Agency for International Development Acquisition Regulation (AIDAR): Revisions to the Incentive Awards Program for Personal Services Contractors

AGENCY:

U.S. Agency for International Development.

ACTION:

Proposed rule.

SUMMARY:

The U.S. Agency for International Development (USAID) proposes to amend its regulation regarding incentive awards for personal services contracts with individuals. In 2004 and 2015, the USAID Administrator approved policies to authorize funding for incentive and recognition awards for personal services contracts with individuals under the Agency’s authorities for such contracts. This proposed rule will allow USAID to recognize the work of an individual personal services contractor (PSC) for extraordinary performance of services under their contract by providing them with monetary or non-monetary incentive awards.

DATES:

Submit comments on or before May 17, 2019.

ADDRESSES:

Submit comments, identified by title of the Proposed Action and Regulation Identifier Number (RIN), by any of the following methods:

1. Through the Federal eRulemaking Portal at http://www.regulations.gov by following the instructions for submitting comments.

2. By Mail addressed to Marcelle J. Wijesinghe, USAID, Bureau for Management, Office of Acquisition & Assistance, Policy Division, Room 867-J, SA-44, 1300 Pennsylvania Ave. NW, Washington, DC 20523-2052.

FOR FURTHER INFORMATION CONTACT:

Richard Spencer, Telephone: 202-567-4781 or Email: rspencer@usaid.gov.

SUPPLEMENTARY INFORMATION:Start Printed Page 9740

A. Instructions

All comments must be in writing and submitted through one of the methods specified in the Addresses section above. All submissions must include the title of the action and RIN for this rulemaking. Please include your name, title, organization, postal address, telephone number, and email address in the text of the message.

Please note that USAID recommends sending all comments to the Federal eRulemaking Portal because security screening precautions have slowed the delivery and dependability of surface mail to USAID in Washington, DC.

All comments will be made available at http://www.regulations.gov for public review without change, including any personal information provided. We recommend that you do not submit information that you consider Confidential Business Information (CBI) or any information that is otherwise protected from disclosure by statute.

USAID will only address substantive comments on the rule. USAID may not consider comments that are insubstantial or outside the scope of the proposed rule.

B. Request for Comments

USAID requests comments on its proposed rule to revise the Agency’s Acquisition Regulations (AIDAR), appendices D and J to allow an individual personal services contractor to be eligible for monetary and non-monetary awards for extraordinary performance as described below.

Background

USAID awards PSCs with individuals based on multiple authorities: (1) Section 636(a)(3) of the Foreign Assistance Act of 1961, as amended (FAA, 22 U.S.C. 2396), for personal services abroad; (2) annual appropriations for Foreign Operations for a maximum number of PSCs in the U.S. (e.g., Sec. 7057(g), Division K, Pub. L. 114-113 for fiscal year 2016); or (3) program-specific provisions of the FAA, the Food for Peace Act, or an appropriations act that authorize use of a broad range of implementation authorities toward those program purposes “notwithstanding any other provision of law” (e.g., FAA Section 491, 22 U.S.C. 2292, which authorizes international assistance “to alleviate human suffering caused by natural and manmade disasters . . .”).

Over the last 27 years, USAID has awarded personal services contracts to individuals as necessary for the Agency to carry out its mission in the U.S. and overseas.

As of September 2015, of USAID’s total workforce, approximately 8 percent were U.S. PSCs, and 47 percent were cooperating country, or third country, national (CCN or TCN) PSCs. The Agency’s overseas local staff are CCNPSCs, with the exception of a very few remaining Foreign Service National (FSN) direct-hire employees. Because the Agency depends on PSCs as part of its workforce for its operations, USAID seeks to recognize and motivate excellence in contract performance.

Because PSCs are not authorized to participate in programs administered by the Office of Personnel Management (OPM), in May 2004, then Administrator Andrew Natsios used the Agency’s discretionary authority to establish a separate awards program for PSCs, distinct from the Agency’s awards program authorized by OPM for the Agency’s direct-hire employees (see 5 U.S.C. 4501 et seq. regarding incentive awards programs for “superior accomplishment” by employees within the definition of 5 U.S.C. 2105; and 5 CFR part 451). The Administrator approved a deviation from the AIDAR appendix D to expand the PSC non-monetary awards program to include limited monetary awards such as “On The Spot” or Special Act cash; and Time-Off awards. The revised PSC monetary awards program was implemented under USAID Acquisition and Assistance Policy Directive (AAPD 04-15) issued on October 15, 2004, which authorized USPSCs, and certain TCNPSCs on an exceptional basis, to be eligible for these three types of monetary incentive awards under USAID Mission, Bureau or Independent Office (M/B/IO) programs.

In March 2015, USAID’s Special Awards Committee (SAC) conducted a review of the Agency’s Awards program for its direct-hire employees. Following that review, on December 22, 2015, Acting Agency Administrator Alfonso Lenhardt approved a deviation to further expand the Agency’s PSC Awards program to include additional types of monetary and non-monetary awards similar to those provided to USAID’s direct-hire employees.

In order to implement the awards programs for PSCs as approved by the Agency in 2004 and 2015, this revision to AIDAR appendices D and J is being proposed, and will replace the deviations approved in 2004 and 2015.

Discussion

This proposed rule will amend the AIDAR to establish a separate monetary and non-monetary awards program to recognize and reward individual personal services contractors for their contributions to the accomplishment of USAID’s mission, goals, and objectives.

Based on Statute—Section 636(a)(3) of the Foreign Assistance Act of 1961, as amended; and by regulation—appendices D and J of the AIDAR, PSCs are not allowed to participate in any award program administered by OPM. Recognition of individual accomplishments by USPSCs was limited to non-monetary awards and certificates of appreciation. However, based on deviations and policy directives signed by the Head of Agency in 2004 and 2015, USAID established an interim separate awards program to make PSCs eligible to receive awards similar to the Agency’s direct-hire employee incentive awards program.

The Agency’s incentive awards program for direct-hire employees is implemented in USAID’s Automated Directives System (ADS) chapter 491. The new PSC awards program proposed in this AIDAR revision will be incorporated into appendices D and J and will be implemented as described in USAID’s PSC policy in ADS chapter 309. Where appropriate, this incentive awards program will closely parallel the program for U.S. direct-hire employees. Any award payments will be made from the same source of funding used for the individual’s contract, and in all cases separately from the pool of funds maintained for USAID direct-hire employee awards. Recognizing that USPSCs receive an annual pay comparability adjustment similar to direct-hires, as well as an annual within-grade salary increase for work evaluated at the “satisfactory performance” level, the policy requires that these awards be for performance or a special act that goes above and beyond the minimum satisfactory performance required under the contract. USAID proposes to recognize and encourage exceptional performance by PSCs when they perform special acts or create innovations that contribute to efficiency, economy, or other improvements in government operations, in the same way USAID recognizes superior performance by its direct-hire employees. The proportion of PSCs receiving cash awards at a M/B/IO or at the Agency level, and the total amount of the awards, will be consistent with, and will not exceed, the existing Agency policy for awards to U.S. direct-hire employees, as set by the Agency’s Senior Management.

The Agency’s internal policies in ADS 309 will describe the criteria for each award, any cash or other limitations associated with each award, how the PSC’s supervisors or others may nominate individuals, and how such Start Printed Page 9741nominations will be reviewed and recommended for approval. Nominations for the annual Agency level awards will generally follow the same procedures and use the same documentation as currently required for USAID’s U.S. direct-hire employees.

Regulatory Basis

Since the Agency depends so much on PSCs and their contributions to the Agency, and as the statute, Section 636(a)(3) of the Foreign Assistance Act of 1961, as amended, and the regulation, appendix D of the Agency for International Development Acquisition Regulations (AIDAR), do not permit PSCs to participate in OPM-administered programs, the Administrator has decided to use the Agency’s discretionary authority to establish a separate monetary awards program for its USPSCs. This incentive awards program is distinct and separate from the Agency’s direct-hire employee incentive awards program found in ADS 491. Additionally, this AIDAR revision will establish an incentive awards program that is different from FAR Subpart 16.4 Incentive Contracts, as the Agency’s PSC contracts are with individuals and profit or fee are not provided under these contracts. The details of this award program are available in a Mandatory Reference to ADS 309, 309mab—“Incentive Awards Program for Personal Services Contracts with Individuals”, accessible on the Agency website.

C. Impact Assessment

(1) Regulatory Planning and Review. Under E.O. 12866, OIRA has designated the proposed rule “significant” and therefore subject to the requirements of the E.O. and subject to review by the Office of Management and Budget (OMB). OIRA has determined that this Rule is not an “economically significant regulatory action” under Section 3(f)(1) of E.O. 12866. This proposed rule is not a major rule under 5 U.S.C. 804.

This rule codifies the Agency’s deviations to date from the current rule in the CFR. The costs calculated in this section are based on upper end estimates to illustrate the potential impact of these revisions from the baseline costs of the current rule. Under this proposed rule, incentive awards at the M/B/IO level paid to USPSCs, and TCNPSCs with exceptions to be paid on the GS-scale (i.e., “excepted TCNPSCs”) for fiscal years 2014-2015 averaged $86,158 per year based on historical data provided by the Bureau for Management, Office of the Chief Financial Officer (M/CFO). The administrative and processing costs for these awards averaged $47,865. Therefore, the total estimated cost for M/B/IO awards is estimated at $134,023 per fiscal year.

For the newly proposed “Agency-level” incentive awards issued from USAID headquarters, the total estimated amount that could be paid to all selected PSCs (USN, TCN and CCN) is $160,000 per fiscal year, assuming nominations are approved for every award. This figure is based on an estimated payout for all of 31 possible cash award amounts listed in ADS 309mab.

As the Agency level headquarters awards program is new and there is no historical data for such awards paid to PSCs, USAID used historical data for awards to U.S. direct hires, as provided by USAID’s Office of Human Capital and Talent Management (HCTM) for estimating the administrative and processing costs. On that basis administrative and processing costs are estimated at $118,525 per fiscal year comprised of labor for nominations, selection panels and award processing, plus ceremony event costs for a volume PSC awards equivalent to those given to direct hires. Also, as PSCs are eligible for fewer categories of Agency-level awards than are U.S. direct hires, the costs were pro-rated accordingly. Therefore, the total estimated cost for Agency-level awards from headquarters is $278,525 per fiscal year.

Based on the above, the M/B/IO awards and Agency level award issues at headquarters are estimated together estimated to cost $412,547 per fiscal year.

Note that for incentive awards at the Agency Mission level for cooperating country national (CCN) and third country national (TCN) PSCs, AIDAR appendix J authorizes such awards in accordance with the local compensation plan at each USAID Mission overseas through the “Joint Special Embassy” awards program. While this proposed rule revises the title of the Mission incentive awards program using current terminology, this rule does not otherwise affect the authority for this long-established awards program for CCN and TCN PSCs. Therefore there are no increased cost implications for this revision that updates the title of the program under AIDAR appendix J.

Overall, USAID’s proposed awards program will impact approximately 5,200 individual PSCs based on USAID’s staffing numbers for fiscal year 2015 (i.e., 775 USPSCs and over 4,470 cooperating country and third country national PSCs). The costs to implement this revision are justified as the Agency depends on PSCs as part of its workforce. Given that USAID PSCs are an important and flexible supplement for the Agency’s dynamic operations, this revision provides the Agency the ability to recognize and motivate excellence in contractor performance. Additionally, since these incentives were previously approved at the highest levels of Agency management, the costs to implement these revisions were deemed necessary as a business decision about how to best promote performance excellence by USAID PSCs.

As a regulatory matter, the cost of the rule making process to incorporate these revisions into the regulation is also justified. The AIDAR appendices include all the compensation and benefits available under personal services contracts. Therefore, the Agency needs these revisions in order to keep the regulation consistent, complete and transparent to industry, other government agencies and the general public.

(2) Regulatory Flexibility Act. The rule will not have an impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Therefore, an Initial Regulatory Flexibility Analysis has not been performed.

