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Federal Register / Vol. 70, No.

118 / Tuesday, June 21, 2005 / Rules and Regulations 35549

■ 55. Appendix F to Chapter 2 is ‘‘http://www.acq.osd.mil/dpap/UID/ management activities and


amended in Part 1, Section F–104, as guides.htm’’; administrative functions when
follows: ■ c. In paragraph (d) introductory text, performing those services requires the
■ a. In paragraph (a)(5)(i) introductory by adding ‘‘(1)(i) or (ii)’’ after ‘‘paragraph service provider to have access to
text by removing ‘‘Continental United (c)’’; and ‘‘confidential’’ information submitted by
States’’ and adding in its place ■ d. In paragraph (e) introductory text, other contractors. One of the comments
‘‘Contiguous United States’’; and by removing ‘‘Embedded DoD serially that NASA received in response to this
■ b. In paragraph (a)(5)(ii), in the first managed subassemblies, components, publication relates to a fundamental
sentence, by removing ‘‘continental and parts. The’’ and adding in its place concept and demands attention at the
U.S.’’ and adding in its place ‘‘For embedded DoD serially managed outset. As published, the proposed rule
‘‘contiguous United States’’. subassemblies, components, and parts used the word ‘‘confidential’’ to
[FR Doc. 05–12100 Filed 6–20–05; 8:45 am] that require unique item identification describe the types of information that
BILLING CODE 5001–08–P under paragraph (c)(1)(iii) of this clause, required special attention when turned
the’’. over to a service provider. NASA
[FR Doc. 05–12095 Filed 6–20–05; 8:45 am] intended this word to describe a general
DEPARTMENT OF DEFENSE BILLING CODE 5001–08–P
class of information, largely of a
business or management nature, the
48 CFR Part 252 value of which arose mostly from the
NATIONAL AERONAUTICS AND fact that it was not readily known to the
Defense Federal Acquisition
SPACE ADMINISTRATION public. NASA never intended this word
Regulation Supplement; Technical
to refer to one of the standard
Amendments
48 CFR Parts 1809, 1837, and 1852 classifications of information for
AGENCY: Department of Defense (DoD). national security purposes, as in
RIN 2700–AC60 ‘‘confidential-secret-top secret.’’
ACTION: Final rule.
Nevertheless, concerns have arisen that
SUMMARY: DoD is making technical Contractor Access to Sensitive
using the word might cause confusion
amendments to a Defense Federal Information
with national security information. To
Acquisition Regulation Supplement AGENCY: National Aeronautics and avoid possible confusion, we have
clause addressing unique identification Space Administration (NASA). replaced the word ‘‘confidential’’ with
and valuation of items delivered under ACTION: Final rule. the word ‘‘sensitive.’’ This revision
DoD contracts. The amendments clarify should clarify that the proposed rule
cross-references and correct an Internet SUMMARY: This final rule adopts with deals with business and management
address. changes the proposed rule published in information, the value of which lies
DATES: Effective June 21, 2005. the Federal Register on December 5, primarily in the fact that is not generally
FOR FURTHER INFORMATION CONTACT: Ms.
2003 (68 FR 67995—67998). This final known to the public. The proposed rule
Michele Peterson, Defense Acquisition rule amends the NASA Federal does not implement or refer to the
Regulations System, Acquisition Regulation (FAR) classification of information for national
OUSD(AT&L)DPAP(DAR), IMD 3C132, Supplement (NFS) by providing policy security purposes.
3062 Defense Pentagon, Washington, DC and procedures on how NASA will With regard to more general
20301–3062. Telephone (703) 602–0311; acquire services to support management background information, NASA’s
facsimile (703) 602–0350. activities and administrative functions essential procurement operations
when performing those services requires generate large amounts of ‘‘sensitive
List of Subjects in 48 CFR Part 252 the contractor to have access to sensitive information,’’ both from offerors and
Government procurement. information submitted by other contractors. Traditionally, NASA civil
contractors. NASA’s increased use of servants received, analyzed, and used
Michele P. Peterson, contractors to support management this information to ensure that the
Editor, Defense Acquisition Regulations activities and administrative functions,
System. Agency spent tax dollars in a
coupled with implementing Agency- responsible and consistent manner. The
■ Therefore, 48 CFR Part 252 is amended wide electronic information systems, Trade Secrets Act and other statutes
as follows: requires establishing consistent have for years imposed criminal
procedures for protecting sensitive liabilities on government employees
PART 252—SOLICITATION information from unauthorized use or
PROVISIONS AND CONTRACT who disclosed this type of information
disclosure. to unauthorized outside parties. Offerors
CLAUSES
EFFECTIVE DATE: June 21, 2005. and contractors have willingly provided
■ 1. The authority citation for 48 CFR FOR FURTHER INFORMATION CONTACT: sensitive information about their
Part 252 continues to read as follows: David Forbes, NASA Headquarters, operations, costs, business practices,
Authority: 41 U.S.C. 421 and 48 CFR Contract Management Division, and other matters, knowing that NASA
Chapter 1. Washington, DC 20546, (202) 358–2051, would not provide another contractor
e-mail: David.P.Forbes@nasa.gov. (‘‘service provider’’) access to this
252.211–7003 [Amended] information without first ensuring that
SUPPLEMENTARY INFORMATION:
■ 2. Section 252.211–7003 is amended as the parties had complied with FAR
follows: A. Background 9.505–4. As a condition to allowing a
■ a. By revising the clause date to read On December 5, 2003, NASA service provider access to another
‘‘(JUN 2005)’; published in the Federal Register (68 contractor’s proprietary information,
■ b. In paragraph (c)(3)(i)(C), in the FR 67995—67998) a proposed revision FAR 9.505–4 would require that the
second sentence, by removing ‘‘http:// to the NFS prescribing policy, parties execute a satisfactory protection/
www.acq.osd.mil/dpap/UID/ procedures, and clauses to address how use agreement. Central to this process
guides.html’’ and adding in its place NASA will acquire services to support were notice to the owner of the

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35550 Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations

information before any access occurred notifies offerors and contractors that to a service provider that needs access
and the opportunity to develop NASA may, subject to the enumerated to specific information owned by
acceptable terms and conditions protections mandated by the ‘‘Access’’ another contractor. In this scenario, the
governing the service provider’s use of clause at 1852.237–72, release their protections that the owner will demand
the information. From a practical sensitive information to service before granting access to specific
standpoint, this approach could work providers that support NASA activities sensitive information are the only
only after the Government had selected and functions. This ‘‘Release’’ clause significant unknowns. The assumptions
a service provider to perform clearly assures offerors and contractors, by behind FAR 9.505–4 are simply not
defined tasks using identified reciting the express protections valid in the early phases of a
information from a known source that incorporated into the service provider’s competitive procurement. Even without
could consent to terms and conditions contract through the ‘‘Access’’ clause, burdening the contracting officer to
governing the access. that their information will remain oversee third-party protection
With many more contractor personnel sensitive. Essentially, the ‘‘Release’’ agreements, FAR 9.505–4 would require
supporting government operations, clause announces NASA’s broad intent each potential service provider in a
NASA must find ways to accommodate to make necessary sensitive information competitive procurement to know in
the increasing number of situations available to service providers, but only advance of submitting a proposal, the
requiring non-government personnel to in accordance with strict limitations exact information needed to perform as
safeguard contractor sensitive enumerated in the companion ‘‘Access’’ specified in the solicitation, what
information. Multiple, inter-related clause. These enumerated limitations contractors own that information, and
third-party protection agreements mandate strict, specific, and express what protections those owners deemed
between service providers and other safeguards and procedures to protect acceptable as a condition to granting
contractors that submit information they that information. access to the information. This level of
claim to be ‘‘sensitive’’ will simply not Comments on the proposed rule were pre-proposal information would simply
work on a large scale. To establish a received from an industry association not be available in a competitive
more efficient, realistic, modern, across- and NASA field installations. The procurement. As a more realistic and
the-board solution, the NFS revisions, comments received were considered in useful alternative, the revised NFS relies
published for public comment in the formulation of this final rule. This final not on individual third-party protection
Federal Register on December 5, 2003 rule adopts the proposed rule with agreements, but rather prescribes
(68 FR 67995—67998), proposed a self- changes. The changes are made to standardized, reciprocal contract
executing system of procurement policy, clarify contractor roles, to emphasize clauses to protect sensitive information.
procedures, and clauses to allow NASA the protection of sensitive information, A ‘‘Release’’ clause goes into the
activities to rely routinely on private and to provide the owners of sensitive information owner’s contract to
sector service providers to support day- information assurance that their data document consent to release and to
to-day operations throughout the will continue to receive protection. The delineate the extensive, specific
Agency. changes include revising the term protections that the service provider
The published NFS revisions ‘‘receiving contractor’’ to ‘‘service will implement. A reciprocal ‘‘Access’’
proposed two new clauses to implement provider;’’ providing a sample legend to clause goes into the service provider’s
this self-executing system of policies identify sensitive information; and contract to place strict controls over its
and procedures. The first clause at identifying the serious consequences for activities. Under the new ‘‘Release’’
1852.237–72, Access to Sensitive unauthorized use or disclosure. clause, the owner of sensitive
Information, would go into all The following summarizes the information expressly consents to
solicitations and contracts for services comments received from NASA’s access, as needed by NASA service
to allow access to sensitive information, publication of the proposed rule and providers. To gain this necessary access,
whenever it is needed to support provides responses. however, the service provider must have
NASA’s management activities and 1. Comment: Was it necessary for the expressly agreed, through the new
administrative functions. As published, NASA Assistant Administrator for ‘‘Access’’ clause, to comply with and
this ‘‘Access’’ clause delineated the Procurement to waive in its entirety implement an extensive number of
service provider’s responsibilities to FAR 9.505–4, Obtaining Access to binding and enumerated protections.
limit to the purposes specified in the Proprietary Information? Could a less 2. Comment: NASA has received a
contract its use of any sensitive drastic solution help NASA without large quantity of ‘‘sensitive information’’
information, to safeguard the impacting the owners of sensitive in connection with solicitations and
information from unauthorized outside information by simply revising the NFS contracts that did not contain the new
disclosure, and to train employees and to relieve contracting officers of ‘‘Release’’ clause. The offerors and
obtain their written commitments to use overseeing a multitude of third party contractors that submitted this
the information in an authorized protection agreements and leave the information are not bound by the clause
manner, only. Because of concerns terms of protection and their and have not expressly agreed that
under the Paperwork Reduction Act, enforcement to the service providers NASA service providers may have
NASA has revised the proposed and owners, themselves? Under this access to their sensitive information. In
‘‘Access’’ clause to require that the approach, the contracting officer would view of the broad waiver of FAR 9.505–
service provider obtain only a simple only identify each NASA service 4, how will NASA contracting officers
affirmation from each employee that he/ provider to the owners of needed avoid violating the Trade Secrets Act by
she has received training and will sensitive information and then leave giving service providers access to
comply with the lessons learned these parties free to arrange for sensitive information that was not
regarding the use and protection of acceptable terms of protection. subject to the ‘‘Release’’ clause?
sensitive information under the Response: In a real world, competitive Response: This point may be valid in
contract. environment, it was necessary for NASA those situations when a service provider
The second clause at 1852.237–73, to waive FAR 9.505–4 in its entirety. requests access to information that
Release of Sensitive Information, goes Implicitly, FAR 9.505–4 assumes an NASA has received pursuant to
into all solicitations and contracts, and agency has already awarded a contract contracts that did not contain the

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Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations 35551

‘‘Release’’ clause. To address contracts comment is referring to the following conflicts of interest (OCI) avoidance
that did not contain the clause at language in 41 USC. 418a: plan and require the contracting officer
1852.237–73, the NFS will provide * * * the United States may not require to approve each offeror’s proposed
internal guidance for NASA contracting persons who have developed products or approach to this important document.
officers and requiring activities processes offered or to be offered for sale to Response: Logically, there can be no
instructing them to examine all requests the public as a condition for the procurement standard approach to avoiding OCI’s,
from service providers for access to of such products or processes by the United which are by their nature unique to the
sensitive information. This examination States, to provide to the United States individual contractor. The service
technical data relating to the design, provider must thoroughly analyze its
should first determine whether NASA development, or manufacture of such
possesses responsive information. If so, own situation, including the services to
products or processes * * *.
the requiring activity should next assess be rendered, the information needed to
whether access to that information is Response: This prohibition deals with perform those services, other
crucial to the service provider’s ability how Federal agencies define their procurements for which the service
to perform. If the requiring activity procurement requirements for provider may intend to compete, and
possesses the requested information and information. An agency may not require specific mechanisms the service
it is crucial to performing the needed a company to forfeit private intellectual provider is willing to implement to
services, then the contracting officer property rights in technical data as a mitigate, neutralize, or eliminate
must try to identify and contact the condition to receiving a government foreseeable possible conflicts of interest.
owner of the information to determine contract. NASA notes simply that the In addition to recognizing that each
whether it claims that the information is proposed rule has nothing to do with service provider’s OCI’s are essentially
defining procurement requirements for unique, any avoidance plan must flow
‘‘sensitive.’’ At this point, the
information. Rather, the proposed rule from performance-based contracting
contracting officer should attempt to
focuses on how NASA manages principles to be acceptable today. As
negotiate a modification to the owner’s
information that offerors and contractors such, the buyer defines only the final
contract to incorporate the ‘‘Release’’
have already delivered to the outcomes to be achieved, not the
clause and proceed from there. Because
Government as part of submitting methods of getting there. Consequently,
the service provider’s contract will
proposals or performing contracts. The the NFS will leave the details of any
contain extensive protections for the
assertion that the proposed rule might OCI avoidance plan to the service
sensitivity of the information, NASA
violate 41 USC. 418a appears to flow provider that must live by it. The
expects that most owners will agree to
from two faulty premises. First, the contracting officer in concert with
incorporate the ‘‘Release’’ clause into proposed rule is not concerned
their existing contracts. If the owner Center counsel is responsible for
primarily with ‘‘technical data’’ of a receiving and reviewing the plan for
refuses to modify its contract to include ‘‘scientific or technical nature,’’ but
the ‘‘Release’’ clause, but persists in reasonable completeness and
instead focuses on ‘‘information communicating any substantive
claiming the information is sensitive, incidental to contract administration,
the requiring activity should prepare a weaknesses and omissions discovered to
such as financial, administrative, cost or the service provider for necessary
preliminary assessment for the pricing or management information.’’
contracting officer addressing whether revisions. The contracting officer will
The FAR expressly excludes this latter incorporate the accepted plan into the
the claim has a valid factual basis. This type of information from the definition
analysis should address whether NASA contract as a compliance document. If
of ‘‘technical data.’’ Second, the the service provider fails to mitigate all
might have persuasive grounds to proposed rule is not concerned with potential conflicts and/or unauthorized
challenge the claim. If there appears to how NASA defines procurement disclosures and uses occur, the service
be persuasive basis for challenging the requirements for information owned by provider must take adequate corrective
owner’s claim, the contracting officer its contractors. The proposed rule actions. If the corrective actions are not
should seek advice from Center counsel simply enables service providers to adequate, the contracting officer may
before taking any further action. If, on obtain access to information they need terminate the contract.
the other hand, the claim appears to be to support Agency management 5. Comment: The Assistant
valid, the requiring activity should re- activities and administrative functions. Administrator for Procurement’s broad
examine the relationship of the In most cases, the owners will have waiver of FAR 9.505–4 could cause
information to the services needed. The already submitted this information as a NASA employees to violate the Trade
service provider may be able to perform matter incidental to contract Secrets Act, 18 U.S.C. 1905, because not
acceptably without the requested administration. all of the information owners would
information. Additionally, the 4. Comment: NASA intends to rely have expressly consented to release
contracting officer may be able to more and more heavily on the private through the new ‘‘Release’’ clause.
facilitate reaching an agreement on sector to support essential management Moreover, with respect to technical
acceptable terms of protection. The activities and administrative functions. data, the proposed rule might also
contracting officer and the requiring Most of these activities and functions violate 41 U.S.C. 418a, which requires
activity should examine all alternatives involve access to sensitive information the FAR to prescribe regulations
to obtain the needed support. But, submitted by offerors in the process of governing the allocation of rights in data
without clear evidence that the owner of competing for awards, or by contractors developed through contracts using tax
the sensitive information has consented as part of performance. Asking the dollars. The Assistant Administrator’s
to release, NASA will not expose its owners of sensitive information to authority to waive rules relating to
employees to the risk of violating 18 provide access to other contractors, Organizational Conflicts of Interest does
USC. 1905. some of which may be business rivals, not extend the requirements of other
3. Comment: One comment blankly is an inherently difficult issue and statutes.
asserted that the proposed rule might could seriously discourage competition. Response: The Trade Secrets Act
violate 41 USC. 418a with respect to To promote trust, the NFS should, as a prohibits government employees from
‘‘technical data.’’ Although not clearly minimum, prescribe standard terms and releasing trade secret information to any
articulated, NASA assumes the conditions for the organizational extent not authorized by law. The Office

