[Federal Register Volume 67, Number 60 (Thursday, March 28, 2002)]
[Rules and Regulations]
[Pages 14869-14873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7300]


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DEPARTMENT OF ENERGY

48 CFR Parts 902, 904, 909, 913, 914, 915, 916, 917, 925, 931, 933, 
950, 952, and 970

RIN 1991-AB51


Acquisition Regulation: Technical and Administrative Amendments

AGENCY: Department of Energy.

ACTION: Final rule.

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SUMMARY: The Department of Energy (DOE) is amending the Department of 
Energy Acquisition Regulation (DEAR) to make technical and 
administrative changes to the regulation. This rulemaking incorporates 
technical and administrative changes to the DEAR that include: 
expanding definitions to distinguish the National Nuclear Security 
Administration (NNSA) as an agency within the DOE; acknowledging the 
Administrator of the NNSA as an agency head; and recognizing the Senior 
Procurement Executives for DOE, the NNSA, and the Federal Energy 
Regulatory Commission (FERC). Additional changes include removing 
obsolete coverage; renumbering and updating certain parts of the 
regulation to conform with the Federal Acquisition Regulation (FAR); 
and correcting typographical errors. These changes have no significant 
impact on non-agency persons such as contractors or offerors.

EFFECTIVE DATE: This final rule will be effective April 29, 2002.

FOR FURTHER INFORMATION CONTACT: Denise P. Wright, Office of 
Procurement and Assistance Policy (ME-61), U.S. Department of Energy, 
1000 Independence Avenue, SW., Washington, DC 20585, telephone 202-586-
6217.

SUPPLEMENTARY INFORMATION:
I. Explanation of Revisions.
II. Procedural Requirements.
    A. Review Under Executive Order 12866
    B. Review Under Executive Order 12988
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act
    E. Review Under Executive Order 13132
    F. Review Under the National Environmental Policy Act
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Small Business Regulatory Enforcement 
Fairness Act of 1996

I. Explanation of Revisions

    1. Section 902.200, Definitions Clause, is amended to the 
definitions for ``Head of Agency'' and ``DOE'' and to add a definition 
for ``Senior Procurement Executive.'' These changes are made pursuant 
to the establishment of the NNSA under the National Defense 
Authorization Act for Fiscal Year 2000 (Pub. L. 106-65), sections 3202 
and 3212 of which provide that the Under Secretary for Nuclear Security 
shall serve as the Administrator for Nuclear Security and head of the 
NNSA and carry out the functions as specified in Section 3212. The 
clause is further amended to correct typographical errors.
    2. Section 904.404, Contract clause, paragraph (4) is amended to 
correct typographical errors.
    3. Section 904.7102, Waiver by the Secretary, is amended to reflect 
organizational changes within the DOE.
    4-5. Part 909, Contractor Qualifications, 909.403 Definitions, is 
amended to revise the designation for ``Debarring Official'' and 
``Suspending Official'' for DOE, the NNSA, and the FERC to be the 
Director, Office of Procurement and Assistance Management, DOE, or 
designee.
    6. Part 913, Simplified Acquisition Procedures, 913.3 Fast Payment 
Procedure, 913.4 Imprest Fund, and 913.5 Purchase Orders, are amended 
to conform to the FAR.
    7. Section 914.406, Mistake in bids, 914.406-3 Other mistakes 
disclosed before award, and 914.406-4 Mistakes after award, are 
amended. The changes are made to conform to current FAR numbering.
    8. Section 915.606, Agency procedures. (DOE coverage-paragraph (b)) 
is amended. The location for submission of unsolicited proposals is 
changed. The change is made to ensure consistency in current DOE 
procedure.
    9. Section 916.6, Time and Materials, Labor Hour, and Letter 
Contracts, is amended to incorporate an approved class deviation to the 
requirement at 48 CFR 16.601, paragraph (c), for a determination and 
findings documenting the suitability of a time and materials contract.
    10. Section 917.602, Policy, is amended to clarify that only the 
Secretary may authorize non-competitive awards and extensions of 
management and operating contracts pursuant to Section 301 of Public 
Law 106-377.
    11. Section 925.901, Omission of the audit, is amended to reflect 
organizational changes within the DOE.
    12. Section 931.205-19, Insurance and Indemnification, is amended 
to revise the reference to the prescribed contract clause.
    13. Section 933.103, Protests to the agency, is amended to reflect 
organizational changes within the DOE.
    14. Section 950.104, Reports, is deleted current FAR coverage is 
sufficient.
    15. Section 952.202-1, Definitions, is amended to revise the terms 
``Head of Agency'' and ``DOE,'' and to add a definition for ``Senior 
Procurement Executive.''
    16. Sections 952.208-7, 952.217-70, 952.227-13, 952.233-2, 952.236-
72, and 952.250-70 are revised to update incorrect references.
    17. Section 952.231-71, Insurance-Litigation and Claims, is added 
to clarify coverage for certain non-management and operating contracts.
    18. Section 952.236-70, Administrative terms for architect-engineer 
contracts, is removed in its entirety. The coverage is determined to be 
obsolete.
    19. Section 952.249-70, Termination clause for cost-reimbursement 
architect-engineer contracts, is removed. The current FAR coverage at 
52.249-6, Termination (Cost-Reimbursement), is sufficient.
    20. Section 970.3102-05-53, Preexisting conditions, is amended to 
renumber as 970.3102-05-70 since the coverage is unique to DOE and does 
not supplement the FAR.
    21. Section 970.5228-1, Insurance-litigation and claims, is amended 
to revise paragraphs (e)(2), (h), and (j)(4) to correct references.

II. Procedural Requirements

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant

[[Page 14870]]

regulatory action'' under Executive Order 12866, ``Regulatory Planning 
and Review,'' (58 FR 51735, October 4, 1993). Accordingly, today's 
action was not subject to review under the Executive Order by the 
Office of Information and Regulatory Affairs of the Office of 
Management and Budget.

B. Review Under Executive Order 12988

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

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires 
preparation of an initial regulatory flexibility analysis for any rule 
that must be proposed for public comment and that is likely to have 
significant economic impact on a substantial number of small entities. 
There is no legal requirement to propose today's rule for public 
comment, and, therefore, the Regulatory Flexibility Act does not apply 
to this rulemaking proceeding.

D. Review Under the Paperwork Reduction Act

    No new collection of information or recordkeeping requirement is 
imposed by this rulemaking. Accordingly, no OMB clearance is required 
subject to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.).

E. Review Under Executive Order 13132

    Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined today's rule and has 
determined that it does not preempt State law and does not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

F. Review Under the National Environmental Policy Act

    Pursuant to the Council on Environmental Quality Regulations (40 
CFR Parts 1500-1508), the Department of Energy has established 
guidelines for its compliance with the provisions of the National 
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.). 
Pursuant to appendix A of subpart D of 10 CFR part 1021, National 
Environmental Policy Act Implementing Procedures (57 FR 15122, 15152, 
April 24, 1992) (Categorical Exclusion A6), the Department of Energy 
has determined that this rule is categorically excluded from the need 
to prepare an environmental impact statement or environmental 
assessment.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 requires each 
Agency to assess the effects of Federal regulatory action on State, 
local, and tribal governments and the private sector. The Department 
has determined that today's regulatory action does not impose a Federal 
mandate on State, local, or tribal governments or on the private 
sector.

H. Review Under Small Business Regulatory Enforcement Fairness Act of 
1996

    As required by 5 U.S.C. 801, the Department of Energy will report 
to Congress promulgation of the rule prior to its effective date. The 
report will state that it has been determined that the rule is not a 
``major rule'' as defined by 5 U.S.C. 804(3).

List of Subjects in 48 CFR Parts 902, 904, 909, 913, 914, 915, 916, 
917, 925, 931, 933, 950, 952, and 970

    Government procurement.

    Issued in Washington, DC, on March 20, 2002.
Spencer Abraham,
Secretary of Energy.
    For the reasons set out in the preamble, Chapter 9 of Title 48 of 
the Code of Federal Regulations is amended as set forth below.

    1. The authority citation for Parts 902, 904, 909, 914, 915, 916, 
917, 925, 931, 933, 950, and 952 is revised to read as follows:

    Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418(b); and 50 
U.S.C. 2401 et seq.

PART 902 --DEFINITIONS OF WORDS AND TERMS

    2. Section 902.200 is revised to read as follows:


902.200  Definitions clause.

    As prescribed by FAR subpart 2.2, insert the clause at FAR 52.202-
1, Definitions, but modify it to limit the definition at paragraph (a) 
of the clause, to encompass only the Secretary, Deputy Secretary, or 
the Under Secretaries of the Department of Energy, and the Chairman, 
Federal Energy Regulatory Commission. The contracting officer shall 
also add paragraphs (h) and (i) or (g) and (h) if Alternate I of the 
FAR clause is used. Paragraph (h) defines ``DOE'' as meaning the United 
States Department of Energy, ``FERC'' as meaning the Federal Energy 
Regulatory Commission, and ``NNSA'' as meaning the National Nuclear 
Security Administration. Paragraph (i) identifies the Senior 
Procurement Executive, DOE, as the Director, Office of Procurement and 
Assistance Management; the Senior Procurement Executive, NNSA, as the 
Administrator for Nuclear Security, NNSA; and the Senior Procurement 
Executive, FERC, as the Chairman, Federal Energy Regulatory Commission.

[[Page 14871]]

PART 904--ADMINISTRATIVE MATTERS


904.4  [Amended]

    3. Section 904.404 is amended as follows:
    a. In paragraph (4) remove ``should'' and add in its place ``may''.


904.7102  [Amended]

    4. Section 904.7102 is amended in paragraph (b) by removing 
``Office of Clearance and Support'' and adding in its place ``Office of 
Contract Management''

PART 909--CONTRACTOR QUALIFICATIONS

    5.-6. Section 909.403 is revised to read as follows:


909.403  Definitions.

    In addition to the definitions set forth at FAR 9.403, the 
following definitions apply to this subpart:
    Debarring Official. The Debarring Official for both DOE and NNSA is 
the Director, Office of Procurement and Assistance Management, DOE, or 
designee.
    Suspending Official. The Suspending Official for both DOE and NNSA 
is the Director, Office of Procurement and Assistance Management, DOE, 
or designee.

    7. Revise Part 913 to read as follows:

PART 913--SIMPLIFIED ACQUISITION PROCEDURES

Subpart 913.3--Simplified Acquisition Methods

Sec.
913.307  Forms
Subpart 913.4--Fast Payment Procedure
913.402  General.

    Authority: 42 U.S.C. 7101 et seq., 41 U.S.C. 418(b); 50 U.S.C. 
2401 et seq.

Subpart 913.3--Simplified Acquisition Methods


913.307  Forms. (DOE coverage paragraph (b))

    (b) Optional Forms 347 and 348, or DOE F 4250.3, may be used for 
purchase orders using simplified acquisition procedures. These forms 
shall not be used as the contractor's invoice. See 48 CFR 12.204 
regarding the use of SF-1449 for the acquisition of commercial items 
using simplified acquisition procedures.

Subpart 913.4--Fast Payment Procedure


913.402  General.

    The fast payment procedure delineated in FAR subpart 13.4 is not to 
be used by DOE.

PART 914--SEALED BIDDING


914.4  [Amended]

    8. Redesignate sections 914.406, 914.406-3, and 914.406-4 as 
sections 914.407, 914.407-3, and 914.407-4, respectively.
    9. Redesignated section 914.407-3 is amended in paragraph (e) as 
follows:
    a. In first sentence remove ``14.406-3(e)'' and ``14.406-3'' and 
add in their place ``14.407-3(e)'' and ``14.407-3,'' respectively.
    b. In the second sentence remove ``14.406-3'' and add in its place 
``14.407-3.''
    10. Redesignated section 914.407-4 is amended as follows:
    a. In the first sentence remove ``14.406-4'' and add in its place 
``14.407-4''
    b. In the second sentence remove ``14.406-4(e) and add in its place 
``14.407-4(e).''

