Agency for International Development Acquisition Regulation (AIDAR): Revisions to the Incentive Awards Program for Personal Services Contractors

Citation84 FR 9739
Record Number2019-03840
Published date18 March 2019
CourtAgency For International Development
Federal Register, Volume 84 Issue 52 (Monday, March 18, 2019)
[Federal Register Volume 84, Number 52 (Monday, March 18, 2019)]
                [Proposed Rules]
                [Pages 9739-9742]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-03840]
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                AGENCY FOR INTERNATIONAL DEVELOPMENT
                48 CFR Chapter 7
                RIN 0412-AA93
                Agency for International Development Acquisition Regulation
                (AIDAR): Revisions to the Incentive Awards Program for Personal
                Services Contractors
                AGENCY: U.S. Agency for International Development.
                ACTION: Proposed rule.
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                SUMMARY: The U.S. Agency for International Development (USAID) proposes
                to amend its regulation regarding incentive awards for personal
                services contracts with individuals. In 2004 and 2015, the USAID
                Administrator approved policies to authorize funding for incentive and
                recognition awards for personal services contracts with individuals
                under the Agency's authorities for such contracts. This proposed rule
                will allow USAID to recognize the work of an individual personal
                services contractor (PSC) for extraordinary performance of services
                under their contract by providing them with monetary or non-monetary
                incentive awards.
                DATES: Submit comments on or before May 17, 2019.
                ADDRESSES: Submit comments, identified by title of the Proposed Action
                and Regulation Identifier Number (RIN), by any of the following
                methods:
                 1. Through the Federal eRulemaking Portal at http://www.regulations.gov by following the instructions for submitting
                comments.
                 2. By Mail addressed to Marcelle J. Wijesinghe, USAID, Bureau for
                Management, Office of Acquisition & Assistance, Policy Division, Room
                867-J, SA-44, 1300 Pennsylvania Ave. NW, Washington, DC 20523-2052.
                FOR FURTHER INFORMATION CONTACT: Richard Spencer, Telephone: 202-567-
                4781 or Email: [email protected].
                SUPPLEMENTARY INFORMATION:
                [[Page 9740]]
                A. Instructions
                 All comments must be in writing and submitted through one of the
                methods specified in the Addresses section above. All submissions must
                include the title of the action and RIN for this rulemaking. Please
                include your name, title, organization, postal address, telephone
                number, and email address in the text of the message.
                 Please note that USAID recommends sending all comments to the
                Federal eRulemaking Portal because security screening precautions have
                slowed the delivery and dependability of surface mail to USAID in
                Washington, DC.
                 All comments will be made available at http://www.regulations.gov
                for public review without change, including any personal information
                provided. We recommend that you do not submit information that you
                consider Confidential Business Information (CBI) or any information
                that is otherwise protected from disclosure by statute.
                 USAID will only address substantive comments on the rule. USAID may
                not consider comments that are insubstantial or outside the scope of
                the proposed rule.
                B. Request for Comments
                 USAID requests comments on its proposed rule to revise the Agency's
                Acquisition Regulations (AIDAR), appendices D and J to allow an
                individual personal services contractor to be eligible for monetary and
                non-monetary awards for extraordinary performance as described below.
                Background
                 USAID awards PSCs with individuals based on multiple authorities:
                (1) Section 636(a)(3) of the Foreign Assistance Act of 1961, as amended
                (FAA, 22 U.S.C. 2396), for personal services abroad; (2) annual
                appropriations for Foreign Operations for a maximum number of PSCs in
                the U.S. (e.g., Sec. 7057(g), Division K, Pub. L. 114-113 for fiscal
                year 2016); or (3) program-specific provisions of the FAA, the Food for
                Peace Act, or an appropriations act that authorize use of a broad range
                of implementation authorities toward those program purposes
                ``notwithstanding any other provision of law'' (e.g., FAA Section 491,
                22 U.S.C. 2292, which authorizes international assistance ``to
                alleviate human suffering caused by natural and manmade disasters . .
                .'').
                 Over the last 27 years, USAID has awarded personal services
                contracts to individuals as necessary for the Agency to carry out its
                mission in the U.S. and overseas.
