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part 1035, of the Code of Federal Regulations.

3.602, may submit, through the HCA, a request to the Procurement Executive, with appropriate justification, for approval of an exception to the prohibitions contained in FAR 3.601.

[49 FR 11940, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]

PART 904—ADMINISTRATIVE

MATTERS

Subpart 903.3-Reports of Suspected Antitrust Violations 903.303 Reporting suspected antitrust

violations. (a) Potential anti-competitive practices, such as described in FAR 3.301, and antitrust law violations as described in FAR 3.303, evidenced in bids or proposals, shall be reported to the Office of General Counsel through the Head of the Contracting Activity with a copy to the Procurement Executive. The Office of General Counsel will provide reports to the Attorney General, as appropriate. [50 FR 12183, Mar. 27, 1985, as amended at 59 FR 9104, Feb. 25, 1994]

Subpart 904.4—Safeguarding Classified

Information Within Industry

Sec. 904.401 Definitions. 904.402 General. 904.404 Contract clause.

Subpart 904.6 [Reserved]

Subpart 904.7-Contractor Records

Retention

904.702 Applicability.

Subpart 903.4–Contingent Fees 903.408–1 Responsibilities.

(b) Each Standard Form 119 completed in connection with a DOE contract, together with other relevant information, shall be reviewed by Counsel prior to the initiation of appropriate action.

Subpart 904.8-Contract Files

904.803 Contents of contract files. 904.804–1 Closeout by the office admin

istering the contract (DOE Coverage

paragraphs (a) and (b)). 904.805 Disposal of contract files.

Subpart 903.5-Other Improper

Business Practices

Subpart 904.70—Foreign Ownership, Control, or Influence Over Contractors

[blocks in formation]

Subpart 904.4—Safeguarding be used instead of that at FAR 52.204

Classified Information Within 2.
Industry

(2) Classification, 952.204–70. This

clause is to be used in all contracts 904.401 Definitions.

which involve classified information. Classified Information means any in

(3) Sensitive foreign nation controls, formation or material that is owned

952.204–71. This clause is required in unby, produced by or for, or is under the

classified research contracts which control of the United States Govern

may involve making unclassified informent, and determined pursuant to pro

mation about nuclear technology visions of Executive Order 12356, April

available to certain sensitive foreign 2, 1982 (47 FR 14874, April 6, 1982), or

nations. The contractor shall be proprior orders, or as authorized under the

vided at the time of award the listing Atomic Energy Act of 1954, as amend- of nations included in DOE 1240.2 (see ed, to require protection against unau- current version.), Attachment 3, and thorized disclosure, and is so des- any subsequent changes. (The attachignated.

ment referred to in the clause shall set Restricted Data means data which is forth the applicable requirements of defined in section 11, of the Atomic En- the DOE regulations on dissemination ergy Act of 1954, as amended, as "all of unclassified published and unpubdata concerning: (1) Design, manufac- lished technical information to foreign ture, or utilization of atomic weapons; nations.) (2) the production of special nuclear (4) Disclosure of information, 952.204–72. material; or (3) the use of special nu- This clause should be used in place of clear material in the production of en- the clauses entitled “Security” and ergy, but shall not include data declas

“Classification” in contracts with edusified or removed from the Restricted

cational institutions for research work Data category pursuant to section 142.”

performed in their own institute facili(49 FR 11941, Mar. 28, 1984, as amended at 59

ties that are not likely to produce clasFR 9104, Feb. 25, 1994]

sified information. 904.402 General.

[49 FR 11941, Mar. 28, 1984; 49 FR 38949, Oct.

2, 1984, as amended at 54 FR 27646, June 30, (a) The basis of DOE's security re- 1989; 59 FR 24358, May 11, 1994] quirements is the Atomic Energy Act of 1954, as amended.

Subpart 904.6 [Reserved] (b) DOE security regulations. DOE regulations concerning national security

Subpart 904.7-Contractor information are codified at 10 CFR pa 1045.

Records Retention [49 FR 11941, Mar. 28, 1984, as amended at 60 904.702 Applicability. FR 47307, Sept. 12, 1995)

(b) Contracts containing the Safety 904.404 Contract clause.

and Health clause at 952.223–71, the Ra

diation Protection and Nuclear Criti(d) The security clauses to be used in

cality clause at 952.223–72, or the NuDOE contracts are found at 952.204.

clear Safety clause at 952.223–74 must They are:

also include the Preservation of Indi(1) Security, 952.204–2. This clause is required in contracts under section 31

vidual Occupational Radiation Expo

sure Records clause at 952.223–75 which (research assistance) or 41 (ownership and operation of production facilities)

will necessitate retention of records in of the Atomic Energy Act of 1954, as

accordance with schedules contained in

in

applicable DOE Directives the amended, and in other contracts and

records subcontracts, the performance of which

management series, rather involves or is likely to involve classi

than those found at FAR 4.7. fied information. The DOE system is

[49 FR 11941, Mar. 28, 1984, as amended at 59 separate from that of the Department FR 9104, Feb. 25, 1994; 60 FR 47307, Sept. 12, of Defense and the DEAR clause shall 1995; 62 FR 2312, Jan. 16, 1997)

Subpart 904.8-Contract Files

904.803 Contents of contract files.

(a) (29) The record copy of the Individual Procurement Action Report shall be included in the file section containing procurement management reports.

or continued performance of a contract by a firm, may pose an undue risk to the common defense and security because of the foreign influence. [49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]

904.804-1 Closeout by the office ad

ministering the contract (DOE Cov

erage-paragraphs (a) and (b)). (a) The Head of the Contracting Activity shall ensure that necessary procedures and milestone schedules are established to meet the requirements of FAR 4.804-1, and that resources are applied to effect the earliest practicable deobligation of excess funds and the timely closeout of all contract files which are physically completed or otherwise eligible for closeout action.

(b) Quick closeout procedures for cost reimbursable and other than firm fixed price type contracts are covered under 48 CFR 42.708.

904.7001 Applicability.

The provisions of this subpart shall apply to all offeror(s), contractors, and subcontractors who will or do have access to classified information or a significant quantity of special nuclear material as defined in 10 CFR part 710. In this subpart, the term “contractor" shall also mean subcontractor at any tier, the term "contract” shall also mean subcontract at any tier, and the term “special nuclear material” shall also mean significant quantity of special nuclear material as defined in 10 CFR part 710.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]

(49 FR 11941, Mar. 28, 1984, as amended at 62 FR 53757, Oct. 16, 1997]

904.805 Disposal of contract files.

Contract files shall be disposed of in accordance with applicable DOE Order 1324.2. (See current version.) [49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]

Subpart 904.70—Foreign Owner

ship, Control, or Influence Over Contractors

904.7000 Purpose.

This subpart sets forth the Department of Energy policies and procedures regarding foreign ownership, control, or influence (FOCI) over contractors. The procedures are designed to protect against an undue risk to the common defense and security which may result if classified information or special nuclear material is made available to DOE contractors or subcontractors who are owned, controlled, or influenced by foreign governments, individuals, or organizations. The procedures require certain offeror(s) and contractors/subcontractors to submit information which will help DOE to determine whether award of a contract to a firm,

904.7002 Definitions.

Contracting officer means the DOE contracting officer.

Foreign interest means any of the following:

(1) Foreign government or foreign government agency or instrumentality thereof;

(2) Any form of business enterprise organized under the laws of any country other than the United States or its possessions;

(3) Any form of business enterprise organized or incorporated under the laws of the U.S., or a State or other jurisdiction within the U.S. which is owned, controlled, or influenced by a foreign government, agency, firm, corporation, or person, or

(4) Any person who is not a U.S. citizen.

Foreign ownership, control, or influence means the situation where the degree of ownership, control, or influence over an offeror(s) or a contractor by a foreign interest is such that a reasonable basis exists for concluding that compromise of classified information or special nuclear material may possibly result.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]

a

904.7003 Disclosure of foreign owner

ship, control, or influence. (a) If a contract requires a contractor to have access to classified information or a significant quantity of special nuclear material, the DOE must determine whether access to the information or material by a contractor who is or may be subject to FOCI may pose an undue risk to the common defense and security before contract can be awarded.

(b) If during the performance of a contract, the contractor comes under FOCI, then the DOE must determine whether any further access to the classified information or special nuclear material may pose an undue risk to the common defense and security through the possible compromise of that information or material. If the DOE determines that such a threat or potential threat exists, the contracting officer shall consider the alternatives of negotiating an acceptable method of isolating the foreign interest which owns, controls, or influences the contractor or terminating the contract.

(c) It is essential for the DOE to obtain information about FOCI which is sufficient to help the Department determine whether award of a contract to a person or firm, or the continued performance of a contract by a person or firm, may pose undue risk to the common defense and security. Therefore, the provision specified at 952.204–73 shall be included in solicitations that involve offeror(s) or contractors that are subject to 904.7001.

(d) The contracting officer shall not award or extend any contract subject to this subpart, exercise any options under a contract, modify any contracts subject to this subpart, or approve or consent to a subcontract subject to this subpart unless:

(1) The cont ctor provides the information required by the solicitation provision at 48 CFR 952.204–73, and

(2) The contracting officer has made a positive determination in accordance with 48 CFR 904.7004.

