80 FR 30416 - Amendments to the HUD Acquisition Regulation (HUDAR)

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Federal Register Volume 80, Issue 102 (May 28, 2015)

This proposed rule would amend the HUDAR to implement miscellaneous changes necessary to update the HUDAR. These changes include a correction to the designation of Source Selection Authorities, limited delegation of Head of Contracting Activity authorities, incorporation of the HUDAR Matrix, addition of new clauses, certain administrative corrections, and incorporation of Alternates to various clauses to allow for electronic invoicing.

[Federal Register Volume 80, Number 102 (Thursday, May 28, 2015)]
[Proposed Rules]
[Pages 30416-30430]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12275]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

48 CFR Parts 2404, 2406, 2408, 2409, 2411, 2415, 2427, 2428, 2432, 
2437, 2444, 2452

[Docket No. FR-5814-P-01]
RIN 2501-AD73


Amendments to the HUD Acquisition Regulation (HUDAR)

AGENCY: Office of the Chief Procurement Officer, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the HUDAR to implement 
miscellaneous changes necessary to update the HUDAR. These changes 
include a correction to the designation of Source Selection 
Authorities, limited delegation of Head of Contracting Activity 
authorities, incorporation of the HUDAR Matrix, addition of new 
clauses, certain administrative corrections, and incorporation of 
Alternates to various clauses to allow for electronic invoicing.

DATES: Comment due date: July 27, 2015.

ADDRESSES: Interested persons are invited to submit comments regarding 
this proposed rule to the Regulations Division, Office of General 
Counsel, Department of Housing and Urban Development, 451 7th Street 
SW., Room 10276, Washington, DC 20410-0500. Communications must refer 
to the above docket number and title. There are two methods for 
submitting public comments. All submissions must refer to the above 
docket number and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the public comments must be 
scheduled by calling the Regulations Division at 202-708-3055 (this is 
not a toll-free number). Individuals with speech or hearing impairments 
may access this number

[[Page 30417]]

via TTY by calling the Federal Relay Service, toll-free, at 800-877-
8339. Copies of all comments submitted are available for inspection and 
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Lisa D. Maguire, Assistant Chief 
Procurement Officer for Policy, Systems and Risk Management, Office of 
the Chief Procurement Officer, Department of Housing and Urban 
Development, 451 7th Street SW., Washington, DC 20410; telephone number 
202-708-0294 (this is not a toll-free number) and fax number 202-708-
8912. Persons with hearing or speech impairments may access Ms. 
Maguire's telephone number via TTY by calling the toll-free Federal 
Relay Service at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    The uniform regulation for the procurement of supplies and services 
by federal departments and agencies, the Federal Acquisition Regulation 
(FAR), was promulgated on September 19, 1983 (48 FR 42102). The FAR is 
codified in title 48, chapter 1, of the Code of Federal Regulations. 
HUD promulgated its regulation to implement the FAR on March 1, 1984 
(49 FR 7696).
    The HUDAR (title 48, chapter 24 of the Code of Federal Regulations) 
is prescribed under section 7(d) of the Department of HUD Act (42 
U.S.C. 3535(d)); section 205(c) of the Federal Property and 
Administrative Services Act of 1949 (40 U.S.C. 121(c)); and the general 
authorization in FAR 1.301. The HUDAR was last revised by final rule 
published on December 10, 2012 (77 FR 73524), and a subsequent 
correcting amendment published on August 15, 2013 (78 FR 49697).

II. This Proposed Rule

    This proposed rule would amend the HUDAR at 48 CFR chapter 24, as 
follows:
    The rule proposes several administrative corrections, including: 
Revising section 2404.7001 to refer to the correct contract clause 
2452.204-70, ``Preservation of, and Access to, Contract Records 
(Tangible and Electronically Stored Information (ESI) Formats),'' and 
removing the title and redesignating the clause that is codified at 
section 2432.705-70 as 2432.705-70(a).
    In part 2406, the rule would add section 2406.303 which requires 
the use of HUD Form 24012 \1\ for justifications for other than full 
and open competition, and section 2406.304(a)(3), which designates the 
HUD Deputy Chief Procurement Officer as the responsible official with 
the authority to approve, in writing, justifications for other than 
full and open procurements for proposed contracts over $12.5 million, 
but not exceeding $62.5 million.
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    \1\ See http://portal.hud.gov/hudportal/documents/huddoc?id=24012.pdf.
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    In part 2408, this rule would add subpart 2408.4, ``Federal Supply 
Schedules,'' and, in that subpart, would add section 2408.405-6(c)(2), 
which requires the use of HUD form 24013 for justifications for 
limiting sources exceeding the simplified acquisition threshold when 
using the Federal Supply Schedules.\2\ This rule would also add section 
24(d)(3) which designates the HUD Deputy Chief Procurement Officer as 
the responsible official with the authority to approve, in writing, 
justifications for Limited Source considerations for proposed Federal 
Supply Schedule order or Blanket Purchase Agreement (BPA) with an 
estimated value exceeding $12.5 million, but not exceeding $62.5 
million.
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    \2\ See http://www.acquisition.gov/far/html/Subpart%2038_1.html#wp1075980.
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    In part 2409, this rule would add subpart 2409.1, entitled 
``Responsible Prospective Contractors,'' and, within that subpart, 
section 2409.105, ``Procedures,'' which includes information to be 
collected in determining financial responsibility.
    This rule would also:
    Revise section 2415.303(a) to HUDAR section 2415.303(a)(1) and, 
except for those acquisitions identified in HUDAR section 
2415.303(a)(2), designate HUD Assistant Secretaries, or their 
equivalent, as the Source Selection Authorities for selections made 
using the tradeoff process and to allow Assistant Secretaries to 
delegate this function to other departmental officials;
    Add section 2415.303(a)(2) to designate HUD's General Counsel as 
the Source Selection Authority, regardless of contract amount, in all 
Headquarters procurements for legal services, unless the General 
Counsel specifically designates another agency official to perform that 
function;
    Clarify section 2415.305(a)(5) to apply to Best Value Tradeoff 
technical evaluations;
    Add part 2444 and, within that part, section 2444.204 entitled 
``Subcontracting Policies and Procedures''; and
    Codify a class deviation approved by HUD's Chief Procurement 
Officer dated April 10, 2013 to add Alternate 1 to clauses 2452.232-70 
and 2452.232-71.
    In part 2452, the proposed rule would:
    Add clause 2452.232-74, entitled ``Not to Exceed Limitation,'' and, 
in part 2432, add a reference to that clause and requirements regarding 
its use at section 2432.705;
    Revise clause 2452.237-77(c)(1)(A) to change ``21 days per month'' 
to ``number of business days in the month'';
    Add clause 2452.237-79, ``Post-Award Conference,'' and a reference 
to that clause and requirements regarding its use at section 
2437.110(e)(5);
    Add clause 2452.237-81, ``Labor Categories, Unit Prices Per Hour 
and Payment,'' and a reference to that clause and requirements 
regarding its use at section 2437.110(e)(6);
    Add section 2452.244-70, ``Consent to Subcontract,'' and a 
reference to that clause and requirements regarding its use at section 
2444.204; and
    Incorporate a new HUDAR matrix under subpart 2452.3.

