HUD Acquisition Regulation; Miscellaneous Revisions

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

48 CFR Parts 2403, 2409, 2436, 2439, 2442, 2452 and 2453

[Docket No. FR-4291-P-01]

RIN 2535-AA25

HUD Acquisition Regulation; Miscellaneous Revisions

AGENCY: Office of the Chief Procurement Officer (CPE).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the Department of Housing and

Urban Development (HUD) Acquisition Regulation (HUDAR) to implement

changes applicable to HUD's procurement activities made in the Federal

Acquisition Regulation since the HUDAR's last issuance. It would also

implement miscellaneous HUD procurement rules as described in the

Supplementary Information below.

DATES: Comment Due Date: October 22, 1999.

ADDRESSES: Interested persons are invited to submit comments regarding

this rule to the Rules Docket Clerk, Office of the General Counsel,

Room 10276, Department of Housing & Urban Development, 451 Seventh

Street, SW., Washington, DC 20410-8000. Communication should refer to

the above docket number and title. Facsimile comments will not be

accepted. A copy of each communication submitted will be available for

public inspection and copying between 7:30 am and 5:30 pm weekdays at

the above address.

FOR FURTHER INFORMATION CONTACT: Frederick Graves, Policy and Field

Operations Division, Office of Procurement and Contracts (Seattle

Outstation), U.S. Department of Housing and Urban Development, Seattle

Federal Office Building, 909 1st Avenue, Seattle, WA 98104-1000, (206)

220-5122, ext. 3450. Hearing or speech-impaired individuals may call

(206) 220-5185 (TTY) or 1-800-877-8339 (Federal Information Relay

Service TTY). (Other than the ``800'' number, these are not toll-free

numbers.)

SUPPLEMENTARY INFORMATION:

Background

The uniform regulation for the procurement of supplies and services

by Federal departments and agencies, the Federal Acquisition Regulation

(FAR), was promulgated on September 19, 1983 (48 FR 42102). The FAR is

codified in title 48, chapter 1, of the Code of Federal Regulations.

HUD promulgated its regulation to implement the FAR on March 1, 1984

(49 FR 7696).

The HUDAR (title 48, chapter 24 of the Code of Federal Regulations)

is prescribed by the Chief Procurement Officer under section 7(d) of

the Department of HUD Act (42 U.S.C. 3535(d)); section 205(c) of the

Federal Property and Administrative Services Act of 1949 (40 U.S.C.

486(c)); the Secretary's delegation effective October 6, 1998 (63 FR

54723); and the general authorization in FAR 1.301.

The most recent version of the HUDAR was published as a final rule

on May 1, 1996 (61 FR 19467). This proposed rule amends the HUDAR to

reflect HUD's implementation of changes in the FAR and Federal statutes

applicable to HUD's procurement activities. Please note that the

Department is also publishing, elsewhere in this issue of the Federal

Register, an interim rule for comment making other changes to the

HUDAR.

Section 2403.670 is revised pursuant to section 4301 of the Federal

Acquisition Reform Act of 1996, (Public Law 104-106, 110 Stat. 642,

approved February 10, 1996) (1996 FAR Act) to delete the requirement

for a certification regarding Federal employment by offerors and

contractors.

In accordance with Section 4301 of the 1996 FAR Act, the Department

is removing, via this proposed rule, two of its three previously

existing regulatory certification requirements that are not statutorily

based, viz., 2452.203-71, ``Certification Regarding Federal

Employment'' and 2452.209-71, ``Organizational Conflicts of Interest

Certification.'' The Chief Procurement Officer has made a determination

to retain the certification requirement at Section 2426.703 and the

related solicitation provision at 2452.226-70, Certification of Status

as a Minority Business Enterprise. The CPE has determined that the

Department needs to maintain its capability to provide accurate, timely

reporting on its minority contracting activity statistics. This

certification is the most efficient means for obtaining the data needed

for making such reports.

In section 2439.107 a new paragraph (b) is added to prescribe the

use of a computer virus security clause in contracts for information

technology.

