E7-1534. Department of State Acquisition Regulation

AGENCY:

State Department.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule makes one change to the DOSAR. It revises the DOSAR to expand contracting authority to non-U.S. citizen locally employed staff, i.e., Foreign Nationals and Third Country Nationals. Presently, only U.S. citizens who are Government employees may be appointed as contracting officers.

DATES:

The Department will accept comments from the public up to April 2, 2007.

ADDRESSES:

You may submit comments, identified by any of the following methods:

• E-mail: [e-mail]. You must include the RIN in the subject line of your message.
• Mail (paper, disk, or CD-ROM submissions): Gladys Gines, Procurement Analyst, Department of State, Office of the Procurement Executive, 2201 C Street, NW., Suite 603, State Annex Number 6, Washington, DC 20522-0602.
• Fax: [phone].

Persons with access to the Internet may also view this notice and provide comments by going to the regulations.gov Web site at http://www.regulations.gov/​index.cfm.

FOR FURTHER INFORMATION CONTACT:

Gladys Gines, Procurement Analyst, Department of State, Office of the Procurement Executive, 2201 C Street, NW., Suite 603, State Annex Number 6, Washington, DC 20522-0602; e-mail address: [e-mail].

SUPPLEMENTARY INFORMATION:

The Department of State initiated a pilot program in which a non-U.S. citizen locally employed staff (LES) member at an Embassy was given contracting authority at $2,500 (the micro-purchase threshold). The pilot resulted in savings in time to process transactions, allowed the Contracting Officer at the Embassy additional time to concentrate on other procurement and non-procurement issues, and increased morale among LES staff through a sense of greater empowerment. Although the pilot did not identify specific cost or headcount savings, the Department believes that further dissemination of contracting authority at increased levels up to $25,000 presents an opportunity for overseas posts (Embassies and Consulates) to achieve reductions in cost and headcount while improving service, largely by providing management flexibility to reconfigure the work portfolios of overseas contracting officers. Approximately 97% of all overseas procurement transactions are below $25,000. Effective management controls will minimize the risks associated with providing contracting authority to non-U.S. citizen LES. These controls are similar to those currently used successfully in the purchase card program for similar transactions. They consist of:

• Review of LES transactions on a monthly basis by a U.S. citizen contracting officer;
• Determination and approval of adequate local conditions such as rule of law and level of corruption as well as the integrity of LES staff recommended for the contracting authority;
• Evaluation of LES delegated procurement by the Office of the Procurement Executive;
• Certification by the Ambassadors on an annual basis that the management controls are sufficient; and
• Time-limited contracting officer authority to LES to permit periodic revalidation of management controls.

Because the current DOSAR language states that all contracting officers must be U.S. citizens, a change to the regulation is required. Because the rulemaking process will take some time, the Department will select several additional pilot posts to continue the deployment process during the rulemaking timeframe.

Regulatory Findings

Administrative Procedure Act

In accordance with provisions of the Administrative Procedure Act governing rules promulgated by federal agencies that affect the public (5 U.S.C. 552), the Department is publishing this proposed rule and inviting public comment.

Regulatory Flexibility Act

The Department of State, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates Act of 1995

This rule will not 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 year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and import markets.

Executive Order 13132

This rule 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. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement.

Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the rule does not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 601

• Government procurement

Accordingly, for reasons set forth in the preamble, title 48, chapter 6 of the Code of Federal Regulations is proposed to be amended as follows:

Subchapter A—General

PART 601—DEPARTMENT OF STATE ACQUISITION REGULATION SYSTEM

1. The authority citation for 48 CFR part 601 continues to read as follows:

Authority: 40 U.S.C. 486(c); 22 U.S.C. 2658. 2. Section 601.603-3 is amended by revising paragraph (c) to read as set forth below:

601.603-3

Appointment.

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(c) Non-Federal employees. Only United States Government employees shall be appointed as contracting officers. For acquisitions at $25,000 and below only, this includes locally employed staff (i.e., Foreign Service Nationals and Third Country nationals). Personal services contractors are not eligible for appointment as DOS contracting officers.

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Dated: January 23, 2007.

Corey M. Rindner,

Procurement Executive, Department of State.