Proposed Rule2022-07786
United States Agency for International Development (USAID) Acquisition Regulation (AIDAR): Foreign Tax Reporting, Conference Planning, and Trade and Investment Activities
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Published
April 18, 2022
Issuing agencies
Agency for International Development
Abstract
The United States Agency for International Development (USAID) proposes to amend its Acquisition Regulation (AIDAR) regarding contractor requirements on foreign tax reporting, conference planning, and trade and investment activities. These revisions are intended to bring the AIDAR into compliance with revised Agency policies and procedures and statutory requirements.
Full Text
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<title>Federal Register, Volume 87 Issue 74 (Monday, April 18, 2022)</title>
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[Federal Register Volume 87, Number 74 (Monday, April 18, 2022)]
[Proposed Rules]
[Pages 22843-22847]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-07786]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
48 CFR Parts 726, 729, 731 and 752
RIN 0412-AB04
United States Agency for International Development (USAID)
Acquisition Regulation (AIDAR): Foreign Tax Reporting, Conference
Planning, and Trade and Investment Activities
AGENCY: U.S. Agency for International Development.
ACTION: Proposed rule.
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SUMMARY: The United States Agency for International Development (USAID)
proposes to amend its Acquisition Regulation (AIDAR) regarding
contractor requirements on foreign tax reporting, conference planning,
and trade and investment activities. These revisions are intended to
bring the AIDAR into compliance with revised Agency policies and
procedures and statutory requirements.
DATES: Interested parties should submit written comments at one of the
addresses shown below on or before June 17, 2022 to be considered in
the formation of the final rule.
ADDRESSES: Submit comments, identified by the title of the action and
Regulatory Information Number (RIN) through the Federal eRulemaking
Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> by following the instructions for
submitting comments. Please include your name, company name (if any),
and ``0412-AB04'' on any attachments. If your comment cannot be
submitted using <a href="https://www.regulations.gov">https://www.regulations.gov</a>, please email the point of
contact in the FOR FURTHER INFORMATION CONTACT section of this document
for alternate instructions.
FOR FURTHER INFORMATION CONTACT: Kelly Miskowski, USAID/M/OAA/P,
<a href="/cdn-cgi/l/email-protection#99e9f6f5f0fae0f4f8f0f5fbf6e1d9eceaf8f0fdb7fef6ef"><span class="__cf_email__" data-cfemail="bacad5d6d3d9c3d7dbd3d6d8d5c2facfc9dbd3de94ddd5cc">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
A. Instructions
All comments must be in writing and submitted through the method
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.
All comments will be made available at <a href="http://www.regulations.gov">http://www.regulations.gov</a>
for public review without change, including any personal information
provided. We recommend that you do not submit information that you
consider Confidential Business Information (CBI) or any information
that is otherwise protected from disclosure by statute.
USAID will only address substantive comments on the rule. USAID may
not consider comments that are insubstantial or outside the scope of
the proposed rule.
B. Background
Several parts in the AIDAR are outdated and no longer comply with
statutory requirements or current agency policies and procedures. USAID
proposes to amend the AIDAR as follows:
1. 48 CFR part 726, subpart 726.71 Relocation of U.S. Businesses,
Assistance to Export Processing Zones, Internationally Recognized
Workers' Rights refers to agency Policy Determination (PD) 20,
``Guidelines to Assure USAID Programs do not Result in the Loss of Jobs
in the U.S.'' PD 20 was replaced in agency policy by Automated
Directives System (ADS) Chapter 225, Program Principles for Trade and
Investment Activities and the ``Impact on U.S. Jobs'' and ``Workers'
Rights.'' ADS 225 is available at <a href="https://www.usaid.gov/ads/policy/200/225">https://www.usaid.gov/ads/policy/200/225</a>. USAID proposes amending the AIDAR to revise subpart 726.71 to
prescribe when to include a new clause in section 752.226-70 in a
solicitation and contract.
ADS 225 mandates that requiring offices and planners perform the
necessary analyses to ensure that USAID-funded ``trade and investment''
activities do not: (a) Provide financial incentives and other
assistance for U.S. companies to relocate operations abroad if it is
likely to result in the loss of U.S. jobs; (b) Contribute to violations
of internationally recognized workers' rights defined in 19 U.S.C.
2467(4); (c) Provide financial incentives for entities located outside
the United States to relocate or transfer jobs from the United States
to other countries or provide financial incentives that would adversely
affect the labor force in the United States; and/or (d) Provide
assistance for enforcement of certain rules if the enforcement would
prohibit certain coal-fired or other power-generation projects. If the
analyses conclude that the activity is a ``gray-area'' as described in
that chapter, and the contract statement of work includes either gray-
area activities or investment-related activities where specific
activities are not identified at the time of obligation but could be
for investment-related activities, as described in ADS Chapter 225,
then the requiring office will provide the contracting officer with a
clause substantially the same as new section 752.226-70 to include in
the solicitation and resulting contract.
2. USAID proposes to amend AIDAR Section 729.402-70 and the
corresponding clause in 752.229-71 to update them to comply with
current statutory requirements. The annual Department of State, Foreign
Operations, and Related Programs Appropriations Act (SFOAA) mandates
that agencies take certain actions to prevent taxation of foreign
assistance provided with funds appropriated in an SFOAA, or to obtain
full reimbursement of all taxes paid.
[[Page 22844]]
Consistent with the statutory requirements, the AIDAR includes a
clause requiring contractors to annually report the amount of foreign
taxes assessed against foreign assistance funding during the preceding
fiscal year and not reimbursed. The AIDAR reporting requirement has not
been updated to reflect the changes Congress made to the foreign tax
provision in 2014, specifically the revisions to the definition of
``foreign taxes'' and the types of transactions subject to the
reporting requirements. The statutory definition of that term now
includes all types of taxes imposed by the foreign government,
including but not limited to value added taxes (VAT) and customs
duties, but excluding individual income taxes assessed to local staff.
Consistent with the current version of the SFOAA, the types of
reportable transactions are expanded from ``commodity purchase
transactions'' to all taxes assessed, with the exception of any foreign
tax of a de minimis nature.
3. Section 731.205-43 and the corresponding clause in 752.231-72
are amended to include the current agency policy and procedures for
funding conference costs in USAID contracts. USAID proposes adding new
sections 731.374 and 731.775 to include these approval policies and
procedures in the cost principles for contracts with educational
institutions and nonprofit organizations, respectively. USAID policy on
conferences is in ADS 580 Conference Planning and Attendance, which is
available at <a href="https://www.usaid.gov/ads/policy/500/580">https://www.usaid.gov/ads/policy/500/580</a>. USAID has
revised ADS 580 several times since the AIDAR was initially amended to
add these two sections; the most recent revision was in February 2021
and reduced the number of USAID employees attending a conference that
triggers the requirement for the contractor to obtain the agency's
prior approval from 20 to 10. This proposed rule includes this number,
retains the current requirement for the contractor to obtain approval
when the net conference expenses by USAID will exceed $100,000, and
revises both sections for clarity.
C. Regulatory Planning and Review
Executive Orders (E.O.s) 12866, Regulatory Planning and Review, and
13563, Improving Regulation and Regulatory Review, direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
E.O. 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been determined ``nonsignificant'' under
E.O. 12866. This rule is not a major rule under 5 U.S.C. 804.
D. Regulatory Flexibility Act
USAID does not expect this proposed rule to have a significant
economic 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.
E. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The
proposed rule contains information collection requirements.
Accordingly, USAID has submitted a request for approval of a new
information collection requirement concerning this rule to the Office
of Management and Budget.
The outlined information collections are an element of a proposed
rule that implements USAID requirements for reporting foreign tax and
conference planning. The proposed rule will amend AIDAR Section
729.402-70 and the corresponding clause in 752.229-71 to align foreign
tax reporting requirements with relevant statutory requirements
(Collection 1); Section 731.205-43 and the corresponding clause in
752.231-72; and add new sections 731.374 and 731.775 (Collection 2).
These last two revisions are to align the AIDAR with USAID's conference
planning policy.
1. Request for Comments Regarding Paperwork Burden
Submit comments, including suggestions for reducing this burden,
not later than June 17, 2022 using the method specified in the
Addresses section above.
Public comments are particularly invited on: Whether this
collection of information is necessary for the proper performance of
functions of the AIDAR, and will have practical utility; whether our
estimate of the public burden of this collection of information is
accurate, and based on valid assumptions and methodology; ways to
enhance the quality, utility, and clarity of the information to be
collected; and ways in which we can minimize the burden of the
collection of information on those who are to respond, through the use
of appropriate technological collection techniques or other forms of
information technology.
Requesters may obtain a copy of the supporting statement by
contacting <a href="/cdn-cgi/l/email-protection#94e4fbf8fdf7edf9f5fdf8f6fbecd4e1e7f5fdf0baf3fbe2"><span class="__cf_email__" data-cfemail="d3a3bcbfbab0aabeb2babfb1bcab93a6a0b2bab7fdb4bca5">[email protected]</span></a>. Please cite RIN Number 0412-AB04 in
all correspondence.
