers and CTOs in a Contract Information

Bulletin.

D. USAID has always extensively used indefinite delivery contracts

which combine features from different contract types; rather than use

the fixed-price or cost-reimbursement payment clauses in the FAR for

these hybrid contracts, the AIDAR allowed for the use of FAR 52.232-7

with an amended preamble, per AIDAR 752.232-7, in those indefinite

quantity contracts which use a fixed daily rate pricing structure for

services and reimbursement of other direct costs at cost. However, the

preamble to the FAR clause in AIDAR 752.232-7 leads to an ambiguity

regarding how much the Agency is to withhold. Our first step to remove

this ambiguity is to clarity our terminology by specifying that

``contract'' in this context includes ``task order'' or ``delivery

order''.

We also propose to modify paragraph (a)(2) of FAR 52.232-7, which

states that the amount to be withheld is ``5 percent of the amounts due

under this paragraph (a), but the total amount withheld shall not

exceed $50,000''. The ambiguity arises because 5 percent is being

withheld under each task order, many of which are issued from different

Agency contracting activities and paid from different paying offices

around the world. The result has been withholdings under the basic

contract which exceed $50,000, even though this is inconsistent with

the FAR's capping the withholdings at $50,000 per contract. USAID's use

of these types of contracts has increased in recent years, and the size

and duration of task orders under these contracts has gown to the point

where there are frequent orders over $1,000,000 and for a year or

longer. Under these circumstances, for some contractors, withholding

$50,000 for each of possibly three or four task orders is a significant

financial burden. However, limiting to $50,000 per basic contract the

amount withheld for some contracts having as much as $10 million in

task orders outstanding at any one time would not sufficiently protect

the Agency, as intended by the FAR clause. Because of the difficulties

that would arise in trying to coordinate cumulative withholdings per

contract when payments are being made from so many different paying

offices, we are proposing to modify the AIDAR implementation of the FAR

clause by reducing the withholding percentage to one percent per task

order, up to a maximum of $50,000 per task order, and have no limit

specified for the basic contract. While we believe this is a reasonable

compromise between not unduly burdening contractors with excessive

withholdings and still protecting the Agency's interests by making the

cap per task order, we are very interested in the pubic's opinion and

comments. A modification of this nature will require a deviation to the

FAR clause, which we intend to seek prior to formulating the final

rule, after considering comments received in response to this proposed

rule.

The changes in this proposed rule are not considered significant

under FAR 1.301 or FAR 1.501. The proposed rule does not establish a

new collection of information as contemplated by the Paperwork

Reduction Act nor will it have an impact on a substantial number of

small entities within the meaning of the Regulatory Flexibility Act, 5

U.S.C. 601, et seq. Although the proposed changes affecting

withholdings under indefinite quantity contracts may result in

cumulative withholdings over $50,000 per basic contract, the limit

specified in the FAR, we do not anticipate that this will have a

negative impact on small businesses, since, overall, the withholdings

will be less than they are now. We conducted a survey of existing task

orders with small businesses and found that none of the orders

currently being implemented would reach the $50,000 cap per task order

using a one percent withholding. In addition, using the reduced

withholding, a task order would have to have $5,000,000 worth of

burdened labor costs before this threshold is reached, which is an

unusually large order for the small businesses with whom USAID

typically contracts. Finally, since $5,000,000 is the maximum in annual

receipts for qualifying as a small business in the typical SIC codes

under which USAID's services contracts usually fall, a firm may no

longer be considered a small business if it were to receive orders of

this size. Therefore, an Initial Regulatory Flexibility Analysis has

not been performed. Comments or questions may be addressed as specified

in the FOR FURTHER INFORMATION CONTACT section of the Preamble.

List of Subjects in 48 CFR Parts 712, 727, 742, and 752

Government procurement.

Therefore, it is proposed that 48 CFR Chapter 7 be amended as set

forth below:

1. The authority citations in Parts 742 and 752 continue to read as

follows:

Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C.

2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR

1979 Comp., p. 435.

2. A new Part 712 is added to subchapter B to read as follows:

PART 712--ACQUISITION OF COMMERCIAL ITEMS

Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C.