III. Findings and Certifications

Paperwork Reduction Act Statement

    The information collection requirements contained in this proposed 
rule are currently approved by the Office of Management and Budget 
(OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520) and assigned OMB control number 2535-0091. The information 
collection requirements for the HUDAR are currently approved by OMB 
under control number 2535-0091. In accordance with the Paperwork 
Reduction Act, an agency may not conduct or sponsor, and a person is 
not required to respond to, a collection of information, unless the 
collection displays a currently valid OMB control number.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531- 1538) (UMRA) establishes requirements for federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments and the private sector. This rule does not impose 
any federal mandate on any state, local, or tribal government or the 
private sector within the meaning of UMRA.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial

[[Page 30418]]

number of small entities. This proposed rule makes technical changes to 
existing contracting procedures and does not make any major changes 
that would significantly impact businesses. Accordingly, the 
undersigned certifies that this rule will not have a significant 
economic impact on a substantial number of small entities.
    Notwithstanding HUD's determination that this rule will not have a 
significant economic impact on a substantial number of small entities, 
HUD specifically invites comments regarding less burdensome 
alternatives to this rule that will meet HUD's objectives as described 
in this preamble.

Environmental Impact

    This proposed rule does not direct, provide for assistance or loan 
and mortgage insurance for, or otherwise govern or regulate real 
property acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
proposed rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This proposed rule would not have 
federalism implications and would not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive Order.

List of Subjects

48 CFR Part 2404

    Government procurement.

48 CFR Part 2406

    Government procurement.

48 CFR Part 2408

    Government procurement.

48 CFR Part 2409

    Government Procurement

48 CFR Part 2411

    Government Procurement.

48 CFR Part 2415

    Government procurement.

48 CFR Part 2432

    Government procurement.

48 CFR Part 2437

    Government procurement.

48 CFR Part 2444

    Government procurement.

48 CFR Part 2452

    Government procurement.

    For the reasons discussed in the preamble, and pursuant to the 
authority under 42 U.S.C. 3535(d), HUD proposes to amend 48 CFR chapter 
24 as follows:

PART 2404--ADMINISTRATIVE MATTERS

0
1. The authority citation for part 2404 continues to read as follows:

    Authority: 42 U.S.C. 3535(d).

Subpart 2404.7--Contractor Records Retention

0
2. Revise section 2404.7001 to read as follows:


2404.7001  Contract clause.

    The contracting officer shall insert the clause at 2452.204-70, 
``Preservation of, and Access to, Contract Records (Tangible and 
Electronically Stored Information (ESI) Formats),'' in all 
solicitations and contracts exceeding the simplified acquisition 
threshold. The contracting officer shall use the basic clause with its 
Alternate I in cost-reimbursement type contracts. The contracting 
officer shall use the basic clause with its Alternate II in labor-hour 
and time-and-materials contracts.

PART 2406--COMPETITION REQUIREMENTS

0
3. The authority citation for part 2406 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 41 U.S.C. 3301 et seq.; 42 U.S.C. 
3535(d).

Subpart 2406.3--Other Than Full and Open Competition

0
4. Add section 2406.303 to read as follows:


2406.303  Justifications.

    Justifications for Other Than Full and Open Competition must be 
prepared and approved using the latest version of HUD Form 24012.
0
5. Add paragraph (a)(3) to section 2406.304 to read as follows:


2406.304  Approval of the justification.

    (a)(3) HUD's Chief Procurement Officer, as the Head of Contracting 
Activity, has delegated the authority to the Deputy Chief Procurement 
Officer to approve, in writing, justifications for other than full and 
open competition procurements for proposed contracts over $12.5 
million, but not exceeding $62.5 million.
* * * * *

PART 2408--REQUIRED SOURCES OF SUPPLIES AND SERVICES

0
6. The authority citation for part 2408 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

0
7. Add subpart 2408.4 to read as follows:

Subpart 2408.4--Federal Supply Schedules


2408.404  Pricing.

    (d) Supplies offered on the schedule are listed at fixed prices. 
Services offered on the schedule are priced either at hourly rates, or 
at fixed price for performance of a specific task (e.g., installation, 
maintenance, and repair). GSA has determined the prices of supplies and 
fixed-price services, and rates for services offered at hourly rates, 
to be fair and reasonable for the purpose of establishing the schedule 
contract. GSA's determination does not relieve the ordering activity 
contracting officer from the responsibility of making a determination 
of fair and reasonable pricing for individual orders, BPAs, and orders 
under BPAs. Contracting Officers shall follow the general principles 
and techniques outlined in FAR Section 15.404-1, Proposal Analysis 
Techniques, to ensure that the final agreed-to price is fair and 
reasonable, keeping in mind that the complexity and circumstances of 
each acquisition should determine the level of detail of the analysis 
required.


2408.405-6  Limiting sources.

    (c)(2) Justifications for Limiting Sources, under the Federal 
Supply Schedules when exceeding the simplified acquisition threshold, 
must be prepared and approved using the latest version of HUD Form 
24013.
    (d)(3) HUD's Chief Procurement Officer, as the Head of Contracting 
Activity, has delegated the authority to the Deputy Chief Procurement 
Officer to approve, in writing, justifications for Limited Source 
considerations for a proposed Federal Supply Schedule order or Blanket 
Purchase Agreement (BPA) with an estimated value

[[Page 30419]]

exceeding $12.5 million, but not exceeding $62.5 million.

PART 2409--CONTRACTOR QUALIFICATIONS

0
8. The authority citation for part 2409 continues to read as follows:


    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

0
9. Add subpart 2409.1 to read as follows:

Subpart 2409.1--Responsible Prospective Contractors


2409.105  Procedures.

    (a) The contracting officer shall perform a financial review when 
the contracting officer does not otherwise have sufficient information 
to make a positive determination of financial responsibility. In 
addition, the contracting officer shall consider performing a financial 
review--
    (1) Prior to award of a contract, when--
    (A) The contractor is on a list requiring pre-award clearance or 
other special clearance before award;
    (B) The contractor is listed on the Consolidated List of 
Contractors Indebted to the Government, or is otherwise known to be 
indebted to the Government;
    (C) The contractor may receive Government assets such as contract 
financing payments or Government property;
    (D) The contractor is experiencing performance difficulties on 
other work; or
    (E) The contractor is a new company or a new supplier of the item.
    (2) At periodic intervals after award of a contract, when--
    (A) Any of the conditions in paragraphs (1)(B) through (1)(E) of 
this subsection are applicable; or
    (B) There is any other reason to question the contractor's ability 
to finance performance and completion of the contract.
    (b) The contracting officer shall obtain the type and depth of 
financial and other information that is required to establish a 
contractor's financial capability or disclose a contractor's financial 
condition. While the contracting officer should not request information 
that is not necessary for protection of the Government's interests, the 
contracting officer must insist upon obtaining the information that is 
necessary. The unwillingness or inability of a contractor to present 
reasonably requested information in a timely manner, especially 
information that a prudent business person would be expected to have 
and to use in the professional management of a business, may be a 
material fact in the determination of the contractor's responsibility 
and prospects for contract completion.
    (c) The contracting officer shall obtain the following information 
to the extent required to protect the Government's interest. In 
addition, if the contracting officer concludes that information not 
listed herein is required to determine financial responsibility, that 
information should be requested. The information must be for the 
person(s) who are legally liable for contract performance. If the 
contractor is not a corporation, the contracting officer shall obtain 
the required information for each individual/joint venturer/partner:
    (1) Balance sheet and income statement--
    (A) For the current fiscal year (interim);
    (B) For the most recent fiscal year and, preferably, for the 2 
preceding fiscal years. These should be certified by an independent 
public accountant or by an appropriate officer of the firm; and
    (C) Forecasted for each fiscal year for the remainder of the period 
of contract performance.
    (2) Summary history of the contractor and its principal managers, 
disclosing any previous insolvencies--corporate or personal, and 
describing its products or services.
    (3) Statement of all affiliations disclosing--
    (A) Material financial interests of the contractor;
    (B) Material financial interests in the contractor;
    (C) Material affiliations of owners, officers, members, directors, 
major stockholders; and
    (D) The major stockholders if the contractor is not a widely-
traded, publicly-held corporation.
    (4) Statement of all forms of compensation to each officer, 
manager, partner, joint venturer, or proprietor, as appropriate--
    (A) Planned for the current year;
    (B) Paid during the past 2 years; and
    (C) Deferred to future periods.
    (5) Business base and forecast that--
    (A) Shows, by significant markets, existing contracts and 
outstanding offers, including those under negotiation; and
    (B) Is reconcilable to indirect cost rate projections.
    (6) Cash forecast for the duration of the contract.
    (7) Financing arrangement information that discloses--
    (A) Availability of cash to finance contract performance;
    (B) Contractor's exposure to financial crisis from creditor's 
demands;
    (C) Degree to which credit security provisions could conflict with 
Government title terms under contract financing;
    (D) Clearly stated confirmations of credit with no unacceptable 
qualifications; and
    (E) Unambiguous written agreement by a creditor if credit 
arrangements include deferred trade payments or creditor 
subordinations/repayment suspensions.
    (8) Statement of all state, local, and Federal tax accounts, 
including special mandatory contributions, e.g., environmental 
superfund.
    (9) Description and explanation of the financial effect of issues 
such as--
    (A) Leases, deferred purchase arrangements, or patent or royalty 
arrangements;
    (B) Insurance, when relevant to the contract;
    (C) Contemplated capital expenditures, changes in equity, or 
contractor debt load;
    (D) Pending claims either by or against the contractor;
    (E) Contingent liabilities such as guarantees, litigation, 
environmental, or product liabilities;
    (E) Validity of accounts receivable and actual value of inventory, 
as assets; and
    (F) Status and aging of accounts payable.
    (10) Significant ratios such as--
    (A) Inventory to annual sales;
    (B) Inventory to current assets;
    (C) Liquid assets to current assets;
    (D) Liquid assets to current liabilities;
    (E) Current assets to current liabilities; and
    (F) Net worth to net debt.

PART 2411--DESCRIBING AGENCY NEEDS

0
10. The authority citation for part 2411 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2411.4--Delivery or Performance Schedules


2411.404  [Removed]

0
11. Remove section 2411.404.

PART 2415--CONTRACTING BY NEGOTIATION

0
12. The authority citation for part 2415 is revised to read as follows:

    Authority: 40 U.S.C. 121(c); 41 U.S.C. 3301-3306 and 3105; 42 
U.S.C. 3535(d).

[[Page 30420]]

Subpart 2415.2--Solicitation and Receipt of Proposals and 
Quotations

0
13. Revise section 2415.209(a)(1) to read as follows:


2415.209  Solicitation provisions.

    (a)(1) The Contracting Officer shall insert a provision 
substantially the same as the provision at 2452.215-70, Proposal 
Content, in all solicitations for negotiated procurements expected to 
exceed the simplified acquisition limit. The provision may be used in 
simplified acquisitions when it is necessary to obtain business 
proposal information in making the award selection. If the proposed 
contract requires work on, or access to, HUD systems or applications 
(see the clause at 2452.239-70), the provision shall be used with its 
Alternate I. When the contracting officer has determined that it is 
necessary to limit the size of the technical and management portion of 
offers submitted by offerors, the provision shall be used with its 
Alternate II.
* * * * *

Subpart 2415.3--Source Selection

0
14. In section 2415.303, redesignate paragraph (a) as (a)(1); revise 
the redesignated paragraph; and add section 2415.303(a)(2), all to read 
as follows:


2415.303  Responsibilities.

    (a)(1) Except as identified in HUDAR Section 2415.303(a)(2), HUD's 
Chief Procurement Officer, as the Senior Procurement Executive, 
designates Assistant Secretaries, or their equivalent, for requiring 
activities as the Source Selection Authorities for selections made 
using the tradeoff process. Assistant Secretaries may delegate this 
function to other departmental officials. This designation also applies 
to acquisitions not performed under the requirements of FAR Part 15, 
but utilizing tradeoff analysis.
    (a)(2) HUD's Chief Procurement Officer, as the Senior Procurement 
Executive, designates HUD's Office of General Counsel (OGC) as the 
Source Selection Authority, regardless of contract amount, in all 
Headquarters procurements for legal services, unless (s)he specifically 
designates another agency official to perform that function. Any 
Headquarters office desiring to procure outside legal services for the 
Department shall obtain OGC approval before advertising or soliciting 
proposals for such services. OGC shall determine whether the services 
are necessary and the extent of OGC involvement in the procurement.
* * * * *
0
15. In section 2415.305, revise paragraph (a)(3) to read as follows:


2415.305  Proposal evaluation.

    (a) * * *
    (3) Technical evaluation when tradeoffs are performed. The TEP 
shall rate each proposal based on the evaluation factors specified in 
the solicitation. The TEP shall identify each proposal as being 
acceptable, unacceptable but capable of being made acceptable, or 
unacceptable. A proposal shall be considered unacceptable if it is so 
clearly deficient that it cannot be corrected through written or oral 
discussions. Under the tradeoff process, predetermined threshold levels 
of technical acceptability for proposals shall not be employed. A 
technical evaluation report, which complies with FAR 15.305(a)(3), 
shall be prepared and signed by the technical evaluators, furnished to 
the contracting officer, and maintained as a permanent record in the 
official procurement file.

PART 2432--CONTRACT FINANCING

0
19. The authority citation for part 2432 continues to read as follows:

    Authority: 31 U.S.C. 3901-3905; 40 U.S.C. 121(c); 42 U.S.C. 
3535(d).

Subpart 2432.7--Contract Funding

0
16. Revise section 2432.705 to read as follows and remove section 
2432.705-70:


2432.705  Contract clauses.

    (a) The contracting officer shall insert the clause at 2452.232-72, 
``Limitation of Government's Obligation,'' in solicitations and 
resultant incrementally funded fixed-price contracts as authorized by 
2432.703-1. The contracting officer shall insert the information 
required in the table in paragraph (b) and the notification period in 
paragraph (c) of the clause.
    (b) The contracting officer shall insert the clause at 2452.232-74, 
``Not To Exceed Limitation'' in all solicitations and contracts where 
the total estimated funds needed for the performance period are not yet 
obligated.


2432.705-70  [Removed]

PART 2437--SERVICE CONTRACTING

0
17. The authority citation for part 2437 continues to read as follows:

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2437.1--Service Contracts--General

0
18. Revise section 2437.110(e)(2); add paragraphs 2437.111(e)(5) and 
(e)(6); all to read as follows:


2437.110  Solicitation provisions and contract clauses.

    (e)(1) * * *
    (2) The Contracting Officer shall insert the clause at 2452.237-73, 
``Conduct of Work and Technical Guidance,'' in all solicitations and 
contracts for services.
    (3) * * *
    (4) * * *
    (5) The contracting officer shall insert the clause at 2452.237-79, 
``Post Award Conference,'' in all solicitations and contracts for 
services when the CO deems that a Post Award Conference is necessary.
    (6) The contracting officer shall insert the clause at 2452.237-81, 
``Labor Categories, Unit Prices Per Hour and Payment,'' in all 
indefinite quantity and requirements solicitations and contracts when 
level of effort task orders will be issued.
0
19. Add part 2444 and heading to read as follows:

PART 2444--SUBCONTRACTING POLICIES AND PROCEDURES

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2444.2--Contract Clauses


2444.204  Contract clauses.

    (a) Insert HUDAR clause 2452.244-70 Consent to Subcontract, in 
contracts and task orders with an estimated value exceeding 
$10,000,000.

PART 2452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
29. The authority citation for part 2452 continues to read as follows:

    Authority: 40 U.S.C. 121(c); 42 U.S.C. 3535(d).

Subpart 2452.2--Texts of Provisions and Clauses


2452.211-70  [Removed]

0
20. Remove section 2452.211-70 including Alternate I.
0
21. Revise section 2452.215-70 to read as follows:


2452.215-70  Proposal content.

    As prescribed in 2415.209(a), insert a provision substantially the 
same as the following:
    PROPOSAL CONTENT ([Insert month and year of publication of final 
rule],)

[[Page 30421]]

    (a) Proposals shall be submitted in two parts as described in 
paragraphs (c) and (d) below. Each of the parts must be complete in 
itself so that evaluation of each part may be conducted independently, 
and so the identified parts of each proposal may be evaluated strictly 
on its own merit. Proposals shall be submitted in the format, if any, 
prescribed elsewhere in this solicitation. Proposals shall be enclosed 
in sealed packaging and addressed to the office specified in the 
solicitation. The offeror's name and address, the solicitation number 
and the date and time specified in the solicitation for proposal 
submission must appear in writing on the outside of the package.
    (b) The number of proposals required are an original and [insert 
number] copies of Part I, and [insert number] copies of Part II.
    (c) Part I--Technical Proposal
    (1) The offeror shall submit the information required in 
Instructions to Offerors designated under Part I--Technical Proposal.
    (d) Part II--Business Proposal
    (1) The offeror shall complete the Representations and 
Certifications provided in Section K of this solicitation and include 
them in Part II, Business Proposal.
    (2) The offeror shall provide information to support the offeror's 
proposed costs or prices as prescribed elsewhere in Instructions to 
Offerors for Part II--Business Proposal.
    (3) The offeror shall submit any other information required in 
Instructions to Offerors designated under Part II--Business Proposal.


(End of provision)

    Alternate I ([Insert month and year of publication of final rule])
    As prescribed in 2415.209(a), if the proposed contract requires 
work on, or access to, sensitive automated systems as described in 
2452.239-70, add the following subparagraph, numbered sequentially, to 
paragraph (d):
    The offeror shall describe in detail how the offeror will maintain 
the security of automated systems as required by clause 2452.239-70 in 
Section I of this solicitation and include it in Part II, Business 
Proposal.


(End of Provision)

    Alternate II ([Insert month and year of publication of final rule])
    As prescribed in 2415.209(a), add the following paragraph (e) when 
the size of any proposal Part I or Part II will be limited:
    (e) Size limits of Parts I and II.
    (1) Offerors shall limit submissions of Parts I and II of their 
initial proposals to the page limitations identified in the 
Instructions to Offerors. Offerors are cautioned that if any Part of 
their proposal exceeds the stipulated limits for that Part, the 
Government will evaluate only the information contained in the pages up 
through the permitted number. Pages beyond that limit will not be 
evaluated.
    (2) A page shall consist of one side of a single sheet of 8\1/2\'' 
x 11'' paper, single spaced, using not smaller than 12 point type font, 
and having margins at the top, bottom, and sides of the page of no less 
than one inch in width.
    (3) Any exemptions from this limitation are stipulated under the 
Instructions to Offerors.
    (4) Offerors are encouraged to use recycled paper and to use both 
sides of the paper (see the FAR clause at 52.204-4).


(End of Provision)

0
22. Revise section 2452.232-70 to read as follows:


2452.232-70  Payment schedule and invoice submission (Fixed-Price).

    As prescribed in 2432.908(c)(2), insert the following clause in all 
fixed-price solicitations and contracts:
    PAYMENT SCHEDULE AND INVOICE SUBMISSION (FIXED-PRICE) ([Insert 
month and year of publication of final rule])
    (a) Payment Schedule. Payment of the contract price (see Section B 
of the contract) will be made upon completion and acceptance of all 
work unless a partial payment schedule is included below.
    [Contracting Officer insert schedule information]:

------------------------------------------------------------------------
                                          Applicable
         Partial payment number            contract    Delivery    Pay
                                         deliverable     date     amount
------------------------------------------------------------------------
1.
2.
3.
------------------------------------------------------------------------

    [Continue as necessary]
    (b) Submission of Invoices.
    (1) The Contractor shall submit invoices as follows: Original to 
the payment office and one copy each to the Contracting Officer and a 
copy to the Government Technical Representative (GTR) identified in the 
contract. To constitute a proper invoice, the invoice must include all 
items required by the FAR clause at 52.232-25, ``Prompt Payment.''
    (2) To assist the government in making timely payments, the 
contractor is also requested to include on each invoice the 
appropriation number shown on the contract award document (e.g., block 
14 of the Standard Form (SF) 26, block 21 of the SF-33, or block 25 of 
the SF-1449). The contractor is also requested to clearly indicate on 
the mailing envelope that an invoice is enclosed.
    (c) Contractor Remittance Information. The contractor shall provide 
the payment office with all information required by other payment 
clauses or other supplemental information (e.g., contracts for 
commercial services) contained in this contract.
    (d) Final Invoice Payment. The final invoice shall not be paid 
prior to certification by the Contracting Officer that all work has 
been completed and accepted.


(End of clause)

    Alternate I ([Insert month and year of publication of final rule]). 
Delete paragraph (b)(1) of HUDAR Clause 2452.232-70 Payment Schedule 
and Invoice Submission (Fixed-price) and replace with the following 
Alternate, when requiring invoices to be submitted electronically via 
email, in fixed price contracts other than performance-based contracts 
under which performance-based payments will be used:
    The contractor shall submit invoices electronically via email to 
the email addresses shown on the contract award document (e.g., block 
12 of the Standard Form (SF) 26, block 25 of the SF-33, or block 18a of 
the SF-1449) and carbon copy the Contracting Officer and the Government 
Technical Representative (GTR). To constitute a proper invoice, the 
invoice must include all items required by the FAR clause at 52.232-25, 
``Prompt Payment.'' The contractor shall clearly include in the Subject 
line of the email: INVOICE INCLUDED; CONTRACT/ORDER #: _____, INVOICE 
NUMBER _____ and Contract Line Item Number(s) ____.


(End of Alternate)

0
23. Revise section 2452.232-71 to read as follows:


2452.232-71  Voucher submission (cost-reimbursement, time-and-
materials, and labor-hour).

    As prescribed in 2432.908(c)(3), insert the following clause in all 
cost-reimbursement, time-and-materials, and labor-hour solicitations 
and contracts:
    VOUCHER SUBMISSION (COST-REIMBURSEMENT, TIME-AND-MATERIALS, AND 
LABOR HOUR) ([Insert month and year of publication of final rule])
    (a) Voucher Submission.
    (1) The contractor shall submit, _____ [Contracting Officer insert 
billing period, e.g., monthly], an original

[[Page 30422]]

and two copies of each voucher. In addition to the items required by 
the clause at FAR 52.232-25, ``Prompt Payment,'' the voucher shall show 
the elements of cost for the billing period and the cumulative costs to 
date. The Contractor shall submit all vouchers, except for the final 
voucher, as follows: Original to the payment office and one copy each 
to the Contracting Officer and the Government Technical Representative 
(GTR) identified in the contract. The contractor shall submit all 
copies of the final voucher to the Contracting Officer.
    (2) To assist the government in making timely payments, the 
contractor is requested to include on each voucher the applicable 
appropriation number(s) shown on the award or subsequent modification 
document (e.g., block 14 of the Standard Form (SF) 26, or block 21 of 
the SF-33). The contractor is also requested to clearly indicate on the 
mailing envelope that a payment voucher is enclosed.
    (b) Contractor Remittance Information.
    (1) The Contractor shall provide the payment office with all 
information required by other payment clauses contained in this 
contract.
    (2) For cost reimbursement, time-and-materials and labor-hour 
contracts, the Contractor shall aggregate vouchered costs by the 
individual task for which the costs were incurred and clearly identify 
the task or job.
    (c) Final Payment. The final payment shall not be made until the 
Contracting Officer has certified that the contractor has complied with 
all terms of the contract.


(End of clause)

    Alternate I ([Insert month and year of publication of final rule]). 
Delete paragraph (a)(1) of HUDAR clause 2452.232-71, Voucher Submission 
(Cost-Reimbursement, Time-and-Materials, and Labor-Hour).) and replace 
with the following Alternate, when requiring invoices to be submitted 
electronically via email, in all cost-reimbursement, time-and-
materials, and labor-hour type solicitations and contracts:
    The contractor shall submit invoices electronically via email to 
the email addresses shown on the contract award document (e.g., block 
12 of the Standard Form (SF) 26, block 25 of the SF-33, or block 18a of 
the SF-1449) and carbon copy the Contracting Officer and the Government 
Technical Representative. To constitute a proper invoice, the invoice 
must include all items required by the FAR clause at 52.232-25, 
``Prompt Payment.'' The contractor shall clearly include in the Subject 
line of the email: INVOICE INCLUDED; CONTRACT/ORDER #: _____, INVOICE 
NUMBER _____ and Contract Line Item Number(s) _____. In addition to the 
items required by the clause at FAR 52.232-25, Prompt Payment, the 
voucher shall show the elements of cost for the billing period and the 
cumulative costs to date. The contractor shall also submit supporting 
documentation such as time cards to verify the hours/costs vouchered.


(End of Alternate)

0
24. Add section 2452.232-74 to read as follows:


2452.232-74  Not to exceed limitation.

    As prescribed in 2432.705(b), insert the following clause in all 
solicitations and contracts where the total estimated funds needed for 
the performance of the contract are not yet obligated.
    NOT TO EXCEED LIMITATION ([Insert month and year of publication of 
final rule])
    (a) The total estimated funds needed for the performance of this 
contract are not yet obligated. The total obligation of funds available 
at this time for performance of work or deliveries is [FILLIN#1#Insert 
Amount]. The Government shall not order, nor shall the contractor be 
required to accept orders for, or perform work or make deliveries that 
exceed the stated funding limit.
    (b) The Government may unilaterally increase the amount obligated 
through contract modification(s) until the full contract value has been 
obligated.


(End of clause)

0
25. Revise section 2452.237-73 to read as follows:


2452.237-73  Conduct of work and technical guidance.

    As prescribed in 2437.110(e)(2), insert the following clause in all 
contracts for services:
    CONDUCT OF WORK AND TECHNICAL GUIDANCE ([Insert month and year of 
publication of final rule])
    (a) The Contracting Officer will provide the contractor with the 
name and contact information of the Government Technical Representative 
(GTR) assigned to this contract. The GTR will serve as the contractor's 
liaison with the Contracting Officer with regard to the conduct of 
work. The Contracting Officer will notify the contractor in writing of 
any change to the current GTR's status or the designation of a 
successor GTR.
    (b) The GTR for liaison with the contractor as to the conduct of 
work is [to be inserted at time of award] or a successor designated by 
the Contracting Officer. The Contracting Officer will notify the 
contractor in writing of any change to the current GTR's status or the 
designation of a successor GTR.
    (c) The GTR will provide guidance to the contractor on the 
technical performance of the contract. Such guidance shall not be of a 
nature which:
    (1) Causes the contractor to perform work outside the statement of 
work or specifications of the contract;
    (2) Constitutes a change as defined in FAR 52.243 1;
    (3) Causes an increase or decrease in the cost of the contract;
    (4) Alters the period of performance or delivery dates; or
    (5) Changes any of the other express terms or conditions of the 
contract.
    (d) The GTR will issue technical guidance in writing or, if issued 
orally, he/she will confirm such direction in writing within five 
calendar days after oral issuance. The GTR may issue such guidance via 
telephone, facsimile (fax), or electronic mail.
    (e) Other specific limitations [to be inserted by Contracting 
Officer]:
    (f) The contractor shall promptly notify the Contracting Officer 
whenever the contractor believes that guidance provided by any 
government personnel, whether or not specifically provided pursuant to 
this clause, is of a nature described in paragraph (b) above.


(End of clause)

0
26. Revise paragraph 2452.237-77(c)(1)(A) to read as follows:


2452.237-77  Temporary closure of HUD facilities. ([Insert month and 
year of publication of final rule])

* * * * *
    (c) * * *
    (1) * * *
    (A) The deduction rate in dollars per day will be equal to the per 
month contract price divided by the number of business days in each 
month.
* * * * *
0
27. Add section 2452.242-79 to read as follows:


2452.237-79  Post award conference.

    As prescribed in 2437.110(e)(5), insert the following clause in all 
contracts for services:
    POST AWARD CONFERENCE ([Insert month and year of publication of 
final rule])
    The Contractor shall be required to attend a post-award conference 
on DATE _____ to be held at ADDRESS _____, unless other arrangements 
are made. All Contractors must have a valid ID for security clearance 
into the building.


[[Page 30423]]



(End of clause)

0
28. Add section 2452.237-81 to read as follows:


2452.237-81  Labor categories, unit prices per hour and payment.

    As prescribed in 2437.110(e)(6), insert the following clause in all 
indefinite quantity and requirements solicitations and contracts when 
level of effort task orders will be issued.
    LABOR CATEGORIES, UNIT PRICES PER HOUR AND PAYMENT ([Insert month 
and year of publication of final rule])
    The contractor shall provide the following types of labor at the 
corresponding unit price per hour in accordance with the terms of this 
contract:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------

    The unit price per hour is inclusive of the hourly wage plus any 
applicable labor overhead, General and Administrative (G&A) expenses, 
and profit. Payment shall be made to the contractor upon delivery to, 
and acceptance by, the Government office requesting services. The total 
amounts billed shall be derived by multiplying the actual number of 
hours worked per category by the corresponding price per hour.

(End of clause)

0
29. Revise section 2452.239-70 to read as follows:


2452.239-70  Access to HUD systems.

    As prescribed in 2439.107(a), insert the following clause:
    ACCESS TO HUD SYSTEMS ([Insert month and year of publication of 
final rule])
    (a) Definitions: As used in this clause--
    ``Access'' means the ability to obtain, view, read, modify, delete, 
and/or otherwise make use of information resources.
    ``Application'' means the use of information resources (information 
and information technology) to satisfy a specific set of user 
requirements (see OMB Circular A-130).
    ``Contractor employee'' means an employee of the prime contractor 
or of any subcontractor, affiliate, partner, joint venture, or team 
members with which the contractor is associated. It also includes 
consultants engaged by any of those entities.
    ``Mission-critical system'' means an information technology or 
telecommunications system used or operated by HUD or by a HUD 
contractor, or organization on behalf of HUD, that processes any 
information, the loss, misuse, disclosure, or unauthorized access to, 
or modification of which would have a debilitating impact on the 
mission of the agency.
    ``NACI'' means a National Agency Check with Inquiries, the minimum 
background investigation prescribed by OPM.
    ``PIV Card'' means the Personal Identity Verification (PIV) Card, 
the Federal Government-issued identification credential (i.e., 
identification badge).
    ``Sensitive information'' means any information of which the loss, 
misuse, or unauthorized access to, or modification of, could adversely 
affect the national interest, the conduct of federal programs, or the 
privacy to which individuals are entitled under section 552a of title 
5, United States Code (the Privacy Act), but which has not been 
specifically authorized under criteria established by an Executive 
Order or an Act of Congress to be kept secret in the interest of 
national defense or foreign policy.
    ``System'' means an interconnected set of information resources 
under the same direct management control, which shares common 
functionality. A system normally includes hardware, software, 
information, data, applications, communications, and people (see OMB 
Circular A-130). System includes any system owned by HUD or owned and 
operated on HUD's behalf by another party.
    (b) General.
    (1) The performance of this contract requires contractor employees 
to have access to a HUD system or systems. All such employees who do 
not already possess a current PIV Card acceptable to HUD shall be 
required to provide personal background information, undergo a 
background investigation (NACI or other OPM-required or approved 
investigation), including an FBI National Criminal History Fingerprint 
Check, and obtain a PIV Card prior to being permitted access to any 
such system in performance of this contract. HUD may accept a PIV Card 
issued by another Federal Government agency but shall not be required 
to do so. No contractor employee will be permitted access to any HUD 
system without a PIV Card.
    (2) All contractor employees who require access to mission-critical 
systems or sensitive information contained within a HUD system or 
application(s) are required to have a more extensive background 
investigation. The investigation shall be commensurate with the risk 
and security controls involved in managing, using, or operating the 
system or applications(s).
    (c) Citizenship-related requirements. Each affected contractor 
employee as described in paragraph (b) of this clause shall be:
    (1) A United States (U.S.) citizen; or,
    (2) A national of the United States (see 8 U.S.C. 1408); or,
    (3) An alien lawfully admitted into, and lawfully permitted to be 
employed in the United States, provided that for any such individual, 
the Government is able to obtain sufficient background information to 
complete the investigation as required by this clause. Failure on the 
part of the contractor to provide sufficient information to perform a 
required investigation or the inability of the Government to verify 
information provided for affected contractor employees will result in 
denial of their access.
    (d) Background investigation process.
    (1) The Government Technical Representative (GTR) shall notify the 
contractor of those contractor employee positions requiring background 
investigations.
    (i) For each contractor employee requiring access to HUD 
information systems, the contractor shall submit the following properly 
completed forms: Standard Form (SF) 85, ``Questionnaire for Non-
Sensitive Positions,'' FD 258 (Fingerprint Chart), and a partial 
Optional Form (OF) 306 (Items 1, 2, 6, 8-13, 16, and 17).
    (ii) For each contractor employee requiring access to mission-
critical systems and/or sensitive information contained within a HUD 
system and/or application(s), the contractor shall submit the following 
properly completed forms: SF-85P, ``Questionnaire for Public Trust 
Positions;'' FD 258; and a Fair Credit Reporting Act form 
(authorization for the credit-check portion of the investigation). 
Contractor employees shall not complete the Medical Release behind the 
SF-85P.
    (iii) The SF-85, 85P, and OF-306 are available from OPM's Web site, 
http://www.opm.gov. The GTR will provide all other forms that are not 
obtainable via the Internet.
    (2) The contractor shall deliver the forms and information required 
in paragraph (d)(1) of this clause to the GTR.
    (3) Affected contractor employees who have had a federal background 
investigation without a subsequent break in federal employment or 
federal contract service exceeding 2 years may be exempt from the 
investigation requirements of this clause subject to verification of 
the previous

