Final Rule – Defense Contractors Performing Private Security Functions

[Federal Register Volume 81, Number 126 (Thursday, June 30, 2016)]
[Rules and Regulations]
[Pages 42559-42562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15247]


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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 216, 225, and 252

[Docket DARS-2015-0045]
RIN 0750-AI69


Defense Federal Acquisition Regulation Supplement: Defense 
Contractors Performing Private Security Functions (DFARS Case 2015-
D021)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.



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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to consolidate all 
requirements for contractors performing private security functions 
outside the United States applicable to DoD contracts in the DFARS and 
make changes regarding applicability and high-level quality assurance 
standards.

DATES: Effective June 30, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Julie Hammond, telephone 571-372-
6174.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 80 FR 
81496 on December 30, 2015, to consolidate all requirements for DoD 
contractors performing private security functions in certain designated 
operational areas in the DFARS at 225.302 and the clause at 252.225-
7039, Defense Contractors Performing Private Security Functions Outside 
the United States. The rule also proposed to identify the international 
high-quality assurance standard ``ISO 18788: Management System for 
Private Security Operations'' as an approved alternative to the 
American standard ``ANSI/ASIS PSC.1-2012'' currently required by DFARS 
clause 252.225-7039. One respondent submitted public comments in 
response to the proposed rule.

II. Discussion and Analysis

    DoD reviewed the public comments in the development of the final 
rule. There are no changes from the proposed rule in the final rule. A 
discussion of the comments is provided as follows:

A. Analysis of Public Comments

    Comment: The respondent proposed that the clause at DFARS 252.225-
7039 be amended to require a contractor to demonstrate compliance with 
the American National Standard, ANSI/ASIS PSC.1-2012, and/or the 
International Standard, ISO 18788, by producing a valid certificate of 
compliance from a nationally accredited certification body.
    Response: DoD does not have the statutory authority to require a 
certificate of compliance from a certification body accredited by a 
national accreditation body. Section 833 of the National Defense 
Authorization Act for Fiscal Year 2011 only authorized that the 
Secretary of Defense ``may provide for the consideration of such 
certifications as a factor in the evaluation of proposals for award of 
a covered contract for the provision of private security functions.'' 
Therefore, no changes are made in the rule.
    Comment: The respondent also proposed that the clause explicitly 
state that the requirements of ANSI/ASIS PSC.1-2012 ``are incumbent 
upon subcontractors on relevant DoD contracts.''
    Response: The Government does not have privity of contract with 
subcontractors. However, paragraph (f) of the clause requires 
contractors to include the substance of the clause, to include 
paragraph (c)(4) of the clause, in covered subcontracts. Paragraph 
(c)(4) of

[[Page 42560]]

the clause requires compliance with ANSI/ASIS PSC.1-2012 or ISO 18788.

B. Other Changes

    For consistency in use of terminology in DFARS clause 252.225-7039, 
in paragraphs (c)(1) and (2), the term ``employees of the Contractor'' 
is removed and replaced with ``Contractor personnel'' in both places.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the Shelf Items

    This rule amends the DFARS to consolidate all requirements for 
contractors performing private security functions outside the United 
States applicable to DoD contracts in the DFARS and makes changes 
regarding applicability and high-level quality assurance standards. 
DFARS clause 252.225-7039, Defense Contractors Performing Private 
Security Functions Outside the United States, and its prescription at 
DFARS 225.302-6 are amended. The revisions, however, do not affect 
applicability of the clause at or below the simplified acquisition 
threshold or to commercial item acquisitions.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 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. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

V. Regulatory Flexibility Act

    A final regulatory flexibility analysis (FRFA) has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
The FRFA is summarized as follows:
    This final rule amends the Defense Federal Acquisition Regulation 
Supplement (DFARS) to consolidate all requirements for DoD contractors 
performing private security functions outside the U.S. from the FAR 
25.302 and the clause at FAR 52.225-26, Contractors Performing Private 
Security Functions Outside the Unites States, in DFARS 225.302 and the 
clause at DFARS 252.225-7039, Defense Contractors Performing Private 
Security Functions Outside the United States.
    The objectives of this rule are as follows:
     Provide DoD contracting officers and contractors a single 
clause covering all requirements related to the performance of private 
security functions outside the United States that may be updated by DoD 
as policies are issued that affect only defense contractors.
     Identify the international high-quality assurance standard 
``ISO 18788: Management System for Private Security Operations'' as an 
approved alternative to the American standard ``ANSI/ASIS PSC.1-2012'' 
currently required by DFARS clause 252.225-7039.
    No comments were received from the public in response to the 
initial regulatory flexibility analysis.
    This final rule will apply to defense contractors performing 
private security functions outside of the United States in designated 
operational areas under DoD contracts. According to data available in 
the Federal Procurement Data System for fiscal year (FY) 2013, DoD 
awarded 159 contracts that required performance outside the United 
States, although not necessarily in a designated operation area, and 
cited the National American Industry Classification System code 561612, 
Security Guards and Patrol Services, of which 33 contracts (21%) were 
awarded to small businesses. In FY 2014, DoD awarded 123 such 
contracts, of which 31 contracts (25%) were to small businesses.
    The private security contractors are required to report incidents 
when: (1) A weapon is discharged by personnel performing private 
security functions; (2) personnel performing private security functions 
are attacked, killed, or injured; (3) persons are killed or injured or 
property is destroyed as a result of conduct by Contractor personnel; 
(4) a weapon is discharged against personnel performing private 
security functions or personnel performing such functions believe a 
weapon was so discharged; or (5) active, non-lethal countermeasures 
(other than the discharge of a weapon) are employed by personnel 
performing private security functions in response to a perceived 
immediate threat. As a regular record keeping requirement, private 
security contractors are required to keep appropriate records of 
personnel by registering in the Synchronized Predeployment Operational 
Tracker the equipment and weapons used by its personnel. The complexity 
of the work to prepare these records requires the expertise equivalent 
to that of a GS-11, step 5 with clerical and analytical skills to 
create the documents.
    There are no known significant alternatives to the rule. The impact 
of this rule on small business is not expected to be significant.

VI. Paperwork Reduction Act

    This rule contains information collection requirements under the 
Paperwork Reduction Act (44 U.S.C. chapter 35). The Office of 
Management and Budget (OMB) has assigned OMB Control Number 0704-0549, 
entitled ``Defense Federal Acquisition Regulation Supplement (DFARS) 
part 225, Foreign Acquisition, and Defense Contractors Performing 
Private Security Functions Outside the United States.''

List of Subjects in 48 CFR Parts 216, 225, and 252

    Government procurement.

Jennifer L. Hawes,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 216, 225, and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 216, 225, and 252 continues 
to read as follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

PART 216--TYPES OF CONTRACTS


216.405-2-71  [Amended]

0
2. In section 216.405-2-71, amend paragraph (b) by removing ``FAR 
52.225-26, Contractors Preforming Private Security Functions'' and 
adding ``252.225-7039, Defense Contractors Performing Private Security 
Functions Outside the United States'' in its place.

PART 225--FOREIGN ACQUISITION


225.302-6  [Amended]

0
3. Amend section 225.302-6 introductory text by removing ``Outside the 
United States,'' and adding ``Outside the United States, instead of FAR 
clause 52.225-26, Contractors Performing Private Security Functions 
Outside the United States,'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. Amend section 252.225-7039 by--
0
a. Removing the clause date ``(JAN 2015)'' and adding ``(JUN 2016)'' in 
its place;

[[Page 42561]]

0
b. Redesignating paragraphs (a) and (b) as paragraphs (c) and (f), 
respectively;
0
c. Adding new paragraphs (a) and (b);
0
d. Revising newly redesignated paragraph (c);
0
e. Adding paragraphs (d) and (e);
0
f. In newly redesignated paragraph (f), removing ``paragraph (b)'' and 
adding ``paragraph (f)'' in its place.
    The additions and revision read as follows:


252.225-7039  Defense Contractors Performing Private Security Functions 
Outside the United States.

* * * * *
    (a) Definitions. As used in this clause--
    Full cooperation--(1) Means disclosure to the Government of the 
information sufficient to identify the nature and extent of the 
incident and the individuals responsible for the conduct. It includes 
providing timely and complete response to Government auditors' and 
investigators' requests for documents and access to employees with 
information;
    (2) Does not foreclose any contractor rights arising in law, the 
FAR or the terms of the contract. It does not require--
    (i) The contractor to waive its attorney-client privilege or the 
protections afforded by the attorney work product doctrine; or
    (ii) Any officer, director, owner, or employee of the contractor, 
including a sole proprietor, to waive his or her attorney-client 
privilege or Fifth Amendment rights; and
    (3) Does not restrict the contractor from--
    (i) Conducting an internal investigation; or
    (ii) Defending a proceeding or dispute arising under the contract 
or related to a potential or disclosed violation.
    Private security functions means the following activities engaged 
in by a contractor:
    (1) Guarding of personnel, facilities, designated sites or property 
of a Federal agency, the contractor or subcontractor, or a third party.
    (2) Any other activity for which personnel are required to carry 
weapons in the performance of their duties in accordance with the terms 
of this contract.
    (b) Applicability. If this contract is performed both in a 
designated area and in an area that is not designated, the clause only 
applies to performance in the designated area. Designated areas are 
areas outside the United States of--
    (1) Contingency operations;
    (2) Combat operations, as designated by the Secretary of Defense;
    (3) Other significant military operations (as defined in 32 CFR 
part 159), designated by the Secretary of Defense upon agreement of the 
Secretary of State;
    (4) Peace operations, consistent with Joint Publication 3-07.3; or
    (5) Other military operations or military exercises, when 
designated by the Combatant Commander.
    (c) Requirements. The Contractor shall--
    (1) Ensure that all Contractor personnel who are responsible for 
performing private security functions under this contract comply with 
32 CFR part 159 and any orders, directives, or instructions to 
contractors performing private security functions that are identified 
in the contract for--
    (i) Registering, processing, accounting for, managing, overseeing 
and keeping appropriate records of personnel performing private 
security functions;
    (ii) Authorizing, accounting for and registering in Synchronized 
Predeployment and Operational Tracker (SPOT), weapons to be carried by 
or available to be used by personnel performing private security 
functions;
    (iii) Identifying and registering in SPOT armored vehicles, 
helicopters and other military vehicles operated by Contractors 
performing private security functions; and
    (iv) In accordance with orders and instructions established by the 
applicable Combatant Commander, reporting incidents in which--
    (A) A weapon is discharged by personnel performing private security 
functions;
    (B) Personnel performing private security functions are attacked, 
killed, or injured;
    (C) Persons are killed or injured or property is destroyed as a 
result of conduct by Contractor personnel;
    (D) A weapon is discharged against personnel performing private 
security functions or personnel performing such functions believe a 
weapon was so discharged; or
    (E) Active, non-lethal countermeasures (other than the discharge of 
a weapon) are employed by personnel performing private security 
functions in response to a perceived immediate threat;
    (2) Ensure that Contractor personnel who are responsible for 
performing private security functions under this contract are briefed 
on and understand their obligation to comply with--
    (i) Qualification, training, screening (including, if applicable, 
thorough background checks) and security requirements established by 32 
CFR part 159;
    (ii) Applicable laws and regulations of the United States and the 
host country and applicable treaties and international agreements 
regarding performance of private security functions;
    (iii) Orders, directives, and instructions issued by the applicable 
Combatant Commander or relevant Chief of Mission relating to weapons, 
equipment, force protection, security, health, safety, or relations and 
interaction with locals; and
    (iv) Rules on the use of force issued by the applicable Combatant 
Commander or relevant Chief of Mission for personnel performing private 
security functions;
    (3) Provide full cooperation with any Government-authorized 
investigation of incidents reported pursuant to paragraph (c)(1)(iv) of 
this clause and incidents of alleged misconduct by personnel performing 
private security functions under this contract by providing--
    (i) Access to employees performing private security functions; and
    (ii) Relevant information in the possession of the Contractor 
regarding the incident concerned; and
    (4) Comply with ANSI/ASIS PSC.1-2012, American National Standard, 
Management System for Quality of Private Security Company Operations--
Requirements with Guidance or the International Standard ISO 18788, 
Management System for Private Security Operations--Requirements with 
Guidance (located at http://www.acq.osd.mil/log/PS/psc.html).
    (d) Remedies. In addition to other remedies available to the 
Government--
    (1) The Contracting Officer may direct the Contractor, at its own 
expense, to remove and replace any Contractor or subcontractor 
personnel performing private security functions who fail to comply with 
or violate applicable requirements of this clause or 32 CFR part 159. 
Such action may be taken at the Government's discretion without 
prejudice to its rights under any other provision of this contract;
    (2) The Contractor's failure to comply with the requirements of 
this clause will be included in appropriate databases of past 
performance and considered in any responsibility determination or 
evaluation of past performance; and
    (3) If this is an award-fee contract, the Contractor's failure to 
comply with the requirements of this clause shall be considered in the 
evaluation of the Contractor's performance during the relevant 
evaluation period, and the Contracting Officer may treat such failure 
to comply as a basis for reducing

[[Page 42562]]

or denying award fees for such period or for recovering all or part of 
award fees previously paid for such period.
    (e) Rule of construction. The duty of the Contractor to comply with 
the requirements of this clause shall not be reduced or diminished by 
the failure of a higher- or lower-tier Contractor or subcontractor to 
comply with the clause requirements or by a failure of the contracting 
activity to provide required oversight.
* * * * *
[FR Doc. 2016-15247 Filed 6-29-16; 8:45 am]
 BILLING CODE 5001-06-P


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