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Rule2024-23817

Department of Energy Acquisition Regulation (DEAR)

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Published

November 13, 2024

Effective

December 13, 2024

Issuing agencies

Energy Department

Abstract

The Department of Energy (DOE or the Department) is publishing a final rule comprehensively revising its Acquisition Regulation in order to update and streamline the policies, procedures, provisions and clauses that are applicable to the Department's contracts. This rulemaking updates or eliminates coverage that is obsolete or that unnecessarily duplicates the Federal Acquisition Regulation (FAR) and retains only that coverage which either implements or supplements the FAR for the award and administration of the DOE's contracts. The rule adds several new clauses and amends several existing clauses in order to promote more uniform application of the DOE's contract award and administration policies.

Full Text

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<title>Federal Register, Volume 89 Issue 219 (Wednesday, November 13, 2024)</title>
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[Federal Register Volume 89, Number 219 (Wednesday, November 13, 2024)]
[Rules and Regulations]
[Pages 89720-89830]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-23817]

[[Page 89719]]

Vol. 89

Wednesday,

No. 219

November 13, 2024

Part II

Department of Energy

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48 CFR Chapter 9

Department of Energy Acquisition Regulation; Final Rule

Federal Register / Vol. 89, No. 219 / Wednesday, November 13, 2024 /
Rules and Regulations

[[Page 89720]]

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DEPARTMENT OF ENERGY

48 CFR Chapter 9

RIN 1991-AC17

Department of Energy Acquisition Regulation (DEAR)

AGENCY: Department of Energy.

ACTION: Final rule.

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SUMMARY: The Department of Energy (DOE or the Department) is publishing
a final rule comprehensively revising its Acquisition Regulation in
order to update and streamline the policies, procedures, provisions and
clauses that are applicable to the Department's contracts. This
rulemaking updates or eliminates coverage that is obsolete or that
unnecessarily duplicates the Federal Acquisition Regulation (FAR) and
retains only that coverage which either implements or supplements the
FAR for the award and administration of the DOE's contracts. The rule
adds several new clauses and amends several existing clauses in order
to promote more uniform application of the DOE's contract award and
administration policies.

DATES: This rule is effective December 13, 2024.

FOR FURTHER INFORMATION CONTACT: Mr. Jason Taylor, U.S. Department of
Energy, Office of Management, Office of Acquisition Management at (301)
518-2257 or by email at <a href="/cdn-cgi/l/email-protection#472d263428296933263e2b2835072f366923282269202831"><span class="__cf_email__" data-cfemail="afc5cedcc0c181dbced6c3c0ddefc7de81cbc0ca81c8c0d9">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Renumbering
III. Discussion of Comments and Changes From the Proposed Rule
IV. Section-by-Section Analysis
V. Regulatory Review
A. Review Under Executive Orders 12866, 13563 and 14094
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Congressional Notification
VI. Approval of the Office of the Secretary

I. Background

The Federal Acquisition Regulation (FAR), 48 CFR chapter 1, is the
primary regulation for use by all executive agencies in their
acquisition of supplies and services with appropriated funds. The
Office of Federal Procurement Policy Act (OFPP Act), 41 U.S.C. 1702,
authorizes the issuance of agency-specific acquisition regulations that
implement or supplement the FAR. Pursuant to this authority, DOE and
the National Nuclear Security Administration (NNSA) promulgated the
Department of Energy Acquisition Regulation (DEAR), set forth at 48 CFR
chapter 9, to provide uniform acquisition policies and procedures for
DOE and NNSA. This final rule to update the DEAR is issued under that
same authority.
Over the past decade, DOE has worked to improve the way it conducts
business with its contractors by strengthening contract management
policies and practices and implementing new processes throughout the
Department complex. In the spirit of alleviating unnecessary regulatory
burdens while remaining prudent stewards of taxpayer resources, DOE
undertook a review of its acquisition framework, including the DEAR.
As a result of that process, DOE issued a notice of proposed
rulemaking (NOPR) on October 26, 2023, proposing amendments to the DEAR
to update or remove obsolete provisions, incorporate class deviations,
streamline policies and procedures where appropriate, and implement ten
new clauses which would standardize clause language and eliminate the
need for various local clauses in current use (88 FR 73644). In
response to comments received on the NOPR, DOE has made several changes
to the proposed language, as discussed in more detail in section III of
this document but left the majority of the proposed language unchanged.
This final rule amends the DEAR to correct inconsistencies, remove
provisions which unnecessarily duplicate coverage contained in the FAR,
delete outdated information, and renumber DEAR provisions where
required, in order to comport with the FAR numbering. The final rule
includes revisions to 48 CFR parts 901, 902, 903, 904, 908, 909, 912,
915, 916, 917, 922, 923, 925, 926, 927, 931, 932, 933, 935, 936, 941,
942, 945, 951, 952, and 970.

II. Renumbering

As discussed in the proposed rule, DOE is renumbering existing and
proposed DEAR sections that have section numbers containing two dashes
(e.g., section 915.404-4-70), in order to conform with the FAR
numbering system as outlined at 48 CFR 1.105-2. DOE is also making
conforming changes to other sections of the DEAR as necessary to
implement the new numbering. Finally, DOE is also renumbering existing
DEAR sections in subparts 923 and 970.23 as necessary to conform with
the recent restructuring of FAR Part 23 accomplished under FAR Case
2022-006. Conforming changes have been made in other sections of the
DEAR as necessary to implement the new numbering. The following table
provides an overview of the redesignations:

------------------------------------------------------------------------
Previous section New section
------------------------------------------------------------------------
Subpart 901.3:
901.301.70............................ 901.301-70
Subpart 915.4:
915.404-2............................. 915.404-2000
915.404-2-70.......................... 915.404-2700
915.404-4............................. 915.404-4000
915.404-4-70.......................... 915.404-4700
915.404-4-70-1........................ 915.404-4710
915.404-4-70-2........................ 915.404-4720
915.404-4-70-3........................ 915.404-4730
915.404-4-70-4........................ 915.404-4740
915.404-4-70-5........................ 915.404-4750
915.404-4-70-6........................ 915.404-4760
915.404-4-70-7........................ 915.404-4770
915.404-4-70-8........................ 915.404-4780
915.404-4-71.......................... 915.404-4800
915.404-4-71-1........................ 915.404-4810
915.404-4-71-2........................ 915.404-4820
915.404-4-71-3........................ 915.404-4830
915.404-4-71-4........................ 915.404-4840
915.404-4-71-5........................ 915.404-4850
915.404-4-71-6........................ 915.404-4860
915.404-4-72.......................... 915.404-4900
Subpart 923.1:
923.101............................... 923.170
923.102............................... 923.171
923.103............................... 923.172
Subpart 923.5: Subpart 926.5:
923.500............................... 926.500
923.570............................... 926.570
923.570-1............................. 926.570-1
923.570-2............................. 926.570-2
923.570-3............................. 926.570-3
Subpart 923.9: Subpart 923.4:
923.903............................... 923.404
Subpart 927.2:
927.206-1............................. 927.202
927.206-2............................. 927.202-5
927.207............................... 927.203
927.207-1............................. 927.203-1
Subpart 927.3:
927.300............................... 927.302
927.302............................... 927.302-70
Subpart 927.4:
927.402-2............................. 927.402
927.404............................... 927.404-70
927.404-70............................ 927.404-71
Subpart 970.04:
970.0407-1............................ 970.0407-100
970.0407-1-1.......................... 970.0407-110
970.0407-1-2.......................... 970.0407-120
970.0407-1-3.......................... 970.0407-130
Subpart 970.15:

[[Page 89721]]

970.1504-1............................ 915.1504-100
970.1504-1-1.......................... 970.1504-101
970.1504-1-2.......................... 970.1504-102
970.1504-1-3.......................... 970.1504-103
970.1504-1-4.......................... 970.1504-104
970.1504-1-5.......................... 970.1504-105
970.1504-1-6.......................... 970.1504-106
970.1504-1-7.......................... 970.1504-107
970.1504-1-8.......................... 970.1504-108
970.1504-1-9.......................... 970.1504-109
970.1504-1-10......................... 970.1504-110
970.1504-1-11......................... 970.1504-111
970.1504-2............................ 970.1504-200
970.1504-2-1.......................... 970.1504-201
970.1504-3............................ 970.1504-300
970.1504-4............................ 970.1504-400
Subpart 970.22:
970.2201-1............................ 970.2201-100
970.2201-1-1.......................... 970.2201-110
970.2201-1-2.......................... 970.2201-120
970.2201-1-3.......................... 970.2201-130
970.2201-2............................ 970.2201-200
970.2201-2-1.......................... 970.2201-210
970.2201-2-2.......................... 970.2201-220
Subpart 970.23:
970.2303-2-70......................... 970.2303-2
970.2305.............................. 970.2605
970.2305-1............................ 970.2605-1
970.2305-2............................ 970.2605-2
970.2305-3............................ 970.2605-3
970.2305-4............................ 970.2605-4
970.2306.............................. 970.2606
Subpart 970.31:
970.3101-00-70........................ 970.3101-1
970.3102-3-70......................... 970.3102-370
970.3102-05........................... 970.3102-500
970.3102-05-4......................... 970.3102-504
970.3102-05-6......................... 970.3102-506
970.3102-05-18........................ 970.3102-518
970.3102-05-19........................ 970.3102-519
970.3102-05-22........................ 970.3102-522
970.3102-05-28........................ 970.3102-528
970.3102-05-30........................ 970.3102-530
970.3102-05-30-70..................... 970.3102-531
970.3102-05-33........................ 970.3102-533
970.3102-05-46........................ 970.3102-546
970.3102-05-47........................ 970.3102-547
970.3102-05-70........................ 970.3102-570
Subpart 970.32:
970.3200-1-1.......................... 970.3200-11
Subpart 970.42:
970.4207-03-02........................ 970.4207-302
970.4207-03-70........................ 970.4207-370
970.4207-05-01........................ 970.4207-501
Subpart 970.52:
970.5223-3............................ 970.5226-4
970.5223-4............................ 970.5226-5
------------------------------------------------------------------------

III. Discussion of Comments and Changes From the Proposed Rule

In response to the NOPR, DOE received twelve comments from the
following individuals/entities:

(1) Ames National Laboratory (Ames)
(2) Argonne National Laboratory (Argonne)
(3) Battelle Memorial Institute, Pacific Northwest Division (Battelle)
(4) Beta Analytic, Inc. (Beta Analytic)
(5) Fermi Research Alliance, LLC (Fermi)
(6) Lawrence Berkeley National Laboratory (LBNL)
(7) Michael Ravnitzky
(8) National Technology & Engineering Solutions of Sandia, LLC (NTESS)
(9) Princeton Plasma Physics Laboratory (PPPL)
(10) Stanford University/SLAC National Accelerator Facility (Stanford)
(11) Thomas Jefferson National Accelerator Facility (TJNAF)
(12) Triad National Security, LLC (Triad)

DOE carefully reviewed the proposed regulation in light of the
comments received during the public comment period and has attempted to
address those requesting clarification or further detail through either
revision to the text of the final rule or through clarification in this
preamble discussion.
Every comment has been analyzed and the following discussion
provides responses organized by issue.

General Support

Comment: Michael Ravnitzky offered general support for the proposed
rule, particularly the efforts to streamline the DEAR and to use plain
language. LBNL supported the inclusion of many of LBNL's Revolutionary
Working Group (RWG) model contract provisions in the proposed rule.
Likewise, SLAC appreciated the inclusion of SLAC's RWG model contract
provisions in the proposed rule.
Response: DOE appreciates the support for this rulemaking.

Extension of Comment Period

Comment: LBNL, Stanford, and Argonne requested an extension to the
time period for submitting comments.
Response: While DOE recognizes that the proposed rule was lengthy,
DOE declines to reopen the comment period, given that DOE provided 60
days for comments on the NOPR.

Existing Deviations

Comment: LBNL and Stanford requested that applicable field
elements' and contracting officers' discretion to maintain previously
approved deviations be explicitly preserved in guidance implementing
clauses revised by this rule.
Response: This final rule does not affect existing contractual
language. Any modifications to individual contracts to incorporate the
changes in clauses revised by this rule will require negotiation and
agreement of the parties.

Contract Cost Principles and Procedures

Comment: In the NOPR, DOE proposed to add a new applicability
section in subpart 970.31 (section 970.3101-00-71, renumbered section
970.3101-2 in this final rule) to clarify that the cost principles of
FAR 31.2 and DEAR 970.31 apply regardless of entity type for an M&O
contract. SLAC objected to the proposed addition because it would apply
FAR subpart 31.2 cost principles applicable to ``commercial
organizations'' to all M&O contracts regardless of entity type. The
commenter suggests that DOE retain the discretion to enter into advance
understandings and other contractual provisions on allowability that
may deviate from the principles in FAR 31.2 if permitted by other parts
of the FAR, such as when the contractor is otherwise subject to FAR
31.3. The commenter also asserts that there is no policy reason or
justification for this addition to the DEAR, which may serve to
significantly restrict DOE's pool of available contractors as well as
limit DOE national laboratories' ability to attract talent through
joint appointments with universities and nonprofits that provide
benefits that are compliant with FAR 31.3.
Response: DOE makes no changes in response to this comment. The
addition of the new section does not change any existing requirements
for M&O contractors, but rather it clarifies the existing requirement
that the cost principles of FAR 31.2 (and DEAR subpart 970.31) apply to
M&O contracts, regardless of entity type. The DEAR currently requires
DOE contracting officers to include (see DEAR 970.3270(a)(1)) DOE's M&O
contract Payments and Advances clause (found at DEAR 970.5232-2) in all
M&O contracts. Paragraph (j) of that clause requires contracting
officers to determine allowable costs in accordance with FAR subpart
31.2 and DEAR subpart 970.31. The new section simply makes the existing
requirement more apparent. DOE hopes that the placement of the section
will help prevent confusion over the requirement in the future.

Conditional Payment of Fee

Comment: DOE's conditional payment of fee policy allows for a
reduction in payment to a contractor if the contractor fails to meet a
performance requirement relating to environment, safety and health or
security or safeguarding of restricted data and other classified
information. In the NOPR, DOE proposed to expand this to also allow a
reduction in payment if the contractor fails to meet a performance
requirement related to business and financial systems.

[[Page 89722]]

LBNL, Triad, Battelle, Fermi, and TJNAF objected to the proposed
expansion of the conditional payment of fee evaluation criteria to
include ``business and financial systems.'' The commenters' primary
concern is that these systems are undefined and therefore not yet fully
developed enough to provide DOE or any M&O contractor with certainty on
what elements of a business and financial system will be reviewed and
considered. The commenters also note that other existing contract
mechanisms already exist to appropriately deal with contractor issues
in these two areas.
Response: DOE agrees with both of these concerns and has removed
the additional business and financial systems evaluation criteria from
the final rule. Sections 942.7100, 952.242-71, 970.1504-1-3 (renumbered
970.1504-103), and 970.5215-3 have been updated to reflect this change.

Key Personnel Clause (952.215-70)

Comment: The ``Key Personnel'' clause requires contractors to
notify the Contracting Officer reasonably in advance of removing,
replacing or diverting any of the listed or specified personnel under
the clause. In the NOPR, DOE proposed changing the ``reasonably in
advance'' language to a Contracting Officer fill-in which would specify
a minimum number of calendar days. Battelle objected to the proposed
change in notice requirements from ``reasonably in advance'' to a
defined minimum number of days, asserting that it has the potential to
be administratively restrictive and may not give consideration for
proper pacing and needed flexibility for recruitment/replacement of key
personnel.
Response: DOE agrees that the change is unnecessarily restrictive
and has retained the existing ``reasonably in advance'' language in
this final rule.

Nuclear Hazards Indemnity Clause (952.250-70)

Comment: In the NOPR, DOE proposed various changes to the ``Nuclear
Hazards Indemnity'' clause. Battelle commented that the level of
indemnity in paragraph (d)(ii) for work outside the United States was
not consistent with the Atomic Energy Act threshold stated at Section
170(d) of that Act and should be $500 million instead of $100 million.
Response: DOE agrees that the amount was incorrectly stated in the
NOPR. However, under Public Law 118-47 (Further Consolidated
Appropriations Act), the amount of such indemnification for nuclear
incidents outside the United States was raised from $500 million to $2
billion (42 U.S.C. 2210(d)(5)). Accordingly, DOE will update the figure
in the Nuclear Hazards Indemnity clause to $2 billion, rather than
retain the previous figure of $500 million.

M&O Conflict of Interest Clause (970.5209-70)

Comments: DOE's conflict of interest policy resides in subpart
909.5 and section 970.0905 and is implemented in contracts (including
M&O contracts) via a contract clause at section 952.209-72. In the
NOPR, DOE proposed the addition of a new conflict of interest clause in
Part 970 specific to M&O contracts. NTESS expressed concern that the
proposed conflicts of interest (COI) nomenclature would be confusing to
the workforce, and there was a risk of additional confusion about
implementation of the clause in relation to the other organizational
conflicts of interest (OCI) clauses found in M&O contracts and section
952.209-72. The commenter also noted that incorporation of the proposed
clause would ``require unfunded substantive changes to existing OCI
policies, training, systems and tools and additional workload on the
OCI team and Legal.'' Stanford expressed overall support for the
addition of the new clause but was concerned that portions of the
clause could be overly prescriptive. Stanford and PPPL suggested
clarifying in proposed paragraph (b) that the contractor's
responsibility for potential conflicts of interest of affiliates and
other entities under this clause is limited to conflicts of interest
relating to activities under the M&O contract. Fermi, Stanford, and
PPPL also proposed adding ``unless otherwise determined by the
Contracting Officer'' to the end of paragraph (b)(1)(ii) (similar to
paragraph (b)(1)(i)) because there may be occasions when it would be
desirable and for the benefit of the government to allow the contractor
to perform or participate in the work. The same three commenters
proposed that with respect to proposed paragraph (c)(6), the Government
should retain flexibility for situations in which partnerships between
the parent entity and the Department's facilities are in the
Government's interests. They explain that since in many cases the work
of the facility is to perform fundamental research, the levels of
restraint indicated in paragraph (c)(6) would be detrimental to the
mission of the facility and may deter parent contractors from investing
their own resources in supporting the Department's facilities. Finally,
these commenters suggested that the proposed requirement in paragraph
(d) to disclose all COIs that cannot be mitigated, including those of
third parties, within 10 calendar days of identifying the COI should be
changed to 30 days.
Response: While there was some support for the overall intent of
the proposed new clause, DOE agrees with NTESS that its addition does
pose a real risk of confusion regarding implementation in relation to
the policy in subpart 909.5 and the clause at section 952.209-72.
Resolution of these difficulties will require further analysis and
consultation with stakeholders in a future effort. Accordingly, DOE has
removed from this final rule the proposed new clause at section
970.5209-70, the associated prescription at section 970.0906, and the
proposed revisions to the policy at section 909.507-2 and 970.0905. In
the interest of clarity, DOE has added a sentence to the end of section
970.0905 which refers Contracting Officers to the policy in subpart
909.5.

Strategic Partnership Projects (970.5217-1)

Comment: In the NOPR, DOE proposed various changes to its
``Strategic Partnership Projects'' clause. While there were no comments
on the specific changes proposed in the NOPR, NTESS suggested a change
throughout the clause from use of the word ``proposal'' to agreement
``package'' as those words have meaning at both the General Terms &
Conditions phase versus the funding Order phase for OFA SPP. Their
context here could mean either.
Response: DOE has revised the clause to consistently reference
``SPP projects'' and eliminate the various terms such as ``proposal
package'' and ``SPP proposal''. DOE believes this clarification should
eliminate any confusion of the term ``proposal'' in other parts of the
DEAR and address the commenter's concern.