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35552 Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations

of Federal Procurement Policy Act The term ‘‘sensitive information’’ NASA operations, not with particular
authorized NASA to issue the NFS. should not be broader in scope than property rights resulting from the
NASA is adding the new ‘‘Release’’ ‘‘data’’ as defined in FAR Part 27, which expenditure of tax dollars. As such, the
clause to the NFS in accordance with specifically excludes information NFS does not need to prescribe a
the OFPP Act. Therefore, releasing incidental to contract administration. particular legend to instruct contractors
information pursuant to the ‘‘Release’’ Response: NASA understands that on how to identify their own sensitive
clause would be ‘‘authorized by law’’ FAR Part 27 specifically excludes information. For the contractor’s
and not violate the Trade Secrets Act. information incidental to contract convenience, however, the revised
Presumably, therefore, this comment administration from the definition of ‘‘Release’’ clause provides a sample
relates to sensitive information that ‘‘data.’’ In contrast, the new NFS notice identifying sensitive information.
NASA received under contracts or other coverage focuses primarily on The new ‘‘Access’’ clause prescribes
agreements that did not contain the new information incidental to contract what service providers must do to
‘‘Release’’ clause. The NFS will contain administration, not technical data. As protect the information they receive to
detailed procedural guidance the published proposed rule noted, the support NASA operations. The NFS
instructing requiring activities and primary purpose of the new coverage is governs NASA contracts, not ‘‘other
contracting officers how to deal with to allow a service provider access to transactions’’ authorized by the Space
this type of information. This information necessary to support NASA Act. Generally, however, NASA does
procedural guidance will first instruct activities and functions, as civil servants not acquire property and services for the
the contracting officer/requiring activity did in the past. expenditure of tax dollars under ‘‘other
to contact the owner of the information 7. Comment: The proposed rule transactions.’’
to evaluate its claim to be entitled to implies that NASA need only protect 9. Comment: Under the new ‘‘Access’’
protection and to seek agreement to data ‘‘developed at private expense.’’ clause, a service provider can allow
incorporate the new ‘‘Release’’ clause. The definition of ‘‘trade secret’’ does not access to sensitive information only to
Alternatively, the contracting officer depend on the concept of development employees that need it to perform the
should try to facilitate an individualized costs. A trade secret covers a variety of specified support. Yet, the clause does
agreement on acceptable terms of forms of information that derive not prescribe any process for
protection. If the information appears to economic value, actual or potential, determining which employees have a
be entitled to protection, but the owner from not being generally known to the ‘‘need-to-know’’ sensitive information
is unwilling to accept the ‘‘Release’’ public. NASA needs to continue to or what sanctions NASA may impose
clause or to negotiate specific, tailored protect any trade secret or it will for unauthorized use.
terms of protection, the contracting compromise the property rights of Response: Performance-based
officer/requiring activity should companies, with which it currently does contracting principles call for NASA to
examine on a more detailed level how business. FAR 27.402 instructs agencies define only the final performance
much access the service provider to avoid doing so. outcomes, not how the contractor is to
actually needs. On closer examination, Response: NASA agrees that the term achieve those objectives. The revised
it may be possible that different, less ‘‘trade secret’’ extends to many types of NFS allows the contractor to define how
comprehensive services could satisfy information that derive economic value it will achieve the specified outcomes
the requiring activity. from not being generally known to the for NASA. Assigning work and
In accordance with 41 U.S.C. 418a, public. But, with regard to protecting functions among its employees is
both the FAR and the NFS have contractors’’ legitimate property rights, certainly within the contractor’s
promulgated regulations dealing with FAR 27.402 establishes the following discretion. The revised section
how agencies acquire and allocate rights policy: ‘‘* * * the Government 1837.203–70 does instruct the
to data developed under government recognizes that its contractors may have contracting officer to monitor the
contracts. The Assistant Administrator a legitimate proprietary interest (e.g., a effectiveness of the contractor’s system
for Procurement’s waiver of FAR 9.505– property right or other valid economic for encouraging employees to avoid
4 does not, however, relate to how interest) in data resulting from private unauthorized uses and disclosures. The
NASA acquires and allocates rights in investment.’’ (Emphasis added.) It seems revised clause at 1852.237–72 also
data. The waiver relates, instead, to fairly clear from this language, that FAR describes the administrative remedies
information submitted in support of 27.402 envisions protecting only available to the contracting officer to
proposals or in the course of performing sensitive or proprietary information that encourage service providers to comply
contracts. Most of this information is a contractor has developed at private with their new obligations to protect
not ‘‘technical data,’’ which the expense. Without meeting this simple sensitive information and avoid
Government procures for its own value. test, the FAR implicitly does not unauthorized uses or disclosures.
Rather, the revised NFS generally uses recognize as ‘‘legitimate’’ a contractor’s 10. Comment: The new ‘‘Access’’
the term ‘‘sensitive information’’ to refer claim for trade secret protection. clause requires service providers to
to financial and administrative 8. Comment: The revised NFS would obtain express, binding written use
information that is incidental to contract require the holders of ‘‘ordinary agreements from their employees to
administration. As such, the Assistant procurement’’ contracts to identify protect sensitive information and use it
Administrator for Procurement’s waiver ‘‘sensitive information,’’ but provides no only for the purposes of performing the
of FAR 9.505–4 does not affect 41 U.S.C. instructions on how to do so. Moreover, specified services. Doing so is likely to
418a or the requirements of any other NASA will continue to obtain sensitive be a tremendous administrative burden.
statute or binding instruction. information under contracting vehicles, Additionally, the service provider has
6. Comment: The proposed rule does such as ‘‘Space Act Agreements,’’ that no obligation to keep different
not define the term ‘‘sensitive are not covered by the new ‘‘Release’’ companies’ information segregated.
information’’ clearly and, as a result, clause. What will tell these contractors Response: As published, the new
fails to exclude from the operation of how to identify ‘‘sensitive information?’’ ‘‘Access’’ clause did require contractors
the clauses cost or pricing data, other Response: The revised NFS deals with to obtain express, binding written
financial information, administrative or how service providers obtain access to agreements from their employees to
management information, and the like. the information they need to support protect sensitive information and use it

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Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations 35553

only for performing the services discuss incorporating the new ‘‘Release’’ this final rule will not have a significant
specified. After considering comments clause. If the owner asserts the economic impact on a substantial
on this language, NASA decided to identified information is sensitive and number of small business entities
revise the clause to require contractors entitled to protection, but resists within the meaning of the Regulatory
to obtain written acknowledgements incorporating the ‘‘Release’’ clause, the Flexibility Act (5 U.S.C. 601, et. seq.),
from their employees that they have contracting officer should attempt to because the new, streamlined approach
received training in how to protect negotiate satisfactory, alternate terms of of having each service provider
sensitive information and will adhere to protection. The contracting officer implement specific safeguards and
the lessons learned in providing should try to include the owner and the procedures should offer the same or
services under the contract. This simple service provider in this process. At the better protection for sensitive
acknowledgement does not require same time, the contracting officer, with information belonging to small business
contractors to collect information. the assistance of Center counsel, should entities than does the current system of
Certainly, a much more onerous burden evaluate whether there is a valid factual third party agreements, envisioned by
would flow from a greatly expanded basis for claiming that the information FAR 9.505–4. Moreover, this final rule
system of interrelated third party non- is sensitive and entitled to protection. If should ease the burden on small
disclosure agreements among all the the owner continues to resist access, the business entities by not requiring them
entities that provide sensitive contracting officer should, next, explore to enter multiple, interrelated third
information in the course of submitting whether some reduced level of support, party agreements with numerous service
competitive proposals or performing not requiring access to sensitive contractors that support NASA’s
contracts for NASA. With regard to information, might be satisfactory. With management activities and
segregating different companies’ regard to a service provider’s administrative functions.
information, that responsibility is unauthorized uses or disclosures, the
implicit in the obligation to use C. Paperwork Reduction Act
clause at 1852.237–72 describes some of
information only to perform the the administrative responses available The proposed NFS revisions simply
specified services. to the contracting officer. amplify and clarify NASA’s
11. Comment: A potentially 12. Comment: 1852.237–73(c) should implementation of FAR 9.504, coverage
tremendous burden on the contracting specify whether and how the parties that has existed for nearly 20 years.
officer, far exceeding any imposed by may challenge the sensitivity of NASA has published these NFS
FAR 9.505–4, will be determining what information, including the process to revisions for public comment and
information in NASA’s possession is follow and the owner’s rights to redress. received no challenges, objections, or
‘‘sensitive’’ and who owns it. Moreover, Response: The new NFS purposely concerns regarding the information
NASA has information from companies defines ‘‘sensitive information’’ to collection requirements associated with
that may no longer do business with the exclude ‘‘technical data,’’ as defined in providing services that will entail access
Government, or may no longer be in the FAR. Sensitive information is to sensitive information. Because access
operation, at all; others have gone on to incidental to contract administration to sensitive information is necessary to
other businesses; and some may never and, generally, does not have perform the specified services,
have a contract containing the new independent value to its owners.
‘‘Release’’ clause. These situations, solicitations will require all bidders and
Consequently, a highly structured, offerors to submit preliminary analyses
effectively, deprive NASA of the formalistic challenge process seems
owner’s consent to release sensitive of potential conflicts of interests.
neither necessary nor desirable. Any Further, each awarded contract that will
information and expose government challenge would have to show the
employees to possible violations of 18 entail access to sensitive information
following basic elements: will also require the service provider to
U.S.C. 1905. If breaches and (a) Private investment developed the
unauthorized disclosures occur, the submit a comprehensive organizational
information or the Government conflicts of interest avoidance plan, as
NFS does not provide guidelines to the generated it and it qualifies for an
contracting officer on what actions are a deliverable report during performance.
exception to the Freedom of Information
appropriate and/or effective. Act. Over the years, NASA has requested
Response: While some of these (b) The information must not and OMB has approved various
observations may be valid, none currently be in the public domain. information collections necessary to
requires regulatory coverage beyond (c) The information may embody evaluate bids and proposals submitted
internal guidance for NASA operations. trade secretes or commercial or financial for the award of contracts, as well as for
With regard to contracts that do not information. contract reports required to manage
contain the ‘‘Release’’ clause, we are (d) The information may be sensitive approved programs and projects. The
developing NFS internal guidance that or privileged. OMB approval numbers currently in
begins by recognizing that in the course The NFS will provide only general effect for these various categories of
of proposing, the service provider will guidance in this area, recognizing these information collections are as follows:
delve into the solicitation requirements are very difficult judgments. Until the 1. OMB No. 2700–0085, bids and
to determine what information is contracting officer decides for sound proposals with an estimated value more
needed to perform. The service provider reasons to challenge an owner’s claim than $500,000.
should then request access to that information is sensitive and 2. OMB No. 2700–0089, reports
specifically identified information from entitled to protection, NASA and its required for contracts with an estimated
the contracting officer/requiring service provider will comply with the value more than $500,000.
activity. At that point, the requiring owner’s assertions.
activity should try to determine whether 3. OMB No. 2700–0087, bids and
NASA possesses the identified B. Executive Order 12866 and proposals with an estimated value less
information, who owns it, and whether Regulatory Flexibility Act than $500,000.
that owner claims to be entitled to This final rule does not meet the 4. OMB No. 2700–0088, reports
protection. The contracting officer definition of ‘‘significant’’ under required on contracts valued at less than
should then contact the owner to Executive 12866. NASA certifies that $500,000.

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35554 Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations

5. OMB No. 2700–0086, purchase with FAR 9.505–4(b) when acquiring management activities and
orders for goods and services with an services to support management administrative functions, NASA relies
estimated value of $100,000 or less. activities and administrative functions. on numerous service providers. These
Our requests for OMB approval for The Assistant Administrator for contractors may require access to
these information collections have Procurement has, therefore, waived the sensitive information in the
noted that NASA prepares solicitations requirement that before gaining access Government’s possession, which may be
for bids and proposals and defines to other companies’ proprietary or entitled to protection from unauthorized
requirements for contract deliverables in sensitive (see 1837.203–70) information use or disclosure.
accordance with the OFPP Policy Act, contractors must enter specific (2) As an initial step, the requiring
as amended by Pub. L. 96–83, the agreements with each of those other organization shall identify when needed
National Aeronautics and Space Act of companies to protect their information services may entail access to sensitive
1958, as amended, the Federal from unauthorized use or disclosure. information and shall determine
Acquisition Regulation (FAR), the Accordingly, NASA will not require whether providing access is necessary
NASA FAR Supplement, and approved contractors and subcontractors and their for accomplishing the Agency’s mission.
mission requirements. In seeking OMB employees in procurements that support The requiring organization shall review
approval, NASA has described and management activities and any service provider requests for access
administratively tracked these administrative functions to enter into to information to determine whether the
information collections in generic, separate, interrelated third party access is necessary and whether the
functional terms, and categorized the agreements to protect sensitive information requested is considered
requests based on the estimated dollar information from unauthorized use or ‘‘sensitive’’ as defined in paragraph
values of the purchase orders or disclosure. As an alternative to (a)(1) of this section.
contracts supporting the procurements numerous, separate third party (c) When the requiring organization
in question. agreements, 1837.203–70 prescribes determines that providing specified
As described above, these information detailed policy and procedures to services will entail access to sensitive
collections cover broad functional protect contractors from unauthorized information, the solicitation shall
procurement needs, at all dollar values use or disclosure of their sensitive require each potential service provider
relevant to NASA’s current contracting information. Nothing in this section to submit with its proposal a
practices. Consequently, OMB’s current waives the requirements of FAR 37.204 preliminary analysis of possible
approvals adequately cover the and 1837.204. organizational conflicts of interest that
proposed rule’s requirements that, might flow from the award of a contract.
during the evaluation phase of each PART 1837—SERVICE CONTRACTING After selection, or whenever it becomes
procurement, all bids and offers must clear that performance will necessitate
■ 3. Add sections 1837.203–70,
contain preliminary analyses of access to sensitive information, the
potential conflicts of interest and that 1837.203–71, and 1837.203–72 to read as
service provider must submit a
after award each new service provider follows:
comprehensive organizational conflicts
must submit a comprehensive conflicts 1837.203–70 Providing contractors access of interest avoidance plan.
of interest avoidance plan for inclusion to sensitive information. (d) This comprehensive plan shall
in the contract as a compliance (a)(1) As used in this subpart, incorporate any previous studies
document. In our view, the Paperwork ‘‘sensitive information’’ refers to performed, shall thoroughly analyze all
Reduction Act does not require any information that the contractor has organizational conflicts of interest that
further action in support of this final developed at private expense or that the might arise because the service provider
rule. Government has generated that qualifies has access to other companies’ sensitive
List of Subjects in 48 CFR Parts 1809, for an exception to the Freedom of information, and shall establish specific
1837, and 1852 Information Act, which is not currently methods to control, mitigate, or
in the public domain, may embody eliminate all problems identified. The
Government Procurement. trade secrets or commercial or financial contracting officer, with advice from
Tom Luedtke, information, and may be sensitive or Center counsel, shall review the plan for
Assistant Administrator for Procurement. privileged, the disclosure of which is completeness and identify to the service
likely to have either of the following provider substantive weaknesses and
■ Accordingly, 48 CFR Parts 1809, 1837,
effects: To impair the Government’s omissions for necessary correction.
and 1852 are amended as follows:
■ 1. The authority citation for 48 CFR
ability to obtain this type of information Once the service provider has corrected
in the future; or to cause substantial the substantive weaknesses and
Parts 1809, 1837, and 1852 continues to
harm to the competitive position of the omissions, the contracting officer shall
read as follows:
person from whom the information was incorporate the revised plan into the
Authority: 42 USC. 2473(c)(1) obtained. The term is not intended to contract, as a compliance document.
resemble the markings of national (e) If the service provider will be
PART 1809—CONTRACTOR operating an information technology
security documents as in sensitive-
QUALIFICATIONS system for NASA that contains sensitive
secret-top secret.
■ 2. Add section 1809.505–4 to read as (2) As used in this subpart, ‘‘requiring information, the operating contract shall
follows: organization’’ refers to the NASA include the clause at 1852.204–76,
organizational element or activity that Security Requirements for Unclassified
1809.505–4 Obtaining access to sensitive requires specified services to be Information Technology Resources,
information. provided. which requires the implementation of
(b) In accordance with FAR 9.503, the (3) As used in this subpart, ‘‘service an Information Technology Security
Assistant Administrator for provider’’ refers to the service contractor Plan to protect information processed,
Procurement has determined that it that receives sensitive information from stored, or transmitted from
would not be in the Government’s NASA to provide services to the unauthorized access, alteration,
interests for NASA to comply strictly requiring organization. (b)(1) To support disclosure, or use.