PART 915--CONTRACTING BY NEGOTIATION

    11. Section 915.606 is amended by removing ``Office of Procurement 
and Assistance, Washington, DC 20585'', and adding in its place ``U.S. 
Department of Energy, National Energy Technology Laboratory (PGH), 
Pittsburgh, PA 15236-0940.''

PART 916--TYPES OF CONTRACTS

    12. Subpart 916.6 is added to read as follows:

Subpart 916.6--Time and Materials, Labor Hour, and Letter Contracts


916.601  Time and Materials (DOE coverage (c)).

    (c) Limitations. The Contracting Officer is not required to execute 
a separate Determination and Findings as required by FAR 16.601 3(c) if 
other file documentation adequately justifies contract actions.

    13. Section 917.602 is amended in paragraph (c) by removing ``Head 
of the Agency'' and adding in its place ``Secretary.''

PART 925--FOREIGN ACQUISITION


925.901  [Amended]

    14. Section 925.901 is amended in paragraph (c) by removing 
``Office of Clearance and Support'' and adding in its place ``Office of 
Contract Management.''

PART 931--CONTRACT COST PRINCIPLES AND PROCEDURES

    15. Section 931.205-19, paragraph (h) is revised to read as 
follows:


931.205-19  Insurance and Indemnification. (DOE coverage-paragraph 
(h)).

    (h) The contracting officer shall insert the clause at 48 CFR 
952.231-71 in non-management and operating cost reimbursement contracts 
involving work performed at facilities owned or leased by the 
Department exceeding $100,000,000.

PART 933--PROTESTS, DISPUTES, AND APPEALS

Subpart 933.1--Protests


933.103  [Amended]

    16. Section 933.103 is amended in paragraphs (f)(2), (j), and (k) 
by removing ``Office of Clearance and Support'' and adding in its place 
``Office of Contract Management.''

PART 950--EXTRAORDINARY CONTRACTUAL ACTIONS


950.104   [Removed]

    17. Section 950.104 is removed.

PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    18. Section 952.202-1 is revised to read as follows:


952.202-1  Definitions.

    (a) As prescribed in 902.200, insert the clause at FAR 52.202-1 in 
all contracts. The contracting officer shall substitute the following 
for paragraph (a) of the clause.

    (a) Head of Agency means: (i) The Secretary; (ii) Deputy 
Secretary; (iii) Under Secretaries of the Department of Energy and 
(iiii) the Chairman, Federal Energy Regulatory Commission.

    (b) The following shall be added as paragraphs (h) and (i) except 
that they will be designated paragraphs (g) and (h) if Alternate I of 
the FAR clause is used.

    (h) The term DOE means the Department of Energy, FERC means the 
Federal Energy Regulatory Commission, and NNSA means the National 
Nuclear Security Administration.
    (i) The term Senior Procurement Executive means, for DOE:
    Department of Energy--Director, Office of Procurement and 
Assistance Management, DOE;

[[Page 14872]]

    National Nuclear Security Administration--Administrator for 
Nuclear Security, NNSA; and
    Federal Energy Regulatory Commission--Chairman, FERC.

    19. In the table below, for each section indicated in the left 
column remove the language indicated in the middle column and add in 
its place the language in the right column.

------------------------------------------------------------------------
            Section                     Remove                 Add
------------------------------------------------------------------------
952.208-7, Introductory Text..  908.7101-7............  908.1104
952.217-70, Introductory Text.  917.7403(c)...........  917.7403
952.227-13, Introductory Text.  927.303(c)............  927.303(a)(1)
952.233-2, Introductory Text..  Clause................  Provision
952.236-72, Introductory Text.  936.202(j)............  936.202(h)
952.250-70, Note II...........  (date to be that of     June 12, 1996
                                 the Final Rule
                                 resulting from the
                                 proposed rule herein.
------------------------------------------------------------------------


    20. Section 952.231-71 is added to read as follows:


952.231-71  Insurance-litigation and claims.

