E6-17543. Application of Post Differential and Danger Pay Allowances To Extended Workweeks Under Cost-Reimbursement Type Contracts

AGENCY:

United States Agency for International Development.

ACTION:

Proposed rule.

SUMMARY:

The U.S. Agency for International Development (USAID) is proposing to amend its regulations by adding how Post-differential and Danger pay allowances will be applied to extended workweeks under cost-reimbursement type contracts.

DATES:

Submit comments on or before December 26, 2006.

ADDRESSES:

Submit comments, identified by title of the Proposed Action, and RIN number by any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

E-mail: [e-mail]. Include title of the proposed action, and RIN number in the subject line of the message.

Fax: [phone].

Mail: U. S. Agency for International Development, Office of Acquisition & Assistance, Policy Division, 1300 Pennsylvania Avenue, NW., Room 7.9-18, Washington, DC 20523-0001.

Instructions: All submissions must include the title of the proposed action, and Regulatory Information Number (RIN) for this rulemaking. Please include your name, title, organization, postal address, telephone number, and e-mail address in the text of the message.

FOR FURTHER INFORMATION CONTACT:

Carol Ketrick, Telephone: [phone], E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Public Participation: Because security screening precautions have slowed the delivery and dependability of surface mail to USAID/Washington, USAID recommends sending all comments to the Federal eRulemaking Portal, e-mail address, or fax number listed above (all comments must be in writing to be reviewed). You may submit comments by electronic mail avoiding the use of any special characters and any form of encryption. All comments will be made available for public review without change, including any personal information provided, from three days after receipt to finalization of rule at http://www.usaid.gov/​policy/​regulations/​index.html.

A. Background

Based on a recent surge in requests to interpret the applicable regulations for Post differential and Danger pay allowances associated with contract awards in Iraq and Afghanistan, we feel it prudent to amend 48 CFR 752.7028 of the USAID Acquisition Regulations (the “AIDAR”) to clarify the existing policy. This clarification brings the policy in line with that applied to direct-hire employees. The Department of State's Standardized Regulations (DSSR) provide those regulations governing allowances, differentials and defraying of official residence expenses for employees in foreign areas. The DSSR provides the following definitions for the allowances noted above as follows: “Post allowance” is “a cost-of-living allowance granted to an employee officially stationed at a post in a foreign area where the cost of living, exclusive of quarters costs, is substantially higher than in Washington, DC”. It is additional compensation for service at places in foreign areas where conditions of environment differ substantially from conditions of environment in the continental U.S. and warrant additional compensation as a recruitment and retention incentive. “Danger Pay Allowance” means the “additional compensation of up to 35 percent over basic compensation granted to employees for service at designated danger pay posts.” Direct hire employees are compensated in accordance with the DSSR which defines basic compensation as the rate of compensation fixed by statute for the position held by an employee: administratively in conformity with rates paid by the Government for work of a comparable level of difficulty and responsibility in the continental United States, before any deduction is made and without taking into consideration any additional compensation such as overtime pay, night pay differential, hazard differential, extra pay for work on holidays, post differential, and allowances * * *”. Further, the Department of State Foreign Affairs Manual, (FAM) 3 FAM-2333.1-1 establishes the basic workweek for full-time employees as being a 40-hour workweek.

Recent contract awards in Iraq and Afghanistan have resulted in circumstances where the contractor may be authorized to work in excess of a 40-hour workweek. Mission direct-hire employees have, in some instances, worked more than a 40-hour workweek; however, for purposes of calculating Danger pay allowance, these additional hours are not included in the amount defined as “basic compensation”. In order to clarify USAID policy aligning payment of allowances with that of direct-hire employees, the Proposed Rule would amend 48 CFR 752.7028 to reflect USAID's policy that Post-differential and Danger Pay allowances are to be calculated by applying the percentage rates to a maximum 40-hour workweek, regardless of whether the contractor has been authorized a workweek in excess of 40 hours. The proposed amendments made under this case are intended to be applicable only to USAID cost reimbursement type contracts; however, the policy would also apply to contracts or task orders using other than a cost-reimbursement pricing structure but that allow for the reimbursement of costs for these allowances. USAID is interested in hearing from contractors regarding the effect on contractors' standard policies regarding employee benefits.

USAID also seeks comment on the inclusion of an exception to the above limitation which would allow Mission Directors to authorize calculation of post-differential and danger percentages applied to a workweek in excess of 40 hours as approved by a contracting officer.

In addition to the clarification of the policy, the applicable clause is modified to delete reference to the Supplemental post allowance to reflect the elimination of that allowance from the Department of States' Standardized Regulations (Government Civilians, Foreign Areas), Chapter 230.

B. Regulatory Planning and Review

This is not a significant regulatory action and, therefore, is subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

C. Regulatory Flexibility Act

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), USAID has considered the economic impact of the rule and has determined that its provisions would not have a significant economic impact on a substantial number of small entities.

D. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed changes to the AIDAR do 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 7

• Government procurement

For the reasons set forth in the preamble, the U. S. Agency for International Development proposes to amend 48 CFR part 7 as follows:

1. The authority citation for 48 CFR part 7 continues to read as follows:

Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., p. 435.

PART 752—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

2. Amend Section 752.7028 by revising paragraph (a), removing and reserving paragraph (e), and adding a sentence at the end of paragraph (j)(1) to read as follows:

§ 752.7028

Differential and allowances.

* * * * *

(a) Post differential. Post differential is an additional compensation for service at places in foreign areas where conditions of environment differ substantially from conditions of environment in the continental United States and warrant additional compensation as a recruitment and retention incentive.

(1) In areas where post differential is paid to USAID direct-hire employees, post differentials not to exceed the percentage of salary as is provided such USAID employees in accordance with the Standardized Regulations (Government civilians, Foreign Areas), Chapter 500 (except the limitation contained in Section 552, “Ceiling on Payment”) Tables—Chapter 900, as from time to time amended, will be reimbursable hereunder for employees in respect to amounts earned during the time such employees actually spend overseas on work under this contract. (See Standardized Regulation 510). Payments for post differential are limited to that percentage rate applied to a maximum 40-hour work week, regardless of whether the contracting officer has authorized a work week in excess of 40 hours. Exceptions to this policy may be granted either by the Mission Director or the Assistant Administrator having program responsibility for the project.

(2) When such post differential is provided to regular employees of the Contractor, it shall be payable beginning on the date of arrival at the post of assignment and continue, including periods away from post on official business, until the close of business on the day of departure from post of assignment en route to the United States. Sick or vacation leave taken at or away from the post of assignment will not interrupt the continuity of the assignment or require a discontinuance of such post differential payments, provided such leave is not taken within the United States or the territories of the United States. Post differential will not be payable while the employee is away from his/her post of assignment for purposes of home leave. Short-term employees shall be entitled to post differential beginning with the forty-third (43rd) day at post.

* * * * *

(e) Reserved.

* * * * *

(j) (1) * * * Payments for danger pay are limited to that percentage of basic compensation as established by the Standardized Regulations applied to a maximum 40-hour work week, regardless of whether the contracting officer has authorized a work week in excess of 40 hours. Exceptions to this policy may be granted either by the Mission Director or the Assistant Administrator having program responsibility for the project.

Dated: October 12, 2006.

Michael F. Walsh,

Procurement Executive.