SUPPLEMENTARY INFORMATION:

A. Background

Section 871 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (NDAA) (Pub. L. 110-417) added language allowing the Comptroller General to interview current employees regarding transactions being examined during an audit of contracting records. The Act revises 41 U.S.C. 254d(c)(1) and 10 U.S.C. 2313(c)(1) by inserting before the period: “and to interview any current employee regarding such transactions”. To implement the Act, FAR clauses 52.215-2, Audit and Records-Negotiation and 52.214-26, Audit and Records-Sealed Bidding, are amended to add the required statutory language. The statute did not specify that Section 871 apply to commercial item contracts and therefore was not applied to FAR clause 52.212-5, Contract Terms and Conditions Required to Implement Statutes or Executive Order-Commercial Items. Section 34 of the Office of Federal Procurement Policy Act (OFPP), 41 U.S.C. 430, exempts commercial item acquisitions from new provisions of law, such as Section 871, unless (1) the law provides criminal or civilian penalties, (2) the law expressly refers to 41 U.S.C. 430 and states that it applies to commercial item contracts, or (3) the FAR Council makes a written determination that it would not be in the best interest of the Federal Government to exempt commercial item contracts. Thus, this new provision was added to the list of inapplicable laws at FAR 12.503(a).

This is a significant regulatory action and, therefore, was subject to review under Section 6 of Executive Order 12886, 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 Councils do not expect this interim rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, at 5 U.S.C. 601, et seq. Only a small number of small businesses are audited by GAO. Currently many GAO audits of small business contractors include contractor employee interviews. This Act is designed to cover those incidents in which contractor employees are not able to be interviewed. Therefore, it is not anticipated that interviewing any current employee regarding such contract transactions will have a significant impact.

Therefore, an Initial Regulatory Flexibility Analysis has not been performed. The Councils will consider comments from small entities concerning the affected FAR Parts 12 and 52 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. FAC 2005-32, FAR Case 2008-026 in all correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to the FAR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. Chapter 35, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary to implement statutory requirements of Section 871 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (NDAA) (Pub. L. 110-417) which went into effect October 14, 2008. The Act revises 41 U.S.C. 254d (c)(1) and 10 U.S.C. 2313 (c)(1) by inserting before the period: “and to interview any current employee regarding such transactions”. To implement the Act, the clauses at FAR 52.215-2(d)(1) and 52.214-26(c) are amended to add the required statutory language. The Councils believe that the interim rule in the FAR will provide the contracting officer the relevant regulatory guidance needed when addressing requirements outlined in this rule. However, pursuant to Public Law 98-577 and FAR 1.501, the Councils will consider public comments received in response to this interim rule in the formation of the final rule.

Therefore, DoD, GSA, and NASA amend 48 CFR parts 12 and 52 as set forth below:

1. The authority citation for 48 CFR parts 12 and 52 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).

2. Amend section 12.503 by adding paragraph (a)(8) to read as follows:

3. Amend section 52.214-26 by revising the date of the clause and paragraph (c) to read as follows:

4. Amend section 52.215-2 by revising the date of the clause and paragraph (d)(1) to read as follows: