Agency for International Development Acquisition Regulation (AIDAR): Revisions to the Incentive Awards Program for Personal Services Contractors (PSCs)
| Published date | 14 November 2019 |
| Citation | 84 FR 61832 |
| Record Number | 2019-20501 |
| Section | Rules and Regulations |
| Court | Agency For International Development |
Federal Register, Volume 84 Issue 220 (Thursday, November 14, 2019)
[Federal Register Volume 84, Number 220 (Thursday, November 14, 2019)]
[Rules and Regulations]
[Pages 61832-61835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20501]
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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 (PSCs)
AGENCY: U.S. Agency for International Development.
ACTION: Final rule.
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SUMMARY: The rule amends the AIDAR's provisions that pertain to
incentive awards for personal services contracts with individuals.
DATES: Effective Date: December 16, 2019.
FOR FURTHER INFORMATION CONTACT: Richard E. Spencer, Procurement
Analyst, Telephone: (202) 567-4781 or email: [email protected] for
clarification of content or information pertaining to status or
publication schedules. All communications regarding this rule must cite
AIDAR RIN No. 0412-AA93.
SUPPLEMENTARY INFORMATION:
A. Proposed Rule and Requests for Comment
USAID published a proposed rule in the Federal Register at 84 FR
9739 on March 18, 2019. The public comment period ended May 17, 2019,
and the Agency received no comments on the proposed rule. Therefore,
USAID is publishing this final rule without change.
B. Background
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 United States and overseas. USAID awards PSCs with
individuals based on multiple authorities: (1) Section 636(a)(3) of the
Foreign Assistance Act of 1961, as amended (FAA, Section 2396 of Title
22 of the United States Code [U.S.C.]), for personal services abroad;
(2) annual appropriations for Foreign Operations for a maximum number
of PSCs in the United States (e.g., Section 7057(g) of Division K of
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 authorizes the use of a broad range of implementation authorities
toward those programmatic purposes ``notwithstanding any other
provision of law'' (e.g., FAA Section 491, Section 2292 of Title 22 of
the U.S.C., which authorizes international assistance ``to alleviate
human suffering caused by natural and manmade disasters . . .'').
As of September 2015, approximately eight (8) percent of USAID's
total workforce 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.
Since the Agency depends on PSCs as part of its workforce for its
operations, USAID seeks to recognize and motivate excellence in the
performance of their contracts. 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 incentive-
awards program for PSCs, distinct from the Agency's incentive awards
program authorized by OPM for the Agency's U.S. Direct-Hire (USDH)
employees (see 5 U.S.C. 4501 et seq. regarding incentive-awards
programs for ``superior accomplishment'' by employees within the
definitions of 5 U.S.C. 2105 and 5 CFR part 451). The Administrator
approved a deviation from Appendix D of the AIDAR to expand the non-
monetary incentive-awards program for PSCs to include limited monetary
awards such as ``On The Spot'' or Special Act cash and Time-Off awards.
The Agency implemented the revised monetary incentive-awards program
for PSCs 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 programs managed by USAID's
Missions, Bureaus, or Independent Offices (M/B/IOs).
In March 2015, USAID's Special Awards Committee (SAC) conducted a
review of the Agency's awards program for its USDH employees. Following
that review, on December 22, 2015, then-Acting Administrator Alfonso
Lenhardt approved a deviation to further expand the Agency's PSC
Incentive Awards program to include additional types of monetary and
non-monetary awards similar to those provided to USAID's USDH
employees.
To implement the incentive-awards programs for PSCs as approved by
the Agency in 2004 and 2015, this final rule revises Appendices D and J
of the AIDAR to replace the deviations approved in 2004 and 2015 and
make them permanent.
C. Discussion
This final rule amends the AIDAR to establish a separate monetary
and non-monetary incentive-awards program to recognize and reward
individual PSCs for their contributions to the accomplishment of
USAID's mission, goals, and objectives.
Based on Statute--Section 636(a)(3) of the FAA, as amended; and by
regulation--Appendices D and J of the AIDAR, PSCs are not allowed to
participate in any program administered by OPM. Recognition of
individual accomplishments by PSCs has been limited to non-monetary
incentive awards and certificates of appreciation. However, based on
deviations and policy directives signed by the Administrator and Acting
Administrator in 2004 and 2015, respectively, USAID established an
interim, separate incentive-awards program to make PSCs eligible to
receive incentive awards similar to those available under the Agency's
incentive-awards program for USDH employees.
USAID implements its incentive-awards program for USDH employees
under parameters set in Chapter 491 of the Agency's Automated
Directives System (ADS). The Agency will incorporate the new PSC
incentive-awards program authorized by this final rule into Appendices
D and J of the AIDAR and implement it as described in USAID's PSC
policy in ADS Chapter 309. Where appropriate, this incentive-awards
program will closely parallel the program for USDH employees. The
Agency will make any incentive award payments from the same source of
funding used for each individual PSC's contract, and in all cases
separately from the pool of funds maintained for incentive awards for
USAID USDH employees. Recognizing that PSCs receive an annual pay-
comparability adjustment similar to what U.S. Direct-Hires receive, as
well as an annual within-grade salary increase for work evaluated at
the ``satisfactory performance'' level, Agency policy requires that
these incentive awards be for performance or a special act that goes
above and beyond the minimum satisfactory performance required under a
contract. USAID will recognize and encourage exceptional performance by
[[Page 61833]]
PSCs when they perform special acts or create innovations that
contribute to efficiency, economy, or other improvements in U.S.
Government operations, in the same way USAID recognizes superior
performance by its USDH employees. The proportion of PSCs who receive
cash awards at a M/B/IO or at the Agency level, and the total amount of
the incentive awards, will be consistent with, and will not exceed, the
Agency's existing policy for incentive awards to USDH employees, as set
by USAID's Senior Management.
The Agency's internal policies in ADS Chapter 309 describe the
criteria for each incentive award, any cash or other limitations
associated with each incentive award, how a PSC's supervisor(s) or
others may nominate individuals, and how such nominations are reviewed
and recommended for approval. Nominations for the annual Agency-level
incentive awards generally follow the same procedures, and use the same
documentation, as currently required for USAID's USDH employees.
Regulatory Basis
Since the Agency depends on PSCs and their contributions, and as
the statute, Section 636(a)(3) of the FAA of 1961, as amended, and the
regulation, Appendix D of the 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
incentive-awards program for its PSCs. This incentive-awards program is
distinct and separate from the Agency's incentive-awards program for
USDH employees described in ADS Chapter 491. Additionally, this final
AIDAR rule establishes an incentive-awards program that is different
from FAR Subpart 16.4 (Incentive Contracts), as the Agency's PSC
contracts are with individuals, and these contracts do not provide
profit or fees. The details of this incentive award program are
available in a Mandatory Reference to ADS Chapter 309, 309mab--
``Incentive Awards Program for Personal Services Contracts with
Individuals,'' accessible on the Agency website.
D. Impact Assessment
(1) Regulatory Planning and Review. Under Executive Order (E.O.)
12866, the Office of Information and Regulatory Affairs (OIRA) has
designated the final rule ``not significant,'' and therefore it is not
subject to review by the Office of Management and Budget (OMB). OMB/
OIRA has determined that this Rule is not an ``economically significant
regulatory action'' under Section 3(f)(1) of E.O. 12866. This final
rule is not a major rule under Section 804 of Title 5 of the U.S.C.