2. Abstract for Collection
Collection 1
The public reporting burden for this collection of information is
estimated as follows:
Respondents: 900.
Responses per respondent: 1.
Total annual responses: 900.
Preparation hours per response: 1.
Total response burden hours: 900.
Collection 2
The public reporting burden for this collection of information is
estimated as follows:
Respondents: 20.
Responses per respondent: 1.
Total annual responses: 20.
Preparation hours per response: 2.
Total response burden hours: 40.
List of Subjects in 48 CFR Chapter 7 Parts 726, 729, 731 and 752
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 Chapter 7 parts 726, 729, 731, and
752 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.
0
2. The authority citation for 48 CFR Chapter 7 part 729 is revised 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 726-OTHER SOCIOECONOMIC PROGRAMS
Subpart 726.71--Trade and Investment Activities, the ``Impact on
U.S. Jobs'' and ``Workers' Rights''.
0
3. Revise Sec. 726.7101 to read as follows:
726.7101 Trade and Investment Activities and the ``Impact on U.S.
Jobs''.
(a) Policy. USAID policy and required procedures in ADS 225 Program
Principles for Trade and Investment Activities and the ``Impact on U.S.
Jobs'' and ``Workers' Rights'' implement statutory prohibitions on
obligation and expenditure of appropriated funds. ADS 225 requires
Agency operating units to analyze a project or activity to ensure
[[Page 22845]]
compliance with U.S. foreign policy objectives as stated in Section 601
of the Foreign Assistance Act (FAA) of 1961, as amended; the U.S.
Government's trade and development objectives set forth in trade
legislation; and related policy documents. If the analysis concludes
that the project or activity meets the criteria for what the ADS
chapter describes as ``gray-area activities'' or if the contract
statement of work has the potential to evolve into what the chapter
defines as a prohibited activity, then the planner must include in the
procurement request language appropriately tailored to the specific
circumstances for the contract statement of work.
(b) Special contract requirement. The contracting officer must
insert in Section H of the uniform contract format a clause
substantially the same as the clause in 752.226-70 when informed by the
requesting operating unit that the statement of work or statement of
objectives includes gray-area activities or investment-related
activities where specific activities are not identified at the time of
obligation but could be for investment-related activities, as described
in ADS Chapter 225.
Sec. 726.7102 [Removed]
0
4. Remove Sec. 726.7102.
PART 729--TAXES
Subpart 729.4--Contract Clauses
0
5. Revise Sec. 729.402-70 to read as follows:
729.402-70 Foreign contracts.
(a) The annual Department of State, Foreign Operations, and Related
Programs Appropriations Act (SFOAA) requires USAID to take certain
steps to prevent countries from imposing taxes, including value added
tax (VAT) and customs duties, on U.S. foreign assistance, or if
imposed, requires the countries to reimburse the assessed taxes or
duties. The SFOAA also requires certain reporting to Congress on host
country taxation. Because countries imposing such taxes assess them
directly on contractors, USAID requires contractors to report annually
on whether taxes have been imposed and, if so, whether the foreign
government reimbursed the taxes.
(b) The contracting officer must insert the clause at Sec.
752.229-71, Reporting of Foreign Taxes in solicitations and resulting
contracts when:
(1) A contract is fully or partially funded with funds appropriated
under titles III through VI of an SFOAA making appropriations for the
Department of State, foreign operations, and related programs, and
(2) the contract is to be performed wholly or partly in a foreign
country.
PART 731--CONTRACT COST PRINCIPLES AND PROCEDURES
Subpart 731.2--Contracts with Commercial Organizations
0
6. Revise Sec. 731.205-43 to read as follows:
731.205-43 Trade, business, technical and professional activity
costs--USAID conference approval requirements.
(a) Definitions. As used in this section--
Conference means a seminar, meeting, retreat, symposium, workshop,
training activity or other such event that is funded in whole or in
part by USAID.
Net conference expense means the total conference expenses
excluding: Any fees or revenue received by the Agency through the
conference, costs to ensure the safety of attending governmental
officials, and salary of USAID employees and USAID personal services
contractors.
Personal Services Contractor (PSC) means any individual who is
awarded a personal services contract in accordance with AIDAR
appendices D or J.
Temporary duty (TDY) travel means official travel at least fifty
(50) miles from both the traveler's home and duty station for a period
exceeding twelve (12) hours.
USAID employee means a USAID direct-hire employee or a direct-hire
federal employee from another U.S. government agency detailed to USAID.
