U. S. Agency for International Development Acquisition Regulation (AIDAR): Designation of Personal Services Contractors (PSCs) as Contracting Officers and Agreement Officers
| Citation | 84 FR 27745 |
| Published date | 14 June 2019 |
| Record Number | 2019-12270 |
| Court | Agency For International Development |
Federal Register, Volume 84 Issue 115 (Friday, June 14, 2019)
[Federal Register Volume 84, Number 115 (Friday, June 14, 2019)]
[Proposed Rules]
[Pages 27745-27749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12270]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
48 CFR Chapter 7
RIN 0412-AA94
U. S. Agency for International Development Acquisition Regulation
(AIDAR): Designation of Personal Services Contractors (PSCs) as
Contracting Officers and Agreement Officers
AGENCY: U.S. Agency for International Development.
ACTION: Proposed rule.
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[[Page 27746]]
SUMMARY: The U.S. Agency for International Development (USAID) proposes
to amend the Agency for International Development Acquisition
Regulation (AIDAR) to allow for the designation of U.S. Personal
Services Contractors (US PSCs) and Cooperating Country National
Personal Services Contractors (CCN PSCs) as contracting officers and
agreement officers. The proposed revisions will address a shortage of
U.S. direct-hire staff by delegating the proposed authorities to
qualified US and CCN PSCs. The delegation of limited contracting/
agreement officer authorities to a select number of CCN PSCs will also
bolster the Agency to succeed in terms of building long-term, host
country technical capacity to materially assist the Missions with
procurement responsibility.
DATES: Comments must be received no later than August 13, 2019.
ADDRESSES: Address all comments concerning this notice to Anne
Sattgast, Bureau for Management, Office of Acquisition and Assistance,
Policy Division (M/OAA/P), Room 867-D, SA-44, Washington, DC 20523-
2052. Submit comments, identified by title of the action and Regulatory
Information 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: USAID, Bureau for Management, Office of
Acquisition & Assistance, Policy Division, Room 867-D, SA-44, 1300
Pennsylvania Ave. NW, Washington, DC 20523-2052.
FOR FURTHER INFORMATION CONTACT: Anne Sattgast, Telephone: 202-567-5094
or Email: [email protected].
SUPPLEMENTARY INFORMATION:
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/
Washington.
At the end of the comment period and until finalization of the
action, all comments will be made available at http://www.regulations.gov for public review without change, including any
personal information provided. We recommend 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.
Comments that are insubstantial or outside the scope of the rule may
not be considered.
B. Background
On August 19, 2016 USAID published a proposed rule at 81 FR 55405
revising the U.S. Agency for International Development Acquisition
Regulation (AIDAR) to incorporate the USAID Cooperating Country
National Warrant Program into the regulation. The proposed rule was
subsequently withdrawn on June 23, 2017, at 82 FR 28617, due to changes
in the regulatory requirements and processes.
USAID has further analyzed the need for contracting/agreement
officers and has determined that the ability to designate both US PSCs
and CCN PSCs as contracting/agreement officers would be a benefit to
the Agency. It would relieve USAID staff from the administrative burden
of processing deviations and exceptions currently required in Agency
regulation and ultimately result in cost savings to the Agency.
USAID is seeking comments on the proposed rule as described below:
Designation of U.S. personal services contractors as contracting
officers and agreement officers.
The U.S. Agency for International Development (USAID) is located in
offices in over 80 countries with programs in over 100 nations. USAID
operates in a fluid environment responding to a myriad of crises such
as war, natural disasters, epidemics, as well as working towards its
long term mission of reducing poverty, strengthening democratic
governance, and helping people emerge from humanitarian crises and
progress beyond assistance.
The current warranted work force to manage these efforts consists
of 120 US direct-hire foreign service officers overseas, 84 direct-hire
civil service officers, 63 warranted foreign service executive
officers, 10 warranted US PSCs, and eleven warranted CCN PSCs.
Additionally, the foreign service contracting staff has one of the
highest attrition rates in USAID's work force that needs to be
supplemented by additional personnel. There has been a decrease of over
20% in the Agency's direct-hire contracting officer staff from 2016 to
2018. The ability to designate US PSCs as contracting/agreement
officers will help offset this decrease in the number of warranted
direct-hire civil service and foreign service employees and increase
the capacity of the Agency's acquisition workforce to process actions
in an expeditious manner.
