[Federal Register Volume 73, Number 8 (Friday, January 11, 2008)]
[Rules and Regulations]
[Pages 1978-1982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-356]
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ENVIRONMENTAL PROTECTION AGENCY
48 CFR Parts 1516, 1533, and 1552
[Docket ID No. EPA-HQ-OARM-2003-0001; FRL-8515-8]
RIN 2030-AA89
Acquisition Regulation: Guidance on Use of Award Term Incentives;
Administrative Amendments
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) amends the EPA
Acquisition Regulation (EPAAR) to add policy, procedures, and contract
clauses for the use of award term incentives. This rule makes two
administrative changes to the EPAAR. One change is to reflect the
Civilian Board of Contract Appeals as EPA's new forum for appeals under
the Contract Disputes Act of 1978. The other change corrects a
numbering error in Subpart 1516.4.
DATES: This final rule is effective on February 11, 2008.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OARM-2003-0001. All documents in the docket are listed on
the www.regulations.gov Web site. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through
www.regulations.gov or in hard copy at EPA Docket Center, OEI Docket,
EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington,
DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday
through Friday, excluding legal holidays. The telephone number for the
Public Reading Room is (202) 566-1744, and the telephone number for the
OEI Docket is (202) 566-1752.
FOR FURTHER INFORMATION CONTACT: Marilyn E. Chambers, U.S. EPA, Office
of Acquisition Management, Mail Code (3802R), Environmental Protection
Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone
number: (202) 564-4398; fax number: (202) 565-2474; e-mail address:
[email protected].
I. Supplementary Information
A. Background
EPA published a proposed rule in the Federal Register at 72 FR
56708, October 4, 2007 to add guidance to the EPAAR on the use of award
term contracts and make two administrative changes. The comment period
closed on December 3, 2007. One comment was received. The respondent
pointed out, effective January 6, 2007, the Board of Contract Appeals
that existed at the General Services Administration was terminated and
the cases were transferred to the Civilian Board of Contract Appeals.
Our proposed rule stated EPA has changed its forum for appeals under
the Contract Disputes Act of 1978 from the Department of Interior Board
of Contract Appeals to the General Services Administration Board of
Contract Appeals. The rule should have stated EPA has changed its forum
for appeals under the Contract Disputes Act of 1978 from the Department
of Interior Board of Contract Appeals to the Civilian Board of Contract
Appeals. The final rule is revised to substitute the Civilian Board of
Contract Appeals for the General Services Administration Board of
Contract Appeals in section
[[Page 1979]]
1533.203. No other changes were made to the proposed rule.
II. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
This proposed rule is not a significant regulatory action for the
purposes of Executive Order 12866; therefore, no review is required by
the Office of Information and Regulatory Affairs within the Office of
Management and Budget (OMB).
B. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because this rule does
not contain information requirements that require the approval of OMB
under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
C. Regulatory Flexibility Act (RFA), as Amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601, et
seq.
The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act or any
other statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
For purposes of assessing the impact of today's rule on small
entities, ``small entity'' is defined as: (1) A small business that
meets the definition of a small business found in the Small Business
Act and codified at 13 CFR 121.201; (2) a small governmental
jurisdiction that is a government of a city, county, town, school
district or special district with a population of less than 50,000; and
(3) a small organization that is any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.
After considering the economic impacts of today's rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, because the
primary purpose of the regulatory flexibility analyses is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the proposed rule on small entities.'' 5 U.S.C. 603
and 604. Thus, an agency may certify that a rule will not have a
significant economic impact on a substantial number of small entities
if the rule relieves regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule. Since
award term incentives will be available equally to large and small
entities, this rule will not have a significant economic impact on
small entities.
D. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess
their regulatory actions on State, local, and Tribal governments, and
the private sector. This proposed rule does not contain a Federal
mandate that may result in expenditures of $100 million or more for
State, local, and Tribal governments, in the aggregate, or the private
sector in one year. Any private sector costs for this action relate to
paperwork requirements and associated expenditures that are far below
the level established for UMRA applicability. Thus, this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
E. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
Executive Order 13045, entitled ``Protection of Children from
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997), applies to any rule that: (1) Is determined to be economically
significant as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
This rule is not subject to Executive Order 13045 because it is not
an economically significant rule as defined by Executive Order 12866,
and because it does not involve decisions on environmental health or
safety risks.
F. Executive Order 13132: Federalism
Executive Order 13132, entitled, ``Federalism'' (64 FR 43255,
August 10, 1999), requires EPA to develop an accountable process to
ensure ``meaningful and timely input by State and local officials in
the development of regulatory policies that have federalism
implications.'' ``Policies that have federalism implications'' are
defined in the Executive Order to include regulations that have
``substantial direct effects on the States, on the relationship between
the national Government and the States, or on the distribution of power
and responsibilities among the various levels of government.''
Under section 6 of Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal Government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law, unless
the Agency consults with State and local officials early in the process
of developing the proposed regulation.
This rule does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132. This rule amends the EPAAR to
provide guidance on the use of award term incentives and make other
administrative changes. Thus, the requirements of section 6 of the
Executive Order do not apply to this rule.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' ``Policies that have tribal
implications'' are defined in the Executive Order to include
regulations that have ``substantial direct effects on one or more
Indian tribes, on the relationship between the Federal Government and
the Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.''
[[Page 1980]]
This rule does not have tribal implications. It does not have
substantial direct effects on tribal governments, on the relationship
between the Federal Government and Indian tribes, or on the
distribution of power and responsibilities between the Federal
Government and Indian tribes, as specified in Executive Order 13175.
Thus, Executive Order 13175 does not apply to this proposed rule.
H. National Technology Transfer and Advancement Act of 1995
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note), directs EPA to use voluntary consensus standards in its
regulatory activities, unless to do so would be inconsistent with
applicable law, or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
This rule does not involve technical standards. Therefore, EPA is
not considering use of any voluntary consensus standards.
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution or Use'' (66 FR 28335 (May 22, 2001)), because it is not a
significant regulatory action under Executive Order 12866.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
EPA has determined that this rule does not have disproportionately
high and adverse human health or environmental effects on minority or
low-income populations because it does not affect the level of
protection provided to human health or the environment. This rule does
not involve human health or environmental effects.
K. Submission to Congress and the Government Accountability Office
The Congressional Review Act, 5 U.S.C. 801, et seq., as added by
the Small Business Regulatory Enforcement Fairness Act of 1996,
generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A major rule
cannot take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective on February 11, 2008.
List of Subjects in 48 CFR Parts 1516, 1533 and 1552
Government procurement.
Dated: December 26, 2007.
John C. Gherardini,
Acting Director, Office of Acquisition Management.
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Therefore, 48 CFR Chapter 15 is amended as set forth below:
PART 1516--TYPES OF CONTRACTS
0
1. The authority citation for part 1516 continues to read as follows:
Authority: The provisions of this regulation are issued under 5
U.S.C. 301; Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C. 486(c);
and 41 U.S.C. 418b.
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2. Add section 1516.401-1 to read as follows:
1516.401-1 General.
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3. Add section 1516.401-170 to read as follows:
1516.401-70 Award term incentives.
(a) Award term incentives enable a contractor to become eligible
for additional periods of performance under a current contract by
achieving prescribed performance measures under that contract.
(b) Award term incentives are designed to motivate contractors to
superior performance. Accordingly, the prescribed performance measures,
i.e., acceptable quality levels (AQL) which must be achieved by a
contractor to become eligible for an award term typically will be in
excess of the AQLs necessary for Government acceptance of contract
deliverables.
(c) The Award Term Incentive Plan sets forth the evaluation
process, including the evaluation criteria and performance measures,
and serves as the basis for award term decisions. The Award Term
Incentive Plan may be unilaterally revised by the Government.
(d) Award term incentives may be used in conjunction with options.
The Federal Acquisition Regulation does not prescribe a level of
performance for the exercise of options, as contrasted with award term
incentives, which should require superior performance as discussed in
paragraph (b) of this subsection. Award term incentive periods will
follow any option periods.
(e)(1) The Government has the unilateral right not to grant or to
cancel award term incentive periods and the associated award term
incentive plans if--
(i) The Contracting Officer has failed to initiate an award term
incentive period, regardless of whether the contractor's performance
permitted the Contracting Officer to consider initiating the award term
incentive period; or
(ii) The contractor has failed to achieve the performance measures
for the corresponding evaluation period; or
(iii) The Government notifies the contractor in writing it does not
have funds available for the award term; or
(iv) The Government no longer has a need for the award term
incentive period at or before the time an award term incentive period
is to commence.
(2) When an award term incentive period is not granted or
cancelled, any--
(i) Prior award term incentive periods for which the contractor
remains otherwise eligible are unaffected.
(ii) Subsequent award term incentive periods are thereby also
cancelled.
(f) Award term incentives may be appropriate for any type of
service contract.
0
4. Add section 1516.401-270 to read as follows:
1516.401-270 Definition.
Acceptable quality level (AQL) as used in this subpart means the
minimum percent of deliverables which are compliant with a given
performance standard that would permit a contractor to become eligible
for an award term incentive. Because the performance necessary for
eligibility for the award term incentive may be in excess of that
[[Page 1981]]
necessary for the Government acceptance of contract deliverables, the
AQLs associated with the award term incentive may exceed the AQLs
associated with the acceptance of contract deliverables. For example,
under contract X, acceptable performance is 75 percent of reports
submitted to the Government within five days. However, to be eligible
for an award term incentive, 85 percent of reports must be submitted to
the Government within five days.
1516.405 [Redesignated as 1516.406]
0
5. Redesignate section 1516.405 as section 1516.406.
1516.404-2 [Redesignated as 1516.405-2]
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6. Redesignate section 1516.404-2 as section 1516.405-2.
1516.404-272 [Redesignated as 1516.405-270]
0
7. Redesignate section 1516.404-272 as section 1516.405-270.
1516.404-273 [Redesignated as 1516.405-271]
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8. Redesignate section 1516.404-273 as section 1516.405-271.
1516.404-274 [Redesignated as 1516.405-272]
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9. Redesignate section 1516.404-274 as section 1516.405-272.
0
10. Amend newly designated section 1516.406 to add new paragraphs (c)
and (d) to read as follows:
1516.406 Contract clauses.
* * * * *
(c) The Contracting Officer shall insert the clauses at 1552.216-
77, Award Term Incentive, 1552.216-78, Award Term Incentive Plan, and
1552.216-79 Award Term Availability of Funds in solicitations and
contracts when award term incentives are contemplated. The clauses at
1552.216-77 and 1552.216-78 may be used on substantially the same
basis.
(d) If the Contracting Officer wishes to use the ratings set forth
in the National Institutes of Health (NIH) Contractor Performance
System (CPS) on the contract at hand as the basis for contractor
eligibility for an award term incentive, the Contracting Officer shall
insert the clause at 1552.216-78 with its Alternate I.
PART 1533--PROTESTS, DISPUTES AND APPEALS
0
11. The authority citation for part 1533 continues to read as follows:
Authority: 5 U.S.C. 301; Sec. 205(c), 63 Stat. 390, as amended,
40 U.S.C. 486(c); and 41 U.S.C. 418b.
0
12. Revise section 1533.203 to read as follows:
1533.203 Applicability.
The Civilian Board of Contract Appeals (CBCA) will hear appeals
from final decisions of EPA Contracting Officers issued pursuant to the
Contracts Disputes Act. The rules and regulations of the CBCA appear in
48 CFR Chapter 61.
PART 1552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
13. The authority citation for part 1552 continues to read as follows:
Authority: 5 U.S.C. 301; Sec. 205(c), 63 Stat. 390, as amended,
40 U.S.C. 486(c); and 41 U.S.C. 418b.
0
14. Add section 1552.216-77 to read as follows:
1552.216-77 Award term incentive.
