[Federal Register Volume 62, Number 146 (Wednesday, July 30, 1997)]
[Rules and Regulations]
[Pages 40748-40753]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20022]
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DEPARTMENT OF ENERGY
48 CFR Parts 909, 952, and 970
RIN 1991-AB26
Acquisition Regulation; Revisions to Organizational Conflicts of
Interest
AGENCY: Office of Procurement and Assistance Management, Department of
Energy.
ACTION: Final rule.
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SUMMARY: The Department of Energy (DOE) publishes today amendments to
its Acquisition Regulation that effect changes to its Organizational
Conflicts of Interest policies as a result of the repeal of the two
statutory provisions upon which DOE's system for treating
organizational conflicts of interest was based.
DATES: These regulations will be effective on August 29, 1997.
FOR FURTHER INFORMATION CONTACT:
Robert M. Webb, U.S. Department of Energy, Office of Procurement and
Assistance Management, 1000 Independence Avenue, SW., Washington, D.C.
20585, (202) 586-8264
Edward Lovett, U.S. Department of Energy, Office of Procurement and
Assistance Management, 1000 Independence Avenue, SW., Washington, D.C.
20585, (202) 586-8614
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Public Comments
III. Procedural Requirements
A. Review Under Executive Order 12866
B. Review Under Executive Order 12988
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act
[[Page 40749]]
E. Review Under the National Environmental Policy Act
F. Review Under Executive Order 12612
G. Review Under Unfunded Mandate Reform Act of 1995
H. Review Under Small Business Regulatory Enforcement Fairness
Act of 1996
I. Background
Subsections (b) (2) and (5) of section 4304 of the Federal
Acquisition Reform Act of 1996 (FARA), Public Law 104-106, repealed
section 33 of the Federal Energy Administration Act of 1974 (15 U.S.C.
789) and section 19 of the Federal Nonnuclear Energy Research and
Development Act of 1974 (42 U.S.C. 5918). These two statutory
provisions provided the basis for the Department of Energy
organizational conflict of interest (OCI) regulation that is codified
at 48 CFR Subpart 909.5. As a result of the repeal of the underlying
statutes, the Department has re-examined the OCI systems established in
the Department of Energy Acquisition Regulation (DEAR) and the Federal
Acquisition Regulation (FAR) and is amending the DEAR to implement and
supplement the current FAR provisions in the manner described below.
The objective of the revision is to streamline the Department's OCI
procedure and reduce the burdens on contractors, but also to preserve
the necessary protections provided by an OCI control system.
A proposed rule to accomplish this purpose was published for public
comment on August 6, 1996, at 61 FR 40775.
II. Discussion of Public Comments
The Department received five sets of comments in response to the
publication of the proposed rule. Three sets of those comments were
from entities that manage and operate DOE facilities, one of which is a
university and two of which are large businesses. Two sets of comments
were received from trade associations. The comments fall into four
areas and are discussed below.
A. Scope of Coverage
One commenter suggested that it be made clear that ``advisory and
assistance services'' do not include research contracts with
universities. The Department believes that the FAR definition is clear.
See FAR 37.201. The definition of advisory and assistance services
provides that such services may be used in support of research and
development; however, it does not include research and development
itself. Therefore, the Department sees no need for clarification in the
text of the rule, and intends that each procurement request for support
services be evaluated against that definition to determine whether the
services to be procured are advisory and assistance services and,
therefore, should be covered by the organizational conflicts of
interest process.
Another commenter questioned the use of the clause at 952.209-72 in
``all contracts, rather than limiting its application to the
contractor's performance of technical consulting and management support
services.'' The basis of this comment is unclear. The proposed rule and
the final rule provide for the use of the organizational conflicts of
interest clause only in those contracts that provide advisory and
assistance services and that are valued in excess of the simplified
acquisition threshold. The Department does not intend that the clause
be used routinely in other contracts. It should be noted, however, that
FAR 9.502(b) provides that the applicability of Subpart 9.5 is not
limited to any particular kind of acquisition and thus allows for the
possibility that the contracting officer will determine that it is
appropriate in rare instances to include the organizational conflicts
of interest clause in individual contracts involving other types of
work.
B. Disclosure Requirement
Two commenters suggested that the Department ought to limit the
disclosure requirement to that of the FAR. In the time since
publication of the proposed rule, the FAR solicitation provision has
been deleted. See 62 FR 224 (1997). However, Subsection 9.507-1 still
provides for including a solicitation provision in affected
solicitations. The revised FAR requires that this solicitation
provision, among other things, state the nature of any potential
conflicts identified by the contracting officer, but is not explicit
about how the contracting officer is to make this judgment.
