E8-17790. General Services Acquisition Regulation; GSAR Case 2008-G502; Improper Personal Conflicts of Interest

AGENCY:

Office of the Chief Acquisition Officer, General Services Administration (GSA).

ACTION:

Proposed rule.

SUMMARY:

The General Services Administration (GSA) is proposing to amend the General Services Acquisition Regulation (GSAR) to revise language regarding requirements for improper business practices and personal conflicts of interest.

DATES:

Interested parties should submit written comments to the Regulatory Secretariat on or before October 3, 2008 to be considered in the formulation of a final rule.

ADDRESSES:

Submit comments identified by GSAR Case 2008-G502 by any of the following methods:

• Regulations.gov: http://www.regulations.gov.Submit comments via the Federal eRulemaking portal by inputting “GSAR Case 2008-G502” under the heading “Comment or Submission”. Select the link “Send a Comment or Submission” that corresponds with GSAR Case 2008-G502. Follow the instructions provided to complete the “Public Comment and Submission Form”. Please include your name, company name (if any), and “GSAR Case 2008-G502” on your attached document.
• Fax: [phone].
• Mail: General Services Administration, Regulatory Secretariat (VPR), 1800 F Street, NW, Room 4041, ATTN: Laurieann Duarte, Washington, DC 20405.

Instructions: Please submit comments only and cite GSAR Case 2008-G502 in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided.

FOR FURTHER INFORMATION CONTACT:

For clarification of content, contact Mr. Ernest Woodson at [phone], or by e-mail at [e-mail]. For information pertaining to the status or publication schedules, contact the Regulatory Secretariat (VPR), Room 4041, GS Building, Washington, DC 20405, [phone]. Please cite GSAR Case 2008-G502.

SUPPLEMENTARY INFORMATION:

A. Background

The General Services Administration (GSA) is amending the General Services Administration Acquisition Regulation (GSAR) to update the text addressing GSAR Part 503, Improper Business Practices and Personal Conflicts of Interest; Subpart 503.1, Safeguards; Subpart 503.2, Contractor Gratuities to Government Personnel; Subpart 503.4, Contingent Fees; Subpart 503.5, Other Improper Business Practices; Subpart 503.7, Voiding and Rescinding Contracts; and Subpart 503.10, Contractor Code of Business Ethnics and Conduct.

This rule is a result of the General Services Administration Acquisition Manual (GSAM) Rewrite initiative. The initiative was undertaken by GSA to revise the GSAM to maintain consistency with the FAR and implement streamlined and innovative acquisition procedures that contractors, offerors, and GSA acquisition personnel can use when entering into and administering contractual relationships. The GSAM incorporates the General Services Administration Acquisition Regulation (GSAR) as well as internal agency acquisition policy.

GSA will rewrite each part of the GSAR and GSAM, and as each GSAR part is rewritten, will publish it in the Federal Register.

This rule covers the rewrite of the regulatory portion of Part 503. The rule revises GSAR Subpart 503.1, Safeguards, to delete 503.104-1, Definitions, and 503.104-9, Contracts clauses, to ensure consistency with the GSAM that provides that the acquisition of leasehold interests in real property is established by GSAM Part 570; Subpart 503.2, Contractor Gratuities to Government Personnel, to revise 503.204(a)(2) to delete the term “joint venture” to ensure grammatical and structural clarity; to delete from 503.204(c) the reference to the Chairman of the GSA Board of Contract Appeals which no longer exists, and revise 503.204(f); to ensure consistency with FAR 3.204(f), Subpart 503.4, Contingents Fees, to delete 503.404, Contract clause, to ensure consistency with the GSAM that provides that the acquisition of leasehold interests in real property is established by GSAM Part 570; Subpart 503.5, Other Improper Business Practices, to revise 503.570-1, Policy, to delete the term “referring” and add “making references” for clarity; Subpart 503.7, Voiding and Rescinding Contracts, to revise 503.702 to delete the definition for “Notice” and “Voiding and rescinding official” as the terms do not require definition; to add a new section 503.703, Authority, to identify the Senior Procurement Executive as having the authority to void and rescind contracts pursuant to FAR 3.703 and 3.705(b); to relocate 503.705 from the GSAR to the manual part of the GSAM because it relates to internal administrative procedures; to add a new Subpart 503.10, Contractor Code of Business Ethics and Conduct, to establish a lower threshold for the inclusion of FAR 52.203-14, Display of Hotline Poster(s), at 503.1004(a) and include the name of the poster and where the poster may be obtained at 503.1004(b)(i) and (ii) pursuant to FAR 52.203.14(b)(3); to delete GSAR 552.203-5, Covenant Against Contingent Fees, to ensure consistency with the GSAM that provides that the acquisition of leasehold interests in real property is established by GSAM Part 570; and to delete GSAR 552.203, Price Adjustment for Illegal or Improper Activity, to ensure consistency with the GSAM requirements that leasehold interests in real property is established by GSAM Part 570.