(b) Prior Approval. USAID policy requires contractors to obtain
contracting officer approval of the following, unless an exception in
paragraph (c) of the clause at 752.231-72 applies:
(1) A conference funded in whole, or in part, by USAID when ten
(10) or more USAID employees or personal services contractors are
required to travel on temporary duty status to attend the conference;
or
(2) A conference funded in whole, or in part, by USAID when the net
conference expense funded by USAID is expected to exceed $100,000,
regardless of the number of USAID employees or USAID personal services
contractors who will participate in the conference.
(c) Allowability of Cost. Costs associated with a conference that
meets the criteria above, incurred without USAID prior written
approval, are unallowable.
(d) Solicitation Provision and Contract Clause. Contracting
officers must insert the clause at 752.231-72 in all USAID-funded
solicitations and contracts anticipated to include a requirement for a
USAID-funded conference.
Subpart 731.3--Contracts With Educational Institutions
0
7. Add Sec. 731.374 to read as follows:
731.374 Conference approval requirements.
USAID's policies regarding conference approval requirements are set
forth in (48 CFR) AIDAR 731.205-43. These policies are also applicable
to contracts with an educational institution.
Subpart 731.7--Contracts With Nonprofit Organizations
0
8. Add Sec. 731.775 to read as follows:
731.775 Conference approval requirements.
USAID's policies regarding conference approval requirements are set
forth in (48 CFR) AIDAR 731.205-43. These policies are also applicable
to contracts with an educational institution.
PART 752--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
Subpart 752.2--Text of Provisions and Clauses
0
9. Add Sec. 752.226-70 to read as follows:
752.226-70 Trade and Investment. Activities, the ``Impact on U.S.
Jobs'' and ``Workers' Rights''.
As prescribed in 48 CFR 726.7101(b), insert a clause substantially
as follows:
Trade and Investment Activities and the ``Impact on U.S. Jobs'' (Date
TBD)
(a) Except as specifically set forth in this contract or otherwise
authorized by USAID in writing, no funds or other support provided
under this contract may be used for any activity that: Provides
financial incentives and other assistance for U.S. companies to
relocate operations abroad if it is likely to result in the loss of
U.S. jobs; contributes to violations of internationally recognized
workers' rights defined in 19 U.S.C. 2467(4); or provides financial
incentives for entities located outside the United States to relocate
or transfer jobs from the United States to other countries or provide
financial incentives that would adversely affect the labor force in the
United States.
(b) In the event the Contractor is requested to provide services in
any of
[[Page 22846]]
the above areas or requires clarification from USAID as to whether an
activity would be consistent with the limitation set forth above, the
Contractor must notify the contracting officer and provide a detailed
description of the expected impact of the proposed activity. The
Contractor must not proceed with the activity until advised by USAID in
writing that it may do so.
(c) The Contractor must ensure that its employees and
subcontractors providing trade and investment support services are made
aware of the restrictions set forth in this clause and must include
this clause in all subcontracts.
[END OF CLAUSE]
0
10. Revise Sec. 752.229-71 to read as follows:
752.229-71 Reporting of Foreign Taxes.
As prescribed in (48 CFR) AIDAR 729.402-70(b), insert the following
clause in applicable solicitations and resulting contracts. The
contracting officer must insert the address and point of contact at the
Embassy, Mission, or M/CFO/CMP as appropriate under paragraph (d) of
this clause.
Reporting of Foreign Taxes (Date TBD)
(a) Definitions. As used in this clause--
Foreign government includes any foreign governmental entity.
Foreign taxes include value-added taxes and customs duties but not
individual income taxes assessed to local staff.
Local Staff means Cooperating Country National employees.
(b) Annual report. (1) The Contractor must submit a report
detailing foreign taxes assessed under this contract during the prior
U.S. government fiscal year. The report must be submitted annually by
April 16.
(2) A report is required even if the Contractor did not pay any
foreign taxes during the reporting period. A cumulative report may be
provided if the Contractor is performing more than one award in the
foreign country.
(c) Contents of report. The report must contain:
(1) Contractor name.
(2) Contact name with phone number and email address.
(3) Contract number(s).
(4) Amount of foreign taxes assessed by each foreign government
(listed separately) under this contract during the prior U.S.
Government fiscal year.
(i) Taxes assessed on any individual transaction of less than $500
should not be reported.
(ii) The contractor must report only foreign taxes assessed by a
foreign government receiving U.S. assistance under this contract. The
Contractor must not report on foreign taxes assessed by a third-party
foreign government.
(5) Any reimbursements of foreign taxes received by the Contractor
on the taxes reported in paragraph (c)(4) of this clause received
through the date of the report.