Rights in Data--Technology Transfer (970.5227-2)

Comment: LBNL, Stanford, Battelle, NTESS, PPPL, TJNAF, and Triad
objected to added language in paragraph (e)(1)(iv) regarding patent
applications containing export-controlled information (ECI) such that a
DOE funding program manager would need to approve adding such export-
controlled information or require an export license. LBNL commented
that the language may have been added by mistake. NTESS commented that
the language will likely cause confusion and may conflict with State
Department regulations and publications on filing patent applications.
Stanford expressed

[[Page 89723]]

concern that obtaining program manager approval before filing a patent
application that could contain ECI would protract patenting timelines.
Triad expressed concern that delays caused by the provision would
impact DOE's and M&O contractors' ability to provide benefit from
Federal research to U.S. industrial competitiveness, in compliance with
the National Competitiveness Technology Transfer Act of 1989.
Similarly, Battelle expressed concern that the delay associated with
the additional approval would put U.S. contractors at a competitive
disadvantage with non-U.S. entities.
Response: Based on the statutory requirements governing the filing
of U.S. patent applications and under the rules of the U.S. Patent and
Trademark Office (USPTO), DOE agrees that patent applicants, including
our M&O contractors, are legally permitted to include Export Controlled
Information (ECI) in their U.S. origin patent applications and are not
required to obtain a separate export license as long as they comply
with regulations issued by the USPTO, unless the applicant seeks to
export technical data exceeding that used to support the patent
application in a foreign country. Accordingly, DOE has removed the
language in paragraph (e)(1)(iv) requiring program manager approval
from this final rule.
Comment: The current DEAR in paragraph (c)(2) recognizes that a
contractor may assert copyright in accordance with either paragraph (d)
or (e). In the proposed rule, paragraph (f), Open Source Software, was
added to this list, so that the proposed language recognized that the
contractor may assert copyright in accordance with ``either paragraph
(d), (e), or (f).'' NTESS commented that using ``either paragraph''
implied that copyright assertion can only be one of these paths, not
multiple of these paths.
Response: DOE agrees to remove the word ``either'' to make it clear
that copyright assertion may occur under multiple paths in paragraphs
(d) through (f).

Technology Transfer Mission (970.5227-3)

Comment: Paragraph (n) concerns technology transfer through
cooperative research and development agreements (CRADAs), which are
agreements established between Government-owned, contractor-operated
laboratories and partners to perform cooperative research on topics of
mutual interest. Under proposed paragraph (n)(5)(i), DOE requires the
contractor operating a laboratory to assure that no employee of the
contractor has a conflict of interest while the employee has a
substantial role in negotiation, approval or performance of a CRADA.
Battelle recommended that DOE clarify that paragraph (n)(5)(i) applies
to ``active'' CRADAs since it would not apply if CRADA-derived IP is no
longer obligated (i.e. option has been terminated or expired).
Response: DOE disagrees that any change is needed. As proposed,
paragraph (n) concerns a conflict of interest in the initial
preparation, negotiation, and approval of a CRADA, whereas the comment
concerns the disposition of subject inventions and licensing after the
CRADA has ended. No change is needed in paragraph (n) because the
paragraph does not deal with the intellectual property derived from the
performance of the CRADA. Any issues with licensing of intellectual
property from a CRADA are covered under paragraph (d) of this clause.
Comment: Fermi suggested updating the definition of CRADA in
paragraph (b) of this clause to reflect the authority for Laboratory
contractors to enter into CRADAs with Federal entities, as permitted by
DOE, by removing the phrase ``including at least one non-Federal
party'' language.
Response: DOE agrees and has revised the definition to remove
references to ``non-federal parties'' in this final rule.
Comment: LBNL noted that proposed paragraph (f) would require M&O
contractors to give preference to U.S. businesses for licensing and
assignments of all intellectual property, not just subject inventions,
as contemplated by the Bayh-Dole Act and the ``Department of Energy
Determination of Exceptional Circumstances under the Bayh-Dole Act to
Further Promote Domestic Manufacture of DOE Science and Technologies''
(S&E DEC). LBNL recommended narrowing the scope of the paragraph to
only cover patents and copyrights, rather than all intellectual
property.
Response: DOE agrees with the commenter's suggestion and has
revised the clause in this final rule to narrow it from ``intellectual
property'' to ``subject inventions''. Other intellectual property
(copyrights, trademarks, mask works, etc.) will not be included in this
clause. The clause was also rewritten to address subject inventions
when the S&E DEC applies under paragraph (1) while retaining much of
the original provision for addressing U.S. industrial competitiveness
when the S&E DEC doesn't apply (usually due to the funding source)
under paragraph (2).

Patent Rights--M&O Contracts (970.5227-10)

Comment: LBNL, Battelle, PPPL, Stanford, Fermi, and TJNAF noted
that paragraph (t)--U.S. Competitiveness appears to retain the pre-S&E
DEC language that suspends all transactions pending DOE approval. That
language was superseded for Office of Science laboratories by an
Internal Patent Instruction (IPI) dated May 5, 2022, which substituted
a notice mechanism instead of suspension. The commenters suggested that
the notice mechanism from the IPI is preferable.
Response: DOE agrees to update this provision to reflect the
guidance in the IPI to require a notice to DOE of change in foreign
ownership rather than require suspension of the license until DOE
approval. Additionally, a new paragraph (2) was added to better
describe the administrative process of seeking a waiver of the
requirements in paragraph (t)(1) (which is the requirement to
substantially U.S. manufacture in compliance with the S&E DEC) with DOE
approval. There are also provisions for transferring title to DOE if
there is a breach of paragraph (t)(1) requirements to substantial U.S.
manufacture.

Patent Rights--M&O for Profit, Patent Waiver (970.5227-12)

Comment: Triad noted that the proposed changes would make it more
difficult to license technology since a licensee would not want to have
its rights suspended when undergoing a liquidity event (e.g.,
acquisition or large investment in exchange for equity). This could be
particularly true in situations where the technology is the foundation
of the company and is the basis for its business.
Response: DOE agrees to update this provision to reflect the
guidance in the Internal Patent Instructions (IPI) issued by the
Assistant General Counsel for Technology Transfer and Intellectual
Property to require a notice to DOE of change in foreign ownership
rather than require suspension of the license until DOE approval.
Additionally, a paragraph (2) was added to better describe the
administrative process of seeking a waiver of the requirements in
paragraph (1) for DOE approval. There are also provisions for
transferring title to DOE if there is a breach of paragraph (t)(1)
requirements to substantial U.S. manufacture.
Comment: Proposed paragraph (b)(6)(iv) stated that ``[e]xceptional
circumstances subject inventions are as set forth in the applicable
patent waiver.'' NTESS commented that the proposed paragraph was
inconsistent

[[Page 89724]]

with its current patent waiver, saying that the S&E DEC is specifically
for Bayh-Dole entities and that NTESS is not governed under Bayh-Dole.
NTESS's class waiver of patent rights is W(C)2017-002.
Response: DOE declines to make changes to paragraph (b)(6)(iv) in
response to this comment. The S&E DEC is broader than only applying to
Bayh-Dole entities. It applies to all entities receiving program
funding under the DEC. The second part of paragraph (b)(6)(iv) allows
DOE to unilaterally amend the contract for the purpose of defining DOE
exceptional circumstance subject inventions. It is clear that DOE
policy is to have the S&E DEC apply to for-profit entities by adding
new paragraph (b)(6)(iii). However, the comment raises the issue about
requiring greater rights determination under paragraph (b)(7) before
publications. DOE is revising paragraph (b)(6)(iii) to state that the
addition of the enhanced U.S. manufacturing requirements under the S&E
DEC does not invoke the greater rights determination process in
paragraph (b)(7) requiring DOE approval for each invention or
publication on such inventions.
Comment: NTESS commented that proposed paragraph (b)(6)(viii)
requires the contractor to obtain approval from DOE prior to any
release or publication of information concerning an exceptional
circumstance subject invention or any subject invention related to a
treaty or international agreement. The commenter stated that this
change would be very burdensome to patent counsel because almost all
subject inventions now fall under an exceptional circumstance subject
invention.
Response: DOE believes that NTESS is referring to paragraph (c)(2),
which has this requirement. DOE agrees with the commenter's concern and
has added the following sentence ``Notwithstanding the above,
inventions subject to the S&E DEC do not require approval from Patent
Counsel prior to any release or publication of information.'' The
purpose of the S&E DEC (US Manufacture) is wholly different from the
other DECs (national security or sensitive technology) so there is no
need for review of purely S&E DEC material.

Property (970.5245-1)

Comment: In the NOPR, DOE proposed adding an ``application of
regulations'' paragraph (a) to the ``Property'' clause which required
compliance with 41 CFR chapters 102 and 109 as well as various minor
editorial changes. Battelle, Fermi, and Stanford suggested that
invoking the entirety of 41 CFR chapters 102 and 109 is too broad, and
recommended it be narrowed to the ``applicable'' requirements in 41 CFR
chapters 102 and 109. NTESS suggested modifying paragraph (a) by adding
``as prescribed or approved by OPMO/PA'' at the end to ensure that NNSA
OPMO would continue to have flexibility to allow contractors to meet
their programmatic needs while complying with requirements that are
formally integrated into their contracts.
Response: DOE agrees with commenters that referencing the entirety
of 41 CFR chapters 102 and 109 is too broad and has revised the
language at section 970.5245-1(a) to only require the contractor to
comply with ``applicable'' requirements in those chapters. DOE
disagrees with NTESS's recommended change because the clause is
applicable beyond NNSA contracts but believes that the change discussed
above addresses NTESS's concern.
Comment: NTESS sought clarity on the regulatory references within
the clause; specifically, why the general regulatory requirements added
to the clause only reference 41 CFR chapter 102 (Federal Management
Regulations) and 41 CFR chapter 109 (Department of Energy Property
Management Regulations), whereas existing contractual coverage of the
management of high risk property and classified materials reference 41
CFR chapter 101 (Federal Property Management Regulations) and 41
chapter 109 (Department of Energy Property Management Regulations).
Response: DOE agrees to also add a reference to 41 CFR chapter 101
in the new paragraph (a), as it still contains relevant requirements
for real property and motor vehicles.

Other Comments

Comment: Michael Ravnitzky suggested adding a provision to the
final rule allowing for prize contests to help address technological
acquisition needs.
Response: DOE appreciates the suggested addition but considers it
to be outside the scope of the current rule. DOE may consider
addressing prize contests in a future rulemaking.
Comment: Michael Ravnitzky suggested adding an appendix to the DEAR
that addresses the use of Other Transaction Authority (OTA), a special
authority that allows DOE to enter into agreements with private-sector
entities that are not subject to the same rules as standard government
contracts or other traditional mechanisms.
Response: DOE appreciates the suggested addition but considers it
to be outside the scope of the current rule. DOE may consider
addressing OTAs in a future rulemaking.
Comment: Beta Analytic suggested adding direct biobased testing
requirements and updating the FAR definition of ``biobased product''.
Response: DOE considers this suggestion to be outside the scope of
the current rule.
Comment: Argonne suggested modifying the Contractor Purchasing
System clause at 970.5244-1 by including language excepting ``shrink
wrap'' click through terms for software agreements, excluding purchases
under the micro-purchase threshold, and changing the approval level
from the Head of Contracting Activity to the local Contracting Officer
in consultation with local legal counsel.
Response: DOE considers this to be outside the scope of the current
rule but will consider these suggestions in a future rulemaking.
Comment: Ames submitted comments in response to a DOE System of
Records Notice (SORN) published on November 27, 2023.
Response: As the SORN notice is unrelated to this rule updating the
DEAR, the comments are considered to be outside the scope of this rule.

Department of Energy Mentor-Prot[eacute]g[eacute] Program (919.70)

DOE proposed various changes to subpart 919.70 that were intended
to update and streamline the DEAR coverage of the mentor-
prot[eacute]g[eacute] program. DOE is now considering more substantive
changes to its mentor-prot[eacute]g[eacute] program and has therefore
decided to withdraw the changes proposed in the NOPR from this final
rule. Additionally, proposed changes to section 952.219-70 that would
have conformed the DOE Mentor-Prot[eacute]g[eacute] program clause with
changes to subpart 919.70, are also not included in this final rule.

IV. Section-by-Section Analysis

<bullet> Section 901.103: Currently this section provides that the
DEAR is issued and amended by the Senior Procurement Executive (SPE)
and the National Nuclear Security Administration (NNSA). This final
rule amends this section to clarify that (1) references throughout the
DEAR to the SPE refers to both the DOE SPE and the NNSA SPE, unless
otherwise indicated; (2) the SPEs may approve deviations to the DEAR
both together and individually; and (3) except for those authorities
designated as non-delegable,

[[Page 89725]]

the SPEs are delegated those authorities assigned to the Agency Head in
the FAR.
<bullet> Section 901.301-70: Current section 901.301.70 states that
DOE will maintain an Acquisition Guide. This final rule redesignates
this section as 901.301-70 and removes the paragraph designation to
conform to standard CFR formatting. The newly redesignated section is
revised to update the website address to access the Acquisition Guide.
<bullet> Subpart 901.4: This final rule adds this new subpart to
address deviations from the DEAR. The new subpart consists of section
901.401, which provides a definition for what constitutes a deviation
from the DEAR; and sections 901.403 and 901.404, which provide
instructions to acquisition personnel for preparing and submitting
requests for individual deviations and class deviations respectively.
<bullet> Section 901.602-3: This final rule amends this section to
increase the threshold for the ratification authority delegated to
heads of contracting activity (HCAs) for unauthorized commitments of
$250,000 or less. A threshold of $25,000 has been in the DEAR for
decades and needs to be updated to account for inflation and associated
increases in the Simplified Acquisition Threshold (SAT), which was the
original basis for the $25,000 threshold.
<bullet> Sections 901.603-1 and 901.603-70: This final rule revises
these sections to update references to two DOE orders.
<bullet> Section 902.101: Section 902.101 is revised to update the
definition of Senior Procurement Executive in order to reflect a change
in the name of the office held by the DOE SPE and the NNSA SPE.
<bullet> Section 903.104-7: This final rule amends this section to
allow reviews to be conducted by the individual one level above the
contracting officer. The regulations at FAR 3.104-7 provide for higher-
level review and concurrence within DOE by an individual designated in
accordance with agency procedures. For violations or possible
violations, the Department decided that this review and concurrence was
better undertaken by those with procurement authority and not legal
counsel whose role is better aligned with providing advice to those
conducting the review and concurrence. Nothing in these changes
prevents access to counsel by those with procurement authority.
<bullet> Section 903.1003: Section 903.1003 is added in order to
supplement the FAR subpart 3.10 coverage of Contractor Code of Business
Ethics and Conduct. The new language articulates the need for
contractors to identify themselves, particularly when communicating on
behalf of DOE, to ensure that all parties know the status of
individuals as contractor personnel.
<bullet> Section 903.1004: Section 903.1004 is revised to prescribe
a new clause at 48 CFR 952.203-1, Identification of Contractor
Employees, for all solicitations and contracts for services over the
micro-purchase threshold. This clause requires contractors to use
standard measures to ensure that contractors and their employees
properly identify themselves as contractors in all DOE internal and
external communications so that all parties are aware of their status
as contractor personnel. Minor editorial changes have been made to the
content of the section for the purpose of improving clarity and
readability as well as updating the website address.
<bullet> Section 904.401: This final rule amends this section to
(1) revise the definition of ``access authorization'' by including the
citation to special nuclear material under the Atomic Energy Act,
Executive Order 12968, and 10 CFR part 710 for more specificity; (2)
add a definition of ``Counterintelligence'' previously located in part
970 but proposed to be relocated here because the term is included in
revisions to other sections in this part; and (3) amend the definition
of ``Classified Information'' for clarity to also include ``Classified
National Security Information'' and ``Transclassified Foreign Nuclear
Information'', and to update the reference to Executive Order 12958
with Executive Order 13526 which revoked and replaced Executive Order
12958.
<bullet> Section 904.402: This final rule amends this section to
reorganize content to conform to the FAR numbering and to add a
reference to the DOE Organization Act of 1977, as amended and update
the reference to Executive Order 12958 with Executive Order 13526 which
revoked and replaced Executive Order 12958. This final rule also
relocates text about DOE's counterintelligence program from section
970.0404-2(b). Part 970 primarily concerns management and operating
(M&O) contracts, but counterintelligence issues are equally applicable
to M&O and non-M&O contracts. Additionally, revisions are made to the
paragraph on conditional payment of fee in order to align with other
changes proposed to the conditional payment of fee clauses in parts 952
and 970 which are discussed in the appropriate places below. Finally,
this final rule adds a paragraph that points to part 927 for policies
and procedures for safeguarding classified information in patent
applications and patents.
<bullet> Section 904.404: This final rule amends section 904.404
to: (1) revise the prescription for the ``Security'' clause at section
952.204-2 to clarify that it is also required to be included in
contracts awarded under simplified acquisition procedures, as well as
National Security Program contracts under which access to proscribed
information is required; (2) make minor editorial changes and add the
title to DOE Order 142.3 to the paragraph that discusses the
``Sensitive Foreign Nation Controls'' clause at section 952.204-71; (3)
delete the prescription for the clause at section 952.204-76,
``Conditional Payment of Fee or Profit--Safeguarding Restricted Data
and Other Classified Information and Protection of Worker Safety and
Health,'' because that clause, along with the clauses at sections
952.223-76 and 952.223-77, is proposed for removal with the content of
those three clauses consolidated into a single new clause at section
952.242-71, which is prescribed elsewhere; and (4) add a prescription
for the counterintelligence clause proposed to be located at section
952.204-74 (and previously at section 970.5204-1) because DOE has
determined that counterintelligence policy is appropriate for both M&O
and non-M&O contracts.
<bullet> Section 904.7004: Section 904.7004 is revised in paragraph
(a) to update the name of the office that the Contracting Officer must
consult in connection with ``Foreign Ownership, Control or Influence
(FOCI)'' reviews prior to determining that award or continued
performance of a contract by a contractor will not pose an undue risk
to the common defense and security. The reference to the DOE Office of
Safeguards and Security is proposed to be changed to the DOE Office of
Environment, Health, Safety and Security.
<bullet> Section 904.7102: This final rule makes editorial
revisions to streamline this section, in paragraph (e), by removing the
following extraneous text: ``that has been developed by the Safeguards
and Security Lead Responsible Office at the contracting activity.''
<bullet> Subpart 904.73: This final rule adds a new subpart on DOE
Directives. The new subpart consists of section 904.7300, which
provides general requirements and information, and section 904.7301,
which prescribes a new DOE Directives clause at 48 CFR 952.204-78,
along with background. Although contractor requirements documents
(CRDs) have been integrated