[[Page 30424]]

investigation. For each such employee, the contractor shall submit the 
following information in lieu of the forms and information listed in 
paragraph (d)(1) of this clause: Employee's full name, Social Security 
number, and place and date of birth.
    (4) The investigation process shall consist of a range of personal 
background inquiries and contacts (written and personal) and 
verification of the information provided on the investigative forms 
described in paragraph (d)(1) of this clause.
    (5) Upon completion of the investigation process, the GTR will 
notify the contractor if any contractor employee is determined to be 
unsuitable to have access to the system(s), application(s), or 
information. Such an employee may not be given access to those 
resources. If any such employee has already been given access pending 
the results of the background investigation, the contractor shall 
ensure that the employee's access is revoked immediately upon receipt 
of the GTR's notification.
    (6) Failure of the GTR to notify the contractor (see subparagraph 
(d)(1)) of any employee who should be subject to the requirements of 
this clause and is known, or should reasonably be known, by the 
contractor to be subject to the requirements of this clause, shall not 
excuse the contractor from making such employee(s) known to the GTR. 
Any such employee who is identified and is working under the contract, 
without having had the appropriate background investigation or 
furnished the required forms for the investigation, shall cease to 
perform such work immediately and shall not be given access to the 
system(s)/application(s) described in paragraph (b) of this clause 
until the contractor has provided the investigative forms required in 
paragraph (d)(1) of this clause for the employee to the GTR.
    (7) The contractor shall notify the GTR in writing whenever a 
contractor employee for whom a background investigation package was 
required and submitted to HUD, or for whom a background investigation 
was completed, terminates employment with the contractor or otherwise 
is no longer performing work under this contract that requires access 
to the system(s), application(s), or information. The contractor shall 
provide a copy of the written notice to the Contracting Officer.
    (e) PIV Cards.
    (1) HUD will issue a PIV Card to each contractor employee who is to 
be given access to HUD systems and does not already possess a PIV Card 
acceptable to HUD (see paragraph (b) of this clause). HUD will not 
issue the PIV Card until the contractor employee has successfully 
cleared an FBI National Criminal History Fingerprint Check, and HUD has 
initiated the background investigation for the contractor employee. 
Initiation is defined to mean that all background information required 
in paragraph (d)(1) of this clause has been delivered to HUD. The 
employee may not be given access prior to those two events. HUD may 
issue a PIV Card and grant access pending the completion of the 
background investigation. HUD will revoke the PIV Card and the 
employee's access if the background investigation process (including 
adjudication of investigation results) for the employee has not been 
completed within 6 months after the issuance of the PIV Card.
    (2) PIV Cards shall identify individuals as contractor employees. 
Contractor employees shall display their PIV Cards on their persons at 
all times while working in a HUD facility, and shall present cards for 
inspection upon request by HUD officials or HUD security personnel.
    (3) The contractor shall be responsible for all PIV Cards issued to 
the contractor's employees and shall immediately notify the GTR if any 
PIV Card(s) cannot be accounted for. The contractor shall promptly 
return PIV Cards to HUD as required by the FAR clause at 52.204-9. The 
contractor shall notify the GTR immediately whenever any contractor 
employee no longer has a need for his/her HUD-issued PIV Card (e.g., 
the employee terminates employment with the contractor, the employee's 
duties no longer require access to HUD systems). The GTR will instruct 
the contractor as to how to return the PIV Card. Upon expiration of 
this contract, the GTR will instruct the contractor as to how to return 
all HUD-issued PIV Cards not previously returned. Unless otherwise 
directed by the Contracting Officer, the contractor shall not return 
PIV Cards to any person other than the GTR.
    (f) Control of access. HUD shall have and exercise full and 
complete control over granting, denying, withholding, and terminating 
access of contractor employees to HUD systems. The GTR will notify the 
contractor immediately when HUD has determined that an employee is 
unsuitable or unfit to be permitted access to a HUD system. The 
contractor shall immediately notify such employee that he/she no longer 
has access to any HUD system, physically retrieve the employee's PIV 
Card from the employee, and provide a suitable replacement employee in 
accordance with the requirements of this clause.
    (g) Incident response notification. An incident is defined as an 
event, either accidental or deliberate, that results in unauthorized 
access, loss, disclosure, modification, or destruction of information 
technology systems, applications, or data. The contractor shall 
immediately notify the GTR and the Contracting Officer of any known or 
suspected incident, or any unauthorized disclosure of the information 
contained in the system(s) to which the contractor has access.
    (h) Nondisclosure of information.
    (1) Neither the contractor nor any of its employees shall divulge 
or release data or information developed or obtained during performance 
of this contract, except to authorized government personnel with an 
established need to know, or upon written approval of the Contracting 
Officer. Information contained in all source documents and other media 
provided by HUD is the sole property of HUD.
    (2) The contractor shall require that all employees who may have 
access to the system(s)/applications(s) identified in paragraph (b) of 
this clause sign a pledge of nondisclosure of information. The 
employees shall sign these pledges before they are permitted to perform 
work under this contract. The contractor shall maintain the signed 
pledges for a period of 3 years after final payment under this 
contract. The contractor shall provide a copy of these pledges to the 
GTR.
    (i) Security procedures.
    (1) The Contractor shall comply with applicable federal and HUD 
statutes, regulations, policies, and procedures governing the security 
of the system(s) to which the contractor's employees have access 
including, but not limited to:
    (i) The Federal Information Security Management Act (FISMA) of 
2002;
    (ii) OMB Circular A-130, Management of Federal Information 
Resources, Appendix III, Security of Federal Automated Information 
Resources;
    (iii) HUD Handbook 2400.25, Information Technology Security Policy;
    (iv) HUD Handbook 732.3, Personnel Security/Suitability;
    (v) Federal Information Processing Standards 201 (FIPS 201), 
Sections 2.1 and 2.2;
    (vi) Homeland Security Presidential Directive 12 (HSPD-12); and
    (vii) OMB Memorandum M-05-24, Implementing Guidance for HSPD-12. 
The HUD Handbooks are available online at: http://www.hud.gov/offices/adm/hudclips/ or from the GTR.