Section 2442.1106 is revised to replace the Department's current

requirement for the use of a specific project planning and monitoring

process for certain technical services contracts with a generic

requirement for an acceptable planning and monitoring system. The

revision allows contractors to develop their own system or use

commercially available systems that are acceptable to the contracting

officer. This also permits the use of automated planning and monitoring

systems to streamline those functions. HUD's current system is not

automated.

Section 2452.203-71 is removed to delete the requirement for the

non-statutory certification (see comments under 2403.670 above).

Section 2452.209-70 is replaced with a new version of the

solicitation provision in which the contracting officer identifies the

potential areas for organizational conflicts of interest. This reflects

the guidance provided in FAR Subpart 9.5.

Section 2452.209-71 is revised to better conform to the

requirements of FAR Subpart 9.5, viz., to place the burden on the

contracting officer of describing any potential organizational conflict

of interest in the contract. The revised clause also prohibits the

contractor's performance under future contracts of work using

specifications developed by the contractor under the immediate

contract. The contracting officer may also impose additional

restrictions via this clause. Section 2452.209-71 is also revised

pursuant to section 4301 of the 1996 FAR Act to delete the existing

requirement for the submission of an organizational conflict of

interest certification by all offerors.

In section 2452.215-70, an Alternate III is added to obtain

information required of offerors by the provision at 2452.209-72.

Section 2452.239-71 is added in accordance with 2439.107(b). The

clause seeks to prevent the knowing submission by a contractor of

information technology containing viruses that the contractor should

have detected before such submission.

Section 2452.242-71 is revised to describe in generic terms the

Department's requirements for project planning and monitoring systems

to be used under contracts exceeding $500,000 for technical or

professional services for work of a developmental or advisory nature.

This eliminates the requirement for HUD's previous system which was not

automated and permits the use of contractors' own automated planning

and monitoring systems to streamline those functions. The forms related

to the previous system at 2453.242-70 and 2453.242-71 are removed.

Findings and Certifications

Paperwork Reduction Act Statement

The information collection requirements contained in the HUDAR,

[[Page 46105]]

as described in the table below, have been submitted to the Office of

Management and Budget for review under section 3507(d) of the Paperwork

Reduction Act of 1995 (44 U.S.C. Chapter 35).

Estimate of the total reporting and recordkeeping burden that will

result from the collection of information:

REPORTING AND RECORDKEEPING BURDEN:

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Annual Est. avg.

Number of freq. of time for Est. annual

Section reference parties requirement requirement burden

(annum) (hours) (hours)

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HUDAR:

2452.209-70............................................. 350 1 0.5 175

2452.209-72............................................. 5 1 1.0 5

2452.215-70............................................. 350 1 120.0 42,000

2452.216-72............................................. 2 4 2.0 16

2452.219-70............................................. 30 1 0.5 15

2452.219-71............................................. 30 4 0.1 12

2452.237-70............................................. 30 1 4.0 120

2452.237-75............................................. 5 1 5.0 25

2452.239-70............................................. 40 1 1.0 40

2452.242-71 (initial plan).............................. 40 1 8.0 320

2452.242-71 (reports)................................... 40 12 8.0 2,880

HUD 770................................................. 2 1 0.5 1

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Total Reporting and Recordkeeping Burden (Hours)...... ........... ........... ........... 45,609

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In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments

from members of the public and affected agencies concerning this

collection of information to:

(1) Evaluate whether the proposed collection of information is

necessary for the proper performance of the functions of the agency,

including whether the information will have practical utility;

(2) Evaluate the accuracy of the agency's estimate of the burden of

the proposed collection of information;

(3) Enhance the quality, utility, and clarity of the information to

be collected; and

(4) Minimize the burden of the collection of information on those

who are to respond; including through the use of appropriate automated

collection techniques or other forms of information technology, e.g.,

permitting electronic submission of responses.

Interested persons are invited to submit comments regarding the

information collection requirements in this proposal. Comments must be

received within sixty (60) days from the date of this proposal.

Comments must refer to the proposal by name (HUDAR) and must be sent

to:

Joseph F. Lackey, Jr., HUD Desk Officer, Office of Management and

Budget, New Executive Office Building, Washington, DC 20503

and

Antoinette Henry, Reports Liaison Officer, Office of the Chief

Procurement Officer, Department of Housing & Urban Development, 451--

7th Street, SW, Room 5262, Washington, DC 20410.

Unfunded Mandates Reform Act

The Secretary has reviewed this rule before publication and by

approving it certifies, in accordance with the Unfunded Mandates Reform

Act of 1995 (2 U.S.C. 1532), that this rule does not impose a Federal

mandate that will result in the expenditure by State, local, and tribal

governments, in the aggregate, or by the private sector, of $100

million or more in any one year.

Regulatory Flexibility Act

The Secretary, in accordance with the Regulatory Flexibility Act (5

U.S.C. 605(b)), has reviewed and approved this rule, and in so doing

certifies that this proposed rule will not have a significant economic

impact on a substantial number of small entities. Small businesses are

specifically invited, however, to comment on whether this rule will

significantly affect them, and persons are invited to submit comments

according to the instructions in the DATES and COMMENTS sections in the

preamble of this proposed rule.

Environmental Impact

This rule does not direct, provide for assistance or loan and

mortgage insurance for, or otherwise govern or regulate real property

acquisition, disposition, leasing, rehabilitation, alteration,

demolition or new construction, or establish, revise or provide for

standards for construction or construction materials, manufactured

housing or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule

is categorically excluded from environmental review under the National

Environmental Policy Act of 1969 (42 U.S.C. 4321). Accordingly, a

Finding of No Significant Impact is not required.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that this rule

will not have substantial direct effects on States or their political

subdivisions, or the relationship between the Federal Government and

the States, or on the distribution of power and responsibilities among

the various levels of Government. No programmatic or policy changes

will result from this document's promulgation that would affect the

relationship between the Federal Government and State and local

governments.

Executive Order 13045, Protection of Children From Environmental Health

Risks and Safety Risks

This rule will not pose an environmental health risk or safety risk

to children.

List of Subjects in 48 CFR Parts 2403, 2409, 2436, 2439, 2442, 2452

and 2453.

Government procurement, HUD acquisition regulations.

Accordingly, title 48, chapter 24 of the Code of Federal

Regulations, is proposed to be amended as follows:

PART 2403--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF

INTEREST

1. The authority citation for part 2403 continues to read as

follows:

[[Page 46106]]

Authority: 42 U.S.C. 3535(d).

2. Section 2403.670 is revised to read as follows:

2403.670 Solicitation provision and contract clause.

Insert the clause at 48 CFR 2452.203-70 in all solicitations and

contracts.

PART 2409--CONTRACTOR QUALIFICATIONS

3. The authority citation for part 2409 continues to read as

follows:

Authority: 40 U.S.C. 486(c); and 42 U.S.C. 3535(d).

4. Section 2409.507-1 is revised to read as follows:

2409.507-1 Solicitation provisions.

The Contracting Officer shall insert a provision substantially the

same as the provision at 48 CFR 2452.209-70, Potential Organizational

Conflicts of Interest, in all solicitations over the simplified

acquisition limitation when the Contracting Officer has reason to

believe that a potential organizational conflict of interest exists.

The Contracting Officer shall describe the nature of the potential

conflict in the provision.

5. Section 2409.507-2 is revised to read as follows:

2409.507-2 Contract clauses.

The Contracting Officer shall insert a clause substantially the

same as the clause at 48 CFR 2452.209-71, Limitation on Future

Contracts, in all contracts above the simplified acquisition threshold.

The Contracting Officer shall describe in the clause the nature of the

potential conflict, and the negotiated terms and the duration of the

limitation.

PART 2436--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

6. The authority citation for part 2436 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

7. Paragraph (a)(2) of section 2436.602-2 is revised to read as

follows:

2436.602-2 Evaluation boards.

(a) * * *

(2) The cognizant program office head for boards appointed at the

field level.

* * * * *

8. Section 2436.602-4 is revised to read as follows:

2436.602-4 Selection authority.

(a) The final selection decision shall be made by the cognizant

Primary Organization Head in headquarters, or field program office

head.

PART 2439--ACQUISITION OF INFORMATION TECHNOLOGY

9. The authority citation for part 2439 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

10. In section 2439.107, a new paragraph (b) is added to read as

follows:

2439.107 Contract clauses.

* * * * *

(b) The contracting officer shall insert the clause at 48 CFR

2452.239-71, Information Technology Virus Security, in solicitations

and contracts under which the contractor will provide information

technology hardware, software or data products.

PART 2442--CONTRACT ADMINISTRATION

11. The authority citation for part 2442 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

12. Section 2442.1106 is revised to read as follows:

2442.1106 Reporting requirements.

(a) All contracts for professional or technical services of a

developmental or advisory nature exceeding $500,000 shall include a

requirement for the use of systematic project planning and progress

reporting. The Contracting Officer may require the use of such project

planning and reporting systems for contracts below the above threshold.

13. Section 2442.1107 is revised to read as follows:

2442.1107 Contract clause.

The Contracting Officer shall insert a clause substantially the

same as the clause at 48 CFR 2452.242-71, Project Management System, in

solicitations and contracts for services as described in 2442.1106

expected to exceed $500,000. Use of this clause below the stated

threshold is at the discretion of the Contracting Officer.

PART 2452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

14. The authority citation for part 2452 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

2452.203-71 [Removed]

15. Section 2452.203-71 is removed.

16. Section 2452.209-70 is revised to read as follows:

2452.209-70 Potential organizational conflicts of interest.

As prescribed in 2409.507-1, the Contracting Officer may insert a

provision substantially the same as follows in solicitations:

Potential Organizational Conflicts of Interest (*** 1999)

(a) The Contracting Officer has determined that the proposed

contract contains a potential organizational conflict of interest.

Offerors are directed to FAR subpart 9.5 for detailed information

concerning organizational conflicts of interest.

(b) The nature of the potential conflict of interest is

[Contracting Officer insert description]:

(c) Offerors shall provide a statement which describes concisely

all relevant facts concerning any past, present or planned interest

(financial, contractual, organizational, or otherwise) relating to

the work to be performed under the proposed contract and bearing on

whether the offeror has a possible organizational conflict of

interest with respect to:

(1) Being able to render impartial, technically sound, and

objective assistance or advice, or

(2) Being given an unfair competitive advantage. The offeror may

also provide relevant facts that show how its organizational

structure and/or management systems limit its knowledge of possible

organizational conflicts of interest relating to other divisions or

sections of the organization and how that structure or system would

avoid or mitigate such organizational conflict.

(d) No award shall be made until any potential conflict of

interest has been neutralized or mitigated to the satisfaction of

the Contracting Officer.

(e) Refusal to provide the requested information or the willful

misrepresentation of any relevant information by an offeror shall

disqualify the offeror from further consideration for award of a

contract under this solicitation.

(f) If the Contracting Officer determines that a potential

conflict can be avoided, effectively mitigated, or otherwise

resolved through the inclusion of a special contract clause, the

terms of the clause will be subject to negotiation.

(End of provision)

17. Section 2452.209-71 is revised to read as follows:

2452.209-71 Limitation on future contracts.

As prescribed in 2409.507-2, the Contracting Officer may insert a

clause substantially the same as follows in solicitations and contracts

for services:

Limitation on Future Contracts (**** 1999)

(a) The Contracting Officer has determined that this contract

may give rise to potential organizational conflicts of interest as

defined at FAR subpart 9.5.

(b) The nature of the potential conflict of interest is

[Contracting Officer insert description]:

[[Page 46107]]

(c) If the contractor, under the terms of this contract or

through the performance of tasks pursuant to this contract, is

required to develop specifications or statements of work that are to

be incorporated into a solicitation, the contractor shall be

ineligible to perform the work described in that solicitation as a

prime or first-tier subcontractor under any ensuing HUD contract.

(d) Other restrictions--[Contracting Officer insert description]

(e) The restrictions imposed by this clause shall remain in

effect until [Contracting Officer insert period or date].

(End of clause)

18. A new section 2452.239-71 is added to read as follows:

2452.239-71 Information technology virus security.

As prescribed in 2439.107(b), insert the following clause:

Information Technology Virus Security (****, 1999)

(a) The contractor hereby agrees to make every reasonable effort

to deliver information technology products to HUD free of known

computer viruses. The contractor shall be responsible for examining

all such products prior to their delivery to HUD using software

tools and processes capable of detecting all known viruses.

(b) The contractor shall include the following statement on

deliveries of hardware, software, and data products, including

diskettes, made under this contract:

[product description, part/catalog number, other identifier, and

serial number, if any]

``This product has been scanned for known viruses using [name of

virus-screening product, including version number, if any] and is

certified to be free of known viruses at the time of delivery.''

(c) The Contracting Officer may assess monetary damages against

the contractor sufficient to compensate HUD for actual or estimated

costs resulting from computer virus damage or malicious destruction

of computer information arising from the contractor's failure to

take adequate precautions to preclude delivery of virus-containing

products in the delivery of hardware, software, or data on diskettes

under this contract.

(d) This clause shall not subrogate the rights of the Government

under any other clause of this contract.

(End of clause)

19. Section 2452.242-71 is revised to read as follows:

2452.242-71 Project management system.

As prescribed in 2442.1107, insert the following clause:

Project Management System (**** 1999)

(a) Within the time period specified elsewhere in this contract,

or as directed by the Contracting Officer, the Contractor shall

provide to the GTR and Contracting Officer a project management

baseline plan and routine reports showing the Contractor's actual

progress against the baseline plan.

(b) The project management system shall consist of two parts:

(1) Baseline plan. The baseline plan shall consist of--

(i) A narrative portion that:

(A) Identifies each task and significant activity required for

completing the contract work, critical path activities, task

dependencies, task milestones, and related deliverables;

(B) Describes the project schedule, including the period of time

needed to accomplish each task and activity (see i(B));

(C) Describes staff (e.g., hours per individual), financial, and

other resources allocated to each task and significant activity; and

(D) Provides the rationale for project organization and resource

allocation.

(ii) A graphic portion showing:

(A) Cumulative planned or budgeted costs of work scheduled for

each reporting period over the life of the contract; and

(B) The planned start and completion dates of all planned and

budgeted tasks and activities.

(2) Progress reports. Progress reports shall consist of:

(i) A narrative portion that:

(A) Provides a brief, concise summary of technical progress made

and the costs incurred for each task during the reporting period;

and

(B) Identifies significant problems, or potential problems,

their causes, proposed corrective actions, and the net effect on

contract completion.

(ii) A graphic portion showing:

(A) The schedule status and degree of completion of the tasks,

activities and deliverables shown in the baseline plan for the

reporting period, including actual start and completion dates for

all tasks and activities in the baseline plan;

(B) The costs incurred during the reporting period, the current

total amount of costs incurred through the end date of the reporting

period for budgeted work, and the projected costs required to

complete the work under the contract.

(c) The formats, forms and/or software to be used for the

project management system under this contract shall be [Contracting

Officer insert appropriate language--``as prescribed in the

schedule;'' ``a format, forms and/or software designated by the

GTR;'' or, ``the contractor's own format, forms and/or software,

subject to the approval of the GTR.'']

(End of clause)

PART 2453--FORMS

20. The authority citation for part 2453 continues to read as

follows:

Authority: 40 U.S.C. 486(c); 42 U.S.C. 3535(d).

2453.242-70 [Removed]

21. Section 2453.242-70 is removed.

2453.242-71 [Removed]

22. Section 2453.242-71 is removed.

Dated: June 7, 1999.

V. Stephen Carberry,

Chief Procurement Officer.

[FR Doc. 99-21078 Filed 8-20-99; 8:45 am]

BILLING CODE 4210-01-P