    As prescribed in 48 CFR 931.205-19, insert the following clause in 
applicable non-management and operating contracts:

Insurance-Litigation and Claims (APRIL 2002)

    (a) The contractor may, with the prior written authorization of 
the contracting officer, and shall, upon the request of the 
Government, initiate litigation against third parties, including 
proceedings before administrative agencies, in connection with this 
contract. The contractor shall proceed with such litigation in good 
faith and as directed from time to time by the contracting officer.
    (b) The contractor shall give the contracting officer immediate 
notice in writing of any legal proceeding, including any proceeding 
before an administrative agency, filed against the contractor 
arising out of the performance of this contract. Except as otherwise 
directed by the contracting officer, in writing, the contractor 
shall furnish immediately to the contracting officer copies of all 
pertinent papers received by the contractor with respect to such 
action. The contractor, with the prior written authorization of the 
contracting officer, shall proceed with such litigation in good 
faith and as directed from time to time by the contracting officer.
    (c)(1) Except as provided in paragraph (c)(2) of this clause, 
the contractor shall procure and maintain such bonds and insurance 
as required by law or approved in writing by the contracting 
officer.
    (2) The contractor may, with the approval of the contracting 
officer, maintain a self-insurance program; provided that, with 
respect to workers' compensation, the contractor is qualified 
pursuant to statutory authority.
    (3) All bonds and insurance required by this clause shall be in 
a form and amount and for those periods as the contracting officer 
may require or approve and with sureties and insurers approved by 
the contracting officer.
    (d) The contractor agrees to submit for the contracting 
officer's approval, to the extent and in the manner required by the 
contracting officer, any other bonds and insurance that are 
maintained by the contractor in connection with the performance of 
this contract and for which the contractor seeks reimbursement. If 
an insurance cost (whether a premium for commercial insurance or 
related to self-insurance) includes a portion covering costs made 
unallowable elsewhere in the contract, and the share of the cost for 
coverage for the unallowable cost is determinable, the portion of 
the cost that is otherwise an allowable cost under this contract is 
reimbursable to the extent determined by the contracting officer.
    (e) Except as provided in paragraphs (g) and (h) of this clause, 
or specifically disallowed elsewhere in this contract, the 
contractor shall be reimbursed--
    (1) For that portion of the reasonable cost of bonds and insurance 
allocable to this contract required in accordance with contract terms 
or approved under this clause, and
    (2) For liabilities (and reasonable expenses incidental to such 
liabilities, including litigation costs) to third persons not 
compensated by insurance or otherwise without regard to and as an 
exception to the limitation of cost or limitation of funds clause of 
this contract.
    (f) The Government's liability under paragraph (e) of this clause 
is subject to the availability of appropriated funds. Nothing in this 
contract shall be construed as implying that the Congress will, at a 
later date, appropriate funds sufficient to meet deficiencies.
    (g) Notwithstanding any other provision of this contract, the 
contractor shall not be reimbursed for liabilities (and expenses 
incidental to such liabilities, including litigation costs, counsel 
fees, judgment and settlements)--
    (1) Which are otherwise unallowable by law or the provisions of 
this contract; or
    (2) For which the contractor has failed to insure or to maintain 
insurance as required by law, this contract, or by the written 
direction of the contracting officer.
    (h) In addition to the cost reimbursement limitations contained in 
48 CFR part 31, as supplemented in 48 CFR part 931, and notwithstanding 
any other provision of this contract, the contractor's liabilities to 
third persons, including employees but excluding costs incidental to 
workers' compensation actions (and any expenses incidental to such 
liabilities, including litigation costs, counsel fees, judgments and 
settlements), shall not be reimbursed if such liabilities were caused 
by contractor managerial personnel's--
    (1) Willful misconduct,
    (2) Lack of good faith, or
    (3) Failure to exercise prudent business judgment, which means 
failure to act in the same manner as a prudent person in the conduct of 
competitive business; or, in the case of a non-profit educational 
institution, failure to act in the manner that a prudent person would 
under the circumstances prevailing at the time the decision to incur 
the cost is made.
    (i) The burden of proof shall be upon the contractor to establish 
that costs covered by paragraph (h) of this clause are allowable and 
reasonable if, after an initial review of the facts, the contracting 
officer challenges a specific cost or informs the contractor that there 
is reason to believe that the cost results from willful misconduct, 
lack of good faith, or failure to exercise prudent business judgment by 
contractor managerial personnel.
    (j)(1) All litigation costs, including counsel fees, judgments and 
settlements shall be differentiated and accounted for by the contractor 
so as to be separately identifiable. If the contracting officer 
provisionally disallows such costs, then the contractor may not use 
funds advanced by DOE under the contract to finance the litigation.
    (2) Punitive damages are not allowable unless the act or failure to 
act which gave rise to the liability resulted from compliance with 
specific terms and conditions of the contract or written instructions 
from the contracting officer.
    (3) The portion of the cost of insurance obtained by the contractor 
that is allocable to coverage of liabilities

[[Page 14873]]

referred to in paragraph (g)(1) of this clause is not allowable.
    (4) The term ``contractor's managerial personnel'' is defined in 
the Property clause in this contract.
    (k) The contractor may at its own expense and not as an allowable 
cost procure for its own protection insurance to compensate the 
contractor for any unallowable or unreimbursable costs incurred in 
connection with contract performance.
    (l) If any suit or action is filed or any claim is made against the 
contractor, the cost and expense of which may be reimbursable to the 
contractor under this contract, and the risk of which is then uninsured 
or is insured for less than the amount claimed, the contractor shall--
    (1) Immediately notify the contracting officer and promptly furnish 
copies of all pertinent papers received;
    (2) Authorize Department representatives to collaborate with: in-
house or DOE-approved outside counsel in settling or defending the 
claim; or counsel for the insurance carrier in settling or defending 
the claim if the amount of the liability claimed exceeds the amount of 
coverage, unless precluded by the terms of the insurance contract; and
    (3) Authorize Department representatives to settle the claim or to 
defend or represent the contractor in and/or to take charge of any 
litigation, if required by the Department, if the liability is not 
insured or covered by bond. In any action against more than one 
Department contractor, the Department may require the contractor to be 
represented by common counsel. Counsel for the contractor may, at the 
contractor's own expense, be associated with the Department 
representatives in any such claim or litigation. (End of Clause)


952.236-70  [Removed]

    21. Section 952.236-70 is removed.


952.249-70  [Removed]

    22. Section 952.249-70 is removed.

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

    23. The authority citation for part 970 continues to read as 
follows:

    Authority: 42 U.S.C. 2201; 42 U.S.C. 7101 et seq.; 50 U.S.C. 
2401 et seq.

    24. 970.3102-05-53 is redesignated as 970.3102-05-70.
    25. 970.5228-1 is amended by revising paragraphs (e)(2), (h) 
introductory language, and (j)(4) to read as follows:


970.5228-1    Insurance-litigation and claims.

* * * * *

    (e) * * *
    (2) For liabilities (and reasonable expenses incidental to such 
liabilities, including litigation costs) to third persons not 
compensated by insurance or otherwise without regard to and as an 
exception to the clause of this contract entitled, ``Obligation of 
Funds.''
* * * * *
    (h) In addition to the cost reimbursement limitations contained 
in 48 CFR part 31, as supplemented by 48 CFR 970.31, and 
notwithstanding any other provision of this contract, the 
contractor's liabilities to third persons, including employees but 
excluding costs incidental to worker's compensation actions, (and 
any expenses incidental to such liabilities, including litigation 
costs, counsel fees, judgments and settlements) shall not be 
reimbursed if such liabilities were caused by contractor managerial 
personnel's--
* * * * *
    (j) * * *
    (4) The term ``contractor's managerial personnel'' is defined in 
clause paragraph (j) of 48 CFR 970.5245-1.
* * * * *
[FR Doc. 02-7300 Filed 3-27-02; 8:45 am]
BILLING CODE 6450-01-P