[[Page 30425]]

    (2) The contractor shall develop and maintain a compliance matrix 
that lists each requirement set forth in paragraphs, (b), (c), (d), 
(e), (f), (g), (h), (i)(1), and (m) of this clause with specific 
actions taken, and/or procedures implemented, to satisfy each 
requirement. The contractor shall identify an accountable person for 
each requirement, the date upon which actions/procedures were 
initiated/completed, and certify that information contained in this 
compliance matrix is correct. The contractor shall ensure that 
information in this compliance matrix is complete, accurate, and up-to-
date at all times for the duration of this contract. Upon request, the 
contractor shall provide copies of the current matrix to the 
contracting officer and/or government technical representative.
    (3) The Contractor shall ensure that its employees, in performance 
of the contract, receive annual training (or once if the contract is 
for less than one year) in HUD information technology security 
policies, procedures, computer ethics, and best practices in accordance 
with HUD Handbook 2400.25.
    (j) Access to contractor's systems. The Contractor shall afford 
authorized personnel, including the Office of Inspector General, access 
to the Contractor's facilities, installations, operations, 
documentation (including the compliance matrix required under paragraph 
(i)(2) of this clause), databases, and personnel used in performance of 
the contract. Access shall be provided to the extent required to carry 
out, but not limited to, any information security program activities, 
investigation, and audit to safeguard against threats and hazards to 
the integrity, availability, and confidentiality of HUD data and 
systems, or to the function of information systems operated on behalf 
of HUD, and to preserve evidence of computer crime.
    (k) Contractor compliance with this clause. Failure on the part of 
the contractor to comply with the terms of this clause may result in 
termination of this contract for default.
    (l) Physical access to Federal Government facilities. The 
contractor and any subcontractor(s) shall also comply with the 
requirements of HUDAR clause 2452.237-75 when the contractor's or 
subcontractor's employees will perform any work under this contract on 
site in a HUD or other Federal Government facility.
    (m) Subcontracts. The contractor shall incorporate this clause in 
all subcontracts where the requirements specified in paragraph (b) of 
this section are applicable to performance of the subcontract.


(End of clause)

0
30. Add section 2452.244-70 to read as follows:


2452.244-70  Consent to subcontract.

    As prescribed in HUDAR Section 2444.204(a), insert the following 
clause in contracts and task orders with an estimated value exceeding 
$10,000,000.
    CONSENT TO SUBCONTRACT ([Insert month and year of publication of 
final rule])
    (a) Due to the substantive nature of subcontracting that may be 
necessary during performance of this contract, the Contracting Officer 
has determined that a consent for individual subcontracts is required 
to adequately protect the Government. Consent is required for--
    (1) Cost-reimbursement, time-and-materials, or labor-hour 
subcontracts, or combination of such, in excess of $150,000 per year to 
a single subcontractor or consultant;
    (2) Fixed price subcontracts in excess of 25% of the annual 
contract value to a single subcontractor or consultant.
    (b) If subcontracts meeting the above parameters were not provided 
during the negotiation of the original contract award, the Contractor 
shall obtain post award consent and provide signed copies of the 
subcontract agreements within 10 days of consent.
    (c) The Contractor shall provide the Contracting Officer with 30 
days advance notification prior to changing subcontractors or existing 
subcontracting agreements, unless precluded due to circumstances beyond 
the control of the contractor. If advance notification is not feasible, 
the Contractor shall provide notification to the Contracting Officer no 
later than 10 days after the Contractor identifies the need to replace 
a subcontractor. The notification shall include a copy of the proposed 
new subcontracting agreement. Upon consent and finalization of the 
final subcontract agreement, the Contractor shall provide a copy of the 
signed agreement to the Contracting Officer.
    (d) The Contracting Officer's consent to a subcontract does not 
constitute a determination of the acceptability of the subcontract 
terms or price, or of the allowability of costs.
    (e) If not required elsewhere in the contract, no more than 30 
calendar days after award, the Contractor shall provide a separate 
continuity of services plan to the Contracting Officer that will ensure 
services performed by subcontractors that cost more than 25% of the 
cost/price of the contract will continue uninterrupted in the event of 
performance problems or default by the subcontractor.


(End of clause)

0
31. Add subpart 2452.3 to read as follows:

Subpart 2452.3--Matrix

0
32. Add section 2452.3 to read as follows:


2452.3  Provision and clause matrix.

    HUDAR Matrix.
BILLING CODE 4210-67-P

[[Page 30426]]

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[[Page 30427]]


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[[Page 30428]]


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[[Page 30429]]


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[[Page 30430]]


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    Dated: April 13, 2015.
Keith W. Surber,
Acting Chief Procurement Officer.
[FR Doc. 2015-12275 Filed 5-27-15; 8:45 am]
BILLING CODE 4210-67-C