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Proposed Rule

Debarment and Suspension (Nonprocurement) Requirements

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Office of the Secretary (OST), DOT.


Notice of proposed rulemaking (NPRM); request for comments.


This proposal would amend Department of Transportation regulations implementing the governmentwide nonprocurement suspension and debarment requirements. Specifically, the DOT proposes to adopt the optional lower tier coverage prohibiting excluded parties from participating in subcontracts at tiers lower than the first tier below a covered nonprocurement transaction.


Comments must be received on or before November 4, 2005.


Mail or hand deliver comments to the U.S. Department of Transportation, Dockets Management Facility, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590, or submit electronically at All comments should include the docket number that appears in the heading of this document. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard or you may print the acknowledgment page that appears after submitting comments electronically.

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Ladd Hakes, Office of the Senior Procurement Executive, Office of Administration (M-61), (202) 366-4268, 400 Seventh Street, SW., Washington, DC 20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m. e.t., Monday through Friday, except Federal holidays.

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On November 26, 2003, the DOT, along with twenty-nine other agencies, published its final rule implementing changes to the governmentwide debarment and suspension common rule (68 FR 66534). These regulations were intended to resolve unnecessary technical differences between suspensions and debarments in the procurement and nonprocurement systems, revise the existing governmentwide suspension and debarment regulations in a plain language style and format, and make other improvements consistent with the purpose of the suspension and debarment system. One of the changes made to the suspension and debarment rules included limiting the exclusion from a suspension or debarment to only the first procurement level. Under the previous governmentwide regulations, all executive agencies applied suspensions and debarments to all procurement levels. However, in the revised governmentwide suspension and debarment regulations, each agency was given the option of applying an exclusion from a suspension or debarment to levels below the first procurement level.

This NPRM proposes to adopt the option to apply an exclusion under the suspension and debarment regulations to levels below the first procurement level. Many of the DOT programs involve billions of dollars in grants that are obligated to construction projects by States, localities, and other recipients. For instance, in fiscal year 2003 alone, the DOT apportioned $24,129,858,248 to the States for highway construction under the Federal-aid Highway Program. Since Federal Highway Administration regulations governing the Federal-aid Highway Program require prime contractors to perform only 30 percent of the contract work themselves (less designated specialty items), a suspended or debarred contractor may continue to receive significant Federal-aid Highway work by continuing to obtain subcontracts. Moreover, suspended or debarred contractors may continue to participate in subcontracts for other DOT programs as well, such as the Federal Transit Program and the Federal-aid Airport Program. The ability of excluded contractors to continue receiving significant subcontracts makes these DOT programs highly vulnerable to fraud, waste, and abuse. As such, DOT is proposing to include the optional lower tier coverage for all DOT nonprocurement transactions.

Section-by-Section Analysis

Section 29.220 Are any Procurement Contracts Included as Covered Transactions?

This NPRM would add a new paragraph (c) to this section to cover contracts that are awarded by any contractor, subcontractor, supplier, consultant, or its agent or representative in any transaction that is expected to equal or exceed $25,000.

Rulemaking Analyses and Notices

All comments received before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, the DOT will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period.

Executive Order 12866 (Regulatory Planning and Review) and DOT Regulatory Policies and Procedures

The DOT has determined that this document does not propose a significant rule within the meaning of Executive Order 12866 or within the meaning of Department of Transportation regulatory policies and procedures. It is anticipated that the economic impact of this rulemaking would be minimal, since it would bring the DOT's regulations concerning the effect of a suspension and debarment back in line with the regulations that were in effect prior to November 26, 2003. These proposed changes would not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. Consequently, a full regulatory evaluation is not required.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) the Department has evaluated the effects of this proposed action on small entities and certifies that the proposed action would not have a significant economic impact on a substantial number of small entities. This proposal would bring the DOT's regulations concerning the effect of a suspension and debarment back in line with the regulations that were in effect prior to November 26, 2003 by excluding persons who have been suspended or debarred from participating in transactions beneath the first procurement level under a nonprocurement transaction. The only parties that might be economically impacted are subcontractors which are suspended or debarred. Based on its experience in implementing suspension and debarment regulations, the Department concludes that a significant number of entities, regardless of size, are unlikely to be suspended or debarred. For these reasons, the DOT certifies that this action would not have a significant economic impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

This proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). Indeed, it does not impose any mandates. This proposed 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 one year (2 U.S.C. 1532).

Executive Order 13132 (Federalism Assessment)

This proposed action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the DOT has determined that this proposed action would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The DOT has also determined that this proposed action would not preempt any State law or State regulation or affect the Start Printed Page 58177States' ability to discharge traditional State governmental functions.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number [Insert number], [Insert Program Name]. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities [apply/do not apply] to this program.

Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et seq.), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. The DOT has determined that this proposal does not contain collection of information requirements for the purposes of the PRA.

National Environmental Policy Act

The agency has analyzed this proposed action for the purpose of the National Environmental Policy Act of 1969 (42 U.S.C. 4321) and has determined that this proposed action would not have any effect on the quality of the environment.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross reference this action with the Unified Agenda.

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List of Subjects in 49 CFR Part 29

  • Administrative practice and procedure
  • Government contracts
  • Grant programs
  • Loan programs
  • Reporting and recordkeeping requirements
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Issued this 22nd day of September, 2005, at Washington, DC.

Norman Y. Mineta,

Secretary of Transportation.

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In consideration of the foregoing, the DOT proposes to amend title 49, Code of Federal Regulations, part 29, as set forth below:

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1. The authority citation for part 29 continues to read as follows:

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Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 11738 (3 CFR, 1973 Comp., p. 799); E.O. 12549 (3 CFR, 1986 Comp., p. 189); E.O. 12689 (3 CFR 1989 Comp., p. 235).

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2. In § 29.220, add paragraph (c) to read as follows:

Are any procurement transactions included as covered transactions?
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(c) The contract is awarded by any contractor, subcontractor, supplier, consultant or its agent or representative in any transaction, regardless of tier, to be funded or provided by the DOT under a nonprocurement transaction that is expected to equal or exceed $25,000. [See optional lower tier coverage shown in the diagram in the appendix to this part.]

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[FR Doc. 05-19965 Filed 10-4-05; 8:45 am]