[Federal Register Volume 64, Number 109 (Tuesday, June 8, 1999)]
[Rules and Regulations]
[Pages 30443-30445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14066]
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ENVIRONMENTAL PROTECTION AGENCY
48 CFR Parts 1537 and 1552
[FRL-6353-9]
Acquisition Regulation: Service Contracting--Avoiding Improper
Personal Services Relationships
AGENCY: Environmental Protection Agency.
ACTION: Final rule.
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SUMMARY: The Environmental Protection Agency (EPA) is issuing this rule
to amend the EPA Acquisition Regulation (EPAAR) (48 CFR Chapter 15) to
emphasize the proper relationship between the Government and its
contractors in its non-personal services contracts. The Agency
recognizes that regardless of the express terms of its contracts, if a
contract is administered improperly, an improper personal services
relationship can be the result. This rule is designed to ensure that
the manner in which contracts are administered will not create an
improper employer-employee relationship.
EFFECTIVE DATE: July 8, 1999.
FOR FURTHER INFORMATION CONTACT: Jean A. Rellins, U.S. EPA, Office of
Acquisition Management, (3802R), 401 M Street, SW, Washington, D.C.
20460, Telephone: (202) 564-4434.
SUPPLEMENTARY INFORMATION:
A. Background.
Recent Agency audits have indicated a vulnerability in the manner
in which Agency contracts have been administered which could create the
existence of improper personal services relationships. This rule amends
the EPAAR to emphasize the proper relationship between the Government
and its contractors in the Government's non-personal services
contracts. The Agency recognizes that regardless of the express terms
of its contracts, if a contract is administered improperly, improper
personal services relationship can be the result. Accordingly, the
Agency is trying to highlight the nature of the proper relationship to
ensure that the manner in which contracts are administered will not
create an improper employer-employee relationship. No public comments
were received.
B. Executive Order 12866
This 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).
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because this rule does
not contain information collection requirements that require the
approval of OMB under the Paperwork Reduction Act of 1980 (44 U.S.C.
3501 et seq.)
D. Regulatory Flexibility Act
The EPA certifies that this rule does not exert a significant
economic impact on a substantial number of small entities. The
requirements to contractors under the rule impose no reporting, record-
keeping, or any compliance costs.
E. Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA),
Public Law 104-4, establishes requirements for Federal agencies to
assess the impact of their regulatory actions on State, local, and
tribal governments, and the private sector. This 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, the rule
is not subject to the requirements of sections 202 and 205 of the UMRA.
F. Executive Order 13045
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 affect 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.
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that are based on health or safety risks, such that
the analysis required under section 5-501 of the Order has the
potential to influence the regulation. This rule is not subject to
Executive Order 13045 because it does not establish an environmental
standard intended to mitigate health or safety risks.
G. Executive Order 12875
Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and creates a mandate upon a State, local or
tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments. If the mandate is unfunded, EPA must provide OMB a
description of the extent of EPA's prior consultation with
representatives of affected State, local and tribal governments, the
nature of their concerns, copies of any written communications from the
governments, and a statement supporting the need to issue the
regulation. In addition, Executive Order 12875 requires EPA to develop
an effective process permitting elected officials and other
representatives of State, local and tribal governments ``to provide
meaningful and timely input in the development of regulatory proposals
containing significant unfunded mandates.''
Today's rule does not create a mandate on State, local or tribal
governments. The rule does not impose any enforceable duties on these
entities. Accordingly, the requirements of section 1(a) of Executive
Order 12875 do not apply to this rule.
H. Executive Order 13084
Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments. If the mandate is unfunded,
EPA must provide to the OMB, in a separately identified section of the
preamble to the rule, a description of the extent of EPA's prior
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consultation with representatives of affected tribal governments, a
summary of the nature of their concerns, and a statement supporting the
need to issue the regulation. In addition, Executive Order 13084
requires EPA to develop an effective process permitting elected and
other representatives of Indian tribal governments ``to provide
meaningful and timely input in the development of regulatory policies
on matters that significantly or uniquely affect their communities.''
Today's rule does not significantly or uniquely affect the
communities of Indian tribal governments. Accordingly, the requirements
of section 3(b) of Executive Order 13084 do not apply to this rule.
I. 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 did
not consider the use of any voluntary consensus standards.
J. Submission to Congress and the General Accounting 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 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. This action is not
a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be
effective July 8, 1999.
Authority: The provisions of this regulation are issued under 5
U.S.C. 301; Sec. 205(c), 63 Stat. 390.
List of Subjects in 48 CFR Parts 1537 and 1552
Government procurement.
Therefore, 48 CFR Chapter 15 is amended as set forth below:
1. The authority citation for Parts 1537 and 1552 continues to read
as follows:
Authority: Sec. 205(c), 63 Stat. 390, as amended.
PART 1537--[AMENDED]
2. Section 1537.110 is amended to add paragraph (g) to read as
follows:
1537.110 Solicitation provisions and contract clauses.
* * * * *
(g) To ensure that Agency contracts are administered so as to avoid
creating an improper employer-employee relationship, contracting
officers shall insert the contract clause at 48 CFR 1552.237-76,
``Government-Contractor Relations'', in all solicitations and contracts
for non-personal services that exceed the simplified acquisition
threshold.
PART 1552--[AMENDED]
3. Add 1552.237-76 to read as follows:
1552.237-76 Government-Contractor Relations.
As prescribed in 1537.110(g), insert the following clause:
Government-Contractor Relations (June 1999)
(a) The Government and the Contractor understand and agree that
the services to be delivered under this contract by the contractor
to the Government are non-personal services and the parties
recognize and agree that no employer-employee relationship exists or
will exist under the contract between the Government and the
Contractor's personnel. It is, therefore, in the best interest of
the Government to afford both parties a full understanding of their
respective obligations.
(b) Contractor personnel under this contract shall not:
(1) Be placed in a position where they are under the
supervision, direction, or evaluation of a Government employee.
(2) Be placed in a position of command, supervision,
administration or control over Government personnel, or over
personnel of other Contractors under other EPA contracts, or become
a part of the Government organization.
(3) Be used in administration or supervision of Government
procurement activities.
(c) Employee relationship. (1) The services to be performed
under this contract do not require the Contractor or his/her
personnel to exercise personal judgment and discretion on behalf of
the Government. Rather the Contractor's personnel will act and
exercise personal judgment and discretion on behalf of the
Contractor.
(2) Rules, regulations, directives, and requirements that are
issued by the U.S. Environmental Protection Agency under its
responsibility for good order, administration, and security are
applicable to all personnel who enter the Government installation or
who travel on Government transportation. This is not to be construed
or interpreted to establish any degree of Government control that is
inconsistent with a non-personal services contract.
(d) Inapplicability of employee benefits. This contract does not
create an employer-employee relationship. Accordingly, entitlements
and benefits applicable to such relationships do not apply.
(1) Payments by the Government under this contract are not
subject to Federal income tax withholdings.
(2) Payments by the Government under this contract are not
subject to the Federal Insurance Contributions Act.
(3) The Contractor is not entitled to unemployment compensation
benefits under the Social Security Act, as amended, by virtue of
performance of this contract.
(4) The Contractor is not entitled to workman's compensation
benefits by virtue of this contract.
(5) The entire consideration and benefits to the Contractor for
performance of this contract is contained in the provisions for
payment under this contract.
(e) Notice. It is the Contractor's, as well as, the Government's
responsibility to monitor contract activities and notify the
Contracting Officer if the Contractor believes that the intent of
this clause has been or may be violated.
(1) The Contractor should notify the Contracting Officer in
writing promptly, within ________ (to be negotiated and inserted
into the basic contract at contract award) calendar days from the
date of any incident that the Contractor considers to constitute a
violation of this clause. The notice should include the date, nature
and circumstance of the conduct, the name, function and activity of
each Government employee or Contractor official or employee involved
or knowledgeable about such conduct, identify any documents or
substance of any oral communication involved in the conduct, and the
estimate in time by which the Government must respond to this notice
to minimize cost, delay or disruption of performance.
(2) The Contracting Officer will promptly, within ________ (to
be negotiated and inserted into the basic contract at contract
award) calendar days after receipt of notice, respond to the notice
in writing. In responding, the Contracting Officer will either:
(i) Confirm that the conduct is in violation and when necessary
direct the mode of further performance,
(ii) Countermand any communication regarded as a violation,
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(iii) Deny that the conduct constitutes a violation and when
necessary direct the mode of further performance; or
(iv) In the event the notice is inadequate to make a decision,
advise the Contractor what additional information is required, and
establish the date by which it should be furnished by the Contractor
and the date thereafter by which the Government will respond.
[(End of Clause)
Dated: May 14, 1999.
Betty L. Bailey,
Director, Office of Acquisition Management.
[FR Doc. 99-14066 Filed 6-7-99; 8:45 am]
BILLING CODE 6560-50-P