                 As of September 2015, of USAID's total workforce, approximately 8
                percent were U.S. PSCs, and 47 percent were cooperating country, or
                third country, national (CCN or TCN) PSCs. The Agency's overseas local
                staff are CCNPSCs, with the exception of a very few remaining Foreign
                Service National (FSN) direct-hire employees. Because the Agency
                depends on PSCs as part of its workforce for its operations, USAID
                seeks to recognize and motivate excellence in contract performance.
                 Because PSCs are not authorized to participate in programs
                administered by the Office of Personnel Management (OPM), in May 2004,
                then Administrator Andrew Natsios used the Agency's discretionary
                authority to establish a separate awards program for PSCs, distinct
                from the Agency's awards program authorized by OPM for the Agency's
                direct-hire employees (see 5 U.S.C. 4501 et seq. regarding incentive
                awards programs for ``superior accomplishment'' by employees within the
                definition of 5 U.S.C. 2105; and 5 CFR part 451). The Administrator
                approved a deviation from the AIDAR appendix D to expand the PSC non-
                monetary awards program to include limited monetary awards such as ``On
                The Spot'' or Special Act cash; and Time-Off awards. The revised PSC
                monetary awards program was implemented under USAID Acquisition and
                Assistance Policy Directive (AAPD 04-15) issued on October 15, 2004,
                which authorized USPSCs, and certain TCNPSCs on an exceptional basis,
                to be eligible for these three types of monetary incentive awards under
                USAID Mission, Bureau or Independent Office (M/B/IO) programs.
                 In March 2015, USAID's Special Awards Committee (SAC) conducted a
                review of the Agency's Awards program for its direct-hire employees.
                Following that review, on December 22, 2015, Acting Agency
                Administrator Alfonso Lenhardt approved a deviation to further expand
                the Agency's PSC Awards program to include additional types of monetary
                and non-monetary awards similar to those provided to USAID's direct-
                hire employees.
                 In order to implement the awards programs for PSCs as approved by
                the Agency in 2004 and 2015, this revision to AIDAR appendices D and J
                is being proposed, and will replace the deviations approved in 2004 and
                2015.
                Discussion
                 This proposed rule will amend the AIDAR to establish a separate
                monetary and non-monetary awards program to recognize and reward
                individual personal services contractors for their contributions to the
                accomplishment of USAID's mission, goals, and objectives.
                 Based on Statute--Section 636(a)(3) of the Foreign Assistance Act
                of 1961, as amended; and by regulation--appendices D and J of the
                AIDAR, PSCs are not allowed to participate in any award program
                administered by OPM. Recognition of individual accomplishments by
                USPSCs was limited to non-monetary awards and certificates of
                appreciation. However, based on deviations and policy directives signed
                by the Head of Agency in 2004 and 2015, USAID established an interim
                separate awards program to make PSCs eligible to receive awards similar
                to the Agency's direct-hire employee incentive awards program.
                 The Agency's incentive awards program for direct-hire employees is
                implemented in USAID's Automated Directives System (ADS) chapter 491.
                The new PSC awards program proposed in this AIDAR revision will be
                incorporated into appendices D and J and will be implemented as
                described in USAID's PSC policy in ADS chapter 309. Where appropriate,
                this incentive awards program will closely parallel the program for
                U.S. direct-hire employees. Any award payments will be made from the
                same source of funding used for the individual's contract, and in all
                cases separately from the pool of funds maintained for USAID direct-
                hire employee awards. Recognizing that USPSCs receive an annual pay
                comparability adjustment similar to direct-hires, as well as an annual
                within-grade salary increase for work evaluated at the ``satisfactory
                performance'' level, the policy requires that these awards be for
                performance or a special act that goes above and beyond the minimum
                satisfactory performance required under the contract. USAID proposes to
                recognize and encourage exceptional performance by PSCs when they
                perform special acts or create innovations that contribute to
                efficiency, economy, or other improvements in government operations, in
                the same way USAID recognizes superior performance by its direct-hire
                employees. The proportion of PSCs receiving cash awards at a M/B/IO or
                at the Agency level, and the total amount of the awards, will be
                consistent with, and will not exceed, the existing Agency policy for
                awards to U.S. direct-hire employees, as set by the Agency's Senior
                Management.
                 The Agency's internal policies in ADS 309 will describe the
                criteria for each award, any cash or other limitations associated with
                each award, how the PSC's supervisors or others may nominate
                individuals, and how such
                [[Page 9741]]
                nominations will be reviewed and recommended for approval. Nominations
                for the annual Agency level awards will generally follow the same
                procedures and use the same documentation as currently required for
                USAID's U.S. direct-hire employees.
                Regulatory Basis
                 Since the Agency depends so much on PSCs and their contributions to
                the Agency, and as the statute, Section 636(a)(3) of the Foreign
                Assistance Act of 1961, as amended, and the regulation, appendix D of
                the Agency for International Development Acquisition Regulations
                (AIDAR), do not permit PSCs to participate in OPM-administered
                programs, the Administrator has decided to use the Agency's
                discretionary authority to establish a separate monetary awards program
                for its USPSCs. This incentive awards program is distinct and separate
                from the Agency's direct-hire employee incentive awards program found
                in ADS 491. Additionally, this AIDAR revision will establish an
                incentive awards program that is different from FAR Subpart 16.4
                Incentive Contracts, as the Agency's PSC contracts are with individuals
                and profit or fee are not provided under these contracts. The details
                of this award program are available in a Mandatory Reference to ADS
                309, 309mab--``Incentive Awards Program for Personal Services Contracts
                with Individuals'', accessible on the Agency website.
                C. Impact Assessment
                 (1) Regulatory Planning and Review. Under E.O. 12866, OIRA has
                designated the proposed rule ``significant'' and therefore subject to
                the requirements of the E.O. and subject to review by the Office of
                Management and Budget (OMB). OIRA has determined that this Rule is not
                an ``economically significant regulatory action'' under Section 3(f)(1)
                of E.O. 12866. This proposed rule is not a major rule under 5 U.S.C.
                804.
                 This rule codifies the Agency's deviations to date from the current
                rule in the CFR. The costs calculated in this section are based on
                upper end estimates to illustrate the potential impact of these
                revisions from the baseline costs of the current rule. Under this
                proposed rule, incentive awards at the M/B/IO level paid to USPSCs, and
                TCNPSCs with exceptions to be paid on the GS-scale (i.e., ``excepted
                TCNPSCs'') for fiscal years 2014-2015 averaged $86,158 per year based
                on historical data provided by the Bureau for Management, Office of the
                Chief Financial Officer (M/CFO). The administrative and processing
                costs for these awards averaged $47,865. Therefore, the total estimated
                cost for M/B/IO awards is estimated at $134,023 per fiscal year.
                 For the newly proposed ``Agency-level'' incentive awards issued
                from USAID headquarters, the total estimated amount that could be paid
                to all selected PSCs (USN, TCN and CCN) is $160,000 per fiscal year,
                assuming nominations are approved for every award. This figure is based
                on an estimated payout for all of 31 possible cash award amounts listed
                in ADS 309mab.
                 As the Agency level headquarters awards program is new and there is
                no historical data for such awards paid to PSCs, USAID used historical
                data for awards to U.S. direct hires, as provided by USAID's Office of
                Human Capital and Talent Management (HCTM) for estimating the
                administrative and processing costs. On that basis administrative and
                processing costs are estimated at $118,525 per fiscal year comprised of
                labor for nominations, selection panels and award processing, plus
                ceremony event costs for a volume PSC awards equivalent to those given
                to direct hires. Also, as PSCs are eligible for fewer categories of
                Agency-level awards than are U.S. direct hires, the costs were pro-
                rated accordingly. Therefore, the total estimated cost for Agency-level
                awards from headquarters is $278,525 per fiscal year.
                 Based on the above, the M/B/IO awards and Agency level award issues
                at headquarters are estimated together estimated to cost $412,547 per
                fiscal year.
                 Note that for incentive awards at the Agency Mission level for
                cooperating country national (CCN) and third country national (TCN)
                PSCs, AIDAR appendix J authorizes such awards in accordance with the
                local compensation plan at each USAID Mission overseas through the
                ``Joint Special Embassy'' awards program. While this proposed rule
                revises the title of the Mission incentive awards program using current
                terminology, this rule does not otherwise affect the authority for this
                long-established awards program for CCN and TCN PSCs. Therefore there
                are no increased cost implications for this revision that updates the
                title of the program under AIDAR appendix J.
                 Overall, USAID's proposed awards program will impact approximately
                5,200 individual PSCs based on USAID's staffing numbers for fiscal year
                2015 (i.e., 775 USPSCs and over 4,470 cooperating country and third
                country national PSCs). The costs to implement this revision are
                justified as the Agency depends on PSCs as part of its workforce. Given
                that USAID PSCs are an important and flexible supplement for the
                Agency's dynamic operations, this revision provides the Agency the
                ability to recognize and motivate excellence in contractor performance.
                Additionally, since these incentives were previously approved at the
                highest levels of Agency management, the costs to implement these
                revisions were deemed necessary as a business decision about how to
                best promote performance excellence by USAID PSCs.
                 As a regulatory matter, the cost of the rule making process to
                incorporate these revisions into the regulation is also justified. The
                AIDAR appendices include all the compensation and benefits available
                under personal services contracts. Therefore, the Agency needs these
                revisions in order to keep the regulation consistent, complete and
                transparent to industry, other government agencies and the general
                public.
                 (2) Regulatory Flexibility Act. The rule will not have an impact on
                a substantial number of small entities within the meaning of the
                Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Therefore, an Initial
                Regulatory Flexibility Analysis has not been performed.
                 (3) Paperwork Reduction Act. The proposed rule does not establish a
                new collection of information that requires the approval of the Office
                of Management and Budget under the Paperwork Reduction Act (44 U.S.C.
                chapter 35).
                List of Subjects in 48 CFR Chapter 7, Appendices D and J
                 Government procurement.
                 For the reasons discussed in the preamble, USAID proposes to amend
                48 CFR chapter 7 as follows:
                CHAPTER 7--AGENCY FOR INTERNATIONAL DEVELOPMENT
                0
                1. Appendix D is amended by revising Section 4 paragraph (f) and adding
                a parenthetical authority citation at the end of the Appendix to read
                as follows:
                Appendix D to Chapter 7--Direct USAID Contracts With a U.S. Citizen or
                a U.S. Resident Alien for Personal Services Abroad
                * * * * *
                4. Policy
                * * * * *
                 (f) Incentive awards. U.S. Personal Services Contractors are not
                eligible to participate in, or be funded under, the OPM-administered
                incentive awards program for USAID direct-hire employees in
                accordance with section 636(a) of the Foreign Assistance Act of
                1961, as amended. U.S. Personal Services
                [[Page 9742]]
                Contractors are eligible to receive certain monetary and non-
                monetary incentive awards as authorized under this section. All
                nominations for incentive awards must be approved by a U.S. direct
                hire employee, who is either the contractor's supervisor or is at
                the next higher level within the M/B/IO. The list of incentive
                awards and detailed eligibility, nomination and approval processes
                are specified in internal Agency policies in ADS chapter 309,
                available on the USAID website. These awards will be funded from the
                authorizations used to fund the specific contract.
                * * * * *
                (Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C.
                2381), as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3
                CFR, 1979 Comp., p. 435.)
                0
                2. Appendix J is amended as follows:
                0
                a. In section 4:
                0
                i. By revising paragraph (c)(1);
                0
                ii. In paragraph (c)(2)(i), by removing ``TCN or CCN'' and adding in
                its place ``CCN or TCN'' and removing the reference ``4c(2)(ii)'' and
                adding in its place the reference ``4(c)(2)(ii)'';
                0
                iii. In paragraph (c)(2)(ii) introductory text, by removing the words
                ``FSNs which includes CCNs and TCNs'' and adding in their place ``CCNs
                and TCNs'' and revising the second sentence.
                0
                iv. In paragraph (c)(2)(ii)(A), by removing the words ``foreign
                national employee'' and adding in its place the words ``CCN or TCN
                personal services contractor'';
                0
                v. In paragraph (c)(2)(ii)(B), by revising the first sentence;
                0
                vi. In paragraph (c)(2)(iii), by removing the words ``compensation plan
                for each'' and adding in its place the words ``local compensation plan
                for each Mission'';
                0
                vii. By revising paragraphs (c)(2)(v) and (vii) and (c)(3); and
                0
                viii. In paragraph (c)(4), by removing ``CCN and TCN PSCs'' and adding
                in its place ``CCN and TCN personal services contractors'' and removing
                the words ``Contracting Officer'' and adding in their place the words
                ``contracting officer''.