As prescribed in 1515.406(c), insert a clause substantially the
same as follows:
Award Term Incentive (FEB 2008)
(a) General. This contract may be extended as set forth in
paragraph (b) based on overall contractor performance as evaluated
in accordance with the Clause entitled ``Award Term Incentive
Plan,'' provided the Agency has a need for the effort at or before
the time an award term is to commence, and if the contractor
receives notice of the availability of funding for an award term
period pursuant to the ``Award Term Availability of Funds'' clause.
The Contracting Officer is responsible for the overall award term
evaluation and award term decision. The Contracting Officer will
unilaterally decide whether or not the contractor is eligible for an
award term extension, and in conjunction with the Contracting
Officer's Representative, will determine the need for continued
performance and funding availability.
(b) Period of performance. Provided the contractor has achieved
the performance measures, e.g., acceptable quality levels, set forth
in the clause ``Award Term Incentive Plan,'' the Contracting Officer
may extend the contract by exercising -------- [insert the total
award term incentive periods] additional award term incentive
period(s) of -------- [insert the award term incentive period]
months each. The total maximum period of performance under this
contract, if the Government exercises any option periods and all
award term incentive periods is -------- [insert the total of the
base period, option periods (if any), and award term incentive
periods] years.
(c) Right not to grant or cancel the award term incentive. (1)
The Government has the unilateral right not to grant or to cancel
award term incentive periods and the associated award term incentive
plans if--
(i) The Contracting Officer has failed to initiate an award term
incentive period, regardless of whether the contractor's performance
permitted the Contracting Officer to consider initiating the award
term incentive period; or
(ii) The contractor has failed to achieve the performance
measures for the corresponding evaluation period; or
(iii) The Government notifies the contractor in writing it does
not have funds available for the award term incentive periods; or
(iv) The Government no longer has a need for the award term
incentive period at or before the time an award term incentive
period is to commence.
(2) When an award term incentive period is not granted or
cancelled, any--
(i) Prior award term incentive periods for which the contractor
remains otherwise eligible are unaffected.
(ii) Subsequent award term incentive periods are thereby also
cancelled.
(d) Cancellation of an award term incentive period that has not
yet commenced for any of the reasons set forth in paragraph (c) of
this clause shall not be considered either a termination for
convenience or termination for default, and shall not entitle the
contractor to any termination settlement or any other compensation.
If the award term incentive is cancelled, a unilateral modification
will cite this clause as the authority.
(e) Award term incentive administration. The award term
incentive evaluation(s) will be completed in accordance with the
schedule in the Award Term Incentive Plan. The contractor will be
notified of the results and their eligibility to be considered for
the respective award term incentive no later than 120 days after an
evaluation period.
(f) Review process. The contractor may request a review of an
award term incentive evaluation which has resulted in the contractor
being ineligible for the award term incentive. The request shall be
submitted in writing to the Contracting Officer within 15 days after
notification of the results of the evaluation.
(end of clause)
0
15. Add section 1552.216-78 to read as follows:
1552.216-78 Award Term Incentive Plan.
As prescribed in 1515.406(c), insert a clause substantially the
same as follows:
Award Term Incentive Plan (FEB 2008)
(a) The Award Term Incentive Plan provides for the evaluation of
performance, and, together with Agency need and availability of
funding, serves as the basis for award term decisions. The Award
Term Incentive Plan may be unilaterally revised by the Government.
