9000-0018 Supporting Statement

SUPPORTING STATEMENT

FOR PAPERWORK REDUCTION ACT SUBMISSION

9000-0018, CERTIFICATION OF INDEPENDENT PRICE DETERMINATION, CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT, AND PREVENTING PERSONAL CONFLICTS OF INTEREST

A. Justification.

1. Administrative requirements. This is a request for a revision and renewal of OMB control number 9000-0018, Certification of Independent Price Determination and Parent Company and Identifying Data, which is being combined with OMB Control Number 9000-0164, Contractor Business Ethics Compliance Program and Disclosure Requirements; and OMB control number 9000-0183, Preventing Personal Conflicts of Interest for Contractor Employees. OMB clearance number 9000-0018 expires on January 31, 2018. OMB clearances 9000-0164 and 9000-0183 expire on December 31, 2017.

a. Certification of Independent Price Determination (FAR 52.203-2). This clause requires the offeror to certify that the prices in the offer have been arrived at independently. Agencies are required to report under 41 U.S.C. 3101 (formerly 41 U.S.C. 252(b)(i)) and 10 U.S.C. 2305(d) suspected violations of the antitrust laws (e.g., collusive bidding, identical bids, uniform estimating systems, etc.) to the Attorney General.

b. Contractor Code of Business Ethics and Conduct (FAR 52.203-13). This clause implements Government policy and Pub. L. 110-252, Title VI (Close the Contractor Fraud Loophole Act). It requires contractors to notify the respective agency Office of Inspector General when the contractor has credible evidence that the contractor’s principal, employee, agent, or subcontractor committed a violation of certain federal criminal laws, or a violation of the Civil False Claims Act.

c. Preventing Personal Conflicts of Interest (FAR 52.203-16). In accordance with 41 U.S.C. 2303, this clause

requires contractors and subcontractors to: (a) identify and prevent personal conflicts of interest of their covered employees; and (b) prohibit covered employees who have access to non-public information by reason of performance on a Government contract from using such information for personal gain. Contractors are required to notify contracting officers whenever they become aware of any personal conflict of interest violations by a covered employee.

2. Uses of information.

a. Certification of Independent Price Determination (FAR 52.203-2). As a first step in assuring that Government contracts are not awarded to firms violating such antitrust laws, offerors on Government contracts must complete the certificate of independent price determination. An offer will not be considered for award where the certificate has been deleted or modified. Deletions or modifications of the certificate and suspected false certificates are reported to the Attorney General (see FAR 3.103-2 Evaluating the certification).

b. Contractor Code of Business Ethics and Conduct (FAR 52.203-13). The objective of the notification requirement is to emphasize the critical importance of integrity in contracting and reduce the occurrence of improper or criminal conduct in connection with the award and performance of Federal contracts and subcontracts. Information obtained from the notification requirements will be provided to the agency Inspector General by the contractor.

c. Preventing Personal Conflicts of Interest (FAR 52.203-16). The information provided to and by contractors in accordance with the clause at FAR 52.203-16 is used by the contractor and the contracting officer to identify and mitigate personal conflicts of interest in compliance with Government policy to (a) identify and prevent personal conflicts of interest of covered employees; and (b) prohibit covered employees who have access to non-public information by reason of performance on a Government contract from using such information for personal gain. (FAR 3.1102)

3. Consideration of information technology. The Government uses improved information technology to the maximum extent practicable. Where both the Government agency and contractors are capable of electronic interchange, the contractors may submit this information collection requirement electronically. Contractors have the option to use electronic interchange to comply with the notification requirements of 52.203-13. There is no Government prohibition against the electronic collection of information by contractors from covered employees and subcontractors in fulfilling the requirements of the clause at FAR 52.203-16.

4. Efforts to identify duplication. This requirement is being issued under the Federal Acquisition Regulation (FAR) which has been developed to standardize Federal procurement practices and eliminate unnecessary duplication.

5. If the collection of information impacts small businesses or other entities, describe methods used to minimize burden. The burden applied to small businesses is the minimum consistent with applicable laws, executive orders, regulations, and prudent business practices.

