Federal Acquisition Regulation; Unique Identification of Entities Receiving Federal Awards

AGENCY:

Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION:

Final rule.

SUMMARY:

DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to redesignate the terminology for unique identification of entities receiving Federal awards. The change to the FAR removes the proprietary standard or number.

DATES:

Effective: October 31, 2016.

FOR FURTHER INFORMATION CONTACT:

Ms. Zenaida Delgado, Procurement Analyst, at 202-969-7207 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite FAC 2005-91, FAR Case 2015-022.

SUPPLEMENTARY INFORMATION:

I. Background

DoD, GSA, and NASA published a proposed rule in the Federal Register at 80 FR 72035 on November 18, 2015, to redesignate the terminology for unique identification of entities receiving Federal awards. The change to the FAR eliminates references to the proprietary Data Universal Numbering System (DUNS®) number, and provides appropriate references to the Web site where information on the unique entity identifier used for Federal contractors will be located. This final rule also establishes definitions of “unique entity identifier”, and “electronic funds transfer (EFT) indicator”. Ten respondents submitted comments on the proposed rule.

II. Discussion and Analysis

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. All ten respondents agreed with the rule. No changes were made to the rule as a result of those comments. A discussion of the comments is provided as follows:

A. Analysis of Public Comments

1. Alternatives to and Considerations for the Evaluation of a Nonproprietary Entity Identifier

Comment: Six respondents provided an alternative to the current entity identifier (e.g., Legal Entity Identifier (LEI), Contractor and Government Entity (CAGE) code) and four respondents provided additional considerations for the evaluation of alternatives for the entity identifier.

Response: The scope of this rule is limited to removing the proprietary standard or number. The Office of Management and Budget (OMB) and the Department of Treasury, in collaboration with the General Services Administration and the Award Committee for E-Government, are establishing a process for considering alternatives to existing entity identifiers, including soliciting information about viable options from and reaching out about nonproprietary alternatives to all sectors, including private companies, nonprofits, and Federal Government providers. The analysis of the alternatives for the entity identifier and the analysis of considerations for the evaluation of alternatives for the entity identifier are beyond the scope of the case. However, the FAR Council will share these recommendations with the agencies conducting the analysis and implementing the changes.

2. Challenges to Statements Made in the Proposed Rule Federal Register Preamble

Comment: One respondent believed that the statement that the “current requirement limits competition by using a proprietary number and organization to meet the identification need as well as the need for other business information associated with that number” incorrectly suggests that the business information is only accessible through usage of the DUNS number. This respondent also challenged the assertion that the Government is not currently in a position to move away from use of the DUNS number in the short term. This respondent recommended that Government agencies consider expanding their acquisitions of business information services through competitive procurements.

Response: There is nothing in the FAR linking business information services to the use of the DUNS number. Agencies are free to procure business information services as deemed appropriate. Regarding the short term ability of the Government to move away from the use of the DUNS number, the Government is in the process of determining requirements. The unique entity identifier provides multiple pieces of business information and serves multiple functions. Analysis will be conducted to ensure the replacement satisfies the full range of information needed. The Government is establishing a process for considering alternatives to existing entity identifiers, including soliciting information about viable options from and reaching out about nonproprietary alternatives to all sectors, including private companies, nonprofits, and Federal government providers. The analysis of alternatives is anticipated to be completed in fiscal year 2017. The scope of this rule is limited to removing the proprietary standard or number hence removing the impediment in anticipation of the change. The Government is interested in reducing cost and that is the reason we are pursuing this case. Recommendations regarding business information services are beyond the scope of the case.

B. Other Changes

Conforming changes were made to the following forms: Standard Forms 294, 330, and 1447, and Optional Form 307. These form changes will be made to be “Previous Edition Usable” in order to avoid Government agencies and Federal contractors having to make unnecessary system changes to accommodate nonsubstantive changes to forms.

III. 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.

IV. Regulatory Flexibility Act

DoD, GSA, and NASA have prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. The FRFA is summarized as follows:

The rule removes a proprietary standard or number for the unique identification of entities receiving Federal awards. The current requirement limits competition by using a proprietary number and organization to meet the identification needs.