Any changes to the Award Term Incentive Plan will be made in writing
and incorporated into the contract through a unilateral modification
citing this clause. The Government will consult with the contractor
prior to the issuance of a revised Award Term Incentive Plan, but is
not required to obtain the contractor's consent to the revisions.
(b) [describe the evaluation periods and associated award term
incentive periods, e.g., months 1-18 for award term incentive period
[[Page 1982]]
I, and months 19-36 for award term incentive period II]
(c) [describe the evaluation schedule, e.g., 90 days after the
end of the evaluation period]
(d) In order to be eligible for an award term incentive period
the contractor must achieve all of the acceptable quality levels
(AQL) for the evaluated tasks, both individual and aggregate, for
that evaluation period. Failure to achieve any AQL renders the
contractor ineligible for the associated award term incentive
period. [identify the most significant tasks. Describe the AQL for
each task as well as an overall AQL for the associated evaluation
periods, e.g., an AQL of 90% each for tasks 1 and 3, and an AQL of
85% for task 7, and an overall AQL of 90% for the months 1-18
evaluation period]
(e) [If the contract will contain a quality assurance
surveillance plan (QASP), reference the QASP, e.g., attachment 2.
Typically, the performance standards and AQLs will be defined in the
QASP]
(end of clause)
Alternate 1 (FEB 2008)
As prescribed in 1516.406(d), substitute paragraphs
substantially the same as following paragraphs (b) through (e) for
paragraphs (b) through (e) in the basic clause:
(b) At the conclusion of each contract year, an average contract
rating shall be determined by using the numerical ratings entered
into the National Institutes of Health (NIH) Contractor Performance
System (CPS) for this contract. The NIHCPS is an interactive
database located on the Internet which EPA uses to record contractor
performance evaluations.
(c) The contract year average rating shall be obtained by
dividing the combined ratings by the number of ratings, for example:
------------------------------------------------------------------------
Criteria Rating
------------------------------------------------------------------------
Quality of Product or Service............. 5.
Cost Control.............................. 4.
Timeliness of Performance................. 4.
Business Relations........................ 5.
18 (combined rating).
/ 4 (number of ratings).
= 4.5 contract year average
rating.
------------------------------------------------------------------------
(d) The contractor shall be evaluated for performance from the
start of the contract through Year ---- [identify the evaluation
period, e.g., year three]. The average rating for each contract year
(as derived in paragraph (c) above) will be combined and divided by
[insert the number of evaluation periods] to obtain an overall
average rating, for example:
------------------------------------------------------------------------
Evaluation period Average rating
------------------------------------------------------------------------
Year One.................................. 4.5.
Year Two.................................. 4.75.
Year Three................................ 4.75.
14 (combined average
rating).
/ 3 (number of evaluation
periods).
= 4.66 overall average
rating.
------------------------------------------------------------------------
(e) Based on the overall average rating as determined under
paragraph (d), provided that no individual rating, i.e., Quality of
Product or Service, Cost Control, Timeliness of Performance, or
Business Relations is below a 3, the contractor shall be eligible
for the following award term periods:
(1) Overall average rating of 4.6 to 5.0--Two award term
incentive periods of ---- [insert the number of months] months.
(2) Overall average rating of 4.0 to 4.6--One award term
incentive period of ---- [insert the number of months] months.
0
16. Add section 1552.216-79 to read as follows:
1552.216-79 Award Term Availability of Funds.
As prescribed in 1515.406(c), insert the following clause:
Award Term Availability of Funds (FEB 2008)
Funds are not presently available for any award term. The
Government's obligation under any award term is contingent upon the
availability of appropriated funds from which payment can be made.
No legal liability on the part of the Government for any award term
payment may arise until funds are made available to the Contracting
Officer for an award term and until the Contractor receives notice
of such availability, to be confirmed in writing by the Contracting
Officer.
(end of clause)
[FR Doc. E8-356 Filed 1-10-08; 8:45 am]
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