The Department's substantial experience in the area of
organizational conflicts of interest has demonstrated that specificity
in defining disclosure requirements facilitates the entire process by
providing the contracting officer with the best information available.
The quality of the ultimate decision as to whether an organizational
conflict of interest may exist is only as good as the information that
the decision-maker has at hand. The ability to craft meaningful
remedies to situations that may present an organizational conflict of
interest is as well dependent upon having complete and accurate
information before the decision-maker.
One commenter suggested that ``[i]n many cases, agency personnel
are aware of the issues and activities that would impair the
objectivity of their actual or potential contractors or that would
impact the fairness of a procurement.'' The Department disagrees. One
type of conflict of interest consists of conflicting financial,
contractual, or organizational interests of the individual contractor
that might reasonably be expected to impair the objectivity of the
contractor or its ability to render impartial analysis or advice. The
potential for conflicting financial interests can be meaningfully
identified only by a disclosure of relevant interests, and there is no
meaningful way to address this facet of organizational conflicts of
interest without disclosure by the proposer.
The final rule supplements the FAR disclosure requirements to
ensure that the apparent successful offeror discloses all information
relevant to the OCI determination. The Department has limited the
disclosure period nominally to 12 months. Also, the Department has
limited the requirement to the apparent successful offeror and does not
require disclosure from subcontractors, except under management and
operating contracts and other contracts for the operation or
remediation of a DOE site or facility, or affiliates.
C. The Organizational Conflicts of Interest Clause
Other commenters questioned various portions of the clause.
1. Affiliates
Three commenters argued that affiliates of the contractor should
not be covered by the organizational conflicts of interest clause at
952.209-72. The Department believes this provision is necessary because
an organizational conflict of interest may arise where the interests of
an affiliate may affect the objectivity of a contractor, or an
affiliate may benefit from an unfair competitive advantage. A detailed
discussion of this point was contained in the proposed rule at 61 FR
40777 (Aug. 6, 1996). Affiliates are unaffected by this clause unless
they attempt to propose in situations described in the clause that
present the potential for an organizational conflict of interest. The
FAR provides for the drafting of a clause to deal with organizational
conflicts of interest. The clause in this final rule has been drafted
to deal systematically with the potential sources of organizational
conflicts of interest relating to the performance of the contractor.
In this regard, the clause has been drafted to protect the
integrity of the
[[Page 40750]]
procurement process as it relates to future procurements and to protect
the integrity of any advice or recommendations produced by the
contractor in the performance of its contract, which advice or
recommendations then may be used in Departmental decision-making and
policy setting processes.
2. Contracting Officer Discretion
Another commenter believed that the clause limits the discretion of
the contracting officer to deal with identified organizational
conflicts of interest. The Department disagrees. The clause provides a
generic remedy to almost every type of post-contract award
organizational conflict of interest. In addition, section 909.507-2 of
this rule provides that ``[c]ontracting officers may make appropriate
modifications where necessary to address the potential for
organizational conflicts of interest in individual contracts.'' This
language provides adequate authority for contracting officers to
consider and adopt appropriate changes to the clause. The contracting
officer is, of course, required by 909.507-2 to determine the duration
of the bar in paragraph (b)(1)(i) against a contractor's or its
affiliate's proposing on work ``stemming directly from'' work performed
under the contract.
3. Five Year Prohibition
Two other commenters believed that the prohibitions against the
contractor or its affiliates proposing for five years on work stemming
``directly from the contractor's performance of work under this
contract'' or where the contractor prepares a statement of work or
specifications for future competitive solicitations is excessive. The
Department has made a change to allow the contracting officer more
discretion in using the clause at 952.209-72. As a preliminary matter,
one should recognize that the prohibitions of the clause do not prevent
the contractor or its affiliates from proposing on the follow-on
support services contract.
The clause has been revised to provide the contracting officer the
discretion to determine the term of the bar in paragraph (b)(1)(i)
against a contractor's or its affiliate's proposing on work ``stemming
directly from'' work performed under the contract. That term should be
between three and five years in the normal contract for advisory and
assistance services, but the contracting officer may select a period of
greater or lesser duration.
E. Subcontracts
Comments were received questioning the flowdown of the
organizational conflicts of interest concerns to subcontracts for
advisory and assistance services valued in excess of the simplified
acquisition threshold, particularly in light of the general Government-
wide practice of not applying organizational conflicts of interest to
subcontracts. The Department has chosen to limit the mandatory flowdown
of organizational conflicts of interest coverage to subcontracts under
management and operating contracts and other contracts for the
operation or management of a DOE facility or environmental remediation
of a specific DOE site or sites. To achieve this result, the
organizational conflict of interest in those contracts will contain
Alternate I to the organizational conflicts of interest clause at
952.209-72.
Contractors under other contracts awarded by DOE generally will not
be required to acquire disclosure from prospective subcontractors and
will not be required to flowdown the clause at 952.209-72 in
subcontracts for advisory and assistance services valued in excess of
the simplified acquisition threshold. However, there is provision for
the contracting officer to use Alternate I in other contracts where he
or she believes there will be sufficient subcontracting for advisory
and assistance services awarded to warrant its use. It is believed that
this change will limit the burden of organizational conflicts of
interest requirements, but permit discretionary application where the
nature and extent of anticipated subcontracting warrant additional
protection for the Government.
III. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
``significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review'' (58 FR 51735, October 4, 1993).
Accordingly, this action was not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs of the Office
of Management and Budget (OMB).
B. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
these final regulations meet the relevant standards of Executive Order
12988.
C. Review Under the Regulatory Flexibility Act
This final rule has been reviewed under the Regulatory Flexibility
Act of 1980, 5 U.S.C. 601 et seq., that requires preparation of an
initial regulatory flexibility analysis for any proposed rule which is
likely to have significant economic impact on a substantial number of
small entities. In the proposed rule, DOE certified that these
regulations will not have a significant economic impact on a
substantial number of small entities, and, therefore, no initial
regulatory flexibility analysis was prepared. The Department received
no comments on this certification.
D. Review Under the Paperwork Reduction Act
No additional information or record keeping requirements are
imposed by this rulemaking. Accordingly, no OMB clearance is required
under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions which would not individually or cumulatively have
significant impact on the human environment, as determined by DOE's
regulations (10 CFR Part 1021,
[[Page 40751]]
Subpart D) implementing the National Environmental Policy Act (NEPA) of
1969 (42 U.S.C. 4321 et seq.). Specifically, this rule is categorically
excluded from NEPA review because the amendments made to the DEAR would
be strictly procedural (categorical exclusion A6). Therefore, this rule
does not require an environmental impact statement or environmental
assessment pursuant to NEPA.
F. Review Under Executive Order 12612
Executive Order 12612, (52 FR 41685, October 30, 1987), requires
that regulations, rules, legislation, and any other policy actions be
reviewed for any substantial direct effects on States, on the
relationship between the Federal Government and the States, or in the
distribution of power and responsibilities among the various levels of
Government. If there are sufficient substantial direct effects, then
the Executive Order requires the preparation of a federalism assessment
to be used in all decisions involved in promulgating and implementing a
policy action. This rule revises certain policy and procedural
requirements. States which contract with DOE will be subject to this
rule. However, DOE has determined that this rule will not have a
substantial direct effect on the institutional interests or traditional
functions of the States.
G. Review Under Unfunded Mandate Reform Act of 1995
The Unfunded Mandate Reform Act of 1995 requires preparation of a
budgetary impact statement for rules that may result in estimated costs
to state, local, or tribal governments in the aggregate, or in the
private sector, of $100 million or more. It also requires a plan for
informing and advising any small governments that may be uniquely
impacted by the rule.
DOE has determined that the rule will not impose estimated costs of
$100 million or more and that it will not significantly or uniquely
affect small government. Accordingly, there are no actions required to
comply with the Unfunded Mandate Reform Act of 1995.
H. Review Under Small Business Regulatory Enforcement Fairness Act of
1996
Prior to the effective date of this regulatory action, set forth
above, DOE will submit a report to Congress containing the rule and
other information, as required by 5 U.S.C. 801(a)(1)(A). The report
will state that the rule is not a ``major rule'' as defined by 5 U.S.C.
804(2).
List of Subjects in 48 CFR Parts 909, 952, and 970
Government Procurement.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is amended as set forth below.
PART 909--CONTRACTOR QUALIFICATIONS
1. The authority citation for Part 909 continues to read as
follows:
Authority: 42 U.S.C. 7254, 40 U.S.C. 486(c).
2. Subpart 909.5 is revised to read as set forth below:
Subpart 909.5--Organizational and Consultant Conflicts of Interest
909.503 Waiver.
909.504 Contracting Officer's Responsibility.
909.507 Solicitation provisions and contract clause.
909.507-1 Solicitation provisions.
909.507-2 Contract Clause.
Sec. 909.503 Waiver.
Heads of Contracting Activities are delegated the authorities in 48
CFR (FAR) 9.503 regarding waiver of OCI requirements.
Sec. 909.504 Contracting Officer's Responsibility. (DOE coverage-
paragraphs (d) and (e)).
(d) The contracting officer shall evaluate the statement by the
apparent successful offeror or, where individual contracts are
negotiated with all firms in the competitive range, all such firms for
interests relating to a potential organizational conflict of interest
in the performance of the proposed contract. Using that information and
any other credible information, the contracting officer shall make
written determination of whether those interests create an actual or
significant potential organizational conflict of interest and identify
any actions that may be taken to avoid, neutralize, or mitigate such
conflict. In fulfilling their responsibilities for identifying and
resolving potential conflicts, contracting officers should avoid
creating unnecessary delays, burdensome information requirements, and
excessive documentation.
(e) The contracting officer shall award the contract to the
apparent successful offeror unless a conflict of interest is determined
to exist that cannot be avoided, neutralized, or mitigated. Before
determining to withhold award based on organizational conflict of
interest considerations, the contracting officer shall notify the
offeror, provide the reasons therefor, and allow the offeror a
reasonable opportunity to respond. If the conflict cannot be avoided,
neutralized, or mitigated to the contracting officer's satisfaction,
the contracting officer may disqualify the offeror from award and
undertake the disclosure, evaluation, and determination process with
the firm next in line for award. If the contracting officer finds that
it is in the best interest of the United States to award the contract
notwithstanding a conflict of interest, a request for waiver shall be
submitted in accordance with 48 CFR 909.503. The waiver request and
decisions shall be included in the contract file.
Sec. 909.507 Solicitation provisions and contract clause.
Sec. 909.507-1 Solicitation provisions. (DOE coverage-paragraph (e)).
(e) The contracting officer shall insert the provision at 48 CFR
952.209-8, Organizational Conflicts of Interest Disclosure-Advisory and
Assistance Services, in solicitations for advisory and assistance
services expected to exceed the simplified acquisition threshold. In
individual procurements, the Head of the Contracting Activity may
increase the period subject to disclosure in 952.209-8 (c)(1) up to 36
months.
Sec. 909.507-2 Contract Clause.
(a) (1) The contracting officer shall insert the clause at 48 CFR
952.209-72, Organizational Conflicts of Interest, in each solicitation
and contract for advisory and assistance services expected to exceed
the simplified acquisition threshold.
(2) Contracting officers may make appropriate modifications where
necessary to address the potential for organizational conflicts of
interest in individual contracts. Contracting officers shall determine
the appropriate term of the bar of paragraph (b)(1)(i) of the clause at
48 CFR 952.209-72 and enter that term in the blank provided. In the
usual case of a contract for advisory and assistance services a period
of three, four, or five years is appropriate; however, in individual
cases the contracting officer may insert a term of greater or lesser
duration.
(3) The contracting officer shall include Alternate I with the
clause in instances in which a meaningful amount of subcontracting for
advisory and assistance services is expected.
(b) Contracts, which are not subject to part 970 but provide for
the operation of
[[Page 40752]]
a DOE site or facility or environmental remediation of a specific DOE
site or sites, shall contain the organizational conflict of interest
clause at 48 CFR 952.209-72. The organizational conflicts of interest
clause in such contracts shall include Alternate I to that clause.
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
3. The authority citation for Part 952 continues to read as
follows:
Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c).
4. Subsection 952.209-8 is added as follows:
Sec. 952.209-8 Organizational Conflicts of Interest-Disclosure.
As prescribed in 48 CFR 909.507-1(e), insert the following
provision:
Organizational Conflicts of Interest Disclosure-Advisory and Assistance
Services (June 1997)
(a) Organizational conflict of interest means that because of
other activities or relationships with other persons, a person is
unable or potentially unable to render impartial assistance or
advice to the Government, or the person's objectivity in performing
the contract work is or might be otherwise impaired, or a person has
an unfair competitive advantage.
(b) An offeror notified that it is the apparent successful
offeror shall provide the statement described in paragraph (c) of
this provision. For purposes of this provision, ``apparent
successful offeror'' means the proposer selected for final
negotiations or, where individual contracts are negotiated with all
firms in the competitive range, it means all such firms.