Currently, a US PSC can be designated as a contracting officer only
when a deviation from AIDAR 701.603-70 is approved; and when the
Assistant Administrator for the Bureau for Management (AA/M) approves
an exception in accordance with AIDAR Appendix D 4(b)(3)e. The proposed
rule will also reduce the administrative burden on Management Bureau
employees in processing requests for deviations and exceptions,
allowing them to focus on other priorities.
US PSCs will be designated as contracting/agreement officers
similar to the direct-hire employees upon meeting the requirements in
FAR subpart 1.6 and the Agency's warrant program requirements.
Designation of Cooperating Country Nationals personal services
contractors as contracting officers and agreement officers.
In 2011, USAID approved a two-year Worldwide CCN Administrative
Contracting and Agreement Officer (ACO/AAO) Pilot Warrant Program. The
purposes of this program were to address the shortage of USAID
contracting/agreement officers, alleviate the workload of contracting/
agreement officers, and build long-term, host country technical
capacity to materially assist the Missions with procurement
responsibility.
USAID made a strategic decision to create a cadre of highly
qualified CCN PSCs, who demonstrated high potential for assuming
responsibilities to serve as administrative contracting/agreement
officers within designated Missions. The program evolved into a
permanent program in 2014, as detailed below. During the two phases of
the program, USAID has issued a total of 12 CCN warrants. Currently,
there are eight warranted CCN administrative contracting/agreement
officers. By the end of calendar year 2018, the Agency anticipates that
there will be approximately 10 warranted CCN PSCs contracting/agreement
officers. While a seemingly small number, it would represent a five
percent increase in USAID's overseas US direct-hire warranted
contracting/agreement officers.
When designing the CCN Pilot Warrant Program, USAID consulted with
the Senior Procurement Executive
[[Page 27747]]
at the State Department and the USAID employee unions. The State
Department's SPE advised that State conducted a similar pilot several
years ago, to great success. They now have a permanent program that
extends limited authority to their locally-employed staff in selected
countries. The vice president of the American Foreign Service
Association concurred with the Pilot, and was pleased by several of its
protections.
Based on that two-year pilot program, revisions were made to the
program structure to better suit the Agency's needs before the
permanent program was launched in September 2014. USAID eliminated the
portion of the program that allowed for third country nationals to
receive warrants. Participation was broadened by the revision of
qualifications and inclusion of full obligation warrant authority up to
the simplified acquisition threshold of $150,000 per transaction and an
annual cumulative amount of $1 million at the potential CCN Grade 13
Level to assist the Missions' procurement function. To mitigate CCN
inexperience from leading to mistakes or malfeasance, the revised 2014
CCN Warrant Program included three levels of obligation authority and
non-monetary administrative responsibility correlating to CCN grade/
experience within the acquisition backstop. Increasing degrees of
responsibility and/or obligation authority, as applicable, were
granted. The levels of contracting/agreement officer responsibilities
designated to a CCN was based on the needs of each mission, complexity
and dollar value of the acquisitions, and the individual's experience,
training, education, business acumen, judgment, reputation and grade
level.
After implementing the 2014 CCN PSC warrant program for almost six
years (including the pilot period before 2014), USAID is further
revising the program based on Agency needs, experience with the current
program, and in response to public comments received under the proposed
rule at 81 FR 55405 published in the Federal Register on August 19,
2016. The new program will have a single warrant level that will
combine the first two warrant levels from the 2014 program. This new
warrant level will be available to qualified CCN PSCs at specific grade
levels who meet training, years of experience, and education
requirements. This warrant authority delegates select contract
administration functions listed in (48 CFR) FAR 42.302(a), including,
for example, conducting post-award orientation conferences, approving
contractors' requests for payments under the progress payments or
performance-based payments clauses. This warrant authority will also
include the ability to obligate incremental funding of any amount
within the scope and total estimated cost of a contract (to include
task orders and purchase orders). This change in the CCN warrant
program also responds to a request from some USAID Missions, where
assistance with incremental-funding actions is needed.
The revised warrant program also eliminates the third warrant level
set at the simplified acquisition threshold. This change responds to
several public comments received under the proposed rule at 81 FR 55405
published in the Federal Register on August 19, 2016. Authorizing CCNs
to execute new awards on behalf of the U.S. Government had inherent
risks that could not be sufficiently mitigated. As such, USAID decided
to eliminate the simplified acquisition threshold warrant.
Additionally, no simplified acquisition threshold warrants had been
issued under the 2014 CCN warrant program.
Analysis of risk associated with designating Non-U.S. citizens as
contracting and agreement officers.
While many CCNs that work for USAID do so for many years with
demonstrated commitment to the United States mission in their country,
non-U.S. citizens with contracting officer authorities inherently
present additional risks, including litigation risk for the Government.
Since CCNs are ingrained in their communities and economic markets,
there can be greater risk of procurement integrity issues with taxpayer
funds or local suits brought directly against the CCN for actions taken
in their official capacity. In suits against the U.S., a CCN might have
less incentive to act as a witness for the Government's defense as a
non-citizen. Prior to establishing the permanent CCN warrant program,
the Agency reviewed additional risks associated with issuing
contracting/agreement officer warrants to non-U.S. citizens who are not
direct-hire employees of USAID. In particular, such factors as proper
accountability, adequate security considerations, conflicts of
interest, and appropriate legal jurisdiction over the employee were
considered. Adequate management controls and warrant limitations
established under the CCN PSC warrant program, as discussed below, were
established to mitigate such risks.
To address the risks associated with adequate accountability,
commitment to USAID, and conflict of interest, the warrant program
requires candidates for the CCN PSC warrant program to show commitment
to the profession and USAID by meeting stringent acquisition
competencies, education and training requirements. In addition to
meeting these requirements, potential candidates must have extensive
experience in direct U.S. Federal Government contracting/assistance and
clearly demonstrate professional and ethical behavior. When reviewing
applications for a CCN PSC warrant, the Agency contacts past
performance references (typically, the candidate's last three
Supervisory Contracting Officers) and any other sources deemed
appropriate for signs of potential risks or cautions that may be
detrimental to the responsibilities inherent in this Program. The
candidate's supervisor must also attest to the candidate's education,
training, experience, business acumen, judgment, character, reputation
and ethical behavior.
Additionally, the Program requires the CCN contracting officer's
supervisor to closely and frequently monitor the CCN PSC's work and
review performance and progress every six months. The review includes
an assessment of all actions where the warrant was used. This review is
followed by periodic reviews conducted by the Bureau for Management,
Office of Acquisition and Assistance, Evaluation Division, which is
responsible for the program implementation.
Warranted CCN PSCs will support the functions of the overseas
Mission's Office of Acquisition & Assistance (A&A), which typically
include acquisition and assistance awards implementing the Agency's
foreign assistance programs and activities. In part to mitigate
litigation risks, warranted CCN PSCs are currently not delegated
authority to make new awards or execute any personal services
contracts. The program also limits delegated authority for select
contract administration functions listed in (48 CFR) FAR 42.302(a),
specifically, the contracting officer functions in which disputes or
possible legal challenges may arise due to decisions of the contracting
officer, functions related to novation and contractor name changes,
which may be a result of changes in a contractor's business structure
as governed under applicable U.S. state law and other functions based
on U.S. state laws, functions related to small business contracting
matters and those requiring extensive knowledge of specific U.S. laws
and government-wide policies not specifically related to contracting.
Accordingly, the functions specified in items 5-7, 9-12, 18, 21-26, 29,
32, 50, 52-55, 62-63, 66 and 68-71 of (48 CFR) FAR 42.302(a) will not
be
[[Page 27748]]
redelegated to CCN PSC contracting officers.
To address conflict of interest and procurement integrity concerns,
the program relies on the standard clause entitled ``Compliance with
Laws and Regulations Applicable Abroad'', included in all personal
services contracts with CCNs, that mandates compliance with the
Standards of Conduct for Executive Branch Employees. These standards,
available at https://www2.oge.gov/web/oge.nsf/All%20Documents/5D633072D0B2DB5085257E96006A90E7?opendocument, contain two provisions
addressing financial interests that conflict with an individual's
official duties. The first provision, entitled ``Disqualifying
financial interests,'' prohibits an employee from participating in an
official government capacity in a matter in which he has a financial
interest or in which his spouse, minor child, employer, or any one of
several other specified persons has a financial interest. The second
provision, entitled ``Prohibited financial interests,'' contains
authority by which agencies may prohibit employee from acquiring or
retaining certain financial interests.
To address the security concerns, the Program uses the current
process, in which the USAID Office of Security and Department of State
Office of Security conduct background checks on potential personal
service contractors.
Recognizing the fact that some countries may not have adequate
legal systems or may be unwilling to provide assistance in prosecuting
or defending their citizens for alleged U.S. procurement infractions,
the CCN PSC Warrant Program established the following management
controls designed to minimize the risk that such legal actions might be
necessary:
--Stringent eligibility criteria,
--Inability for CCN PSCs to enter into new awards,
--CCN participation in this program is limited to two candidates per
overseas mission. This limitation may be expanded only if it is deemed
by the Senior Procurement Executive to be in the best interest of the
Agency.
--Ongoing risk assessments are performed throughout the Program
implementation to assure compliance with the program requirements. The
warrant program may be revised as a result of these assessments.
Regulatory authorities and limitations.
(48 CFR) FAR part 1 establishes the authority for Agency heads to
select and appoint contracting officers and it does not specify that
contracting officers must be U.S. citizen direct-hire employees of the
Federal government. (48 CFR) FAR subpart 7.5 includes contracting
officer duties in the list of inherently governmental functions or
functions that must be treated as such, but does not exclude personal
services contractors hired under a statutory authority from performing
such functions.
(48 CFR) AIDAR 701.603-70 currently limits delegations of
contracting officer authorities to U.S. citizen direct-hire employees
of the U.S. Government as a matter of Agency policy. However, section
4(b)(3) of (48 CFR) AIDAR Appendix D and the corresponding section of
Appendix J contain an exception for PSCs to be delegated authority to
sign obligating and subobligating documents with approval from the
Assistant Administrator for the Bureau of Management.
In September 2014, USAID issued a two-year class deviation from 48
CFR AIDAR 701.603-70 to establish the permanent CCN PSC warrant program
to allow a limited number of selected and qualified CCN PSCs to be
delegated contracting officer authorities. In conjunction with the
approval of the class deviation described above, the Assistant
Administrator for the Bureau for Management (AA/M) approved a class
exception to the limitations in (48 CFR) AIDAR Appendix J4(b)(3).
Subsequent two-year class deviations were issued for the CCN warrant
program in September 2016 and September 2018. The September 2018 class
deviation also allows for the designation of US PSCs as contracting
officers without requiring prior approval from AA/M. By this rule USAID
is proposing to revise (48 CFR) AIDAR to permanently authorize
delegation of contracting/agreement officer authorities to a limited
number of selected and qualified US PSCs and CCN PSCs.
USAID is seeking public comments on the proposed changes to the
AIDAR. These proposed changes will eliminate the need for an exception
from AA/M currently required before the Director, Bureau for
Management, Office of Acquisition and Assistance (M/OAA Director) can
designate qualified US and CCN PSCs as contracting/agreement officers.
The proposed changes also eliminate the need for a class deviation from
AIDAR 701.603-70. As the M/OAA Director both approves AIDAR class
deviations and delegates individual warrant authority this proposed
change will eliminate a redundancy in the designation of qualified US
and CCN PSCs as contracting/agreement officers.
C. Impact Assessment
(1) Regulatory Planning and Review. Under E.O. 12866, the Office of
Information and Regulatory Affairs (OIRA) has determined this
regulatory action is ``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 deviation from the current rule in
the CFR. The costs calculated in this section are based on conservative
estimates to illustrate the impact of these revisions from the baseline
costs of the current rule. The proposed rule's cost benefit is due to
the ability to designate CCN PSCs as Contracting Officers, eliminating
the need to assign a warranted Foreign Service Officers (FSOs) to a
Mission. It costs the Agency approximately an average of $250,000 per
year to post a warranted FSO to a Mission. This figure is based upon
the Foreign Service pay scale and data from the Department of State's
Office of Allowances.
The Agency's warranted FSO staff is comprised of individuals at the
FS-4 to the FS-1 grade levels with the majority at the FS-2 and FS-3
grade levels. The $250,000 figure assumes a base salary of $100,000,
which is within an average range of the FS-2 and FS-3 grade levels. An
FSO's annual compensation and benefits package easily exceeds this base
salary and can vary based upon the FSO's number of dependents and a
variety of allowances that may be claimed including cost of living
allowance, post differential, danger pay, separate maintenance
allowance, housing allowance, education allowance, home leave, etc.