To minimize the impact on small business concerns, the Government adopted the following decisions in 52.203-13:

• The requirement for formal training programs and internal control systems are inapplicable to small business concerns.

• The requirement for mandatory reporting is limited to violations of Federal criminal law or civil False Claims Act in connection with performance or award of a Government contract performed by the contractor or a subcontract there under, rather than requiring report of any improper conduct, even that which is not a violation of Federal criminal law, or reports of violations under the contracts of other contractors.

The provision at 252.203-2 and the clause at 52.203-16 do not apply to solicitations at or below the simplified acquisition threshold, which are set-aside for small businesses.

6. Describe consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently.

a. Certification of Independent Price Determination (FAR 52.203-2). Collection of information on a basis other than solicitation-by-solicitation is not practical.

b. Contractor Code of Business Ethics and Conduct (FAR 52.203-13). The requirement for mandatory disclosure is necessary because only a few companies have responded to prior invitations that they report or voluntarily disclose suspected instances of violations of Federal criminal law relating to the contract or subcontract. Without mandatory disclosure, the occurrence of improper or criminal conduct in connection with the award and performance of Federal contracts and subcontracts may not be effectively addressed.

c. Preventing Personal Conflicts of Interest (FAR 52.203-16). Collection of information on a less frequent basis is not practical. FAR 52.203-16 only requires contractors to obtain and maintain information from each covered employee on an “as required basis”, i.e., (1) when initially assigned to a task that a disclosure of interest that might be affected by the task to which the employee has been assigned; and (2) whenever the employee’s personal or financial circumstances change in such as way that a new personal conflict of interest might occur because of the task that the covered employee is performing. Other associated information collection is required only to report to the contracting officer any personal conflict of interest violation by a covered employee as soon as it is identified, and, in exceptional circumstances, for submission of a request by the contractor, through the contracting officer, for the head of the contracting activity to agree to a plan to mitigate the personal conflict of interest, or waive the requirement to prevent personal conflicts of interest.

7. Special circumstances for collection. Collection is consistent with guidelines in 5 CFR 1320.6.

8. Efforts to consult with person outside the agency. A notice was published in the Federal Register at 82 FR 40582 on August 25, 2017. No comments were received. A 30-day notice was published in the Federal Register at 83 FR 2780 on January 19, 2018.

9. Explanation of any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees. Not applicable.

10. Describe assurance of confidentiality provided to respondents. This information is disclosed only to the extent consistent with prudent business practices and current regulations.

11. Additional justification for questions of a sensitive nature. No sensitive questions are involved.

12. Estimated total annual public hour and cost burden.

a. Certification of Independent Price Determination (FAR 52.203-2).

This provision is prescribed at FAR 3.103-1 for inclusion in solicitations for a firm-fixed price contract or fixed-price economic price adjustment contract unless the acquisition is (1) made under the simplified acquisition threshold; (2) at the request for technical proposals under two-step sealed bidding procedures; or (3) for utility services for which rates are set by law or regulation. The provision requires a Certificate of Independent Price Determination each time an offeror responds to a solicitation containing the provision. The offerors certify that the prices in their offer have been arrived at independently, have not been or will not be knowingly disclosed, and have not been submitted for the purpose of restricting competition. This provision does not apply to commercial items.

In Fiscal Year (FY) 2016, the Federal Procurement Data System (FPDS) indicated that 8,090 unique vendors received 90,150 awards that exceeded the simplified acquisition threshold, were firm-fixed-price or fixed-price with economic price adjustment, excluding awards for utilities and commercial items (about 11 awards per vendor).

In addition, if DoD, GSA, and NASA estimate approximately 8 offers per solicitation, that equals 721,200 responses. There were probably many offerors that never received an award, and many offerors received multiple awards. The estimated number of respondents is based on the number of responses (721,200) divided by estimated number of offerors (8090*3 = 24,270) = 30 responses per offeror.

It is estimated that an average of 15 minutes will be required for offerors to research, prepare, and submit the required information.

Estimated respondents/yr...................... 24,270

Responses annually............................x 30

Total annual responses........................ 721,200

Estimated hrs/response........................x .25

Estimated total burden/hrs.................... 180,300

Average wages + overhead .................... x $ 65

Estimated cost to the public ................. $11,719,500

* Because of contractor legal and management involvement necessary for this certification, DoD, GSA, and NASA estimated an hourly rate of 47.86 per hour, equivalent to a GS-14, Step-5, based on the OPM salary table for calendar year 2017or $47.86 per hour, plus 36.25 percent overhead burden which is the rate mandated by OMB for A-76 public-private competitions, and rounded to the nearest whole dollar, or $65.00. The cost per response is approximately $16.25.

b. Contractor Code of Business Ethics and Conduct (FAR 52.203-13).

This clause is prescribed at FAR 3.1004(a) for inclusion in solicitations and contracts that exceed $5.5 million and the performance period is 120 days or more. By law, the clause applies to contracts for commercial items and contracts awarded both inside and outside the United States. The clause requires contractors to report to the agency Office of the Inspector General, whenever, in connection with the award, performance, or closeout of any Government contract performed by the Contractor or a subcontractor thereunder, the Contractor has credible evidence that a principal, employee, agent, or subcontractor of the contractor has committed a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 U.S.C., or a violation of the Civil False Claims Act (31 U.S.C. 3729-3733). The requirements of the clause at 52.203-13 also flow down to subcontracts that have a value in excess of $5.5 million, and a performance period of greater than 120 days.

Based on FPDS data for FY 2016, the Government estimates that 5,200 contractors per year will be subject to the clause 52.203-13 (contracts greater than $5.5 million). It is estimated that of those 5,200 contractors, 208 (4%) will report violations of Federal criminal law with regard to performance or award of a Government contract or subcontract. In addition, DoD, GSA, and NASA estimated that 69 subcontractors (208 * .333) will be involved in providing necessary information to the prime contractor.

Wages are based on the average hourly wage and associate overhead of a lawyer and business manager that may be responsible for disclosing violations of Federal criminal law.

It is estimated that an average of 60 hours will be required for contractors to research, prepare, and submit the required information.

Respondents: 278

Responses per respondent: X ______ 1

Total annual responses: 278

Preparation hours per response: X_______60

Total response burden hours: 16,680

Averages wages + overhead X $102

Estimated cost to the Public 1,701,360

* Because of contractor legal and management involvement necessary for this notification regarding potential criminal violations, DoD, gsA, and NASA estimated an hourly rate of $75.00 per hour, plus 36.25 percent overhead burden which is the OMB rate for A-76 public-private competitions, and rounded to the nearest whole dollar, or $102.00. The cost per response is approximately $6,120.

c. Preventing Personal Conflicts of Interest (FAR 52.203-16).

The clause at FAR 52.203-16, Preventing Personal Conflicts of Interest, as prescribed at FAR 3.1106, is required in solicitations and contracts that—

1. Exceed the simplified acquisition threshold; and

2. Include a requirement for services by contractor employee(s) that involve performance of acquisition functions closely associated with inherently governmental functions for, or on behalf of, a Federal agency or department.

The clause at FAR 52.203-16 requires contractors and

subcontractors performing acquisition functions closely associated with inherently governmental functions to—

1. Obtain and maintain from each covered employee initially assigned to the task under the contract, a disclosure of interests that might be affected by the task to which the employee has been assigned, e.g., financial interests, other employment or financial interests, gifts, including travel;

2. Require each covered employee to update the disclosure statement whenever the employee’s personal or financial circumstances change in such a way that a new personal conflict of interest might occur because of the task the covered employee is performing;

3. Report to the contracting officer any personal conflict of interest violation by a covered employee as soon as identified. The report shall include a description of the violation and the proposed actions to be taken by the contractor in response to the violation, with follow-up reports of corrective action taken, as necessary; and

4. In exceptional circumstances, if the contractor cannot satisfactorily prevent a personal conflict of interest, the contractor may submit a request, through the contracting officer, for the head of the contracting activity to—

(a) Agree to a plan to mitigate the personal conflict of interest; or

(b) Waive the requirement to prevent personal conflicts of interest.

Annual reporting and recordkeeping burden estimates, based on data reported to the Federal Procurement Data System (FPDS) for FY 2016, are provided for each of the above instances. Estimates are based on data reported to FPDS on contract actions coded as—

• R408, Support-Professional: Program Management Support

• R410, Support-Professional: Program Evaluation/Review/Development

• R425, Support-Professional: Engineering/Technical

• R497, Support-Professional: Personal Services contracts

• R707, Support-Management: Contract/Procurement/Acquisition Support

In FY 2016, there were 5,974 contracts in these PSCs that were awarded to 2,906 unique vendors. Collection and maintenance of contractor employee disclosures of interests and employee disclosure of interests updates are recordkeeping in nature, and are provided for under the Annual Recordkeeping Burden portion of this analysis.

Total Public Reporting Burden

(Personal Conflict of Interest Violation and Follow-up Reports, and Personal Conflict of Interest Mitigation Plan/Waiver Request (combined))

Respondents 120

Responses per respondent: 1

Total responses: 120

Burden hours per response: 30

Total response burden hours: 3,600

Average wage + overhead: x $65

Estimated cost to public: $ 234,000

Estimated cost per response: $ 1,950

Personal Conflict of Interest Violation and Follow-up Reports

The clause at 52.203-16, Preventing Personal Conflicts of Interest, requires contractors to report to the contracting officer any personal conflict of interest violation by a covered employee as soon as it is identified. The report shall include a description of the violation and the proposed actions to be taken by the contractor in response to the violation, with follow-up reports of corrective action taken, as necessary. DoD, GSA, and NASA estimate that personal conflict of interest violations would be identified and require the issuance of violation reports and follow-up corrective action reports for 1 percent (.01) of the covered contracts (5,974 x .01 = 60 (rounded)). Development and issuance of the initial violation report and any follow-up corrective action reports are estimated to require an average of 40 hours of effort.

Estimated number of respondents: 60

Estimated number of responses per respondent per year: x1 Total annual responses (rounded): 60

Estimated preparation time per response (hours): x 40

Total response burden hours: 2,400

Average wages + overhead: x $ 65*

Estimated cost to public: $ 156,000

* Because of contractor legal and management involvement necessary for the development and issuance of personal conflict of interest violation reports and their updates,, DoD, GSA, and NASA estimated an hourly rate of 47.86 per hour, equivalent to a GS-14, Step-5, based on the OPM salary table for calendar year 2017 plus 36.25 percent overhead burden which is the rate mandated by OMB for A-76 public-private competitions, and rounded to the nearest whole dollar, or $65.00. The cost per response is approximately $2,600.

Personal conflict of interest waiver requests

According to the clause at 52.203-16, in exceptional circumstances, if the contractor cannot satisfactorily prevent a personal conflict of interest, the contractor may submit a request, through the contracting officer, for the head of the contracting activity to:

1. Agree to a plan to mitigate the personal conflict of interest; or

2. Waive the requirement to prevent personal conflicts of interest.

Because of their exceptional nature, DoD, GSA, and NASA estimate that such requests would be issued for an employee on one percent (.01) of the covered contracts. Development, internal review, and issuance of the requests are estimated to require an average of 20 hours of effort.

Estimated number of respondents: 60

Estimated number of responses per respondent per year: x 1 Total annual responses (rounded): 60

Estimated preparation time per response (hours): x 20

Total response burden hours: 1,200

Average wages + overhead: x $ 65*

Estimated cost to public: $78,000

* Because of contractor legal and management involvement necessary for the development and issuance of personal conflict of interest violation reports and their updates,, DoD, GSA, and NASA estimated an hourly rate of 47.86 per hour, equivalent to a GS-14, Step-5, based on the OPM salary table for calendar year 2017 plus 36.25 percent overhead burden which is the rate mandated by OMB for A-76 public-private competitions, and rounded to the nearest whole dollar, or $65.00.

Annual Recordkeeping Burden

Employee Disclosure of Interests

The clause at FAR 52.203-16, Preventing Personal Conflicts of Interest, requires contractors and subcontractors to obtain and maintain from each covered employee initially assigned to the task under the contract, a disclosure of interests that might be affected by the task to which the employee has been assigned, e.g., financial interests, other employment or financial interests, gifts, including travel. As indicated above, according to FPDS data for FY 2016, 5,974 contracts were awarded to 2,863 unique vendors in the specified service codes. Using the same ratio (5974/2863 = .48), DoD, GSA, and NASA estimated 11,948 subcontracts (5,974*2) and 5,735 unique subcontractors. DoD, GSA, and NASA estimated an average of 25 contractor and subcontractor employees per contract and subcontract will have a tasking under the contract or subcontract that requires them to complete an initial disclosure of interests. Preparation time and maintenance per record is estimated to average 2 hour per year.

Estimated number of recordkeepers: 8,598

Estimated number of records per recordkeeper per yr :_x 25

Total annual records: 214,950

Estimated hours per record: x 2.0

Total recordkeeping burden hours: 429,900

Employee Disclosure of Interests Update

DoD, GSA, and NASA estimate that a third of the covered employees who completed an initial disclosure of interests would be required to update their disclosure statements due to changes in their personal or financial circumstances that might introduce the occurrence of a new personal conflict of interest because of the task the covered employee is performing. DoD, GSA, ands NASA estimate that the time necessary to complete and maintain an employee disclosure update would be half that required to complete an initial employee disclosure of interests, or one hour.

Estimated number of recordkeepers: 8,598 Estimated number of records per recordkeeper updated : x 9

Total annual records updated: 77,382 Estimated hours per record: x 1.0

Total recordkeeping burden hours for updating: 77,382

Total Annual Recordkeeping Burden

Estimated number of recordkeepers: 8,598

Estimated number of records per recordkeeper per year:_x 25

Total annual records: 214,950

Estimated hours per record: x 2.4

Total recordkeeping burden hours: 507,282

Average wage + overhead: $46.00
Estimated cost to public: $23,334,972

* DoD, GSA, and NASA used a rate equivalent to a GS-12, Step 5 or $34.06/hour from the Office of Personnel Management (OPM) 2012 GS Salary Table – Hourly Rate), added overhead at 36.25 percent and rounded the average wages and overhead to the nearest dollar, or $46 an hour.

13. There are no capital start-up or operational land maintenance costs associated with this information collection.

14. Estimated cost to the Government.

a. Certification of Independent Price Determination (FAR 52.203-2).

Time required for Governmentwide review is estimated at 1 minute per response.

Certification of Independent Price Determination

Total annual responses ....................... 721,200

Reviewing time/response ...................... x .0166

Total Burden Hours............................ 11,972

Average wage + overhead......................... x $46*

Total Government cost.......................... $550,708

* Based on the OPM salary table for calendar year 2017, DoD, GSA, and NASA estimated an hourly rate equivalent to a GS-12, Step-5, or $34.06 per hour, plus 36.25 percent overhead burden which is the OMB rate for A-76 public-private competitions, and rounded to the nearest whole dollar, or $46.00.

b. Contractor Code of Business Ethics and Conduct (FAR 52.203-13). b. The time required for the Government review is estimated at 24 hours. The cost is based on the average hourly wage salary of GS-14 step 5 plus 36.25 percent overhead burden which is the OMB rate for A-76 public-private competitions, and rounded to the nearest whole dollar, or $65.00.

Responses/yr 278

Reviewing time/response x 24

Review time/yr 6672

Average wage + overhead X $65

Total Government cost $433,680

* Because of contracting officer, legal counsel, and head of contracting activity involvement necessary for review and action to be taken on contractor potential violations of the contractor code of business ethics and conduct, DoD, GSA, and NASA used a rate equivalent to a GS-14, Step 5 or $47.86/hour (from the Office of Personnel Management (OPM) 2017 GS Salary Table – Hourly Rate), added overhead at 36.25 percent and rounded the average wages and overhead to the nearest dollar, or $65 an hour.

c. Preventing Personal Conflicts of Interest (FAR 52.203-16).

The Government’s burden associated with the clause at 52.203-16 would be limited to receipt, review, and action taken on Personal Conflict of Interest Violation and Follow-up Reports and Personal Conflict of Interest Mitigation Plan/Waiver Requests received from contractors. DoD, GSA, and NASA estimate receipt of an average of 120 such reports and requests Governmentwide annually. Time required for Governmentwide review is estimated at 80 hours per response.