[[Page 89726]]

into non-M&O contracts for a long time, adding the general information
section, the new clause prescription, and the new clause will clarify
the process of integrating the requirements of DOE Directives into non-
M&O contracts on a bilateral basis.
<bullet> Subpart 908.71: This final rule revises subpart 908.71 in
order to remove some out-of-date procedures for handling special items.
Specifically, sections 908.7103, Office machines; 908.7115, Forms;
908.7116, Electronic data processing tape; and 908.7117, Tabulating
machine cards, have been removed.
<bullet> Section 909.403: Section 909.403 is revised to reflect a
change in the name of the offices held by the individuals designated as
the DOE and NNSA Debarring Official and Suspending Official.
<bullet> Section 909.405: Section 909.405 is revised to replace
references to the now defunct Excluded Parties List System (EPLS) with
the new System for Award Management (SAM).
<bullet> Section 909.407-3: This final rule amends this section in
paragraph (e)(1)(vii) to replace a reference to the now defunct EPLS
with the new SAM.
<bullet> Section 912.301: This final rule adds a new section
912.301 to clarify those DEAR clauses that are also required to be
included in solicitations and contracts for the acquisition of
commercial items, in accordance with 48 CFR 12.301(f).
<bullet> Subpart 915.4: This final rule redesignates sections
915.404-2 through 915.404-4-72 as provided by the table in section II
of this document to conform with the FAR numbering system. Cross-
reference changes are made throughout the subpart to conform with the
new numbering.
<bullet> Section 915.404-4-70 (915.404-4700): This final rule
revises the text to clarify that DOE's structured profit and fee system
for non-management and operating contracts comprises two approaches.
<bullet> Section 915.404-4-70-2 (915.404-4720): This final rule
revises this section to correct the errors throughout the table in
paragraph (d) by replacing ``items 4.a. thru 4.e.'' with ``items I.a.
thru I.e.''.
<bullet> Section 915.404-4-72 (915.404-4900): This final rule
revises paragraph (a) of this section to update the reference to fee
policy for management and operating contracts from ``970.15404-4-8'' to
``970.1504-101 through 970.1504-300.''
<bullet> Section 915.408-70: Section 915.408-70 is revised to
simplify the clause prescription for section 952.215-70, ``Key
Personnel,'' and make minor editorial changes.
<bullet> Section 915.606: Section 915.606 is revised to replace a
defunct postal address for the receipt of unsolicited proposals with a
new email address.
<bullet> Section 916.307: Section 916.307 is revised to: (1)
simplify the prescription for the DEAR ``Allowable Cost and Payment''
clause at section 952.216-7 in paragraph (a); and (2) remove the
prescription for section 952.216-15, ``Predetermined Indirect Cost
Rates,'' because the FAR clause at 48 CFR 52.216-15 is now considered
to be adequate.
<bullet> Section 916.504: Section 916.504 is revised to redesignate
paragraph (c) as paragraph (a)(1) to conform with the FAR coverage at
48 CFR 16.504(a)(1) that this language supplements.
<bullet> Section 916.505: Section 916.505 is revised to: (1)
redesignate paragraph (b)(6) as paragraph (b)(8) to conform with the
FAR coverage at 48 CFR 16.505(b)(8) that this language supplements and
update the corresponding FAR citation accordingly; and (2) update the
office name from ``Office of Procurement and Assistance Management'' to
``Office of Acquisition Management''.
<bullet> Subpart 917.6: This final rule makes several changes to
this subpart. Editorial changes are made in sections 917.600(b) and
917.602(b) to remove obsolete references to ``performance-based
management contracts''. Likewise, section 917.601, which defines
``performance-based management contract'' and ``performance-based
contracting'' is also removed. Those terms and those references to
performance-based management contracts are considered to be unnecessary
since all management and operating contracts employ, to the maximum
extent practicable, performance-based contracting concepts and
methodologies. Editorial changes are also made in section 917.602(c) to
streamline the content of that paragraph.
<bullet> Section 917.7402: This final rule makes revisions to
paragraphs (b) and (c)(4) of this section to update the referenced DOE
order from DOE Order 430.1B to the current DOE Order 430.1C.
<bullet> Section 922.101-70: This final rule adds a new section
922.101-70 to describe situations where labor policies applicable to
M&O contracts may also apply to non-M&O contracts. DOE labor policies
for M&O contracts are located at 48 CFR part 970, subpart 970.22. The
policies therein are applicable to non-M&O contracts where the contract
work had been previously performed under a DOE Management and Operating
contract; and/or the Contractor is required to employ all or part of
the former Contractor's workforce; or contracts designated by the
Senior Procurement Executive. The labor policies at 48 CFR part 970,
subpart 970.22, are reiterated here to highlight their application to
certain non-M&O contracts.
<bullet> Subpart 922.4: This final rule adds new subpart 922.4 with
content previously located in section 970.2204-1-1, but better placed
in part 922 since it is applicable to both non-M&O and M&O contracts.
The existing content is revised to update references to the Davis-Bacon
Act with the Construction Wage Rate Requirements Statute (40 U.S.C.
chapter 31, subchapter IV, Wage Rate Requirements (Construction)) as
currently referenced in 48 CFR 22.403-1 and to remove information that
unnecessarily duplicates content already set forth in 48 CFR 22.404
through 22.404-12.
<bullet> Section 923.002: Section 923.002 is removed. Paragraph (a)
is removed because it conveys policy from revoked Executive Order 13423
and duplicates coverage in the FAR. The prescription at paragraph (b)
is removed because revoked Executive Order 13423 was the basis for that
prescription and for the clause at section 970.5223-6.
<bullet> Section 923.101: This final rule redesignates this section
as section 923.170 to maintain consistency with FAR numbering and
revise the content to align with current statutory, regulatory, and
executive order requirements and to remove an out-of-date hyperlink.
<bullet> Section 923.102: This final rule redesignates this section
as section 923.171 to maintain consistency with FAR numbering.
<bullet> Section 923.103: This final rule redesignates this section
as section 923.172 to maintain consistency with FAR numbering and
revises the content to: (1) make minor editorial changes; (2) remove
the reference to Alternate I to section 952.223-78, as that alternate
is removed as unnecessary as a result of a revision to the base clause;
and (3) remove prescriptions to FAR clauses that are already prescribed
in 48 CFR chapter 1, and are not necessary to be prescribed here.
<bullet> Subpart 923.5: This final rule redesignates subpart 923.5
consisting of sections 923.500, 923.570 and 923.570-1 through 923.570-3
as new subpart 926.5 consisting of sections 926.500, 926.570 and 926-
570-1 through 926-570-3 respectively. These changes are necessary to
align with recent FAR restructuring which moved ``Drug Free Workplace''
coverage from FAR 23.5 to FAR 26.5. Conforming changes are also made as
necessary to update references

[[Page 89727]]

to the associated FAR coverage as well as to the referenced DEAR
clauses which are appropriately redesignated.
<bullet> Subpart 923.9: This final rule redesignates subpart 923.9
consisting of section 923.903 as new subpart 923.4 consisting of
section 923.404. These changes are necessary to align with a recent FAR
restructuring which moved the Contractor Compliance with Environmental
Management Systems coverage from FAR 23.9 to FAR 23.404. The newly
redesignated section 923.404 is also revised to correctly state the
clause number for the FAR Environmental Management Systems clause as
``52.223-19'', whereas the current text has ``52.223-XX''.
<bullet> Section 923.7002: Section 923.7002 is revised to: while
retaining the current policy, state it more clearly and succinctly;
update references to reflect new locations of clauses; add references
to clause prescriptions; and update office titles.
<bullet> Section 923.7003: This final rule amends this section by:
(1) in paragraph (a), updating the name of the office which the
Contracting Officer is required to consult with in making a decision to
include or not include environmental, safety, and health clauses and
insert a reference to the appropriate coverage for M&O contracts; (2)
consolidating paragraphs (f) and (g) into one paragraph (f) and
revising it to state the prescription for the Conditional payment of
fee clause more clearly and succinctly and updating the reference to
the clause; and (3) redesignating paragraph (h) as paragraph (g).
<bullet> Section 925.1001: Section 925.1001 is revised to update
the name of the ``Office of Procurement and Assistance Management'' to
``Office of Acquisition Management'' and the office name of the NNSA
Deputy Associate Administrator from ``Acquisition and Project
Management'' to ``Office of Partnership and Acquisition Services''.
<bullet> Section 926.7001: Section 926.7001 is revised to reflect
the addition of Qualified HUBZone small business concerns to the list
of Energy Policy Act 1992 target groups by the Small Business
Reauthorization Act of 1997 (Pub. L. 105-135).
<bullet> Section 926.7004: This final rule revises this section by
removing the outdated reference to Standard Industrial Classification
(SIC) 8711 and adding in its place a reference to the North American
Industry Classification System code 541330.
<bullet> Section 926.7005: Section 926.7005 is revised to
reorganize the content to remove the separate paragraph on subcontracts
as this content is unnecessarily duplicative of the prescriptions for
solicitation provisions and contract clauses in section 926.7007.
<bullet> Section 926.7006: This final rule revises this section to
reorganize and streamline content to remove obsolete and unnecessary
reporting requirements.
<bullet> Section 926.7007: This final rule revises this section in
the prescription for the clause at 952.226-72, ``Energy Policy Act
Subcontracting Goals and Reporting Requirements'' to update the dollar
threshold from $500,000 ($1M for construction) to $750,000 and ($1.5M
for construction) to conform to the FAR threshold for requiring a
subcontracting plan at 48 CFR 19.702.
<bullet> Subpart 926.71: This final rule amends this subpart by:
(1) revising section 926.7101 to update the citation in the first
sentence from 42 U.S.C. 7474h to 50 U.S.C. 2704(c)(2); (2) revising
section 926.7103 to make the same update to the citation in the first
sentence of paragraph (a); and (3) revising section 926.7104 to change
the clause title to add the words ``Workforce Restructuring and''
before '' Displaced Employee Hiring Preference'' (in order to
distinguish this from hiring preferences tied to the Service Contract
Act) and revising the clause prescription to add a parenthetical that
makes clear that the clause is for both M&O and non-M&O contracts.
<bullet> Sections 927.200 and 927.201-1: This final rule removes
section 927.200 and adds the content of that section to section
927.201-1 to better conform with FAR numbering and section headings.
Additionally, the proposed rule broadens the requirement in section
927.201-1 to consult with Patent Counsel regarding the use of the
Patent and Copyright Infringement Liability clause, which includes the
Authorization and Consent clause referenced currently, to fully address
indemnity in contracts based on the work being performed. but instead
requires consultation regarding the use of the Patent and Copyright
Infringement Liability clause in certain situations.
<bullet> Sections 927.202, 927.202-5, and 927.206: This final rule
removes section 927.206, ``Refund of Royalties,'' and redesignates
sections 927.206-1, ``General,'' and 927.206-2, ``Clause for refund of
royalties,'' as new sections 927.202, ``Royalties,'' and 927.202-5,
``Solicitation provisions and contract clause,'' respectively. These
changes are made in order to conform to the FAR numbering and section
headings which this coverage supplements.
<bullet> Sections 927.203 and 927.203-1: This final rule
redesignates sections 927.207 and 927.207-1 as new sections 927.203 and
927.203-1 respectively and revises the section heading for section
927.203 (formerly section 927.207). These changes are made in order to
correspond with the FAR numbering and section headings which this
coverage supplements.
<bullet> Section 927.302: This final rule redesignates section
927.300 as section 927.302 and revises the section heading to
correspond with the FAR numbering and section headings which this
coverage supplements. The rule also makes minor reorganization and
editorial changes to the content of new section 927.302 for the purpose
of improving clarity and readability.
<bullet> Section 927.302-70: This final rule redesignates current
section 927.302 as section 927.302-70 and revises the section heading
in order to accommodate the changes to current section 927.300
previously described. In addition, a new paragraph (a) is added to
include a definition of ``background patent'' similar to the definition
found in the new Alternate I of section 952.227-13 for the purpose of
improving clarity of the regulation. Current paragraphs (b) and (c) are
replaced with a new paragraph (c) to reflect DOE's determination that
the requirement of licensing background patents should only be
permitted in certain situations approved by DOE Patent Counsel with
concurrence of a DOE program official. This policy is implemented in
new section 927.303(d)(5) by moving the paragraph regarding background
patents from the clause at section 952.227-13 to an Alternate I so that
it only applies to certain contracts.
<bullet> Section 927.303: This final rule revises section 927.303
to correspond with the FAR numbering and to make additions to
instructions located in 48 CFR 27.303. The rule also adds paragraph
(a)(4) to direct the Contracting Officer to subpart 970.27 for certain
decontamination and decommissioning activities and the building and/or
operations of other DOE facilities. Additionally, 48 CFR 27.303(d)
provides that DOE will insert its specific patent rights clauses
according to agency procedures. Therefore, section 927.303(d) outlines
the use of the various patent clauses such as the clause at 48 CFR
952.227-13 or 37 CFR 401.14 depending on whether the contractor is a
large or small business or university.
[cir] DOE provides in paragraph (d)(2) that contracts with domestic
small business firms or nonprofit

[[Page 89728]]

organizations use the clause at 37 CFR 401.14 instead of the clause at
48 CFR 952.227-11 because DOE has not modified 48 CFR 48.952.227-11 to
keep up with changes in the standard patent clause for these entities,
while 37 CFR 401.14 is regularly updated. However, 37 CFR 401.14 has
certain provisions requiring agency implementing regulations, which DOE
addresses in a prescription for new Alternate I.
[cir] The most significant update is necessary to implement DOE's
Declaration of Exceptional Circumstance that requires contractors, at
any tier, to substantially manufacture any subject inventions in the
United States. Alternate II for domestic small business firms or
nonprofit organizations adds both the agency implementing regulations
from Alternate I and the U.S. substantial manufacturing requirements.
For 952.227-13, an Alternate II is used to implement the U.S.
manufacturing requirement, as addressed in section 927.303(d)(6).
<bullet> Section 927.304: This final rule revises section 927.304
to make minor editorial changes and to replace the reference to the
clause at section 952.227-11, which is also revised, with the clause at
37 CFR 401.14. The clause at section 952.227-11 is not regularly
updated while the clause at 37 CFR 401.14 does receive regular updates.
<bullet> Subpart 927.4: This final rule revises the heading of
subpart 927.4 to read ``Rights in Data and Copyrights'' to conform to
the FAR heading at 48 CFR part 27, subpart 27.4, which this subpart
supplements.
<bullet> Section 927.401: This final rule adds section 927.401 to
provide a definition of ``technical data''. The regulations at 48 CFR
27.401 define ``data'' to include ``technical data'' and ``computer
software.'' DOE wants to have a clear definition of what technical data
encompasses since it relates directly to information sent to DOE's
Office of Scientific and Technical Information.
<bullet> Sections 927.402, 927.402-1, and 927.402-2: This final
rule removes sections 927.402 and 927.402-1, and redesignates section
927.402-2 as section 927.402 to conform to FAR numbering, which these
sections supplement. The content of section 927.402-1 is added to new
section 927.406 and revised for clarity. Finally, DOE also revises the
introductory language of the newly redesignated section 927.402 to add
a reference to scientific and technical information (STI) because this
is the term used at the Office of Scientific and Technical Information
(OSTI) where DOE's publicly available technical data is stored.
<bullet> Section 927.403: This final rule removes section 927.403,
which outlines when DOE Contracting Officers and Patent Counsel make
determinations as part of the acquisition and use of technical data,
and adds its content to newly added section 927.406-4 for
organizational purposes.
<bullet> Sections 927.404 and 927.404-70: This final rule:
[cir] Redesignates section 927.404-70 as section 927.404-71 for
organizational purposes and revises the newly redesignated section to
replace the reference to 48 CFR 927.409(a) with 48 CFR 52.227-14 to
reflect changes to the prescription at 48 CFR 927.409(a);
[cir] Redesignates section 927.404 as section 927.404-70 for
organizational purposes;
[cir] Revises the newly redesignated section 927.404-70 to update
the instructions on when to use 48 CFR 52.227-14 as supplemented by
this subpart, as well as the use of 48 CFR 52.227-16; and
[cir] Relocates paragraphs (g)(4), (l), and (m) of section 927.404-
70 to portions of new section 927.406-4 and revised section 927.409.
<bullet> Sections 927.406 and 927.406-4: FAR 27.406 is for
Acquisition of data with sections 27.406-1 through 27.406-3. This final
rule adds section 927.406, Acquisition of data, and section 927.406-4,
Acquisition and use of technical data, to conform with the numbering
and headings of the FAR, which these sections supplement. Section
927.406-4(a) and (b) address several statutory changes that have been
enacted, such as EPAct 2005 and the DOE Energy Research and Innovation
Act. EPACT mandates that DOE maintain publicly available collection of
Scientific Technical Information funded by the agency which is achieved
by the Office of Scientific and Technical Information. DOE Energy
Research and Innovation Act has a similar mandate for DOE to maintain a
public database populated with information on unclassified research and
development projects as well as relevant literature and patents.
Additionally, this final rule relocates content formerly located at
section 927.402-1(b) to new section 927.406-4(c) for organizational
purposes and revises the text for clarity and to update references.
Likewise, the final rule relocates content formerly located at section
927.403 to new section 927.406-4(d) for organizational purposes. And
finally, this final rule relocates content formerly located at section
927.404(g)(4) and (l) to new section 927.406-4(e) and (f),
respectively, for organizational purposes and revises the text for
clarity and to update references.
<bullet> Section 927.409: This final rule revises section 927.409
by removing the contract clause at paragraph (a)(1), which permitted
the DOE Patent Counsel to only approve copyright of software. In lieu
of that clause, new paragraph (a) instructs the contracting officer to
use the definitions at Alternate I of 52.227-14 and a new Alternate
VIII of 48 CFR 952.227-14, Rights in Data--General, which allows DOE
Patent Counsel to approve copyright of all technical data (including
software) of a subcontractor. In addition, this final rule reorganizes
the section so that paragraph (a)(2) is now a new paragraph (b) that
outlines special treatment of certain data. Paragraph (b)(1)(i)
requires Patent Counsel to insert a new Alternate I of 48 CFR 952.227-
17 to change paragraph (c)(1)(ii) of 48 CFR 52.227-17, Rights in Data-
Special Works, such that DOE Patent Counsel can approve the
subcontractor to assert copyright in all technical data of
subcontractor and transfer to the Government or other entity.
Paragraphs (b)(1)(ii) through (vii) of the proposed section remain the
same as current paragraphs (a)(2)(ii) through (vii) with some minor
changes to streamline content and update references. However, Paragraph
(b)(1)(viii) is added to contain an instruction located in current
subcontract paragraph (a)(1) regarding the use of Alternate IV of 48
CFR 52.227-14, Rights in Data--General, to be used with educational
institutions. The prohibition for use of Alternate IV for any software
has been changed to allow for copyright assertion when creating open
source software. Paragraph (b)(1)(ix) describes the use of Alternate
VI, as provided at 48 CFR 952.227-14, Rights in Data--General. These
instructions are being relocated from current section 927.404 (l) to
section 927.409(b)(1)(ix) for organizational purposes and revised
accordingly to give further guidance on when to require limited
licensing of Limited Rights Data and Restricted Computer Software of
the subcontractor. Finally, paragraph (b)(1)(x) contains instructions
for using Alternate VII as provided at 48 CFR 952.227-14, Rights in
Data--General, which are currently located at section 927.404(m) to
limit the contractor's use of DOE restricted data. Section 927.409(d)
is an expansion of the instructions located in current section
927.409(h) and 48 CFR 27.409(d). Lastly, the current paragraphs (s) and
(t) of section 927.409 are relocated to paragraphs (m) and (n),

[[Page 89729]]

respectively, to conform with the numbering of 48 CFR 27.409.
<bullet> Section 931.205-18: This final rule makes minor editorial
revisions to this section in order to improve clarity.
<bullet> Section 931.205-47: This final rule revises section
931.205-47 to update the citation in the definition of ``Employee
whistleblower action'' from 42 U.S.C. 7239 to 50 U.S.C. 2702.
<bullet> Section 932.970: This final rule revises section 932.970
in paragraph (b) to clarify that: (1) Contracting Officers can specify
accelerated payment dates upon making a written determination (on a
case-by-case basis) that a shorter contract financing payment cycle
will be beneficial to the Government by reducing the contractor's
working capital requirements; and (2) Whenever a contract specifies
payment due dates that are sooner than those required under the
relevant prompt payment requirements, the contract will permit the
Contracting Officer to unilaterally authorize additional time for
review of invoices if needed to perform an adequate review prior to
payment. These changes are necessary to ensure that accelerated
payments are only approved when doing so is determined to be beneficial
to the Government, and adequate time for review of invoices is
maintained.
<bullet> Section 932.971: This final rule adds this section
concerning electronic submission of invoices/vouchers and prescribes a
new clause at 48 CFR 952.232-7. These changes are intended to establish
DOE's strong preference for electronic submission of vendor invoices
and to provide standardized instructions for such submissions. While
electronic submission is preferred, other methods of submission can be
approved after consultation with the Office of the Chief Financial
Officer.
<bullet> Subpart 932.70: This final rule removes subpart 932.70 in
its entirety, as DOE Loan Guarantee Authority is regulated at 10 CFR
part 609.
<bullet> Section 933.103: Section 933.103 is revised to: (1)
reorganize and renumber the paragraphs to conform to the FAR numbering
at 48 CFR 33.103 which this section supplements; (2) make minor
editorial revisions for clarity; and (3) clarify that DOE does not
accept or adjudicate protests from prospective subcontractors.
<bullet> Section 933.104: Section 933.104 is revised to reorganize
content to conform to the FAR numbering at 48 CFR 33.104 which this
section supplements, streamline content, and make minor editorial
revisions for clarity.
<bullet> Section 933.106: Section 933.106 is revised to simplify
the prescription for the solicitation provision at section 952.233-2
such that it is required to be inserted whenever the provision at 48
CFR 52.233-2 is included. In addition, this final rule removes the
prescriptions for the provisions at sections 952.233-4 and 952.233-5
because the content of those provisions is being added to the provision
at section 952.233-2.
<bullet> Section 935.010: This final rule makes minor editorial
revisions to section 935.010 to improve clarity, and to add a sentence
at the end of paragraph (c) that clarifies that STI products identified
in DOE Order 241.1B are reportable to OSTI whether publicly releasable,
controlled unclassified information or classified.
<bullet> Section 935.070: This final rule revises section 935.070
by making minor editorial revisions and removing the definition
paragraph, since research misconduct is already defined in 10 CFR part
733.
<bullet> Section 936.202-71: This final rule removes section
936.202-71 because its basis (Executive Order 13514) has been revoked.
<bullet> Section 941.201-70: This final rule amends section
941.201-70 by: (1) revising the section heading to conform to 48 CFR
41.201 which this section supplements; (2) revising the text to add a
reference to the Energy Policy Act of 2005 (25 U.S.C. 3502) and
integrate new Office of Federal Energy Management Programs (FEMP)
policy, given that DOE Order 430.2B has been rescinded.
<bullet> Section 942.705-1: Section 942.705-1 is revised to remove
paragraph (a)(3) as its content is outdated.
<bullet> Sections 942.705-3, 942.705-4, 942.705-5: This final rule
removes sections 942.705-3 through 942.705-5 as they only convey
procedures internal to the agency that do not need to be covered in
this regulation.
<bullet> Subpart 942.71: This final rule adds new subpart 942.71 to
provide an explanation of the need for and the use of the new clause
added at section 952.242-71, ``Conditional Payment of Fee, Profit, and
Other Incentives,'' which is also discussed in sections 904.402,
923.7002, and 923.7003. The new clause's prescription is also added.
<bullet> Section 945.000: This final rule revises section 945.000
to account for situations where the personal property management
policies in 41 CFR chapter 109 may also apply to certain non-M&O
contracts.
<bullet> Section 945.101: This final rule removes section 945.101
as the definitions are either unnecessary or are already defined in the
FAR.
<bullet> Section 945.102-70: This final rule removes section
945.102-70 as the FAR coverage is considered to be adequate.
<bullet> Section 945.102-71: This final rule removes section
945.102-71 as the FAR coverage is considered to be adequate.
<bullet> Section 945.570-1: This final rule revises section
945.570-1 to update the reference to the ``Personal Property Policy
Division'' with the ``Office of Asset Management.''
<bullet> Sections 945.602, 945.602-3, and 945.602-70: This final
rule removes these sections as their content is adequately addressed in
41 CFR chapters 102 and 109.
<bullet> Section 945.603: This final rule removes section 945.603
as its content is adequately addressed in 41 CFR chapters 102 and 109.
<bullet> Section 945.670-1: This final rule revises section
945.670-1 to update the currently incorrect reference (48 CFR 45.606-3)
to 48 CFR 2.101.
<bullet> Section 945.670-3: This final rule removes section
945.670-3 because the content is adequately addressed in 41 CFR chapter
109.
<bullet> Section 945.671: This final rule revises section 945.671
to add a reference to ``41 CFR chapter 109'' in place of an outdated
reference to ``41 CFR 109-45.50 and 45.51 or its successor''.
<bullet> Section 951.102: This final rule revises section 951.102,
in paragraph (c)(1), to remove the obsolete reference to the Federal
Standard Requisitioning and Issue Procedures (FEDSTRIP) and update the
reference to the ``Office of Resource Management within the
Headquarters procurement organization'' to the ``Systems Division
within the Office of Acquisition Management.''
<bullet> Section 952.203-1: This final rule adds a new clause
``Identification of Contractor Employees'' to require contractors to
use standard measures to ensure that contractors and their employees
properly identify themselves as contractors in all DOE internal and
external communications so that all parties are aware of their status
as contractor personnel.
<bullet> Section 952.204-2: This final rule makes several
amendments to the ``Security Requirements'' clause. Specifically, this
final rule: (1) consolidates definitions previously located in separate
paragraphs (c) through (g) into a single paragraph (a), and adds
definitions of ``contracting officer'', ``contract'', ``contractor'',
``cyber system'' and ``special access program''; (2) makes minor
editorial revisions and update references throughout; and (3) adds a
reference in the last paragraph to clarify that facility clearance may
be granted prior to award or after award of a subcontract in

[[Page 89730]]

accordance with the clause at 48 CFR 952.204-73, ``Facility
Clearance''.
<bullet> Section 952.204-70: This final rule revises the
``Classification/Declassification'' clause by reorganizing its content,
with definitions being brought together into a separate paragraph (a).
Additionally, minor editorials changes were made to improve clarity.
<bullet> Section 952.204-73: This final rule amends the ``Facility
Clearance'' clause to make minor editorial revisions throughout and, in
paragraph (d), to include both a pre-award facility clearance process
and an alternative post-award process. The current 48 CFR 952.204-73
requires a full Facility Clearance prior to the award of a contract
requiring access to classified information, and prior to granting any
Interim Access Authorizations to key management personnel. The section
is revised to provide a process that permits contract award prior to
granting a full Facility Clearance, and to permit contract award prior
to granting Interim Access Authorizations to key management personnel.
This alternate post-award process will enhance efficiencies in awarding
contracts while ensuring security requirements are met.
<bullet> Section 952.204-74: This final rule relocates the
``Counterintelligence'' clause from section 970.5204-1 to this new
section, as it is pertinent to both M&O and non-M&O contracts. This
final rule also makes minor editorial revisions.
<bullet> Section 952.204-76: This final rule removes this clause,
``Conditional Payment of Fee or Profit--Safeguarding Restricted Data
and Other Classified Information,'' to reflect that section 952.242-71,
Conditional Payment of Fee, Profit or Incentives, a new clause, is
added in its place. The new clause replaces three existing clauses
(952.204-76, Conditional Payment of Fee or Profit--Safeguarding
Restricted Data and Other Classified Information, 952.223-76,
Conditional Payment of Fee or Profit--Safeguarding Restricted Data and
Other Classified Information and Protection of Worker Safety and
Health, and 952.223-77, Conditional Payment of Fee or Profit--
Protection of Worker Safety and Health).
<bullet> Section 952.204-77: This final rule revises section
952.204-77, in the introductory text, to update the citation for the
clause prescription and make minor editorial changes.
<bullet> Section 952.204-78: This final rule adds this new clause,
``DOE Directives'' in order to clarify the policy and procedures for
integrating directives into non-M&O contracts.
<bullet> Section 952.215-70: This final rule revises the ``Key
Personnel'' clause to make minor editorial changes to improve clarity.
<bullet> Section 952.216-15: This final rule removes the
``Predetermined Indirect Cost Rates'' clause as the corresponding FAR
clause at 48 CFR 52.216-15 is considered to be adequate.
<bullet> Section 952.223-71: This final rule revises this section
to add a non-M&O version of the ``Integration of Environment, Safety,
and Health into Work Planning and Execution'' clause on the basis that
the requirement is applicable to both non-M&Os and M&Os. The section
language previously redirected the reader to a clause for M&O
contracts.
<bullet> Section 952.223-75: This final rule revises this section
in the introductory text to update the location of the clause
prescription from section 923.7003(h) to section 923.7003(g).
<bullet> Sections 952.223-76 and 952.223-77: This final rule
removes the ``Conditional Payment of Fee or Profit--Safeguarding
Restricted Data and Other Classified Information and Protection of
Worker Safety and Health'' clause and the ``Conditional Payment of Fee
or Profit--Protection of Worker Safety and Health'' clause to reflect
that 952.242-71, Conditional Payment of Fee, Profit or Incentives, a
new clause, is added in their place. The new clause replaces three
existing clauses (section 952.204-76, Conditional Payment of Fee or
Profit--Safeguarding Restricted Data and Other Classified Information,
section 952.223-76, Conditional Payment of Fee or Profit--Safeguarding
Restricted Data and Other Classified Information and Protection of
Worker Safety and Health, and section 952.223-77, Conditional Payment
of Fee or Profit--Protection of Worker Safety and Health).
<bullet> Section 952.223-78: This final rule revises the
``Sustainable Acquisition Program'' clause to streamline requirements,
to obviate the need for Alternate I to the clause, and to eliminate
outdated references and areas of redundancy with FAR coverage.
<bullet> Section 952.226-70: This final rule revises the
``Subcontracting Goals Under Section 3021(a) of the Energy Policy Act
of 1992'' clause to reflect the addition of a fourth target group by
the Small Business Reauthorization Act of 1997 (Pub. L. 105-135) and to
make minor editorial revisions.
<bullet> Section 952.226-71: This final rule revises the
``Utilization of Energy Policy Act target entities'' clause by updating
the citation for the clause prescription in the introductory text and
replacing ``Energy Policy Act'' where it appears in the clause title
and text with ``Energy Policy Act 1992'' or ``EPAct 1992'' in order to
more clearly identify the source of these requirements. Additionally,
minor editorial changes are made to paragraph (a) of the clause for
streamlining purposes.
<bullet> Section 952.226-72: This final rule amends the ``Energy
Policy Act of 1992 Subcontracting Goals and Reporting Requirements''
clause to reflect the addition of a fourth target group by the Small
Business Reauthorization Act of 1997 (Pub. L. 105-135) as well as to
replace references to the outdated Standard Form (SF) 294 and SF 295
with references to the Individual Subcontract Report and or Summary
Subcontract Report in the Electronic Subcontracting Reporting System
(ESRS).
<bullet> Section 952.226-73: This final rule revises the ``Energy
Policy Act target group certification'' provision to revise the section
heading and clause title and to reflect the addition of a fourth target
group by the Small Business Reauthorization Act of 1997 (Pub. L. 105-
135).
<bullet> Section 952.226-74: This final rule amends the ``Displaced
employee hiring preference'' clause to revise the section heading and
clause title by adding the words ``Workforce Restructuring and'' before
``Displaced Hiring Preference.'' This revision is intended to clearly
tie this clause to workforce restructuring and distinguish it from
other hiring preferences related to the Service Contract Act.
<bullet> Section 952.227-9: This final rule revises the ``Refund of
Royalties'' clause to require contractors with contracts greater than
five years in duration to furnish a statement of royalties paid or
required to be paid in connection with performing the contract every
five years, and to make minor editorial revisions.
<bullet> Section 952.227-11: Since 37 CFR 401.14, Standard Patent
Rights, is updated regularly, DOE has decided to use that clause in
preference to 48 CFR 52.227-11. However, 37 CFR 401.14 has sections
requiring agency implementing regulations. Therefore, this final rule
revises section 952.227-11 to replace the full clause text with two
alternates. Alternate I is used to supplement the standard patent
rights clause to include DOE's implementing regulations. For example,
paragraph (g)(2) requires the Contracting Officer to direct whether to
include this clause in certain subcontracts. Also, paragraph (l)
requires reports to be uploaded into iEdison invention management
system. DOE has recently issued a Declaration of Exceptional
Circumstance (DEC) to require substantial US manufacture of

[[Page 89731]]

subject inventions funded by many DOE programs. Alternate II addresses
the modifications and additions to 37 CFR 401.14 to implement this DEC
by adding paragraphs (m) and (n).
<bullet> Section 952.227-13: This final rule amends the ``Patent
Rights--Acquisition by the Government'' clause to update references and
account for statutory changes. Paragraph (k) has been moved to a new
alternate I to provide for a right to require licensing of third
parties to background inventions only when deemed necessary. Also, a
new Alternate II has been added to implement the U.S. Competitiveness
requirement for DOE funding programs that require it.
<bullet> Section 952.227-14: This final rule amends the ``Rights in
Data--General'' clause to add a new Alternate VIII which addresses the
approval by DOE Patent Counsel of all types of data by subcontractors
of the M&O Contractor. Minor editorial revisions and revisions to
update references are also made.
<bullet> Section 952.227-17: This final rule adds a new ``Rights in
Data--Special Works'' clause which supplements the FAR clause at 48 CFR
52.227-17 to permit Patent Counsel to direct the subcontractor to
assert copyright and transfer to the Government or M&O Contractor.
<bullet> Section 952.227-82: This final rule removes the ``Rights
to proposal data'' clause on the basis that the corresponding FAR
clause at 48 CFR 52.227-23 is considered to be adequate.
<bullet> Section 952.227-84: This final rule amends the ``Notice of
right to request patent waiver'' provision to revise the introductory
text to correctly specify the location of the prescription and to
revise the text in the third sentence to replace the reference to
``DEAR 952.227-11'' which has been removed, with ``37 CFR 401.14.''
<bullet> Section 952.231-71: This final rule revises the
``Insurance--Litigation and Claims'' clause, in paragraph (f)(2) to
explicitly identify the property clause at 48 CFR 970.5245-1 that
defines ``contractor's managerial personnel.''
<bullet> Section 952.232-7: As detailed in the description to
section 932.971, DOE has added this new ``Electronic Submission of
Invoices/Vouchers'' clause to ensure clarity on electronic invoicing
and payment procedures.
<bullet> Sections 952.233-2, 952.233-4, and 952.233-5: This final
rule revises the ``Service of Protest'' clause to add the provisions
previously located at sections 952.233-4 and 952.233-5, since all three
provisions had the same prescription and interrelated subject matter.
Sections 952.233-4 and 952.233-5 have been removed.
<bullet> Section 952.242-71: This final rule adds a new
``Conditional Payment of Fee, Profit or Incentives'' clause to replace
three existing clauses (section 952.204-76, Conditional Payment of Fee
or Profit--Safeguarding Restricted Data and Other Classified
Information, section 952.223-76, Conditional Payment of Fee or Profit--
Safeguarding Restricted Data and Other Classified Information and
Protection of Worker Safety and Health, and section 952.223-77,
Conditional Payment of Fee or Profit--Protection of Worker Safety and
Health). Like the previous clauses, the new clause provides for a
reduction in payment to a contractor if the contractor fails to meet a
performance requirement relating to environment, safety and health or
security or safeguarding of restricted data and other classified
information. The new clause also includes updated references and
reflects revisions made for clarity.
<bullet> Section 952.245-2: This final rule revises section
952.245-2 to update the clause prescription to conform with the current
FAR.
<bullet> Section 952.245-5: This final rule revises section
952.245-5 to update the clause prescription to conform with the current
FAR.
<bullet> Section 952.250-70: This final rule revises the ``Nuclear
Hazards Indemnity Agreement'' clause to correctly reflect the current
underlying statute and to eliminate ``effective date'' considerations
not germane to contracts awarded in 2020 and beyond. The clause has
been updated to delete Note 1 in accordance with 2005 Pub. L. 109-58,
sec. 610(b), which amended Atomic Energy Act (AEA) section 234A(d) to
eliminate the exclusion from civil penalties for certain identified
non-profit institutions. Prior to amendment, AEA section 234A(d)
provided that the provisions of AEA section 234A on imposition of civil
penalties would not apply to the University of Chicago for activities
associated with Argonne National Laboratory; the University of
California for activities associated with Los Alamos National
Laboratory, Lawrence Livermore National Laboratory, and Lawrence
Berkeley National Laboratory; American Telephone and Telegraph Company
and its subsidiaries for activities associated with Sandia National
Laboratories; Universities Research Association, Inc. for activities
associated with FERMI National Laboratory; Princeton University for
activities associated with Princeton Plasma Physics Laboratory; the
Associated Universities, Inc. for activities associated with the
Brookhaven National Laboratory; and Battelle Memorial Institute for
activities associated with Pacific Northwest Laboratory
<bullet> Section 970.0100: Section 970.0100 indicates that part 970
of the DEAR provides DOE policies, procedures, provisions, and clauses
that implement and supplement the FAR and other parts of the DEAR for
the award and administration of M&O contracts. This final rule revises
this section to clarify that part 970 does not apply to non-M&O
contracts, except as approved by the cognizant SPE, or as otherwise
prescribed in the DEAR.
<bullet> Section 970.0371-8: Section 970.0371-8 requires that
certain information be included in a written disclosure statement made
by an employee of an M&O contractor. In this final rule, DOE requires
each disclosure statement to include an acknowledgement that the
employee has read and is familiar with DOE Order 486.1, Department of
Energy Foreign Government Sponsored or Affiliated Activities.
Additionally, section 970.0371-8 already requires that each disclosure
statement include an acknowledgement that the employee has read and is
familiar with the DOE publication entitled ``Reporting Results of
Scientific and Technical Work Funded by DOE''. This final rule updates
the title of that publication to reflect the publication's current
title.
<bullet> Section 970.0371-9: Section 970.0371-9 requires a
contracting officer to insert the clause at section 970.5203-3,
Contractor's Organization, in all M&O contracts and provides that in
paragraph (a) of that clause, the words ``and managerial personnel (see
970.5245-1(j))'' may be inserted after ``(see 952.215-70)''. This final
rule updates the cross reference from ``970.5245-1(j)'' to ``970.5245-
1(k)'' to reflect the new location of that paragraph.
<bullet> Subpart 970.04: This final rule redesignates sections
970.0407-1, 970.0407-1-1, 970.0407-1-2, and 970.0407-1-3 as provided by
the table in section II of this document to conform with the FAR
numbering system. A cross reference to section 970.0407-1-3 in section
970.5204-3 is updated to reflect the new numbering.
<bullet> Section 970.0404-1: Section 970.0404-1 provides
definitions of several terms. This final rule removes that section
because the definitions of those terms are provided in section 904.401
and duplication in this subpart is unnecessary.
<bullet> Section 970.0404-2
[cir] Paragraph (a) of section 970.0404-2 points to several places
where the reader may find information about the National Industrial
Security Program,

[[Page 89732]]

information concerning contractor ownership when national security or
atomic energy information is involved, and information regarding
contractor ownership involving national security program contracts.
Paragraph (b) of section 970.0404-2 provides that all DOE elements
should undertake the necessary precautions to ensure that DOE and
covered contractor personnel, programs and resources are properly
protected from foreign intelligence threats and activities. The
regulations in 48 CFR part 904 contain DOE policies, definitions,
provisions, and clauses associated with the safeguarding and security
of classified information. In order to avoid unnecessary duplication,
this final rule replaces the content of paragraphs (a) and (b) with a
new paragraph (a) that points the reader to that part.
[cir] Paragraph (c) of section 970.0404-2 provides that for DOE M&O
contracts and other contracts designated by the Senior Procurement
Executive, or designee, the clause entitled ``Conditional Payment of
Fee, Profit, and Other Incentives--Facility Management Contracts''
implements the requirements of section 234B of the Atomic Energy Act
regarding the use of a contract clause that provides for an appropriate
reduction in the fee or amount paid to the contractor in the event of a
violation by the contractor or any contractor employee of any rule,
regulation, or order relating to the safeguarding or security of
restricted data or other classified information. This final rule makes
minor editorial revisions to this text for streamlining purposes and
redesignates the content as paragraph (b) of section 970.0404-2.
<bullet> Section 970.0404-4: Paragraph (a) of section 970.0404-4
requires a contracting officer to include the clause located at 48 CFR
5204-1 in certain contracts. Paragraph (b) of section 970.0404-4 points
the contracting officer to sections 904.404 and 904.7103 for the
prescription of solicitation provisions and contract clauses relating
to safeguarding classified information and foreign ownership, control,
or influence over contractors. This final rule removes section
970.0404-4 because (1) the requirement in paragraph (a) of that section
has been relocated to paragraph (d)(7) of section 904.404 and (2) the
references to sections 904.404 and 904.7103 are unnecessary and
duplicative of those sections.
<bullet> Section 970.0407-1-3 (970.0407-130): This final rule
amends this section to revise the prescription for the ``Access to and
Ownership of Records'' clause to reflect the addition of a non-M&O
version of the ``Integration of Environment, Safety, and Health into
Work Planning and Execution'' clause and to make minor editorial
changes.
<bullet> Section 970.0801-2: This final rule revises section
970.0801-2 to replace the reference to the Federal Property Management
Regulation at 41 CFR part 101-43 with a reference to the Federal
Management Regulation at 41 CFR chapter 102. This change is necessary
because the General Services Administration (GSA) is phasing out the
Federal Property Management Regulation and transitioning its sections
to the Federal Management Regulation.
<bullet> Section 970.0905: This final rule revises section 970.0905
to add a sentence at the end referring Contracting Officers to the
policy in subpart 909.5 which is also applicable to M&O contracts.
<bullet> Section 970.1100-1: This final rule amends section
970.1100-1 to more concisely state DOE policy. Accordingly, paragraphs
(a) and (b) are streamlined and combined into paragraph (a). Paragraph
(c) is redesignated as new paragraph (b). Paragraph (d) is removed, as
its content is limited to internal procedures and does not need to be
included in the regulation.
<bullet> Section 970.1100-2: This final rule removes this section
as its content is limited to internal procedures and does not need to
be included in the regulation.
<bullet> Subpart 970.15: This final rule redesignates sections
970.1504-1 through 970.1504-4 as provided by the table in section II of
this document to conform with the FAR numbering system. Cross-reference
changes are made in sections 970.5215-5, 970.3102-3-70, and 970.5244-1
to conform with the new numbering.
DOE's guidance in subpart 970.15 covers DOE's fee policy for its
Management and Operating contracts. This final rule amends DOE's
current guidance found in sections 970.1504-1-1 through 970.1504-5 by
revising and reorganizing it (into sections 970.1504-100 through
970.1504-400) to simplify and state explicitly its construct, sequence
for calculating, and step-by-step process for determining the total
available fee for an M&O contract. These amendments reflect DOE's
Contracting Officers' several decades of experience with the current
articulation of the policy. They have found the policy satisfactory,
have demonstrated a comprehensive understanding of its details, and
have reflected their understanding in implementing the policy.
Nonetheless, DOE's Contracting Officers have indicated it would be
efficacious, for many reasons (training new procurement analysts,
communicating with other offices, such as program, reviewing, and legal
offices, etc.) if DOE's policy:
[cir] were reorganized and restated in a more straightforward, more
``plain English'' format;
[cir] was pruned of what has become unnecessary guidance for a
number of reasons (for example, guidance covered adequately in the FAR,
or DOE's internal guidance, such as DOE Acquisition Guide chapters);
[cir] reflected Contracting Offers' current practices in executing
the policy;
[cir] included a detailed example of a fee calculation; and
[cir] conformed more tightly to the FAR's articulation of fee
policy, fee constructs, fee definitions, and fee terms, to the extent
appropriate.
The amendments provide a clearer articulation of the policy. DOE
has: (1) deleted or revised entire sections and large portions of
sections of the policy, sometimes without replacement, sometimes
replacing the deleted or revised language with much more concise
language; (2) reorganized the policy; and (3) added a detailed example.
Often when replacing deleted or revised language with more concise
language, different aspects of the topic addressed by the deleted or
revised language appear more cogently stated in several sections of the
policy (sometimes more than once in several sections).
In its amending of its guidance, DOE retained the current fee
policy for M&O contracts and clarified it. There are no changes of any
significance to the current fee policy, with two exceptions. The two
exceptions that DOE has made are: eliminating the special
considerations for determining fee for laboratory M&O contracts (which
now appears in the current policy at section 970.1504-103); and raising
the Classification Factor of for research and development at a
laboratory (which now appears in the current policy at section
970.1504-109(e)(4)) from 1.25 to 1.5.
It is worth noting that one minor change to the current fee policy
is the suggested order of the steps in determining the maximum total
available fee for a one-year period and the use of the ``significant
factors'' (in one of the steps) in calculating the maximum total
available fee amount for a one-year period. The revisions--which
reflect the current practice and DOE Contracting Officers' desire to
formalize it--establish that suggested order and use. The new suggested
order and use and the current suggested order and use both consider the
fee base, fee

[[Page 89733]]

schedules, classification factors, and significant factors, and both
orders and uses produce the same result. The revised suggested order
and use require (for each type of effort) calculating an appropriate
percentage derived from considering the significant factors (and
applying it to the product of the maximum fixed fee and the
classification factor). The current fee policy's suggested order and
use--implied at sections 970.1504-1-5(c) and 970.1504-1-9(c)--require
(for each type of effort) determining an appropriate fixed fee amount
for each of the significant factors, summing those appropriate fixed
fee amounts, and multiplying that sum by the classification factor.
The revised suggested order and process comprise considering the:
magnitude of the effort (reflected by the total fee base for the year);
type of effort (reflected by the allocation of the total fee base to
the three fee schedules); nature, difficulty, complexity, and
importance of the work (reflected by the choice of classification
factors); and specific circumstances of the procurement (reflected by
the appropriate percentages derived from considering significant
factors). This order entails using (for each type of effort) the
maximum amount of fixed fee from the fee schedule, multiplying it by
the classification factor, and multiplying by the appropriate
percentage (derived from considering the significant factors).
The current fee policy's suggested order and process comprise
considering the: magnitude of the effort (reflected by the total fee
base for the year); type of effort (reflected by the allocation of the
total fee base to the three fee schedules); specific circumstances of
the procurement (reflected by the determining an appropriate fee
amounts for each of the significant factors and summing those amounts);
and nature, difficulty, complexity, and importance of the work
(reflected by the choice of classification factors). This order entails
using (for each type of effort) the fixed fee that would have been
calculated for a cost-plus-fixed-fee contract action (using the fee
schedules and considering the significant factors) and multiplying that
fixed fee by the classification factor.
A second minor change to the current fee policy is deleting cost
reduction incentives, which are discussed in the current policy at
sections 970.1504-1-4(f), 970.1504-5(c), and 970.5215-4. DOE no longer
uses cost reduction incentives, using instead value engineering, which
is covered in the DOE Acquisition Guide and the FAR.
A detailed breakdown of the changes to subpart 970.15 is provided
below.
<bullet> Section 970.1504-1-1 (970.1504-101): DOE has revised this
section for clarity.
<bullet> Section 970.1504-1-2 (970.1504-102): DOE has revised this
section to reorganize and clarify the agency's fee policy for M&O
contracts. Additionally, in some cases, this final rule revises and
moves its coverage from other sections to this section. In other cases,
this final rule revises its coverage in this section and moves it to
other sections. In its amendments to this section, among other things,
the current numbering of sections 970.1504-1-2(a) through (h) will
become sections 970.1504-102(a) through (b).
[cir] Paragraph (a)(1): This final rule adds this paragraph to
clarify DOE policy on fee for M&O contracts. DOE's policy on types of
contracts and fee arrangements suitable to M&O contracts that was
originally located at 48 CFR 970.1504-1-4(a)(1) and 970.1504-1-2(h) is
revised for clarity and moved to this paragraph.
[cir] Paragraph (a)(2): This final rule adds this paragraph to
reorganize and clarify DOE M&O contract fee policy to: (1) move the
policy requiring that a cost-plus-fixed-fee contract only be used if
approved in advance by the Senior Procurement Executive (SPE) or
designee from current 48 CFR 970.1504-1-4(b) to this paragraph; and (2)
add a mention of the limitation on the fee for a cost-plus-fixed-fee
contract found at 48 CFR 15.404-4(c)(4)(i), which makes unnecessary the
last sentence of current section 970.1504-1-2(d), which is deleted.
[cir] Paragraph (a)(3): This final rule adds this paragraph to
reorganize and clarify DOE policy on the approval of base fee in a
cost-plus-award-fee M&O contract. The policy requiring that a base fee
amount may only be used if approved in advance by the SPE or designee
has been revised and moved from 48 CFR 970.1504-1-4(c)(3) to this
paragraph.
[cir] Paragraph (a)(4): In this final rule, DOE adds this paragraph
to reorganize and clarify DOE policy that incentive fees allocated to
evaluation periods under cost-reimbursement type contracts should, to
the greatest extent appropriate, be tied to a specific portion of the
maximum total available fee. In addition, this final rule revises and
moves the policy described herein from 48 CFR 970.1504-1-2(b) to this
paragraph.
[cir] Paragraph (a)(5): This final rule adds paragraph (a)(5) to
reorganize and clarify DOE policy that: (1) the maximum total available
fee amount may not exceed the fee derived from this section unless
approved in advance by the SPE or designee; and (2) a request to allow
a higher fee must be in writing and must clearly explain why the
situation merits consideration. In addition, this final rule revises
and moves the policy described herein from, in part, both 48 CFR
970.1504-1-2(d) and 970.1504-1-10 to this paragraph.
[cir] Paragraph (a)(5)(i): This final rule adds paragraph (a)(5)(i)
to reorganize and clarify DOE policy that typically, only a situation
where either unusually difficult objective performance incentives would
be used or where successful performance would provide extraordinary
value would merit consideration for allowing a higher fee. In addition,
this final rule revises and moves the policy described herein from 48
CFR 970.1504-1-10 to this paragraph.
[cir] Paragraph (a)(5)(ii): This final rule adds paragraph
(a)(5)(ii) to reorganize and clarify DOE policy that when a contract
requires a contractor to use its own facilities, equipment, or other
resources for contract performance (e.g., when there is no letter-of-
credit financing), consideration may be given, subject to approval by
the SPE or designee, to allowing a maximum total available fee amount
above the amount calculated by this section. In addition, this final
rule revises and moves the policy described herein from 48 CFR
970.1504-1-2(g) to this paragraph.
[cir] Paragraph (a)(6): This final rule adds paragraph (a)(6) to
reorganize and clarify DOE policy that each M&O contract must set forth
in the contract (or in a Performance Evaluation and Measurement Plan
(PEMP) or similar document) the methods that will be used to rate the
contractor's performance and to determine the fee the contractor's
performance will earn. The DOE Contracting Officer must ensure all
important areas of contract performance are specified in the contract
or in a PEMP (or similar document), even if such areas are not assigned
a specific portion of the maximum total available fee the contractor
might earn. In addition, this final rule revises and moves the policy
described herein from 48 CFR 970.1504-1-9(h) and (j), in part, to this
paragraph.
[cir] Paragraph (a)(6)(i): This final rule adds paragraph (a)(6)(i)
to reorganize and clarify that an M&O contract is an ``incentive
contract'' as that term is used in 48 CFR part 16, subpart 16.4, and
that subpart 16.4 prohibits the use in a contract of other than cost
incentives without also providing a cost incentive (or constraint).
This paragraph is added to better align with the cost-plus-award-

[[Page 89734]]

fee contract policy in subpart 16.4, particularly 48 CFR 16.401(e).
[cir] Paragraph (a)(6)(ii): This final rule adds paragraph
(a)(6)(ii) to clarify: (1) award fee not earned during the award fee
cycle shall not be carried over to any future award fee cycle; (2) when
the award fee cycle consists of one evaluation period, unearned award
fee amounts may not be carried over from one evaluation period to the
next; and (3) when the award fee cycle consists of two or more
evaluation periods the Contracting Officer may make the decision that
unearned award fee amounts may be carried over from one evaluation
period to the next, if the periods are within the same award fee cycle.
This paragraph is added to better align its cost-plus-award-fee
contract policy with the cost-plus-award-fee contract policy in 48 CFR
16.401(e)(4).
[cir] Paragraphs (b)(1) and (2): This final rule reorganizes,
revises, and moves the policy at section 970.1504-1-2(f) to this
section to clarify: (1) that before issuing a competitive solicitation,
the Head of the Contracting Activity (HCA) must coordinate the maximum
total available fee amount with the SPE or designee; (2) a competitive
solicitation must identify the greatest maximum total available fee
amount the Government will accept and may invite offerors to propose a
lower fee amount; and (3) before beginning to negotiate an extension to
an existing contract, the HCA must coordinate the greatest maximum
total available fee amount the HCA will accept and the maximum total
available fee amount targeted for negotiation with the SPE or designee.
<bullet> Section 970.1504-1-3 (970.1504-103): First, this final
rule deletes the policy describing special considerations for
determining fee for laboratory M&O contracts in current sections
970.1504-1-3(a) through (c)(7). That policy required determining
whether any fee is appropriate for laboratory M&O contracts; DOE's new
policy is that a fee is appropriate. DOE believes, based upon its
experience with the current policy, the new policy will encourage a
larger potential group of entities to compete for DOE's laboratory M&O
contracts, which will result in better outcomes for DOE. (This deletion
of the laboratory M&O contracts fee policy is one of the two proposed
changes of any significance to the current M&O contracts fee policy
mention earlier, the other being the Classification Factor for research
and development at a laboratory was increased.) Second, a better
articulation of DOE's general policy for fee determination for M&O
contracts is now added at sections 970.1504-103(a) through (f). DOE's
general policy for fee determination has been and remains that: all M&O
contracts are ``incentive fee'' contracts as described in 48 CFR part
16, subpart 16.4; and DOE will evaluate (per a contract's performance
measures) the contractor's performance to determine the fee the
contractor's performance has earned it. This is a long-standing policy,
which, in essence, is strewn across several sections of the current fee
policy, not necessary in ideal sequential order, or covered by the
Federal Acquisition Regulation and not reiterated in the DEAR. Stated
in more detail, the long-standing construct of fee policy for M&O
contracts has been and will remain:
Objective performance measures are preferred to subjective ones and
tying specific fee to specific outcomes should be accomplished whenever
feasible. Consequently, fixed-price actions would be ideal (albeit the
unlikelihood of their being feasible in M&O contracts) and cost-plus-
fixed-fee actions (such as base fee in a cost-plus-award-fee action)
are to be avoided whenever practical (and their use requires high level
approval). The formula to determine the maximum total available fee is
based on annual fee determinations using fees bases, fee schedules,
classification factors, and appropriate percentages. More specifically,
the maximum total available fee amount for an M&O contract is the sum
of the maximum total available fee amounts of the contract's one-year
periods. The maximum total available fee amount in a one-year period is
based on the fee base of the one-year period. Calculating the maximum
total available fee amount for a one-year period requires considering
the: magnitude of the effort (reflected by the total fee base for the
year); type of effort (reflected by the allocation of the total fee
base to the three fee schedules); nature, difficulty, complexity, and
importance of the work (reflected by the choice of classification
factors); and specific circumstances of the procurement (reflected by
the appropriate percentages derived from considering significant
factors).
This better articulation of DOE's general policy for fee
determination for M&O contracts reflects the construct of (and some
pertinent details of) DOE's long-standing general policy for fee
determination in more concise terms, in a more logical sequence, and in
more congruence with the Federal Acquisition Regulation's articulation
of the concept of contract types and fee arrangements. In essence, DOE
is pulling and revising (sometimes integrating constructs, sometimes
integrating and revising specific language, sometimes deleting
unnecessary language, sometimes revising necessary language) policy
guidance from the following sections and placing it in section
970.1504-103:
[cir] 970.1504-7(a) through (e)--Fee base;
[cir] 970.1504-1-6(a) and (b)--Calculating fixed fee;
[cir] 970.1504-1-9(a) through (j)--Special considerations: Cost-
plus-award-fee;
[cir] 970.1504-1-5--General considerations and techniques for
determining fixed fees;
[cir] 970.1504-1-2(i)--which addresses conditional payment of fee,
profit, and other incentives;
[cir] 970.1504-1-4(e)--which addresses requirements if using
multiple contract types;
[cir] 970.1504-1-4(f)--which addresses cost reduction incentives;
this section is deleted without replacement because DOE determined its
policy for value engineering (stated in its Acquisition Guide) was more
appropriate;
[cir] 970.1504-1-4(g)--which addresses the responsibilities of
operations and field offices in establishing contract types and fee
arrangements;
[cir] 970.1504-1-2(c) and (d)--which discuss annual fee
determination, maximum amount of annual fee, and the role of the Senior
Procurement Executive;
[cir] 970.1504-1-2(b)(3)--which discusses preferences for fixed
price awards, objective measures, and tying fee to specific portions of
the fee pool;
[cir] 970.1504-1-4(c)(3) and (4)--which discuss risk, base fee,
performance fee and its two components, and the preference for the
objective fee component; and
[cir] 970.1504-1-4(d)--which addresses performance fee, measures
and objectives, the preference for tying fee to outcomes, and the
allocation of fee to outcomes.
(It should be noted that some of the pulled and revised language
listed above appears more than once, that is, it appears not only in
970.1504-103(a) through (f) but also--for the purpose of improving
readability--in other sections of DOE's revised fee policy.)
[cir] Paragraphs (a) through (b)(6): This final rule reorganizes,
revises, and moves the policy currently located at sections 970.1504-
7(a) through (e)--Fee base, sections 970.1504-1-6(a) and (b)--
Calculating fixed fee, sections 970.1504-1-9(a) through (j)--Special
considerations: Cost-plus-award-fee, and section 970.1504-1-5--General
considerations and techniques for determining fixed fees to sections
970.1504-103(a) through (b)(6) to clarify

[[Page 89735]]

the construct of DOE's long-standing general policy for fee
determination for M&O contracts. The guidance in the portions of
general policy moved to section 970.1504-103 includes guidance
regarding: magnitude of the effort; type of the effort; nature,
difficulty, complexity, and importance of the work; specific
circumstances of the procurement; maximum total available fee amount
for the contract; annual fee bases; allocation of the maximum total
available fee amount; the fee base in each of the one-year periods of
the contract; allocating that total available fee to the evaluation
periods of the contract based upon what best motivates the contractor's
superior performance; allocating incentives in a manner that will
result in reasonable contractor risk and provide the contractor with
the greatest incentive; maximum total available fee amount equaling the
sum of the maximum total available fee amounts in the contract's one-
year periods; the maximum total available fee amount for a one-year
period is based on the fee base for that one-year period; the fee base
is an estimate of the allowable costs (with some exclusions) for that
one-year period; the fee base is a basic component of the fee
schedules, which link the fee base to fee; the amount of the fee base
and the amount of fee in the fee schedules are annual amounts;
calculating the maximum total available fee amount for a one-year
period is based on the contract's one-year periods and their fee bases;
usually the maximum total available fee amount for a one-year period is
allocated to the same one-year period; when a maximum total available
fee amount is established for longer than a year, it is subject to
adjustment; the SPE's or designee's approval is required for evaluation
periods other than one year; the Government's objective is to allocate
incentives in a manner that will provide the contractor with the
greatest incentive for efficient and economical performance; and
occasions could occur where it would be appropriate to allocate the
maximum total available fee amount for a year to a subsequent one-year
evaluation period, an evaluation period of greater than a year, or to
several evaluation periods.
[cir] Paragraph (b)(7): To clarify the construct of DOE's long-
standing general policy for fee determination for M&O contracts, this
final rule: (1) reorganizes and revises the policy currently located at
sections 970.1504-1-2(b)(3), (c), and (d), sections 970.1504-1-4(c)(2)
through (d), and sections 970.1504-1-9(b) and (h) and moves it to
paragraph (b)(7); (2) repeats some of the M&O contract Total Available
Fee contract clause's language and adds it to this paragraph,
specifically the clause's language requiring the negotiations to
establish the requirements for the year and the maximum total available
fee that the contractor can earn for its performance must occur before
the contract year begins, and the language requiring the maximum total
available fee allocated to an evaluation period be apportioned among a
base fee amount and a performance fee amount; and (3) rephrases some of
the Federal Acquisition Regulation's discussion at 48 CFR part 16,
subpart 16.4, regarding incentives, objective performance requirements,
and subjective performance requirements, and award fee and adds it to
this paragraph.
[cir] Paragraph (b)(8): This final rule reorganizes, revises, and
moves the policy at currently located at sections 970.1504-1-2(b)(3)
and (e) to this paragraph.
[cir] Paragraph (c): This final rule adds this paragraph because it
repeats and emphasizes the fee determining sequence mentioned earlier.
Paragraph (a) addressed the general requirements for determining fee,
and paragraph (b) addressed the maximum total fee amount for the
contract, which necessarily mentioned total available fee for each one-
year period of the contract. Therefore, it adds to the readability of
DOE's M&O contract fee policy to address determining the maximum total
available fee for each one-year period of the contract at this point.
(The next paragraph addresses conditional payment of fee, profit, and
other incentives, which applies to paragraphs (a), (b), and (c).)
Paragraph (c) alludes to base fee, fee schedules, classification
factors, appropriate percentages derived from the significant factors,
and the specific details for calculating the maximum total available
fee one-year period and an example, subjects addressed comprehensively
at sections 970.1504-105, 970.1504-106, 970.1504-107, 970.1504-108, and
970.1504-104, respectively.
[cir] Paragraph (d): This final rule reorganizes and revises the
policy currently located at section 970.1504-1-2(i) and moves it to
paragraph (d). DOE is taking this action to clarify the significance to
the fee determining process of the performance requirements of the
contract relating to environment, safety, and health (ES&H) and
relating to safeguarding of Restricted Data and other classified
information.
[cir] Paragraph (e): This final rule reorganizes and revises the
policy on multiple contract types and fee arrangements at section
970.1504-1-4(e) and moves it to paragraph (e). This final rule removes
the policy on cost reduction incentives at section 970.1504-1-4(f) and
the associated clause at section 970.5215-4, which is prescribed at
section 970.1504-5(c). DOE no longer uses the types of cost reduction
incentives at section 970.1504-1-4(f), using instead value engineering,
which is covered in the DOE Acquisition Guide and the Federal
Acquisition Regulation.
[cir] Paragraph (f): This final rule reorganizes and revises the
policy at section 970.1504-1-4(g) and moves it to paragraph (f).
<bullet> Section 970.1504-1-4 (970.1504-104): This final rule
reorganizes and revises this section to simplify and state explicitly
the construct underlying, the sequence for calculating, and the step-
by-step process for determining the total available fee for an M&O
contract and includes a numerical example for determining the total
available fee for a one-year period of an M&O contract. While this
section articulates the gist of the current fee policy, there is
neither an exact parallel to this section in the current fee policy nor
a direct link to specific language in the current fee policy. This
section is based in large part on the current fee policy's sections on
fee base, fee schedules, classification factors, and significant
factors, which are found at sections 970.1504-107, 970.1504-106,
970.1504-109, 970.1504-105, respectively.
<bullet> Section 970.1504-1-5 (970.1504-105): This final rule
revises and reorganizes the section to clarify DOE's policy on the
calculation of fee base, which is the estimate of necessary allowable
costs, with some exclusions. DOE's policy on fee base is moved here
from 48 CFR 970.1504-1-7. In addition, the section was revised to align
with the revised section 48 CFR 970.1504-1-4 (48 CFR 970.1504-104).
<bullet> Section 970.1504-1-6 (970.1504-106): This final rule
revises and reorganizes the section to clarify DOE policy on the
calculation of the M&O maximum total available fee amount, for a one-
year period once the total fee base for the year is determined,
including the use of the DOE M&O fee schedules (section 970.1504-1-6),
which list the maximum amount of fixed fee. The DOE fee schedules that
are based on three types of efforts (Production, research and
development (R&D), environmental management (EM)). The section was
revised to align with the revised section 970.1504-1-4 (48 CFR
970.1504-104). In addition, DOE has revised the section to better align
the section with DOE