904.7004 Findings, determination, and

contract award or termination. (a) Based on the information disclosed by the offeror(s) or contractor, and after consulting with the DOE Office of Safeguards and Security, the contracting officer must determine that award of a contract to an offeror(s) or continued performance of a contract by a contractor will not pose an undue risk to the common defense and security. The contracting officer need not prepare a separate finding and determination addressing FOCI; however, the memorandum of negotiation shall include a discussion of the applicability of this subpart and the resulting determination.

(b) In those cases where FOCI does exist, and the DOE determines that an undue risk to the common defense and security may exist, the offeror(s) or contractor shall be requested to propose within a prescribed period of time a plan of action to avoid or mitigate the foreign influences by isolation of the foreign interest.

(c) The types of plans that a contractor can propose

are: measures which provide for physical or organizational separation of the facility or organizational component containing the classified information or special nuclear material; modification or termination of agreements with foreign interests; diversification or reduction of foreign source income; assignment of specific security duties and responsibilities to board members or special executive level committees; or any other actions to negate or reduce FOCI to acceptable levels. The plan of action may vary with the type of foreign interest involved, degree of ownership, and information involved so that each plan must be negotiated on a case by case basis. If the offeror(s) or contractor and the DOE cannot negotiate a plan of action that isolates the offeror(s) or contractor from FOCI satisfactory to the DOE, then the offeror(s) shall not be considered for contract award and affected existing contracts with a contractor shall be terminated.

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994; 62 FR 42073, Aug. 5, 1997)

[49 FR 11941, Mar. 28, 1984, as amended at 59 FR 9104, Feb. 25, 1994]

904.7005 Solicitation provision and

contract clause. (a) The contracting officer shall insert the provision at 48 CFR 952.204–73, Foreign Ownership, Control, or Influence over Contractor, in all solicitations for contracts subject to 48 CFR 904.7001.

(b) The contracting officer shall insert the clause at 952.204–74, Foreign Ownership, Control, or Influence Over Contractor, in new contracts and contract modifications to existing contracts subject to 904.7001. (49 FR 11941, Mar. 28, 1984, as amended at 62 FR 42074, Aug. 5, 1997]

Foreign government means any governing body organized and existing under the laws of any country other than the United States and its possessions and trust territories and any agent or instrumentality of that government.

Proscribed information means(1) Top Secret information;

(2) Communications Security (COMSEC) information, except classified keys used to operate secure telephone units (STU IIIS);

(3) Restricted Data, as defined in the Atomic Energy Act of 1954, as amended;

(4) Special Access Program (SAP) information; or,

(5) Sensitive compartmented Information (SCI).

Subpart 904.71 -Prohibition on

Contracting (National Security
Program Contracts)

SOURCE: 58 FR 59684, Nov. 10, 1993, unless otherwise noted.

904.7100 Scope of subpart.

This subpart implements section 836 of the Fiscal Year 1993 Defense Authorization Act (Pub. L. 102–484) which prohibits the award of a Department of Energy contract under the national security program to a company owned by an entity controlled by a foreign government if it is necessary for that company to be given access to information in a proscribed category of information in order to perform the contract.

904.7101 Definitions.

Effectively owned or controlled means that a foreign government or an entity controlled by a foreign government has the power, either directly or indirectly, whether exercised or exercisable, to control or influence the election or appointment of the Offeror's officers, directors, partners, regents, trustees, or a majority of the Offeror's board of directors by any means, e.g., ownership, contract, or operation of law.

Entity controlled by a foreign government means any domestic or foreign organization or corporation that is effectively owned or controlled by a foreign government or any individual acting on behalf of a foreign government. See 925.7 for a statement of the prohibition.

904.7102 Waiver by the Secretary.

(a) The Secretary of Energy may waive this prohibition, pursuant to 10 U.S.C. 2536(b), if the Secretary determines that waiver is essential to the national security interests of the United States. Any request for such a waiver shall address:

(1) Identification of the proposed awardee and description of the foreign ownership;

(2) Description of the procurement and performance requirements;

(3) Description of the national security interests involved and the ways award of the contract would promote those interests;

(4) The availability of other entities to perform the work; and,

(5) A description of alternate means available to satisfy the requirement.

(b) Any request for such a waiver shall be forwarded by the Head of the Contracting Activity to the Office of Clearance and Support, within the Headquarters procurement organization. That office will coordinate such requests with the Program Assistant Secretary, the Office of Intelligence and National Security, the Office of General Counsel, and the Procurement Executive prior to seeking approval of the Secretary.

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