2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR

1979 Comp., p. 435.

712.101 Policy.

USAID policy regarding the acquisition of commercial items

prohibits the use of Government facilities or personnel in the

performance of such contracts, unless customary commercial practice for

the item or service being acquired involves the use of the purchaser's

facilities or personnel. In the latter case, USAID shall comply with

customary commercial practice but shall ensure that the contract terms,

including price, reflect this practice, unless a waiver is obtained in

accordance with FAR 12.302. If a waiver is approved, then the

contracting officer shall include the clause at 752.7008 in the

contract.

3. A new part 727 is added to subchapter E to read as follows:

PART 727--PATENTS, DATA, AND COPYRIGHTS

Subpart 727.4--Rights in Data and Copyrights

Sec.

727.401 Definitions.

727.409 Solicitation provisions and contract clauses.

727.470 USAID policy on academic publications.

Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C.

2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR

1979 Comp., p. 435.

Subpart 727.4--Rights in Data and Copyrights

727.401 Definitions.

Contract manuscript means a report or other data [as defined in FAR

27.401] which is prepared and delivered to the Agency under the terms

of the contract.

Non-contract manuscript means an article, book or other data

compilation based upon experience and information gained under a USAID

contract but not prepared or delivered under the contract.

727.409 Solicitation provisions and contract clauses.

(a) Notwithstanding the exception in FAR 27.409(a)(1)(iii), and as

provided for in paragraph (n) of the same section, USAID procedures are

to include the clause at FAR 52.227.14 in contracts with U.S. entities,

regardless of place of performance, and in contracts with non-

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U.S. entities for performance in the U.S., to the same extent that the

clause would be included in contracts with U.S. entities for

performance in the U.S. In contracts performed overseas, where the

release or publication of data first produced in the performance of the

contract may be sensitive to U.S. Government relations with the

cooperating country, the contracting officer shall also use the clause

at 752.227-14.

(b) For contracts with non-U.S. entities involving performance

overseas, contracting officers shall include the substance of the

clause at FAR 52.227-14 but adapted as necessary to comply with

applicable laws in the country of performance. Legal advice shall be

obtained to the extent necessary in adapting the clause. A deviation is

not required.

727.470 USAID policy on academic publications.

(a) USAID policy favors and encourages the publication of scholarly

research as well as the maximum availability, distribution, and use of

knowledge developed in its programs and will not require an academic

institution to obtain permission to publish the written work produced

under a contract. USAID does, however, ask for the opportunity to

review the manuscript, for comment only, prior to publication.

(1) In the case of a contract manuscript as defined in section

727.401 of this subpart, USAID reserves the right to disclaim

endorsement of the opinions expressed.

(2) In the case of a non-contract manuscript as defined in section

727.401 of this subpart, USAID reserves the right to dissociate itself

from sponsorship or publication.

(b)(1) To implement the policy stated in paragraph (a) of this

section, the contracting officer may reserve the right to review all

manuscripts prior to release for publication in those exceptional cases

where conditions exist making its reasonably foreseeable, in light of

the contract's scope of work and the manner and place of performance,

that the written work to be prepared and delivered under the contract

may have adverse repercussions on the relations and programs of the

United States. Where this right is reserved, it must be so specified in

the contract in accordance with paragraph (c) of this section.

(2) When deciding whether to reserve the right of review prior to

release, the contracting officer shall consult with other USAID

technical offices (such as the strategic objective/results package

team, LPA, GC, etc.), as appropriate, and shall carefully consider all

relevant factors of the specific contract, including:

(i) The extent to which prompt and full performance of the contract

will require access, facilitated by reason of the contract, to

information not generally available to scholars;

(ii) The extent to which the work involves matters of political

concern to foreign countries, particularly where any substantial part

of the work is to be performed therein;

(iii) The extent to which, by reason of USAID's close involvement

and cooperation in the performance of the contract, the work product

may be so identified with USAID itself as to prevent effective

disclaimer of USAID endorsement thereof;

(iv) The extent to which the objective of the contract is to

provide advice to USAID or to a foreign government of immediate

operational significance in the conduct of the USAID program or the

implementation of governmental programs in the host country;

(v) The desires of the host country.