This is not a significant regulatory action and, therefore, was not 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.

B. Regulatory Flexibility Act

The General Services Administration does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the revisions are not considered substantive. The revisions only update the GSAR and reorganize existing coverage. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. GSA will consider comments from small entities concerning the affected GSAR Parts 503 and 552 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601, et seq. (GSAR case 2008-G502), in correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the proposed changes to the GSAM 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 Parts 503 and 552

• Government procurement

Dated: July 28, 2008

Al Matera,

Director, Office of Acquisition Policy.

Therefore, GSA proposes to amend 48 CFR parts 503 and 552 as set forth below:

PART 503—IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

1. The authority citation for 48 CFR part 503 is revised to read as follows:

Authority: 40 U.S.C. 121(c).

503.104-3 and 503-104-9

[Removed]

2. Remove sections 503.104-3 and 503.104-9.

3. Amend section 503.204 by—

a. Removing from paragraph (a)(2) “or joint venture”;

b. Removing from paragraph (c) “designated by the Chairman of the GSA Board of Contract Appeals.” and adding a period, in its place; and

c. Revising paragraph (f).

The revised text reads as follows:

503.204

Treatment of violations.

(f) If the Gratuities clause was violated, the contractor may present evidence of mitigating factors to the Senior Procurement Executive, or designee, in accordance with FAR 3.204(b), either orally or in writing, consistent with a schedule the Senior Procurement Executive, or designee, establishes. The Senior Procurement Executive, or designee, exercises the Government’s rights under FAR 3.204(c) only after considering mitigating factors.

503.404

[Removed]

4. Remove section 503.404.

503.570-1

[Amended]

5. Amend section 503.570-1 by removing “referring” and adding “making references” in its place.

503.702

[Removed]

6. Remove section 503.702.

503.703

[Added]

7. Add section 503.703 to read as follows:

503.703

Authority.

Pursuant to FAR 3.703 and 3.705(b), the authority to void or rescind contracts resides with the Senior Procurement Executive.

8. Add Subpart 503.10 to read as follows:

Subpart 503.10—Contractor Code of Business Ethics and Conduct

503.1004

Contract clauses.

(a) The FAR threshold for the clause at 52.203-14, Display of Hotline Poster(s), is $5,000,000. However, GSA has exercised the authority provided at FAR 3.1004(b)(1)(i) to establish a lower threshold, $1,000,000, for inclusion of the clause when the contract or order is funded with disaster assistance funds.

(b) The information required to be inserted in the clause at FAR 52.203-14, Display of Hotline Poster(s), is as follows:

(i) Poster: GSA OIG “FRAUDNET HOTLINE”; and

(ii) Obtain from: Contracting Officer.

PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

9. The authority citation for 48 CFR part 552 continues to read as follows:

Authority: 40 U.S.C. 121(c).

552.203-5 and 552.203-70

[Removed]

10. Remove sections 552.203-5 and 552.203-70.