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Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations 35555

(f) NASA will monitor performance to (b) To assist NASA in accomplishing Release of Sensitive Information
assure any service provider that requires management activities and administrative
(June 2005)
access to sensitive information follows functions, the Contractor shall provide the
services specified elsewhere in this contract. (a) As used in this clause, ‘‘sensitive
the steps outlined in the clause at information’’ refers to information, not
1852.237–72, Access to Sensitive (c) If performing this contract entails access
to sensitive information, as defined above, currently in the public domain, that the
Information, to protect the information Contractor has developed at private expense,
the Contractor agrees to—
from unauthorized use or disclosure. (1) Utilize any sensitive information that may embody trade secrets or commercial
or financial information, and that may be
1837.203–71 Release of contractors’ coming into its possession only for the
sensitive or privileged.
sensitive information. purposes of performing the services specified
(b) In accomplishing management activities
in this contract, and not to improve its own
Pursuant to the clause at 1852.237–73, and administrative functions, NASA relies
competitive position in another procurement. heavily on the support of various service
Release of Sensitive Information,
(2) Safeguard sensitive information coming providers. To support NASA activities and
offerors and contractors agree that into its possession from unauthorized use
NASA may release their sensitive functions, these service providers, as well as
and disclosure. their subcontractors and their individual
information when requested by service (3) Allow access to sensitive information employees, may need access to sensitive
providers in accordance with the only to those employees that need it to information submitted by the Contractor
procedures prescribed in 1837.203–70 perform services under this contract. under this contract. By submitting this
and subject to the safeguards and (4) Preclude access and disclosure of proposal or performing this contract, the
protections delineated in the clause at sensitive information to persons and entities Contractor agrees that NASA may release to
1852.237–72, Access to Sensitive outside of the Contractor’s organization. its service providers, their subcontractors,
Information. As required by the clause (5) Train employees who may require and their individual employees, sensitive
at 1852.237–73, or other contract clause access to sensitive information about their information submitted during the course of
or solicitation provision, contractors obligations to utilize it only to perform the this procurement, subject to the enumerated
must identify information they claim to services specified in this contract and to protections mandated by the clause at
safeguard it from unauthorized use and 1852.237–72, Access to Sensitive
be ‘‘sensitive’’ submitted as part of a Information.
disclosure.
proposal or in the course of performing (6) Obtain a written affirmation from each (c)(1) The Contractor shall identify any
a contract. The contracting officer shall employee that he/she has received and will sensitive information submitted in support of
evaluate all contractor claims of comply with training on the authorized uses this proposal or in performing this contract.
sensitivity in deciding how NASA and mandatory protections of sensitive For purposes of identifying sensitive
should respond to requests from service information needed in performing this information, the Contractor may, in addition
providers for access to information. contract. to any other notice or legend otherwise
(7) Administer a monitoring process to required, use a notice similar to the
1837.203–72 NASA contract clauses. ensure that employees comply with all following:
(a) The contracting officer shall insert reasonable security procedures, report any Mark the title page with the following
the clause at 1852.237–72, Access to breaches to the Contracting Officer, and legend:
Sensitive Information, in all This proposal or document includes
implement any necessary corrective actions.
sensitive information that NASA shall not
solicitations and contracts for services (d) The Contractor will comply with all
disclose outside the Agency and its service
that may require access to sensitive procedures and obligations specified in its
providers that support management activities
information belonging to other Organizational Conflicts of Interest
and administrative functions. To gain access
companies or generated by the Avoidance Plan, which this contract to this sensitive information, a service
Government. incorporates as a compliance document. provider’s contract must contain the clause at
(b) The contracting officer shall insert (e) The nature of the work on this contract NFS 1852.237–72, Access to Sensitive
the clause at 1852.237–73, Release of may subject the Contractor and its employees Information. Consistent with this clause, the
to a variety of laws and regulations relating service provider shall not duplicate, use, or
Sensitive Information, in all
to ethics, conflicts of interest, corruption, and disclose the information in whole or in part
solicitations, contracts, and basic other criminal or civil matters relating to the for any purpose other than to perform the
ordering agreements. award and administration of government services specified in its contract. This
contracts. Recognizing that this contract restriction does not limit the Government’s
PART 1852—SOLICITATION establishes a high standard of accountability right to use this information if it is obtained
PROVISIONS AND CONTRACT and trust, the Government will carefully from another source without restriction. The
CLAUSES review the Contractor’s performance in information subject to this restriction is
relation to the mandates and restrictions contained in pages [insert page numbers or
■ 4. Add sections 1852.237–72 and found in these laws and regulations. other identification of pages].
1852.237–73 to read as follows: Unauthorized uses or disclosures of sensitive Mark each page of sensitive information
1852.237–72 Access to Sensitive information may result in termination of this the Contractor wishes to restrict with the
Information. contract for default, or in debarment of the following legend:
Contractor for serious misconduct affecting Use or disclosure of sensitive information
As prescribed in 1837.203–72(a), contained on this page is subject to the
present responsibility as a government
insert the following clause: contractor. restriction on the title page of this proposal
Access to Sensitive Information (f) The Contractor shall include the or document.
substance of this clause, including this (2) The Contracting Officer shall evaluate
(June 2005) the facts supporting any claim that particular
paragraph (f), suitably modified to reflect the
(a) As used in this clause, ‘‘sensitive relationship of the parties, in all subcontracts information is ‘‘sensitive.’’ This evaluation
information’’ refers to information that a that may involve access to sensitive shall consider the time and resources
contractor has developed at private expense, information necessary to protect the information in
or that the Government has generated that (End of clause) accordance with the detailed safeguards
qualifies for an exception to the Freedom of mandated by the clause at 1852.237–72,
Information Act, which is not currently in 1852.237–73 Release of sensitive Access to Sensitive Information. However,
the public domain, and which may embody information. unless the Contracting Officer decides, with
trade secrets or commercial or financial the advice of Center counsel, that reasonable
information, and which may be sensitive or As prescribed in 1837.203–72(b), grounds exist to challenge the Contractor’s
privileged. insert the following clause: claim that particular information is sensitive,

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35556 Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Rules and Regulations