(c) The actual contractual language reserving to the contracting

officer the right to review a manuscript prior to release for

publication must be worded to reflect the agreement reached in the

contract negotiations. In order to allow enough time for USAID to

adequately review and then determine its position regarding the

manuscript, the contractual language shall provide for at least a two

week (10 business days) timeframe for the USAID review to take place

prior to the manuscript being submitted to the publisher.

PART 742--CONTRACT ADMINISTRATION

742.1170 [Added]

4. A new section 742.1170 and subsections 742.1170-1 through

742.1170-4 are added to read as follows:

742.1170 Performance monitoring and progress reporting.

742.1170 General.

Performance monitoring is a function of contract administration

used to determine contractor progress towards achieving the goals and

objectives of the contract and to identify any factors that may delay

or prevent the accomplishment of those goals and objectives.

Performance monitoring requires USAID personnel, particularly the

Cognizant Technical Officer, to maintain adequate knowledge of the

contractor's activities and progress in order to ensure that USAID's

objectives, as stated in the contract's Statement of Work, will be

achieved.

742.1170-2 Applicability.

(a) This section applies to USAID non-personal, professional/

technical services contracts exceeding the simplified acquisition

threshold, but may be applied to other USAID contracts (except personal

services contracts awarded in accordance with Appendices D and J), if

the contracting officer and requiring office determine that doing so is

in the best interests of the Agency. This determination shall be

documented in the contract file.

(b) The underlying principles of FAR Subpart 42.11 apply to USAID

contracts and are inherent to this section. However, not all of the

specific requirements and terminology in FAR 42.11 are compatible with

the types of technical assistance contracts usually awarded by USAID.

Therefore, this section 742.1170 shall apply in lieu of the

requirements of FAR Subpart 42.11.

(c) The progress reports discussed in this section are separate

from the performance evaluation reports prepared in accordance with FAR

42.15 and internal Agency procedures, although they may be used by

USAID personnel or their authorized representatives when evaluating the

contractor's performance. Furthermore, the policies, procedures and

limitations of this section do not apply to technical reports, studies,

papers, etc., the acquisition of which may be part of or even the sole

purpose of the contract.

742.1170-3 Policy.

(a) The contractor is responsible for timely contract performance.

Performance monitoring by USAID does not obviate this responsibility.

(b) The Strategic Objective Team (SOT), particularly the Cognizant

Technical Officer and the Contracting Officer, will determined how to

monitor the contractor's performance to protect the Government's

interests, by considering:

(1) The contract requirements for reporting progress;

(2) The contract performance schedule;

(3) The contractor's implementation plan or workplan;

(4) The contractor's history of contract performance;

(5) The contractor's experience with the services or supplies being

provided under the contract;

(6) The contractor's financial capability;

(7) Any other factors the SOT considers appropriate and necessary

to adequately monitor contractor

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performance (for example, the day-to-day working proximity of the SOT,

CTO, or contracting officer to the contractor's place of performance).

(c) In monitoring contractor performance, the SOT (particularly the

cognizant technical officer and contracting officer) shall utilize any

of the contractor's existing systems or processes for monitoring

progress, provided that doing so is not contrary to the terms of the

contract. The SOT shall not require anything from the contractor that

is outside the claims of waivers, of changes, or of other contract

modifications. Further, progress reports shall not require information

already available from other sources.

742.1170-4 Progress reporting requirements and contract clause.

(a) When information on contract performance status is needed, the

contract may include a requirement for the contractor to submit

periodic progress reports, tailored to address specific contract

requirements but limited to only that information essential to USAID's

needs in monitoring the contractor's progress.

(b) Because the cognizant technical officer (CTO) is the individual

most familiar with the contractor's performance, the progress reports

shall be directed to the CTO, who shall review the reports and advise

the contracting officer of any required action, including any action

needed to address potential or actual delays in performance. Such

advice shall be in writing and provided in sufficient time for the

contracting officer to take necessary action, and shall provide a

definite recommendation, if action is appropriate. The requirements of

this paragraph do not relieve the contractor of notification

requirements identified elsewhere in the contract.

(c) The contracting officer shall insert the clause at 752.242-70,

Periodic Progress Reports, in solicitations and contracts when progress

reporting is required, as specified in this section. When this clause

is used, the contract shall specify appropriate reporting instructions

in Section G of the contract.