This rule codifies the Agency's deviations to date from the current
rule in the Code of Federal Regulations (CFR). The costs calculated in
this section are based on upper-end estimates to illustrate the
potential impact of this final rule from the baseline costs of the
current rule. Under this final rule, incentive awards paid to USPSCs at
the level of USAID's Missions, Bureaus, and Independent Offices (M/B/
IO), and TCNPSCs with exceptions to be paid on the General Schedule
(GS) scale (i.e., ``excepted TCNPSCs'') for FY 2014-2015 averaged
$86,158 per year based on historical data provided by the Office of the
Chief Financial Officer (M/CFO) in the Bureau for Management. 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 ``Agency-level'' incentive awards issued from USAID
headquarters, the total estimated amount that could be paid to all
selected PSCs (U.S., TCN, and CCN) is $160,000 per Fiscal Year,
assuming nominations are approved for every incentive 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 incentive awards program is new,
and there are no historical data for such incentive awards paid to
PSCs, USAID used historical data for incentive 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 labor for nominations, selection panels,
and the processing of incentive awards, plus the costs of ceremony
events for a volume of PSC incentive awards equivalent to those given
to USDH employees. Also, as PSCs are eligible for fewer categories of
Agency-level incentive awards than are USDH staff, the Agency pro-rated
the costs accordingly. Therefore, the total estimated cost for Agency-
level incentive awards from headquarters is $278,525 per Fiscal Year.
Based on the above, the M/B/IO awards and Agency-level incentive
award issues at headquarters are estimated together estimated to cost
$412,547 per Fiscal Year.
Note that for incentive awards at the Mission level for CCN and 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 final rule revises
the title of the Mission incentive-awards program by using current
terminology, this rule does not otherwise affect the authority for this
long-established incentive awards program for CCN and TCN PSCs.
Therefore, there are no increased cost implications for such incentive
awards under this rule, as it only updates the title of the program
under AIDAR Appendix J.
Overall, USAID's awards program affects approximately 5,200
individual PSCs based on USAID's staffing numbers for FY2015 (i.e., 775
PSCs and more than 4,470 CCNand TCN PSCs). The costs to implement this
rule are justified, as the Agency depends on PSCs as large part of its
workforce. Given that USAID PSCs are an important and flexible
supplement for the Agency's dynamic operations, this rule provides the
Agency the ability to recognize and motivate excellence in the
performance of its contractors. Additionally, because these incentives
were previously approved at the highest levels of Agency management,
USAID deemed the costs to implement this rule as a necessary business
decision to promote excellent performance by PSCs.
As a regulatory matter, the cost of the rule-making process to
incorporate this final rule into the regulation is also justified. The
AIDAR appendices include all the compensation and benefits available
under personal services contracts. Therefore, the Agency needs this
rule to keep the regulation consistent, complete, and transparent to
industry, other U.S. Government Departments and Agencies, and the
general public.
(2) Regulatory Flexibility Act. This final rule will not have an
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, Section 601 of Title 5 of the U.S.C.,
et seq. Therefore, USAID has not performed an Initial Regulatory
Flexibility Analysis.
(3) Paperwork Reduction Act. This final rule does not establish a
new collection of information that requires the approval of OMB under
the Paperwork Reduction Act (Chapter 35 of Title 44 of the U.S.C.).
List of Subjects in Appendices D and J of Chapter 7 of Title 48 of
the CFR
Government procurement.
For the reasons discussed in the preamble, USAID amends Chapter 7
of Title 48 of the CFR under the authority of Section 621 of Public Law
87-195, 75
[[Page 61834]]
Stat. 445, (Section 2381 of Title 22 of the U.S.C.), as amended; E.O.
12163, Sept. 29, 1979, 44 Federal Register 56673; and Title 3 of the
CFR, 1979 Comp., p. 435, as follows:
CHAPTER 7--AGENCY FOR INTERNATIONAL DEVELOPMENT
0
1. Appendix D is amended as follows:
0
a. In Section 4, by revising paragraph (f);
0
b. In Section 10 entitled, ``Form USAID 1420-36, ``Cover Page'' and
``Schedule'', in the Table of Contents under the heading General
Provisions, reserve numbers 27 and 28, and add 29 to the list of
provisions;
0
c. In Section 11 entitled, ``Optional Schedule With a U.S. Citizen or
U.S. Resident Alien'', in the Table of Contents, under the heading
General Provisions, reserve numbers 27 and 28, and add 29 to the list
of provisions;
0
d. In Section 12:
0
i. Revise the heading, ``General Provisions'';
0
ii. Remove the heading, ``Contract with a U.S. Citizen or a U.S.