Based upon data pulled from the Department of State's Office of
Allowances, $250,000 per annum is considered a conservative estimate of
the cost to field a warranted FSO. Given that the Agency currently has
eleven warranted CCN PSCs, this eliminates the need to post the
equivalent number of warranted FSOs, resulting in annual cost savings
to the Agency of approximately $2.75 million.
The ability to issue a warrant to PSCs does not result in any
increase in costs to the Agency. Eligible CCN PSCs live in country and
are already working at the Missions. There is also no additional cost
to the Agency to process a PSC warrant as compared to a US direct-hire
employee.
As a regulatory matter, the cost of the rule making process to
incorporate these
[[Page 27749]]
revisions into the regulation is justified. The Agency requires these
revisions in order to eliminate the administrative burden of processing
deviations and exceptions and to realize a cost savings resulting from
the ability to issue CCN PSCs warrants.
(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 Parts 701 and Appendices D and J to
Chapter 7
Government procurement.
For the reasons discussed in the preamble, USAID proposes to amend
48 CFR Chapter 7 as set forth below:
0
1. The authority citation for 48 CFR 7 part 701 continues to read as
follows:
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.
PART 701--FEDERAL ACQUISITION REGULATION SYSTEM
Subpart 701.6--Career Development, Contracting Authority, and
Responsibilities
0
2. Revise 701.603-70 to read as follows:
701.603-70 Designation of contracting officers.
A contracting officer represents the U.S. Government through the
exercise of his/her delegated authority to negotiate, sign, and
administer contracts on behalf of the U.S. Government. The contracting
officer's duties are sensitive, specialized, and responsible. To ensure
proper accountability, and to preclude possible security, conflict of
interest, or jurisdiction problems, USAID contracting officers must be
U.S. citizen direct-hire employees of the U.S. Government. However,
Director, Bureau for Management, Office of Acquisition and Assistance
(M/OAA Director) may also designate a U.S. Personal Services Contractor
(USPSC) or a Cooperating Country National Personal Services Contractor
(CCNPSC) as a contracting officer with a specific level of warrant
authority. To qualify for a designation as a contracting officer, an
individual must meet the requirements in FAR subpart 1.6 and the
Agency's applicable warrant program.
0
3. In appendix D to chapter 7, revise paragraph 4(b)(3)b. and add
paragraph (b)(4) 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 * * *
(b) * * *
(3) * * *
b. They may not be delegated authority to sign obligating or
subobligating documents except when specifically designated as a
contracting officer or an agreement officer in accordance FAR
subpart 1.6 and the Agency's applicable warrant program.
* * * * *
(4) Exceptions. The Assistant Administrator Bureau for
Management (AA/M) must approve exceptions to the limitations in
paragraph (b)(3). Approval of an exception by the AA/M is not
required when the Director, Bureau for Management, Office of
Acquisition and Assistance (M/OAA Director) designates a USPSC as a
contracting officer or an agreement officer.
* * * * *
0
4. In appendix J to chapter 7, under the heading ``4. Policy,'' revise
paragraphs (b)(3)b. and (b)(4) to read as follows:
Appendix J to Chapter 7--Direct USAID Contracts With a Cooperating
Country National and With a Third Country National for Personal
Services Abroad
* * * * *
4--Policy
* * * * *
(b) * * *
(3) * * *
b. They may not be delegated authority to sign obligating or
subobligating documents except when a cooperating country national
personal services contractor is specifically designated as a
contracting officer or an agreement officer in accordance FAR
subpart 1.6 and the Agency's applicable warrant program.
* * * * *
(4) Exceptions. The Assistant Administrator Bureau for
Management (AA/M) must approve exceptions to the limitations in
paragraph (b)(3). Approval of an exception by the AA/M is not
required when the Director, Bureau for Management, Office of
Acquisition and Assistance (M/OAA Director) designates a cooperating
country national personal services contractor as a contracting
officer or an agreement officer.
* * * * *
Mark Walther,
Acting Chief Acquisition Officer.
[FR Doc. 2019-12270 Filed 6-13-19; 8:45 am]
BILLING CODE 6116-01-P