Total annual responses: 120

Review time per response (hours): _x 80

Total burden hours (rounded): 9,600

Average wage + overhead: x $65*

Total Government Cost: $624,000

_{* Because of contracting officer, legal counsel, and head of contracting activity involvement necessary for review and action to be taken on contractor Personal Conflict of Interest Violation and Follow-up Reports, and Personal Conflict of Interest Mitigation Plan/Waiver Requests,} DoD, GSA, and NASA used a rate equivalent to a GS-14, Step 5 or $47.86/hour (from the Office of Personnel Management (OPM) 2017 GS Salary Table – Hourly Rate), added overhead at 36.25 percent and rounded the average wages and overhead to the nearest dollar, or $65 an hour.

15. Explain reasons for program changes or adjustment reported in Item 13 or 14. DoD, GSA, and NASA have consolidated 3 OMB clearances into one clearance(see matrix summary at end of justification).

a. Certification of Independent Price Determination (FAR 52.203-2). Based on FY 2016 FPDS data, DoD, GSA, and NASA now estimate a reduction in the burden hours from 256,234 to 180,300, based on a revised estimate of the number of responses from 1,024,936 to 721,200.

b. Contractor Code of Business Ethics and Conduct (FAR 52.203-13) (formerly OMB clearance number 9000-0164). Based on FY 2016 FPDS data, DoD, GSA, and NASA now estimate an increase in the estimated burden hours from 16,560 to 16,680, due to a slight reduction in the estimated number of responses from 276 to 278.

c. Preventing Personal Conflicts of Interest (FAR 52.203-16) (formerly OMB clearance 9000-0183). Based on FY 2016 FPDS data, DoD, GSA, and NASA now estimate a reduction in the reporting burden hours from 5,640 to 3,600, due to a revised estimate of the number of responses from 188 to 120.

Although both Federal Register notices for 9000-0183 included 9,361 recordkeepers and 552,299 recordkeeping hours, those numbers were not included in the approval as recorded on Reginfo.gov. This clearance includes 8,598 recordkeepers and 507,282 hours.

Overall, this clearance requests a decrease of 351,719 reporting hours and an increase of 552,299 recordkeeping hours, due to the inadvertent omission of these recordkeeping hours from the prior clearance.

16. Outline plans for published results of information collections. Results will not be tabulated or published.

17. Approval not to display expiration date. Not applicable.

17. Explanation of exception to certification statement. Not applicable.

B. Collections of Information Employing Statistical Methods.

Statistical methods are not used in this information collection.

Matrix:

9000-0018				ESTIMATE OF PUBLIC BURDEN HOURS
		ANNUAL REPORTING BURDEN				RECORDKEEPING BURDEN
	Respond	Res/Resd	TOT RES	Hrs/Res	RES Hrs	RK	Hrs/RK	REC Hrs	TOT hrs
52.203-2	24,270	30	721,200	0.25	180,300				180,300
52.203-13	278	1	278	60.00	16,680				16,680
52.203-16	120	1	120	30.00	3,600				3,600
TOTAL RESP	24,668	29.25	721,598	0.28	200,580				200,580
TOTAL rec.						8,598	59	507,282	507,282
TOTAL	33,266								707,862
Current Approved Burdens
9000-0018			1,024,936		256,234
9000-0164			276		16,560
9000-0183			188		5,640	(did not include recordkeeping hours in approval)
9000-0183 recordkeeping (in fr)			9,361		552,299
			1,034,761		830,733

9000-0018		ESTIMATED COST
	ESTIMATED COST
	COST TO GOVERNMENT						COST TO PUBLIC
Req.	Resp		Hr/Resp	Govt hr	$/hr	Govt $	Publ Hr	$/hr	PUBL $
52.203-2	721,200		0.15	108,180	$46.00	$4,976,280	180,300	$65.00	$11,719,500
52.203-13	278		0.15	42	$46.00	$1,918	16680	$102.00	$1,701,360
52.203-16	120		0.15	18	$46.00	$828	3,600	$65.00	$234,000
TOTAL	721,598		0.15	108,240	$46.00	$4,979,026	200,580	$184.41	$36,989,832
							507,282	$46.00	$23,334,972
							707,862	$85.22	$60,324,804

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