Unique identification of such entities is critical to ensure Federal dollars are awarded to responsible parties, awardees are paid in a timely manner, and awards are appropriately recorded and reported. This is currently accomplished in the FAR by using the proprietary Data Universal Numbering System (DUNS®) number from Dun and Bradstreet. This rule eliminates references to the proprietary standard or number, and provides appropriate references to the Web site where information on the unique entity identifier used for Federal contractors will be designated. Although the Government does not intend to move away from use of the DUNS number in the short term, elimination of regulatory references to a proprietary entity identifier will provide opportunities for future competition that can reduce costs to taxpayers.

No public comments were submitted in response to the initial regulatory flexibility analysis.

The final rule is internal to the Government and does not directly impose any requirements on the vendor community. However, the rule may affect certain entities if those entities have arranged certain of their business systems to utilize, accept, or otherwise recognize the existing unique identifier (DUNS number) and should that unique identifier be changed at some point to another identifier. As of June 2015, there were 380,092 unique and active DUNS numbers designated in the System for Award Management and attributed to Government contracting.

There is no change to recordkeeping as a result of this rule.

There are no known significant alternative approaches to the rule that would meet the requirements.

Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.

V. Paperwork Reduction Act

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 2, 4, 9, 12, 19, 52, and 53

• Government procurement

Therefore, DoD, GSA, and NASA amend 48 CFR parts 2, 4, 9, 12, 19, 52, and 53 as set forth below:

1. The authority citation for 48 CFR parts 2, 4, 9, 12, 19, 52, and 53 continues to read as follows:

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

PART 2—DEFINITIONS OF WORDS AND TERMS

2. Amend section 2.101, in paragraph (b)(2) by—

a. Removing the definitions “Data Universal Numbering System (DUNS) number” and “Data Universal Numbering System +4 (DUNS+4) number”;

b. Adding, in alphabetical order, the definition “Electronic Funds Transfer (EFT) indicator”;

c. Revising paragraph (1) of the definition “Registered in the System for Award Management (SAM) database”; and

d. Adding, in alphabetical order, the definition, “Unique entity identifier”.

The revisions and additions read as follows:

PART 4—ADMINISTRATIVE MATTERS

3. Amend section 4.601 by removing the definition “Generic DUNS number” and adding, in alphabetical order, the definition “Generic entity identifier” to read as follows:

4. Amend section 4.605 by revising paragraph (b), the heading of paragraph (c), and paragraphs (c)(1) and (2) introductory text; and removing from paragraph (c)(2)(i)(C) “DUNS number” and adding “unique entity identifier” in its place.

The revisions read as follows:

5. Amend section 4.607 by—

a. Removing from paragraph (b) “Data Universal Numbering System Number” and adding “Unique Entity Identifier” in its place; and

b. Revising paragraph (c) to read as follows.

6. Amend section 4.1103 by—

a. Removing from paragraph (a)(1) “must register;” and adding “shall register;” in its place;

b. Removing from the introductory text of paragraph (a)(2) “DUNS number or, if applicable, the DUNS+4 number,” and adding “unique entity identifier” in its place;

c. Adding to the end of paragraph (a)(2)(i) “or”; and

d. Revising paragraphs (a)(3) and (d) to read as follows:

7. Amend section 4.1402 by removing from paragraph (b), last sentence, “DUNS number” and adding “entity identifier” in its place.

8. Amend section 4.1705 by removing from paragraphs (a) and (b) “DUNS number” and adding “entity identifier” in their places.

9. Amend section 4.1800 by revising paragraph (b) to read as follows.

10. Amend section 4.1802 by revising paragraph (a)(1) and removing from paragraph (b) “DUNS Number” and adding “unique entity identifier” in its place.

The revision reads as follows:

11. Amend section 4.1804 by removing from paragraph (a)(1) “Data Universal Numbering System Number” and adding “Unique Entity Identifier” in its place.

PART 9—CONTRACTOR QUALIFICATIONS

12. Amend section 9.404 by revising paragraph (b)(6) to read as follows:

PART 12—ACQUISITION OF COMMERCIAL ITEMS

13. Amend section 12.301 by removing from paragraphs (d)(1) and (2) “DUNS Number” and adding “unique entity identifier” in their places.

PART 19—SMALL BUSINESS PROGRAMS

14. Amend section 19.704 by removing from paragraphs (a)(10)(v) and (vi) “DUNS number” and adding “unique entity identifier” in their places.

PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

15. Revise section 52.204-6 to read as follows.

16. Amend section 52.204-7 by—

a. Revising the provision heading and the date of the provision;

b. Amending paragraph (a) by—

1. Removing the definitions “Data Universal Numbering System (DUNS) number” and “Data Universal Numbering System +4 (DUNS+4) number”;

2. Adding, in alphabetical order, the definition “Electronic Funds Transfer (EFT) indicator”;

3. Revising paragraph (1) of the definition “Registered in the System for Award Management (SAM) database”; and

4. Adding, in alphabetical order, the definition “Unique entity identifier”;

c. Removing from paragraph (b)(1) “the offeror” and adding “the Offeror” in its place; and

d. Revising paragraphs (b)(2) and (c).

The revisions and additions read as follows:

17. Amend section 52.204-10 by—

a. Revising the date of the clause; and

b. Removing from paragraph (d)(2)(i) “identifier (DUNS Number)” and adding “entity identifier” in its place.

The revision reads as follows:

18. Revise section 52.204-12 to read as follows:

19. Amend section 52.204-13 by—

a. Revising the date of the clause;

b. Amending paragraph (a) by—

1. Removing the definitions “Data Universal Numbering System (DUNS) number” and “Data Universal Numbering System +4 (DUNS+4) number”;

2. Adding, in alphabetical order, the definition “Electronic Funds Transfer (EFT) indicator”;

3. Revising paragraph (1) of the definition “Registered in the System for Award Management (SAM) database”; and

4. Adding, in alphabetical order, the definition “Unique entity identifier”; and

c. Revising paragraph (c)(3);

The revisions and additions read as follows:

20. Amend section 52.204-14 by—

a. Revising the date of the clause; and

b. Removing from paragraph (f)(1)(i) “DUNS number” and adding “unique entity identifier” in its place.

The revision reads as follows:

21. Amend section 52.204-15 by—

a. Revising the date of the clause; and

b. Removing from paragraph (f)(1)(i) “DUNS number” and adding “unique entity identifier” in its place.

The revision reads as follows:

22. Amend section 52.212-1 by revising the date of the provision and paragraph (j) to read as follows:

23. Amend section 52.212-3 by—

a. Revising the date of the provision; and

b. Removing from the introductory text of paragraph (p) “DUNS Number” and adding “unique entity identifier” in its place.

The revision reads as follows:

24. Amend section 52.212-5 by revising the date of the clause and paragraphs (b)(4), (b)(6), (b)(7), and (b)(17)(i) to read as follows:

25. Amend section 52.213-4 by revising the date of the clause and paragraph (b)(1)(i) to read as follows:

26. Amend section 52.219-9 by—

a. Revising the section heading;

b. Revising the date of the clause;

c. Removing from paragraph (d)(10)(vi) “DUNS number,” and adding “unique entity identifier,” in its place.

The revisions read as follows:

PART 53—FORMS

27. Amend section 53.214 by removing from paragraph (d) “SF 1447 (Rev. 2/2012)” and adding “SF 1447 (Rev. 8/2016)” in its place.

28. Amend section 53.215-1 by removing from paragraph (e) “OF 307 (9/97)” and adding “OF 307 (Rev. 8/2016)” in its place.

29. Amend section 53.219 by removing from the paragraph “(Rev. 10/2015)” and adding “(Rev. 8/2016)” in its place.

30. Amend section 53.236-2 by removing from paragraph (b) “SF 330 (Rev. 3/2013)” and adding “SF 330 (Rev. 8/2016)” in its place.

31. Revise section 53.301-294 to read as follows:

32. Revise section 53.301-330 to read as follows:

33. Revise section 53.301-1447 to read as follows:

34. Revise section 53.302-307 to read as follows: