[Federal Register Volume 61, Number 152 (Tuesday, August 6, 1996)]
[Proposed Rules]
[Pages 40775-40781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19797]
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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: Proposed rule.
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SUMMARY: The Department of Energy (DOE) proposes today to amend its
Acquisition Regulation to 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.
[[Page 40776]]
DATES: Written comments (three copies) must be submitted no later than
October 7, 1996.
ADDRESSES: Comments should be addressed to: Robert M. Webb, U.S.
Department of Energy, Office of Procurement and Assistance Management,
Office of Policy, HR-51, Room 8H-023, 1000 Independence Avenue, SW.,
Washington, D.C. 20585.
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.
A. Types of Contracts Subject to OCI Treatment
B. Dollar Threshold for Application
C. Disclosure of Interest
D. Contract Clause
E. The OCI Determination
F. Waiver
III. Public Comments.
A. Consideration and Availability of Comments.
B. Public Hearing Determination.
IV. 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.
E. Review Under the National Environmental Policy Act.
F. Review Under Executive Order 12612.
I. Background
Subsections (b)(2) and (5) of section 4304 of the Federal
Acquisition Reform Act of 1996 (FARA), Pub. L. 104-106, repealed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 proposes to implement and supplement
the current FAR provisions in the manner described below. The OCI
system refinements proposed in this regulation are intended to address
concerns that the agency has identified based on more than a decade of
experience under the OCI system described in the DEAR. To facilitate
understanding of the revisions that the Department is proposing, the
following text not only describes how the Department's regulation
builds on the OCI system provided in the FAR, but also explains how it
differs from the DOE OCI system currently found in the DEAR.
II. Discussion
A. Types of Contracts Subject to OCI Treatment
The FAR OCI system applies to advisory and assistance services and
to consultants. This regulation proposes no change in the FAR
provisions that define the scope of coverage of the OCI regulations.
Although the OCI system currently described in the DEAR applies to
evaluation services and technical consulting and management support
services, the Department believes that the FAR definition of ``advisory
and assistance services'' and the DOE definitions of ``evaluation
services'' and ``technical consulting and management support services''
are essentially the same. The scope of coverage of the FAR regulation
and the DOE supplement proposed in this rule, therefore, will be
substantially the same as the OCI system currently found in the DEAR.
B. Dollar Threshold For Application
The OCI system described in the DEAR applies to covered contracts
without regard to the dollar amount of the transaction. The FAR system
applies to covered contracts in excess of the simplified acquisition
threshold, currently $100,000. The proposed DOE system also would apply
to covered contracts and subcontracts in excess of the simplified
acquisition threshold.
C. Disclosure of Interest
The solicitation provision currently found in DEAR section 952.209-
70, Organizational Conflicts of Interest--Disclosure or Representation,
requires all offerors to provide a concise statement of all relevant
facts concerning past, present, or currently planned interests
(financial, contractual, organizational, or otherwise) that relate to
the work described in the statement of work. The DEAR provision extends
this disclosure requirement to the offeror's affiliates, proposed
consultants, and subcontractors of any tier. It also places no time
limit on the information that must be provided.
In contrast, the FAR, in solicitation provision 52.209-8,
Organizational Conflicts of Interest Certificate--Advisory and
Assistance Services, requires that the apparent successful offeror
submit a certificate that, among other things, describes services
rendered to the Government or other clients, during the 12 months
preceding the date of the certification, with respect, or directly
related, to the same subject matter as the solicitation in question.
The FAR provision allows the head of the contracting activity to extend
the period subject to the reporting requirement to up to 36 months. The
offeror's affiliates, proposed consultants, and subcontractors are not
subject to the reporting requirement.
The approach to disclosure of information proposed in this rule is
based on the approach provided in section 52.209-8 of the FAR. Like the
FAR, the proposed rule would require that only the apparent successful
offeror disclose information related to organizational conflicts of
interest and would not require disclosure from affiliates. The proposed
rule provides, however, that any consultants or subcontractors
identified as part of the team proposed by the offeror also would be
subject to the disclosure requirement. The proposed rule also adopts
the twelve to thirty-six month time period of the FAR for disclosure of
information. Finally, the proposed rule clarifies and somewhat expands
the categories of information that would be subject to disclosure to
include all relevant information concerning any past, present, or
currently planned interest (financial, contractual, organizational, or
other information) related to the work described in the statement of
work. These refinements of the language provided in the FAR will help
ensure that all information relevant to an organizational conflict of
interest review is available to the Department when it conducts its
evaluation of the apparent successful offeror and any identified
subcontractors and consultants.
The proposed solicitation provision also eliminates the
certification requirement. The Department believes that this approach
is consistent with section 4301 of the FARA which requires agencies to
eliminate certification requirements that are not required by statute.
The new provision will require only a disclosure by the apparent
successful offeror. This approach is predicated on anticipated changes
to the FAR solicitation provision. The Department, however, will review
the certification issue if the
[[Page 40777]]
FAR adopts a different approach to addressing this matter.
D. Contract Clause
In section 9.507-2, Contract Clause, the FAR recognizes that there
may be instances where, as a condition of award, the contractor's
eligibility for future prime contracts should be restricted or the
contractor must agree to some other restraint. The FAR further provides
that the solicitation is to contain a proposed clause that specifies
both the nature and duration of the proposed restraint and that the
contracting officer is to include this clause in the contract. The FAR
provides no model for this clause, but does recognize that, when
appropriate, the contracting officer may negotiate the final terms of
this clause with the successful offeror. The FAR also states that the
restraint imposed by the clause is to be limited to a fixed term of
reasonable duration. The duration of the restraint must be specified in
the clause and may vary from one contract to another.
This rule proposes to address this issue by providing a contract
clause for inclusion in solicitations for advisory and assistance
services and, ultimately, in the resulting contracts. This clause is
modeled in many important respects on the organizational conflict of
interest clause currently found in section 952.209-72 of the DEAR. The
proposed clause differs, however, in a number of respects from the
approaches found currently in the FAR and DEAR.
1. Coverage of Affiliates
While the FAR does not provide that affiliates of the successful
contractor would be subject to any restraints on future activities, the
clause currently found in the DEAR extends the restrictions described
in that clause to affiliates of the contractors and their successors in
interest. The proposed DEAR clause would continue to extend restraints
on future activities to affiliates of the successful contractor.
Based on our experience in addressing organizational conflict of
interest issues, the Department believes that this restriction on
activities of affiliates is necessary for two reasons. First, it
reduces the potential for bias in the contractor's work, by eliminating
the possibility that a contractor's objectivity might be affected by
the knowledge that a particular outcome might improve an affiliate's
position in a competition stemming directly from performance of the
contract. Second, it reduces the potential for an affiliate to obtain
an unfair competitive advantage in future competitions, by ensuring
that they are unable to benefit from information obtained by the
contractor during the course of performance and not otherwise available
to the public.
2. Application to Subcontractors
The FAR does not require the restraints imposed on the successful
contractor extend to subcontractors. The clause currently found in the
DEAR provides that the restraints imposed by this clause are to flow
down to subcontractors of any tier. The current DEAR clause further
provides that the contracting officer must review the subcontractor's
disclosure statement and may preclude award to a subcontractor if
organizational conflict of interest issues cannot be resolved.
Under the proposed rule, all subcontracts for advisory and
assistance services whose value exceeds the simplified acquisition
threshold would be subject to the proposed contract clause. This is
necessary because prime contractors may subcontract crucial areas of
contract performance. However, in contrast to the system currently
described in the DEAR, the contracting officer would no longer be
responsible for reviewing and evaluating the organizational conflict of
interest information. In the future, the prime contractor would be
responsible for conducting the organizational conflict of interest
review of the subcontractors that were not identified in, and evaluated
as part of, the proposal submitted in response to the solicitation.
These subcontractors, in turn, would be responsible for evaluating
subcontractors that they propose to use. In the event that the prime
contractor or any of the subcontractors identify an actual or
significant potential organizational conflict of interest that cannot
be avoided or neutralized, they would be required to obtain the
approval of the contracting officer prior to entering into the
subcontract.
3. Other Issues
The proposed clause would limit restrictions on future contracting
to five years. This is in contrast to the clause currently found in the
DEAR that places no time limit on the restrictions against future
contracting. Also, the proposed rule permits the contracting officer to
tailor the provisions of the clause to address the circumstances of
each acquisition.
E. The OCI Determination
The OCI system described in the DEAR explicitly requires the DOE
contracting officer to evaluate all relevant information concerning
possible organizational conflicts of interest prior to any award and to
make a finding as to whether a possible organizational conflict of
interest may exist with respect to a particular offeror. Consistent
with applicable statutory requirements, the OCI regulation currently
found in the DEAR provides that the contracting officer must determine
whether the interests disclosed and information otherwise available
present ``little or no likelihood'' of an organizational conflict of
interest. If, by application of this standard, an organizational
conflict of interest is found, then the contacting officer may take
steps to avoid the conflict, disqualify the offeror from award, or,
after another statutorily directed determination, award the contract in
the face of the conflict.
The FAR does not explicitly require the contracting officer to
evaluate the information submitted in the OCI certificate nor, to make
a written determination regarding the potential for an organizational
conflict of interest in all instances.
To clarify the responsibilities of the contracting officer, the
proposed rule would require the contracting officer to make a written
determination regarding the existence of an actual or significant
potential organizational conflict of interest for each procurement
subject to OCI requirements. If an actual or significant potential
conflict exists, the contracting officer would be required to ``avoid,
neutralize, or mitigate'' the conflict. If the conflict cannot be
avoided, neutralized, or mitigated, the contracting officer may
disqualify the offeror from award and begin the disclosure and
evaluation process with the firm next in line for award.
F. Waiver
The OCI regulations currently contained in the DEAR do not provide
for waiver of any portion of the OCI requirements. In order to award a
contract in the face of an organizational conflict of interest, the
Secretary or the Secretary's designee must determine that the award is
in the best interests of the United States. The regulations further
require that an appropriate written finding and determination be
published in the Federal Register.
The FAR provides that ``any general rule or procedure'' of Subpart
9.5 may be waived by an official not lower than the Head of the
Contracting Activity. Consistent with the FAR, the proposed rule
delegates the FAR waiver authority to DOE Heads of Contracting
Activities.
[[Page 40778]]
III. Public Comments
A. Consideration and Availability of Comments
Interested persons are invited to participate by submitting data,
views, or arguments with respect to the proposed Department of Energy
Acquisition Regulation amendments set forth in this notice. Three
copies of written comments should be submitted to the address indicated
in the ADDRESSES section of this notice. All written comments received
by the date indicated in the DATES section of this notice and all other
relevant information in the record will be carefully assessed and fully
considered prior to publication of the final rule. All comments
received will be available for public inspection in the DOE Reading
Room, Room 1E-190, Forrestal Building, 1000 Independence Avenue, SW.,
Washington, DC 20585, between the hours of 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays. Any information considered to
be confidential must be so identified and submitted in writing, one
copy only. DOE reserves the right to determine the confidential status
of the information and to treat it according to our determination (See
10 CFR 1004.11).
B. Public Hearing Determination
The Department has concluded that this proposed rule does not
involve a substantial issue of fact or law and that the proposed rule
should not have substantial impact on the nation's economy or a large
number of individuals or businesses. Therefore, pursuant to Public Law
95-91, the DOE Organization Act, and the Administrative Procedure Act
(5 U.S.C. 553), the Department does not plan to hold a public hearing
on this proposed rule. However, should a sufficient number of people
request a public hearing, the Department will reconsider its
determination.
IV. 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, the proposed regulations meet the relevant standards
of Executive Order 12988.
C. Review Under the Regulatory Flexibility Act
This proposed 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. This proposed rule would likely
ease any burden on small businesses associated with the organizational
conflicts of interest system currently found in the DEAR. The proposal
would limit application to contracts and subcontracts in excess of
$100,000, thereby not applying to transactions dominated by small
businesses. The proposed system requires no special expertise and the
disclosure requirements are limited to the apparently successful or
those firms in the competitive range, as opposed to applying to all
offerors. The obligation to disclose past interests, which the system
currently found in the DEAR does not limit, has been limited from
generally to the past twelve (12) months. On the basis of the
foregoing, DOE certifies that this proposed rule, if adopted, would not
have a significant economic impact on a substantial number of small
entities, and, therefore, no initial regulatory flexibility analysis
has been prepared.
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 proposed 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, Subpart D) implementing the
National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et
seq.). Specifically, this proposed rule is categorically excluded from
NEPA review because the proposed amendments to the DEAR would be
strictly procedural (categorical exclusion A6). Therefore, this
proposed 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 proposed rule, when finalized, will revise certain
policy and procedural requirements. States which contract with DOE will
be subject to this proposed rule. However, DOE has determined that this
proposed rule will not have a substantial direct effect on the
institutional interests or traditional functions of the States.
List of Subjects in 48 CFR Parts 909, 952, and 970.
Government procurement.
[[Page 40779]]
Issued in Washington, D.C. on July 22, 1996.
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 proposed to be 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.
909.503 Waiver.
Heads of Contracting Activities are delegated the authorities in 48
CFR (FAR) 9.503 regarding waiver of OCI requirements.
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 a
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 and evaluation 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 decision shall
be included in the contract file.
909.507 Solicitation provisions and contract clause.
909.507-1 Solicitation provisions. (DOE coverage--paragraph (c))
(c) 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 paragraph (c)(4) up to 36
months.
909.507-2 Contract Clause.
Contracting Officers shall insert the clause at 48 CFR 952.209-72,
Organizational Conflicts of Interest, in each contract for advisory and
assistance services expected to exceed the simplified acquisition
threshold. Contracting officers may make appropriate modifications
where necessary to address the potential for organizational conflicts
of interest in individual contracts.
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:
952.209-8 Organizational conflicts of interest--disclosure.
As prescribed in 48 CFR 909.507-1(c), insert the following
provision:
Organizational Conflicts of Interest Disclosure--Advisory and
Assistance Services (XXX 1996)
(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. The
requirements of this provision apply individually to any of the
proposer's identified consultants or subcontractors that will also
furnish advisory and assistance services in performance of this
contract.
(c) The statement must contain the following:
(1) Name of the agency and the number of the solicitation in
question.
(2) The name, address, telephone number, and federal taxpayer
identification number of the apparent successful offeror.
(3) A description of the nature of the services rendered by or
to be rendered on the instant contract.
(4) 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.
(5) 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
[[Page 40780]]
may result in the assessment of penalties associated with false
statements or such other provisions provided for by law or
regulation.
(End of provision)
952.209-70 [Removed]
5. Subsection 952.209-70 is removed.
6. Subsection 952.209-72 is revised to read as follows:
952.209-72 Organizational conflicts of interest.
As prescribed at 48 CFR 909.507-2, the contracting officer shall
insert the following clause:
Organizational Conflicts of Interest (XXX 1996)
(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.
(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 five 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.
(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) Subcontracts. (1) The contractor shall include a clause,
substantially similar to this clause, including this paragraph, in
subcontracts expected to exceed the simplified acquisition threshold
determined in accordance with FAR Part 13 and involving 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 to the satisfaction of the contractor the
organizational conflict. 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.
(e) 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.
(f) 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)
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:
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
[[Page 40781]]
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 require a disclosure of interests
substantially similar to the one at 48 CFR 952.209-8 and inclusion of a
clause substantially similar to the one at 48 CFR 952.209-72 in each
subcontract for advisory and assistance services expected to exceed the
simplified acquisition threshold, determined in accordance with FAR
part 13.
9. Subsection 970.5204-44 is amended by revising clause paragraph
(b)(15) to read as follows:
970.5204-44 Flowdown of contract requirements to subcontracts.
* * * * *
Flowdown of Contract Requirements to Subcontracts (Oct 1995)
* * * * *
(b) * * *
(15) Organizational Conflicts of Interest. Clause at DEAR
952.209-72 in accordance with DEAR 970.0905.
* * * * *
[FR Doc. 96-19797 Filed 8-5-96; 8:45 am]
BILLING CODE 6450-01-P
