Federal Acquisition Regulation; Removal of Fair Pay and Safe Workplaces Rule Republication

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 4, 9, 17, 22, 42, and 52

[FAC 2005-96; FAR Case 2017-015; Docket No. 2017-0002; Sequence No. 1]

RIN 9000-AN52

Federal Acquisition Regulation; Removal of Fair Pay and Safe

Workplaces Rule Republication

Editorial Note: Rule document 2017-23590 originally published

on pages 51527 through 51531 in the issue of Monday, November 6,

2017, with an extraneous web address inadvertently inserted. The

corrected document is published here in its entirety.

AGENCY: Department of Defense (DoD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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

SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the

Federal Acquisition Regulation (FAR) to implement a public law that

disapproved the final rule, Fair Pay and Safe Workplaces (FAR Case

2014-025), and an Executive Order (E.O.) dated March 27, 2017, that

rescinded the prior Executive orders authorizing that rule.

DATES:

Effective date: November 6, 2017.

Applicability dates: See section I.F of the Supplementary

Information.

FOR FURTHER INFORMATION CONTACT: Ms. Zenaida Delgado, Procurement

Analyst, at 202-969-7207 for clarification of content. For information

pertaining to status or publication schedules, contact the Regulatory

Secretariat Division at 202-501-4755. Please cite FAC 2005-96, FAR Case

2017-015.

SUPPLEMENTARY INFORMATION:

I. Background

A. The FAR Rule Implementing E.O. 13673

FAR Case 2014-025 implemented E.O. 13673, Fair Pay and Safe

Workplaces, dated July 31, 2014 (79 FR 45309, August 5, 2014), amended

by section 3 of E.O. 13683, dated December 11, 2014 (79 FR 75041,

December 16, 2014) and E.O. 13738, dated August 23, 2016 (81 FR 58807,

August 26, 2016).

The FAR Case final rule was published in the Federal Register on

August 25, 2016, at 81 FR 58562. It was to be effective on October 25,

2016.

[[Page 51774]]

Certain aspects of the rule were to be phased in. For example, the

clause at FAR 52.222-60, Paycheck Transparency (Executive Order 13673),

was to be inserted in solicitations starting January 1, 2017, if the

estimated value of the resultant contract was to exceed $500,000.

The Department of Labor (DOL) published ``Guidance for Executive

Order 13673, `Fair Pay and Safe Workplaces' '' on the same day as the

FAR final rule was published (81 FR 58653).

B. Injunction and Federal Acquisition Regulatory Council Memorandum

On October 7, 2016, the Associated Builders and Contractors of

Southeast Texas, Inc., the Associated Builders and Contractors, Inc.,

and the National Association of Security Companies filed a lawsuit in

the United States District Court for the Eastern District of Texas

(Civil Action No. 1:16-CV-425) seeking to overturn the final rule. On

October 13, 2016, the plaintiffs filed an ``Emergency Motion for

Temporary Restraining Order and Preliminary Injunction.''

On October 24, 2016, the District Court issued a ``Memorandum and

Order Granting Preliminary Injunction.'' The Court Order (on page 31)

stated: ``Defendants are enjoined [from] implementing any portion of

the FAR Rule or the DOL Guidance relating to the new reporting and

disclosure requirements regarding labor law violations as described in

E.O. 13673 and implemented in the FAR Rule and DOL Guidance. Further,

Defendants are enjoined from enforcing the restriction on arbitration

agreements.''

The Court Order did not enjoin the Paycheck Transparency clause,

FAR 52.222-60. Starting January 1, 2017, this clause was prescribed for

solicitations if the estimated value of the resultant contract would

exceed $500,000.

On October 25, 2016, the Federal Acquisition Regulatory Council

issued a memorandum to the Chief Acquisition Officers, Senior

Procurement Executives, Defense Acquisition Regulations Council, and

Civilian Agency Acquisition Council directing that all steps necessary

be taken to ensure that the enjoined sections, provisions, and clauses

of the final rule would not be implemented until such time as the

injunction is terminated. The Council enumerated specific steps to be

taken at a minimum, including the following:

1. Ensure that new solicitations do not include representations

or clauses that the enjoined coverage of the rule would have

required--i.e., the representation at FAR 52.222-57 and its

commercial items version at paragraph (s) of 52.212-3, 52.222-58 and

52.222-59, which would have directed disclosure of labor law

violation decisions by offerors or contractors, and 52.222-61, which

would have required an offeror or contractor to agree to restrict

the use of mandatory pre-dispute arbitration agreements.

2. If a solicitation had been issued with representations or

clauses listed in the previous paragraph 1, amend those

solicitations immediately to remove those representations and

clauses. Additionally, agencies were directed not to take any action

on information, if any, submitted in response to those

representations and clauses.

3. Ensure that contracting officers do not implement the

procedures in FAR 22.2004-2, 22.2004-3, 22.2004-4, or associated

changes in FAR parts 9 and 42.

The FAR Council requested that agencies share these instructions

widely among their workforces and posted the Memorandum online. Also,

the DOL re-posted the Memorandum at the top of its then-existing

information page on the Fair Pay and Safe Workplaces E.O.

In further compliance with the terms of the Court Order, as

explained by the FAR Council in its October 25, 2016 Memorandum, GSA's

Integrated Award Environment immediately ceased all actions to release

the changes for the System for Award Management (SAM) that would have

supported bidder and contractor submission of information on labor law

violation decisions, as well as the changes that would have supported

public disclosure of this information in the Federal Awardee

Performance and Integrity Information System (FAPIIS).

C. FAR Rule Implementing the Injunction

As an additional step to ensure full awareness of, and compliance

with, the Court Order, DoD, GSA, and NASA, on behalf of the FAR

Council, took a more comprehensive administrative action to amend the

August 25, 2016, final rule to include caveats throughout the rule for

each section, provision, and clause that was enjoined by the terms of

the Court Order. On December 16, 2016, the rule implementing the

injunction was published as a final rule (81 FR 91636).

The Court Order did not enjoin implementation of the coverage on

paycheck transparency; therefore, the December 16, 2016, amendments did

not impact this aspect of the rule. Starting January 1, 2017, this

clause was prescribed for solicitations if the estimated value of the

resultant contract was to exceed $500,000.

D. H.J. Res. 37 (Pub. L. 115-11)

In March 2017, under the Congressional Review Act (5 U.S.C. chapter

8), Congress passed House Joint Resolution 37 (Pub. L. 115-11), which

stated the following:

Resolved by the Senate and House of Representatives of the

United States of America in Congress assembled, That Congress

disapproves the rule submitted by the Department of Defense, the

General Services Administration, and the National Aeronautics and

Space Administration relating to the Federal Acquisition Regulation

(published at 81 FR 58562 (August 25, 2016)), and such rule shall

have no force or effect.

On March 27, 2017, House Joint Resolution 37 was signed into law

and became Public Law 115-11.

Under 5 U.S.C. 801(b)(1), a rule shall not take effect or continue

if the Congress enacts a joint resolution of disapproval, described

under 5 U.S.C. 802. Under 5 U.S.C. 801(f), any rule that takes effect

and later is made of no force or effect by enactment of a joint

resolution under section 802 shall be treated as though such rule had

never taken effect.

Congress disapproved the entire FAR rule that was published on

August 25, 2016.

As a result, the rule being published today removes that entire

rule including the amendments published on December 16, 2016.

By statute, the rule shall be treated as if it had never taken

effect. Only FAR 52.222-60, Paycheck Transparency (Executive Order

13673), had gone into effect; it was authorized to be included in

solicitations starting on January 1, 2017, and may have been included

in recently awarded contracts. This and all other Fair Pay and Safe

Workplaces provisions and clauses are unenforceable. See the

Applicability paragraph under Dates at the beginning of this preamble

for instructions to contracting officers on removal of the clause.

E. Executive Order 13782

On March 27, 2017, the same date on which H.J. Res 37 was signed,

President Trump signed E.O. 13782 (82 FR 15607, March 30, 2017). This

E.O. revoked E.O. 13673, section 3 of E.O. 13683, and E.O. 13738, which

were the authority for the Fair Pay and Safe Workplaces rule. E.O.

13782 also directed reconsideration of existing rules, regulations,

guidance, guidelines, or policies implementing or enforcing E.O. 13673,

section 3 of E.O. 13683, and E.O. 13738. The rule published today also

implements E.O. 13782.

Public Law 115-11 and E.O. 13782 did not specifically address the

DOL Guidance. However, that Guidance has no legal effect in the absence

of the FAR rule. Accordingly, the DOL is

[[Page 51775]]

publishing its own notice rescinding the DOL Guidance pursuant to

Public Law 115-11 and E.O. 13782.

F. Applicability

This rule applies to solicitations issued and contracts awarded

before, on, or after October 25, 2016--i.e., the effective date of the

final FAR rule published in the Federal Register at 81 FR 58562 on

August 25, 2016. All clauses identified in the final FAR rule are

unenforceable by law and considered to have never taken effect, even if

they were included in a contract. Contracting officers are directed to

modify, to the maximum extent practicable, existing contracts to remove

any solicitation provisions and contract clauses related to the Fair

Pay and Safe Workplaces rule because they are unenforceable by law.

Since the FAR 52.222-60 clause, Paycheck Transparency (Executive Order

13673), had gone into effect, starting on January 1, 2017, that clause

will need to be removed if it was included. Other provisions, i.e.,

paragraph(s) of FAR 52.212-3, 52.222-57, 52.222-58, 52.222-59, and

52.222-61, had been enjoined by a Court order prior to their effective

date and should not have been incorporated into contracts.

II. Executive Orders 12866 and 13563

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess

all costs and benefits of available regulatory alternatives and, if

regulation is necessary, to select regulatory approaches that maximize

net benefits (including potential economic, environmental, public

health and safety effects, distributive impacts, and equity). E.O.

13563 emphasizes the importance of quantifying both costs and benefits,

of reducing costs, of harmonizing rules, and of promoting flexibility.

The rule being removed (FAR Case 2014-025) was a significant regulatory

action and, therefore, was subject to review under Section 6(b) of E.O.

12866, Regulatory Planning and Review, dated September 30, 1993. It was

a major rule under 5 U.S.C. 804. This rule being published today is a

significant regulatory action and, therefore, was subject to review

under Section 6(b) of E.O. 12866; it has been determined to be a major

rule under 5 U.S.C. 804. This rule removes a prior rule that had been

considered a major rule.

The Regulatory Impact Analysis (RIA) that included a detailed

discussion and explanation about the assumptions and methodology used

to estimate the cost of the final rule under FAR Case 2014-025 is

available at https://www.regulations.gov as a supporting document under

FAR-2014-0025-0933. Exhibit 8 of the RIA presented a summary of the

first-year, second-year, and annualized quantifiable costs of

implementing the disclosure and paycheck transparency requirements of

the final rule to contractors and subcontractors, as well as the

estimated Government costs. The chart below shows the total monetized

cost in the first and second year, and annualized costs with a 3 and 7

percent discount to contractors and the Government.

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

Annualized Annualized

Monetized year Monetized year costs, 3% costs, 7%

1 costs 2 costs discounting discounting

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

Total employer costs............................ $458,352,949 $413,733,272 $398,541,816 $400,939,861

Government costs................................ 15,772,150 10,129,299 10,944,157 11,091,474

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

Total....................................... 474,075,099 423,862,572 409,535,973 412,031,335

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Most of the 2016 final rule's provisions were preliminarily

enjoined before compliance would have been required. (In addition, on

March 27, 2017, under E.O. 13782, the President rescinded E.O. 13673,

the Order that served as the underpinning of the rule. On the same day,

the President signed the Joint Resolution that Congress passed under

the Congressional Review Act disapproving the final rule.) Therefore,

if the impacts of this final rule are assessed relative to current (and

anticipated future) practice, the resulting impacts are negligible. If,

on the other hand, this final rule's effects are assessed relative to a

baseline in which regulated entities comply with the 2016 final rule,

the costs summarized in the preceding table (minus the relatively small

portion that may already have been incurred as entities prepared to

comply with the regulatory provisions that were not enjoined) would be

eliminated as a result of this rulemaking's removal of the 2016 final

rule.

III. Executive Order 13771

Consistent with E.O. 13771 (82 FR 9339, February 3, 2017), Reducing

Regulation and Controlling Regulatory Costs, and the Office of

Management and Budget (OMB) guidance on implementing E.O. 13771 (April

5, 2017), the annualized cost savings of $412 million (with a 7 percent

discount rate) associated with this final rule have been estimated, as

shown in section II, above. (Of particular relevance is the statement

in OMB's guidance that costs associated with ``regulatory actions

overturned by subsequently enacted laws. . . such as disapprovals of

rules under the Congressional Review Act'' qualify as cost savings

under E.O. 13771.) This rulemaking constitutes a deregulatory action

under E.O. 13771.

IV. Regulatory Flexibility Act

The Regulatory Flexibility Act does not apply to this rule because

this final rule does not constitute a significant FAR revision within

the meaning of FAR 1.501-1, and 41 U.S.C. 1707 does not require

publication for public comment. However, the rule reduces the burden on

small entities as it rescinds the August 25, 2016, Fair Pay and Safe

Workplaces (FAR Case 2014-025), major rule.

V. Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies to this

rule, because this rule removes information collection requirements

currently cleared by the Office of Management and Budget (OMB) under

OMB clearance 9000-0195, Fair Pay and Safe Workplaces. The final rule,

published August 25, 2016, contained the following summary table of the

annual estimated cost to the public of the reporting burden:

Table 3--Summary of Table 1 Annual Estimated Total Cost to the Public of

Reporting Burden

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

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Number of respondents................................... 24,183

Responses per respondent................................ 17.3

Total annual responses.................................. 417,808

Hours per response...................................... 5.19

Total hours............................................. 2,166,815

Rate per hour (average)................................. $61.43

Total annual cost to public............................. $133,109,793

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[[Page 51776]]

The requirements that would impose these burden hours are now

removed from the FAR and OMB clearance 9000-0195 has been discontinued.

List of Subjects in 48 CFR Parts 1, 4, 9, 17, 22, 42, and 52

Government procurement.

Dated: October 11, 2017.

William F. Clark,

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

Acquisition Policy, Office of Governmentwide Policy.

Therefore DoD, GSA, and NASA amend 48 CFR parts 1, 4, 9, 17, 22,

42, and 52 as set forth below:

0

1. The authority citation for 48 CFR parts 1, 4, 9, 17, 22, 42, and 52

continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51

U.S.C. 20113.

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

1.106 [Amended]

0

2. Amend section 1.106, by removing FAR segments ``52.222-57'',

``52.222-58'', ``52.222-59'' and ``52.222-60'' and their corresponding

OMB Control Number ``9000-0195'', and the Note to 1.106.

PART 4--ADMINISTRATIVE MATTERS

4.1202 [Amended]

0

3. Amend section 4.1202 by removing paragraph (a)(22), and Note to

paragraph (a)(22), and redesignating paragraphs (a)(23) through (34) as

paragraphs (a)(22) through (33), respectively.

PART 9--CONTRACTOR QUALIFICATIONS

9.104-4 [Amended]

0

4. Amend section 9.104-4 by removing paragraph (b), and Note to

paragraph (b), and redesignating paragraph (c) as paragraph (b).

9.104-5 [Amended]

0

5. Amend section 9.104-5 by removing paragraph (d), and Note to

paragraph (d), and redesignating paragraph (e) as paragraph (d).

0

6. Amend section 9.104-6 by--

0

a. Revising paragraph (b)(4), and removing Note to paragraph (b)(4);

and

0

b. Removing paragraph (b)(6), and Note to paragraph (b)(6).

The revision reads as follows:

9.104-6 Federal Awardee Performance and Integrity Information System.

* * * * *

(b) * * *

(4) Since FAPIIS may contain information on any of the offeror's

previous contracts and information covering a five-year period, some of

that information may not be relevant to a determination of present

responsibility, e.g., a prior administrative action such as debarment

or suspension that has expired or otherwise been resolved, or

information relating to contracts for completely different products or

services.

* * * * *

9.105-1 [Amended]

0

7. Amend section 9.105-1 by removing paragraph (b)(4), and Note to

paragraph (b)(4).

9.105-3 [Amended]

0

8. Amend section 9.105-3 by removing from paragraph (a) ``9.105-

2(b)(2)(iii) and''.

PART 17--SPECIAL CONTRACTING METHODS

17.207 [Amended]

0

9. Amend section 17.207 by--

0

a. Removing from paragraph (c)(6) ``considered;'' and adding

``considered; and'' in its place;

0

b. Removing from paragraph (c)(7) ``ratings; and'' and adding

``ratings.'' in its place; and

0

c. Removing paragraph (c)(8), and Note to paragraph (c)(8).

PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

0

10. Revise section 22.000 to read as follows:

22.0 Scope of part.

This part--

(a) Deals with general policies regarding contractor labor

relations as they pertain to the acquisition process;

(b) Prescribes contracting policy and procedures for implementing

pertinent labor laws; and

(c) Prescribes contract clauses with respect to each pertinent

labor law.

0

11. Amend section 22.102-2 by--

0

a. Revising the section heading and paragraph (c)(1); and

0

b. Removing paragraph (c)(3), and Note to paragraph (c)(3).

The revision reads as follows:

22.102-2 Administration.

* * * * *

(c)(1) The U.S. Department of Labor is responsible for the

administration and enforcement of the Occupational Safety and Health

Act. The Department of Labor's Wage and Hour Division is responsible

for administration and enforcement of numerous wage and hour statutes

including--

(i) 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements

(Construction);

(ii) 40 U.S.C. chapter 37, Contract Work Hours and Safety

Standards;

(iii) The Copeland Act (18 U.S.C. 874 and 40 U.S.C. 3145);

(iv) 41 U.S.C. chapter 65, Contracts for Materials, Supplies,

Articles, and Equipment Exceeding $15,000;

(v) 41 U.S.C. chapter 67, Service Contract Labor Standards.

* * * * *

22.104 [Removed]

0

12. Remove section 22.104.

Subpart 22.20 [Removed and Reserved]

0

13. Remove and reserve Subpart 22.20.

PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES

42.1502 [Amended]

0

14. Amend section 42.1502 by removing paragraph (j), and Note to

paragraph (j).

42.1503 [Amended]

0

15. Amend section 42.1503 by--

0

a. Removing from paragraph (a)(1)(i) ``agency labor compliance advisor

(ALCA) office (see subpart 22.20), '' and removing Note to paragraph

(a)(1)(i);

0

b. Removing from paragraph (a)(1)(ii) ``ALCA,'' and removing Note to

paragraph (a)(1)(ii); and

0

c. Removing paragraph (h)(5), and Note to paragraph (h)(5) introductory

text.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0

16. Amend section 52.204-8 by--

0

a. Revising the date of the provision;

0

b. Removing paragraph (c)(1)(xvi), and Note to Paragraph (c)(1)(xvi);

and

0

c. Redesignating paragraphs (c)(1)(xvii) through (xxv) as (c)(1)(xvi)

through (xxiv), respectively.

The revision reads as follows:

52.204-8 Annual Representations and Certifications.

* * * * *

Annual Representations and Certifications (NOV 2017)

* * * * *

0

17. Amend section 52.212-3 by--

0

a. Revising the date of the provision;

0

b. Removing from paragraph (a), the following definitions

``Administrative merits determination'', ``Arbitral award or

decision'', ``Civil judgment'', ``DOL Guidance'', ``Enforcement

agency'',

[[Page 51777]]

``Labor compliance agreement'', Labor laws'', and ``Labor law

decision'';

0

c. Removing Note to paragraph (a); and

0

d. Removing and reserving paragraph (s), and removing the Note to

paragraph (s).

The revision reads as follows:

52.212-3 Offeror Representations and Certifications-- Commercial

Items.

* * * * *

Offeror Representations and Certifications--Commercial Items (NOV 2017)

* * * * *

0

18. Amend section 52.212-5 by--

0

a. Revising the date of the clause;

0

b. Removing paragraphs (b)(35), Note to paragraph (b)(35), and (b)(36),

and redesignating paragraphs (b)(37) through (61) as (b)(35) through

(59), respectively;

0

c. Removing paragraphs (e)(1)(xvii), Note to paragraph (e)(1)(xvii),

and (e)(1)(xviii), and redesignating paragraphs (e)(1)(xix) through

(xxii) as (e)(1)(xvii) through (xxi), respectively; and

0

d. Amending Alternate II by--

0

i. Revising the date of the Alternate; and

0

ii. Removing paragraphs (e)(1)(ii)(P), Note to paragraph (e)(1)(ii)(P),

and (e)(1)(ii)(Q) of Alternate II, and redesignating paragraphs

(e)(1)(ii)(R) through (U) as (e)(1)(ii)(P) through (S), respectively.

The revisions read as follows:

52.212-5 Contract Terms and Conditions Required to Implement Statutes

or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required to Implement Statutes or

Executive Orders--Commercial Items (NOV 2017)

* * * * *

Alternate II (NOV 2017). * * *

* * * * *

0

19. Amend section 52.213-4 by revising the date of the clause and

paragraph (a)(2)(viii) to read as follows:

52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than

Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial

Items) (NOV 2017)

* * * * *

(a) * * *

(2) * * *

(viii) 52.244-6, Subcontracts for Commercial Items (NOV 2017)

* * * * *

52.222-57 through 52.222-61 [Removed and Reserved]

0

20. Remove and reserve sections 52.222-57 through 52.222-61.

0

21. Amend section 52.244-6 by--

0

a. Revising the date of the clause; and

0

b. Removing paragraphs (c)(1)(xiv), Note to paragraph (c)(1)(xiv), and

(c)(1)(xv), and redesignating paragraphs (c)(1)(xvi) through (xx) as

(c)(1)(xiv) through (xviii), respectively.

The revision reads as follows:

52.244-6 Subcontracts for Commercial Items.

* * * * *

Subcontracts for Commercial Items (NOV 2017)

* * * * *

[FR Doc. 2017-23590 Filed: 11/3/2017 8:45 am; Publication Date: 11/

6/2017]

Editorial Note: Rule document 2017-23590 originally published

on pages 51527 through 51531 in the issue of Monday, November 6,

2017, with an extraneous Web address inadvertently inserted. The

corrected document is published here in its entirety.

[FR Doc. R1-2017-23590 Filed 11-7-17; 8:45 am]

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