(c) The statement must contain the following:
(1) A statement of any past (within the past twelve months),
present, or currently planned financial, contractual,
organizational, or other interests relating to the performance of
the statement of work. For contractual interests, such statement
must include the name, address, telephone number of the client or
client(s), a description of the services rendered to the previous
client(s), and the name of a responsible officer or employee of the
offeror who is knowledgeable about the services rendered to each
client, if, in the 12 months preceding the date of the statement,
services were rendered to the Government or any other client
(including a foreign government or person) respecting the same
subject matter of the instant solicitation, or directly relating to
such subject matter. The agency and contract number under which the
services were rendered must also be included, if applicable. For
financial interests, the statement must include the nature and
extent of the interest and any entity or entities involved in the
financial relationship. For these and any other interests enough
such information must be provided to allow a meaningful evaluation
of the potential effect of the interest on the performance of the
statement of work.
(2) A statement that no actual or potential conflict of interest
or unfair competitive advantage exists with respect to the advisory
and assistance services to be provided in connection with the
instant contract or that any actual or potential conflict of
interest or unfair competitive advantage that does or may exist with
respect to the contract in question has been communicated as part of
the statement required by (b) of this provision.
(d) Failure of the offeror to provide the required statement may
result in the offeror being determined ineligible for award.
Misrepresentation or failure to report any fact may result in the
assessment of penalties associated with false statements or such
other provisions provided for by law or regulation.
(End of provision)
Sec. 952.209-70 [Removed]
5. Subsection 952.209-70 is removed.
6. Subsection 952.209-72 is revised to read as follows:
Sec. 952.209-72 Organizational conflicts of interest.
As prescribed at 48 CFR 909.507-2, insert the following clause:
Organizational Conflicts of Interest (June 1997)
(a) Purpose. The purpose of this clause is to ensure that the
contractor (1) is not biased because of its financial, contractual,
organizational, or other interests which relate to the work under
this contract, and (2) does not obtain any unfair competitive
advantage over other parties by virtue of its performance of this
contract.
(b) Scope. The restrictions described herein shall apply to
performance or participation by the contractor and any of its
affiliates or their successors in interest (hereinafter collectively
referred to as ``contractor'') in the activities covered by this
clause as a prime contractor, subcontractor, cosponsor, joint
venturer, consultant, or in any similar capacity. For the purpose of
this clause, affiliation occurs when a business concern is
controlled by or has the power to control another or when a third
party has the power to control both.
(1) Use of Contractor's Work Product. (i) The contractor shall
be ineligible to participate in any capacity in Department
contracts, subcontracts, or proposals therefor (solicited and
unsolicited) which stem directly from the contractor's performance
of work under this contract for a period of (Contracting Officer see
DEAR 9.507-2 and enter specific term) years after the completion of
this contract. Furthermore, unless so directed in writing by the
contracting officer, the Contractor shall not perform any advisory
and assistance services work under this contract on any of its
products or services or the products or services of another firm if
the contractor is or has been substantially involved in their
development or marketing. Nothing in this subparagraph shall
preclude the contractor from competing for follow-on contracts for
advisory and assistance services.
(ii) If, under this contract, the contractor prepares a complete
or essentially complete statement of work or specifications to be
used in competitive acquisitions, the contractor shall be ineligible
to perform or participate in any capacity in any contractual effort
which is based on such statement of work or specifications. The
contractor shall not incorporate its products or services in such
statement of work or specifications unless so directed in writing by
the contracting officer, in which case the restriction in this
subparagraph shall not apply.
(iii) Nothing in this paragraph shall preclude the contractor
from offering or selling its standard and commercial items to the
Government.
(2) Access to and use of information. (i) If the contractor, in
the performance of this contract, obtains access to information,
such as Department plans, policies, reports, studies, financial
plans, internal data protected by the Privacy Act of 1974 (5 U.S.C.
552a), or data which has not been released or otherwise made
available to the public, the contractor agrees that without prior
written approval of the contracting officer it shall not:
(A) use such information for any private purpose unless the
information has been released or otherwise made available to the
public;
(B) compete for work for the Department based on such
information for a period of six (6) months after either the
completion of this contract or until such information is released or
otherwise made available to the public, whichever is first;
(C) submit an unsolicited proposal to the Government which is
based on such information until one year after such information is
released or otherwise made available to the public; and
(D) release such information unless such information has
previously been released or otherwise made available to the public
by the Department.