(3) Paperwork Reduction Act. The proposed rule does not establish a new collection of information that requires the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).


VA Acquisition Regulation: Construction and Architect-Engineer Contracts

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

The Department of Veterans Affairs (VA) is amending and updating its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency specific regulations or policies. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, we will publish them in the Federal Register. In particular, this rulemaking revises VAAR concerning Construction and Architect-Engineer Contracts, as well as affected parts covering the Department of Veterans Affairs Acquisition Regulations System, Foreign Acquisition, Contract Administration and Audit Services, Quality Assurance, Solicitation Provisions and Contract Clauses, and Forms.

DATES:

This rule is effective on April 18, 2019.

FOR FURTHER INFORMATION CONTACT:

Mr. Rafael N. Taylor, Senior Procurement Analyst, Procurement Policy and Warrant Management Services, 003A2A, 425 I Street NW, Washington, DC 20001, (202) 382-2787. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION:

On September 7, 2018, VA published a Start Printed Page 9969proposed rule in the Federal Register (83 FR 45384) which announced VA’s intent to amend regulations for VAAR Case RIN 2900-AQ18 (part 836). In particular, this final rule removes subpart 825.2, Buy American Act—Construction Materials, and the associated prescribed clauses under subpart 825.11, Solicitation Provisions and Contract Clauses, as it is duplicative of the FAR.

In part 836, under 836.203, Government estimate of construction costs, this rule renumbers and retitles the section to 836.203-70, Protection of the independent government estimate—sealed bid, and revises it to more specifically clarify VA procedures to protect the independent government estimate in sealed bid acquisitions when bid openings are held. Section 836.204, Disclosure of the magnitude of construction projects, revises the estimated price ranges to provide a better measure for contractors to gauge estimated construction costs for projects of the National Cemetery Administration and the Office of Construction and Facilities Management.

This rule removes 836.206, Liquidated damages, since the subject matter is adequately covered in the FAR, as well as 836.209, Construction contracts with architect-engineer firms, as it contains internal procedures and moves the coverage to the VAAM. For the same reason, this rule removes 836.213-4, Notice of award, and 836.213-70, Notice to proceed.

This rule removes 836.513, Accident prevention, since the prescribed clause is duplicative of coverage in FAR clause 52.236-1, Accident Prevention, as well as 836.570, Correspondence, as the clause it prescribes, 852.236-76, Correspondence, is being removed. The subject matter will be addressed in the VAAM by directing contracting officers to include this information in a “Notice to Proceed” letter to the contractor from the contracting officer.

This rule adds 836.580, Notice to bidders—additive or deductive bid line items, and a prescription requiring the contracting officer to insert the provision 852.236-92, Notice to Bidders—Additive or Deductive Bid Line Items, in invitations for bids when the contracting officer determines that funds may not be available for all the desired construction features at contract award.

This rule adds coverage under VAAR subpart 842.2, Contract Administration Services, and 842.271, Contract clause for Government construction contract administration, to prescribe clause 852.242-70, Government Construction Contract Administration, that describes contract administration functions to be delegated under construction contracts that exceed the micro-purchase threshold for construction. It describes the role of the designated contracting officer performing contract administration, as well as certain functions that are delegated to VA resident engineers, if assigned. It also contains some language found under the previous clause, 852.236-78, Government Supervision.

This rule removes 846.312, Construction contracts, which prescribes clause 852.236-74, Inspection of Construction, as well as the clause.

Under part 852, this rule removes 852.236-74, Inspection of Construction, since VA Master Specifications provide the requirements for performing inspections. This rule also removes 852.236-77, Reference to “Standards,” as VA Master Specifications are used in VA contracts. This rule removes 852.236-78, Government Supervision, and adds a revised version at 852.242-70, Government Construction Contract Administration. This rule amends clause 852.236-79, Daily Report of Workers and Materials, by changing the title to “Contractor Production Report” and revises the clause to reflect use of VA Form 10101 which is based on industry reporting standards.

In subpart 853.1—General, this rule revises the text of 853.107, Obtaining forms, to provide the current website address where VA forms are obtained now: https://www.va.gov/​vaforms/​. It removes the outdated address for an old VA office and discontinues the outdated practice of requesting forms in hard copy directly from the agency policy office. All forms will now be available online. This rule, under subpart 853.2—Prescription of Forms, revises the list of forms applicable to VAAR part 836 that are used between VA and its contractors, potential offerors or bidders, or the general public.

Technical Non-Substantive Change to the Proposed Rule

This rule makes one technical non-substantive change to correct the amendatory instruction at 801.106 to remove the reference to 852.236-82 through 852.236-84, and its corresponding OMB Control Number.

VA provided a 60-day comment period for the public to respond to the proposed rule. The comment period for the proposed rule ended on November 6, 2018 and VA received no comments. This document adopts as a final rule the proposed rule published in the Federal Register on September 7, 2018, with the technical non-substantive change noted above and other minor formatting and/or grammatical edits. This final rule has Federal Register administrative format changes in the amendatory text which make no substantive text changes at the affected sections.

Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule 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 (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal Governments or on the private sector.

Paperwork Reduction Act

This final rule impacts seven existing information collection requirements associated with four Office of Management and Budget (OMB) control number approvals. The actions in this rule result in multiple actions affecting some of these information collections, such as: The outright removal of the information collection; no change in information collection burdens although titles and number of the information collection would be slightly revised; or no change to the existing OMB control number and associated burden.

The Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507) requires that VA consider the impact of paperwork and other information collection burdens imposed on the public. Under 44 U.S.C. 3507(a), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid OMB control number. See also 5 CFR 1320.8(b)(3)(vi).

This final rule contains one provision constituting a collection of information at 48 CFR 836.606-71, Architect-engineer’s proposal, concerning use of and prescription for VA Form 10-6298, Architect-Engineer Fee Proposal, which is revised with updated thresholds and FAR citations, as well as an updated form number. Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), no new collection of information is associated with this provision as a part of this final rule. The information collection requirement for 836.606-71 is currently approved by OMB and has been assigned OMB control number 2900-0208. The burden of this information collection remains unchanged. However, this rule does amend this information collection requirement to Start Printed Page 9970renumber the form currently numbered and titled as VA Form 10-6298, Architect-Engineer Fee Proposal, to now read: VA Form 6298, Architect-Engineer Fee Proposal. Additionally, older dollar thresholds and FAR citations in the form are updated to current levels and correct citations. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), OMB has approved the reporting or recordkeeping provisions that are included in the text and form under 836.606-71 cited above against the assigned OMB control number. For the requested administrative amendments to the form, as required by the Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507(d)), VA has submitted this information collection amendment to OMB for its review. Notice of OMB approval for this information collection will be published in a future Federal Register document. Other revisions to the associated OMB control number relating to other provisions of this rule are identified separately in this submittal.

This final rule also contains one provision constituting a collection of information at 48 CFR 852.236-72, Performance of Work by the Contractor, that will remain unchanged. Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), the collection of information associated with this provision remains unchanged. The information collection requirement for 852.236-72 is currently approved by OMB and has been assigned OMB control number 2900-0422. The burden of this information collection remains unchanged. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), OMB has approved the reporting or recordkeeping provision that is included in the clause at 852.236-72 cited above and against the assigned OMB control number.

This final rule imposes the following amended information collection requirements to one of the four existing information collection approval numbers associated with this rule. Although this action contains the following provision constituting a collection of information at 48 CFR 852.236-79, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521), no new collection of information is associated with this provision as a part of this final rule. The information collection requirement for 852.236-79 is currently approved by OMB and has been assigned OMB control number 2900-0208. The burden of this information collection remains unchanged. However, this rule does amend this information collection requirement to prescribe the new form—VA Form 10101, Contractor Production Report. As required by the Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507(d)), VA has submitted this information collection amendment to OMB for its review. Notice of OMB approval for this information collection will be published in a future Federal Register document. The currently approved burden remains unchanged.

This action also contains a provision constituting a collection of information at 48 CFR 852.236-80, however, under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521), no new proposed collection of information is associated with this provision as a part of this final rule. The information collection requirement for 852.236-80 is currently approved by OMB and has been assigned OMB control number 2900-0422. The currently approved burden associated with this clause remains unchanged. However, this information collection has been submitted to OMB to amend the information collection requirement to make a minor correction to the title of the clause, as stated in paragraph 1 of the Supporting Statement, to reflect the full name of the clause—“Subcontracts and Work Coordination” in lieu of an abbreviated title reflected on the Supporting Statement—“Work Coordination.” The clause was otherwise referenced correctly in the remainder of the supporting statement. As required by the Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507(d)), VA has submitted this information collection amendment to OMB for its review to revise the title in paragraph 1 of the submitted statement. Notice of OMB approval for this information collection will be published in a future Federal Register document.

This final rule removes one of the existing information collection requirements associated with this action at 48 CFR 852.236-84, Schedule of Work Progress. Under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521), while the actual OMB control number will remain in existence due to other information collections on the same OMB control number that are approved and active, it discontinues the inclusion of 852.236-84 under the associated corresponding approved OMB control number, 2900-0422. As a result of this final rule, the information collection burden that is associated with clause 852.236-84 is removed. For 48 CFR 852.236-84, Schedule of Work Progress, this would result in a removal of 1828.5 estimated annual burden hours and an annual cost savings of $70,800.

As required by the Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507(d)), this final rule removes two of the existing information collection requirements associated with this action at 48 CFR 852.236-89, Buy American Act; and 852.236-91, Special Notes. Under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501-3521), it discontinues the associated corresponding approved OMB control numbers, 2900-0622 and 2900-0623, respectively. As a result of this final rule, the information collection burden that is associated with them is removed. For 48 CFR 852.236-89, Buy American Act, and its corresponding OMB control number 2900-0622, this results in the removal of 22 estimated annual burden hours and an annual cost savings to respondents of $852. For 48 CFR 852.236-91, Special Notes, and its corresponding OMB control number 2900-0623, this results in the removal of 778 estimated annual burden hours and an annual cost savings of $30,122. As required by the Paperwork Reduction Act of 1995 (at 44 U.S.C. 3507(d)), VA has submitted these information collection amendments to OMB for its review. Notice of OMB approval for this information collection will be published in a future Federal Register document.

Regulatory Flexibility Act

This final rule does not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The overall impact of the rule is of benefit to small businesses owned by Veterans or service-disabled Veterans as the VAAR is being updated to remove extraneous procedural information that applies only to VA’s internal operating processes or procedures. VA estimates no cost impact to individual business will result from these rule updates. This rulemaking clarifies VA’s policy regarding the contracting order of priority for Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-Owned Small Businesses (VOSBs) as a result of VA’s implementation of 38 U.S.C. 8127-8128 as a result of the U.S. Supreme Court’s decision in Kingdomware Technologies, Inc. vs. the United States, July 25, 2018, only as it pertains to the application of the VA Rule of Two to contracts for construction and architect-engineer contracts in accordance with Public Law 109-461 as codified at 38 U.S.C. 8127-8128. It does not have an economic impact to individual businesses, and there are no increased or decreased costs to small business entities. On this Start Printed Page 9971basis, the final rule does not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. Therefore, under 5 U.S.C. 605(b), this regulatory action is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

Executive Orders 12866, 13563 and 13771

Executive Orders (E.O.) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, of harmonizing rules, and of promoting flexibility. E.O. 12866, Regulatory Planning and Review defines “significant regulatory action” to mean any regulatory action that is likely to result in a rule that may: “(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.”

VA has examined the economic, interagency, budgetary, legal, and policy implications of this regulatory action, and it has been determined not be a significant regulatory action under E.O. 12866 because it does not raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive Order. VA’s impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA’s website at http://www.va.gov/​orpm by following the link for VA Regulations Published from FY 2004 Through Fiscal Year to Date. This final rule is considered an E.O. 13771 deregulatory action. Details on the estimated cost savings of this final rule can be found in the rule’s economic analysis and in the PRA section below.