(d) Submission of report. The Contractor must submit the report to:
[Contracting Officer must insert address and point of contact at the
Embassy or Mission in the country in which the contract will be
performed, or CFO/CMP for USAID/W-issued contracts, as appropriate],
with a copy to the Contracting Officer's Representative.
(e) Subcontracts. The Contractor must include this reporting
requirement in all subcontracts issued under this contract. The
Contractor shall collect and incorporate into the Contractor's report
all information received from subcontractors pursuant to this clause.
(End of clause)
0
11. Revise Sec. 752.231-71 to read as follows:
752.231-72 Conference planning and required approval.
As prescribed in (48 CFR) AIDAR 731.205-43(d), insert the following
clause in section H of all USAID-funded solicitations and contracts
anticipated to include a requirement for a USAID-funded conference.
Conference Planning and Required Approval (Date TBD)
(a) Definitions. As used in this clause--
Conference means a seminar, meeting, retreat, symposium, workshop,
training activity or other such event that is funded in whole or in
part by USAID.
Net conference expense means the total conference expenses
excluding: Any fees or revenue received by the Agency through the
conference, costs to ensure the safety of attending governmental
officials, and salary of USAID employees and USAID personal services
contractors.
Personal Services Contractor (PSC) means any individual who is
awarded a personal services contract in accordance with AIDAR
appendices D or J.
Temporary duty (TDY) travel means official travel at least fifty
(50) miles from both the traveler's home and duty station for a period
exceeding twelve (12) hours.
USAID employee means a USAID direct-hire employee or a direct-hire
federal employee from another U.S. government agency detailed to USAID.
(b) Prior Approval. Unless an exception in paragraph (c) applies,
the Contractor must obtain prior written approval from the contracting
officer at least 30 days prior to committing costs, for the following:
(1) A conference funded in whole or in part by USAID when ten (10)
or more USAID employees or Personal Services Contractors are required
to travel on temporary duty status to attend the conference; or
(2) A conference funded in whole or in part by USAID and attended
by USAID employees or USAID Personal Services Contractors, when the net
conference expense funded by USAID is expected to exceed $100,000,
regardless of the number of USAID participants.
(c) Exceptions. Prior USAID approval is not required for the
following:
(1) Co-creation conferences to facilitate the design of programs or
procurements.
(2) Events funded and scheduled by the Center for Professional
Development within the USAID Office of Human Capital and Talent
Management.
(3) A single course presented by an instructor conducted at a U.S.
Government training facility (including the Washington Learning Center
or other USAID training facilities), a commercial training facility, or
other venue if a U.S. Government training facility is not available.
(4) Conferences conducted at a U.S. Government facility or other
venue not paid directly or indirectly by USAID, when travel of USAID
employees or USAID Personal Services Contractors, light refreshments
and, if applicable, costs associated with participation of the
contractor's staff are the only direct costs associated with the event.
(d) Allowability of Cost. Costs associated with a conference that
meet the criteria above, incurred without USAID prior written approval,
are unallowable.
(e) Post-Award. Conferences approved at the time of award will be
incorporated into the contract. The contractor must submit subsequent
requests for approval of conferences on a case-by-case basis, or
requests for multiple conferences may be submitted at one time.
(f) Documentation. Requests for approval of a conference that meets
the criteria in paragraphs (b) of this section must include:
(1) A brief summary of the proposed event;
(2) A justification for the conference and alternatives considered,
e.g., teleconferencing and video-conferencing;
[[Page 22847]]
(3) The estimated budget by line item (e.g., travel and per diem,
venue, facilitators, meals, equipment, printing, access fees, ground
transportation);
(4) A list of USAID employees or PSCs attending and a justification
for each, and the number of other USAID-funded participants (e.g.,
contractor personnel);
(5) A cost comparison for at least three potential venues
(including a U.S. Government owned or leased facility) and a
justification if the lowest cost facility is not selected;
(6) If meals will be provided to local USAID employees or PSCs (a
local employee would not be in travel status), a statement on whether
the meals are a necessary expense to support the conference objectives;
and
(7) A statement signed by an employee of the Contractor with
authority to bind the Contractor, confirming that strict fiscal
responsibility has been exercised in making decisions regarding
conference expenditures, the proposed costs are comprehensive and
represent the greatest cost advantage to the U.S. Government, and that
the proposed conference representation has been limited to the minimum
number necessary to support the conference objectives.
(End of clause)
Luis Rivera,
Acting Senior Procurement Executive, U.S. Agency for International
Development.
[FR Doc. 2022-07786 Filed 4-15-22; 8:45 am]
BILLING CODE 6116-01-P
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