80 FR 15011 - Notice of a Class Deviation To Address Commercial Supplier Agreement Terms Inconsistent With Federal Law
GENERAL SERVICES ADMINISTRATION Federal Register Volume 80, Issue 54 (March 20, 2015)
Federal Register Volume 80, Issue 54 (March 20, 2015)
| Page Range | 15011-15013 | |
| FR Document | 2015-06422 |
[Federal Register Volume 80, Number 54 (Friday, March 20, 2015)] [Notices] [Pages 15011-15013] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-06422] ======================================================================= ----------------------------------------------------------------------- GENERAL SERVICES ADMINISTRATION [NOTICE-MVA-2015-01; Docket No. 2015-0002; Sequence No. 4] Notice of a Class Deviation To Address Commercial Supplier Agreement Terms Inconsistent With Federal Law AGENCY: Office of Government-wide Policy, General Services Administration. ACTION: Request for Information (RFI). ----------------------------------------------------------------------- SUMMARY: The Office of Acquisition Policy is requesting feedback on a proposed class deviation to the Federal Acquisition Regulation (FAR) and the General Services Acquisition Regulation (GSAR) to address common Commercial Supplier Agreement terms that are inconsistent with or create ambiguity with Federal law. This class deviation will go into effect forty-five (45) days from the date of publication of this RFI in the Federal Register, after considering comments received. DATES: Comments: Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown below on or before April 20, 2015. ADDRESSES: Submit comments in response to Notice--MVA-2015-01 by any of the following methods:Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by searching for ``Notice-- MVA-2015-01''. Select the link ``Comment Now'' that corresponds with ``Notice--MVA-2015-01'' and follow the instructions provided on the screen. Please include your name, company name (if any), and ``Notice-- MVA-2015-01'' on your attached document. Mail: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Ms. Flowers/Notice--MVA-2015-01, 1800 F Street NW., 2nd Floor, Washington, DC 20405-0001. Instructions: Please submit comments only and cite Notice--MVA- 2015-01 in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. FOR FURTHER INFORMATION CONTACT: Mr. James Tsujimoto, Program Analyst, Acquisition Policy Division, at telephone 202-208-3585 or email [email protected]. SUPPLEMENTARY INFORMATION: Background GSA defines Commercial Supplier Agreements as terms and conditions that are customarily offered to the public by vendors of supplies or services that meet the definition of ``commercial item'' and are intended to create a binding legal obligation on the end user. Commercial Supplier Agreements are particularly common in information technology acquisitions, including acquisitions of commercial computer software and commercial technical data, but they may apply to any supply or service. Customarily, commercial item supplies and services are offered to the public under standard agreements that may take a variety of forms, including license agreements, terms of service (TOS), terms of sale or purchase, and similar agreements. These customary, standard Commercial Supplier Agreements typically contain terms and conditions that make sense when the purchaser is a private party but are inappropriate when the purchaser is the Federal Government. The existence of Federally-incompatible terms in contractors' standard Commercial Supplier Agreements has long been recognized in FAR 27.405-3(b), which is limited to the acquisition of commercial computer software. This clause advises contracting officers to exercise caution when accepting a contractor's terms and conditions. However, the use of Commercial Supplier Agreements is not limited to information technology acquisitions; Commercial Supplier Agreements have become ubiquitous in a broad variety of contexts, from travel to telecommunications to financial services to building maintenance systems, including purchases below the simplified acquisition threshold. Discrepancies between Commercial Supplier Agreements and Federal law or the Government's needs create recurrent points of inconsistency. Below are several examples of incompatible clauses that are commonly found in Commercial Supplier Agreements: Jurisdiction or venue clauses may require that disputes be resolved in a particular state or Federal court. Such clauses conflict with the sovereign immunity of the US Government and cannot apply to litigation where the US Government is a defendant because those disputes must be heard either in US District Court (28 U.S.C. 1346) or the US Court of Federal Claims (28 U.S.C. 1491). Automatic renewal clauses may automatically renew or extend contracts unless affirmative action is taken by the Government. Such clauses that require the obligation of funds prior to appropriation violate the restrictions of [[Page 15012]] the Anti-Deficiency Act, 31 U.S.C. 1341(a)(1)(B). Termination clauses may allow the contractor to unilaterally terminate a contract if the Government is alleged to have breached the contract. Termination clauses and other clauses that permit substantive unilateral modification by the contractor are not permitted. Additionally, Government contracts are subject to the Contract Disputes Act of 1978 (41 U.S.C. 601-613). The Contract Disputes Act requires a certain process for resolving disputes, including terminations, and that the ``Contractor shall proceed diligently with performance of this contract, pending final resolution'' under the terms of the FAR Disputes clause at 52.233-1. As a result, Industry and Government representatives must undergo lengthy and costly contract term negotiations in order to avoid Commercial Supplier Agreement terms that conflict or are incompatible with Federal law. Both sides may expend considerable resources on legal counsel and negotiations before coming to agreement. Moreover, the current order of precedence contained in the commercial item clause at FAR 52.212-4 potentially allows commercial agreements to supersede the terms of Federal contracts, especially in those areas where Federal law is implicated indirectly. As a result, industry and Government representatives must spend significant time and resources tailoring Commercial Supplier Agreements to comply with Federal law. Discussion GSA intends to issue a class deviation to clarify the order of precedence in the commercial item clause by explaining that the terms of the commercial item clause control in the event of a conflict with a Commercial Supplier Agreement. The class deviation will also implement standard terms and conditions to minimize the need for negotiating the terms of Commercial Supplier Agreements on an individual basis. The new clause will make unenforceable any conflicting or inconsistent Commercial Supplier Agreement terms that are addressed in the class deviation, so long as an express exception is not authorized elsewhere by Federal statute. GSA has identified fifteen (15) points of inconsistency with Federal law that are addressed by this class deviation. Below is a list of the fifteen points of inconsistency and a summary of how they will be addressed by the class deviation: 1. Definition of contracting parties: Contract agreements are between the commercial supplier or licensor and the U.S. Government. Government employees or persons acting on behalf of the Government will not be bound in their personal capacity by the Commercial Supplier Agreement. 2. Contract formation: Commercial Supplier Agreements may be integrated into a contract, so long as the terms are included verbatim and are not incorporated by reference. The terms of the deviated clause and other identified elements will supersede any conflict with the Commercial Supplier Agreement. This order of precedence will allow for the incorporation of Commercial Supplier Agreements, with certain clauses being stricken as unenforceable, without the need to individually negotiate agreements. ``Click-wrap'', ``Browse-wrap'' and other such mechanisms that purport to bind the end-user will not bind the Government or any Government authorized end-user. 3. Patent indemnity (contractor assumes control of proceedings): Any clause requiring that the commercial supplier or licensor control any litigation arising from the government's use of the contractor's supplies or services is deleted. Such representation when the Government is a party is reserved by statute for the U.S. Department of Justice. 4. Automatic renewals of term-limited agreements: Due to Anti- Deficiency Act restrictions, automatic contract renewal clauses are impermissible. Any such Commercial Supplier Agreement clauses are unenforceable. 5. Future fees or penalties: Future fees--such as attorney fees, cost or interest--may only be awarded against the U.S. Government when expressly authorized by statute (e.g. Prompt Payment Act). 6. Taxes: Any taxes or surcharges that will be passed along to the Government will be governed by the terms of the underlying contract. The cognizant contracting officer must make a determination of applicability whenever such a request is made. 7. Payment terms or invoicing (late payment): Any Commercial Supplier Agreement terms that purport to establish payment terms or invoicing requirements that contradict the terms of the Government contract will be unenforceable. Discrepancies found during an audit must comply with the invoicing procedures from the underlying contract. 8. Automatic incorporation/deemed acceptance of third party terms: No third party terms may be incorporated into the contract by reference. Incorporation of third party terms after the time of award may only be performed by bilateral contract modification with the approval of the cognizant contracting officer. 9. State/foreign law governed contracts: Clauses that conflict with the sovereign immunity of the U.S. Government cannot apply to litigation where the U.S. Government is a defendant because those disputes must be heard either in U.S. District Court or the U.S. Court of Federal Claims. Commercial Supplier Agreement terms that require the resolution of a dispute in a forum other than that expressly authorized by Federal law are deleted. Statutes of limitation on potential claims shall be governed by U.S. Government law. 10. Equitable remedies, injunctions, binding arbitration: Equitable remedies, injunctive relief and binding arbitration clauses may not be enforced unless explicitly authorized by agency guidance or statute. 11. Unilateral termination of Commercial Supplier Agreement by supplier: Commercial suppliers may not unilaterally terminate or suspend a contract unless the supplies or services are generally withdrawn from the commercial market. Remedy from contractual breach by the Government must be pursued under the Contract Disputes Act. 12. Unilateral modification of Commercial Supplier Agreement by supplier: Unilateral changes of the Commercial Supplier Agreement are impermissible and any clause authorizing such changes is unenforceable. 13. Assignment of Commercial Supplier Agreement or Government contract by supplier: The contract, Commercial Supplier Agreement, party rights and party obligations may not be assigned or delegated without express Government approval. Payment to a third party financial institution may still be reassigned. 14. Confidentiality of Commercial Supplier Agreement terms and conditions: The content of the Commercial Supplier Agreement and the final contract pricing may not be deemed confidential. The Government may retain other marked confidential information as required by law, regulation or agency guidance, but will appropriately guard such confidential information. 15. Audits (automatic liability for payment): Discrepancies found during an audit must comply with the invoicing procedures from the underlying contract. Disputed charges [[Page 15013]] must be resolved through the Disputes clause. Any audits requested by the commercial supplier or licensor will be performed at supplier or licensor's expense. This class deviation will apply to all new awards for GSA acquisitions for commercial supplies or services. Existing contracts will be required to incorporate the new terms whenever an option period is exercised or the contract is otherwise modified. This effort will reduce risk by uniformly addressing common unacceptable Commercial Supplier Agreement terms, facilitate efficiency and effectiveness in the contracting process by reducing the administrative burden for the Government and industry, and promote competition by reducing barriers to industry, particularly small businesses. Dated: March 17, 2015. Jeffrey A. Koses, Senior Procurement Executive, Office of Acquisition Policy, Office of Government-wide Policy. [FR Doc. 2015-06422 Filed 3-19-15; 8:45 am] BILLING CODE 6820-61-P
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measure and monitor systemic risk and GENERAL SERVICES that are customarily offered to the
counterparty exposure, as well as ADMINISTRATION public by vendors of supplies or
improve operational efficiencies. A services that meet the definition of
[NOTICE–MVA–2015–01; Docket No. 2015–
single global system would help support 0002; Sequence No. 4]
‘‘commercial item’’ and are intended to
the shared objective of a more stable create a binding legal obligation on the
financial system. Notice of a Class Deviation To Address end user. Commercial Supplier
Commercial Supplier Agreement Agreements are particularly common in
While the Federal Reserve has
Terms Inconsistent With Federal Law information technology acquisitions,
considered retrieving LEI’s from the including acquisitions of commercial
issuers directly, this method has been AGENCY: Office of Government-wide computer software and commercial
deemed as ineffective since the Policy, General Services technical data, but they may apply to
associated structure data is very limited Administration. any supply or service.
at this time. Reconciling the entity’s LEI ACTION: Request for Information (RFI). Customarily, commercial item
with their current structure data would supplies and services are offered to the
be difficult and most likely result in SUMMARY: The Office of Acquisition
Policy is requesting feedback on a public under standard agreements that
inaccuracies given that so many may take a variety of forms, including
proposed class deviation to the Federal
institutions have similar attributes, such license agreements, terms of service
Acquisition Regulation (FAR) and the
as entity names. Therefore, obtaining (TOS), terms of sale or purchase, and
General Services Acquisition Regulation
the LEI directly from the reporting (GSAR) to address common Commercial similar agreements. These customary,
entity is the most reliable source to Supplier Agreement terms that are standard Commercial Supplier
accurately match an entity with the inconsistent with or create ambiguity Agreements typically contain terms and
correct LEI. with Federal law. This class deviation conditions that make sense when the
The Federal Reserve proposes to add will go into effect forty-five (45) days purchaser is a private party but are
the LEI to the FR Y–6 and FR Y–7 from the date of publication of this RFI inappropriate when the purchaser is the
organizational chart effective with fiscal in the Federal Register, after Federal Government.