PART 752--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

752.227-14 [Added]

5. A new section 752.227-14 is added to read as follows:

752.227-14 Rights in data--General (overseas).

As prescribed in 727.409(a), the following paragraph (d) shall be

used in lieu of paragraph (d) in FAR 52.227-14 in all contracts

requiring performance overseas:

Rights in Data--General (Overseas) (XXXX 1998)

(d)(1) For all data first produced or specifically used by the

Contractor in the performance of this contract in the United States,

its territories, or Puerto Rico, the Contractor shall have the right

to use, release to others, reproduce, distribute, or publish such

data, except to the extent such data may be subject to the Federal

export control or national security laws or regulations, or unless

otherwise provided in this paragraph of this clause or expressly set

forth in this contract.

(2) For all data first produced or specifically used by the

Contractor in the overseas performance of this contract, the

Contractor shall not release, reproduce, distribute, or publish such

data without the written permission of the Contracting Officer.

(3) The Contractor agrees that to the extent it receives or is

given access to data necessary for the performance of this contract

which contain restrictive markings, the Contractor shall treat the

data in accordance with such markings unless otherwise specifically

authorized in writing by the Contracting Officer.

752.232-7 [Revised]

5. Section 752.232-7 is revised to read as follows:

752.232-7 Payments under Time-and-Materials and Labor-Hour Contracts.

USAID uses the payment clause contained in FAR 52.232-7, PAYMENT

UNDER THE TIME-AND-MATERIALS AND LABOR-HOUR CONTRACTS, in indefinite

delivery (task order) contracts for professional services, modified as

follows:

Payment Under Time-and-Materials and Labor-Hour Contracts (XXXX 1998)

(a) The following preamble will be included:

Certain terms used in this clause shall be interpreted as

follows:

The term ``contract(s)'' includes ``delivery order(s)'' and

``task orders''; ``hour(s)'', or ``hourly'' may be calculated in

terms of ``day(s)'' or ``daily (8 hours)''; and ``materials''

includes ``other direct costs''.

(b) Paragraph (a)(2) of the FAR clause is revised to read as

follows:

Unless otherwise prescribed in the Schedule, the Contracting

Officer shall withhold one (1) percent of the amount due under each

task order, but the total amount withheld per task order shall not

exceed $50,000. Amounts withheld under an individual task order

shall be retained until the execution and delivery of a release for

each task order by the Contractor as provided in paragraph (f)

below.

752.242-70 [Added]

6. A new section 752.242-70 is added to read as follows:

752.242-70 Periodic progress reports.

As prescribed in 742.1170-3(c), insert the following clause in

contracts for which periodic progress reports are required from the

contractor. The term ``contract'' shall be interpreted as ``task

order'' or ``delivery order'' when this clause is used in an

indefinite-delivery contract.

Periodic Progress Reports (August 1998)

(a) The contractor shall prepare and submit progress reports as

specified in the Schedule of this contract. These reports are

separate from the interim and final performance evaluation reports

prepared by USAID in accordance with FAR 42.15 and internal Agency

procedures, but they may be used by USAID personnel or their

authorized representatives when evaluating the contractor's

performance.

(b) During any delay in furnishing a progress report required

under this contract, the contracting officer may withhold from

payment an amount not to exceed US$25,000 (or local currency

equivalent) or 5 percent of the amount of this contract, whichever

is less, until such time as the contracting officer determines that

the delay no longer has a detrimental effect on the Government's

ability to monitor the contractor's progress.

752.7008 [Amended]

7. Section 752.7008 is amended by adding ``, and in commercial

contracts when required in 712.101'' after ``contracts'' in the

introductory paragraph.

752.7026 [Removed]

8. Section 752.7026 is removed and reserved.

Appendix I to Chapter 7--[Removed]

9. Under the authority of Sec. 621, Pub. L. 87-195, 75 Stat. 445,

(22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3

CFR 1979 Comp., p. 435, Chapter 7 is amended by removing Appendix I and

reserving it.

Dated: September 21, 1998.

Marcus L. Stevenson,

Procurement Executive.

[FR Doc. 98-28804 Filed 11-3-98; 8:45 am]

BILLING CODE 6116-01-M