Resident Alien for Personal Services Abroad'';
0
iii. Amend the Index of Clauses by reserving clause numbers 27 and 28,
and add clause 29, ``Incentive Awards''; and
0
e. By adding a parenthetical authority citation at the end of the
appendix.
The revision and addition 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 incentive-awards
program administered by the Office of Personnel Management (OPM) for
USAID U.S. direct-hire employees in accordance with section 636(a)
of the Foreign Assistance Act of 1961, as amended. U.S. personal
services 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 Mission/Bureau/Independent Office
(M/B/IO). The list of incentive awards and detailed eligibility,
nomination, and approval processes are specified in internal Agency
policies in Chapter 309 of Automated Directive System (ADS),
available on the USAID website. These awards will be funded from the
authorizations used to fund the specific contract.
* * * * *
10. Form USAID 1420-36, ``Cover Page'' and ``Schedule''.
* * * * *
27. [Reserved]
28. [Reserved]
29. Incentive Awards
* * * * *
11. Optional Schedule With a U.S. Citizen or U.S. Resident Alien
* * * * *
27. [Reserved]
28. [Reserved]
29. Incentive Awards
* * * * *
12. General Provisions for a Contract With a U.S. Citizen or a U.S.
Resident Alien for Personal Services Abroad
* * * * *
Index of Clauses
* * * * *
27. [Reserved]
28. [Reserved]
29. Incentive Awards
* * * * *
29. Incentive Awards
[Insert the following clause in all USPSC contracts.]
Incentive Awards (Date)
The contractor is eligible to receive certain monetary and non-
monetary USAID incentive awards in accordance with the AIDAR and
USAID internal policy.
* * * * *
(Authority: Section 621 of Public Law. 87-195, 75 Stat. 445,
(Section 2381 of Title 22 of the U.S.C.), as amended; E.O. 12163,
Sept. 29, 1979, 44 Federal Register 56673; and Title 3 of the 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,'' 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,'' removing
the words ``Contracting Officer,'' and adding in their place the words
``contracting officer.''
0
b. In 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 (OPM), 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 Department of 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, which consists of the local salary schedule
including salary rates, statements that authorize fringe benefit
payments, and other pertinent facets of compensation for CCNs and
TCNs. * * *
* * * * *
(B) Section 4 of Appendix D of this chapter, entitled,
``Policy,'' sections (c) ``Withholdings and Fringe Benefits,'' (d)
``Resident Hire U.S. Personal Services Contractors,'' (e)
``Determining Salary for Personal Services Contractors,'' (f)
``Incentive Awards,'' (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
[[Page 61835]]
Affairs Community are eligible for an interagency Mission incentive
awards program. The Joint Country Awards Committee administers each
post's (Embassy) awards program, including the 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
U.S. 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
[Insert the following clause in all CCN and TCN contracts paid
under the local compensation plan.]
Incentive Awards (Date)
(a) CCN and 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 USAID internal policy.
(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: Section 621 of, Public Law. 87-195, 75 Stat. 445,
(Section 2381 of Title 22 of the U.S.C. 2381), as amended; E.O.
12163, Sept. 29, 1979, 44 Federal Register 56673; and Title 3 of the
CFR, 1979 Comp., p. 435)
Mark A. Walther,
Acting Chief Acquisition Officer.
[FR Doc. 2019-20501 Filed 11-13-19; 8:45 am]
BILLING CODE 6116-01-P