NASA and its service providers and their modified to reflect the relationship of the This technical amendment will not
employees shall comply with all of the parties, in all subcontracts that may require impose or relax any substantive
safeguards contained in paragraph (d) of this the furnishing of sensitive information. requirements or burdens on
clause. (End of clause)
(d) To receive access to sensitive
manufacturers. Except for Part 577, we
information needed to assist NASA in [FR Doc. 05–12191 Filed 6–20–05; 8:45 am] are providing a lead-time of one year in
accomplishing management activities and BILLING CODE 7510–01–P order to afford affected parties time to
administrative functions, the service provider update the relevant contact information
must be operating under a contract that where necessary. Therefore, NHTSA
contains the clause at 1852.237–72, Access to DEPARTMENT OF TRANSPORTATION finds for good cause that any notice and
Sensitive Information. This clause obligates opportunity for comment on these
the service provider to do the following:
National Highway Traffic Safety correcting amendments are not
(1) Comply with all specified procedures
and obligations, including the Organizational Administration necessary.
Conflicts of Interest Avoidance Plan, which In consideration of the foregoing, this
the contract has incorporated as a 49 CFR Parts 571, 575, 577, 582 document amends the CFR by updating
compliance document.
[Docket No. NHTSA–2005–21564]
the contact information for the Vehicle
(2) Utilize any sensitive information Safety Hotline.
coming into its possession only for the
purpose of performing the services specified Vehicle Safety Hotline; Technical List of Subjects in 49 CFR Parts 571,
in its contract. Amendment 575, 577, 582
(3) Safeguard sensitive information coming
AGENCY: National Highway Traffic Consumer protection; Insurance;
into its possession from unauthorized use
and disclosure. Safety Administration (NHTSA), Motor vehicles; Motor vehicle safety;
(4) Allow access to sensitive information Department of Transportation. Reporting and recordkeeping
only to those employees that need it to ACTION: Final rule; technical requirements; Tires.
perform services under its contract. amendment. ■ 49 CFR Parts 571, 575, 577, 582 are
(5) Preclude access and disclosure of
sensitive information to persons and entities amended by making the following
SUMMARY: This document contains
outside of the service provider’s organization. technical amendments:
technical amendments to Part 571,
(6) Train employees who may require Federal motor vehicle safety standards;
access to sensitive information about their PART 571—FEDERAL MOTOR
obligations to utilize it only to perform the Part 575, Consumer information; Part VEHICLE SAFETY STANDARDS
services specified in its contract and to 577, Defect and noncompliance
safeguard it from unauthorized use and notification; and Part 582, Insurance ■ 1. The authority citation continues to
disclosure. cost information regulation. read as follows:
(7) Obtain a written affirmation from each Specifically, we are updating the Authority: 49 U.S.C. 322, 2011, 30115,
employee that he/she has received and will telephone number that should be used 30166 and 30177; delegation of authority at
comply with training on the authorized uses to reach NHTSA’s Vehicle Safety 49 CFR 1.50.
and mandatory protections of sensitive Hotline, and adding our web address.
information needed in performing this ■ 2. Section 571.213 is amended by
contract. This amendment updates the pertinent
contact information without making any revising sections S5.5.2(m), S5.5.5(k),
(8) Administer a monitoring process to S5.6.1.7, and S5.6.2.2 to read as follows:
ensure that employees comply with all substantive changes to our regulations.
reasonable security procedures, report any DATES: The technical amendments to § 571.213 Standard No. 213; Child restraint
breaches to the Contracting Officer, and parts 571, 575, and 582 are effective systems.
implement any necessary corrective actions. June 21, 2006. The technical
(e) When the service provider will have
* * * * *
primary responsibility for operating an
amendment to Part 577 is effective July S5.5.2 * * *
information technology system for NASA 21, 2005. Voluntary compliance is (m) The following statement, inserting
that contains sensitive information, the permitted before that time. an address and telephone number:
service provider’s contract shall include the FOR FURTHER INFORMATION CONTACT: Mr. ‘‘Child restraints could be recalled for
clause at 1852.204–76, Security George Feygin, Office of Chief Counsel safety reasons. You must register this
Requirements for Unclassified Information (Telephone: 202–366–2992) (Fax: 202– restraint to be reached in a recall. Send
Technology Resources. The Security 366–3820); NHTSA, 400 Seventh Street, your name, address and the restraint’s
Requirements clause requires the service
provider to implement an Information SW., Washington, DC 20590. model number and manufacturing date
Technology Security Plan to protect SUPPLEMENTARY INFORMATION: In several to (insert address) or call (insert
information processed, stored, or transmitted regulations, NHTSA specifies that telephone number). For recall
from unauthorized access, alteration, vehicle manufacturers, child seat information, call the U.S. Government’s
disclosure, or use. Service provider manufacturers, or automobile dealers Vehicle Safety Hotline at 1–888–327–
personnel requiring privileged access or must provide the telephone number for 4236 (TTY: 1–800–424–9153), or go to
limited privileged access to these information http://www.NHTSA.gov.’’
technology systems are subject to screening
our Vehicle Safety Hotline so that
using the standard National Agency Check consumers concerned about safety * * * * *
(NAC) forms appropriate to the level of risk recalls or potential defects could contact (k) The following statement, inserting
for adverse impact to NASA missions. The this agency. That telephone number has an address and telephone number:
Contracting Officer may allow the service changed. This document amends the ‘‘Child restraints could be recalled for
provider to conduct its own screening, relevant sections of the CFR to correct safety reasons. You must register this
provided the service provider employs the telephone number and to add our restraint to be reached in a recall. Send
substantially equivalent screening web address so that consumers can your name, address and the restraint’s
procedures.
(f) This clause does not affect NASA’s
access the safety recall and defect model number and manufacturing date
responsibilities under the Freedom of information online. We are also to (insert address) or call (insert
Information Act. changing the text in the Part 582 telephone number). For recall
(g) The Contractor shall insert this clause, information form to reflect our current information, call the U.S. Government’s
including this paragraph (g), suitably New Car Assessment Program efforts. Vehicle Safety Hotline at 1–888–327–

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