                0
                b. Under section 12, General Provisions for a Contract with a
                Cooperating Country National or with a Third Country National for
                Personal Services, revise item 19.
                0
                c. By adding a parenthetical authority citation at the end of the
                appendix.
                 The revisions and addition read as follows:
                Appendix J--Direct USAID Contracts With a Cooperating Country National
                and With a Third Country National for Personal Services Abroad
                * * * * *
                4. Policy
                * * * * *
                 (c) * * *
                 (1) General. For the purpose of any law administered by the U.S.
                Office of Personnel Management, USAID personal services contractors
                are not to be regarded as employees of the U.S. Government, are not
                included under any retirement or pension program of the U.S.
                Government, and are not eligible for the Incentive Awards Program
                covered by Uniform State/USAID regulations. Each USAID Mission is
                expected to participate in an interagency Mission incentive awards
                program. Additionally, CCN and TCN personal services contractors are
                eligible to receive certain USAID monetary and non-monetary
                incentive awards as authorized under this section. See paragraph (3)
                of this section for incentive awards.
                 (2) * * *
                 (ii) * * * The plan is each post's official system of position
                classification and pay, consisting of the local salary schedule,
                which includes salary rates, statements authorizing fringe benefit
                payments, and other pertinent facets of compensation for CCNs and
                TCNs.* * *
                * * * * *
                 (B) Section 4 of appendix D of this chapter, entitled Policy,
                subsections (c) ``Withholdings and Fringe Benefits'', (d) ``Resident
                Hire U.S. Personal Services Contractors'', (e) ``Determining Salary
                for Personal Services Contractors'', (g) ``Annual Salary Increase'',
                (h) ``Pay Comparability Adjustment'', and (i) ``Subcontracting''. *
                * *
                * * * * *
                 (v) CCN and TCN personal services contractors are eligible for
                allowances and differentials as provided under the post's local
                compensation plan.
                * * * * *
                 (vii) CCNs and TCNs retired from the U.S. government may be
                awarded personal services contracts without any reduction in or
                offset against their U.S. Government annuity.
                 (3) Incentive Awards. (i) All CCN and TCN personal services
                contractors of the Foreign Affairs Community are eligible for an
                interagency Mission incentive awards program. The Joint Country
                Awards Committee administers each post's (Embassy) awards program,
                including establishment of procedures for submission, review and
                approval of proposed awards.
                 (ii) CCN and TCN personal services contractors are also eligible
                to receive certain monetary and non-monetary USAID incentive awards.
                The list of incentive awards, eligibility, nomination and approval
                processes are specified in internal Agency policies in ADS chapter
                309, available on the USAID website. These awards will be funded
                from the authorizations used to fund the PSC contract, and not from
                funds allocated for the OPM-administered awards program for USAID
                direct-hire employees.
                 (iii) Meritorious Step Increases for USAID CCN and TCN personal
                services contractors may be authorized provided the granting of such
                increases is the general practice locally.
                * * * * *
                12. General Provisions for a Contract With a Cooperating Country
                National or With a Third Country National for Personal Services
                * * * * *
                19. Incentive Awards
                 [For use in both CCN and TCN Contracts].
                Incentive Awards (Date)
                 (a) Cooperating Country National (CCN) and Third Country
                National (TCN) personal services contractors of the Foreign Affairs
                Community are eligible for an interagency Mission incentive awards
                program. The program is administered by each post's (Embassy) Joint
                Country Awards Committee.
                 (b) CCN and TCN personal services contractors are also eligible
                to receive certain monetary and non-monetary USAID incentive awards
                in accordance with the AIDAR and internal USAID policies.
                 (c) Meritorious Step Increases. CCNs and TCN personal services
                contractors paid under the local compensation plan are eligible to
                receive meritorious step increases provided the granting of such
                increases is the general practice locally.
                * * * * *
                (Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C.
                2381), as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3
                CFR, 1979 Comp., p. 435.)
                 Dated: February 14, 2019.
                Mark A. Walther,
                Acting Chief Acquisition Officer.
                [FR Doc. 2019-03840 Filed 3-15-19; 8:45 am]
                 BILLING CODE 6116-01-P
                

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