(ii) In addition, the contractor agrees that to the extent it
receives or is given access to proprietary data, data protected by
the Privacy Act of 1974 (5 U.S.C. 552a), or other confidential or
privileged technical, business, or financial information under this
contract, it shall treat such information in accordance with any
restrictions imposed on such information.
(iii) The contractor may use technical data it first produces
under this contract for its private purposes consistent with
paragraphs (b)(2)(i) (A) and (D) of this clause and the patent,
rights in data, and security provisions of this contract.
(c) Disclosure after award. (1) The contractor agrees that, if
changes, including additions, to the facts disclosed by it prior to
award of this contract, occur during the performance of this
contract, it shall make an immediate and full disclosure of such
changes in writing to the contracting officer. Such disclosure may
include a description of any action which the contractor has taken
or proposes to take to avoid, neutralize, or mitigate any resulting
conflict of interest. The Department may, however, terminate the
contract for convenience if it deems such termination to be in the
best interest of the Government.
[[Page 40753]]
(2) In the event that the contractor was aware of facts required
to be disclosed or the existence of an actual or potential
organizational conflict of interest and did not disclose such facts
or such conflict of interest to the contracting officer, DOE may
terminate this contract for default.
(d) Remedies. For breach of any of the above restrictions or for
nondisclosure or misrepresentation of any facts required to be
disclosed concerning this contract, including the existence of an
actual or potential organizational conflict of interest at the time
of or after award, the Government may terminate the contract for
default, disqualify the contractor from subsequent related
contractual efforts, and pursue such other remedies as may be
permitted by law or this contract.
(e) Waiver. Requests for waiver under this clause shall be
directed in writing to the contracting officer and shall include a
full description of the requested waiver and the reasons in support
thereof. If it is determined to be in the best interests of the
Government, the contracting officer may grant such a waiver in
writing.
(End of clause)
ALTERNATE I: In accordance with 909.507-2 and 970.0905, include
the following alternate in the specified types of contracts.
(f) Subcontracts. (1) The contractor shall include a clause,
substantially similar to this clause, including this paragraph (f),
in subcontracts expected to exceed the simplified acquisition
threshold determined in accordance with FAR Part 13 and involving
the performance of advisory and assistance services as that term is
defined at FAR 37.201. The terms ``contract,'' ``contractor,'' and
``contracting officer'' shall be appropriately modified to preserve
the Government's rights.
(2) Prior to the award under this contract of any such
subcontracts for advisory and assistance services, the contractor
shall obtain from the proposed subcontractor or consultant the
disclosure required by DEAR 909.507-1, and shall determine in
writing whether the interests disclosed present an actual or
significant potential for an organizational conflict of interest.
Where an actual or significant potential organizational conflict of
interest is identified, the contractor shall take actions to avoid,
neutralize, or mitigate the organizational conflict to the
satisfaction of the contractor. If the conflict cannot be avoided or
neutralized, the contractor must obtain the approval of the DOE
contracting officer prior to entering into the subcontract.
(End of alternate)
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
7. The authority citation for part 970 continues to read as
follows:
Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201), sec. 644 of the Department of Energy Organization Act, Public
Law 95-91 (42 U.S.C. 7254).
8. Section 970.0905 is revised to read as follows:
Sec. 970.0905 Organizational conflicts of interest.
Management and operating contracts shall contain an organizational
conflict of interest clause substantially similar to the clause at 48
CFR 952.209-72 and appropriate to the statement of work of the
individual contract. In addition, the contracting officer shall assure
that the clause contains appropriate restraints on intra-corporate
relations between the contractor's organization and personnel operating
the Department's facility and its parent corporate body and affiliates,
including personnel access to the facility, technical transfer of
information from the facility, and the availability from the facility
of other advantages flowing from performance of the contract. The
Contracting Officer is responsible for ensuring that M&O contractors
adopt policies and procedures in the award of subcontracts that will
meet the Department's need to safeguard against a biased work product
and an unfair competitive advantage. To this end, the organizational
conflicts of interest clause in the management and operating contract
shall include Alternate I.
9. Subsection 970.5204-44 is amended by revising clause paragraph
(b)(15) to read as follows:
Sec. 970.5204-44 Flowdown of contract requirements to subcontracts.
* * * * *
(b) * * *
(15) Organizational Conflicts of Interest. Clause at 48 CFR (DEAR)
952.209-72 in accordance with 48 CFR (DEAR) 970.0905.
* * * * *
[FR Doc. 97-20022 Filed 7-29-97; 8:45 am]
BILLING CODE 6450-01-P
