SUPPLEMENTARY INFORMATION:

A. Background

1. The Councils are considering the need for standard OCI clauses, or a set of standard OCI clauses, if appropriate, for inclusion in solicitations and contracts. The Councils are publishing a related advance notice of proposed rulemaking on the subject of Service Contractor Employee Personal Conflicts of Interest.

2. Organizational and Consultant Conflicts of Interest are addressed in Subpart 9.5, as well as in some agencies’ supplements.

3. With the recent increase in the use of contractor employees to perform functions previously performed by Government employees (blended workforce) and the increased consolidation in many sectors of the contractor community, the Councils are seeking to determine if the FAR’s current guidance on OCIs adequately ( printed page 15963) addresses the current needs of the acquisition community or whether providing standard provisions and/or clauses, or a set of such standard provisions and clauses, might be beneficial. A review of agency-specific guidance on OCI’s may reveal useful language, tools, and/or training that might be beneficial if expanded Governmentwide. The Councils also believe a review of current available training to contracting officers on the identification and mitigation of OCIs is necessary and should be included, with a gap analysis and recommendations.

4. The Acquisition Advisory Panel (AAP) was chartered by the Congress at Section 1423 of the Services Acquisition Reform Act (SARA). Relevant portions of the final report of the AAP are located on the Web at http://acquisition.gov/​comp/​aap/​documents/​Chapter6.pdf. The Acquisition Advisory Panel (AAP) found that “the use of contractor employees to perform functions previously performed by Government employees combined with consolidation in many sectors of the contractor community has increased the potential for organizational conflicts of interest” (AAP Final Report, Chapter 6, Finding 6, page 417). The nature of the blended or multisector workforce could potentially distort previously clear distinctions between Government employees and private-sector employees, who often are working side-by-side, and may add complexity to the business ethics landscape for which the acquisition community needs updated guidance.

5. Two recent FAR cases, 2006-007 and 2007-006, have expanded, or proposed to expand, general business ethics coverage and requirements in the FAR with respect to contractor entities. The former case was published as a final rule at 72 FR 65873, November 23, 2007, with an effective date of December 24, 2007. It requires employers to post Inspector General (IG) Hotline posters in their places of business, to have a written code of business ethics, and, with the exception of small businesses, to have a formal business ethics training program and internal control system. The latter case was published as a proposed rule at 72 FR 64019, November 14, 2007, whose comment period closed on January 14, 2008. The Councils are now reviewing the comments received. FAR Case 2007-006 proposes additional mandatory requirements for the business ethics programs. For example, contractors that do not timely report violations of law in connection with a Government contract or subcontract may be subject to suspension or debarment.

6. Other Government agencies’ approaches are located at the following Web sites:

AGENCY FOR INTERNATIONAL DEVELOPMENT — Organizational conflicts of interest discovered after award : Section 752.209-71 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr752_​07.html.

DEPARTMENT OF EDUCATION — Organizational conflicts of interest : Section 3452.209-70 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr3452_​07.html.

DEPARTMENT OF ENERGY — Organizational conflicts of interest : Subpart 909.5 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr909_​07.html; and sections 952.209-8 and 952.209-72 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr952_​07.html.

DEPARTMENT OF HOMELAND SECURITY — Organizational conflicts of interest : Sections 3052.209-72 and 3052.209-73 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr3052_​07.html.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT — Organizational conflicts of interest : Sections 2452.209-70 thru 2452.209-72 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr2452_​07.html.

DEPARTMENT OF VETERANS AFFAIRS — Organizational conflict of interest : Subpart 809.5 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr809_​07.html; and section 852.209-70 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr852_​07.html.

ENVIRONMENTAL PROTECTION AGENCY — Organizational conflicts of interest : Subpart 1509.5 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr1509_​07.html; and sections 1552.209-70 thru 1552.209-75 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr1552_​07.html.

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION — Organizational conflict of interest — Limitation on future contracting : Section 1852.209-71 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr1852_​07.html.

NUCLEAR REGULATORY COMMISSION — Organizational conflicts of interest : Subpart 2009.5 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr2009_​07.html; and sections 2052.209-71 and 2052.209-72 located at http://www.access.gpo.gov/​nara/​cfr/​waisidx_​07/​48cfr2052_​07.html.

B. Solicitation of Public Comment

The Councils are seeking comments on whether additional coverage in this area is needed, the suitability of expanding Governmentwide one or a combination of the agencies’ approaches, and whether expanded coverage would enhance the integrity of the Government’s decision-making processes.

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.