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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: August 31, 2000

FROM: Barry McVay, CPCM

SUBJECT: Defense Federal Acquisition Regulation Supplement (DFARS); Pollution Control and Clean Air and Water

SOURCE: Federal Register, August 31, 2000, Vol. 65, No. 170, page 52954

AGENCIES: Department of Defense (DOD)

ACTION: Final Rule

SYNOPSIS: DOD is revising and relocating policy on the level of approval required to exempt a contract from certain restrictions of the Clean Air Act or the Clean Water Act. The policy is moved from DFARS Subpart 223.1, Pollution Control and Clean Air and Water, to DFARS Subpart 209.4, Debarment, Suspension, and Ineligibility, because Federal Acquisition Regulation (FAR) Subpart 23.1 was removed by Federal Acquisition Circular (FAC) 97-15, effective February 25, 2000.

EDITOR'S NOTE: For more on the proposed rule, see the May 22, 2000, FEDERAL CONTRACTS DISPATCH "Defense Federal Acquisition Regulation Supplement (DFARS); Pollution Control and Clean Air and Water."

For more on FAC 97-15, see the January 2000 Federal Contracts Perspective article "FAC 97-15 Addresses Foreign Acquisition, Contract Bundling, Award Fee Determination."

EFFECTIVE DATE: August 31, 2000.

FOR FURTHER INFORMATION CONTACT: Sandra G. Haberlin, Defense Acquisition Regulations Council, OUSD(AT&L)DP(DAR), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062; 703-602-0289; fax: 703-602-0350. Cite DFARS Case 2000-D004 in all correspondence related to this rule.

SUPPLEMENTAL INFORMATION: FAR Subpart 23.1 was removed by FAC 97-15 because the Environmental Protection Agency (EPA) identifies violators of the Clean Air Act and the Clean Water Act in the List of Parties Excluded from Federal Procurement and Nonprocurement Programs, so it was considered unnecessary.

Since FAR Subpart 23.1 no longer exists, DFARS Subpart 223.1 must be removed. However, FAR Subpart 23.1 included FAR 23.104, Exemptions, which stated that the agency head may exempt any contract or subcontract from the prohibition against award of a contract to a Clean Air Act or Clean Water Act violator "for 1 year when it is in the paramount interest of the United States to do so" as provided by EPA's regulations. DFARS 223.104, Exemptions, limited the delegation of this authority to "a level no lower than an official who is appointed by and with the advice of the Senate."

Since EPA's regulations allowing agencies to exercise this exemption authority are still in effect, DOD published a proposed rule on May 22, 2000, to remove DFARS Subpart 223.1, and relocate the text to DFARS 209.405, Effect of Listing, as paragraph (b) because the corresponding text at FAR 9.405(b) addresses matters relating to entities on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs. However, the new paragraph (b) would be revised to permit the delegation of the exemption authority to a level no lower than a general or flag officer or a member of the Senior Executive Service.

In addition, the current text of DFARS 209.405 was proposed to be redesignated as paragraph (a) and revised to clarify that the exemption authority in paragraph (b) may be delegated. The proposed revised paragraph (a) would state that the 10 U.S.C. 2393 provisions requiring the secretary of a military department to make a "compelling reason" determination permitting award of a contract to an ineligible contractor apply only to "a contractor that is debarred or suspended from procurement programs", not to "a contractor on the list of parties excluded from procurement programs" as was then stated in DFARS 209.405. This clarification was considered necessary because the List of Parties Excluded from Federal Procurement and Nonprocurement Programs contains "the names [of] parties debarred, suspended, or voluntarily excluded...proposed from debarment, and determined to be ineligible" (definition of "List of Parties Excluded from Federal Procurement and Nonprocurement Programs" in FAR 9.403, Definitions.) FAR 9.403 also states that an "ineligible" party is excluded from government contracting and subcontracting "pursuant to statutory, executive order, or regulatory authority...for example, pursuant to the Davis-Bacon Act, the Service Contract Act...or the Environmental Protection Acts and [related] executive orders." Therefore, the secretary of a military department is not required by 10 U.S.C. 2393 to make the "compelling reason" determination to contract with Clean Air Act or Clean Water Act violators -- this authority could be delegated.

No comments were received, so the proposed rule is finalized without change.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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