[[Page 89736]]

policy that an M&O contract is an ``incentive contract'' unless
otherwise approved by the SPE.
<bullet> Section 970.1504-1-7 (970.1504-107): This final rule
revises and reorganizes the section to clarify DOE policy on
application of the DOE facility classification factors in the
calculation of the maximum total available fee, to increase the
Classification Factor for research and development conducted at a
laboratory from 1.25 to 1.5, to add a Classification Factor (of 1) for
efforts performed using a fixed fee, and to relocate the policy on
application of facility classification factors from current 48 CFR
970.1504-1-9 to this section. In addition, the section has been revised
to align with the revisions to 48 CFR 970.1504-1-4 (48 CFR 970.1504-
104). This final rule increases the Classification Factor for research
and development conducted at a laboratory because of the increased
importance DOE places on such efforts. This final rule adds the
Classification Factor for efforts performed using a fixed fee because,
despite the rare use of fixed fee, use of a fixed fee is permitted by
DOE's fee policy.
<bullet> Section 970.1504-1-8 (970.1504-108): This final rule
revises and reorganizes the section to clarify DOE policy on
consideration of the specific circumstances of the procurement in the
calculation of the maximum total available fee, the application of DOE
significant factors for each type of effort, and relocates the DOE
policy on the consideration of significant factors from current 48 CFR
970.1504-1-5 to this section.
<bullet> Section 970.1504-1-9 (970.1504-109): This final rule
revises the section to clarify the sequence for calculating, and the
step-by-step process for determining, the maximum total available fee
for an M&O contract. In addition, the section is revised to align with
revisions to section 970.1504-1-4 (48 CFR 970.1504-104).
<bullet> Section 970.1504-1-10 (970.1504-110): This final rule
revises the section to reorganize and clarify the policy for
calculating the maximum total available fee for an M&O contract, the
policy for the length of evaluation periods, the policy for allocating
the maximum total available fee amount for a one-year period, and the
policy for the use of evaluation periods greater than one year. The
policy on the length of evaluation periods and the use of evaluation
periods greater than one year is relocated from the current 48 CFR
970.1504-1-2(c) and (d) to this section.
<bullet> Section 970.1504-1-11 (970.1504-111): This final rule
revises the section, which is simply a repetition of the last step in
calculating the maximum total available fee for a contract. This
section is aligned with the revisions in section 970.1504-1-4 (48 CFR
970.1504-104).
<bullet> Section 970.1504-2-1 (970.1504-201): This final rule
amends this section to maintain its current guidance on cost or pricing
data (relocated from current section 970.1504-3-1). This final rule
also removes its current guidance: on the documentation of the fee
prenegotiation objective (section 970.1504-1-11); and on the price
negotiation (section 970.1504-2). The language in the deleted sections
is unnecessary either because it is primarily procurement guidance
adequately covered elsewhere (among other places, at 48 CFR 15.406-1
and 15.406-3 and internal DOE guidance) or primary funding guidance
that should be addressed in the Office of Chief Financial Officer's
guidance.
<bullet> Section 970.1504-3 (970.1504-300): This final rule moves
the policy currently located at 48 CFR 970.1504-5 to this section. The
revisions to the text of section 970.1504-5 include:
[cir] deleting references to the Total Available Fee clause's
Alternates I through IV, currently found at 48 CFR 970.1504-5(a)(1)
through (4) because elsewhere DOE is revising the Total Available Fee
clause and eliminating its Alternates I through IV;
[cir] deleting the prescription for the Cost Reduction clause
(currently found at 970.1504-5(c)) because DOE no longer uses cost
reductions incentives (DOE is also eliminating the policy and clause
for cost reductions incentives, found at sections 970.1504-1-4(f) and
970.5215-4, respectively, because DOE uses value engineering instead of
cost reduction incentives);
[cir] deleting the references to the clause at 970.5215-3's
Alternates I and II, found at 48 CFR 970.1504-5(b)(2) and (3) because
elsewhere DOE is revising the clause to eliminate the need for the
Alternates; and
[cir] revising for clarity DOE's policy on using the Limitation on
Fee solicitation provision (found at 970.5215-5).
<bullet> Section 970.1706-1: This final rule amends this section to
clarify the DOE policy on the award, renewal, and extension of M&O
contracts.
[cir] Paragraph (a): This paragraph is revised to clarify the DOE
policy that: (1) effective performance under an M&O contract is
facilitated by the use of a relatively long contract term; (2) only the
Secretary can authorize the use of an M&O contract; and (3) only the
Secretary can renew the original authorization of an M&O contract.
[cir] Paragraph (a)(1): This paragraph is added to reorganize
content and clarify DOE policy that an M&O contract shall provide for a
base term not to exceed the lesser of five years or the maximum term
the Secretary authorized.
[cir] Paragraph (a)(2): This paragraph is added to reorganize
content and clarify DOE policy that: (1) the contract may include
option terms provided no option term exceeds the lesser of five years
or the maximum term the Secretary authorized; (2) the sum of base term
and the option terms does not exceed the lesser of 10 years or the
maximum term the Secretary authorized for the contract; (3) in addition
to the base term and the option terms just described, an M&O contract
for a national laboratory that is competitively awarded may provide for
award term incentives provided none exceed the maximum term the
Secretary authorized for each; and (4) the sum of base term, option
terms, and award terms shall not exceed the lesser of 20 years or the
maximum term the Secretary authorized for the contract.
[cir] Paragraph (a)(3): This paragraph is added to reorganize
content and clarify DOE policy that after the Secretary's original
authorization of the use of the M&O contract has expired, any
continuation of work under an M&O contract must be preceded by the
Secretary's renewal of the authorization for use of an M&O contract.
[cir] Paragraph (a)(4): This paragraph is added to reorganize
content and clarify DOE policy that a sole source extension of an M&O
contract to the incumbent must be justified under one of the statutory
authorities listed in 48 CFR 6.302 and authorized by the Secretary.
[cir] Paragraph (a)(5): This paragraph is added to reorganize
content and clarify DOE policy that the specific duration of the base
term, option terms, and award terms of an M&O contract must be
established concurrent with the Secretary's authorization (or renewal
of his/her authorization) to use an M&O contract (for original use,
sole source award to a new contractor, competitive award to a new
contractor or to the incumbent, or sole source extension of the
contract to the incumbent).
[cir] Paragraph (b): This paragraph is revised to clarify the DOE
policy that the contracting officer's decision to exercise an option
must be approved by the Senior Procurement Executive and the cognizant
Assistant Secretary(s), and that in deciding to exercise the option,
the contracting officer shall make the determinations required by 48
CFR 17.605.
[cir] Paragraph (b)(1): This paragraph is added to clarify DOE
policy that for the exercise of an M&O option period, the contracting
officer shall consider the

[[Page 89737]]

extent to which performance-based management contract provisions are
present or can be negotiated into the contract.
[cir] Paragraph (b)(2): This paragraph is added to reorganize
content and clarify DOE policy that for the exercise of an M&O option
period, the contracting officer shall make the determinations required
by 48 CFR 17.605 in the manner described therein. The content formerly
located at paragraph (b) is moved here and provides that as part of the
review required by 48 CFR 17.605(b), the contracting officer shall
assess whether competing the contract will produce a more advantageous
offer than exercising the option; the incumbent contractor's past
performance under the contract; the extent to which performance-based
management contract provisions are present, or can be negotiated into,
the contract; and the impact of a change in a contractor on the
Department's discharge of its programs. The contracting office shall
address the considerations in 48 CFR 17.605 in the decision that the
exercise of the option is in the Government's best interest. The new
paragraph adds that the determination described in 48 CFR 17.207(d) and
(e)(2) is not required, and because of the way in which the evaluation
of cost to the Government is performed in the award of an M&O contract
that includes options, the contracting officer need only determine the
option was evaluated as part of the initial competition and contains a
maximum fee. The contracting officer need not, for example: issue a new
solicitation; informally analyze prices; or determine the option is the
more advantageous offer.
<bullet> Sections 970.1707-1, 970.1707-3, and 970.1707-4: This
final rule amends these sections to make minor editorial changes to
update references and update policy to reflect the Department of Energy
Research and Innovation Act (Pub. L. 115-246). In addition to
referencing the Economy Act (31 U.S.C. 1535), 42 U.S.C. 7259a has been
added as the authority for the Secretary to allow work to be performed
at DOE laboratories ``on behalf of other departments and agencies of
the Government, agencies of State and local governments, and private
persons and entities''.
<bullet> Sections 970.1708, 970.1708-1, 970.1708-2, and 970.1708-3:
This final rule adds these sections to integrate a new DOE policy on
Agreements for Commercializing Technology (ACT) and prescribe a new
clause at 48 CFR 970.5217-2. The rule adds new regulatory coverage that
provides authorization for M&O contractors to conduct third party-
sponsored research at the M&O contractor's risk under Agreements for
Commercializing Technology. Whereas the requirements and policy for
Agreements for Commercializing Technology are currently contained in
DOE guidance and in special provisions included in contracts, this
final rule will establish regulatory coverage and incorporate the
requirements into a new clause at 48 CFR 970.5217-2. DOE is adding the
new policy and clause to allow M&O contractors to engage with industry
more flexibly on research and technology transfer projects. Through
ACT, an M&O contractor can negotiate and accept financial and
performance risks and accept terms and conditions more consistent with
industry practice that are not permitted under Cooperative Research and
Development Agreements and SPP agreements to advance technology
transfer and the commercialization of technologies.
<bullet> Section 970.1907-8: This final rule adds this section to
clarify that Contracting Officers should insert the clause at 48 CFR
5219-9, Small Business Subcontracting Plan, in all M&O solicitations
and contracts and to prescribe a new clause that supplements the FAR
clause at 48 CFR 970.5219, ``Small Business Subcontracting Plan''. The
new clause incorporates a DOE policy concerning ``Management and
Operating Contractor Subcontract Reporting Capability (MOSRC)'' to
collect key information about M&O contractor first tier subcontracts
for reporting to the Small Business Administration.
<bullet> Subpart 970.22: This final rule redesignates sections
970.2201-1 through 970.2201-2-2 as provided by the table in section II
of this document to conform with the FAR numbering system. Cross
references in sections 970.5222-1, 970.5222-2, and 970.5244-1 have been
updated to reflect the new numbering.
<bullet> Section 970.2201-1-1 (970.2201-110): This final rule
amends this section to identify situations with non-management and
operating contracts where the applicability of management and operating
contractor basic labor policies may apply.
<bullet> Section 970.2201-1-2 (970.2201-120): This final rule
amends this section in several places to identify the basis for the
policies presented by adding a citation to the underlying regulations.
The amendments also include minor textual edits for clarity, including
applicability to certain non-M&O contracts as described in section
970.2201-1-1 and limit the scope of this section to wages, salaries,
and employee benefits under the collective bargaining agreement
process. The final rule also transfers more general matters from this
section to section 970.2201-140.
<bullet> Section 970.2201-1-3 (970.2201-130): This final rule
revises this section to add language to expand the applicability of
section 970.5222-1, Collective Bargaining Agreements--Management and
Operating Contracts to certain non-M&O contracts (as described in
section 970.2201-110) and require that it be flowed down to
subcontracts for protective services or other services performed at a
DOE-owned site that affect continuity of operations.
<bullet> Section 970.2201-140: This final rule adds this section to
incorporate policy on critically skilled employees initially
established in DOE Acquisition Letter 94-19 and to emphasize the
connection to a contractor's compensation system and policies in the
recruitment and retention of a critically skilled workforce. This
section also emphasizes that costs in support of this policy must be
reasonable and meet allowability requirements. Lastly, the discussion
of wages, salaries, and employee benefits removed from section
970.2201-1-2 is relocated to this section.
<bullet> Sections 970.2204, 970-2204-1, and 970-2204-1-1: This
final rule revises section 970.2204 to clarify that both non-management
and operating contracts and management and operating contracts are
subject to the same subpart 922.4 governing labor standards involving
construction. Accordingly, the reader is pointed to the policy in
subpart 922.4, and section 970.2204-1 is removed as duplicative.
Section 970.2204-1-1 is relocated to subpart 922.4 as well.
<bullet> Section 970.2210: This final rule revises this section to
update the reference to the Service Contract Act of 1965. The section
heading is revised to read ``Service contract labor standards'' and the
section text updates the reference to read ``The Service Contract Labor
Standards, historically referred to as the Service Contract Act of
1965''.
<bullet> Section 970.2270: This final rule revises this section
regarding unemployment compensation to better comport with existing
federal and state unemployment compensation laws and eliminate
inconsistencies.
<bullet> Section 970.2270-2: This final rule adds this prescription
to ensure Contracting Officers include the clause at section 970.5222-
4, Unemployment Compensation, in applicable solicitations and contracts
and that fill-in data are also identified by the Contracting Officer.

[[Page 89738]]

<bullet> Section 970.2301-1: This final rule removes this section
as its contents include an out-of-date hyperlink, reference to the
requirements of a rescinded Executive order, and internal procedures
that are not necessary to set forth in regulation.
<bullet> Section 970.2301-2: This final rule revises this section
to: (1) add a prescription for the inclusion of the clause at section
952.223-78, ``Sustainable Acquisition Program''; (2) remove
prescriptions for clauses that are proposed for removal (section
970.5223-6, which is removed because the Executive order that is its
basis has been revoked and section 970.5223-7 which duplicates the
clause at section 952.223-78); and (3) remove prescriptions for various
FAR clauses as they are already prescribed in 48 CFR chapter 1 and it
is unnecessary to prescribe them here.
<bullet> Section 970.2303-2-70: This final rule redesignates this
section as section 970.2303-2 in order to conform with FAR numbering
and revises the text of the section to update the office name in
paragraph (c)(2)(ii).
<bullet> Section 970.2305: This final rule redesignates section
970.2305 consisting of sections 970.2305-1 through 970.2305-4 as
970.2605 consisting of sections 970.2605-1 through 970.2605-4
respectively. These changes are necessary to align with recent FAR
restructuring which moved ``Drug Free Workplace'' coverage from FAR
23.5 to FAR 26.5. Conforming changes are also made as necessary to
update references to the associated FAR coverage as well as to the
referenced DEAR clauses which are appropriately redesignated.
<bullet> Section 970.2306: This final rule redesignates section
970.2306 as 970.2606. These changes are necessary to align with recent
FAR restructuring which moved ``Drug Free Workplace'' coverage from FAR
23.5 to FAR 26.5. Conforming changes are also made as necessary to
update references to the associated FAR coverage as well as to the
referenced DEAR clauses which are appropriately redesignated.
<bullet> Section 970.2672-3: This final rule revises the section to
clarify the applicability of 48 CFR 952.226-74 ``Workforce
Restructuring and Displaced Employee Hiring Preference'' to both non-
management and operating contracts and management and operating
contracts pursuant to section 3161 of the National Defense
Authorization Act for Fiscal Year 1993.
<bullet> Section 970.2673-2: This final rule revises the section to
change the prescription for the clause at section 970.5226-3,
``Community Commitment'', making it optional rather than mandatory.
<bullet> Section 970.2701-1: This final rule revises the section to
clarify that subpart 970.27 applies to contracts for decontamination
and decommissioning activities.
<bullet> Sections 970.2702 and 970.2702-70: This final rule makes
several amendments to sections 970.2702 through 970.2702-6.
Specifically, the rule: (1) revises the heading to section 970.2702 and
section numbering to conform to the FAR subpart 27.2 which this subpart
supplements; and (2) consolidates clause prescriptions formerly located
in sections 970.2702-2 through 970.2702-6 into new section 970.2702-70.
<bullet> Section 970.2703-1: This final rule revises the section to
streamline content by removing paragraphs (b)(1) through (5) as its
content is adequately addressed elsewhere, and redesignating paragraph
(c) as paragraph (b).
<bullet> Section 970.2703-2: This final rule revises the section to
address more clearly when each of the patent clauses should be used
based on the type of Contractor and patent waivers granted. In
addition, paragraph (a)(2) addresses ``privately funded technology
transfer'' activities that are authorized under Alternate I of 48 CFR
970.5227-3. Although there is no specific language prescribed by an
Alternate in this clause, the instructions allow further changes to the
patent clause if DOE or the Contractor requests to further define use
of royalty funds, cost restrictions and liability related to privately
funded licensing activities. Since DOE has replaced a DEAR clause for
subcontracts to non-profit organization or small business firms with
the FAR provision at 37 CFR 401.14, a new paragraph (h) is added to
address the use of appropriate Alternates I or II for 48 CFR 952.227-11
to add agency implementing regulations and, if applicable, DOE's
Declaration of Exceptional Circumstance for substantial U.S.
manufacture.
<bullet> Section 970.2704-2: This final rule revises this section
to: (1) add a sentence at the end of paragraph (a) that, in compliance
with Government-wide mandates to make research results publicly
available, references section 935.010 for R&D results conveyed in
scientific and technical information and DOE Order 241.1B which
addresses requirements for scientific and technical information that
are stored in the Office of Scientific and Technical Information
(OSTI); and (2) revises the last sentence of paragraph (e) to reflect
the new standard of not requiring the Contractor to renew copyright
exclusivity every five years, which was administratively burdensome and
hampered long-term licensing activity, but to notify Patent Counsel and
OSTI when commercial activity ceases.
<bullet> Section 970.2704-3: This final rule revises the section to
add more clarity as to when to use either of the Rights in Data clauses
in M&O Contracts.
<bullet> Section 970.2770-2: This final rule revises this section
to reflect the addition of the new clause at section 970.5217-2,
Agreements for Commercializing Technology (ACT), and require its
inclusion in new awards for or extensions of existing DOE laboratory or
weapon production facility M&O contracts. By authorizing the use of
ACT, the Contractor may engage with third parties with more flexibility
in terms, but the Contractor accepts greater risks in advance funding
and liability.
<bullet> Section 970.2803-1: This final rule revises this section
by updating the office name in paragraph (b)(1). Additionally, in
paragraph (b)(3), this final rule establishes the Head of Contracting
Activity as the official responsible for approving management and
operating contractor employees' benefit plans because that individual
is better situated to make these determinations.
<bullet> Section 970.2803-2: This section is revised to update the
reference in the last sentence from ``(f)(3)(C)'' to
``(f)(1)(iii)(C)''.
<bullet> Subpart 970.31: This final rule redesignates sections
970.3101-00-70 through 970.3102-05-70 as provided by the table in
section II of this document to conform with the FAR numbering system.
<bullet> Section 970.3101-2: This section is added to clarify that
the cost principles of 48 CFR 31.2 and subpart 970.31 apply to M&O
contracts, regardless of entity type.
<bullet> Section 970.3102-3-70 (970.3102-370): This section is
revised to remove the parenthetical reference in paragraph (a)(3)(i)
because DOE's fee policy no longer distinguishes between a contract for
the management and operation of a laboratory and a contract for the
management and operation of a non-laboratory.
<bullet> Section 970.3102-05-6 (970.3102-506): This final rule
revises this section by removing the last sentence of paragraph (a)(6)
which states ``For purposes of designating the threshold, total
compensation includes only the employee's salary and cash bonus or
incentive compensation.'' Removing this sentence increases DOE
flexibility in this area to account for other things which should be
included in the definition of total compensation, such

[[Page 89739]]

as deferred compensation. In addition, paragraph (p)(1) which
references the Office of Federal Procurement Policy senior executive
compensation benchmark is removed because that information is covered
in the FAR. This final rule also adds a pointer to that coverage at the
end of paragraph (a)(7)(ii).
<bullet> Section 970.3200-1: This final rule revises the section,
in paragraph (c), by removing the words ``remedy coordination
official'' and adding in their place ``Head of the Contracting
Activity''. This change is intended to improve clarity since ``remedy
coordination official'' is an undefined term that is not widely used
whereas ``Head of the Contracting Activity'' is universally used and
understood in the acquisition community.
<bullet> Section 970.3200-1-1: This final rule redesignates section
970.3200-1-1 as section 970.3200-11 to conform with the FAR numbering
system. A cross reference in section 970.5232-1 is updated to reflect
the new numbering.
<bullet> Section 970.3270: This section is revised by removing
section 970.5203-1, ``Management Controls,'' from the list of standard
financial management clauses at paragraph (a)(4) and redesignating
paragraphs (a)(5) through (8) as paragraphs (a)(4) through (7). The
management controls clause is prescribed elsewhere and does not need to
be prescribed here as well.
<bullet> Section 970.3501-1: This section is revised to remove an
obsolete reference.
<bullet> Section 970.3501-2: This final rule revises this section
to update references and clarify that only a federal Contracting
Officer can obligate the Government to place work on the contract and
obligate the Government to reimburse the contractor under the contract.
<bullet> Section 970.4102-1: This final rule revises this section
to update office names, remove references to a rescinded DOE Order,
clarify that Federal Energy Management Program (FEMP) concurrence is
not necessary for NNSA programs, and make minor editorial changes.
<bullet> Subpart 970.42: This final rule redesignates sections
970.4207-03-02, 970.4207-03-70, and 970.4207-05-01 as provided by the
table in section II of this document to conform with the FAR numbering
system. Cross references in sections 970.3101-10 and 970.5242-1 are
updated to reflect the new numbering.
<bullet> Section 970.4207-05-01(970.4207-501): This section is
revised, in paragraph (b)(4)(ii) to add the words ``if such costs have
been the subject of a DOE audit'' to the end of the sentence. This
change is made in order to clarify that the contracting officer cannot
resolve any questioned costs that have been the subject of a DOE audit
without first obtaining the opinion of the DOE's auditor on the
allowability of such costs.
<bullet> Section 970.4401-1: This section is revised to remove
Balanced Scorecard metrics as a means of evaluating purchasing systems
and allow for other metrics to be used. This change is made because the
Balanced Scorecard program does not include metrics for evaluating M&O
contractor purchasing systems.
<bullet> Section 970.4402-1: This final rule revises this section
to add a new paragraph (c) which states that the M&O contractor's
purchasing performance, including compliance with its approved system
and methods, will be evaluated against the performance criteria and
measures set forth in 48 CFR part 44, subpart 44.3, using the
procedures articulated in DOE policies including DOE guidance on
oversight of M&O Contractor's Purchasing Systems.
<bullet> Section 970.4501-1: This final rule amends this section by
revising the section heading to read ``Applicability'' and replacing
the existing section text (moved to new section 970.4501-2) with
language that clarifies the applicability of this subpart to M&O
contractors and on-site environmental management and other major prime
contractors as designated by the SPE. A reference to 41 CFR chapter 109
is also added.
<bullet> Section 970.4501-2: This final rule adds this section with
text taken from the former section 970.4501-1. Paragraph (a) is
modified by adding ``and environmental management, and other major
prime contractors located at DOE sites'' to the end of the first
sentence; removing the second sentence; and updating the reference to
managerial personnel in the third sentence from ``paragraph (j)'' to
``paragraph (k)''.
<bullet> Section 970.5203-1: This final rule amends the
``Management Controls'' clause, in the introductory text, by removing
the words ``and 970.3270(a)(4)'' before the words ``insert the
following clause:''. It is only necessary to prescribe this clause in
one location, and the second prescription located at section
970.3270(a)(4) was therefore removed (as described above).
<bullet> Section 970.5204-1: This final rule removes the
``Counterintelligence'' clause from part 970 and relocates it to
section 952.204-74, as this requirement pertains to both M&O and non-
M&O contractors.
<bullet> Section 970.5204-3: This final rule revises the ``Access
to and Ownership of Records'' clause to incorporate a class deviation.
Paragraph (b) is revised to delete the parenthetical instruction to
Contracting Officers in the second sentence as well as the last
sentence of paragraph (b)(1), which lists examples of employee-related
systems of record. Paragraph (g) is revised to replace the automatic
flow down requirement based on the presence of the ``Integration of
environment, safety, and health into work planning and execution''
clause currently at section 970.5223-1 with language that requires the
contractor to flow down the clause (or maintain the applicable records
themselves) whenever the subcontract scope of work could result in
potential exposure to radioactive or other toxic substances that can
cause long term health impacts.
<bullet> Section 970.5215-1: This final rule revises the ``Total
available Fee: Base Fee Amount and Performance Fee Amount'' clause to
make minor editorial revisions throughout to improve clarity.
<bullet> Section 970.5215-3: This final rule revises the
``Conditional Payment of Fee, Profit, and other Incentives--Facility
Management Contracts'' clause to: update references; make revisions for
clarity; remove Alternate I (it addressed contracts without security
requirements; its requirements are now combined with the basic clause);
and remove Alternate II (it addressed contracts awarded on a cost plus
award fee basis; it is no longer necessary).
<bullet> Section 970.5215-4: This final rule removes the ``Cost
Reduction'' clause. Because the Department has a value engineering
policy for M&O contracts, a cost reduction clause is not necessary.
<bullet> Section 970.5215-5: This final rule revises the
``Limitation on Fee'' clause by updating the reference for the clause
prescription in the introductory text and making minor editorial
changes for clarity in paragraph (b).
<bullet> Section 970.5217-1: This final rule revises the
``Strategic Partnership Projects Program (Non-DOE Funded Work)'' clause
to incorporate the Research and Innovation Act and Master Scope of Work
requirements, which reduce the transactional approvals by DOE for
previously approved groups of projects. In paragraph (d)(3), DOE has
modified its requirements for requiring intellectual property indemnity
to allow the contractor to reserve the provision when the sponsor is a
federally-funded entity (DOE accepting liability to promote Government
funded research) or a state or local government or public university,
which may be prohibited from indemnifying others by state law. Minor
editorial changes have also been made, to include consistently

[[Page 89740]]

referencing ``SPP projects'' rather than ``agreement package''.
<bullet> Section 970.5217-2: This final rule adds a new
``Agreements for Commercializing Technology'' clause in order to
integrate a new DOE policy that was developed to allow M&O contractors
to engage with industry more flexibly on research and technology
transfer projects. Through ACT, an M&O contractor can negotiate and
accept financial and performance risks and accept terms and conditions
more consistent with industry practice that are not permitted under
Cooperative Research and Development Agreements and SPP agreements.
Whereas the requirements and policy for Agreements for Commercializing
Technology are currently contained in DOE guidance and in special
provisions included in contracts, this final rule will establish
regulatory coverage and incorporate the requirements into this new
clause.
<bullet> Section 970.5219: This final rule adds a new ``Small
Business Subcontracting Plan'' clause, in order to integrate a new DOE
policy concerning the ``Management and Operating Contractor Subcontract
Reporting Capability (MOSRC)'', a DOE system, and associated processes
to collect key information about M&O contractor first tier subcontracts
for reporting to the Small Business Administration.
<bullet> Section 970.5222-4: This final rule adds a new
``Unemployment Compensation'' clause to address situations where a
contractor, under federal and state unemployment rules are permitted to
opt out of paying the state unemployment insurance tax and permitted to
instead reimburse the state for actual claims paid out to its former
employees. This section requires notification to the Government of its
election and asserts governments right to review such changes to assess
budgetary and programmatic risks when opting out.
<bullet> Section 970.5223-3: This final rule redesignates the
provision entitled ``Agreement regarding Work-place Substance Abuse
Programs at DOE sites'' as 970.5226-4 and makes conforming changes to
the prescription in the introductory text. These changes are necessary
to align with recent restructuring of FAR Part 23 which moved the
corresponding ``Drug Free Workplace'' coverage from FAR 23.5 to FAR
26.5.
<bullet> Section 970.5223-4: This final rule redesignates the
``Workplace Substance Abuse Programs at DOE sites'' clause as 970.5226-
5 and makes conforming changes to the prescription in the introductory
text. These changes are necessary to align with recent restructuring of
FAR Part 23 which moved the corresponding ``Drug Free Workplace''
coverage from FAR 23.5 to FAR 26.5.
<bullet> Section 970.5223-6: This final rule removes the
``Executive Order 13423, Strengthening Federal Environmental, Energy,
and Transportation Management'' clause because Executive Order 13423
has been rescinded.
<bullet> Section 970.5223-7: This final rule removes the
``Sustainable Acquisition Program'' clause on the basis that it
duplicates the clause at section 952.223-78, which is prescribed in
section 923.172.
<bullet> Section 970.5226-1: This final rule revises the
``Diversity Plan'' clause to incorporate the more current terminology
of ``Diversity, Equity, Inclusion, and Accessibility'' (DEIA) and make
minor editorial revisions. This update will better align the DOE clause
with current Administration initiatives and will clarify the broader
scope of recent DEIA initiatives.
<bullet> Section 970.5227-1: This final rule revises the ``Rights
in Data-Facilities'' clause to add new definitions of Assistant General
Counsel for Technology Transfer and Intellectual Property, Department
of Energy, and Patent Counsel for clarity. The revisions also add a new
paragraph (b)(4) requiring the Contractor to deposit technical data at
the Office of Scientific and Technical Information per the DOE Order
241.1. Paragraph (c)(3) is added to allow the Government to instruct
the Contractor to assert copyright in technical data or software and
transfer title to the Government for licensing and distribution if
necessary. Paragraph (d) is modified to allow Patent Counsel to
determine what Alternates are appropriate to data rights clauses in
subcontracts. In order to allow for competitive solicitations,
Alternate II is added to include a provision in the Limited Rights
Notice to allow for the use of contractor's proprietary data in
solicitations for government facilities being constructed, modified or
decontaminated and decommissioned.
<bullet> Section 970.5227-2: This final rule revises the ``Rights
in Data-Technology Transfer'' clause to add several new definitions of
Assistant General Counsel for Technology Transfer and Intellectual
Property, Department of Energy, Open Source Software, and Patent
Counsel for clarity. Paragraph (b) was broadened to allow the lab to
assert copyright from just articles to ``works'' such as drawings,
chapters in books, workshop documents, datasets, etc. that are released
to the public. This allows control of the content when the public uses
or references this copyright work, but still satisfies DOE's duty to
disseminate the results of its research. Also, Office of Scientific and
Technical Information requirements are updated in this section to
comply with DOE Order 241.1. Added paragraph (c)(3) allows the
government to direct the Contractor to assert copyright and transfer
title to the Government for further control and distribution of
technical data and software. As part of the broadening of copyright
assertion without DOE Patent Counsel approval, paragraph (d) expands
the type of data that the Contractor can protect for control without
commercializing and adds a shorter notice to the publisher if
necessary. Since paragraph (d) expanded the type of data, paragraph (e)
is revised to require DOE Patent Counsel approval when the Contractor
needs to control distribution to advance the goals of the technology
transfer mission through commercialization. When the Contractor is
granted permission to assert copyright, the five-year renewal periods
have been changed to a period of commercialization activities since
software can be useful for decades and licensees are reluctant to
commercialize for only five years if DOE Patent Counsel rejected any
extensions of time. The government may distribute copies to the public
of the copyrighted work after the period of commercialization has
ended. Paragraph (f) is added to address copyright assertion and
distribution in open source software (OSS). The Contractor must notify
the funding program that the Contractor intends to distribute the
software as OSS and the program has two weeks to object. DOE Patent
Counsel can supply that approval if a funding program doesn't exist.
This section also provides the requirements that the Contractor to
retain records, distribute OSS such as the type of OSS licenses used
and allow the public free access to software. Paragraph (g),
Subcontracting, has been revised to allow DOE Patent Counsel to approve
the use of 48 CFR 52.227-14, Rights in Data-General, or 48 CFR 52.227-
17, Rights in Data-Special Works. The definitions in section 927.409(a)
have been removed to use Alternate I of 48 CFR 52.227-14. The paragraph
(d)(3) in section 927.409 has been replaced with Alternate VIII of 48
CFR 952.227-14 to allow DOE Patent Counsel to approve copyright
requests. Similarly, Alternate I of 48 CFR 952.227-17 permits DOE
Patent Counsel to direct a subcontractor to assert copyright in
technical data and transfer to the Government or a third party such as
the Contractor. This will allow the

[[Page 89741]]

Laboratory to consolidate copyright title if portions are generated by
subcontractors. Alternate II of this clause is added to include a
provision for Limited Rights Data in the Notice for government
facilities being constructed, modified or decontaminated and
decommissioned.
<bullet> Section 970.5227-3: This final rule revises the
``Technology Transfer Mission'' clause to address the M&O Contractor's
use of Trademark and Service marks with regards to the Laboratory names
and facilities. In paragraph (a), statutory updates are included to
comply with the Laboratory Modernization and Technology Transfer Act.
Paragraph (b) includes, for clarity, new definitions for Bailment,
Assignment, Strategic Partnership Projects (SPP), Agreements for
Commercializing Technology (ACT), Master Scope of Work, and Joint Work
Statement. Paragraph (d), Conflicts of Interest--Technology Transfer,
has been modified in paragraph (d)(8) to include more information when
the Contractor requests for approval of some exclusive licenses or
assignments of technology to third parties. In addition, paragraph
(d)(10) is revised to better define when the DOE is to be notified of
potential conflicts when evaluating proposals on behalf of the program.
In paragraph (f), U.S. Industrial Competitiveness, DOE has narrowed
that applicability of this clause from intellectual property to only
subject inventions. The Exceptional Circumstance Determination for U.S.
Competitiveness (substantial U.S. manufacturing) when licensing
contractor technology is added to this clause. After many years of
experience, DOE has determined that a less cumbersome procedure, which
involves relying on information available from United States Trade
Representative (USTR) websites, can be utilized for obtaining the
relevant information to assist in the consideration by the M&O
contractor in determining whether the potential foreign licensee or
assignee of laboratory inventions has similar protections for
intellectual property in that foreign country. Paragraph (g),
Indemnity-Product Liability, was amended to exclude CRADA (Cooperative
Research and Development Agreements) and SPP requirements for product
liability indemnity because it is covered under guidance for those
agreements. Paragraph (l) was amended to allow the annual technology
transfer plan to be included in the Annual Laboratory Plan. Paragraph
(n)(3)(iii) was added to require the CRADA Final Report required in DOE
Order 483.1 to be submitted to OSTI. Paragraph (n)(5) conflict of
interest was changed from ``preparation, negotiation, or approval'' to
``negotiation, approval or performance'' of CRADAs since preparing the
agreements would include support staff with no control over the content
and performance is added to capture the principal investigator's role.
When requirements for providing a Technology Partnership Ombudsman was
added to the Contract, it was accidently added to Alternate I. To
correct this error, paragraph (p) was added to move the Technology
Partnership Ombudsman from Alternate I into the contract clause.
Alternate I was revised to remove the ombudsman provision.
<bullet> Section 970.5227-4: This final rule revises the
``Authorization and Consent'' clause in paragraphs (c)(1) through (3)
to replace $100,000 with ``simplified acquisition threshold'' so that
when the simplified acquisition threshold limit is increased, this
clause does not have to update the dollar value.
<bullet> Section 970.5227-5: This final rule revises the ``Notice
and Assistance Regarding Patent and Copyright Infringement'' clause, in
paragraph (c) to replace $100,000 with ``simplified acquisition
threshold'' so that when the simplified acquisition threshold limit is
increased, this clause does not have to update the dollar value.
<bullet> Sections 970.5227-6 through 970.5227-9: This final rule
revises the introductory text of each of these sections to reflect a
new cross reference to 970.2702-70.
<bullet> Sections 970.5227-10 and 970.5227-12: This final rule
revises the clauses at section 970.5227-10, ``Patent Rights-Management
and Operating Contracts, Nonprofit Organization or Small Business Firm
Contractor,'' and section 970.5227-12, ``Patent Rights-Management and
Operating Contracts, For-Profit Contractor,'' in order to reflect
statutory changes and addition of approved determinations of
exceptional circumstance (DEC). Paragraph (a) of both clauses adds
definitions of Initial Patent Application and Statutory Period for
clarity. Paragraph (b)(3) of the clause at section 970.5227-10
(previously located at paragraph (b)(2)) and paragraph (b)(6) of the
clause at section 970.5227-12 (previously located at paragraph (b)(5))
have been modified to clarify when the Contractor may elect title to
inventions that are covered under a DEC. Paragraph (c) of both clauses
has been revised to allow electronic reporting using the Government's
iEdison or similar system along with certain information such as award
numbers. Both clauses have changed the requirement for ``publication
approval'' to ``publication review'' requiring the Contractor Invention
Identification Procedures to address notification to DOE instead of
approval. In paragraph (g) of both clauses, the reference to 48 CFR
925.227-11 has been replaced with 37 CFR401.14 because 48 CFR 952.227-
11 has been revised with Alternates I and II for agency implementation
of the DEC. In paragraph (j), March-in Rights, both clauses were
modified to remove the four reasons where DOE can exercise this right
by referencing the statute (for nonprofit organization or small
business firm contractors) or patent waiver (for For-Profit
Contractors.) Both clauses have added paragraph (t), U.S.
Competitiveness, in compliance with the Determination of Exceptional
Circumstance for Domestic Manufacture of DOE Science and Energy
Technologies. Lastly, both clauses added a final paragraph on
Unauthorized Access to require the Contractor to adequately protect
materials related to inventions and notify DOE of a breach.
<bullet> Section 970.5227-11: This final rule revises the ``Patent
Rights-Management and Operating Contracts, For-profit Contractor Non-
Technology Transfer'' clause in a few ways. First, the clause title is
changed to remove ``Non-Technology Transfer'' and add ``No Patent
Waiver'' in its place. Second the final rule adds a definition of
Department of Energy to paragraph (a) for clarity. Additional changes
are made to reflect statutory changes. Furthermore, paragraph
(c)(2)(vii) requires not only the B&R code but related information such
as funding announcements or SPP/CRADA numbers to make it easier to
identify inventions from other sources and paragraph (c)(5) is modified
to include reporting inventions to Government electronic reporting
systems instead of the contracting officer or patent counsel. Finally,
this final rule adds an ``Unauthorized Access'' paragraph (o) to
require the Contractor to adequately protect materials related to
inventions and notify DOE of a breach.
<bullet> Section 970.5232-2: This final rule revises the ``Payments
and Advances'' clause to: (1) re-organize and re-number the paragraphs;
(2) make editorial changes to streamline and simplify content to
improve clarity and update references; and (3) add a paragraph
concerning ``provisional fee,'' which DOE has never addressed in the
DEAR, to Alternate II. Although DOE has issued internal guidance that
defines provisional fee, articulates when it might be useful, and
specifies how to

[[Page 89742]]

use it, neither the FAR nor the DEAR define or addresses it.
Consequently, DOE has concluded it would be prudent to heighten
awareness of DOE's view of provisional fee by including some discussion
of it in DEAR.
<bullet> Section 970.5232-3: This final rule revises the
``Accounts, Records, and Inspection'' clause to clarify (in paragraph
(c)) the contractor's responsibility to either perform a sufficient
amount of audit work of its subcontractors' incurred costs or arrange
for an audit of its subcontractors' incurred costs. Minor editorial
changes for clarity are also made.
<bullet> Section 970.5232-5: This final rule revises the
``Liability with Respect to Cost Accounting Standards'' clause, in the
introductory text, by updating the citation for the clause
prescription.
<bullet> Section 970.5232-6: This final rule revises the
``Strategic Partnership Project Funding Authorization'' clause, in the
introductory text, by updating the citation for the clause
prescription.
<bullet> Section 970.5232-7: This final rule revises the
``Financial Management System'' clause to: (1) reorganize and number
the paragraphs; (2) clarify that contractors must maintain and
administer a financial management system that is in accordance with
Generally Accepted Accounting Principles (GAAP) for Federal Entities as
defined by the Federal Accounting Standards Advisory Board and
implemented by the DOE Financial Management Handbook and other
implementing policies; and (3) make minor editorial changes for
clarity.
<bullet> Section 970.5235-1: This final rule revises the
``Federally Funded Research and Development Center Sponsoring
Agreement'' clause to make minor editorial revisions and to clarify
that only the Contracting Officer can place work on the contract and
obligate the Government to reimburse the Contractor for the work.
<bullet> Section 970.5244-1: This final rule revises the
``Contractor Purchasing System'' clause to: (1) clarify the Contactor's
obligations regarding: maintaining documentation; providing audit or a
sufficient amount of audit work; and for which subcontracts the
Contractor must provide audit or a sufficient amount of audit work; (2)
change the approval level for subcontractor indemnification requests
from the SPE to the HCA in consultation with local legal counsel in
paragraph (l) in order to give flexibility for local level approval of
routine, low risk indemnity; (3) add seven clauses to the list of
required subcontract flowdown requirements in paragraph (x); and (4)
update references and make minor editorial changes for clarity.
<bullet> Section 970.5245-1: This final rule revises the
``Property'' clause to add references to 41 CFR chapters 102 and 109
and make minor editorial changes for clarity.

V. Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

Executive Order (E.O.) 12866, ``Regulatory Planning and Review,''
as supplemented and reaffirmed by E.O. 13563, ``Improving Regulation
and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011), and amended by
E.O. 14094, ``Modernizing Regulatory Review,'' 88 FR 21879 (April 11,
2023), requires agencies, to the extent permitted by law, to (1)
propose or adopt a regulation only upon a reasoned determination that
its benefits justify its costs (recognizing that some benefits and
costs are difficult to quantify); (2) tailor regulations to impose the
least burden on society, consistent with obtaining regulatory
objectives, taking into account, among other things, and to the extent
practicable, the costs of cumulative regulations; (3) select, in
choosing among alternative regulatory approaches, those approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; distributive impacts;
and equity); (4) to the extent feasible, specify performance
objectives, rather than specifying the behavior or manner of compliance
that regulated entities must adopt; and (5) identify and assess
available alternatives to direct regulation, including providing
economic incentives to encourage the desired behavior, such as user
fees or marketable permits, or providing information upon which choices
can be made by the public. Section 6(a) of E.O. 12866 also requires
agencies to submit ``significant regulatory actions'' to the Office of
Information and Regulatory Affairs (OIRA) for review. This final rule
has been determined to be a ``significant regulatory action'' under
Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 51735,
October 4, 1993). Accordingly, this rule was reviewed under that
Executive order by OIRA of the Office of Management and Budget (OMB).
Consistent with Executive Orders 12866, 13563 and 14094, DOE issues
this final rule only on a reasoned determination that the benefits of
the rule justify its costs, and, in choosing among alternative
regulatory approaches, DOE has selected those approaches that maximize
net benefits. DOE is undertaking a broad but largely procedural
revision of its acquisition regulation to update and streamline the
policies, procedures, provisions, and clauses that are currently
applicable to its contracts.
This final rule updates, clarifies, and eliminates coverage that is
unclear, obsolete, or unnecessarily duplicates the FAR; incorporates
class deviations into the coverage; streamlines the coverage's policies
and procedures where appropriate (taking into account DOE's and its
contractors' actual experiences); and adds several new minor clauses in
order to standardize local clause language throughout the department by
eliminating the multiple versions of local clauses in current use.
While this final rule does include several minor policy revisions, none
of the revisions are substantial and in total they will have negligible
impact on DOE's operations, its contractors, or the economy. The
revisions do not in any specific case, or in total, substantially
change the existing DEAR or how DOE and DOE contractors adhere to the
DEAR. Most of these proposed changes will not generate any additional
costs.
Nonetheless, DOE is highlighting several changes to the DEAR that
raise potential cost burden concerns and discuss the expected impacts
of these changes.
First, this final rule includes a revision of the Facility
Clearance clause and associated policy coverage to incorporate a pre-
award Interim Access procedure and allow for final Facility Clearance
post-award. This change is not expected to result in any increased
costs and is intended to benefit the Government by leveraging interim
access authorizations for key contractor personnel and improving
efficiencies in the timeliness of contract awards, and in contract
management.
Additionally, DOE is revising the M&O fee policy to simplify the
explanation of fee calculations, delete outdated requirements, and
raise the classification factor for R&D laboratory from 1.25 to 1.5.
These changes should not result in any increased costs. Most of the
changes are editorial in nature, and are internal procedures directed
to DOE contracting officers who will benefit from the simplified
explanation of fee calculations. The change in classification factor is
not expected to result in any cost increase since DOE expects no change
to the total available fees under these contracts. The revisions are
intended to reduce the administrative burden associated with routine
requests to the SPE to exceed

[[Page 89743]]

the total available fees calculated using the existing classification
factor.
Furthermore, DOE is adding several new contract clauses. Four of
these (Agreements for Commercializing Technology; Small Business
Subcontracting Plan; Conditional Payment of Fee, Profit, and Other
Incentives; Identification of Contractor Employees) are substantially
similar to clauses already widely used in DOE contracts. As a result,
these four changes will not result in any added burden or costs but
would benefit the Department and its contractors by standardizing these
clauses across contracts.
The entirely new clauses are:
<bullet> A clause to address situations where a M&O contractor is
permitted under federal and state unemployment rules to opt out of
paying the state unemployment insurance tax and instead reimburse the
state for actual claims paid out to its former employees. The new
clause requires notification to the government of the contractor's
election and asserts the government's right to review such changes to
assess budgetary and programmatic risks when opting out. This clause
only applies to M&O contracts and the notification required poses no
significant burden or cost.
<bullet> A clause to clarify the policy and procedures for
integrating DOE Directives into non-M&O contracts. Contractor
requirements documents (CRDs), attached to DOE Directives, have been
integrated into non-M&O contracts as needed for a long time. The
addition of the new clause, along with the general information section
and clause prescription is simply intended to codify the existing
process of integrating the requirements of DOE Directives into non-M&O
contracts on a bilateral basis and imposes no additional burden or
cost.
Finally, many of the changes included in this final rule will
result in benefits to the public. Because the DEAR has not had a
comprehensive update in decades, it contains outdated and unused
content. Additionally, it has citations to outdated laws and
regulations and contains sections that are duplicative of the FAR or
that are more appropriate for internal procedures and policies. The new
changes will streamline the DEAR, make it easier to read, and reflect
current practice and requirements.

B. Review Under the Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA)
requires preparation of an initial regulatory flexibility analysis for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by Executive Order 13272, ``Proper Consideration of Small
Entities in Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE
published procedures and policies on February 19, 2003, to ensure that
the potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. The Department
has made its procedures and policies available on the Office of General
Counsel's website: <a href="http://www.energy.gov/gc/office-general-counsel">www.energy.gov/gc/office-general-counsel</a>.
The DEAR governs all DOE acquisitions which obligate appropriated
funds. Using data from its Integrated Data Warehouse, DOE estimates
that it currently has approximately 3,200 prime contractors whose
contracts are governed in part by the DEAR and that approximately 2,000
of those contractors are small entities under the RFA. Due to
limitations in subaward reporting it is difficult to accurately
estimate the number of small entity subcontractors. However, based on
data from the Federal Subaward Reporting System (FSRS) and DOE's M&O
Subcontract Reporting Capability (MOSRC) system, DOE estimates that it
has approximately 15,300 subcontractors. Of those, approximately 9,000
were designated as small businesses. Therefore, DOE has reason to
believe that this final rule, which is a comprehensive update of the
DEAR, could affect a substantial number of small entities.
However, DOE expects that this rule will not have a significant
economic impact on those small entities. In fact, DOE expects that the
overall impacts of the rule will benefit small entities because the
rule revises or removes outdated information and citations, removes
extraneous procedural information that applies only to DOE's internal
procedures, and removes policy or procedures duplicative of FAR
requirements.
Moreover, the changes that are not merely technical or procedural
primarily apply to DOE's twenty-three M&O contracts. An M&O contract is
an agreement by which a private sector entity operates a DOE facility,
such as a national laboratory. None of DOE's M&O contracts are held by
small entities, and therefore changes to those contracts do not
directly impact small entities.
Furthermore, even if M&O contractors could be considered small
entities under the RFA, the changes in the rule that will only pact M&O
contracts are not economically significant.
<bullet> DOE's changes to the M&O fee policy sections will simplify
and state explicitly the methodology Contracting Officers are to
utilize for determining the total available fee for an M&O contract.
The revisions are primarily intended to reduce the administrative
burden for Contracting Officers. For instance, this rule clarifies that
the maximum total available fee amount for an M&O contract may not
exceed the fee derived from calculations included in the policy unless
approved in advance by the SPE or designee. Additionally, the rule
includes an increase in the classification factor for R&D laboratory
from 1.25 to 1.5. This change will impact 16 M&O contractors who
currently operate national laboratories (all of which are managed and
operated by large entities) but should not have a significant economic
impact because DOE does not anticipate an increase in the total
available fees approved for these contracts.
<bullet> DOE is adding a clause at section 970.5222-4 to address
situations where a M&O contractor is permitted under Federal and state
unemployment rules to opt out of paying the state unemployment
insurance tax and instead reimburse the state for actual claims paid
out to its former employees. The clause requires notification to the
government of the contractor's election and asserts the government's
right to review such changes to assess budgetary and programmatic risks
when opting out. DOE does not believe that the notification will result
in any economic impact.
<bullet> DOE is adding two clauses specific to M&O contractors:
Agreements for Commercializing Technology at section 970.5217-2 and
Small Business Subcontracting Plan at section 970.1907-8. These clauses
are substantially similar to clauses already widely used in DOE
contracts and will therefore not have a significant economic impact.
Finally, the remaining substantive revisions in the rule that are
applicable to non-M&O contracts will not have a significant economic
impact.
<bullet> The rule includes a revision of the Facility Clearance
provision at section 952.204-73, which is required in all solicitations
for which the contract work is anticipated to require access to
classified information or special nuclear material. The current
provision requires a full Facility Clearance prior to the award of a
contract requiring access to classified information, and prior to
granting any Interim Access Authorizations to key management

[[Page 89744]]

personnel. The revision provides a process that permits contract award
prior to granting a full Facility Clearance, and permit contract award
prior to granting Interim Access Authorizations to key management
personnel. There is no change to the processes themselves, only to the
timing of the processes.
<bullet> DOE adds a clause to clarify the policy and procedures for
integrating DOE Directives into non-M&O contracts. Contractor
requirements documents (CRDs), attached to DOE Directives, have been
integrated into non-M&O contracts as needed for a long time. The
addition of the clause, along with the general information section and
clause prescription is intended to codify the existing process of
integrating the requirements of DOE Directives into non-M&O contracts
on a bilateral basis and imposes no additional burden or cost to the
contractors.
<bullet> The rule includes two new clauses: Conditional Payment of
Fee, Profit, and Other Incentives at section 952.242-71 and
Identification of Contractor Employees at section 952.203-1. These
clauses are substantially similar to clauses already widely used in DOE
contracts and will therefore not have a significant economic impact.
Accordingly, DOE certifies that this final rule will not have a
significant economic impact on a substantial number of small entities,
and, therefore, no regulatory flexibility analysis has been prepared.
DOE's certification and supporting statement of factual basis will be
provided to the Chief Counsel for the Office of Advocacy of the Small
Business Administration for review under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act of 1995

This rulemaking imposes no new information or record keeping
requirements. Accordingly, Office of Management and Budget clearance is
not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et
seq.) Existing information collections imposed by the Department of
Energy Acquisition Regulation are covered by OMB Control Number 1910-
4100.

D. Review Under the National Environmental Policy Act of 1969

DOE analyzed this final rule in accordance with the National
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has
determined that the rule fits within the following categorical
exclusion listed in appendix A to subpart D of part 1021: A6
(Procedural rulemakings, including rulemaking under 48 CFR chapter 9
establishing procedures for technical and pricing proposals and
establishing contract clauses and contracting practices for the
purchase of goods and services). Therefore, this rule does not require
the preparation of either an environmental impact statement or
environmental assessment pursuant to NEPA.

E. Review Under Executive Order 13132

Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4,
1999), imposes certain requirements on agencies formulating and
implementing policies or regulations that preempt State law or that
have federalism implications. The Executive order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. DOE has determined that
this final rule does not limit the policymaking discretion of the
States. No further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Federal agencies the general duty to adhere to the following
requirements: (1) eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. Section 3(b) of Executive
Order 12988 specifically requires that Executive agencies make every
reasonable effort to ensure that the regulation: (1) clearly specifies
the preemptive effect, if any; (2) clearly specifies any effect on
existing Federal law or regulation; (3) provides a clear legal standard
for affected conduct while promoting simplification and burden
reduction; (4) specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting
clarity and general draftsmanship under any guidelines issued by the
Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met, or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law, this rule meets the relevant standards of Executive
Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. (Pub. L. 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect small governments. On March 18, 1997,
DOE published a statement of policy on its process for
intergovernmental consultation under UMRA (62 FR 12820) (This policy is
also available at: <a href="http://www.energy.gov/gc/guidance-opinions">www.energy.gov/gc/guidance-opinions</a> under ``Guidance
& Opinions'' (Rulemaking)). DOE examined this final rule according to
UMRA and its statement of policy and has determined that the rule
contains neither an intergovernmental mandate, nor a mandate that may
result in the expenditure by State, local, and Tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
year. Accordingly, no further assessment or analysis is required under
UMRA.

[[Page 89745]]

H. Review Under the Treasury and General Government Appropriations Act,
1999

Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This final rule would not have any impact on the autonomy or integrity
of the family as an institution. Accordingly, DOE has concluded that it
is not necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

The Department has determined, under Executive Order 12630,
``Governmental Actions and Interference with Constitutionally Protected
Property Rights,'' 53 FR 8859 (March 18, 1988), that this final rule
would not result in any takings which might require compensation under
the Fifth Amendment to the United States Constitution.

J. Review Under the Treasury and General Government Appropriations Act,
2001

Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002).
Pursuant to OMB Memorandum M-19-15, Improving Implementation of the
Information Quality Act (April 24, 2019), DOE published updated
guidelines which are available at: <a href="http://www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf">www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf</a>.
DOE has reviewed this rule under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.

K. Review Under Executive Order 13211

Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to the
Office of Information and Regulatory Affairs (OIRA), Office of
Management and Budget, a Statement of Energy Effects for any proposed
significant energy action. A ``significant energy action'' is defined
as any action by an agency that promulgates or is expected to lead to
promulgation of a final rule, and that: (1) is a significant regulatory
action under Executive Order 12866, or any successor order; and (2) is
likely to have a significant adverse effect on the supply,
distribution, or use of energy, or (3) is designated by the
Administrator of OIRA as a significant energy action. For any proposed
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution, or use should the
proposal be implemented, and of reasonable alternatives to the action
and their expected benefits on energy supply, distribution, and use.
This final rule, which revises and updates DOE's acquisition
regulation, would not have a significant adverse effect on the supply,
distribution, or use of energy and, therefore, is not a significant
energy action.

L. Congressional Notification

As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that the rule does not meet the criteria set forth in 5 U.S.C.
804(2).

VI. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of this final
rule.

List of Subjects

48 CFR Parts 901, 902, 909, 912, 915, 916, 926, and 951

Government procurement.

48 CFR Part 903

Antitrust, Conflict of interest, Government procurement.

48 CFR Part 904

Classified information, Government procurement.

48 CFR Part 908

Government procurement, Motor vehicles, Printing, Utilities.

48 CFR Part 917

Government procurement, Reporting and recordkeeping requirements,
Research.

48 CFR Part 922

Equal employment opportunity, Government procurement, Labor,
Reporting and recordkeeping requirements.

48 CFR Part 923

Drug abuse, Government procurement, Radiation protection.

48 CFR Part 925

Foreign trade, Government procurement.

48 CFR Part 927

48 CFR Part 931

Accounting, Government procurement.

48 CFR Part 932

Accounting, Government procurement, Loan programs--energy, Loan
programs--National defense.

48 CFR Part 933

Administrative procedure and practice, Government procurement.

48 CFR Part 935

Government procurement, Research.

48 CFR Parts 936 and 952

Government procurement, Reporting and recordkeeping requirements.

48 CFR Part 941

Government procurement, Utilities.

48 CFR Part 942

Accounting, Government procurement.

48 CFR Part 945

Government procurement, Government property.

48 CFR Part 970

Accounting, Classified information, Drug abuse, Government
procurement, Insurance, Labor, Minority businesses, Reporting and
recordkeeping requirements, Small businesses, Surety bonds, Taxes,
Whistleblowing, Women.

Signing Authority

This document of the Department of Energy was signed on October 9,
2024, by William J. Quigley, Deputy Associate Administrator,
Partnership and Acquisition Services, National Nuclear Security
Administration, pursuant to delegated authority from the Administrator,
National Nuclear Security Administration, and Berta L. Schreiber,
Director, Office of Acquisition Management, Department of Energy,
pursuant to delegated authority from the Secretary of Energy. These
documents with the original signature and date are maintained by DOE/
NNSA. For administrative purposes only, and in compliance with
requirements of the Office of the Federal Register, the undersigned DOE
Federal Register Liaison Officer has been authorized to sign and submit
the document in

[[Page 89746]]

electronic format for publication, as an official document of the
Department of Energy. This administrative process in no way alters the
legal effect of this document upon publication in the Federal Register.

Signed in Washington, DC, on October 10, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

For the reasons stated in the preamble, DOE amends chapter 9 of
title 48 of the Code of Federal Regulations as set forth below:

PART 901--FEDERAL ACQUISITION REGULATIONS SYSTEM

0
1. The authority citation for part 901 continues to read as follows:

Authority: 42 U.S.C. 7101 et. seq. and 50 U.S.C. 2401 et seq.

0
2. Section 901.103 is revised to read as follows:

901.103 Authority.

The DEAR and amendments thereto are issued by the Senior
Procurement Executives (SPEs) of the Department of Energy (DOE) and the
National Nuclear Security Administration (NNSA). The SPEs may also
approve deviations from the DEAR, together and individually. The DOE
SPE delegation is pursuant to a delegation from the Secretary of Energy
in accordance with the authority of section 644 of the Department of
Energy Organization Act (42 U.S.C. 7254), section 205(c) of the Federal
Property and Administrative Services Act of 1949, as amended (40 U.S.C.
121(c)(2)), and other applicable laws. The NNSA SPE delegation is
pursuant to a delegation from the Administrator of

[…truncated; see source link]

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Indexed from Federal Register on November 13, 2024.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.