year ends beginning June 30, 2015. considering comments received. The existence of Federally-
DATES: Comments: Interested parties incompatible terms in contractors’
Submission of existing LEI information
should submit written comments to the standard Commercial Supplier
would follow the normal FR Y–6 and FR
Regulatory Secretariat Division at one of Agreements has long been recognized in
Y–7 submission deadlines. The Federal FAR 27.405–3(b), which is limited to
Reserve proposes a one-time the addresses shown below on or before
April 20, 2015. the acquisition of commercial computer
information collection to populate software. This clause advises
existing LEI data for all FR Y–10 ADDRESSES: Submit comments in
response to Notice—MVA–2015–01 by contracting officers to exercise caution
reportable entities (excluding branches), when accepting a contractor’s terms and
as of June 30, 2015. Respondents would any of the following methods:
• Regulations.gov: http:// conditions. However, the use of
submit this information no later than Commercial Supplier Agreements is not
www.regulations.gov. Submit comments
September 30, 2015. LEIs issued after limited to information technology
via the Federal eRulemaking portal by
June 30, 2015, should be reported on the searching for ‘‘Notice—MVA–2015–01’’. acquisitions; Commercial Supplier
appropriate FR Y–10 schedules. For all Select the link ‘‘Comment Now’’ that Agreements have become ubiquitous in
LEIs assigned between June 30, 2015, corresponds with ‘‘Notice—MVA–2015– a broad variety of contexts, from travel
and September 30, 2015, information 01’’ and follow the instructions to telecommunications to financial
must be received at the appropriate provided on the screen. Please include services to building maintenance
Federal Reserve Bank by October 30, your name, company name (if any), and systems, including purchases below the
2015. The Federal Reserve would ‘‘Notice—MVA–2015–01’’ on your simplified acquisition threshold.
provide a means for institutions to attached document. Discrepancies between Commercial
provide their one-time submission data • Mail: General Services Supplier Agreements and Federal law or
in a format easier than individual FR Y– Administration, Regulatory Secretariat the Government’s needs create recurrent
10 submissions. (MVCB), ATTN: Ms. Flowers/Notice— points of inconsistency. Below are
MVA–2015–01, 1800 F Street NW., 2nd several examples of incompatible
Question: Comments are invited on clauses that are commonly found in
Floor, Washington, DC 20405–0001.
whether collecting existing LEI Instructions: Please submit comments Commercial Supplier Agreements:
information only from entities that are only and cite Notice—MVA–2015–01 in • Jurisdiction or venue clauses may
reportable on the FR Y–10 would be all correspondence related to this case. require that disputes be resolved in a
sufficient rather than collecting LEI All comments received will be posted particular state or Federal court. Such
information from all entities reportable without change to http:// clauses conflict with the sovereign
on the FR Y–6 and FR Y–7 www.regulations.gov, including any immunity of the US Government and
organizational charts. personal and/or business confidential cannot apply to litigation where the US
Board of Governors of the Federal Reserve information provided. Government is a defendant because
System, March 16, 2015. FOR FURTHER INFORMATION CONTACT: Mr. those disputes must be heard either in
Robert deV. Frierson, James Tsujimoto, Program Analyst, US District Court (28 U.S.C. 1346) or the
mstockstill on DSK4VPTVN1PROD with NOTICES
Acquisition Policy Division, at US Court of Federal Claims (28 U.S.C.
Secretary of the Board.
telephone 202–208–3585 or email 1491).
[FR Doc. 2015–06363 Filed 3–19–15; 8:45 am]
james.tsujimoto@gsa.gov. • Automatic renewal clauses may
BILLING CODE 6210–01–P
SUPPLEMENTARY INFORMATION: automatically renew or extend contracts
unless affirmative action is taken by the
Background Government. Such clauses that require
GSA defines Commercial Supplier the obligation of funds prior to
Agreements as terms and conditions appropriation violate the restrictions of
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![Federal Register / Vol. 80, No. 54 / Friday, March 20, 2015 / Notices 15013
must be resolved through the Disputes Reduction Act of 1995, the National Office of Clinical Research and
clause. Any audits requested by the Institutes of Health (NIH) has submitted Bioethics Policy, Office of Science
commercial supplier or licensor will be to the Office of Management and Budget Policy, NIH, 6705 Rockledge Dr., Suite
performed at supplier or licensor’s (OMB) a request for review and 750, Bethesda, MD 20892, or call non-
expense. approval of the information collection toll-free number (301) 496–9838, or
This class deviation will apply to all listed below. This proposed information Email your request, including your
new awards for GSA acquisitions for collection was previously published in address to: OCRBP-OSP@od.nih.gov.
commercial supplies or services. the Federal Register on November 25, Formal requests for additional plans and
Existing contracts will be required to 2014 (79 FR 70194), and allowed 60- instruments must be requested in
incorporate the new terms whenever an days for public comment. No public writing.
option period is exercised or the comments were received. The purpose
contract is otherwise modified. of this notice is to allow an additional Proposed Collection: The Genetic
This effort will reduce risk by 30 days for public comment. The Office Testing Registry, 0925–0651,
uniformly addressing common of the Director (OD), National Institutes Reinstatment Without Change,—Office
unacceptable Commercial Supplier of Health, may not conduct or sponsor, of the Director (OD), National Institutes
Agreement terms, facilitate efficiency and the respondent is not required to of Health (NIH)
and effectiveness in the contracting respond to, an information collection
process by reducing the administrative that has been extended, revised, or Need and Use of Information
burden for the Government and implemented on or after October 1, Collection: Clinical laboratory tests are
industry, and promote competition by 1995, unless it displays a currently valid available for more than 5,000 genetic
reducing barriers to industry, OMB control number. conditions. The Genetic Testing Registry
particularly small businesses. Direct Comments to OMB: Written (GTR) provides a centralized, online
Dated: March 17, 2015. comments and/or suggestions regarding location for test developers,
Jeffrey A. Koses, the item(s) contained in this notice, manufacturers, and researchers to
Senior Procurement Executive, Office of especially regarding the estimated voluntarily submit detailed information
Acquisition Policy, Office of Government- public burden and associated response about the availability and scientific
wide Policy. time, should be directed to the: Office basis of their genetic tests. The GTR is
[FR Doc. 2015–06422 Filed 3–19–15; 8:45 am] of Management and Budget, Office of of value to clinicians by providing
BILLING CODE 6820–61–P Regulatory Affairs, OIRA_submission@ information about the accuracy,
omb.eop.gov or by fax to 202–395–6974, validity, and usefulness of genetic tests.
Attention: NIH Desk Officer. The GTR also highlights evidence gaps
DEPARTMENT OF HEALTH AND DATES: Comment Due Date: Comments where additional research is needed.
HUMAN SERVICES regarding this information collection are
best assured of having their full effect if OMB approval is requested for 3
National Institutes of Health received within 30-days of the date of years. There are no costs to respondents
this publication. other than their time. The total
Submission for OMB Review; 30-Day estimated annualized burden hours are
FOR FURTHER INFORMATION CONTACT: To
Comment Request: The Genetic 5,536.
obtain a copy of the data collection
Testing Registry
plans and instruments or request more
SUMMARY: Under the provisions of information on the proposed project
section 3507(a)(1)(D) of the Paperwork contact: Ms. Sarah Carr, Acting Director,
ESTIMATED ANNUALIZED BURDEN HOURS
Average
Number of
Number of burden per Total annual
Type of respondent Form name responses per
respondents response burden hours
respondent (in hours)
Laboratory Personnel Using Bulk Minimal Fields .................................. 190 29 18/60 1,653
Submission.
Optional Fields ................................. 159 29 14/60 1,076
Laboratory Personnel Not Using Minimal Fields .................................. 116 29 30/60 1,682
Bulk Submission.
Optional Fields ................................. 97 29 24/60 1,125
Dated: March 13, 2015.
Lawrence A. Tabak,
Deputy Director, National Institutes of Health.
[FR Doc. 2015–06370 Filed 3–19–15; 8:45 am]
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BILLING CODE 4140–01–P
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Document Created: 2015-12-18 11:34:15
Document Modified: 2015-12-18 11:34:15
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Request for Information (RFI). | |
| Dates | Comments: Interested parties should submit written comments to | |
| Contact | Mr. James Tsujimoto, Program Analyst, Acquisition Policy Division, at telephone 202-208-3585 or email [email protected] | |
| FR Citation | 80 FR 15011 |
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